Cover Page
Cover Page | 6 Months Ended |
Jun. 30, 2021 | |
Cover [Abstract] | |
Document Type | S-4/A |
Entity Registrant Name | RMR Mortgage Trust |
Entity Central Index Key | 0001452477 |
Entity Filer Category | Non-accelerated Filer |
Entity Emerging Growth Company | false |
Entity Small Business | true |
Amendment Flag | false |
Consolidated Portfolio of Inves
Consolidated Portfolio of Investments | 12 Months Ended | ||||
Dec. 31, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | ||
Investment Company, Financial Highlights [Line Items] | |||||
Net assets attributable to common shareholders | 100.00% | ||||
Other assets less liabilities | $ 101,015,000 | ||||
Net assets attributable to common shares | $ 192,894,000 | $ 132,073,000 | $ 255,326,000 | $ 198,498,881 | |
Mortgage Loan | |||||
Investment Company, Financial Highlights [Line Items] | |||||
Net assets attributable to common shareholders | [1],[2] | 47.60% | |||
Cost | $ 91,879,000 | ||||
Value | 91,879,000 | ||||
Mortgage Loan | Office Property, Downers Grove, IL | |||||
Investment Company, Financial Highlights [Line Items] | |||||
Committed Principal Amount | 30,000,000 | ||||
Cost | 29,232,000 | ||||
Value | 29,232,000 | ||||
Mortgage Loan | Laboratory Property, Durham, NC | |||||
Investment Company, Financial Highlights [Line Items] | |||||
Committed Principal Amount | 21,500,000 | ||||
Cost | 13,281,000 | ||||
Value | 13,281,000 | ||||
Mortgage Loan | Retail Property, Los Angeles, CA | |||||
Investment Company, Financial Highlights [Line Items] | |||||
Committed Principal Amount | 24,600,000 | ||||
Cost | 17,029,000 | ||||
Value | 17,029,000 | ||||
Mortgage Loan | Office Property, Aurora, IL | |||||
Investment Company, Financial Highlights [Line Items] | |||||
Committed Principal Amount | 16,500,000 | ||||
Cost | 14,540,000 | ||||
Value | 14,540,000 | ||||
Mortgage Loan | Laboratory Property, Berkeley, CA | |||||
Investment Company, Financial Highlights [Line Items] | |||||
Committed Principal Amount | 19,120,000 | ||||
Cost | 17,797,000 | ||||
Value | $ 17,797,000 | ||||
Non-Mortgage Loan Investments | |||||
Investment Company, Financial Highlights [Line Items] | |||||
Net assets attributable to common shareholders | [3] | 52.40% | |||
LIBOR | Mortgage Loan | Office Property, Downers Grove, IL | |||||
Investment Company, Financial Highlights [Line Items] | |||||
Coupon Rate | 0.0425 | ||||
LIBOR | Mortgage Loan | Laboratory Property, Durham, NC | |||||
Investment Company, Financial Highlights [Line Items] | |||||
Coupon Rate | 0.0435 | ||||
LIBOR | Mortgage Loan | Retail Property, Los Angeles, CA | |||||
Investment Company, Financial Highlights [Line Items] | |||||
Coupon Rate | 0.0425 | ||||
LIBOR | Mortgage Loan | Office Property, Aurora, IL | |||||
Investment Company, Financial Highlights [Line Items] | |||||
Coupon Rate | 0.0435 | ||||
LIBOR | Mortgage Loan | Laboratory Property, Berkeley, CA | |||||
Investment Company, Financial Highlights [Line Items] | |||||
Coupon Rate | 0.0435 | ||||
[1] | The mortgage loans we invest in are not registered under the securities laws. These mortgage loans are valued using Level III inputs as defined in the fair value hierarchy under U.S. generally accepted accounting principles, or GAAP. | ||||
[2] | The mortgage loans we invest in are not registered under the securities laws. These mortgage loans are valued using Level III inputs as defined in the fair value hierarchy under generally accepted accounting principles, or GAAP. | ||||
[3] | Please refer to our Consolidated Statement of Assets and Liabilities for further information on these amounts. |
Consolidated Statement of Asset
Consolidated Statement of Assets and Liabilities - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
ASSETS | ||||||||
Cash and cash equivalents | $ 46,839,000 | $ 103,314,000 | ||||||
Loans held for investment (cost $91,878,969) | 147,247,000 | 91,879,000 | ||||||
Restricted cash | 220,000 | 250,000 | ||||||
Dividends and interest receivable | 139,000 | |||||||
Prepaid expenses | 345,000 | |||||||
Other assets | 128,000 | |||||||
Total assets | 195,067,000 | 196,055,000 | ||||||
Liabilities | ||||||||
Accrued income taxes | 2,386,000 | |||||||
Accrued expenses and other liabilities | 491,000 | |||||||
Advisory fee payable | 141,000 | |||||||
Deferred revenue | 82,000 | |||||||
Compliance and internal audit costs payable | 31,000 | |||||||
Administrative fee payable | 30,000 | |||||||
Total liabilities | 1,823,000 | 3,161,000 | ||||||
Net assets attributable to common shares | 192,894,000 | $ 132,073,000 | $ 255,326,000 | $ 198,498,881 | ||||
Composition of net assets attributable to common shares | ||||||||
Common shares, $0.001 par value per share; unlimited number of shares authorized | 10,000 | 10,000 | ||||||
Additional paid in capital | $ 192,884,000 | 192,884,000 | ||||||
Net assets attributable to common shares | $ 192,894,000 | $ 132,073,000 | $ 255,326,000 | $ 198,498,881 | ||||
Common shares outstanding (in shares) | 10,202,009 | 10,202,009 | 10,202,000 | 10,202,009 | 10,202,009 | |||
Net asset value per share attributable to common shares (in dollars per share) | $ 18.91 | $ 25.03 | $ 19.46 | $ 23.28 | $ 25.54 | $ 23.53 |
Consolidated Statement of Ass_2
Consolidated Statement of Assets and Liabilities (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Loans held for investment, cost | $ 91,879 | |
Common shares, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Consolidated Statement of Opera
Consolidated Statement of Operations | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Investment Income | |
Dividend income | $ 6,803,613 |
Interest income from mortgage loan investments | 563,655 |
Other income | 352,991 |
Total investment income | 7,720,259 |
Expenses | |
Advisory | 2,363,603 |
Legal | 361,411 |
Compliance and internal audit | 144,543 |
Shareholder reporting | 110,246 |
Custodian | 86,257 |
Administrative | 76,757 |
Preferred share remarketing and auction fees | 65,458 |
Trustees' fees and expenses | 55,347 |
Audit | 49,134 |
Other | 424,403 |
Total expenses before interest expense | 3,737,159 |
Interest expense | 1,207,561 |
Total expenses | 4,944,720 |
Net investment income | 2,775,539 |
Realized and change in unrealized gain (loss) on investments | |
Net realized gain on investments before taxes | 13,207,592 |
Income tax expense | (2,386,000) |
Net realized gain on investments after taxes | 10,821,592 |
Net change in unrealized losses on investments | (69,278,340) |
Net realized and change in unrealized losses on investments | (58,456,748) |
Net decrease in net assets before preferred distributions resulting from operations | (55,681,209) |
Distributions to preferred shareholders from net investment income | (322,917) |
Net decrease in net assets attributable to common shares resulting from operations | $ (56,004,126) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Net Assets - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Increase (decrease) in net assets resulting from operations | ||
Net investment income | $ 2,775,539 | $ 4,896,213 |
Net realized gain on investments after taxes | 10,821,592 | 4,292,510 |
Net change in unrealized gains (losses) on investments | (69,278,340) | 61,744,128 |
Distributions to preferred shareholders | (322,917) | (639,400) |
Net decrease in net assets attributable to common shares resulting from operations | (56,004,126) | 70,293,451 |
Distributions to common shareholders from: | ||
Distributable earnings | (6,427,266) | (8,334,106) |
Return of capital | (5,132,546) | |
Total distributions to common shareholders | (6,427,266) | (13,466,652) |
Capital shares transactions | ||
Redemption of auction rate preferred shares | (16,675,000) | |
Net decrease in capital share transactions | (16,675,000) | |
Liquidation preference of preferred shares repurchased | 16,675,000 | 16,675,000 |
Total increase (decrease) in net assets attributable to common shares | (62,431,392) | 56,826,799 |
Beginning of period | 255,326,000 | 198,498,881 |
End of period | $ 192,894,000 | $ 255,326,000 |
Beginning balance (in shares) | 10,202,009 | 10,202,009 |
Ending balance (in shares) | 10,202,009 | 10,202,009 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities | |||
Net decrease in net assets before preferred distributions resulting from operations | $ (119,760,000) | $ (55,681,209) | |
Adjustments to reconcile net decrease in net assets before preferred distributions resulting from operations to cash provided by operating activities: | |||
Origination of loans held for investment | (91,878,969) | ||
Purchases of long term investments | (5,757,000) | (10,077,968) | |
Proceeds from sales of long term investments | 4,900,000 | 302,797,118 | |
Net (purchases)\ and sales of short term investments | 4,476,850 | ||
Decrease in payable for securities purchased | (9,832) | ||
Changes in assets and liabilities: | |||
Decrease in dividends and interest receivable and other assets | 524,000 | 2,436,359 | |
Increase in accrued income taxes | 2,386,000 | ||
Increase in accrued expenses and other liabilities | 38,000 | 430,012 | |
Increase in prepaid expenses | (296,775) | ||
Decrease in advisory fee payable | (63,000) | (118,012) | |
Decrease in interest payable | (55,000) | (212,232) | |
Decrease in compliance and internal audit costs payable | 34,000 | (5,934) | |
Increase in administrative fee payable | (20,000) | 2,272 | |
Net change in unrealized losses on investments | 123,346,000 | 69,278,340 | $ (61,744,128) |
Net realized gain on investments and foreign currency transactions | (915,000) | (13,207,592) | |
Net cash used in operating activities | 3,540,000 | 210,318,428 | |
Cash flows from financing activities | |||
Distributions paid to preferred shareholders | (130,000) | (322,917) | |
Distributions paid to common shareholders | (3,367,000) | (6,427,266) | |
Repayment of revolving credit facility | (88,000,000) | ||
Redemption of Auction Preferred Shares | (16,675,000) | ||
Net cash used in financing activities | (3,497,000) | (111,425,183) | |
Decrease in cash, cash equivalents and restricted cash | 43,000 | 98,893,245 | |
Cash, cash equivalents and restricted cash at beginning of period | 7,000 | 7,000 | |
Cash, cash equivalents and restricted cash at end of period | 50,000 | 103,564,000 | 7,000 |
Cash and cash equivalents and restricted cash at end of year | |||
Cash and cash equivalents | 103,314,000 | ||
Restricted cash | 250,000 | ||
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statement of cash flows | 50,000 | 103,564,000 | 7,000 |
Supplemental cash flow information: | |||
Cash paid for interest and fees on borrowings | 609,000 | 1,419,793 | |
Restatement Adjustment [Member] | |||
Cash flows from financing activities | |||
Cash, cash equivalents and restricted cash at beginning of period | $ 4,670,299 | $ 4,670,299 | |
Cash, cash equivalents and restricted cash at end of period | 4,670,299 | ||
Cash and cash equivalents and restricted cash at end of year | |||
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statement of cash flows | $ 4,670,299 |
Consolidated Financial Highligh
Consolidated Financial Highlights - Consolidated Selected Data For A Common Share Outstanding Throughout Each Year Presented - USD ($) | 12 Months Ended | ||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Investment Company, Financial Highlights [Abstract] | |||||
Net asset value, beginning of year | $ 25.03 | $ 19.46 | $ 23.28 | $ 25.54 | $ 23.53 |
Income from Investment Operations | |||||
Net investment income | 0.27 | 0.48 | 0.68 | 0.67 | 0.69 |
Net realized and unrealized gain (loss) on investments | (5.73) | 6.47 | (3.12) | 0.29 | 2.68 |
Distributions to preferred shareholders (common stock equivalent basis) from: | |||||
Net investment income | (0.01) | (0.04) | (0.04) | (0.03) | (0.04) |
Net realized gains on investment | (0.02) | (0.02) | (0.02) | (0.02) | |
Net increase (decrease) in net asset value from operations | (5.49) | 6.89 | (2.50) | 0.91 | 3.33 |
Less: Distributions to common shareholders from: | |||||
Net investment income | (0.23) | (0.51) | (0.64) | (0.84) | (1.32) |
Net realized gains on investment | (0.40) | (0.33) | (0.28) | (0.48) | |
Return of capital | (0.48) | (0.40) | |||
Dilutive effect of rights offering | (1.85) | ||||
Net asset value, end of year | 18.91 | 25.03 | 19.46 | 23.28 | 25.54 |
Market price, beginning of year | 20.20 | 15.07 | 19.09 | 20.46 | 19.28 |
Market price, end of year | $ 10.56 | $ 20.20 | $ 15.07 | $ 19.09 | $ 20.46 |
Total investment return based on: | |||||
Market price | (43.89%) | 43.41% | (14.72%) | (0.46%) | 13.25% |
Net asset value | (20.58%) | 35.81% | (11.06%) | (3.89%) | 14.32% |
Ratios/Supplemental Data: | |||||
Net investment income, before total preferred share distributions | 1.49% | 2.01% | 3.14% | 2.67% | 2.76% |
Total preferred share distributions | 0.17% | 0.26% | 0.26% | 0.21% | 0.17% |
Net investment income, net of preferred share distributions | 1.32% | 1.75% | 2.88% | 2.46% | 2.59% |
Expenses | 2.65% | 2.86% | 3.14% | 2.62% | 2.28% |
Portfolio turnover rate | 40.75% | 6.60% | 21.59% | 13.89% | 10.48% |
Net assets attributable to common shares | $ 192,894,288 | $ 255,325,680 | $ 198,498,881 | $ 237,464,973 | $ 195,435,521 |
Borrowings on revolving credit facility | $ 88,000,000 | $ 88,000,000 | $ 88,000,000 | $ 60,000,000 | |
Asset coverage ratio of borrowings | 409.00% | 345.00% | 389.00% | 454.00% | |
Preferred shares liquidation preference | $ 16,675,000 | $ 16,675,000 | $ 16,675,000 | $ 16,675,000 | $ 16,675,000 |
Asset coverage ratio of preferred shares | 1631.00% | 1290.00% | 1524.00% | 1272.00% | |
Asset coverage ratio of borrowings and preferred shares | 344.00% | 290.00% | 327.00% | 355.00% |
Consolidated Financial Highli_2
Consolidated Financial Highlights - Consolidated Selected Data For A Common Share Outstanding Throughout Each Year Presented (Parenthetical) - USD ($) | 1 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2020 | Nov. 30, 2020 | |
Investment Company, Financial Highlights [Abstract] | |||
Rights offering of common shares | 2,550,502 | ||
Non-recurring expense ratio | 0.17% | ||
Expense ratio | 2.45% | ||
Preferred shares redemption value | $ 16,675,000 |
Organization
Organization | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Organization | Organization RMR Mortgage Trust (formerly known as RMR Real Estate Income Fund), or we, us, our, or the Trust, is a Maryland statutory trust. We were previously registered under the Investment Company Act of 1940, as amended, or the 1940 Act, as a closed-end management investment company. Our investment objective while we operated as a registered investment company was investing in equity securities of real estate companies. On January 5, 2021, the Securities and Exchange Commission, or the SEC, issued an order granting our request to deregister as an investment company under the 1940 Act. As a result, the Trust changed its SEC registration to a reporting company under the Securities Exchange Act of 1934, as amended, or the Exchange Act. The issuance of the deregistration order enabled us to proceed with full implementation of our new business mandate to operate as a real estate investment trust, or REIT, that focuses primarily on originating and investing in first mortgage whole loans secured by middle market and transitional commercial real estate, or CRE, or the Business Change. On April 26, 2021, we and Tremont Mortgage Trust, or TRMT, entered into an Agreement and Plan of Merger, or the Merger Agreement, pursuant to which, on the terms and subject to the satisfaction or waiver of the conditions thereof, TRMT has agreed to merge with and into us, with us continuing as the surviving entity in the merger, or the Merger. Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Merger, or the Effective Time, each common share of beneficial interest, $0.01 par value per share, of TRMT, or TRMT Common Shares, issued and outstanding immediately prior to the Effective Time will be converted into the right to receive 0.52, or the Exchange Ratio, of one newly issued common share of beneficial interest, $0.001 par value per share, of us, or the RMRM Common Shares, subject to adjustment as described in the Merger Agreement, with cash paid in lieu of fractional shares. Under the Merger Agreement, the Exchange Ratio is fixed and will not be adjusted to reflect changes in the market price of the RMRM Common Shares or the TRMT Common Shares prior to the Effective Time. Pursuant to the Merger Agreement, at the Effective Time, any unvested TRMT Common Share awards outstanding under TRMT's equity compensation plan generally will be converted into an unvested RMRM Common Share award under our equity compensation plan, subject to substantially similar vesting requirements and other terms and conditions, determined by multiplying the number of unvested TRMT Common Shares subject to such award by the Exchange Ratio (rounded down to the nearest whole number). The Merger and the other transactions contemplated by the Merger Agreement are collectively referred to herein as the Transactions. Following the consummation of the Merger, the combined company will continue to be managed by our and TRMT’s current manager, Tremont Realty Advisors LLC, or TRA or our Manager, pursuant to the terms of our existing management agreement with TRA. Contemporaneously with the execution of the Merger Agreement, we, TRMT and TRA entered into a letter agreement, or the TRA Letter Agreement, pursuant to which, on the terms and subject to conditions contained therein, we, TRMT and TRA have acknowledged and agreed that, effective upon consummation of the Merger, TRMT shall have terminated its management agreement with TRA, and TRA shall have waived its right to receive payment of the termination fee pursuant to such agreement. In consideration of this waiver, we have agreed that, effective upon consummation of the Merger and the termination of TRMT's management agreement with TRA, certain of the expenses TRA had paid on behalf of TRMT pursuant to such management agreement will be included in the “Termination Fee” under and as defined in our existing management agreement with TRA. The TRA Letter Agreement further provides that such termination by TRMT and waiver by TRA shall apply only in respect of the Merger and will not apply in respect of any competing proposal or superior proposal (as those terms are defined in the Merger Agreement) or to any other transaction or arrangement. Contemporaneously with the execution of the Merger Agreement, we entered into a voting agreement with TRA, or the Voting Agreement, pursuant to which TRA has agreed to vote all of the TRMT Common Shares which it is entitled to vote in favor of approval of the Merger and the other Transactions to which TRMT is a party at the special meeting of TRMT's shareholders held for that purpose and against any competing acquisition proposal. | Note A 1. Organization RMR Mortgage Trust (formerly known as RMR Real Estate Income Fund), or we, us, our, or the Trust, was organized as a Delaware statutory trust on December 17, 2008, and was registered under the Investment Company Act of 1940, as amended, or the 1940 Act, as a non-diversified closed end management investment company. At our annual meeting on April 13, 2017, our shareholders approved the redomestication of the Trust from a Delaware statutory trust to a Maryland statutory trust. The redomestication was completed on April 18, 2017, and we then became and continue to be a Maryland statutory trust. On April 16, 2020, our shareholders approved a change in business from a registered investment company that makes equity investments in real estate companies to a real estate investment trust, or REIT, engaged in the business of originating and investing in first mortgage whole loans secured by middle market and transitional commercial real estate. Our fundamental investment objectives of earning and paying a high level of current income to common shareholders, with capital appreciation as a secondary objective, have been replaced with a non-fundamental primary objective to balance capital preservation with generating attractive risk adjusted returns. Our shareholders also amended our fundamental investment restrictions to permit us to engage in our new business while awaiting deregistration as an investment company and approved our return to non-diversified status under the 1940 Act. On January 5, 2021, the SEC issued an order granting our request to deregister as an investment company under the 1940 Act. We sold all our legacy portfolio assets in 2020 and during 2020 began originating and investing in commercial mortgage loans within our new investment scope. |
Basis of Presentation
Basis of Presentation | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Basis of Presentation | Basis of Presentation. Prior to the Business Change, the Trust was accounted for as an investment company in accordance with the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 946, Financial Services - Investment Companies , or the Predecessor Basis. Upon the Business Change, we discontinued the application of guidance in ASC Topic 946 and prospectively applied the guidance required under GAAP, applicable to companies that are not investment companies, or the Successor Basis. As a result of these changes, our condensed consolidated financial statements as of and for the three months ended March 31, 2021 are presented separately from our financial statements on the Predecessor Basis, as of and for the periods prior to the Business Change. The results of operations from January 1, 2021 through January 4, 2021 were not material to the Trust's condensed consolidated financial statements and have not been presented separately, but they are included in our statement of operations for the three months ended March 31, 2021. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement of results for the interim periods have been included. All intercompany transactions and balances with or among our consolidated subsidiaries have been eliminated. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect reported amounts. Actual results could differ from those estimates. Significant estimates in the accompanying condensed consolidated financial statements include the fair value of financial instruments. | 2. Basis of Presentation These consolidated financial statements includes the accounts of us and our subsidiaries, RMRM RTP Lender LLC and RMTG Lender LLC, all of which are 100% owned directly by us. All intercompany transactions and balances with or among our consolidated subsidiaries have been eliminated. For the year ended December 31, 2020, we are an investment company in accordance with the FASB Accounting Standards Codification (ASC) 946, Financial Services - Investment Companies , for the purposes of financial reporting. We will apply accounting and reporting guidance for REITs beginning in 2021. Preparation of these consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that may affect the amounts reported in our financial statements and related notes. Our actual results could differ from these estimates. |
Portfolio Valuation
Portfolio Valuation | 12 Months Ended |
Dec. 31, 2020 | |
Portfolio Valuation Disclosure [Abstract] | |
Portfolio Valuation | 3. Portfolio Valuation As of December 31, 2020, our portfolio primarily consisted of mortgage loans and cash. Our mortgage loans held for investment are carried at their fair values. Please see Note 4 Fair Value Measurements for further information on these investments. Investments in open end mutual funds are valued at the closing NAV on the valuation date. As of December 31, 2020 we held $21,441,093 shares in State Street Institutional U.S. Government Money Market Fund valued at $21,441,093. This amount in included with other cash balances in the Statement of Assets and Liabilities and are considered Level 1 assets for fair value measurements (see Note 4). |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | ||
Fair Value Measurements | Fair Value of Financial Instruments ASC Topic 820, Fair Value Measurements , establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities (Level I) and the lowest priority to unobservable inputs (Level III). A financial asset’s or financial liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. The carrying values of cash and cash equivalents, restricted cash and accounts payable approximate their fair values due to the short term nature of these financial instruments. We estimate the fair values of our loans held for investment using Level III inputs, including discounted cash flow analyses and currently prevailing market terms as of the measurement date, determined by significant unobservable market inputs, which include holding periods, discount rates based on LTV, property types and loan pricing expectations which are corroborated by a comparison with other market participants to determine the appropriate market spread to add to the one month LIBOR (Level III inputs as defined in the fair value hierarchy under GAAP). The table below provides information regarding our financial assets: March 31, 2021 (Successor Basis) December 31, 2020 (Predecessor Basis) Carrying Value Fair Value Carrying Value Fair Value Financial assets Loans held for investment $ 147,247 $ 146,400 $ 91,879 $ 91,879 | 4. Fair Value Measurements We estimate the fair values of our loans held for investment using Level III inputs, including discounted cash flow analyses and currently prevailing market terms as of the measurement date, determined by significant unobservable market inputs, which include holding periods, discount rates based on loan to value, or LTV, property types and loan pricing expectations which are corroborated by a comparison with other market participants to determine the appropriate market spread to add to the one month LIBOR (Level III inputs as defined in the fair value hierarchy under GAAP). As of December 31, 2020, the fair value of the mortgage loans approximated their historical cost. We report the value of our investments at their fair value. Fair value is defined as the price that we would receive upon selling an investment in a timely transaction to an independent buyer in the principal or most advantageous market for the investment. When valuing investments, we use observable market data when possible and otherwise uses other significant observable or unobservable inputs for fair value measurements. Inputs refer broadly to the assumptions we believe believes that market participants would use in valuing the asset or liability, including assumptions about risk; for example, the risk inherent in using a particular valuation technique to measure fair value and the risk inherent in the inputs to the valuation technique. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in valuing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs are inputs that reflect our own assumptions about the assumptions market participants would use in valuing the asset or liability developed based on the best information available in the circumstances. The three tier hierarchy of inputs used to value securities reported in these financial statements is summarized below: · Level 1 – unadjusted quoted prices in active markets for identical investments. · Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, credit risk, etc.). · Level 3 – significant unobservable inputs (including our own assumptions in determining the fair value of investments). Legacy Portfolio Assets We use broker quotes, issuer company financial information and other market indicators to value the securities whose prices are not readily available. The types of inputs used to value a security may change as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. When the S&P 500 Index (an unmanaged index published as Standard & Poor’s Composite Index of 500 common stocks) fluctuates more than 0.75% from the previous day close, we believe that the closing price of foreign securities on the principal foreign exchange on which they trade may no longer represent the fair value of those securities at the time the U.S. market closes, in which case, we fair value those foreign securities. In such circumstances, we report holdings in foreign securities at their fair values as determined by an independent security pricing service. The service uses a multi-factor model that includes such information as the security’s local closing price, relevant general and sector indices, currency fluctuations, depository receipts and futures, as applicable. The model generates an adjustment factor for each security that is applied to the local closing price to adjust it for post closing events, resulting in the security’s reported fair value. The adjustment factor is applied to a security only if the minimum confidence interval is 75% or more. The types of inputs may change as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. We recognize interperiod transfers between the input levels as of the end of the period. Mortgage Loans Held for Investment Our loans are classified as held for investment based upon our intent and ability to hold them until maturity. We evaluate each of our loans for impairment at least quarterly by assessing a variety of risk factors in relation to each loan and assigning a risk rating to each loan based on those factors. Factors considered in these evaluations include, but are not limited to, property type, geographic and local market dynamics, physical condition, leasing and tenant profile, projected cash flow, risk of loss, current LTV, debt yield, collateral performance, structure, exit plan and sponsorship. Loans are rated "1" (lower risk) through "5" (impaired/loss likely) as defined below: "1" lower risk—Criteria reflects a sponsor having a strong financial condition and low credit risk and our evaluation of management’s experience; collateral performance exceeding performance metrics included in the business plan or credit underwriting; and the property demonstrating stabilized occupancy and/or market rates, resulting in strong current cash flow and net operating income and/or having a very low LTV. "2" average risk—Criteria reflects a sponsor having a stable financial condition and our evaluation of management’s experience; collateral performance meeting or exceeding substantially all performance metrics included in the business plan or credit underwriting; and the property demonstrating improved occupancy at market rents, resulting in sufficient current cash flow and/or having a low LTV. "3" acceptable risk—Criteria reflects a sponsor having a history of repaying loans at maturity and meeting its credit obligations and our evaluation of management’s experience; collateral performance expected to meet performance metrics included in the business plan or credit underwriting; and the property having a moderate LTV. New loans and loans with a limited history will typically be assigned this rating and will be adjusted to other levels from time to time as appropriate. "4" higher risk—Criteria reflects a sponsor having a history of unresolved missed or late payments, maturity extensions and difficulty timely fulfilling its credit obligations and our evaluation of management’s experience; collateral performance failing to meet the business plan or credit underwriting; the existence of a risk of default possibly leading to a loss and/or potential weaknesses that deserve management’s attention; and/or the property having a high LTV. "5" impaired/loss likely—Criteria reflects a very high risk of realizing a principal loss or having incurred a principal loss; a sponsor having a history of default payments, trouble fulfilling its credit obligations, deeds in lieu of foreclosures, and/or bankruptcies; collateral performance is significantly worse than performance metrics included in the business plan; loan covenants or performance milestones having been breached or not attained; timely exit via sale or refinancing being uncertain; and/or the property having a very high LTV. We evaluate each of our loans for impairment at least quarterly by assessing a variety of risk factors in relation to each loan and assigning a risk rating to each loan based on those factors. The following table allocates the carrying value of our loan portfolio at December 31, 2020 based on our internal risk rating policy: December 31, 2020 Number of Risk Rating Loans Carrying Value 1 — $ — 2 — — 3 5 91,878,969 4 — — 5 — — 5 $ 91,878,969 The weighted average risk rating of our loans by carrying value was 3.0 as of December 31, 2020. We did not have any impaired loans or nonaccrual loans as of December 31, 2020. As of December 31, 2020, and February 22, 2021, all of our borrowers had paid all of their debt service obligations owed and due to us and none of the loans included in our investment portfolio were in default. The following table provides a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining value: Investments in Mortgage Loan Characterized as Level 3 Balance, as of December 31, 2019 $ — Loan originations (Level 3) 91,878,969 Balance, as of December 31, 2020 $ 91,878,969 Net change in unrealized appreciation/depreciation from investments still held as of December 31, 2020 $ — At December 31, 2020, there were no Level 3 fair value measurements utilizing significant inputs determined by management. We recognize interperiod transfers between the input levels as of the end of the period. There were no transfers of financial assets or liabilities within the fair value hierarchy during the year ended December 31, 2020. |
Investment Transactions and Inv
Investment Transactions and Investment Income | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Receivables [Abstract] | ||
Investment Transactions and Investment Income | Loans Held for Investment We originate first mortgage whole loans secured by middle market and transitional CRE, which are generally to be held as long term investments. We funded our existing loan portfolio using cash on hand. The table below provides overall statistics for our loan portfolio as of March 31, 2021 and December 31, 2020: As of March 31, 2021 (Successor Basis) As of December 31, 2020 (Predecessor Basis) Number of loans 7 5 Total loan commitments $ 177,195 $ 111,720 Unfunded loan commitments (1)(2) $ 28,613 $ 18,857 Principal balance (2) $ 148,652 $ 92,863 Unamortized net deferred origination fees $ (1,405) $ (984) Carrying value $ 147,247 $ 91,879 Weighted average coupon rate 4.99 % 5.08 % Weighted average all in yield (3) 5.65 % 5.71 % Weighted average maximum maturity (years) (4) 4.3 4.2 Weighted average risk rating 3.0 3.0 Weighted average LTV (5) 67 % 68 % (1) Unfunded loan commitments are primarily used to finance property and building improvements and leasing capital and are generally funded over the term of the loan. (2) The principal balance at March 31, 2021 includes $69 of capitalized interest that does not reduce the amount of unfunded loan commitments. (3) All in yield represents the yield on a loan, excluding any repurchase debt funding applicable to the loan and including amortization of deferred fees over the initial term of the loan. (4) Maximum maturity assumes all borrower loan extension options have been exercised, which options are subject to the borrower meeting certain conditions. (5) LTV represents the initial loan amount divided by the underwritten in-place value of the underlying collateral at closing. The table below represents our loan activities during the three months ended March 31, 2021: Principal Balance Deferred Fees Carrying Value Balance at December 31, 2020 (Predecessor Basis) $ 92,863 $ (984) $ 91,879 Additional funding 274 — 274 Originations 55,515 (675) 54,840 Net amortization of deferred fees — 254 254 Balance at March 31, 2021 (Successor Basis) $ 148,652 $ (1,405) $ 147,247 In April 2021, we originated a first mortgage whole loan of $34,275 to refinance an office/industrial property with 288,275 square feet located in Colorado Springs, Colorado. This loan requires the borrower to pay interest at the floating rate of LIBOR plus a premium of 450 basis points per annum. This floating rate loan includes an initial funding of $28,970 and a future funding allowance of $5,305 for tenant improvements, leasing commissions and capital expenditures and has a three year initial term with one one-year extension option, subject to the borrower meeting certain conditions. Also in April 2021, we originated a first mortgage whole loan of $39,240 to finance the acquisition of two cold storage industrial buildings located in Londonderry, New Hampshire. This loan requires the borrower to pay interest at the floating rate of LIBOR plus a premium of 400 basis points per annum. This floating rate loan includes an initial funding of $34,200 and a future funding allowance of $5,040 for tenant improvements, leasing commissions and capital expenditures and has a three year initial term with two one-year extension options, subject to the borrower meeting certain conditions. The tables below detail the property type and geographic location of the properties securing the loans in our portfolio as of March 31, 2021 and December 31, 2020: March 31, 2021 December 31, 2020 Property Type Number of Loans Carrying Value Percentage of Value Number of Loans Carrying Value Percentage of Value Office (1) 3 $ 48,979 33 % 2 $ 38,106 41 % Multifamily 1 44,119 30 % — — — % Lab 2 31,139 21 % 2 31,078 34 % Retail 1 17,344 12 % 1 17,029 19 % Industrial (1) — 5,666 4 % — 5,666 6 % 7 $ 147,247 100 % 5 $ 91,879 100 % (1) Our loan investment secured by a mixed use property consisting of office space and an industrial warehouse in Aurora, IL is classified as office for the purpose of counting the number of loans in our portfolio. The carrying value of this loan investment is reflected in office and industrial based on the fair value of the buildings at the time of origination relative to the total fair value of the property. March 31, 2021 December 31, 2020 Geographic Location Number of Loans Carrying Value Percentage of Value Number of Loans Carrying Value Percentage of Value Midwest 3 $ 87,960 60 % 2 $ 43,772 48 % West 2 35,167 24 % 2 34,826 38 % South 2 24,120 16 % 1 13,281 14 % 7 $ 147,247 100 % 5 $ 91,879 100 % Loan Risk Ratings We evaluate each of our loans for impairment at least quarterly by assessing a variety of risk factors in relation to each loan and assigning a risk rating to each loan based on those factors. The following table allocates the carrying value of our loan portfolio at March 31, 2021 and December 31, 2020 based on our internal risk rating policy: March 31, 2021 (Successor Basis) December 31, 2020 (Predecessor Basis) Risk Rating Number of Loans Carrying Value Number of Loans Carrying Value 1 — $ — — $ — 2 — — — — 3 7 147,247 5 91,879 4 — — — — 5 — — — — 7 $ 147,247 5 $ 91,879 The weighted average risk rating of our loans by carrying value was 3.0 as of March 31, 2021 and December 31, 2020. We did not have any impaired loans or nonaccrual loans as of March 31, 2021 or December 31, 2020. See Note 3 for further information regarding our loan risk ratings. | 5. Investment Transactions and Investment Income We record securities transactions on a trade date basis, dividend income on the ex-dividend date and any non-cash dividends at the fair market value of the securities received. We use the accrual method for recording interest income, including accretion of original issue discount, where applicable, and accretion of discount on short term investments and identified cost basis for realized gains and losses from securities transactions. The difference between cost and fair value of for investments we continue to hold is reflected as unrealized gain (loss), and any change in that amount from a prior period is reflected in the accompanying consolidated statement of operations. Interest income related to our first mortgage whole loans secured by CRE will generally be accrued based on the coupon rates applied to the outstanding principal balance of such loans. Fees, premiums and discounts, if any, will be amortized or accreted into interest income over the remaining lives of the loans using the effective interest method, as adjusted for any prepayments. If a loan’s interest or principal payments are not paid when due and there is uncertainty that such payments will be collected, the loan may be categorized as non-accrual and no interest will be recorded unless it is collected. When all overdue payments are collected and, in our judgment, a loan is likely to remain current, it may be re-categorized as accrual. |
Taxes
Taxes | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Taxes | Income TaxesWe intend to elect to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, or the IRC, effective for our 2020 taxable year. Accordingly, we generally are not, and will not be, subject to U.S. federal income tax, provided that we meet certain distribution and other requirements. We are subject to certain state and local taxes, certain of which amounts are or will be reported as income taxes in our condensed consolidated statements of operations. | 6. Taxes We have adopted the provisions of the Topic of the FASB Accounting Standard Codification, or ASC 740. ASC 740 sets forth a minimum threshold for financial statement recognition of a tax position taken, or expected to be taken, in a tax return. Financial reporting records are adjusted for permanent book/tax differences to reflect tax character. These reclassifications have no impact on net assets or results of operations. We recognize interest and penalties, if any, related to unrecognized tax positions as an income tax expense in the Consolidated Statement of Operations. At December 31, 2020, we did not have any unrecognized tax positions. Each of the tax years in the four year period ended December 31, 2020 remains subject to examination by the Internal Revenue Service. We have elected to retain realized capital gains and designate such gains as a distribution to shareholders in accordance with section 852(b)(3)(D) of the Internal Revenue Code, or IRC, and we have recorded a $2,386,000 provision for income taxes for the year ended December 31, 2020. The amount of undistributed capital gains was $7,997,377 for the year ended December 31, 2020. The aggregate cost of investments that generated these undistributed gains for U.S. federal income tax purposes was $334,389,280. Current income tax expense as shown on our consolidated statement of operations is comprised of as described in the table below: Year ended December 31, 2020 Income tax expense Federal $ 1,746,210 State 639,790 Total $ 2,386,000 On January 5, 2021, the SEC issued an order deregistering us as an investment company. We elected to be taxed as a REIT beginning with the 2020 tax year. Our REIT election, assuming continuing compliance with the then applicable qualification tests, will continue in effect for subsequent taxable years. Although we cannot be sure, beginning with our taxable year for which we make our election to be taxed as a REIT, we expect that we will be organized and will operate in a manner that will allow us to so qualify, and we expect that we will continue to be so organized and to so operate in subsequent taxable years. Accordingly, we generally will not be subject to U.S. federal income tax provided that we meet certain distribution and other requirements. We are subject to certain state and local taxes, certain of which amounts are or will be reported as income taxes in our consolidated statements of operations. |
Distributable Earnings
Distributable Earnings | 12 Months Ended |
Dec. 31, 2020 | |
Investment Company, Distributable Earnings [Abstract] | |
Distributable Earnings | 7. Distributable Earnings We earn income, net of expenses on our investments. On February 22, 2019, we, acting pursuant to an SEC exemptive order and with the approval of our Board of Trustees adopted a managed distribution plan, consistent with our investment objectives and policies, allowing us to include long term capital gains, where applicable, as part of a regular fixed quarterly distribution to our shareholders that is intended to distribute an amount consistent with our total returns in relation to NAV over time, or the Managed Distribution Plan. Distributions following our deregistration as an investment company are no longer subject to our Managed Distribution Plan, which ceased to be effective as of that time. Consistent with the Managed Distribution Plan (when effective) and our currently effective distribution policy, our distributions to common shareholders may consist of ordinary income (net investment income and short term capital gains), a portion of the estimated realized long term capital gains or return of capital, which is not taxable. To the extent net realized capital gains, if any, can be offset by capital loss carry forwards, it is our policy not to distribute such gains. During the year ended December 31, 2020, we had substantial investments in REITs, which are generally not subject to U.S. federal income taxes. Distributions that we receive from REITs can be classified as ordinary income, capital gain income or return of capital by the REITs that make these distributions to us. We have excluded from our investment income the portions of the distributions received from REITs classified by those REITs as capital gain income or return of capital. We have included in our "net realized gain on investments" that portion of the distributions received from REITs that is classified by those REITs as capital gain income. We credited "net change in unrealized appreciation on investments" with that portion of the distributions received from REITs that is classified by those REITs as return of capital. In addition, if we use capital loss carryforwards to offset capital gains, a portion of our distribution to common shareholders may be classified as ordinary income for U.S. federal income tax purposes. Further, our distributions to common shareholders for the years ended December 31, 2020 and 2019 did not exceed the aggregate of the cash distributions we received from our investments and capital gains as a result of trading activities less our expenses and distributions to preferred shareholders. The classifications of distributions received from our investments were as follows: Year ended Year ended December 31, December 31, 2020 2019 Ordinary income (1) $ 7,720,259 $ 11,845,727 Capital gain income (2) 1,926,594 2,273,809 Return of capital (3) 2,997,332 4,989,497 $ 12,644,185 $ 19,109,033 (1) Reported as investment income in our Consolidated Statement of Operations. (2) Included in net realized gain on investments, net of tax, in our Consolidated Statement of Operations. (3) Included in net change in unrealized gain on investments in our Consolidated Statement of Operations. Only distributions in excess of accumulated tax basis earnings and profits are reported in the financial statements as a return of capital for tax purposes. The tax character of distributions during the years ended December 31, 2020 and December 31, 2019 were as follows: Year ended Year ended December 31, December 31, 2020 2019 Ordinary income $ 1,786,150 $ 5,431,697 Long term capital gains 4,964,033 3,541,809 Return of capital — 5,132,546 $ 6,750,183 $ 14,106,052 As of December 31, 2020, the components of distributable earnings on a U.S. federal income tax basis were as follows: Undistributed ordinary income $ — Undistributed net long term capital gains $ 7,997,377 Net unrealized gain (loss) $ — Capital losses generated are carried forward indefinitely, and retain the character of the original loss. Net capital loss carryforwards may be applied against any net realized taxable gains in succeeding years where applicable. During the year ended December 31, 2020, we utilized net capital loss carryforwards of $209,830. At December 31, 2020, our accumulated capital loss carryovers that can be used to offset future realized long term capital gains were $1,140,262. |
Concentration, Interest Rate an
Concentration, Interest Rate and Illiquidity Risk | 12 Months Ended |
Dec. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
Concentration, Interest Rate and Illiquidity Risk | 8. Concentration, Interest Rate and Illiquidity Risk As of December 31, 2020, our investments were concentrated in income producing debt securities, primarily first mortgage whole loans secured by middle market and transitional CRE. All our loans held were made in U.S. dollars and earn interest at floating rates based on London Interbank Offer Rate, or LIBOR, plus a premium. Accordingly, we are exposed to interest rate risk for changes in U.S. dollar based short-term rates, specifically LIBOR. As LIBOR decreases, our risk is partially mitigated by interest rate floor provisions in our loan agreements with borrowers. In addition, upon repayment from our borrowers we are vulnerable to decreases in interest rate premiums due to market conditions at the time any such repayment proceeds are reinvested. LIBOR is currently expected to be phased out for new contracts by December 31, 2021 and for pre-existing contracts by June 30, 2023. We currently expect that the determination of interest under our loan agreements with our borrowers would be revised as provided under the agreements or amended as necessary to provide for an interest rate that approximates the existing interest rate as calculated in accordance with LIBOR. Despite our current expectations, we cannot be sure that, if LIBOR is phased out or transitioned, the changes to the determination of interest under our agreements would approximate the current calculation in accordance with LIBOR. Our mortgage loans are considered illiquid securities for which no secondary market is readily available. The lack of liquidity of these investments may make it difficult to sell such investments if the need or desire arises. If we are required to liquidate all or a portion of our portfolio quickly, we may incur losses. |
Advisory and Administration Agr
Advisory and Administration Agreements and Other Transactions with Affiliates; Trustee Compensation; Other Agreements | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Related Party Transactions [Abstract] | ||
Advisory and Administration Agreements and Other Transactions with Affiliates; Trustee Compensation; Other Agreements | Management Agreement with our Manager We have no employees. The personnel and various services we require to operate our business are provided to us by our Manager, pursuant to a management agreement, which provides for the day to day management of our operations by our Manager, subject to the oversight and direction of our Board of Trustees. Prior Agreements with RMR Advisors Administration Agreement. Prior to its merger with our Manager on January 6, 2021, RMR Advisors LLC, or RMR Advisors, performed administrative functions for us pursuant to an administration agreement with us. RMR Advisors was also a party to a subadministration agreement with State Street Bank and Trust Company, or State Street, to perform substantially all fund accounting and other administrative services for us. Under the administration agreement, RMR Advisors was entitled to reimbursement of the cost of providing administrative services. On January 6, 2021, RMR Advisors merged with and into our Manager, with our Manager being the surviving entity, and our Manager assumed the administration agreement with us and the subadministration agreement with State Street. Each of those agreements was terminated, effective March 16, 2021. We incurred administration service fees of $24 for the three months ended March 31, 2020, all of which related to the subadministration service fees payable by RMR Advisors to State Street and reimbursable by us; we did not incur any additional administration service fees beyond those reimbursable amounts for that period. Investment Advisory Agreement. Prior to January 5, 2021, RMR Advisors provided us with a continuous investment program, made day to day investment decisions and generally managed our business affairs in accordance with our investment objectives and policies as a registered investment company pursuant to an investment advisory agreement. The investment advisory agreement was terminated on January 5, 2021 with our deregistration as an investment company. Pursuant to the investment advisory agreement, RMR Advisors was compensated at an annual rate of 0.85% of our average daily managed assets. We incurred advisory fees of $705 for the three months ended March 31, 2020 and for the period from January 1, 2021 to January 5, 2021, we incurred advisory fees of $22 which is included in base management fees in our condensed consolidated statement of operations. For the three months ended March 31, 2020, we incurred internal audit and compliance costs reimbursable to RMR Advisors of $34. Current Management Agreement with our Manager Effective January 5, 2021, our Manager provides services to us pursuant to a new management agreement. We recognized base management fees of $715 for the three months ended March 31, 2021. Pursuant to the terms of our management agreement, no management incentive fees are payable until the first full quarter following the effective date of the management agreement and, thereafter, any management incentive fees would be subject to our Manager earning those fees in accordance with the management agreement. Our Manager, and not us, is responsible for the costs of its employees who provide services to us, including the cost of our Manager’s personnel who originate our loans, unless any such payment or reimbursement is specifically approved by a majority of our Independent Trustees, is a shared services cost or relates to awards made under any equity compensation plan adopted by us. We are required to pay or to reimburse our Manager and its affiliates for all other costs and expenses of our operations. Some of these overhead, professional and other services are provided by The RMR LLC Group, or RMR LLC, pursuant to a shared services agreement between our Manager and RMR LLC. We reimburse our Manager for shared services costs our Manager pays to RMR LLC. These reimbursements include an allocation of the cost of personnel employed by RMR LLC and our share of RMR LLC’s costs for providing our internal audit function. These shared services costs are subject to approval by a majority of our Independent Trustees at least annually. We incurred shared services costs of $352 payable to our Manager for the three months ended March 31, 2021. We include these amounts in reimbursement of shared services expenses or general and administrative expenses, as applicable, in our condensed consolidated statements of operations. Contemporaneously with the execution of the Merger Agreement, we, TRMT and TRA entered into the TRA Letter Agreement, pursuant to which, on the terms and subject to conditions contained therein, we, TRMT and TRA have acknowledged and agreed that, effective upon consummation of the Merger, TRMT shall have terminated its management agreement with TRA, and TRA shall have waived its right to receive payment of the termination fee pursuant to such agreement. In consideration of this waiver, we have agreed that, effective upon consummation of the Merger and the termination of TRMT’s management agreement with TRA, certain of the expenses TRA had paid on behalf of TRMT pursuant to such management agreement will be included in the “Termination Fee” under and as defined in our existing management agreement with TRA. The TRA Letter Agreement further provides that such termination by TRMT and waiver by TRA shall apply only in respect of the Merger and will not apply in respect of any competing proposal or superior proposal (as those terms are defined in the Merger Agreement) or to any other transaction or arrangement. See Note 1 for further information regarding the TRA Letter Agreement and the Merger. | Note B Advisory and Administration Agreements and Other Transactions with Affiliates; Trustee Compensation; Other Agreements We had an investment advisory agreement with RMR Advisors LLC, or RMR Advisors, to provide us with a continuous investment program, to make day to day investment decisions and to generally manage our business affairs in accordance with our investment objectives and policies. This agreement was terminated on January 5, 2021 in connection with our deregistration as an investment company. Pursuant to this agreement, RMR Advisors was compensated at an annual rate of 0.85% of our average daily managed assets. Managed assets means our total assets less liabilities other than any indebtedness entered into for purposes of leverage. Thus, for purposes of calculating managed assets, our revolving credit facility and the liquidation preference of our preferred shares were not considered a liability and they were considered indebtedness entered into for purposes of leverage. We incurred advisory fees of $2,363,603 for the year ended December 31, 2020. On January 5, 2021, we terminated this investment advisory agreement and entered into a management agreement, or Management Agreement, with Tremont Realty Advisors LLC, or our Manager, effective January 5, 2021, or the Effective Date, to manage our day-to-day operations, subject to the oversight and direction of our Board of Trustees. Under the terms of the Management Agreement: 1. Base Management Fee: We are required to pay our Manager an annual base management fee equal to 1.5% of our equity, payable in cash quarterly (0.375% per quarter) in arrears. Under the Management Agreement, "equity" means (a) the sum of (i) our net asset value as of the Effective Date, plus (ii) the net proceeds received by us from any future sale or issuance of our shares of beneficial interest, plus (iii) our cumulative core earnings (as defined below) for the period commencing on the Effective Date to the end of the applicable most recent completed calendar quarter, less (b) (i) any distributions previously paid to holders of our common shares, (ii) any incentive fee previously paid to our Manager and (iii) any amount that we may have paid to repurchase our common shares. All items in the foregoing sentence (other than clause (a)(iii)) are calculated on a daily weighted average basis. 2. Incentive Fee: Starting in the calendar quarter ending March 31, 2021, we are required to pay our Manager quarterly an incentive fee in arrears in cash equal to the difference between: (a) the product of (i) 20% and (ii) the difference between (A) our core earnings for the most recent 12 month period (or such lesser number of completed calendar quarters, if applicable), including the calendar quarter (or part thereof) for which the calculation of the incentive fee is being made, and (B) the product of (1) our equity in the most recent 12 month period (or such lesser number of completed calendar quarters, if applicable), including the calendar quarter (or part thereof) for which the calculation of the incentive fee is being made, and (2) 7% per year and (b) the sum of any incentive fees paid to our Manager with respect to the first three calendar quarters of the most recent 12 month period (or such lesser number of completed calendar quarters preceding the applicable period, if applicable). No incentive fee shall be payable with respect to any calendar quarter unless our core earnings for the 12 most recently completed calendar quarters (or such lesser number of completed calendar quarters from the Effective Date) in the aggregate is greater than zero. The incentive fee may not be less than zero. 3. Termination Fee. In the event the Management Agreement is terminated by us without a cause event or by our Manager for a material breach, we will be required to pay our Manager a termination fee equal to (a) three times the sum of (i) the average annual base management fee and (ii) the average annual incentive fee, in each case paid or payable to our Manager during the 24 month period immediately preceding the most recently completed calendar quarter prior to the date of termination or, if such termination occurs within 24 months of its initial commencement, the base management fee and the incentive fee will be annualized for such two year period based on such fees earned by our Manager during the period from the Effective Date through the most recently completed calendar quarter prior to the termination date, plus (b) $1,600,000. No termination fee will be payable if the Management Agreement is terminated by us for a cause event or by our Manager without our material breach. 4. Expense Reimbursement. Our Manager will be responsible for the costs of our Manager’s employees who provide services to us, including the cost of our Manager’s personnel who originate our loans, unless any such payment or reimbursement is specifically approved by a majority of our Independent Trustees (as defined under our governing documents) or is a shared services cost. We are required to pay or to reimburse our Manager and its affiliates for all other costs and expenses of our operations, including but not limited to, the costs of rent, utilities, office furniture, equipment, machinery and other overhead type expenses, the costs of legal, accounting, auditing, tax planning and tax return preparation, consulting services, diligence costs related to our investments, investor relations expenses and other professional services, and other costs and expenses not specifically required under the management agreement to be borne by our Manager. Some of these overhead, professional and other services will be provided by The RMR Group LLC, or RMR LLC, pursuant to a shared services agreement between our Manager and RMR LLC. In addition, we will also pay our pro rata portion of internal audit costs incurred by RMR LLC on our behalf and on behalf of other public companies to which RMR LLC or its affiliates provides management services. 5. Term and Termination. The initial term of the Management Agreement ends on December 31, 2023, and the agreement will automatically renew for successive one year terms beginning January 1, 2024 and each January 1 thereafter, unless it is sooner terminated upon written notice delivered no later than 180 days prior to a renewal date by the affirmative vote of at least two thirds (2/3) of our Independent Trustees based upon a determination that (a) our Managers’ performance is unsatisfactory and materially detrimental to us or (b) the base management fee and incentive fee, taken as a whole, payable to our Manager under the Management Agreement are not fair to us (provided that, in the instance of (b), our Manager will be afforded the opportunity to renegotiate the base management fee and incentive fee prior to termination). The Management Agreement may be terminated by our Manager before each annual renewal upon written notice delivered to our Board of Trustees no later than 180 days prior to an annual renewal date. Our Manager may also terminate the Management Agreement if we become required to register as an investment company under the 1940 Act, with such termination deemed to occur immediately before such event. In addition, our Manager may terminate the Management Agreement upon 60 days’ written notice for a material breach by us, as defined in the Management Agreement, which includes if we default in the performance or observance of any material term, condition or covenant contained in the Management Agreement, the consequence of which was materially adverse to our Manager and which did not result from and was not attributable to any action, or failure to act, of our Manager and the default continues for a period of 30 days after written notice to us requesting that the default be remedied within that period, we materially reduce our Managers’ duties and responsibilities or scope of its authority under the Management Agreement or we cease or take steps to cease to conduct the business of originating or investing in commercial real estate loans. 6. Other Provisions. We have agreed to indemnify our Manager and its affiliates, including RMR LLC, its members, officers, employees and affiliates against liabilities relating to acts or omissions of such party with respect to the provision of services to us, except to the extent such provision of services was in bad faith or was grossly negligent. In addition, the Management Agreement provides that any disputes, as defined in the agreements, arising out of or relating to the agreement or the provision of services pursuant thereto, upon the demand of a party to the dispute, shall be subject to mandatory arbitration in accordance with procedures provided in the agreement. For purposes of the calculation of base management fees and incentive fees payable to our Manager under the Management Agreement, "core earnings" is defined as net income (or loss) attributable to common shareholders computed in accordance with GAAP, including realized losses not otherwise included in GAAP net income (loss), and excluding: (a) the incentive fees earned by our Manager; (b) depreciation and amortization (if any); (c) non cash equity compensation expense (if any); (d) unrealized gains, losses and other similar non-cash items that are included in net income for the period of the calculation (regardless of whether such items are included in or deducted from net income or in other comprehensive income or loss under GAAP); and (e) one-time events pursuant to changes in GAAP and certain material non cash income or expense items (in each case after discussions between our Manager and our Independent Trustees and approved by a majority of such Independent Trustees). Pursuant to the terms of the Management Agreement, the exclusion of depreciation and amortization from the calculation of core earnings shall only apply to owned real estate. Our shares of beneficial interest that are entitled to a specific periodic distribution or have other debt characteristics will not be included in equity for the purpose of calculating incentive fees payable to our Manager. Instead, the aggregate distribution amount that accrues to such shares during the calendar quarter of such calculation will be subtracted from core earnings for purposes of calculating incentive fees, unless such distribution is otherwise already excluded from core earnings. Equity and core earnings as defined in the Management Agreement are non-GAAP financial measures and may be different than our shareholders’ equity and net income calculated according to GAAP. Until January 6, 2021, RMR Advisors also performed administrative functions for us pursuant to an administration agreement with us. RMR Advisors also entered into a subadministration agreement with State Street Bank and Trust Company, or State Street, to perform substantially all fund accounting and other administrative services for us. Under the administration agreement, RMR Advisors was entitled to reimbursement of the cost of providing administrative services. We paid RMR Advisors $76,757 for subadministrative fees charged by State Street for the year ended December 31, 2020. On January 6, 2021, RMR Advisors merged with and into our Manager, with our Manager being the surviving entity. Our Manager has assumed the administration agreement with us and the subadministration agreement with State Street. Each trustee who is not a director, officer or employee of Tremont Realty Advisors, and who is not an "interested person" of us, as defined under the 1940 Act, for the year ended December 31, 2020 is considered to be a "disinterested trustee". We pay cash compensation to our disinterested trustees, consisting primarily of an annual retainer. We incurred trustee fees and expenses of $55,347 for the year ended December 31, 2020. Our Board of Trustees, and separately the disinterested trustees, has authorized us to make payments to RMR Advisors and, commencing January 5, 2021, our Manager for costs, related to our compliance and internal audit programs. We incurred compliance and internal audit expenses of $144,543, which includes our allocated portion for compliance and internal audit related costs for the year ended December 31, 2020. |
Securities Transactions
Securities Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Securities Transactions. | |
Securities Transactions | Note C Securities Transactions Cost of purchases and proceeds from sales of investments, excluding short-term securities, and brokerage commissions on these transactions during the year ended December 31, 2020, were as follows: Brokerage Purchases (1) Sales (1) Commissions $ 10,077,968 $ $ (1) Includes the cost of brokerage commissions we paid for purchases and sales of securities of $2,039 and $179,106 respectively. These amounts are recorded as the cost of security for purchases and reduced from net proceeds while recording sales. |
Preferred Shares
Preferred Shares | 12 Months Ended |
Dec. 31, 2020 | |
Preferred Shares | |
Preferred Shares | Note D Preferred Shares In November 2020, we redeemed all 667 of our issued and outstanding auction rate preferred shares (64 Series M, 438 Series T, 47 Series W, 91 Series Th and 27 Series F auction rate preferred shares) for a total liquidation preference of $16,675,000, plus accrued and unpaid dividends. |
Capital Share Transactions
Capital Share Transactions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Capital Share Transactions | ||
Capital Share Transactions | Shareholders' EquityOn April 15, 2021, we declared a quarterly distribution of $0.15 per common share for the first quarter of 2021, or approximately $1,530, to shareholders of record on April 26, 2021. We expect to pay this distribution on or about May 20, 2021. | Note E Capital Share Transactions As of December 31, 2020, 10,202,009 common shares, $.001 par value per share, were issued and outstanding. The Trust had no capital stock transactions during the year ended December 31, 2020. |
Revolving Credit Facility
Revolving Credit Facility | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Debt Disclosure [Abstract] | ||
Revolving Credit Facility | Debt AgreementsOn February 18, 2021, one of our wholly owned subsidiaries entered into a master repurchase agreement, or the Master Repurchase Agreement, with UBS AG, or UBS, for a master repurchase facility, or the Master Repurchase Facility, pursuant to which we may sell to UBS, and later repurchase, commercial mortgage loans, or the Purchased Assets. The expiration date of the Master Repurchase Agreement is February 18, 2024, unless extended or earlier terminated in accordance with the terms of the Master Repurchase Agreement. Pursuant to the Master Repurchase Agreement, we will pay UBS a non-refundable upfront fee that is equal to 0.50% of the applicable tranche amount on each Purchase Date (as each term is defined in the Master Repurchase Agreement). While the Master Repurchase Facility has no maximum facility amount, we expect the advancements under the Master Repurchase Facility to not exceed our equity, which is as of March 31, 2021 is $193,244. Our equity will change from time-to-time and may increase or decrease. We expect that the size of our Master Repurchase Facility may similarly change as our equity changes. Under the Master Repurchase Facility, the initial purchase price paid by UBS for each Purchased Asset is up to 75% of the lesser of the market value of the Purchased Asset and the unpaid principal balance of such Purchased Asset, subject to UBS’s approval. Upon the repurchase of a Purchased Asset, we are required to pay UBS the outstanding purchase price of the Purchased Asset, accrued interest and all accrued and unpaid expenses of UBS relating to such Purchased Assets. The pricing rate (or interest rate) relating to a Purchased Asset is equal to one month LIBOR plus a customary premium within a fixed range, determined by the debt yield and property type of the Purchased Asset’s real estate collateral. UBS has the discretion under our Master Repurchase Agreement to make advancements at margins higher than 75%. In connection with our Master Repurchase Agreement, we entered into a guaranty, or the Guaranty, which requires us to guarantee 25% of the aggregate repurchase price, and 100% of losses in the event of certain bad acts as well any costs and expenses of UBS related to our Master Repurchase Agreement. The Guaranty also requires us to comply with customary financial covenants, which include the maintenance of a minimum tangible net worth, minimum cash liquidity and a total indebtedness to stockholders equity ratio. The Master Repurchase Facility also contains margin maintenance provisions that provide UBS with the right, in certain circumstances related to a Credit Event (as defined in the Master Repurchase Agreement) to redetermine the value of Purchased Assets. Where a decline in the value of such Purchased Assets has resulted in a margin deficit, UBS may require us to eliminate any margin deficit through a combination of Purchased Asset repurchases and cash transfers to UBS subject to UBS’s approval. As of March 31, 2021 we had no outstanding balance under our Master Repurchase Facility and as of April 30, 2021 we had a $23,172 aggregate outstanding principal balance under our Master Repurchase Facility. For the three months ended March 31, 2020, we recorded interest expense of $554 related to our revolving credit facility, or the Facility, with BNP Paribas Prime Brokerage International Ltd, or PBL. In November 2020, we repaid all outstanding amounts and terminated the Facility with PBL. | Note F Revolving Credit Facility In November 2020, we repaid all outstanding amounts and terminated our $88,000,000 revolving credit facility, or the Facility, with BNP Paribas Prime Brokerage International, Ltd., or PBL. During 2020, the average outstanding daily balance under the Facility was $86,673,780 at a weighted average borrowing cost of 1.51%. The Facility with PBL permitted, subject to certain conditions, PBL to rehypothecate portfolio securities pledged by us up to the amount of the loan balance outstanding. We received dividends and interest on these rehypothecated securities. We received a portion of the fees earned by PBL in connection with the rehypothecation of portfolio securities. During the year ended December 31, 2020, we earned $41,814 in fees from rehypothecated securities, which we recorded as other income in our Consolidated Statement of Operations under other income. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events | |
Subsequent Events | Note G Subsequent Events In January 2021, we closed a first mortgage bridge loan of $10,900,000 to finance the acquisition of a nine story multi-tenant office building with 83,000 square feet located in Miami, Florida. This loan requires the borrower to pay interest at per annum floating rate of LIBOR plus a premium of 450 basis points. This floating rate loan was fully funded at closing and has a two year term with two one-year extension options, subject to the borrower meeting certain conditions. In January 2021, we closed a first mortgage bridge loan of $54,575,000 to refinance two manufactured housing communities comprised of 1,200 home sites located in Cleveland and Olmsted Falls, Ohio. This loan requires the borrower to pay interest at per annum floating rate of LIBOR plus a premium of 400 basis points. This floating rate loan includes an initial funding of $44,615,000 and a future funding allowance of $9,960,000 for capital improvements to further enhance these communities and has a three year term with two one-year extension options, subject to the borrower meeting certain conditions. We entered into a master repurchase agreement, with UBS AG, or UBS, on February 18, 2021, or the Master Repurchase Agreement. Under the Master Repurchase Agreement, UBS will purchase the mortgage loans and advance up to 75% of the lesser of the market value of the mortgage asset or the unpaid principal balance of such mortgage asset, subject to UBS’s approval. In connection with our Master Repurchase Agreement, we entered into a guaranty, or the Guaranty, which requires us to guarantee 25% of the aggregate repurchase price, and 100% of losses in the event of certain bad acts as well any costs and expenses of UBS related to our Master Repurchase Agreement. The Guaranty also requires us to comply with customary financial covenants, which include the maintenance of a minimum tangible net worth, minimum cash liquidity and a total indebtedness to stockholders equity ratio. These maintenance provisions provide UBS with the right, in certain circumstances related to a credit event, as defined in our Master Repurchase Agreement, to re-determine the market value of purchased assets. Where a decline in the market value of purchased assets has resulted in a margin deficit, UBS may require us to eliminate such margin deficit through a combination of purchased asset repurchases and cash transfers to UBS, subject to UBS’s approval. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | ||
Schedule of Loans | The table below provides overall statistics for our loan portfolio as of March 31, 2021 and December 31, 2020: As of March 31, 2021 (Successor Basis) As of December 31, 2020 (Predecessor Basis) Number of loans 7 5 Total loan commitments $ 177,195 $ 111,720 Unfunded loan commitments (1)(2) $ 28,613 $ 18,857 Principal balance (2) $ 148,652 $ 92,863 Unamortized net deferred origination fees $ (1,405) $ (984) Carrying value $ 147,247 $ 91,879 Weighted average coupon rate 4.99 % 5.08 % Weighted average all in yield (3) 5.65 % 5.71 % Weighted average maximum maturity (years) (4) 4.3 4.2 Weighted average risk rating 3.0 3.0 Weighted average LTV (5) 67 % 68 % (1) Unfunded loan commitments are primarily used to finance property and building improvements and leasing capital and are generally funded over the term of the loan. (2) The principal balance at March 31, 2021 includes $69 of capitalized interest that does not reduce the amount of unfunded loan commitments. (3) All in yield represents the yield on a loan, excluding any repurchase debt funding applicable to the loan and including amortization of deferred fees over the initial term of the loan. (4) Maximum maturity assumes all borrower loan extension options have been exercised, which options are subject to the borrower meeting certain conditions. (5) LTV represents the initial loan amount divided by the underwritten in-place value of the underlying collateral at closing. The table below represents our loan activities during the three months ended March 31, 2021: Principal Balance Deferred Fees Carrying Value Balance at December 31, 2020 (Predecessor Basis) $ 92,863 $ (984) $ 91,879 Additional funding 274 — 274 Originations 55,515 (675) 54,840 Net amortization of deferred fees — 254 254 Balance at March 31, 2021 (Successor Basis) $ 148,652 $ (1,405) $ 147,247 March 31, 2021 December 31, 2020 Property Type Number of Loans Carrying Value Percentage of Value Number of Loans Carrying Value Percentage of Value Office (1) 3 $ 48,979 33 % 2 $ 38,106 41 % Multifamily 1 44,119 30 % — — — % Lab 2 31,139 21 % 2 31,078 34 % Retail 1 17,344 12 % 1 17,029 19 % Industrial (1) — 5,666 4 % — 5,666 6 % 7 $ 147,247 100 % 5 $ 91,879 100 % (1) Our loan investment secured by a mixed use property consisting of office space and an industrial warehouse in Aurora, IL is classified as office for the purpose of counting the number of loans in our portfolio. The carrying value of this loan investment is reflected in office and industrial based on the fair value of the buildings at the time of origination relative to the total fair value of the property. March 31, 2021 December 31, 2020 Geographic Location Number of Loans Carrying Value Percentage of Value Number of Loans Carrying Value Percentage of Value Midwest 3 $ 87,960 60 % 2 $ 43,772 48 % West 2 35,167 24 % 2 34,826 38 % South 2 24,120 16 % 1 13,281 14 % 7 $ 147,247 100 % 5 $ 91,879 100 % March 31, 2021 (Successor Basis) December 31, 2020 (Predecessor Basis) Risk Rating Number of Loans Carrying Value Number of Loans Carrying Value 1 — $ — — $ — 2 — — — — 3 7 147,247 5 91,879 4 — — — — 5 — — — — 7 $ 147,247 5 $ 91,879 | The following table allocates the carrying value of our loan portfolio at December 31, 2020 based on our internal risk rating policy: December 31, 2020 Number of Risk Rating Loans Carrying Value 1 — $ — 2 — — 3 5 91,878,969 4 — — 5 — — 5 $ 91,878,969 |
Schedule of reconciliation of investments in which significant unobservable inputs | The following table provides a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining value: Investments in Mortgage Loan Characterized as Level 3 Balance, as of December 31, 2019 $ — Loan originations (Level 3) 91,878,969 Balance, as of December 31, 2020 $ 91,878,969 Net change in unrealized appreciation/depreciation from investments still held as of December 31, 2020 $ — |
Taxes (Tables)
Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of current income tax expense | Current income tax expense as shown on our consolidated statement of operations is comprised of as described in the table below: Year ended December 31, 2020 Income tax expense Federal $ 1,746,210 State 639,790 Total $ 2,386,000 |
Distributable Earnings (Tables)
Distributable Earnings (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Investment Company, Distributable Earnings [Abstract] | |
Schedule of classifications of distributions received from investments | The classifications of distributions received from our investments were as follows: Year ended Year ended December 31, December 31, 2020 2019 Ordinary income (1) $ 7,720,259 $ 11,845,727 Capital gain income (2) 1,926,594 2,273,809 Return of capital (3) 2,997,332 4,989,497 $ 12,644,185 $ 19,109,033 (1) Reported as investment income in our Consolidated Statement of Operations. (2) Included in net realized gain on investments, net of tax, in our Consolidated Statement of Operations. (3) Included in net change in unrealized gain on investments in our Consolidated Statement of Operations. |
Schedule of tax character of distributions | The tax character of distributions during the years ended December 31, 2020 and December 31, 2019 were as follows: Year ended Year ended December 31, December 31, 2020 2019 Ordinary income $ 1,786,150 $ 5,431,697 Long term capital gains 4,964,033 3,541,809 Return of capital — 5,132,546 $ 6,750,183 $ 14,106,052 |
Schedule of components of distributable earnings on a U.S. federal income tax basis | As of December 31, 2020, the components of distributable earnings on a U.S. federal income tax basis were as follows: Undistributed ordinary income $ — Undistributed net long term capital gains $ 7,997,377 Net unrealized gain (loss) $ — |
Securities Transactions (Tables
Securities Transactions (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Securities Transactions. | |
Schedule of Investments | Cost of purchases and proceeds from sales of investments, excluding short-term securities, and brokerage commissions on these transactions during the year ended December 31, 2020, were as follows: Brokerage Purchases (1) Sales (1) Commissions $ 10,077,968 $ $ Includes the cost of brokerage commissions we paid for purchases and sales of securities of $2,039 and $179,106 respectively. These amounts are recorded as the cost of security for purchases and reduced from net proceeds while recording sales. |
Basis of Presentation (Details)
Basis of Presentation (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Percent ownership | 100.00% | 100.00% |
Portfolio Valuation (Details)
Portfolio Valuation (Details) | Dec. 31, 2020USD ($) |
Portfolio Valuation Disclosure [Abstract] | |
Amount of shares in State Street Institutional U.S. Government Money Market Fund | $ 21,441,093 |
Fund value | $ 21,441,093 |
Fair Value Measurements - Loan
Fair Value Measurements - Loan Risk Ratings (Details) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021USD ($)loan | Dec. 31, 2020USD ($)loan | |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of Loans | loan | 7 | 5 |
Carrying value | $ | $ 147,247 | $ 91,879 |
Weighted average risk rating | 3 | 3 |
Risk Rating, 3 | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of Loans | loan | 7 | 5 |
Carrying value | $ | $ 147,247 | $ 91,879 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation of investments in which significant unobservable inputs (Level 3) (Details) | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Fair Value Disclosures [Abstract] | |
Loan originations (Level 3) | $ 91,878,969 |
Balance, as of December 31, 2020 | 91,878,969 |
Fair value assets transfers from level 1 to level 2 | 0 |
Fair value assets transfers from level 2 to level 1 | 0 |
Fair value assets transfers in and out of level 3 | 0 |
Fair value liabilities transfers from level 1 to level 2 | 0 |
Fair value liabilities transfers from level 2 to level 1 | 0 |
Fair value liabilities transfers in and out of level 3 | $ 0 |
Taxes (Details)
Taxes (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Income tax examination period | 4 years | |
Provision for income taxes | $ 18,000 | $ 2,386,000 |
Undistributed capital gains | 7,997,377 | |
Aggregate cost of investments that generated these undistributed gains for U.S. federal income tax purposes | $ 334,389,280 |
Taxes - Income tax expense (Det
Taxes - Income tax expense (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Federal | $ 1,746,210 | |
State | 639,790 | |
Total | $ 18,000 | $ 2,386,000 |
Distributable Earnings (Details
Distributable Earnings (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Investment Company, Distributable Earnings [Abstract] | ||
Ordinary income | $ 7,720,259 | $ 11,845,727 |
Capital gain income | 1,926,594 | 2,273,809 |
Return of capital | 2,997,332 | 4,989,497 |
Total | $ 12,644,185 | $ 19,109,033 |
Distributable Earnings - Tax ch
Distributable Earnings - Tax character of distributions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Tax Character Of Distributions [Abstract] | ||
Ordinary income | $ 1,786,150 | $ 5,431,697 |
Long term capital gains | 4,964,033 | 3,541,809 |
Return of capital | 5,132,546 | |
Investment company tax on distributable earnings total | $ 6,750,183 | $ 14,106,052 |
Distributable Earnings - Distri
Distributable Earnings - Distributable earnings on a U.S. federal income tax basis (Details) | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Components of Distributable Earnings on a U.S. Federal Income Tax Basis [Abstract] | |
Undistributed net long term capital gains | $ 7,997,377 |
Amount of utilized net capital loss carryforwards | 209,830 |
Amount of accumulated capital loss carryovers that can be used to offset future realized long term capital gains | $ 1,140,262 |
Advisory and Administration A_2
Advisory and Administration Agreements and Other Transactions with Affiliates; Trustee Compensation; Other Agreements (Details) | Jan. 05, 2021USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($)item | Jan. 04, 2021 |
Related Party Transaction [Line Items] | ||||
Administrative | $ 24,000 | $ 76,757 | ||
Annual rate, percent of average daily managed assets | 0.85% | |||
Advisory fees | $ 22,000 | 705,000 | 2,363,603 | |
Compliance and internal audit | $ 34,000 | $ 144,543 | ||
Percent of annual base management fee | 1.50% | |||
Percent of annual base management fee per quarter | 0.375% | |||
Incentive Fee calculation, Percentage of product multiplication factor | 20.00% | |||
Incentive Fee calculation, Term of core earnings | 12 months | |||
Incentive Fee calculation, Term of equity | 12 months | |||
Incentive Fee calculation, Percentage of annual fee | 7.00% | |||
Incentive Fee calculation, Number of calendar quarters of the most recent 12 month period | item | 3 | |||
Incentive fee payable | $ 0 | |||
Termination Fee, Number of times defined for calculation of fees | item | 3 | |||
Incentive Fee calculation, Term of incentive fee paid | 24 months | |||
Termination Fee, Period of annual base management fee and incentive fee payment | 24 months | |||
Termination Fee, Annualized period for base management fee and the incentive fee | 2 years | |||
Termination Fee, Threshold amount | $ 1,600,000 | |||
Trustee fee and expenses | 55,347 | |||
State Street | ||||
Related Party Transaction [Line Items] | ||||
Advisory fees | $ 76,757 |
Securities Transactions (Detail
Securities Transactions (Details) | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Securities Transactions. | |
Purchases | $ 10,077,968 |
Sales | 302,797,118 |
Brokerage Commissions | 181,145 |
Brokerage commissions paid for purchases of securities | 2,039 |
Brokerage commissions paid for sales of securities | $ 179,106 |
Preferred Shares (Details)
Preferred Shares (Details) - USD ($) | 1 Months Ended | |||||
Nov. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Preferred Shares | ||||||
Auction rate preferred stock, shares redeemed | 667 | |||||
Preferred shares liquidation preference | $ 16,675,000 | $ 16,675,000 | $ 16,675,000 | $ 16,675,000 | $ 16,675,000 | $ 16,675,000 |
Series M preferred shares | ||||||
Preferred Shares | ||||||
Auction rate preferred stock, shares redeemed | 64 | |||||
Series T preferred shares | ||||||
Preferred Shares | ||||||
Auction rate preferred stock, shares redeemed | 438 | |||||
Series W preferred shares | ||||||
Preferred Shares | ||||||
Auction rate preferred stock, shares redeemed | 47 | |||||
Series Th preferred shares | ||||||
Preferred Shares | ||||||
Auction rate preferred stock, shares redeemed | 91 | |||||
Series F preferred shares | ||||||
Preferred Shares | ||||||
Auction rate preferred stock, shares redeemed | 27 |
Capital Share Transactions (Det
Capital Share Transactions (Details) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Capital Share Transactions | |||||
Common shares issued | 10,202,009 | 10,202,009 | |||
Common shares outstanding | 10,202,009 | 10,202,009 | 10,202,000 | 10,202,009 | 10,202,009 |
Common shares, par value | $ 0.001 | $ 0.001 |
Revolving Credit Facility (Deta
Revolving Credit Facility (Details) - Revolving Credit Facility - USD ($) | 1 Months Ended | 12 Months Ended |
Nov. 30, 2020 | Dec. 31, 2020 | |
Line of Credit Facility [Line Items] | ||
Average outstanding daily balance under the Facility | $ 86,673,780 | |
Weighted average borrowing rate | 1.51% | |
BNP Paribas Prime Brokerage International, Ltd | ||
Line of Credit Facility [Line Items] | ||
Credit facility terminated | $ 88,000,000 | |
Fees from rehypothecated securities | $ 41,814 |
Subsequent Events (Details)
Subsequent Events (Details) | 1 Months Ended | |||
Jan. 31, 2021USD ($)ft²propertyOptions | Mar. 31, 2021USD ($) | Feb. 18, 2021 | Dec. 31, 2020USD ($) | |
Subsequent Event [Line Items] | ||||
Committed Principal Amount | $ 148,652,000 | $ 92,863,000 | ||
Mortgages And Related Assets | ||||
Subsequent Event [Line Items] | ||||
Percentage of loan guaranteed | 25.00% | |||
Debt Instrument, Loan Percentage Guaranteed In Event Of Certain Bad Acts | 100.00% | |||
Subsequent Event | Mortgages And Related Assets | ||||
Subsequent Event [Line Items] | ||||
Percentage of loan guaranteed | 25.00% | |||
Debt Instrument, Loan Percentage Guaranteed In Event Of Certain Bad Acts | 100.00% | |||
Subsequent Event | Mortgages And Related Assets | UBS AG | ||||
Subsequent Event [Line Items] | ||||
Minimum percentage of margin to advance | 75.00% | |||
Miami, Florida | Office | Mortgage bridge loan | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Committed Principal Amount | $ 10,900,000 | |||
Area of building | ft² | 83,000 | |||
Initial term | 2 years | |||
Number of extension options | Options | 2 | |||
Extension term | 1 year | |||
Miami, Florida | Office | Mortgage bridge loan | Subsequent Event | LIBOR | ||||
Subsequent Event [Line Items] | ||||
Basis spread on variable rate | 4.50% | |||
Cleveland and Olmsted Falls, Ohio | Manufactured housing communities | Mortgage bridge loan | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Committed Principal Amount | $ 54,575,000 | |||
Number of manufactured housing communities | property | 2 | |||
Number of home sites | property | 1,200 | |||
Initial term | 3 years | |||
Number of extension options | Options | 2 | |||
Extension term | 1 year | |||
Cleveland and Olmsted Falls, Ohio | Manufactured housing communities | Mortgage bridge loan | Subsequent Event | Initial Funding | ||||
Subsequent Event [Line Items] | ||||
Committed Principal Amount | $ 44,615,000 | |||
Cleveland and Olmsted Falls, Ohio | Manufactured housing communities | Mortgage bridge loan | Subsequent Event | Future Funding Allowance | ||||
Subsequent Event [Line Items] | ||||
Committed Principal Amount | $ 9,960,000 | |||
Cleveland and Olmsted Falls, Ohio | Manufactured housing communities | Mortgage bridge loan | Subsequent Event | LIBOR | ||||
Subsequent Event [Line Items] | ||||
Basis spread on variable rate | 4.00% |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS/CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES | Mar. 31, 2021USD ($)shares |
ASSETS | |
Cash and cash equivalents | $ 46,839,000 |
Restricted cash | 220,000 |
Loans held for investment, net | 147,247,000 |
Accrued interest receivable | 456,000 |
Prepaid expenses and other assets | 305,000 |
Total assets | 195,067,000 |
LIABILITIES AND SHAREHOLDERS' EQUITY | |
Accounts payable, accrued liabilities and deposits | 1,121,000 |
Due to related persons | 702,000 |
Total liabilities | 1,823,000 |
Commitments and contingencies | |
Shareholders' equity: | |
Common shares of beneficial interest, $0.001 par value per share; unlimited number of shares authorized; 10,202,009 shares issued and outstanding | 10,000 |
Additional paid in capital | 192,884,000 |
Cumulative net income | 350,000 |
Total shareholders' equity | 193,244,000 |
Total liabilities and shareholders' equity | 195,067,000 |
Composition of net assets attributable to common shares | |
Common shares, $0.001 par value per share; unlimited number of shares authorized | 10,000 |
Additional paid in capital | $ 192,884,000 |
Common shares outstanding (in shares) | shares | 10,202,009 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS/CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | |||||
Loans held for investment, cost | $ 91,879 | ||||
Common shares, par value (in dollars per share) | $ 0.001 | $ 0.001 | |||
Common shares issued (in shares) | 10,202,009 | 10,202,009 | |||
Common shares outstanding (in shares) | 10,202,009 | 10,202,009 | 10,202,000 | 10,202,009 | 10,202,009 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS/CONSOLIDATED STATEMENT OF OPERATIONS - USD ($) shares in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
INCOME FROM INVESTMENTS/INVESTMENT INCOME: | ||
Interest income from investments | $ 2,001,000 | |
Dividend income | $ 4,129,000 | |
Interest income | 21,000 | |
Other income | 15,000 | |
Total investment income | 4,165,000 | |
OTHER EXPENSES/EXPENSES: | ||
Base management fees | 715,000 | |
General and administrative expenses | 592,000 | |
Reimbursement of shared services expenses | 326,000 | |
Advisory | 705,000 | |
Legal | 37,000 | |
Compliance and internal audit | 34,000 | |
Shareholder reporting | 18,000 | |
Custodian | 24,000 | |
Administrative | 24,000 | |
Preferred share remarketing and auction fees | 18,000 | |
Audit | 12,000 | |
Trustees' fees and expenses | 15,000 | |
Other | 53,000 | |
Total expenses before interest expense | 940,000 | |
Interest expense | 554,000 | |
Total expenses | 1,494,000 | |
Total expenses | 1,633,000 | |
Income before income tax expense | 368,000 | |
Net investment income | 2,671,000 | |
Income tax expense | (18,000) | |
Net income | $ 350,000 | |
Weighted average common shares outstanding (in shares) | 10,202 | |
Net income per common share (in dollars per share) | $ 0.03 | |
Realized and change in unrealized gain (loss) on investments | ||
Net realized gain on investments | 915,000 | |
Net change in unrealized losses on investments | (123,346,000) | |
Net realized and change in unrealized losses on investments | (122,431,000) | |
Net decrease in net assets before preferred distributions resulting from operations | (119,760,000) | |
Distributions to preferred shareholders from net investment income | (126,000) | |
Net decrease in net assets attributable to common shares resulting from operations | $ (119,886,000) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS? EQUITY/CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS - USD ($) | Total | Common Shares | Additional Paid In Capital | Cumulative Net Income |
Beginning balance (in shares) at Dec. 31, 2018 | 10,202,009 | |||
Ending balance (in shares) at Dec. 31, 2019 | 10,202,009 | |||
Decrease in net assets resulting from operations | ||||
Net investment income | $ 4,896,213 | |||
Net realized gain on investments | 4,292,510 | |||
Net change in unrealized losses on investments | 61,744,128 | |||
Distributions to preferred shareholders from net investment income | (639,400) | |||
Net decrease in net assets attributable to common shares resulting from operations | 70,293,451 | |||
Investment Company, Distributable Earnings [Abstract] | ||||
Total distributions to common shareholders | (13,466,652) | |||
Total decrease in net assets attributable to common shares | 56,826,799 | |||
Beginning of period at Dec. 31, 2018 | 198,498,881 | |||
End of period at Dec. 31, 2019 | $ 255,326,000 | |||
Beginning balance (in shares) at Dec. 31, 2018 | 10,202,009 | |||
Ending balance (in shares) at Dec. 31, 2019 | 10,202,009 | |||
Investment Company, Distributable Earnings [Abstract] | ||||
Distributable earnings | $ (8,334,106) | |||
Ending balance (in shares) at Mar. 31, 2020 | 10,202,000 | |||
Decrease in net assets resulting from operations | ||||
Net investment income | $ 2,671,000 | |||
Net realized gain on investments | 915,000 | |||
Net change in unrealized losses on investments | (123,346,000) | |||
Distributions to preferred shareholders from net investment income | (126,000) | |||
Net decrease in net assets attributable to common shares resulting from operations | (119,886,000) | |||
Investment Company, Distributable Earnings [Abstract] | ||||
Total distributions to common shareholders | (3,367,000) | |||
Total decrease in net assets attributable to common shares | (123,253,000) | |||
End of period at Mar. 31, 2020 | $ 132,073,000 | |||
Beginning balance (in shares) at Dec. 31, 2019 | 10,202,009 | |||
Ending balance (in shares) at Mar. 31, 2020 | 10,202,000 | |||
Beginning balance (in shares) at Dec. 31, 2019 | 10,202,009 | |||
Ending balance (in shares) at Dec. 31, 2020 | 10,202,009 | 10,202,000 | ||
Ending balance at Dec. 31, 2020 | $ 192,894,000 | $ 10,000 | $ 192,884,000 | $ 0 |
Decrease in net assets resulting from operations | ||||
Net investment income | 2,775,539 | |||
Net realized gain on investments | 10,821,592 | |||
Net change in unrealized losses on investments | (69,278,340) | |||
Distributions to preferred shareholders from net investment income | (322,917) | |||
Net decrease in net assets attributable to common shares resulting from operations | (56,004,126) | |||
Investment Company, Distributable Earnings [Abstract] | ||||
Total distributions to common shareholders | (6,427,266) | |||
Total decrease in net assets attributable to common shares | (62,431,392) | |||
Beginning of period at Dec. 31, 2019 | 255,326,000 | |||
End of period at Dec. 31, 2020 | $ 192,894,000 | |||
Beginning balance (in shares) at Dec. 31, 2019 | 10,202,009 | |||
Ending balance (in shares) at Dec. 31, 2020 | 10,202,009 | 10,202,000 | ||
Investment Company, Distributable Earnings [Abstract] | ||||
Distributable earnings | $ (3,367,000) | |||
Distributable earnings | (6,427,266) | |||
Net income | $ 350,000 | 350,000 | ||
Ending balance (in shares) at Mar. 31, 2021 | 10,202,009 | 10,202,000 | ||
Ending balance at Mar. 31, 2021 | $ 193,244,000 | $ 10,000 | $ 192,884,000 | $ 350,000 |
Beginning balance (in shares) at Dec. 31, 2020 | 10,202,009 | 10,202,000 | ||
Ending balance (in shares) at Mar. 31, 2021 | 10,202,009 | 10,202,000 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 350,000 | |
Net decrease in net assets before preferred distributions resulting from operations | $ (119,760,000) | |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Amortization of loan origination and exit fees | (254,000) | |
Purchases of long term investments | (5,757,000) | |
Proceeds from sales of long term investments | 4,900,000 | |
Net sales of short term investments | 3,099,000 | |
Changes in operating assets and liabilities: | ||
Accrued interest receivable and interest advances | (436,000) | |
Prepaid expenses and other assets | 217,000 | |
Accounts payable, accrued liabilities and deposits | (1,815,000) | |
Due to related persons | 553,000 | |
Dividends and interest receivable and other assets | 524,000 | |
Receivable for securities sold | (1,849,000) | |
Prepaid expenses | 28,000 | |
Interest payable | (55,000) | |
Payable for securities purchased | (10,000) | |
Advisory fee payable | (63,000) | |
Compliance and internal audit costs payable | 34,000 | |
Administrative fee payable | (20,000) | |
Accrued expenses and other liabilities | 38,000 | |
Net unrealized losses on investments | 123,346,000 | |
Net realized gain on investments and foreign currency transactions | (915,000) | |
Net cash used in operating activities | (1,385,000) | 3,540,000 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Origination of loans held for investment | (54,840,000) | |
Additional funding of loans held for investment | (204,000) | |
Net cash used in investing activities | (55,044,000) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments of deferred financing costs | (76,000) | |
Distributions paid to preferred shareholders | (130,000) | |
Distributions paid to common shareholders | (3,367,000) | |
Net cash used in financing activities | (76,000) | (3,497,000) |
Decrease in cash, cash equivalents and restricted cash | (56,505,000) | 43,000 |
Cash, cash equivalents and restricted cash at beginning of period | 103,564,000 | 7,000 |
Cash, cash equivalents and restricted cash at end of period | 47,059,000 | 50,000 |
SUPPLEMENTAL DISCLOSURES: | ||
Income taxes paid | 1,830,000 | |
Cash paid for interest and fees on borrowings | 609,000 | |
Cash and cash equivalents | 46,839,000 | |
Restricted cash | 220,000 | |
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statement of cash flows | $ 47,059,000 | $ 50,000 |
CONSOLIDATED PORTFOLIO OF INV_2
CONSOLIDATED PORTFOLIO OF INVESTMENTS | 12 Months Ended | ||||
Dec. 31, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | ||
Investment Company, Financial Highlights [Line Items] | |||||
Net assets attributable to common shareholders | 100.00% | ||||
Other assets less liabilities | $ 101,015,000 | ||||
Net assets attributable to common shares | $ 192,894,000 | $ 132,073,000 | $ 255,326,000 | $ 198,498,881 | |
Mortgage Loan | |||||
Investment Company, Financial Highlights [Line Items] | |||||
Net assets attributable to common shareholders | [1],[2] | 47.60% | |||
Cost | $ 91,879,000 | ||||
Value | 91,879,000 | ||||
Mortgage Loan | Office Property, Downers Grove, IL | |||||
Investment Company, Financial Highlights [Line Items] | |||||
Committed Principal Amount | 30,000,000 | ||||
Cost | 29,232,000 | ||||
Value | 29,232,000 | ||||
Mortgage Loan | Laboratory Property, Durham, NC | |||||
Investment Company, Financial Highlights [Line Items] | |||||
Committed Principal Amount | 21,500,000 | ||||
Cost | 13,281,000 | ||||
Value | 13,281,000 | ||||
Mortgage Loan | Retail Property, Los Angeles, CA | |||||
Investment Company, Financial Highlights [Line Items] | |||||
Committed Principal Amount | 24,600,000 | ||||
Cost | 17,029,000 | ||||
Value | 17,029,000 | ||||
Mortgage Loan | Office Property, Aurora, IL | |||||
Investment Company, Financial Highlights [Line Items] | |||||
Committed Principal Amount | 16,500,000 | ||||
Cost | 14,540,000 | ||||
Value | 14,540,000 | ||||
Mortgage Loan | Laboratory Property, Berkeley, CA | |||||
Investment Company, Financial Highlights [Line Items] | |||||
Committed Principal Amount | 19,120,000 | ||||
Cost | 17,797,000 | ||||
Value | $ 17,797,000 | ||||
Non-Mortgage Loan Investments | |||||
Investment Company, Financial Highlights [Line Items] | |||||
Net assets attributable to common shareholders | [3] | 52.40% | |||
LIBOR | Mortgage Loan | Office Property, Downers Grove, IL | |||||
Investment Company, Financial Highlights [Line Items] | |||||
Coupon Rate | 0.0425 | ||||
LIBOR | Mortgage Loan | Laboratory Property, Durham, NC | |||||
Investment Company, Financial Highlights [Line Items] | |||||
Coupon Rate | 0.0435 | ||||
LIBOR | Mortgage Loan | Retail Property, Los Angeles, CA | |||||
Investment Company, Financial Highlights [Line Items] | |||||
Coupon Rate | 0.0425 | ||||
LIBOR | Mortgage Loan | Office Property, Aurora, IL | |||||
Investment Company, Financial Highlights [Line Items] | |||||
Coupon Rate | 0.0435 | ||||
LIBOR | Mortgage Loan | Laboratory Property, Berkeley, CA | |||||
Investment Company, Financial Highlights [Line Items] | |||||
Coupon Rate | 0.0435 | ||||
[1] | The mortgage loans we invest in are not registered under the securities laws. These mortgage loans are valued using Level III inputs as defined in the fair value hierarchy under U.S. generally accepted accounting principles, or GAAP. | ||||
[2] | The mortgage loans we invest in are not registered under the securities laws. These mortgage loans are valued using Level III inputs as defined in the fair value hierarchy under generally accepted accounting principles, or GAAP. | ||||
[3] | Please refer to our Consolidated Statement of Assets and Liabilities for further information on these amounts. |
Organization_2
Organization | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Organization | Organization RMR Mortgage Trust (formerly known as RMR Real Estate Income Fund), or we, us, our, or the Trust, is a Maryland statutory trust. We were previously registered under the Investment Company Act of 1940, as amended, or the 1940 Act, as a closed-end management investment company. Our investment objective while we operated as a registered investment company was investing in equity securities of real estate companies. On January 5, 2021, the Securities and Exchange Commission, or the SEC, issued an order granting our request to deregister as an investment company under the 1940 Act. As a result, the Trust changed its SEC registration to a reporting company under the Securities Exchange Act of 1934, as amended, or the Exchange Act. The issuance of the deregistration order enabled us to proceed with full implementation of our new business mandate to operate as a real estate investment trust, or REIT, that focuses primarily on originating and investing in first mortgage whole loans secured by middle market and transitional commercial real estate, or CRE, or the Business Change. On April 26, 2021, we and Tremont Mortgage Trust, or TRMT, entered into an Agreement and Plan of Merger, or the Merger Agreement, pursuant to which, on the terms and subject to the satisfaction or waiver of the conditions thereof, TRMT has agreed to merge with and into us, with us continuing as the surviving entity in the merger, or the Merger. Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Merger, or the Effective Time, each common share of beneficial interest, $0.01 par value per share, of TRMT, or TRMT Common Shares, issued and outstanding immediately prior to the Effective Time will be converted into the right to receive 0.52, or the Exchange Ratio, of one newly issued common share of beneficial interest, $0.001 par value per share, of us, or the RMRM Common Shares, subject to adjustment as described in the Merger Agreement, with cash paid in lieu of fractional shares. Under the Merger Agreement, the Exchange Ratio is fixed and will not be adjusted to reflect changes in the market price of the RMRM Common Shares or the TRMT Common Shares prior to the Effective Time. Pursuant to the Merger Agreement, at the Effective Time, any unvested TRMT Common Share awards outstanding under TRMT's equity compensation plan generally will be converted into an unvested RMRM Common Share award under our equity compensation plan, subject to substantially similar vesting requirements and other terms and conditions, determined by multiplying the number of unvested TRMT Common Shares subject to such award by the Exchange Ratio (rounded down to the nearest whole number). The Merger and the other transactions contemplated by the Merger Agreement are collectively referred to herein as the Transactions. Following the consummation of the Merger, the combined company will continue to be managed by our and TRMT’s current manager, Tremont Realty Advisors LLC, or TRA or our Manager, pursuant to the terms of our existing management agreement with TRA. Contemporaneously with the execution of the Merger Agreement, we, TRMT and TRA entered into a letter agreement, or the TRA Letter Agreement, pursuant to which, on the terms and subject to conditions contained therein, we, TRMT and TRA have acknowledged and agreed that, effective upon consummation of the Merger, TRMT shall have terminated its management agreement with TRA, and TRA shall have waived its right to receive payment of the termination fee pursuant to such agreement. In consideration of this waiver, we have agreed that, effective upon consummation of the Merger and the termination of TRMT's management agreement with TRA, certain of the expenses TRA had paid on behalf of TRMT pursuant to such management agreement will be included in the “Termination Fee” under and as defined in our existing management agreement with TRA. The TRA Letter Agreement further provides that such termination by TRMT and waiver by TRA shall apply only in respect of the Merger and will not apply in respect of any competing proposal or superior proposal (as those terms are defined in the Merger Agreement) or to any other transaction or arrangement. Contemporaneously with the execution of the Merger Agreement, we entered into a voting agreement with TRA, or the Voting Agreement, pursuant to which TRA has agreed to vote all of the TRMT Common Shares which it is entitled to vote in favor of approval of the Merger and the other Transactions to which TRMT is a party at the special meeting of TRMT's shareholders held for that purpose and against any competing acquisition proposal. | Note A 1. Organization RMR Mortgage Trust (formerly known as RMR Real Estate Income Fund), or we, us, our, or the Trust, was organized as a Delaware statutory trust on December 17, 2008, and was registered under the Investment Company Act of 1940, as amended, or the 1940 Act, as a non-diversified closed end management investment company. At our annual meeting on April 13, 2017, our shareholders approved the redomestication of the Trust from a Delaware statutory trust to a Maryland statutory trust. The redomestication was completed on April 18, 2017, and we then became and continue to be a Maryland statutory trust. On April 16, 2020, our shareholders approved a change in business from a registered investment company that makes equity investments in real estate companies to a real estate investment trust, or REIT, engaged in the business of originating and investing in first mortgage whole loans secured by middle market and transitional commercial real estate. Our fundamental investment objectives of earning and paying a high level of current income to common shareholders, with capital appreciation as a secondary objective, have been replaced with a non-fundamental primary objective to balance capital preservation with generating attractive risk adjusted returns. Our shareholders also amended our fundamental investment restrictions to permit us to engage in our new business while awaiting deregistration as an investment company and approved our return to non-diversified status under the 1940 Act. On January 5, 2021, the SEC issued an order granting our request to deregister as an investment company under the 1940 Act. We sold all our legacy portfolio assets in 2020 and during 2020 began originating and investing in commercial mortgage loans within our new investment scope. |
Basis of Presentation_2
Basis of Presentation | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Basis of Presentation | Basis of Presentation. Prior to the Business Change, the Trust was accounted for as an investment company in accordance with the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 946, Financial Services - Investment Companies , or the Predecessor Basis. Upon the Business Change, we discontinued the application of guidance in ASC Topic 946 and prospectively applied the guidance required under GAAP, applicable to companies that are not investment companies, or the Successor Basis. As a result of these changes, our condensed consolidated financial statements as of and for the three months ended March 31, 2021 are presented separately from our financial statements on the Predecessor Basis, as of and for the periods prior to the Business Change. The results of operations from January 1, 2021 through January 4, 2021 were not material to the Trust's condensed consolidated financial statements and have not been presented separately, but they are included in our statement of operations for the three months ended March 31, 2021. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement of results for the interim periods have been included. All intercompany transactions and balances with or among our consolidated subsidiaries have been eliminated. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect reported amounts. Actual results could differ from those estimates. Significant estimates in the accompanying condensed consolidated financial statements include the fair value of financial instruments. | 2. Basis of Presentation These consolidated financial statements includes the accounts of us and our subsidiaries, RMRM RTP Lender LLC and RMTG Lender LLC, all of which are 100% owned directly by us. All intercompany transactions and balances with or among our consolidated subsidiaries have been eliminated. For the year ended December 31, 2020, we are an investment company in accordance with the FASB Accounting Standards Codification (ASC) 946, Financial Services - Investment Companies , for the purposes of financial reporting. We will apply accounting and reporting guidance for REITs beginning in 2021. Preparation of these consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that may affect the amounts reported in our financial statements and related notes. Our actual results could differ from these estimates. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Consolidation. These consolidated financial statements include the accounts of us and our subsidiaries, all of which are 100% owned directly by us. All intercompany transactions and balances with or among our consolidated subsidiaries have been eliminated. For each investment we make, we evaluate whether consolidation of the borrower's financial statements is required under GAAP. GAAP addresses the application of consolidation principles to an investor with a controlling financial interest. Cash, Cash Equivalents and Restricted Cash. We consider highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. Restricted cash primarily consists of deposit proceeds from potential borrowers when originating loans, which may be returned to the applicable borrower upon the closing of the loan, after deducting any transaction costs paid by us for the benefit of such borrower. Loans Held for Investment. Generally, our loans are classified as held for investment based upon our intent and ability to hold them until maturity, if earlier, repayment. Loans that are held for investment are carried at cost, net of unamortized loan origination and accreted exit fees that are required to be recognized in the carrying value of the loans in accordance with GAAP, unless the loans are deemed to be impaired. Loans that we have a plan to sell or liquidate are held at the lower of cost or fair value less cost to sell. We evaluate each of our loans for impairment at least quarterly by assessing a variety of risk factors in relation to each loan and assigning a risk rating to each loan based on those factors. Factors considered in these evaluations include, but are not limited to, property type, geographic and local market dynamics, physical condition, leasing and tenant profile, projected cash flow, risk of loss, current loan to value ratio, or LTV, debt yield, collateral performance, structure, exit plan and sponsorship. Loans are rated “1” (lower risk) through “5” (impaired/loss likely) as defined below: "1" lower risk—Criteria reflects a sponsor having a strong financial condition and low credit risk and our evaluation of management's experience; collateral performance exceeding performance metrics included in the business plan or credit underwriting; and the property demonstrating stabilized occupancy and/or market rates, resulting in strong current cash flow and net operating income and/or having a very low LTV. "2" average risk—Criteria reflects a sponsor having a stable financial condition and our evaluation of management's experience; collateral performance meeting or exceeding substantially all performance metrics included in the business plan or credit underwriting; and the property demonstrating improved occupancy at market rents, resulting in sufficient current cash flow and/or having a low LTV. "3" acceptable risk—Criteria reflects a sponsor having a history of repaying loans at maturity and meeting its credit obligations and our evaluation of management's experience; collateral performance expected to meet performance metrics included in the business plan or credit underwriting; and the property having a moderate LTV. New loans and loans with a limited history will typically be assigned this rating and will be adjusted to other levels from time to time as appropriate. "4" higher risk—Criteria reflects a sponsor having a history of unresolved missed or late payments, maturity extensions and difficulty timely fulfilling its credit obligations and our evaluation of management's experience; collateral performance failing to meet the business plan or credit underwriting; the existence of a risk of default possibly leading to a loss and/or potential weaknesses that deserve management’s attention; and/or the property having a high LTV. "5" impaired/loss likely—Criteria reflects a very high risk of realizing a principal loss or having incurred a principal loss; a sponsor having a history of default payments, trouble fulfilling its credit obligations, deeds in lieu of foreclosures, and/or bankruptcies; collateral performance is significantly worse than performance metrics included in the business plan; loan covenants or performance milestones having been breached or not attained; timely exit via sale or refinancing being uncertain; and/or the property having a very high LTV. See Note 5 for further information regarding our current loan portfolio’s assessment under our internal risk rating policy. Impairment occurs when it is deemed probable that we will not be able to collect all amounts due under a loan according to its contractual terms. Impairment will then be measured based on the present value of the expected future cash flows discounted at the loan's contractual effective rate and the fair value of any available collateral, net of any costs we expect to incur to realize that value. The determination of this estimated fair value involves judgments and assumptions based on objective and subjective factors. Consideration will be given to various factors, such as business plans, property occupancies, tenant profiles, rental rates, operating expenses and borrowers’ repayment plans, among others, and will require significant judgments regarding certain circumstances, such as guarantees, if any. Upon measurement of an impairment, we will record an allowance to reduce the carrying value of the loan accordingly, and record a corresponding charge to net income in our condensed consolidated statements of operations. As of March 31, 2021, we have not recorded any allowances for losses as we believe it is probable that we will collect all amounts due pursuant to the contractual terms of our loan agreements with borrowers. Fair Value of Financial Instruments. FASB ASC Topic 820-10, Fair Value Measurements and Disclosures , defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands the required disclosure regarding fair value measurements. ASC Topic 820-10 defines fair value as the price that would be received for a financial instrument in a current sale, which assumes an orderly transaction between market participants on the measurement date. We determine the estimated fair value of financial assets and liabilities using the three-tier fair value hierarchy established by GAAP, which prioritizes the inputs used in measuring fair value. GAAP establishes market based or observable inputs as the preferred source of values followed by valuation models using management assumptions in the absence of market inputs. The three levels of inputs that may be used to measure fair value are as follows: Level I—Inputs include quoted prices in active markets for identical assets or liabilities that we have the ability to access. Level II—Inputs include quoted prices in markets that are less active or inactive or for which all significant inputs are observable, either directly or indirectly. Level III—Inputs include unobservable prices and are supported by little or no market activity and are significant to the overall fair value measurement. Loan Deferred Fees. Loan origination and exit fees are reflected in loans held for investment, net, in our condensed consolidated balance sheet and include fees charged to borrowers. These fees are amortized and accreted, respectively, into interest income over the life of the related loans held for investment. Deferred Financing Costs. Costs incurred in connection with financings are capitalized and recorded as an offset to the related liability and amortized over the respective financing terms and are recorded in our condensed consolidated statement of operations as a component of interest and related expenses. At March 31, 2021, we had approximately $76 of capitalized financing costs. Net Income Per Common Share. We calculate net income per common share, or EPS, by dividing net income by the weighted average number of common shares outstanding during the period. At March 31, 2021 and December 31, 2020, no warrants, options or other types or classes of securities existed that could be potentially dilutive to our common shares outstanding. Revenue Recognition. Interest income related to our first mortgage whole loans secured by CRE will generally be accrued based on the coupon rates applied to the outstanding principal balance of such loans. Fees, premiums and discounts, if any, will be amortized or accreted into interest income over the remaining lives of the loans using the effective interest method, as adjusted for any prepayments. If a loan's interest or principal payments are not paid when due and there is uncertainty that such payments will be collected, the loan may be categorized as non-accrual and no interest will be recorded unless it is collected. When all overdue payments are collected and, in our judgment, a loan is likely to remain current, it may be re-categorized as accrual. For loans purchased at a discount, GAAP limits the yield that may be accreted (accretable yield) to the excess of the investor’s estimate of undiscounted expected principal, interest and other cash flows (cash flows expected at acquisition to be collected) over the investor’s initial investment in the loan. GAAP also requires that the excess of contractual cash flows over cash flows expected to be collected (non-accretable difference) not be recognized as an adjustment of yield, loss accrual or valuation allowance. Subsequent increases in cash flows expected to be collected from such loans generally will be recognized prospectively through adjustment of the loan’s yield over its remaining life. Decreases in cash flows expected to be collected will be recorded as an impairment. Securities Transactions and Investment Income. Under the Predecessor Basis, we recorded securities transactions on a trade date basis, dividend income on the ex-dividend date and any non-cash dividends at the fair market value of the securities received. We use the accrual method for recording interest income, including accretion of original issue discount, where applicable, and accretion of discount on short term investments and identified cost basis for realized gains and losses from securities transactions. The difference between cost and fair value for investments we continue to hold is reflected as unrealized gain (loss), and any change in that amount from a prior period is reflected in the accompanying consolidated statement of operations. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the FASB issued Accounting Standards Update, or ASU, No. 2016-13, Financial Instruments - Credit Losses (Topic 326) : Measurement of Credit Losses on Financial Instruments , which requires that entities use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowance for credit losses. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. As a smaller reporting company, we expect to adopt ASU No. 2016-13 on January 1, 2023. We are currently assessing the potential impact the adoption of ASU No. 2016-13 will have on our condensed consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides temporary optional expedients and exceptions on contract modifications meeting certain criteria to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to the alternative reference rates. For a contract that meets the criteria, this ASU generally allows an entity to account for and present modifications as an event that does not require remeasurement at the modification date or reassessment of a previous accounting determination. This ASU was effective upon issuance and can be applied through December 31, 2022. The adoption of ASU No. 2020-04 did not have a material impact on our condensed consolidated financial statements. |
Loans Held for Investment
Loans Held for Investment | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Receivables [Abstract] | ||
Loans Held for Investment | Loans Held for Investment We originate first mortgage whole loans secured by middle market and transitional CRE, which are generally to be held as long term investments. We funded our existing loan portfolio using cash on hand. The table below provides overall statistics for our loan portfolio as of March 31, 2021 and December 31, 2020: As of March 31, 2021 (Successor Basis) As of December 31, 2020 (Predecessor Basis) Number of loans 7 5 Total loan commitments $ 177,195 $ 111,720 Unfunded loan commitments (1)(2) $ 28,613 $ 18,857 Principal balance (2) $ 148,652 $ 92,863 Unamortized net deferred origination fees $ (1,405) $ (984) Carrying value $ 147,247 $ 91,879 Weighted average coupon rate 4.99 % 5.08 % Weighted average all in yield (3) 5.65 % 5.71 % Weighted average maximum maturity (years) (4) 4.3 4.2 Weighted average risk rating 3.0 3.0 Weighted average LTV (5) 67 % 68 % (1) Unfunded loan commitments are primarily used to finance property and building improvements and leasing capital and are generally funded over the term of the loan. (2) The principal balance at March 31, 2021 includes $69 of capitalized interest that does not reduce the amount of unfunded loan commitments. (3) All in yield represents the yield on a loan, excluding any repurchase debt funding applicable to the loan and including amortization of deferred fees over the initial term of the loan. (4) Maximum maturity assumes all borrower loan extension options have been exercised, which options are subject to the borrower meeting certain conditions. (5) LTV represents the initial loan amount divided by the underwritten in-place value of the underlying collateral at closing. The table below represents our loan activities during the three months ended March 31, 2021: Principal Balance Deferred Fees Carrying Value Balance at December 31, 2020 (Predecessor Basis) $ 92,863 $ (984) $ 91,879 Additional funding 274 — 274 Originations 55,515 (675) 54,840 Net amortization of deferred fees — 254 254 Balance at March 31, 2021 (Successor Basis) $ 148,652 $ (1,405) $ 147,247 In April 2021, we originated a first mortgage whole loan of $34,275 to refinance an office/industrial property with 288,275 square feet located in Colorado Springs, Colorado. This loan requires the borrower to pay interest at the floating rate of LIBOR plus a premium of 450 basis points per annum. This floating rate loan includes an initial funding of $28,970 and a future funding allowance of $5,305 for tenant improvements, leasing commissions and capital expenditures and has a three year initial term with one one-year extension option, subject to the borrower meeting certain conditions. Also in April 2021, we originated a first mortgage whole loan of $39,240 to finance the acquisition of two cold storage industrial buildings located in Londonderry, New Hampshire. This loan requires the borrower to pay interest at the floating rate of LIBOR plus a premium of 400 basis points per annum. This floating rate loan includes an initial funding of $34,200 and a future funding allowance of $5,040 for tenant improvements, leasing commissions and capital expenditures and has a three year initial term with two one-year extension options, subject to the borrower meeting certain conditions. The tables below detail the property type and geographic location of the properties securing the loans in our portfolio as of March 31, 2021 and December 31, 2020: March 31, 2021 December 31, 2020 Property Type Number of Loans Carrying Value Percentage of Value Number of Loans Carrying Value Percentage of Value Office (1) 3 $ 48,979 33 % 2 $ 38,106 41 % Multifamily 1 44,119 30 % — — — % Lab 2 31,139 21 % 2 31,078 34 % Retail 1 17,344 12 % 1 17,029 19 % Industrial (1) — 5,666 4 % — 5,666 6 % 7 $ 147,247 100 % 5 $ 91,879 100 % (1) Our loan investment secured by a mixed use property consisting of office space and an industrial warehouse in Aurora, IL is classified as office for the purpose of counting the number of loans in our portfolio. The carrying value of this loan investment is reflected in office and industrial based on the fair value of the buildings at the time of origination relative to the total fair value of the property. March 31, 2021 December 31, 2020 Geographic Location Number of Loans Carrying Value Percentage of Value Number of Loans Carrying Value Percentage of Value Midwest 3 $ 87,960 60 % 2 $ 43,772 48 % West 2 35,167 24 % 2 34,826 38 % South 2 24,120 16 % 1 13,281 14 % 7 $ 147,247 100 % 5 $ 91,879 100 % Loan Risk Ratings We evaluate each of our loans for impairment at least quarterly by assessing a variety of risk factors in relation to each loan and assigning a risk rating to each loan based on those factors. The following table allocates the carrying value of our loan portfolio at March 31, 2021 and December 31, 2020 based on our internal risk rating policy: March 31, 2021 (Successor Basis) December 31, 2020 (Predecessor Basis) Risk Rating Number of Loans Carrying Value Number of Loans Carrying Value 1 — $ — — $ — 2 — — — — 3 7 147,247 5 91,879 4 — — — — 5 — — — — 7 $ 147,247 5 $ 91,879 The weighted average risk rating of our loans by carrying value was 3.0 as of March 31, 2021 and December 31, 2020. We did not have any impaired loans or nonaccrual loans as of March 31, 2021 or December 31, 2020. See Note 3 for further information regarding our loan risk ratings. | 5. Investment Transactions and Investment Income We record securities transactions on a trade date basis, dividend income on the ex-dividend date and any non-cash dividends at the fair market value of the securities received. We use the accrual method for recording interest income, including accretion of original issue discount, where applicable, and accretion of discount on short term investments and identified cost basis for realized gains and losses from securities transactions. The difference between cost and fair value of for investments we continue to hold is reflected as unrealized gain (loss), and any change in that amount from a prior period is reflected in the accompanying consolidated statement of operations. Interest income related to our first mortgage whole loans secured by CRE will generally be accrued based on the coupon rates applied to the outstanding principal balance of such loans. Fees, premiums and discounts, if any, will be amortized or accreted into interest income over the remaining lives of the loans using the effective interest method, as adjusted for any prepayments. If a loan’s interest or principal payments are not paid when due and there is uncertainty that such payments will be collected, the loan may be categorized as non-accrual and no interest will be recorded unless it is collected. When all overdue payments are collected and, in our judgment, a loan is likely to remain current, it may be re-categorized as accrual. |
Debt Agreements
Debt Agreements | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Debt Disclosure [Abstract] | ||
Debt Agreements | Debt AgreementsOn February 18, 2021, one of our wholly owned subsidiaries entered into a master repurchase agreement, or the Master Repurchase Agreement, with UBS AG, or UBS, for a master repurchase facility, or the Master Repurchase Facility, pursuant to which we may sell to UBS, and later repurchase, commercial mortgage loans, or the Purchased Assets. The expiration date of the Master Repurchase Agreement is February 18, 2024, unless extended or earlier terminated in accordance with the terms of the Master Repurchase Agreement. Pursuant to the Master Repurchase Agreement, we will pay UBS a non-refundable upfront fee that is equal to 0.50% of the applicable tranche amount on each Purchase Date (as each term is defined in the Master Repurchase Agreement). While the Master Repurchase Facility has no maximum facility amount, we expect the advancements under the Master Repurchase Facility to not exceed our equity, which is as of March 31, 2021 is $193,244. Our equity will change from time-to-time and may increase or decrease. We expect that the size of our Master Repurchase Facility may similarly change as our equity changes. Under the Master Repurchase Facility, the initial purchase price paid by UBS for each Purchased Asset is up to 75% of the lesser of the market value of the Purchased Asset and the unpaid principal balance of such Purchased Asset, subject to UBS’s approval. Upon the repurchase of a Purchased Asset, we are required to pay UBS the outstanding purchase price of the Purchased Asset, accrued interest and all accrued and unpaid expenses of UBS relating to such Purchased Assets. The pricing rate (or interest rate) relating to a Purchased Asset is equal to one month LIBOR plus a customary premium within a fixed range, determined by the debt yield and property type of the Purchased Asset’s real estate collateral. UBS has the discretion under our Master Repurchase Agreement to make advancements at margins higher than 75%. In connection with our Master Repurchase Agreement, we entered into a guaranty, or the Guaranty, which requires us to guarantee 25% of the aggregate repurchase price, and 100% of losses in the event of certain bad acts as well any costs and expenses of UBS related to our Master Repurchase Agreement. The Guaranty also requires us to comply with customary financial covenants, which include the maintenance of a minimum tangible net worth, minimum cash liquidity and a total indebtedness to stockholders equity ratio. The Master Repurchase Facility also contains margin maintenance provisions that provide UBS with the right, in certain circumstances related to a Credit Event (as defined in the Master Repurchase Agreement) to redetermine the value of Purchased Assets. Where a decline in the value of such Purchased Assets has resulted in a margin deficit, UBS may require us to eliminate any margin deficit through a combination of Purchased Asset repurchases and cash transfers to UBS subject to UBS’s approval. As of March 31, 2021 we had no outstanding balance under our Master Repurchase Facility and as of April 30, 2021 we had a $23,172 aggregate outstanding principal balance under our Master Repurchase Facility. For the three months ended March 31, 2020, we recorded interest expense of $554 related to our revolving credit facility, or the Facility, with BNP Paribas Prime Brokerage International Ltd, or PBL. In November 2020, we repaid all outstanding amounts and terminated the Facility with PBL. | Note F Revolving Credit Facility In November 2020, we repaid all outstanding amounts and terminated our $88,000,000 revolving credit facility, or the Facility, with BNP Paribas Prime Brokerage International, Ltd., or PBL. During 2020, the average outstanding daily balance under the Facility was $86,673,780 at a weighted average borrowing cost of 1.51%. The Facility with PBL permitted, subject to certain conditions, PBL to rehypothecate portfolio securities pledged by us up to the amount of the loan balance outstanding. We received dividends and interest on these rehypothecated securities. We received a portion of the fees earned by PBL in connection with the rehypothecation of portfolio securities. During the year ended December 31, 2020, we earned $41,814 in fees from rehypothecated securities, which we recorded as other income in our Consolidated Statement of Operations under other income. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | ||
Fair Value of Financial Instruments | Fair Value of Financial Instruments ASC Topic 820, Fair Value Measurements , establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities (Level I) and the lowest priority to unobservable inputs (Level III). A financial asset’s or financial liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. The carrying values of cash and cash equivalents, restricted cash and accounts payable approximate their fair values due to the short term nature of these financial instruments. We estimate the fair values of our loans held for investment using Level III inputs, including discounted cash flow analyses and currently prevailing market terms as of the measurement date, determined by significant unobservable market inputs, which include holding periods, discount rates based on LTV, property types and loan pricing expectations which are corroborated by a comparison with other market participants to determine the appropriate market spread to add to the one month LIBOR (Level III inputs as defined in the fair value hierarchy under GAAP). The table below provides information regarding our financial assets: March 31, 2021 (Successor Basis) December 31, 2020 (Predecessor Basis) Carrying Value Fair Value Carrying Value Fair Value Financial assets Loans held for investment $ 147,247 $ 146,400 $ 91,879 $ 91,879 | 4. Fair Value Measurements We estimate the fair values of our loans held for investment using Level III inputs, including discounted cash flow analyses and currently prevailing market terms as of the measurement date, determined by significant unobservable market inputs, which include holding periods, discount rates based on loan to value, or LTV, property types and loan pricing expectations which are corroborated by a comparison with other market participants to determine the appropriate market spread to add to the one month LIBOR (Level III inputs as defined in the fair value hierarchy under GAAP). As of December 31, 2020, the fair value of the mortgage loans approximated their historical cost. We report the value of our investments at their fair value. Fair value is defined as the price that we would receive upon selling an investment in a timely transaction to an independent buyer in the principal or most advantageous market for the investment. When valuing investments, we use observable market data when possible and otherwise uses other significant observable or unobservable inputs for fair value measurements. Inputs refer broadly to the assumptions we believe believes that market participants would use in valuing the asset or liability, including assumptions about risk; for example, the risk inherent in using a particular valuation technique to measure fair value and the risk inherent in the inputs to the valuation technique. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in valuing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs are inputs that reflect our own assumptions about the assumptions market participants would use in valuing the asset or liability developed based on the best information available in the circumstances. The three tier hierarchy of inputs used to value securities reported in these financial statements is summarized below: · Level 1 – unadjusted quoted prices in active markets for identical investments. · Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, credit risk, etc.). · Level 3 – significant unobservable inputs (including our own assumptions in determining the fair value of investments). Legacy Portfolio Assets We use broker quotes, issuer company financial information and other market indicators to value the securities whose prices are not readily available. The types of inputs used to value a security may change as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. When the S&P 500 Index (an unmanaged index published as Standard & Poor’s Composite Index of 500 common stocks) fluctuates more than 0.75% from the previous day close, we believe that the closing price of foreign securities on the principal foreign exchange on which they trade may no longer represent the fair value of those securities at the time the U.S. market closes, in which case, we fair value those foreign securities. In such circumstances, we report holdings in foreign securities at their fair values as determined by an independent security pricing service. The service uses a multi-factor model that includes such information as the security’s local closing price, relevant general and sector indices, currency fluctuations, depository receipts and futures, as applicable. The model generates an adjustment factor for each security that is applied to the local closing price to adjust it for post closing events, resulting in the security’s reported fair value. The adjustment factor is applied to a security only if the minimum confidence interval is 75% or more. The types of inputs may change as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. We recognize interperiod transfers between the input levels as of the end of the period. Mortgage Loans Held for Investment Our loans are classified as held for investment based upon our intent and ability to hold them until maturity. We evaluate each of our loans for impairment at least quarterly by assessing a variety of risk factors in relation to each loan and assigning a risk rating to each loan based on those factors. Factors considered in these evaluations include, but are not limited to, property type, geographic and local market dynamics, physical condition, leasing and tenant profile, projected cash flow, risk of loss, current LTV, debt yield, collateral performance, structure, exit plan and sponsorship. Loans are rated "1" (lower risk) through "5" (impaired/loss likely) as defined below: "1" lower risk—Criteria reflects a sponsor having a strong financial condition and low credit risk and our evaluation of management’s experience; collateral performance exceeding performance metrics included in the business plan or credit underwriting; and the property demonstrating stabilized occupancy and/or market rates, resulting in strong current cash flow and net operating income and/or having a very low LTV. "2" average risk—Criteria reflects a sponsor having a stable financial condition and our evaluation of management’s experience; collateral performance meeting or exceeding substantially all performance metrics included in the business plan or credit underwriting; and the property demonstrating improved occupancy at market rents, resulting in sufficient current cash flow and/or having a low LTV. "3" acceptable risk—Criteria reflects a sponsor having a history of repaying loans at maturity and meeting its credit obligations and our evaluation of management’s experience; collateral performance expected to meet performance metrics included in the business plan or credit underwriting; and the property having a moderate LTV. New loans and loans with a limited history will typically be assigned this rating and will be adjusted to other levels from time to time as appropriate. "4" higher risk—Criteria reflects a sponsor having a history of unresolved missed or late payments, maturity extensions and difficulty timely fulfilling its credit obligations and our evaluation of management’s experience; collateral performance failing to meet the business plan or credit underwriting; the existence of a risk of default possibly leading to a loss and/or potential weaknesses that deserve management’s attention; and/or the property having a high LTV. "5" impaired/loss likely—Criteria reflects a very high risk of realizing a principal loss or having incurred a principal loss; a sponsor having a history of default payments, trouble fulfilling its credit obligations, deeds in lieu of foreclosures, and/or bankruptcies; collateral performance is significantly worse than performance metrics included in the business plan; loan covenants or performance milestones having been breached or not attained; timely exit via sale or refinancing being uncertain; and/or the property having a very high LTV. We evaluate each of our loans for impairment at least quarterly by assessing a variety of risk factors in relation to each loan and assigning a risk rating to each loan based on those factors. The following table allocates the carrying value of our loan portfolio at December 31, 2020 based on our internal risk rating policy: December 31, 2020 Number of Risk Rating Loans Carrying Value 1 — $ — 2 — — 3 5 91,878,969 4 — — 5 — — 5 $ 91,878,969 The weighted average risk rating of our loans by carrying value was 3.0 as of December 31, 2020. We did not have any impaired loans or nonaccrual loans as of December 31, 2020. As of December 31, 2020, and February 22, 2021, all of our borrowers had paid all of their debt service obligations owed and due to us and none of the loans included in our investment portfolio were in default. The following table provides a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining value: Investments in Mortgage Loan Characterized as Level 3 Balance, as of December 31, 2019 $ — Loan originations (Level 3) 91,878,969 Balance, as of December 31, 2020 $ 91,878,969 Net change in unrealized appreciation/depreciation from investments still held as of December 31, 2020 $ — At December 31, 2020, there were no Level 3 fair value measurements utilizing significant inputs determined by management. We recognize interperiod transfers between the input levels as of the end of the period. There were no transfers of financial assets or liabilities within the fair value hierarchy during the year ended December 31, 2020. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Equity [Abstract] | ||
Shareholders' Equity | Shareholders' EquityOn April 15, 2021, we declared a quarterly distribution of $0.15 per common share for the first quarter of 2021, or approximately $1,530, to shareholders of record on April 26, 2021. We expect to pay this distribution on or about May 20, 2021. | Note E Capital Share Transactions As of December 31, 2020, 10,202,009 common shares, $.001 par value per share, were issued and outstanding. The Trust had no capital stock transactions during the year ended December 31, 2020. |
Management Agreement with our M
Management Agreement with our Manager | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Related Party Transactions [Abstract] | ||
Management Agreement with our Manager | Management Agreement with our Manager We have no employees. The personnel and various services we require to operate our business are provided to us by our Manager, pursuant to a management agreement, which provides for the day to day management of our operations by our Manager, subject to the oversight and direction of our Board of Trustees. Prior Agreements with RMR Advisors Administration Agreement. Prior to its merger with our Manager on January 6, 2021, RMR Advisors LLC, or RMR Advisors, performed administrative functions for us pursuant to an administration agreement with us. RMR Advisors was also a party to a subadministration agreement with State Street Bank and Trust Company, or State Street, to perform substantially all fund accounting and other administrative services for us. Under the administration agreement, RMR Advisors was entitled to reimbursement of the cost of providing administrative services. On January 6, 2021, RMR Advisors merged with and into our Manager, with our Manager being the surviving entity, and our Manager assumed the administration agreement with us and the subadministration agreement with State Street. Each of those agreements was terminated, effective March 16, 2021. We incurred administration service fees of $24 for the three months ended March 31, 2020, all of which related to the subadministration service fees payable by RMR Advisors to State Street and reimbursable by us; we did not incur any additional administration service fees beyond those reimbursable amounts for that period. Investment Advisory Agreement. Prior to January 5, 2021, RMR Advisors provided us with a continuous investment program, made day to day investment decisions and generally managed our business affairs in accordance with our investment objectives and policies as a registered investment company pursuant to an investment advisory agreement. The investment advisory agreement was terminated on January 5, 2021 with our deregistration as an investment company. Pursuant to the investment advisory agreement, RMR Advisors was compensated at an annual rate of 0.85% of our average daily managed assets. We incurred advisory fees of $705 for the three months ended March 31, 2020 and for the period from January 1, 2021 to January 5, 2021, we incurred advisory fees of $22 which is included in base management fees in our condensed consolidated statement of operations. For the three months ended March 31, 2020, we incurred internal audit and compliance costs reimbursable to RMR Advisors of $34. Current Management Agreement with our Manager Effective January 5, 2021, our Manager provides services to us pursuant to a new management agreement. We recognized base management fees of $715 for the three months ended March 31, 2021. Pursuant to the terms of our management agreement, no management incentive fees are payable until the first full quarter following the effective date of the management agreement and, thereafter, any management incentive fees would be subject to our Manager earning those fees in accordance with the management agreement. Our Manager, and not us, is responsible for the costs of its employees who provide services to us, including the cost of our Manager’s personnel who originate our loans, unless any such payment or reimbursement is specifically approved by a majority of our Independent Trustees, is a shared services cost or relates to awards made under any equity compensation plan adopted by us. We are required to pay or to reimburse our Manager and its affiliates for all other costs and expenses of our operations. Some of these overhead, professional and other services are provided by The RMR LLC Group, or RMR LLC, pursuant to a shared services agreement between our Manager and RMR LLC. We reimburse our Manager for shared services costs our Manager pays to RMR LLC. These reimbursements include an allocation of the cost of personnel employed by RMR LLC and our share of RMR LLC’s costs for providing our internal audit function. These shared services costs are subject to approval by a majority of our Independent Trustees at least annually. We incurred shared services costs of $352 payable to our Manager for the three months ended March 31, 2021. We include these amounts in reimbursement of shared services expenses or general and administrative expenses, as applicable, in our condensed consolidated statements of operations. Contemporaneously with the execution of the Merger Agreement, we, TRMT and TRA entered into the TRA Letter Agreement, pursuant to which, on the terms and subject to conditions contained therein, we, TRMT and TRA have acknowledged and agreed that, effective upon consummation of the Merger, TRMT shall have terminated its management agreement with TRA, and TRA shall have waived its right to receive payment of the termination fee pursuant to such agreement. In consideration of this waiver, we have agreed that, effective upon consummation of the Merger and the termination of TRMT’s management agreement with TRA, certain of the expenses TRA had paid on behalf of TRMT pursuant to such management agreement will be included in the “Termination Fee” under and as defined in our existing management agreement with TRA. The TRA Letter Agreement further provides that such termination by TRMT and waiver by TRA shall apply only in respect of the Merger and will not apply in respect of any competing proposal or superior proposal (as those terms are defined in the Merger Agreement) or to any other transaction or arrangement. See Note 1 for further information regarding the TRA Letter Agreement and the Merger. | Note B Advisory and Administration Agreements and Other Transactions with Affiliates; Trustee Compensation; Other Agreements We had an investment advisory agreement with RMR Advisors LLC, or RMR Advisors, to provide us with a continuous investment program, to make day to day investment decisions and to generally manage our business affairs in accordance with our investment objectives and policies. This agreement was terminated on January 5, 2021 in connection with our deregistration as an investment company. Pursuant to this agreement, RMR Advisors was compensated at an annual rate of 0.85% of our average daily managed assets. Managed assets means our total assets less liabilities other than any indebtedness entered into for purposes of leverage. Thus, for purposes of calculating managed assets, our revolving credit facility and the liquidation preference of our preferred shares were not considered a liability and they were considered indebtedness entered into for purposes of leverage. We incurred advisory fees of $2,363,603 for the year ended December 31, 2020. On January 5, 2021, we terminated this investment advisory agreement and entered into a management agreement, or Management Agreement, with Tremont Realty Advisors LLC, or our Manager, effective January 5, 2021, or the Effective Date, to manage our day-to-day operations, subject to the oversight and direction of our Board of Trustees. Under the terms of the Management Agreement: 1. Base Management Fee: We are required to pay our Manager an annual base management fee equal to 1.5% of our equity, payable in cash quarterly (0.375% per quarter) in arrears. Under the Management Agreement, "equity" means (a) the sum of (i) our net asset value as of the Effective Date, plus (ii) the net proceeds received by us from any future sale or issuance of our shares of beneficial interest, plus (iii) our cumulative core earnings (as defined below) for the period commencing on the Effective Date to the end of the applicable most recent completed calendar quarter, less (b) (i) any distributions previously paid to holders of our common shares, (ii) any incentive fee previously paid to our Manager and (iii) any amount that we may have paid to repurchase our common shares. All items in the foregoing sentence (other than clause (a)(iii)) are calculated on a daily weighted average basis. 2. Incentive Fee: Starting in the calendar quarter ending March 31, 2021, we are required to pay our Manager quarterly an incentive fee in arrears in cash equal to the difference between: (a) the product of (i) 20% and (ii) the difference between (A) our core earnings for the most recent 12 month period (or such lesser number of completed calendar quarters, if applicable), including the calendar quarter (or part thereof) for which the calculation of the incentive fee is being made, and (B) the product of (1) our equity in the most recent 12 month period (or such lesser number of completed calendar quarters, if applicable), including the calendar quarter (or part thereof) for which the calculation of the incentive fee is being made, and (2) 7% per year and (b) the sum of any incentive fees paid to our Manager with respect to the first three calendar quarters of the most recent 12 month period (or such lesser number of completed calendar quarters preceding the applicable period, if applicable). No incentive fee shall be payable with respect to any calendar quarter unless our core earnings for the 12 most recently completed calendar quarters (or such lesser number of completed calendar quarters from the Effective Date) in the aggregate is greater than zero. The incentive fee may not be less than zero. 3. Termination Fee. In the event the Management Agreement is terminated by us without a cause event or by our Manager for a material breach, we will be required to pay our Manager a termination fee equal to (a) three times the sum of (i) the average annual base management fee and (ii) the average annual incentive fee, in each case paid or payable to our Manager during the 24 month period immediately preceding the most recently completed calendar quarter prior to the date of termination or, if such termination occurs within 24 months of its initial commencement, the base management fee and the incentive fee will be annualized for such two year period based on such fees earned by our Manager during the period from the Effective Date through the most recently completed calendar quarter prior to the termination date, plus (b) $1,600,000. No termination fee will be payable if the Management Agreement is terminated by us for a cause event or by our Manager without our material breach. 4. Expense Reimbursement. Our Manager will be responsible for the costs of our Manager’s employees who provide services to us, including the cost of our Manager’s personnel who originate our loans, unless any such payment or reimbursement is specifically approved by a majority of our Independent Trustees (as defined under our governing documents) or is a shared services cost. We are required to pay or to reimburse our Manager and its affiliates for all other costs and expenses of our operations, including but not limited to, the costs of rent, utilities, office furniture, equipment, machinery and other overhead type expenses, the costs of legal, accounting, auditing, tax planning and tax return preparation, consulting services, diligence costs related to our investments, investor relations expenses and other professional services, and other costs and expenses not specifically required under the management agreement to be borne by our Manager. Some of these overhead, professional and other services will be provided by The RMR Group LLC, or RMR LLC, pursuant to a shared services agreement between our Manager and RMR LLC. In addition, we will also pay our pro rata portion of internal audit costs incurred by RMR LLC on our behalf and on behalf of other public companies to which RMR LLC or its affiliates provides management services. 5. Term and Termination. The initial term of the Management Agreement ends on December 31, 2023, and the agreement will automatically renew for successive one year terms beginning January 1, 2024 and each January 1 thereafter, unless it is sooner terminated upon written notice delivered no later than 180 days prior to a renewal date by the affirmative vote of at least two thirds (2/3) of our Independent Trustees based upon a determination that (a) our Managers’ performance is unsatisfactory and materially detrimental to us or (b) the base management fee and incentive fee, taken as a whole, payable to our Manager under the Management Agreement are not fair to us (provided that, in the instance of (b), our Manager will be afforded the opportunity to renegotiate the base management fee and incentive fee prior to termination). The Management Agreement may be terminated by our Manager before each annual renewal upon written notice delivered to our Board of Trustees no later than 180 days prior to an annual renewal date. Our Manager may also terminate the Management Agreement if we become required to register as an investment company under the 1940 Act, with such termination deemed to occur immediately before such event. In addition, our Manager may terminate the Management Agreement upon 60 days’ written notice for a material breach by us, as defined in the Management Agreement, which includes if we default in the performance or observance of any material term, condition or covenant contained in the Management Agreement, the consequence of which was materially adverse to our Manager and which did not result from and was not attributable to any action, or failure to act, of our Manager and the default continues for a period of 30 days after written notice to us requesting that the default be remedied within that period, we materially reduce our Managers’ duties and responsibilities or scope of its authority under the Management Agreement or we cease or take steps to cease to conduct the business of originating or investing in commercial real estate loans. 6. Other Provisions. We have agreed to indemnify our Manager and its affiliates, including RMR LLC, its members, officers, employees and affiliates against liabilities relating to acts or omissions of such party with respect to the provision of services to us, except to the extent such provision of services was in bad faith or was grossly negligent. In addition, the Management Agreement provides that any disputes, as defined in the agreements, arising out of or relating to the agreement or the provision of services pursuant thereto, upon the demand of a party to the dispute, shall be subject to mandatory arbitration in accordance with procedures provided in the agreement. For purposes of the calculation of base management fees and incentive fees payable to our Manager under the Management Agreement, "core earnings" is defined as net income (or loss) attributable to common shareholders computed in accordance with GAAP, including realized losses not otherwise included in GAAP net income (loss), and excluding: (a) the incentive fees earned by our Manager; (b) depreciation and amortization (if any); (c) non cash equity compensation expense (if any); (d) unrealized gains, losses and other similar non-cash items that are included in net income for the period of the calculation (regardless of whether such items are included in or deducted from net income or in other comprehensive income or loss under GAAP); and (e) one-time events pursuant to changes in GAAP and certain material non cash income or expense items (in each case after discussions between our Manager and our Independent Trustees and approved by a majority of such Independent Trustees). Pursuant to the terms of the Management Agreement, the exclusion of depreciation and amortization from the calculation of core earnings shall only apply to owned real estate. Our shares of beneficial interest that are entitled to a specific periodic distribution or have other debt characteristics will not be included in equity for the purpose of calculating incentive fees payable to our Manager. Instead, the aggregate distribution amount that accrues to such shares during the calendar quarter of such calculation will be subtracted from core earnings for purposes of calculating incentive fees, unless such distribution is otherwise already excluded from core earnings. Equity and core earnings as defined in the Management Agreement are non-GAAP financial measures and may be different than our shareholders’ equity and net income calculated according to GAAP. Until January 6, 2021, RMR Advisors also performed administrative functions for us pursuant to an administration agreement with us. RMR Advisors also entered into a subadministration agreement with State Street Bank and Trust Company, or State Street, to perform substantially all fund accounting and other administrative services for us. Under the administration agreement, RMR Advisors was entitled to reimbursement of the cost of providing administrative services. We paid RMR Advisors $76,757 for subadministrative fees charged by State Street for the year ended December 31, 2020. On January 6, 2021, RMR Advisors merged with and into our Manager, with our Manager being the surviving entity. Our Manager has assumed the administration agreement with us and the subadministration agreement with State Street. Each trustee who is not a director, officer or employee of Tremont Realty Advisors, and who is not an "interested person" of us, as defined under the 1940 Act, for the year ended December 31, 2020 is considered to be a "disinterested trustee". We pay cash compensation to our disinterested trustees, consisting primarily of an annual retainer. We incurred trustee fees and expenses of $55,347 for the year ended December 31, 2020. Our Board of Trustees, and separately the disinterested trustees, has authorized us to make payments to RMR Advisors and, commencing January 5, 2021, our Manager for costs, related to our compliance and internal audit programs. We incurred compliance and internal audit expenses of $144,543, which includes our allocated portion for compliance and internal audit related costs for the year ended December 31, 2020. |
Related Person Transactions
Related Person Transactions | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Person Transactions | Related Person Transactions We have relationships and historical and continuing transactions with our Manager, RMR LLC, The RMR Group Inc., or RMR Inc., and others related to them, including other companies to which RMR LLC or its subsidiaries provide management services and some of which have trustees, directors or officers who are also our Trustees or officers. Our Manager is a subsidiary of RMR LLC, which is a majority owned subsidiary of RMR Inc., and RMR Inc. is the managing member of RMR LLC. RMR LLC provides certain shared services to our Manager that are applicable to us, and we reimburse our Manager for the amounts it pays for those services. One of our Managing Trustees, Adam Portnoy, is the sole trustee, an officer and the controlling shareholder of ABP Trust, which is the controlling shareholder of RMR Inc., and he is also a director of our Manager, a managing director and the president and chief executive officer of RMR Inc., and an officer and employee of RMR LLC. In connection with the Business Change, our Board appointed Thomas J. Lorenzini as our President and G. Douglas Lanois as our Chief Financial Officer and Treasurer. Mr. Lorenzini and Mr. Lanois succeeded Fernando Diaz and Brian E. Donley, respectively, who each resigned from our Company, effective January 5, 2021. In addition, on January 5, 2021, Jennifer B. Clark resigned as our Managing Trustee, and our Board elected Matthew P. Jordan as successor Managing Trustee to fill the vacancy created by Ms. Clark’s resignation. Also effective January 1, 2021, Mr. Jordan was appointed as a director and the president and chief executive officer of our Manager. Mr. Jordan is an officer of RMR Inc., he and Messrs. Lorenzini and Lanois are both officers of RMR LLC and Messrs. Lorenzini and Lanois are also officers of our Manager. In addition, each of our other officers is also an officer and/or employee of our Manager or RMR LLC. Our Independent Trustees also serve as independent directors or independent trustees of other public companies to which RMR LLC or its subsidiaries provide management services. Adam Portnoy serves as the chair of the boards of trustees and boards of directors of several of these public companies and as a managing director or managing trustee of all of these companies and other officers of RMR LLC, including Mr. Jordan and certain of our other officers and officers of our Manager, serve as managing trustees, managing directors or officers of certain of these companies. Our Manager, Tremont Realty Advisors LLC. We have a management agreement with our Manager to provide management services to us. See Note 9 for further information regarding our management agreement with our Manager. Our Manager also provides management services to Tremont Mortgage Trust, or TRMT, a mortgage REIT that focuses primarily on originating and investing in first mortgage whole loans secured by middle market and transitional CRE. Tremont Mortgage Trust. As described further in Note 1, on April 26, 2021, we and TRMT entered into the Merger Agreement. Adam D. Portnoy and Matthew P. Jordan, our Managing Trustees, are also TRMT’s managing trustees. Thomas J. Lorenzini, our President, also serves as president of TRMT, and G. Douglas Lanois, our Chief Financial Officer and Treasurer, also serves as chief financial officer and treasurer of TRMT. John L. Harrington serves as one of our Independent Trustees and is also an independent trustee of TRMT, and Joseph L. Morea, one of our independent trustees, previously served as an independent trustee of TRMT; Jeffrey P. Somers, one of our independent trustees, previously served as an independent trustee of TRMT. See Note 1 for further information regarding the Merger Agreement. For further information about these and other such relationships and certain other related person transactions, refer to our definitive Proxy Statement for our 2021 Annual Meeting of Shareholders and to our Current Report on Form 8-K dated April 26, 2021. |
Income Taxes
Income Taxes | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Income Taxes | Income TaxesWe intend to elect to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, or the IRC, effective for our 2020 taxable year. Accordingly, we generally are not, and will not be, subject to U.S. federal income tax, provided that we meet certain distribution and other requirements. We are subject to certain state and local taxes, certain of which amounts are or will be reported as income taxes in our condensed consolidated statements of operations. | 6. Taxes We have adopted the provisions of the Topic of the FASB Accounting Standard Codification, or ASC 740. ASC 740 sets forth a minimum threshold for financial statement recognition of a tax position taken, or expected to be taken, in a tax return. Financial reporting records are adjusted for permanent book/tax differences to reflect tax character. These reclassifications have no impact on net assets or results of operations. We recognize interest and penalties, if any, related to unrecognized tax positions as an income tax expense in the Consolidated Statement of Operations. At December 31, 2020, we did not have any unrecognized tax positions. Each of the tax years in the four year period ended December 31, 2020 remains subject to examination by the Internal Revenue Service. We have elected to retain realized capital gains and designate such gains as a distribution to shareholders in accordance with section 852(b)(3)(D) of the Internal Revenue Code, or IRC, and we have recorded a $2,386,000 provision for income taxes for the year ended December 31, 2020. The amount of undistributed capital gains was $7,997,377 for the year ended December 31, 2020. The aggregate cost of investments that generated these undistributed gains for U.S. federal income tax purposes was $334,389,280. Current income tax expense as shown on our consolidated statement of operations is comprised of as described in the table below: Year ended December 31, 2020 Income tax expense Federal $ 1,746,210 State 639,790 Total $ 2,386,000 On January 5, 2021, the SEC issued an order deregistering us as an investment company. We elected to be taxed as a REIT beginning with the 2020 tax year. Our REIT election, assuming continuing compliance with the then applicable qualification tests, will continue in effect for subsequent taxable years. Although we cannot be sure, beginning with our taxable year for which we make our election to be taxed as a REIT, we expect that we will be organized and will operate in a manner that will allow us to so qualify, and we expect that we will continue to be so organized and to so operate in subsequent taxable years. Accordingly, we generally will not be subject to U.S. federal income tax provided that we meet certain distribution and other requirements. We are subject to certain state and local taxes, certain of which amounts are or will be reported as income taxes in our consolidated statements of operations. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Unfunded Loan Commitments As of March 31, 2021, we had unfunded commitments of $28,613 related to our loans held for investment that are not reflected in our condensed consolidated balance sheet. These unfunded commitments had a weighted average initial maturity of 2.6 years as of March 31, 2021. See Note 5 for further information related to our loans held for investment. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Prior to the Business Change, the Trust was accounted for as an investment company in accordance with the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 946, Financial Services - Investment Companies , or the Predecessor Basis. Upon the Business Change, we discontinued the application of guidance in ASC Topic 946 and prospectively applied the guidance required under GAAP, applicable to companies that are not investment companies, or the Successor Basis. As a result of these changes, our condensed consolidated financial statements as of and for the three months ended March 31, 2021 are presented separately from our financial statements on the Predecessor Basis, as of and for the periods prior to the Business Change. The results of operations from January 1, 2021 through January 4, 2021 were not material to the Trust's condensed consolidated financial statements and have not been presented separately, but they are included in our statement of operations for the three months ended March 31, 2021. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement of results for the interim periods have been included. All intercompany transactions and balances with or among our consolidated subsidiaries have been eliminated. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect reported amounts. Actual results could differ from those estimates. Significant estimates in the accompanying condensed consolidated financial statements include the fair value of financial instruments. |
Consolidation | Consolidation. These consolidated financial statements include the accounts of us and our subsidiaries, all of which are 100% owned directly by us. All intercompany transactions and balances with or among our consolidated subsidiaries have been eliminated. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash. We consider highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. Restricted cash primarily consists of deposit proceeds from potential borrowers when originating loans, which may be returned to the applicable borrower upon the closing of the loan, after deducting any transaction costs paid by us for the benefit of such borrower. |
Loans Held for Investment | Loans Held for Investment. Generally, our loans are classified as held for investment based upon our intent and ability to hold them until maturity, if earlier, repayment. Loans that are held for investment are carried at cost, net of unamortized loan origination and accreted exit fees that are required to be recognized in the carrying value of the loans in accordance with GAAP, unless the loans are deemed to be impaired. Loans that we have a plan to sell or liquidate are held at the lower of cost or fair value less cost to sell. We evaluate each of our loans for impairment at least quarterly by assessing a variety of risk factors in relation to each loan and assigning a risk rating to each loan based on those factors. Factors considered in these evaluations include, but are not limited to, property type, geographic and local market dynamics, physical condition, leasing and tenant profile, projected cash flow, risk of loss, current loan to value ratio, or LTV, debt yield, collateral performance, structure, exit plan and sponsorship. Loans are rated “1” (lower risk) through “5” (impaired/loss likely) as defined below: "1" lower risk—Criteria reflects a sponsor having a strong financial condition and low credit risk and our evaluation of management's experience; collateral performance exceeding performance metrics included in the business plan or credit underwriting; and the property demonstrating stabilized occupancy and/or market rates, resulting in strong current cash flow and net operating income and/or having a very low LTV. "2" average risk—Criteria reflects a sponsor having a stable financial condition and our evaluation of management's experience; collateral performance meeting or exceeding substantially all performance metrics included in the business plan or credit underwriting; and the property demonstrating improved occupancy at market rents, resulting in sufficient current cash flow and/or having a low LTV. "3" acceptable risk—Criteria reflects a sponsor having a history of repaying loans at maturity and meeting its credit obligations and our evaluation of management's experience; collateral performance expected to meet performance metrics included in the business plan or credit underwriting; and the property having a moderate LTV. New loans and loans with a limited history will typically be assigned this rating and will be adjusted to other levels from time to time as appropriate. "4" higher risk—Criteria reflects a sponsor having a history of unresolved missed or late payments, maturity extensions and difficulty timely fulfilling its credit obligations and our evaluation of management's experience; collateral performance failing to meet the business plan or credit underwriting; the existence of a risk of default possibly leading to a loss and/or potential weaknesses that deserve management’s attention; and/or the property having a high LTV. "5" impaired/loss likely—Criteria reflects a very high risk of realizing a principal loss or having incurred a principal loss; a sponsor having a history of default payments, trouble fulfilling its credit obligations, deeds in lieu of foreclosures, and/or bankruptcies; collateral performance is significantly worse than performance metrics included in the business plan; loan covenants or performance milestones having been breached or not attained; timely exit via sale or refinancing being uncertain; and/or the property having a very high LTV. See Note 5 for further information regarding our current loan portfolio’s assessment under our internal risk rating policy. Impairment occurs when it is deemed probable that we will not be able to collect all amounts due under a loan according to its contractual terms. Impairment will then be measured based on the present value of the expected future cash flows discounted at the loan's contractual effective rate and the fair value of any available collateral, net of any costs we expect to incur to realize that value. The determination of this estimated fair value involves judgments and assumptions based on objective and subjective factors. Consideration will be given to various factors, such as business plans, property occupancies, tenant profiles, rental rates, operating expenses and borrowers’ repayment plans, among others, and will require significant judgments regarding certain circumstances, such as guarantees, if any. Upon measurement of an impairment, we will record an allowance to reduce the carrying value of the loan accordingly, and record a corresponding charge to net income in our condensed consolidated statements of operations. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments. FASB ASC Topic 820-10, Fair Value Measurements and Disclosures , defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands the required disclosure regarding fair value measurements. ASC Topic 820-10 defines fair value as the price that would be received for a financial instrument in a current sale, which assumes an orderly transaction between market participants on the measurement date. We determine the estimated fair value of financial assets and liabilities using the three-tier fair value hierarchy established by GAAP, which prioritizes the inputs used in measuring fair value. GAAP establishes market based or observable inputs as the preferred source of values followed by valuation models using management assumptions in the absence of market inputs. The three levels of inputs that may be used to measure fair value are as follows: Level I—Inputs include quoted prices in active markets for identical assets or liabilities that we have the ability to access. Level II—Inputs include quoted prices in markets that are less active or inactive or for which all significant inputs are observable, either directly or indirectly. |
Loan Deferred Fees | Loan Deferred Fees. Loan origination and exit fees are reflected in loans held for investment, net, in our condensed consolidated balance sheet and include fees charged to borrowers. These fees are amortized and accreted, respectively, into interest income over the life of the related loans held for investment. |
Deferred Financing Costs | Deferred Financing Costs. Costs incurred in connection with financings are capitalized and recorded as an offset to the related liability and amortized over the respective financing terms and are recorded in our condensed consolidated statement of |
Net Income Per Common Share | Net Income Per Common Share. We calculate net income per common share, or EPS, by dividing net income by the weighted average number of common shares outstanding during the period. |
Revenue Recognition | Revenue Recognition. Interest income related to our first mortgage whole loans secured by CRE will generally be accrued based on the coupon rates applied to the outstanding principal balance of such loans. Fees, premiums and discounts, if any, will be amortized or accreted into interest income over the remaining lives of the loans using the effective interest method, as adjusted for any prepayments. If a loan's interest or principal payments are not paid when due and there is uncertainty that such payments will be collected, the loan may be categorized as non-accrual and no interest will be recorded unless it is collected. When all overdue payments are collected and, in our judgment, a loan is likely to remain current, it may be re-categorized as accrual. |
Securities Transactions and Investment Income | Securities Transactions and Investment Income. Under the Predecessor Basis, we recorded securities transactions on a trade date basis, dividend income on the ex-dividend date and any non-cash dividends at the fair market value of the securities received. We use the accrual method for recording interest income, including accretion of original issue discount, where applicable, and accretion of discount on short term investments and identified cost basis for realized gains and losses from securities transactions. The difference between cost and fair value for investments we continue to hold is reflected as unrealized gain (loss), and any change in that amount from a prior period is reflected in the accompanying consolidated statement of operations. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the FASB issued Accounting Standards Update, or ASU, No. 2016-13, Financial Instruments - Credit Losses (Topic 326) : Measurement of Credit Losses on Financial Instruments , which requires that entities use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowance for credit losses. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. As a smaller reporting company, we expect to adopt ASU No. 2016-13 on January 1, 2023. We are currently assessing the potential impact the adoption of ASU No. 2016-13 will have on our condensed consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides temporary optional expedients and exceptions on contract modifications meeting certain criteria to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to the alternative reference rates. For a contract that meets the criteria, this ASU generally allows an entity to account for and present modifications as an event that does not require remeasurement at the modification date or reassessment of a previous accounting determination. This ASU was effective upon issuance and can be applied through December 31, 2022. The adoption of ASU No. 2020-04 did not have a material impact on our condensed consolidated financial statements. |
Loans Held for Investment (Tabl
Loans Held for Investment (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Receivables [Abstract] | ||
Schedule of Loans | The table below provides overall statistics for our loan portfolio as of March 31, 2021 and December 31, 2020: As of March 31, 2021 (Successor Basis) As of December 31, 2020 (Predecessor Basis) Number of loans 7 5 Total loan commitments $ 177,195 $ 111,720 Unfunded loan commitments (1)(2) $ 28,613 $ 18,857 Principal balance (2) $ 148,652 $ 92,863 Unamortized net deferred origination fees $ (1,405) $ (984) Carrying value $ 147,247 $ 91,879 Weighted average coupon rate 4.99 % 5.08 % Weighted average all in yield (3) 5.65 % 5.71 % Weighted average maximum maturity (years) (4) 4.3 4.2 Weighted average risk rating 3.0 3.0 Weighted average LTV (5) 67 % 68 % (1) Unfunded loan commitments are primarily used to finance property and building improvements and leasing capital and are generally funded over the term of the loan. (2) The principal balance at March 31, 2021 includes $69 of capitalized interest that does not reduce the amount of unfunded loan commitments. (3) All in yield represents the yield on a loan, excluding any repurchase debt funding applicable to the loan and including amortization of deferred fees over the initial term of the loan. (4) Maximum maturity assumes all borrower loan extension options have been exercised, which options are subject to the borrower meeting certain conditions. (5) LTV represents the initial loan amount divided by the underwritten in-place value of the underlying collateral at closing. The table below represents our loan activities during the three months ended March 31, 2021: Principal Balance Deferred Fees Carrying Value Balance at December 31, 2020 (Predecessor Basis) $ 92,863 $ (984) $ 91,879 Additional funding 274 — 274 Originations 55,515 (675) 54,840 Net amortization of deferred fees — 254 254 Balance at March 31, 2021 (Successor Basis) $ 148,652 $ (1,405) $ 147,247 March 31, 2021 December 31, 2020 Property Type Number of Loans Carrying Value Percentage of Value Number of Loans Carrying Value Percentage of Value Office (1) 3 $ 48,979 33 % 2 $ 38,106 41 % Multifamily 1 44,119 30 % — — — % Lab 2 31,139 21 % 2 31,078 34 % Retail 1 17,344 12 % 1 17,029 19 % Industrial (1) — 5,666 4 % — 5,666 6 % 7 $ 147,247 100 % 5 $ 91,879 100 % (1) Our loan investment secured by a mixed use property consisting of office space and an industrial warehouse in Aurora, IL is classified as office for the purpose of counting the number of loans in our portfolio. The carrying value of this loan investment is reflected in office and industrial based on the fair value of the buildings at the time of origination relative to the total fair value of the property. March 31, 2021 December 31, 2020 Geographic Location Number of Loans Carrying Value Percentage of Value Number of Loans Carrying Value Percentage of Value Midwest 3 $ 87,960 60 % 2 $ 43,772 48 % West 2 35,167 24 % 2 34,826 38 % South 2 24,120 16 % 1 13,281 14 % 7 $ 147,247 100 % 5 $ 91,879 100 % March 31, 2021 (Successor Basis) December 31, 2020 (Predecessor Basis) Risk Rating Number of Loans Carrying Value Number of Loans Carrying Value 1 — $ — — $ — 2 — — — — 3 7 147,247 5 91,879 4 — — — — 5 — — — — 7 $ 147,247 5 $ 91,879 | The following table allocates the carrying value of our loan portfolio at December 31, 2020 based on our internal risk rating policy: December 31, 2020 Number of Risk Rating Loans Carrying Value 1 — $ — 2 — — 3 5 91,878,969 4 — — 5 — — 5 $ 91,878,969 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The table below provides information regarding our financial assets: March 31, 2021 (Successor Basis) December 31, 2020 (Predecessor Basis) Carrying Value Fair Value Carrying Value Fair Value Financial assets Loans held for investment $ 147,247 $ 146,400 $ 91,879 $ 91,879 |
Organization (Details)
Organization (Details) - $ / shares | Apr. 26, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | |||
Common shares, par value (in dollars per share) | $ 0.001 | $ 0.001 | |
Merger Agreement | Subsequent Event | |||
Business Acquisition [Line Items] | |||
Common shares, par value (in dollars per share) | $ 0.001 | ||
Exchange ratio of shares issued per acquiree share ( in shares) | 0.52 | ||
Merger Agreement | Subsequent Event | Tremont Mortgage Trust | |||
Business Acquisition [Line Items] | |||
Common shares, par value (in dollars per share) | $ 0.01 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | ||
Percent ownership | 100.00% | 100.00% |
Debt financing costs | $ 76 |
Loans Held for Investment - Loa
Loans Held for Investment - Loan Portfolio Statistics (Details) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021USD ($)loan | Dec. 31, 2020USD ($)loan | |
Receivables [Abstract] | ||
Number of Loans | loan | 7 | 5 |
Total loan commitments | $ 177,195 | $ 111,720 |
Unfunded loan commitments | 28,613 | 18,857 |
Principal Balance | 148,652 | 92,863 |
Unamortized net deferred origination fees | (1,405) | (984) |
Carrying value | $ 147,247 | $ 91,879 |
Weighted average coupon rate | 4.99% | 5.08% |
Weighted average all in yield | 5.65% | 5.71% |
Weighted average maximum maturity | 4 years 3 months 18 days | 4 years 2 months 12 days |
Weighted average risk rating | 3 | 3 |
Weighted average LTV | 0.67 | 0.68 |
Capitalized interest | $ 69 | $ 69 |
Loans Held for Investment - L_2
Loans Held for Investment - Loan Activity (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
SEC Schedule, 12-29, Real Estate Companies, Investment in Movement in Mortgage Loans on Real Estate [Roll Forward] | |
Principal, beginning balance | $ 92,863 |
Deferred fees, beginning balance | (984) |
Carrying value, beginning balance | 91,879 |
Additional funding | 274 |
Principal, originations | 55,515 |
Deferred fees, originations | (675) |
Carrying value, originations | 54,840 |
Net amortization of deferred fees | 254 |
Principal, ending balance | 148,652 |
Deferred fees, ending balance | (1,405) |
Carrying value, ending balance | $ 147,247 |
Loans Held for Investment - Nar
Loans Held for Investment - Narrative (Details) $ in Thousands | 1 Months Ended | ||
Apr. 30, 2021USD ($)ft²propertyextension_option | Mar. 31, 2021USD ($) | Dec. 31, 2020USD ($) | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Committed Principal Amount | $ 148,652 | $ 92,863 | |
Weighted average risk rating | 3 | 3 | |
Colorado Springs, Colorado | Subsequent Event | Office/Industrial Property | First Mortgage Bridge Loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Committed Principal Amount | $ 34,275 | ||
Area of property | ft² | 288,275 | ||
Initial term | 3 years | ||
Number of extension options | extension_option | 1 | ||
Extension term | 1 year | ||
Colorado Springs, Colorado | Subsequent Event | Office/Industrial Property | LIBOR | First Mortgage Bridge Loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Basis spread on variable rate | 4.50% | ||
Colorado Springs, Colorado | Subsequent Event | Office/Industrial Property | Initial Funding | First Mortgage Bridge Loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Committed Principal Amount | $ 28,970 | ||
Colorado Springs, Colorado | Subsequent Event | Office/Industrial Property | Future Funding Allowance | First Mortgage Bridge Loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Committed Principal Amount | 5,305 | ||
Londonderry, New Hampshire | Subsequent Event | Office/Industrial Property | First Mortgage Bridge Loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Committed Principal Amount | $ 39,240 | ||
Initial term | 3 years | ||
Number of extension options | extension_option | 2 | ||
Extension term | 1 year | ||
Number of properties | property | 2 | ||
Londonderry, New Hampshire | Subsequent Event | Office/Industrial Property | LIBOR | First Mortgage Bridge Loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Basis spread on variable rate | 4.00% | ||
Londonderry, New Hampshire | Subsequent Event | Office/Industrial Property | Initial Funding | First Mortgage Bridge Loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Committed Principal Amount | $ 34,200 | ||
Londonderry, New Hampshire | Subsequent Event | Office/Industrial Property | Future Funding Allowance | First Mortgage Bridge Loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Committed Principal Amount | $ 5,040 |
Loans Held for Investment - L_3
Loans Held for Investment - Loan Portfolio (Details) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021USD ($)loan | Dec. 31, 2020USD ($)loan | |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of Loans | loan | 7 | 5 |
Carrying value | $ | $ 147,247 | $ 91,879 |
Percentage of Value | 100.00% | 100.00% |
Midwest | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of Loans | loan | 3 | 2 |
Carrying value | $ | $ 87,960 | $ 43,772 |
Percentage of Value | 60.00% | 48.00% |
West | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of Loans | loan | 2 | 2 |
Carrying value | $ | $ 35,167 | $ 34,826 |
Percentage of Value | 24.00% | 38.00% |
South | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of Loans | loan | 2 | 1 |
Carrying value | $ | $ 24,120 | $ 13,281 |
Percentage of Value | 16.00% | 14.00% |
Office | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of Loans | loan | 3 | 2 |
Carrying value | $ | $ 48,979 | $ 38,106 |
Percentage of Value | 33.00% | 41.00% |
Multifamily | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of Loans | loan | 1 | 0 |
Carrying value | $ | $ 44,119 | $ 0 |
Percentage of Value | 30.00% | 0.00% |
Lab | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of Loans | loan | 2 | 2 |
Carrying value | $ | $ 31,139 | $ 31,078 |
Percentage of Value | 21.00% | 34.00% |
Retail | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of Loans | loan | 1 | 1 |
Carrying value | $ | $ 17,344 | $ 17,029 |
Percentage of Value | 12.00% | 19.00% |
Industrial | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of Loans | loan | 0 | 0 |
Carrying value | $ | $ 5,666 | $ 5,666 |
Percentage of Value | 4.00% | 6.00% |
Loans Held for Investment - L_4
Loans Held for Investment - Loan Risk Ratings (Details) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021USD ($)loan | Dec. 31, 2020USD ($)loan | |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of Loans | loan | 7 | 5 |
Carrying value | $ | $ 147,247 | $ 91,879 |
Weighted average risk rating | 3 | 3 |
Percentage of Value | 100.00% | 100.00% |
Risk Rating, 1 | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of Loans | loan | 0 | 0 |
Carrying value | $ | $ 0 | $ 0 |
Risk Rating, 2 | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of Loans | loan | 0 | 0 |
Carrying value | $ | $ 0 | $ 0 |
Risk Rating, 3 | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of Loans | loan | 7 | 5 |
Carrying value | $ | $ 147,247 | $ 91,879 |
Risk Rating, 4 | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of Loans | loan | 0 | 0 |
Carrying value | $ | $ 0 | $ 0 |
Risk Rating, 5 | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of Loans | loan | 0 | 0 |
Carrying value | $ | $ 0 | $ 0 |
Debt Agreements (Details)
Debt Agreements (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2020 | Dec. 31, 2020 | Apr. 30, 2021 | Mar. 31, 2021 | Feb. 18, 2021 | |
Assets Sold under Agreements to Repurchase [Line Items] | |||||
Equity | $ 192,894,000 | $ 193,244,000 | |||
Outstanding balance | $ 0 | ||||
Interest expense | $ 554,000 | $ 1,207,561 | |||
Subsequent Event | |||||
Assets Sold under Agreements to Repurchase [Line Items] | |||||
Outstanding balance | $ 23,172,000 | ||||
Mortgages and Related Assets | |||||
Assets Sold under Agreements to Repurchase [Line Items] | |||||
Percentage of loan guaranteed | 25.00% | ||||
Debt Instrument, Loan Percentage Guaranteed In Event Of Certain Bad Acts | 100.00% | ||||
Mortgages and Related Assets | Subsequent Event | |||||
Assets Sold under Agreements to Repurchase [Line Items] | |||||
Percentage of loan guaranteed | 25.00% | ||||
Debt Instrument, Loan Percentage Guaranteed In Event Of Certain Bad Acts | 100.00% | ||||
UBS AG | Mortgages and Related Assets | |||||
Assets Sold under Agreements to Repurchase [Line Items] | |||||
Non-refundable upfront fee, percent of tranche | 0.50% | ||||
Percentage of purchased asset, initial purchase price | 75.00% | ||||
Minimum percentage of margin to advance | 75.00% |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - Level III - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for investment | $ 147,247 | $ 91,879 |
Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for investment | $ 146,400 | $ 91,879 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - Subsequent Event $ / shares in Units, $ in Thousands | Apr. 15, 2021USD ($)$ / shares |
Subsequent Event [Line Items] | |
Distributions declared (in dollars per share) | $ / shares | $ 0.15 |
Distributions | $ | $ 1,530 |
Management Agreement with our_2
Management Agreement with our Manager (Details) - USD ($) | Jan. 05, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Jan. 04, 2021 |
Related Party Transaction [Line Items] | |||||
Administrative | $ 24,000 | $ 76,757 | |||
Annual rate, percent of average daily managed assets | 0.85% | ||||
Advisory | $ 22,000 | 705,000 | 2,363,603 | ||
Compliance and internal audit | $ 34,000 | $ 144,543 | |||
Base management fees | $ 715,000 | ||||
Reimbursement of shared services expenses | 326,000 | ||||
Principal Owner | Shared Service Costs | |||||
Related Party Transaction [Line Items] | |||||
Reimbursement of shared services expenses | $ 352,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Other Commitments [Line Items] | ||
Unfunded loan commitments | $ 28,613 | $ 18,857 |
Weighted average maximum maturity | 4 years 3 months 18 days | 4 years 2 months 12 days |
Unfunded Commitments | ||
Other Commitments [Line Items] | ||
Weighted average maximum maturity | 2 years 7 months 6 days |