Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 16, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Document Transition Report | false | ||
Entity File Number | 001-35517 | ||
Entity Registrant Name | ARES COMMERCIAL REAL ESTATE CORPORATION | ||
Entity Incorporation, State or Country Code | MD | ||
Entity Tax Identification Number | 45-3148087 | ||
Entity Address, Address Line One | 245 Park Avenue | ||
Entity Address, Address Line Two | 42nd Floor | ||
Entity Address, City or Town | New York | ||
Entity Address, State or Province | NY | ||
Entity Address, Postal Zip Code | 10167 | ||
City Area Code | 212 | ||
Local Phone Number | 750-7300 | ||
Title of 12(b) Security | Common Stock, $0.01 par value per share | ||
Trading Symbol | ACRE | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 274,443,403 | ||
Entity Common Stock, Shares Outstanding | 33,477,841 | ||
Entity Central Index Key | 0001529377 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
ASSETS | ||
Cash and cash equivalents | $ 74,776 | $ 5,256 |
Restricted cash | 0 | 379 |
Loans held for investment ($550,590 and $515,896 related to consolidated VIEs, respectively) | 1,815,219 | 1,682,498 |
Current expected credit loss reserve | (23,604) | 0 |
Loans held for investment, net of current expected credit loss reserve | 1,791,615 | 1,682,498 |
Real estate owned, net | 37,283 | 37,901 |
Other assets ($1,079 and $1,309 of interest receivable related to consolidated VIEs, respectively; $6,410 and $41,104 of other receivables related to consolidated VIEs, respectively) | 25,823 | 58,100 |
Total assets | 1,929,497 | 1,784,134 |
LIABILITIES | ||
Secured funding agreements | 755,552 | 728,589 |
Notes payable | 61,837 | 54,708 |
Secured term loan | 110,000 | 109,149 |
Collateralized loan obligation securitization debt (consolidated VIE) | 443,871 | 443,177 |
Secured borrowings | 59,790 | 0 |
Due to affiliate | 3,150 | 2,761 |
Dividends payable | 11,124 | 9,546 |
Other liabilities ($391 and $718 of interest payable related to consolidated VIEs, respectively) | 11,158 | 9,865 |
Total liabilities | 1,456,482 | 1,357,795 |
Commitments and contingencies (Note 8) | ||
STOCKHOLDERS' EQUITY | ||
Common stock, par value $0.01 per share, 450,000,000 shares authorized at December 31, 2020 and December 31, 2019 and 33,442,332 and 28,865,610 shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively | 329 | 283 |
Additional paid-in capital | 497,803 | 423,619 |
Accumulated earnings (deficit) | (25,117) | 2,437 |
Total stockholders' equity | 473,015 | 426,339 |
Total liabilities and stockholders' equity | $ 1,929,497 | $ 1,784,134 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Loans held for investment | $ 1,815,219 | $ 1,682,498 |
Other assets | 25,823 | 58,100 |
Other liabilities | $ 11,158 | $ 9,865 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 450,000,000 | 450,000,000 |
Common stock shares issued (in shares) | 33,442,332 | 28,865,610 |
Common stock, shares outstanding (in shares) | 33,442,332 | 28,865,610 |
Variable Interest Entity, Primary Beneficiary | ||
Loans held for investment | $ 550,590 | $ 515,896 |
Interest receivable | 1,079 | 1,309 |
Other assets | 6,410 | 41,104 |
Other liabilities | $ 391 | $ 718 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue: | ||||
Interest income | $ 29,100 | $ 121,052 | $ 114,784 | $ 118,284 |
Interest expense | (51,949) | (62,583) | (63,002) | |
Net interest margin | 69,103 | 52,201 | 55,282 | |
Revenue from real estate owned | 13,593 | 25,058 | 0 | |
Total revenue | 82,696 | 77,259 | 55,282 | |
Expenses: | ||||
Management and incentive fees to affiliate | 2,400 | 8,159 | 7,363 | 7,418 |
Professional fees | $ 400 | 2,640 | 2,194 | 1,945 |
General and administrative expenses | 3,732 | 4,188 | 3,307 | |
General and administrative expenses reimbursed to affiliate | 3,653 | 3,026 | 3,570 | |
Expenses from real estate owned | 18,127 | 22,982 | 0 | |
Total expenses | 36,311 | 39,753 | 16,240 | |
Provision for current expected credit losses | 20,185 | 0 | 0 | |
Realized losses on loans sold | 4,008 | 0 | 0 | |
Income before income taxes | 22,192 | 37,506 | 39,042 | |
Income tax expense, including excise tax | 352 | 515 | 446 | |
Net income attributable to common stockholders | $ 21,840 | $ 36,991 | $ 38,596 | |
Earnings Per Share [Abstract] | ||||
Basic earnings per common share (in dollars per share) | $ 0.66 | $ 1.29 | $ 1.35 | |
Diluted earnings per common share (in dollars per share) | $ 0.66 | $ 1.28 | $ 1.35 | |
Weighted average number of common shares outstanding: | ||||
Basic weighted average shares of common stock outstanding (in shares) | 32,977,462 | 28,609,282 | 28,529,439 | |
Diluted weighted average shares of common stock outstanding (in shares) | 33,196,508 | 28,846,641 | 28,656,660 |
CONSOLIDATED STATEMENT OF STOCK
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Impact of adoption of CECL | Common Stock | Additional Paid-in Capital | Accumulated Earnings (Deficit) | Accumulated Earnings (Deficit)Impact of adoption of CECL |
Beginning Balance (in shares) at Dec. 31, 2017 | 28,598,916 | |||||
Beginning Balance at Dec. 31, 2017 | $ 419,170 | $ 283 | $ 420,637 | $ (1,750) | ||
Increase (Decrease) in Stockholders' Equity | ||||||
Stock-based compensation (in shares) | 156,749 | |||||
Stock-based compensation | 1,102 | 1,102 | ||||
Net income | 38,596 | 38,596 | ||||
Dividends declared | (33,281) | (33,281) | ||||
Ending Balance (in shares) at Dec. 31, 2018 | 28,755,665 | |||||
Ending Balance at Dec. 31, 2018 | $ 425,587 | $ 283 | 421,739 | 3,565 | ||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Stock-based compensation (in shares) | 109,945 | |||||
Stock-based compensation | $ 1,880 | 1,880 | ||||
Net income | 36,991 | 36,991 | ||||
Dividends declared | $ (38,119) | (38,119) | ||||
Ending Balance (in shares) at Dec. 31, 2019 | 28,865,610 | 28,865,610 | ||||
Ending Balance at Dec. 31, 2019 | $ 426,339 | $ (5,051) | $ 283 | 423,619 | 2,437 | $ (5,051) |
Increase (Decrease) in Stockholders' Equity | ||||||
Stock-based compensation (in shares) | (23,278) | |||||
Stock-based compensation | 1,339 | 1,339 | ||||
Net income | 21,840 | 21,840 | ||||
Offering costs | (341) | (341) | ||||
Dividends declared | (44,343) | (44,343) | ||||
Sale of common stock (in shares) | 4,600,000 | |||||
Sale of common stock | $ 73,232 | $ 46 | 73,186 | |||
Ending Balance (in shares) at Dec. 31, 2020 | 33,442,332 | 33,442,332 | ||||
Ending Balance at Dec. 31, 2020 | $ 473,015 | $ 329 | $ 497,803 | $ (25,117) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Operating activities: | |||
Net income | $ 21,840 | $ 36,991 | $ 38,596 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Amortization of deferred financing costs | 6,434 | 6,569 | 5,720 |
Accretion of deferred loan origination fees and costs | (7,430) | (7,013) | (6,949) |
Stock-based compensation | 1,339 | 1,880 | 1,102 |
Depreciation of real estate owned | 892 | 667 | 0 |
Provision for current expected credit losses | 20,185 | 0 | 0 |
Realized losses on loans sold | 4,008 | 0 | 0 |
Changes in operating assets and liabilities: | |||
Other assets | (15,344) | (6,435) | 198 |
Due to affiliate | 389 | (402) | 535 |
Other liabilities | (551) | 195 | 16 |
Net cash provided by (used in) operating activities | 31,762 | 32,452 | 39,218 |
Investing activities: | |||
Issuance of and fundings on loans held for investment | (524,166) | (673,160) | (543,077) |
Principal repayment of loans held for investment | 341,450 | 492,884 | 695,183 |
Proceeds from sale of loans held for sale | 96,597 | 0 | 0 |
Receipt of origination fees | 4,526 | 7,536 | 5,818 |
Purchases of capitalized additions to real estate owned | (274) | (1,686) | 0 |
Net cash provided by (used in) investing activities | (81,867) | (174,426) | 157,924 |
Financing activities: | |||
Proceeds from secured funding agreements | 473,493 | 793,801 | 642,241 |
Repayments of secured funding agreements | (446,530) | (843,186) | (822,227) |
Proceeds from notes payable | 6,967 | 56,155 | 0 |
Proceeds from secured borrowings | 60,215 | 0 | 0 |
Payment of secured funding costs | (5,065) | (5,731) | (2,322) |
Proceeds from issuance of debt of consolidated VIEs | 0 | 172,673 | 0 |
Dividends paid | (42,765) | (37,487) | (32,088) |
Proceeds from sale of common stock | 73,232 | 0 | 0 |
Payment of offering costs | (301) | (84) | 0 |
Net cash provided by (used in) financing activities | 119,246 | 136,141 | (214,396) |
Change in cash, cash equivalents and restricted cash | 69,141 | (5,833) | (17,254) |
Cash, cash equivalents and restricted cash, beginning of period | 5,635 | 11,468 | 28,722 |
Cash, cash equivalents and restricted cash, end of period | 74,776 | 5,635 | 11,468 |
Supplemental Information: | |||
Interest paid during the period | 46,137 | 54,595 | 56,719 |
Income taxes paid during the period | 399 | 668 | 360 |
Supplemental disclosure of noncash investing and financing activities: | |||
Dividends declared, but not yet paid | 11,124 | 9,546 | 8,914 |
Notes Issued | $ 6,410 | $ 41,104 | $ 51,582 |
ORGANIZATION
ORGANIZATION | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | ORGANIZATION Ares Commercial Real Estate Corporation (together with its consolidated subsidiaries, the “Company” or “ACRE”) is a specialty finance company primarily engaged in originating and investing in commercial real estate loans and related investments. Through Ares Commercial Real Estate Management LLC (“ACREM” or the Company’s “Manager”), a Securities and Exchange Commission (“SEC”) registered investment adviser and a subsidiary of Ares Management Corporation (NYSE: ARES) (“Ares Management” or “Ares”), a publicly traded, leading global alternative investment manager, it has investment professionals strategically located across the United States and Europe who directly source new loan opportunities for the Company with owners, operators and sponsors of commercial real estate (“CRE”) properties. The Company was formed and commenced operations in late 2011. The Company is a Maryland corporation and completed its initial public offering (the “IPO”) in May 2012. The Company is externally managed by its Manager, pursuant to the terms of a management agreement (the “Management Agreement”). The Company operates as one operating segment and is primarily focused on directly originating and managing a diversified portfolio of CRE debt-related investments for the Company’s own account. The Company’s target investments include senior mortgage loans, subordinated debt, preferred equity, mezzanine loans and other CRE investments, including commercial mortgage backed securities. These investments are generally held for investment and are secured, directly or indirectly, by office, multifamily, retail, industrial, lodging, senior-living, self storage, student housing, residential and other commercial real estate properties, or by ownership interests therein. The Company has elected and qualified to be taxed as a real estate investment trust (“REIT”) for United States federal income tax purposes under the Internal Revenue Code of 1986, as amended (the “Code”), commencing with its taxable year ended December 31, 2012. The Company generally will not be subject to United States federal income taxes on its REIT taxable income as long as it annually distributes all of its REIT taxable income prior to the deduction for dividends paid to stockholders and complies with various other requirements as a REIT. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements have been prepared on the accrual basis of accounting in conformity with United States generally accepted accounting principles (“GAAP”) and include the accounts of the Company, the consolidated variable interest entities (“VIEs”) that the Company controls and of which the Company is the primary beneficiary, and the Company’s wholly-owned subsidiaries. The consolidated financial statements reflect all adjustments and reclassifications that, in the opinion of management, are necessary for the fair presentation of the Company’s results of operations and financial condition as of and for the periods presented. All intercompany balances and transactions have been eliminated. Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. As of the filing date of this Annual Report, there is a continued outbreak of the novel Coronavirus pandemic (“COVID-19”), for which the World Health Organization has declared a global pandemic, the United States has declared a national emergency and every state in the United States is under a federal disaster declaration. Many states, including those in which the Company and its borrowers operate, have issued orders requiring the closure of, or certain restrictions on the operation of, non-essential businesses and/or requiring residents to stay at home. The COVID-19 pandemic and preventative measures taken to contain or mitigate its spread have caused, and are continuing to cause, business shutdowns or the re-introduction of business shutdowns, cancellations of events and restrictions on travel, significant reductions in demand for certain goods and services, reductions in business activity and financial transactions, supply chain interruptions and overall economic and financial market instability both globally and in the United States. While several countries, as well as certain states in the United States, have relaxed the public health restrictions with a view to partially or fully reopen their economies, recurring COVID-19 outbreaks have led to the re-introduction of such restrictions in certain states in the United States and globally and could continue to lead to the re-introduction of such restrictions elsewhere. Additionally, in December 2020, the U.S. Food and Drug Administration authorized certain vaccines for emergency use. However, it remains unclear how quickly the vaccines will be distributed nationwide and globally or when “herd immunity” will be achieved and the restrictions that were imposed to slow the spread of the virus will be lifted entirely. The delay in distributing the vaccines could lead people to continue to self-isolate and not participate in the economy at pre-pandemic levels for a prolonged period of time. Even after the COVID-19 pandemic subsides, the U.S. economy and most other major global economies may continue to experience a recession, and we anticipate our business and operations could be materially adversely affected by a prolonged recession in the United States. The Company believes the estimates and assumptions underlying its consolidated financial statements are reasonable and supportable based on the information available as of December 31, 2020, however, uncertainty over the ultimate impact the COVID-19 pandemic will have on the global economy and the Company’s business, makes any estimates and assumptions as of December 31, 2020 inherently less certain than they would be absent the current and potential impacts of the COVID-19 pandemic. Actual results could differ from those estimates. Variable Interest Entities The Company evaluates all of its interests in VIEs for consolidation. When the Company’s interests are determined to be variable interests, the Company assesses whether it is deemed to be the primary beneficiary of the VIE. The primary beneficiary of a VIE is required to consolidate the VIE. Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810, Consolidation , defines the primary beneficiary as the party that has both (i) the power to direct the activities of the VIE that most significantly impact its economic performance, and (ii) the obligation to absorb losses and the right to receive benefits from the VIE which could be potentially significant. The Company considers its variable interests, as well as any variable interests of its related parties in making this determination. Where both of these factors are present, the Company is deemed to be the primary beneficiary and it consolidates the VIE. Where either one of these factors is not present, the Company is not the primary beneficiary and it does not consolidate the VIE. To assess whether the Company has the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, the Company considers all facts and circumstances, including its role in establishing the VIE and its ongoing rights and responsibilities. This assessment includes first, identifying the activities that most significantly impact the VIE’s economic performance; and second, identifying which party, if any, has power over those activities. In general, the parties that make the most significant decisions affecting the VIE or have the right to unilaterally remove those decision makers are deemed to have the power to direct the activities of a VIE. To assess whether the Company has the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE, the Company considers all of its economic interests, including debt and equity investments, servicing fees, and other arrangements deemed to be variable interests in the VIE. This assessment requires that the Company applies judgment in determining whether these interests, in the aggregate, are considered potentially significant to the VIE. Factors considered in assessing significance include: the design of the VIE, including its capitalization structure; subordination of interests; payment priority; relative share of interests held across various classes within the VIE’s capital structure; and the reasons why the interests are held by the Company. For VIEs of which the Company is determined to be the primary beneficiary, all of the underlying assets, liabilities, equity, revenue and expenses of the structures are consolidated into the Company’s consolidated financial statements. The Company performs an ongoing reassessment of: (1) whether any entities previously evaluated under the majority voting interest framework have become VIEs, based on certain events, and therefore are subject to the VIE consolidation framework, and (2) whether changes in the facts and circumstances regarding its involvement with a VIE cause the Company’s consolidation conclusion regarding the VIE to change. See Note 15 included in these consolidated financial statements for further discussion of the Company’s VIEs. Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents include funds on deposit with financial institutions, including demand deposits with financial institutions. Cash and short‑term investments with an original maturity of three months or less when acquired are considered cash and cash equivalents for the purpose of the consolidated balance sheets and statements of cash flows. Restricted cash includes deposits required under certain Secured Funding Agreements (each individually defined in Note 6 included in these consolidated financial statements). The following table provides a reconciliation of cash, cash equivalents and restricted cash in the consolidated balance sheets to the total amount shown in the consolidated statements of cash flows ($ in thousands): As of December 31, 2020 2019 2018 Cash and cash equivalents $ 74,776 $ 5,256 $ 11,089 Restricted cash — 379 379 Total cash, cash equivalents and restricted cash shown in the Company's consolidated statements of cash flows $ 74,776 $ 5,635 $ 11,468 Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and restricted cash, loans held for investment and interest receivable. The Company places its cash and cash equivalents with financial institutions and, at times, cash held may exceed the Federal Deposit Insurance Corporation insured limit. The Company has exposure to credit risk on its loans held for investment. The Company and the Company’s Manager seek to manage credit risk by performing due diligence prior to origination or acquisition and through the use of non‑recourse financing, when and where available and appropriate. Loans Held for Investment The Company originates CRE debt and related instruments generally to be held for investment. Loans that are held for investment are carried at cost, net of unamortized loan fees and origination costs (the “carrying value”). Loans are generally collateralized by real estate. The extent of any credit deterioration associated with the performance and/or value of the underlying collateral property and the financial and operating capability of the borrower could impact the expected amounts received. The Company monitors performance of its loans held for investment portfolio under the following methodology: (1) borrower review, which analyzes the borrower’s ability to execute on its original business plan, reviews its financial condition, assesses pending litigation and considers its general level of responsiveness and cooperation; (2) economic review, which considers underlying collateral (i.e. leasing performance, unit sales and cash flow of the collateral and its ability to cover debt service, as well as the residual loan balance at maturity); (3) property review, which considers current environmental risks, changes in insurance costs or coverage, current site visibility, capital expenditures and market perception; and (4) market review, which analyzes the collateral from a supply and demand perspective of similar property types, as well as from a capital markets perspective. Such analyses are completed and reviewed by asset management and finance personnel who utilize various data sources, including periodic financial data such as property occupancy, tenant profile, rental rates, operating expenses, and the borrower’s exit plan, among other factors. Loans are generally placed on non-accrual status when principal or interest payments are past due 30 days or more or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed against interest income in the period the loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding the borrower’s ability to make pending principal and interest payments. Non-accrual loans are restored to accrual status when past due principal and interest are paid and, in management’s judgment, are likely to remain current. The Company may make exceptions to placing a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection. Loan balances that are deemed to be uncollectible are written off as a realized loss and are deducted from the current expected credit loss reserve. The write-offs are recorded in the period in which the loan balance is deemed uncollectible based on management’s judgment. Current Expected Credit Losses In June 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . The standard replaced the incurred loss impairment methodology pursuant to GAAP with a methodology that reflects current expected credit losses (“CECL”) on both the outstanding balances and unfunded commitments on loans held for investment and requires consideration of a broader range of historical experience adjusted for current conditions and reasonable and supportable forecast information to inform credit loss estimates (the “CECL Reserve”). ASU No. 2016-13 was effective for annual reporting periods beginning after December 15, 2019, including interim periods within that reporting period. ASU No. 2016-13 was adopted by the Company on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of January 1, 2020. Subsequent period increases and decreases to expected credit losses impact earnings and are recorded within provision for current expected credit losses in the Company’s consolidated statements of operations. The CECL Reserve related to outstanding balances on loans held for investment required under ASU No. 2016-13 is a valuation account that is deducted from the amortized cost basis of the Company’s loans held for investment in the Company’s consolidated balance sheets. The CECL Reserve related to unfunded commitments on loans held for investment is recorded within other liabilities in the Company's consolidated balance sheets. See Note 4 included in these consolidated financial statements for CECL related disclosures. Loans Held for Sale Although the Company generally holds its target investments as long-term investments, the Company may occasionally classify some of its investments as held for sale. Investments held for sale are carried at fair value within loans held for sale, at fair value in the Company’s consolidated balance sheets, with changes in fair value recorded through earnings. Real Estate Owned Real estate assets are carried at their estimated fair value at acquisition and are presented net of accumulated depreciation and impairment charges. The Company allocates the purchase price of acquired real estate assets based on the fair value of the acquired land, building, furniture, fixtures and equipment. Real estate assets are depreciated using the straight-line method over estimated useful lives of up to 40 years for buildings and improvements and up to 15 years for furniture, fixtures and equipment. Renovations and/or replacements that improve or extend the life of the real estate asset are capitalized and depreciated over their estimated useful lives. The cost of ordinary repairs and maintenance are expensed as incurred. Real estate assets are evaluated for indicators of impairment on a quarterly basis. Factors that the Company may consider in its impairment analysis include, among others: (1) significant underperformance relative to historical or anticipated operating results; (2) significant negative industry or economic trends; (3) costs necessary to extend the life or improve the real estate asset; (4) significant increase in competition; and (5) ability to hold and dispose of the real estate asset in the ordinary course of business. A real estate asset is considered impaired when the sum of estimated future undiscounted cash flows expected to be generated by the real estate asset over the estimated remaining holding period is less than the carrying amount of such real estate asset. Cash flows include operating cash flows and anticipated capital proceeds generated by the real estate asset. An impairment charge is recorded equal to the excess of the carrying value of the real estate asset over the fair value. When determining the fair value of a real estate asset, the Company makes certain assumptions including, but not limited to, consideration of projected operating cash flows, comparable selling prices and projected cash flows from the eventual disposition of the real estate asset based upon the Company’s estimate of a capitalization rate and discount rate. The Company reviews its real estate assets, from time to time, in order to determine whether to sell such assets. Real estate assets are classified as held for sale when the Company commits to a plan to sell the asset, when the asset is being marketed for sale at a reasonable price and the sale of the asset is probable and the transfer of the asset is expected to qualify for recognition as a completed sale within one year. Real estate assets that are held for sale are carried at the lower of the asset’s carrying amount or its fair value less costs to sell. Debt Issuance Costs Debt issuance costs under the Company’s indebtedness are capitalized and amortized over the term of the respective debt instrument. Unamortized debt issuance costs are expensed when the associated debt is repaid prior to maturity. Debt issuance costs related to debt securitizations are capitalized and amortized over the term of the underlying loans using the effective interest method. When an underlying loan is prepaid in a debt securitization and the outstanding principal balance of the securitization debt is reduced, the related unamortized debt issuance costs are charged to expense based on a pro‑rata share of the debt issuance costs being allocated to the specific loans that were prepaid. Amortization of debt issuance costs is included within interest expense, except as noted below, in the Company’s consolidated statements of operations while the unamortized balance on (i) Secured Funding Agreements (each individually defined in Note 6 included in these consolidated financial statements) is included within other assets and (ii) Notes Payable, the Secured Term Loan (each defined in Note 6 included in these consolidated financial statements) and Secured Borrowings (defined in Note 7 included in these consolidated financial statements) and debt securitizations are each included as a reduction to the carrying amount of the liability, in the Company’s consolidated balance sheets. Amortization of debt issuance costs for the note payable on the hotel property that is recognized as real estate owned in the Company’s consolidated balance sheets (see Note 6 included in these consolidated financial statements for additional information on the note payable) is included within expenses from real estate owned in the Company’s consolidated statements of operations. The original issue discount (“OID”) on amounts drawn under the Company’s Secured Term Loan represents a discount to the face amount of the drawn debt obligations. The OID is amortized over the term of the Secured Term Loan using the effective interest method and is included within interest expense in the Company’s consolidated statements of operations while the unamortized balance is included as a reduction to the carrying amount of the Secured Term Loan in the Company’s consolidated balance sheets. Revenue Recognition Interest income is accrued based on the outstanding principal amount and the contractual terms of each loan. For loans held for investment, the origination fees, contractual exit fees and direct loan origination costs are also recognized in interest income over the initial loan term as a yield adjustment using the effective interest method. Revenue from real estate owned represents revenue associated with the operations of a hotel property classified as real estate owned. Revenue from the operation of the hotel property is recognized when guestrooms are occupied, services have been rendered or fees have been earned. Revenues are recorded net of any discounts and sales and other taxes collected from customers. Revenues consist of room sales, food and beverage sales and other hotel revenues. Net Interest Margin and Interest Expense Net interest margin in the Company’s consolidated statements of operations serves to measure the performance of the Company’s loans as compared to its use of debt leverage. The Company includes interest income from its loans and interest expense related to its Secured Funding Agreements, Notes Payable, securitization debt, the Secured Term Loan (each individually defined in Note 6 included in these consolidated financial statements) and Secured Borrowings (defined in Note 7 included in these consolidated financial statements) in net interest margin. For the years ended December 31, 2020, 2019 and 2018, interest expense is comprised of the following ($ in thousands): For the years ended December 31, 2020 2019 2018 Secured funding agreements $ 28,003 $ 32,859 $ 43,039 Notes payable (1) 1,317 867 — Securitization debt 12,384 19,950 11,434 Secured term loan 7,114 8,907 8,529 Secured borrowings 3,131 — — Interest expense $ 51,949 $ 62,583 $ 63,002 ____________________________ (1) Excludes interest expense on the $28.3 million note payable, which is secured by a hotel property that is recognized as real estate owned in the Company’s consolidated balance sheets (see Note 6 included in these consolidated financial statements for additional information on the note payable). Interest expense on the $28.3 million note payable is included within expenses from real estate owned in the Company’s consolidated statements of operations. Income Taxes The Company has elected and qualified for taxation as a REIT commencing with its taxable year ended December 31, 2012. As a result of the Company’s REIT qualification and its distribution policy, the Company does not generally pay United States federal corporate level income taxes. Many of the REIT requirements, however, are highly technical and complex. To continue to qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement that the Company distributes annually to its stockholders at least 90% of the Company’s REIT taxable income prior to the deduction for dividends paid. To the extent that the Company distributes less than 100% of its REIT taxable income in any tax year (taking into account any distributions made in a subsequent tax year under Sections 857(b)(9) or 858 of the Code), the Company will pay tax at regular corporate rates on that undistributed portion. Furthermore, if the Company distributes less than the sum of 1) 85% of its ordinary income for the calendar year, 2) 95% of its capital gain net income for the calendar year, and 3) any undistributed shortfall from its prior calendar year (the “Required Distribution”) to its stockholders during any calendar year (including any distributions declared by the last day of the calendar year but paid in the subsequent year), then it is required to pay a non-deductible excise tax equal to 4% of any shortfall between the Required Distribution and the amount that was actually distributed. The 90% distribution requirement does not require the distribution of net capital gains. However, if the Company elects to retain any of its net capital gain for any tax year, it must notify its stockholders and pay tax at regular corporate rates on the retained net capital gain. The stockholders must include their proportionate share of the retained net capital gain in their taxable income for the tax year, and they are deemed to have paid the REIT’s tax on their proportionate share of the retained capital gain. Furthermore, such retained capital gain may be subject to the nondeductible 4% excise tax. If it is determined that the Company’s estimated current year taxable income will be in excess of estimated dividend distributions (including capital gain dividend) for the current year from such income, the Company accrues excise tax on estimated excess taxable income as such taxable income is earned. The annual expense is calculated in accordance with applicable tax regulations. Excise tax expense is included in the line item income tax expense, including excise tax in the consolidated statements of operations included in this annual report on Form 10-K. The Company formed a wholly-owned subsidiary, ACRC Lender W TRS LLC (“ACRC W TRS”), in December 2013 in order to issue and hold certain loans intended for sale. The Company also formed a wholly-owned subsidiary, ACRC 2017-FL3 TRS LLC (“FL3 TRS”), in March 2017 in order to hold a portion of the CLO Securitization (as defined below), including the portion that generates excess inclusion income. Additionally, the Company also formed a wholly-owned subsidiary, ACRC WM Tenant LLC (“ACRC WM”), in March 2019 in order to lease the hotel property classified as real estate owned, which was acquired on March 8, 2019. Entity classification elections to be taxed as a corporation and taxable REIT subsidiary (“TRS”) elections were made with respect to ACRC W TRS, FL3 TRS and ACRC WM. A TRS is an entity taxed as a corporation that has not elected to be taxed as a REIT, in which a REIT directly or indirectly holds equity, and that has made a joint election with such REIT to be treated as a TRS. A TRS generally may engage in any business, including investing in assets and engaging in activities that could not be held or conducted directly by the Company without jeopardizing its qualification as a REIT. A TRS is subject to applicable United States federal, state and local income tax on its taxable income. In addition, as a REIT, the Company also may be subject to a 100% excise tax on certain transactions between it and its TRS that are not conducted on an arm’s-length basis. For financial reporting purposes, a provision for current and deferred taxes has been established for the portion of the Company’s GAAP consolidated earnings recognized by ACRC W TRS, FL3 TRS and ACRC WM. The income tax provision is included in the line item income tax expense, including excise tax in the consolidated statements of operations included in this annual report on Form 10-K. FASB ASC Topic 740, Income Taxes (“ASC 740”), prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company has analyzed its various federal and state filing positions and believes that its income tax filing positions and deductions are well documented and supported. As of December 31, 2020 and 2019, based on the Company’s evaluation, there is no reserve for any uncertain income tax positions. ACRC W TRS, FL3 TRS and ACRC WM recognize interest and penalties, if any, related to unrecognized tax benefits within income tax expense in the consolidated statements of operations. Accrued interest and penalties, if any, are included within other liabilities in the consolidated balance sheets. Comprehensive Income For the years ended December 31, 2020, 2019 and 2018, comprehensive income equaled net income; therefore, a separate consolidated statement of comprehensive income is not included in the accompanying consolidated financial statements. Stock-Based Compensation The Company recognizes the cost of stock‑based compensation, which is included within general and administrative expenses in the Company’s consolidated statements of operations. The fair value of the time vested restricted stock or restricted stock units (“RSUs”) granted is recorded to expense on a straight‑line basis over the vesting period for the award, with an offsetting increase in stockholders’ equity. For grants to directors and officers and employees of the Manager, the fair value is determined based upon the market price of the stock on the grant date. Earnings per Share The Company calculates basic earnings (loss) per share by dividing net income (loss) allocable to common stockholders for the period by the weighted average shares of common stock outstanding for that period after consideration of the earnings (loss) allocated to the Company’s restricted stock, which are participating securities as defined in GAAP. Diluted earnings (loss) per share takes into effect any dilutive instruments, such as restricted stock, RSUs and convertible debt, except when doing so would be anti‑dilutive. See Note 10 included in these consolidated financial statements for the earnings per share calculations. Recent Accounting Pronouncements 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 optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. ASU No. 2020-04 is effective for all entities as of March 12, 2020 through December 31, 2022. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements. |
LOANS HELD FOR INVESTMENT
LOANS HELD FOR INVESTMENT | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
LOANS HELD FOR INVESTMENT | LOANS HELD FOR INVESTMENT As of December 31, 2020, the Company’s portfolio included 50 loans held for investment, excluding 98 loans that were repaid, sold or converted to real estate owned since inception. The aggregate originated commitment under these loans at closing was approximately $2.1 billion and outstanding principal was $1.8 billion as of December 31, 2020. During the year ended December 31, 2020, the Company funded approximately $538.3 million of outstanding principal, received repayments of $304.0 million of outstanding principal and sold three loans with outstanding principal of $101.0 million to third parties as described in more detail in the tables below. As of December 31, 2020, 95.3% of the Company’s loans have LIBOR floors, with a weighted average floor of 1.73%, calculated based on loans with LIBOR floors. References to LIBOR or “L” are to 30-day LIBOR (unless otherwise specifically stated). The Company’s investments in loans held for investment are accounted for at amortized cost. The following tables summarize the Company’s loans held for investment as of December 31, 2020 and 2019 ($ in thousands): As of December 31, 2020 Carrying Amount (1) Outstanding Principal (1) Weighted Average Unleveraged Effective Yield Weighted Average Remaining Life (Years) Senior mortgage loans $ 1,713,601 $ 1,723,638 5.9 % (2) 6.2 % (3) 1.2 Subordinated debt and preferred equity investments 101,618 102,603 13.4 % (2) 13.4 % (3) 1.9 Total loans held for investment portfolio $ 1,815,219 $ 1,826,241 6.3 % (2) 6.6 % (3) 1.2 As of December 31, 2019 Carrying Amount (1) Outstanding Principal (1) Weighted Average Unleveraged Effective Yield (2) Weighted Average Remaining Life (Years) Senior mortgage loans $ 1,622,666 $ 1,632,164 6.5% 1.5 Subordinated debt and preferred equity investments 59,832 60,730 15.1% 2.6 Total loans held for investment portfolio $ 1,682,498 $ 1,692,894 6.8% 1.6 ______________________________ (1) The difference between the Carrying Amount and the Outstanding Principal amount of the loans held for investment consists of unamortized purchase discount, deferred loan fees and loan origination costs. (2) Unleveraged Effective Yield is the compounded effective rate of return that would be earned over the life of the investment based on the contractual interest rate (adjusted for any deferred loan fees, costs, premiums or discounts) and assumes no dispositions, early prepayments or defaults. The total Weighted Average Unleveraged Effective Yield is calculated based on the average of Unleveraged Effective Yield of all loans held by the Company as of December 31, 2020 and 2019 as weighted by the outstanding principal balance of each loan. (3) Unleveraged Effective Yield is the compounded effective rate of return that would be earned over the life of the investment based on the contractual interest rate (adjusted for any deferred loan fees, costs, premiums or discounts) and assumes no dispositions, early prepayments or defaults. The total Weighted Average Unleveraged Effective Yield is calculated based on the average of Unleveraged Effective Yield of all interest accruing loans held by the Company as of December 31, 2020 as weighted by the total outstanding principal balance of each interest accruing loan (excludes loans on non-accrual status as of December 31, 2020). A more detailed listing of the Company’s loans held for investment portfolio based on information available as of December 31, 2020 is as follows ($ in millions, except percentages): Loan Type Location Outstanding Principal (1) Carrying Amount (1) Interest Rate Unleveraged Effective Yield (2) Maturity Date (3) Payment Terms (4) Senior Mortgage Loans: Office Diversified $109.8 $109.4 L+3.65% 5.7% Jan 2023 I/O Mixed-use FL 99.0 98.9 L+4.25% 7.8% Feb 2021 I/O Multifamily FL 91.3 90.8 L+5.00% 6.7% Jun 2022 I/O Multifamily TX 75.0 74.8 L+2.85% 5.0% Oct 2022 I/O Hotel OR/WA 68.1 67.3 L+3.45% 4.6% (5) May 2021 I/O Office IL 67.8 67.6 L+3.75% 5.3% Dec 2021 (6) I/O Office NC 61.5 61.4 L+4.25% 8.4% Mar 2021 I/O Hotel Diversified 60.8 60.7 L+3.60% 6.2% Sep 2021 I/O Office IL 57.4 57.3 L+3.95% 6.3% Jun 2021 I/O Industrial NY 52.3 51.9 L+5.00% 8.1% Feb 2021 I/O Mixed-use CA 51.2 51.0 L+4.00% 6.2% Apr 2022 (7) I/O Multifamily FL 46.2 46.0 L+5.00% 6.6% Jun 2022 I/O Multifamily FL 43.4 43.3 L+2.60% 5.5% Jan 2022 I/O Office GA 43.1 42.7 L+3.05% 5.7% Dec 2022 I/O Student Housing TX 41.0 41.0 L+4.75% 5.4% Jan 2021 I/O Multifamily NJ 41.0 40.8 L+3.05% 4.9% Mar 2022 I/O Hotel CA 40.0 39.9 L+4.12% 5.9% Jan 2022 (8) I/O Student Housing CA 36.7 36.7 L+3.95% 4.3% Jul 2022 (9) I/O Multifamily KS 35.8 35.6 L+3.25% 5.5% Nov 2022 I/O Mixed-use TX 35.3 35.1 L+3.75% 6.7% Sep 2022 I/O Industrial NC 34.9 34.7 L+4.05% 5.9% Mar 2024 I/O Hotel MI 34.2 34.1 L+3.95% 4.3% Jul 2022 (10) I/O Hotel IL 32.9 32.1 L+4.40% —% (11) May 2021 I/O Office CA 31.6 31.4 L+3.35% 6.0% Nov 2022 I/O Multifamily NY 30.1 30.1 L+3.20% 4.8% Dec 2021 (12) I/O Student Housing NC 30.0 29.9 L+3.15% 5.9% Feb 2022 I/O Multifamily PA 29.3 29.2 L+3.00% 5.9% Dec 2021 I/O Office IL 28.5 28.3 L+3.80% 6.2% Jan 2023 I/O Office NC 28.5 27.9 L+3.52% 6.8% May 2023 I/O Multifamily TX 27.5 27.5 L+3.20% 4.6% Oct 2021 (13) I/O Mixed-use CA 26.9 26.6 L+4.10% 6.3% Mar 2023 I/O Student Housing TX 24.6 24.3 L+3.45% 5.6% Feb 2023 I/O Student Housing AL 24.1 22.7 L+4.45% —% (11) Feb 2021 (14) I/O Office CA 22.9 22.8 L+3.40% 6.2% Nov 2021 I/O Industrial CA 22.0 21.9 L+4.50% 7.4% Dec 2021 I/O Student Housing FL 22.0 21.9 L+3.25% 5.9% Aug 2022 I/O Self Storage FL 19.5 19.4 L+3.50% 6.0% Mar 2022 I/O Multifamily WA 18.7 18.5 L+3.00% 5.1% Mar 2023 I/O Office TX 17.4 17.3 L+4.05% 7.5% Nov 2021 I/O Multifamily SC 16.3 16.0 L+6.50% 10.1% Sep 2022 I/O Residential CA 14.2 14.2 13.00% 13.0% Feb 2021 (15) I/O Industrial CA 13.7 13.6 L+3.75% 6.3% Mar 2023 I/O Office NC 8.6 8.5 L+4.00% 6.7% Nov 2022 I/O Office IL 8.5 8.5 L+2.15% 3.7% Mar 2023 I/O Subordinated Debt and Preferred Equity Investments: Office IL 37.6 37.3 L+8.00% 10.0% Mar 2023 I/O Residential Condominium NY 17.6 17.5 L+14.00% (16) 17.9% May 2021 (16) I/O Office NJ 17.0 16.5 12.00% 12.8% Jan 2026 I/O (17) Mixed-use IL 16.0 15.9 L+12.25% 14.5% Nov 2021 I/O Residential Condominium HI 11.5 11.5 14.00% 17.9% Feb 2021 (18) I/O Office CA 2.9 2.9 L+8.25% 9.7% Nov 2021 I/O Total/Weighted Average $1,826.2 $1,815.2 6.3% _________________________ (1) The difference between the Carrying Amount and the Outstanding Principal amount of the loans held for investment consists of unamortized purchase discount, deferred loan fees and loan origination costs. For the loans held for investment that represent co-investments with other investment vehicles managed by Ares Management (see Note 13 included in these consolidated financial statements for additional information on co-investments), only the portion of Carrying Amount and Outstanding Principal held by the Company is reflected. (2) Unleveraged Effective Yield is the compounded effective rate of return that would be earned over the life of the investment based on the contractual interest rate (adjusted for any deferred loan fees, costs, premiums or discounts) and assumes no dispositions, early prepayments or defaults. Unleveraged Effective Yield for each loan is calculated based on LIBOR as of December 31, 2020 or the LIBOR floor, as applicable. The total Weighted Average Unleveraged Effective Yield is calculated based on the average of Unleveraged Effective Yield of all loans held by the Company as of December 31, 2020 as weighted by the outstanding principal balance of each loan. (3) Certain loans are subject to contractual extension options that generally vary between one and two 12-month extensions and may be subject to performance based or other conditions as stipulated in the loan agreement. Actual maturities may differ from contractual maturities stated herein as certain borrowers may have the right to prepay with or without paying a prepayment penalty. The Company may also extend contractual maturities and amend other terms of the loans in connection with loan modifications. (4) I/O = interest only, P/I = principal and interest. (5) At origination, the Oregon/Washington loan was structured as both a senior and mezzanine loan with the Company holding both positions. The mezzanine position of this loan, which had an outstanding principal balance of $13.1 million as of December 31, 2020, was on non-accrual status as of December 31, 2020 and therefore, the Unleveraged Effective Yield presented is for the senior position only as the mezzanine position is non-interest accruing. (6) In November 2020, the borrower exercised a one-year extension option in accordance with the loan agreement, which extended the maturity date on the senior Illinois loan to December 2021. (7) In May 2020, the Company and the borrower entered into a modification and extension agreement to, among other things, extend the maturity date on the senior California loan to April 2022. (8) In December 2020, the borrower exercised a one-year extension option in accordance with the loan agreement, which extended the maturity date on the senior California loan to January 2022. (9) In October 2020, the Company and the borrower entered into a modification and extension agreement to, among other things, extend the maturity date on the senior California loan to July 2022. (10) In August 2020, the Company and the borrower entered into a modification and extension agreement to, among other things, extend the maturity date on the senior Michigan loan to July 2022. (11) Loan was on non-accrual status as of December 31, 2020 and therefore, there is no Unleveraged Effective Yield as the loan is non-interest accruing. (12) In October 2020, the borrower exercised a one-year extension option in accordance with the loan agreement, which extended the maturity date on the senior New York loan to December 2021. (13) In September 2020, the borrower exercised a one-year extension option in accordance with the loan agreement, which extended the maturity date on the senior Texas loan to October 2021. (14) In July 2020, the Company and the borrower entered into a modification and extension agreement to, among other things, extend the maturity date on the senior Alabama loan to February 2021. (15) In August 2020, the Company and the borrowers entered into a modification and extension agreement to, among other things, extend the maturity date on the senior California loan to February 2021. (16) The subordinated New York loan includes a $2.5 million loan to the borrower, for which such amount accrues interest at a per annum rate of 20.00% and has an initial maturity date of April 2021 upon the borrower exercising a 6-month extension option in September 2020 in accordance with the loan agreement. The remaining outstanding principal balance of the subordinated New York loan accrues interest at L + 14.00% and has an initial maturity date of May 2021. (17) In February 2021, amortization will begin on the subordinated New Jersey loan, which had an outstanding principal balance of $17.0 million as of December 31, 2020. The remainder of the loans in the Company’s portfolio are non-amortizing through their primary terms. (18) In December 2020, the Company and the borrower entered into a modification and extension agreement to, among other things, extend the maturity date on the subordinated Hawaii loan to February 2021. The Company has made, and may continue to make, modifications to loans, including loans that are in default. Loan terms that may be modified include interest rates, required prepayments, asset release prices, maturity dates, covenants, principal amounts and other loan terms. The terms and conditions of each modification vary based on individual circumstances and will be determined on a case by case basis. The Company’s Manager monitors and evaluates each of the Company’s loans held for investment and has maintained regular communications with borrowers and sponsors regarding the potential impacts of the COVID-19 pandemic on the Company’s loans. Some of the Company’s borrowers, in particular, borrowers with properties exposed to the hospitality, student housing and retail industries, have indicated that due to the impact of the COVID-19 pandemic, they may be unable to timely execute their business plans, are experiencing cash flow pressure, have had to temporarily close their businesses or have experienced other negative business consequences. Certain borrowers have requested temporary interest deferral or forbearance or other modifications of their loans. Based on these discussions with borrowers, the Company has made 11 loan modifications, representing an aggregate principal balance of $494.8 million, during the year ended December 31, 2020. These modifications included deferrals or capitalization of interest, amendments in extension, future funding or performance tests, extension of the maturity date, amendments to the interest rate, repurposing of reserves or covenant waivers on loans secured by properties directly or indirectly impacted by the COVID-19 pandemic. Loan modifications during the period were conducted pursuant to the relief granted via Coronavirus Aid, Relief, and Economic Security Act and therefore are not evaluated for or accounted for as troubled debt restructurings. For the years ended December 31, 2020 and 2019, the activity in the Company’s loan portfolio was as follows ($ in thousands): Balance at December 31, 2018 $ 1,524,873 Initial funding 493,913 Origination fees and discounts, net of costs (7,539) Additional funding 185,281 Loan payoffs (482,407) Loan converted to real estate owned (see Note 5) (38,636) Origination fee accretion 7,013 Balance at December 31, 2019 $ 1,682,498 Initial funding 430,562 Origination fees and discounts, net of costs (5,778) Additional funding 107,767 Amortizing payments (2,728) Loan payoffs (304,028) Loans sold to third parties (1) (100,504) Origination fee accretion 7,430 Balance at December 31, 2020 $ 1,815,219 _________________________ (1) In July 2020, the Company closed the sale of a senior mortgage loan with outstanding principal of $31.5 million, which was collateralized by a hotel property located in Minnesota, to a third party. In addition, in August 2020, the Company closed the sale of two senior mortgage loans to a third party with outstanding principal of $39.9 million and $29.6 million, respectively, which were collateralized by multifamily properties located in Illinois and Texas, respectively. For the year ended December 31, 2020, the Company recognized an aggregate net realized loss of $4.0 million in the Company's consolidated statements of operations upon the sale of the three senior mortgage loans as the carrying value exceeded the sale prices of the loans. The three senior mortgage loans discussed above were previously classified as held for investment and were sold in order to rebalance and optimize the Company’s loan portfolio. As of December 31, 2020, all loans held for investment were paying in accordance with their contractual terms. As of December 31, 2020, the Company had three loans held for investment on non-accrual status due to the impact of the COVID-19 pandemic with a carrying value of $67.1 million. As of December 31, 2019, no loans held for investment were on non-accrual status. |
CURRENT EXPECTED CREDIT LOSSES
CURRENT EXPECTED CREDIT LOSSES | 12 Months Ended |
Dec. 31, 2020 | |
Credit Loss [Abstract] | |
CURRENT EXPECTED CREDIT LOSSES | CURRENT EXPECTED CREDIT LOSSES The Company estimates its CECL Reserve primarily using a probability-weighted model that considers the likelihood of default and expected loss given default for each individual loan. Calculation of the CECL Reserve requires loan specific data, which includes capital senior to the Company when the Company is the subordinate lender, changes in net operating income, debt service coverage ratio, loan-to-value, occupancy, property type and geographic location. Estimating the CECL Reserve also requires significant judgment with respect to various factors, including (i) the appropriate historical loan loss reference data, (ii) the expected timing of loan repayments, (iii) calibration of the likelihood of default to reflect the risk characteristics of the Company’s floating-rate loan portfolio and (iv) the Company’s current and future view of the macroeconomic environment. The Company may consider loan-specific qualitative factors on certain loans to estimate its CECL Reserve. In order to estimate the future expected loan losses relevant to the Company’s portfolio, the Company utilizes historical market loan loss data licensed from a third party data service. The third party’s loan database includes historical loss data for commercial mortgage-backed securities, or CMBS, issued dating back to 1998, which the Company believes is a reasonably comparable and available data set to its type of loans. The Company utilized macroeconomic data that reflects a current recession; however, the short and long-term economic implications of the COVID-19 pandemic and its financial impact on the Company are highly uncertain. For periods beyond the reasonable and supportable forecast period, the Company reverts back to historical loss data. Management’s current estimate of expected credit losses increased from January 1, 2020 to December 31, 2020 due to a recession caused by the impact of the COVID-19 pandemic, which was not known as of January 1, 2020 and thus, did not have an impact on the Company’s current expected credit loss reserve as of January 1, 2020. The CECL Reserve takes into consideration the macroeconomic impact of the COVID-19 pandemic on CRE properties and is not specific to any loan losses or impairments on the Company’s loans held for investment. As of December 31, 2020, the Company’s CECL Reserve for its loans held for investment portfolio is $25.2 million or 125 basis points of the Company’s total loans held for investment commitment balance of $2.0 billion and is bifurcated between the current expected credit loss reserve (contra-asset) related to outstanding balances on loans held for investment of $23.6 million and a liability for unfunded commitments of $1.6 million. The liability was based on the unfunded portion of the loan commitment over the full contractual period over which the Company is exposed to credit risk through a current obligation to extend credit. Management considered the likelihood that funding will occur, and if funded, the expected credit loss on the funded portion. Current Expected Credit Loss Reserve for Funded Loan Commitments Activity related to the CECL Reserve for outstanding balances on the Company’s loans held for investment as of and for the year ended December 31, 2020 was as follows ($ in thousands): Balance at December 31, 2019 $ — Impact of adoption of CECL 4,440 Provision for current expected credit losses 19,164 Write-offs — Recoveries — Balance at December 31, 2020 (1) $ 23,604 __________________________ (1) As of December 31, 2020, the CECL Reserve related to outstanding balances on loans held for investment is recorded within current expected credit loss reserve in the Company's consolidated balance sheets. Current Expected Credit Loss Reserve for Unfunded Loan Commitments Activity related to the CECL Reserve for unfunded commitments on the Company’s loans held for investment as of and for the year ended December 31, 2020 was as follows ($ in thousands): Balance at December 31, 2019 $ — Impact of adoption of CECL 611 Provision for current expected credit losses 1,021 Write-offs — Recoveries — Balance at December 31, 2020 (1) $ 1,632 __________________________ (1) As of December 31, 2020, the CECL Reserve related to unfunded commitments on loans held for investment is recorded within other liabilities in the Company's consolidated balance sheets. The Company continuously evaluates the credit quality of each loan by assessing the risk factors of each loan and assigning a risk rating based on a variety of factors. Risk factors include property type, geographic and local market dynamics, physical condition, leasing and tenant profile, projected cash flow, loan structure and exit plan, loan-to-value ratio, debt service coverage ratio, project sponsorship, and other factors deemed necessary. Based on a 5-point scale, the Company’s loans are rated “1” through “5,” from less risk to greater risk, which ratings are defined as follows: Ratings Definition 1 Very Low Risk 2 Low Risk 3 Medium Risk 4 High Risk/Potential for Loss: Asset performance is trailing underwritten expectations. Loan at risk of impairment without material improvement to performance 5 Impaired/Loss Likely: A loan that has a significantly increased probability of default or principal loss The risk ratings are primarily based on historical data as well as taking into account future economic conditions. As of December 31, 2020, the carrying value, excluding the CECL Reserve, of the Company’s loans held for investment within each risk rating by year of origination is as follows ($ in thousands): 2020 2019 2018 2017 2016 Prior Total Risk rating: 1 $ — $ — $ 8,547 $ — $ — $ — $ 8,547 2 — 109,429 66,055 68,438 — — 243,922 3 429,785 468,721 254,858 201,627 16,492 — 1,371,483 4 — 35,094 99,387 22,657 — 34,129 191,267 5 — — — — — — — Total $ 429,785 $ 613,244 $ 428,847 $ 292,722 $ 16,492 $ 34,129 $ 1,815,219 Accrued Interest Receivable The Company elected not to measure a current expected credit loss reserve on accrued interest receivable due to the Company’s policy of writing off uncollectible accrued interest receivable balances in a timely manner. As of December 31, 2020, interest receivable of $11.2 million is included within other assets in the Company's consolidated balance sheets and is excluded from the carrying value of loans held for investment. If the Company were to have uncollectible accrued interest receivable, it generally would reverse accrued and unpaid interest against interest income and no longer accrue for these amounts. |
REAL ESTATE OWNED
REAL ESTATE OWNED | 12 Months Ended |
Dec. 31, 2020 | |
Real Estate Owned [Abstract] | |
REAL ESTATE OWNED | REAL ESTATE OWNED On March 8, 2019, the Company acquired legal title to a hotel property located in New York through a deed in lieu of foreclosure. Prior to March 8, 2019, the hotel property collateralized a $38.6 million senior mortgage loan held by the Company that was in maturity default due to the failure of the borrower to repay the outstanding principal balance of the loan by the December 2018 maturity date. In conjunction with the deed in lieu of foreclosure, the Company derecognized the $38.6 million senior mortgage loan and recognized the hotel property as real estate owned. As the Company does not expect to complete a sale of the hotel property within the next twelve months, the hotel property is considered held for use, and is carried at its estimated fair value at acquisition and is presented net of accumulated depreciation and impairment charges. The Company did not recognize any gain or loss on the derecognition of the senior mortgage loan as the fair value of the hotel property of $36.9 million and the net assets held at the hotel property of $1.7 million at acquisition approximated the $38.6 million carrying value of the senior mortgage loan. The assets and liabilities of the hotel property are included within other assets and other liabilities, respectively, in the Company’s consolidated balance sheets and include items such as cash, restricted cash, trade receivables and payables and advance deposits. The following table summarizes the Company’s real estate owned as of December 31, 2020 and December 31, 2019 ($ in thousands): As of December 31, 2020 2019 Land $ 10,200 $ 10,200 Buildings and improvements 24,281 24,281 Furniture, fixtures and equipment 4,362 4,087 38,843 38,568 Less: Accumulated depreciation (1,560) (667) Real estate owned, net $ 37,283 $ 37,901 As of December 31, 2020, no impairment charges have been recognized for real estate owned. For the years ended December 31, 2020 and 2019, the Company incurred depreciation expense of $892 thousand and $667 thousand, respectively. Depreciation expense is included within expenses from real estate owned in the Company’s consolidated statements of operations. |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Financing Agreements The Company borrows funds, as applicable in a given period, under the Wells Fargo Facility, the Citibank Facility, the BAML Facility, the CNB Facility, the MetLife Facility, the U.S. Bank Facility and the Morgan Stanley Facility (individually defined below and collectively, the “Secured Funding Agreements”), Notes Payable (as defined below) and the Secured Term Loan (as defined below). The Company refers to the Secured Funding Agreements, Notes Payable and the Secured Term Loan as the “Financing Agreements.” The outstanding balance of the Financing Agreements in the table below are presented gross of debt issuance costs. As of December 31, 2020 and 2019, the outstanding balances and total commitments under the Financing Agreements consisted of the following ($ in thousands): As of December 31, 2020 2019 Outstanding Balance Total Outstanding Balance Total Secured Funding Agreements: Wells Fargo Facility $ 336,001 $ 350,000 (1) $ 360,354 $ 500,000 Citibank Facility 117,506 325,000 126,603 325,000 BAML Facility — — (2) 36,280 36,280 (2) CNB Facility 50,000 50,000 (3) 30,500 50,000 (3) MetLife Facility 104,124 180,000 131,807 180,000 U.S. Bank Facility — — (4) 43,045 185,989 Morgan Stanley Facility 147,921 150,000 — — Subtotal $ 755,552 $ 1,055,000 $ 728,589 $ 1,277,269 Notes Payable $ 63,122 $ 84,155 $ 56,155 $ 84,155 Secured Term Loan $ 110,000 $ 110,000 $ 110,000 $ 110,000 Total $ 928,674 $ 1,249,155 $ 894,744 $ 1,471,424 ______________________________ (1) In December 2020, the Company amended the Wells Fargo Facility (as defined below) to, among other things, reduce the maximum commitment under the Wells Fargo Facility from $500.0 million to $350.0 million, which the maximum commitment may be increased to up to $500.0 million at the Company’s option. (2) In May 2019, the Company’s borrowing period for new individual loans under the BAML Facility (as defined below) expired and its term was not extended. As such, the total commitment amount under the BAML Facility as of December 31, 2019 represented the outstanding balance under the facility at the time the borrowing period expired. In June 2020, the BAML Facility was repaid in full and its term was not extended. (3) The CNB Facility (as defined below) has an accordion feature that provides for, subject to approval by City National Bank in its sole discretion, an increase in the commitment amount from $50.0 million to $75.0 million for up to a period of 120 days once per calendar year. (4) In July 2020, the U.S. Bank Facility matured and its term was not extended. The U.S. Bank Facility had been repaid in full prior to its maturity. Some of the Company’s Financing Agreements are collateralized by (i) assignments of specific loans, preferred equity or a pool of loans held for investment or loans held for sale owned by the Company, (ii) interests in the subordinated portion of the Company’s securitization debt, or (iii) interests in wholly-owned entity subsidiaries that hold the Company’s loans held for investment. The Company is the borrower or guarantor under each of the Financing Agreements. Generally, the Company partially offsets interest rate risk by matching the interest index of loans held for investment with the Secured Funding Agreements used to fund them. The Company’s Financing Agreements contain various affirmative and negative covenants, including negative pledges, and provisions regarding events of default that are normal and customary for similar financing arrangements. Wells Fargo Facility The Company is party to a master repurchase funding facility with Wells Fargo Bank, National Association (“Wells Fargo”) (the “Wells Fargo Facility”), which allows the Company to borrow up to $350.0 million. Under the Wells Fargo Facility, the Company is permitted to sell, and later repurchase, certain qualifying senior commercial mortgage loans, A-Notes, pari-passu participations in commercial mortgage loans and mezzanine loans under certain circumstances, subject to available collateral approved by Wells Fargo in its sole discretion. In December 2020, the Company amended the Wells Fargo Facility to, among other things, (1) reduce the maximum commitment under the Wells Fargo Facility from $500.0 million to $350.0 million, which the maximum commitment may be increased to up to $500.0 million at the Company’s option, subject to the satisfaction of certain conditions, including payment of an upsize fee, (2) extend the funding period of the Wells Fargo Facility to December 14, 2022, subject to one 12-month extension at the Company’s option, which, if exercised, would extend the funding period to December 14, 2023, (3) extend the initial maturity date of the Wells Fargo Facility to December 14, 2022, subject to three 12-month extensions, each of which may be exercised at the Company’s option, subject to the satisfaction of certain conditions, including payment of an extension fee, which, if all three were exercised, would extend the maturity date of the Wells Fargo Facility to December 14, 2025, (4) update the interest rate on advances under the Wells Fargo Facility from a per annum rate equal to the sum of one-month LIBOR plus a pricing margin range of 1.50% to 2.25%, subject to certain exceptions, to a per annum rate equal to the sum of one-month LIBOR plus a pricing margin range of 1.50% to 2.75%, subject to certain exceptions and (5) eliminate the non-utilization fee on the Wells Fargo Facility. Prior to and including December 13, 2018, advances under the Wells Fargo Facility accrued interest at a per annum rate equal to the sum of one-month LIBOR plus a pricing margin range of 1.75% to 2.35%. Prior to the amendment, the Company incurred a non-utilization fee of 25 basis points per annum on the average daily available balance of the Wells Fargo Facility to the extent less than 75% of the Wells Fargo Facility was utilized. For the years ended December 31, 2020, 2019 and 2018, the Company incurred a non-utilization fee of $19 thousand, $618 thousand and $149 thousand, respectively. The non-utilization fee is included within interest expense in the Company’s consolidated statements of operations. The Wells Fargo Facility contains various affirmative and negative covenants and provisions regarding events of default that are applicable to the Company and certain of the Company’s subsidiaries, which are normal and customary for similar repurchase facilities, including the following: (a) limitations on the incurrence of additional indebtedness or liens, (b) limitations on how borrowed funds may be used, (c) limitations on certain distributions and dividend payments in excess of the minimum amount necessary to continue to qualify as a REIT and avoid the payment of income and excise taxes, (d) maintenance of adequate capital, (e) limitations on change of control, (f) maintaining a ratio of total debt to tangible net worth of not more than 4.00 to 1.00, (g) maintaining a ratio of recourse debt to tangible net worth of not more than 3.00 to 1.00, (h) maintaining a fixed charge coverage ratio (expressed as the ratio of EBITDA (net income before net interest expense, income tax expense, depreciation and amortization), as defined, to fixed charges) for the immediately preceding 12-month period ending on the last date of the applicable reporting period to be at least 1.25 to 1.00, (i) maintaining a tangible net worth of at least the sum of (1) approximately $135.5 million, plus (2) 80% of the net proceeds raised in all future equity issuances by the Company and (j) if certain specific debt yield, loan to value or other credit based tests are not met with respect to assets on the Wells Fargo Facility, the Company may be required to repay certain amounts under the Wells Fargo Facility. As of December 31, 2020, the Company was in compliance with all financial covenants of the Wells Fargo Facility. Citibank Facility The Company is party to a $325.0 million master repurchase facility with Citibank, N.A. (“Citibank”) (the “Citibank Facility”). Under the Citibank Facility, the Company is permitted to sell and later repurchase certain qualifying senior commercial mortgage loans and A-Notes approved by Citibank in its sole discretion. The initial maturity date of the Citibank Facility is December 13, 2021, subject to two 12-month extensions, each of which may be exercised at the Company’s option assuming no existing defaults under the Citibank Facility and applicable extension fees being paid, which, if both were exercised, would extend the maturity date of the Citibank Facility to December 13, 2023. Since December 13, 2018, advances under the Citibank Facility accrue interest at a per annum rate equal to the sum of one-month LIBOR plus an indicative pricing margin range of 1.50% to 2.25%, subject to certain exceptions. Prior to and including December 12, 2018, advances under the Citibank Facility accrued interest at a per annum rate equal to the sum of one-month LIBOR plus an indicative pricing margin range of 2.25% to 2.50%, subject to certain exceptions. Since December 13, 2018, the Company incurs a non-utilization fee of 25 basis points per annum on the average daily available balance of the Citibank Facility to the extent less than 75% of the Citibank Facility is utilized. Prior to and including December 12, 2018, the Company incurred a non-utilization fee of 25 basis points per annum on the average daily available balance of the Citibank Facility. For the years ended December 31, 2020, 2019 and 2018, the Company incurred a non-utilization fee of $516 thousand, $388 thousand and $143 thousand, respectively. The non-utilization fee is included within interest expense in the Company’s consolidated statements of operations. The Citibank Facility contains various affirmative and negative covenants and provisions regarding events of default that are applicable to the Company and certain of the Company’s subsidiaries, which are normal and customary for similar repurchase facilities, including the following: (a) maintaining tangible net worth of at least the sum of (1) 80% of the Company’s tangible net worth as of September 30, 2013, plus (2) 80% of the total net capital raised in all future equity issuances by the Company, (b) maintaining liquidity in an amount not less than the greater of (1) $5.0 million or (2) 5% of the Company’s recourse indebtedness, not to exceed $10.0 million (provided that in the event the Company’s total liquidity equals or exceeds $5.0 million, the Company may satisfy the difference between the minimum total liquidity requirement and the Company’s total liquidity with available borrowing capacity), (c) maintaining a fixed charge coverage ratio (expressed as the ratio of EBITDA (net income before net interest expense, income tax expense, depreciation and amortization), as defined, to fixed charges) for the immediately preceding 12-month period ending on the last date of the applicable reporting period to be at least 1.25 to 1.00, (d) maintaining a ratio of total debt to tangible net worth of not more than 4.00 to 1.00, (e) maintaining a ratio of recourse debt to tangible net worth of not more than 3.00 to 1.00 and (f) if certain specific debt yield and loan to value tests are not met with respect to assets on the Citibank Facility, the Company may be required to repay certain amounts under the Citibank Facility. The Citibank Facility also prohibits the Company from amending the management agreement with its Manager in a material respect without the prior consent of the lender. As of December 31, 2020, the Company was in compliance with all financial covenants of the Citibank Facility. BAML Facility The Company was party to a $125.0 million Bridge Loan Warehousing Credit and Security Agreement with Bank of America, N.A. (“Bank of America”) (the “BAML Facility”). Under the BAML Facility, the Company was able to obtain advances secured by eligible commercial mortgage loans collateralized by multifamily properties. Bank of America approved the loans on which advances were made under the BAML Facility in its sole discretion. The Company was able to request individual loans under the facility up to May 23, 2019 and the term of the borrowing period was not extended. Individual advances under the BAML Facility had a two-year maturity, subject to one 12-month extension at the Company’s option upon the satisfaction of certain conditions and applicable extension fees being paid. At the time the term of the borrowing period expired, the Company had one individual advance outstanding in the amount of $36.3 million that had a maturity date of September 5, 2019 per the original terms of the BAML Facility. In September 2019, the Company amended the BAML Facility to extend the maturity date for the one individual advance outstanding to December 4, 2019. In addition, in December 2019, the Company amended the BAML Facility to extend the maturity date for the one individual advance outstanding to March 3, 2020. In addition, effective February 2020, the Company amended the BAML Facility to extend the maturity date for the one individual advance outstanding to July 1, 2020. In June 2020, the BAML Facility was repaid in full and its term was not extended. Advances under the BAML Facility accrued interest at a per annum rate equal to the sum of one-month LIBOR plus a spread of 2.00%, subject to certain exceptions. The Company incurred a non-utilization fee of 12.5 basis points per annum up to May 23, 2019 on the average daily available balance of the BAML Facility to the extent less than 50% of the BAML Facility was utilized. For the year ended December 31, 2020, the Company did not incur a non-utilization fee. For the years ended December 31, 2019 and 2018, the Company incurred a non-utilization fee of $43 thousand and $21 thousand, respectively. The non-utilization fee is included within interest expense in the Company’s consolidated statements of operations. CNB Facility The Company is party to a $50.0 million secured revolving funding facility with City National Bank (the “CNB Facility”). The Company is permitted to borrow funds under the CNB Facility to finance investments and for other working capital and general corporate needs. In March 2020, the Company exercised a 12-month extension option on the CNB Facility to extend the initial maturity date to March 10, 2021. In June 2019, the Company amended the CNB Facility to, among other things, (1) add an accordion feature that provides for, subject to approval by City National Bank in its sole discretion, an increase in the commitment amount from $50.0 million to $75.0 million for up to a period of 120 days once per calendar year, (2) add two additional 12-month extensions, each of which may be exercised at the Company’s option, subject to the satisfaction of certain conditions, including payment of an extension fee, which, if both were exercised, would extend the maturity date of the CNB Facility to March 10, 2022 and (3) decrease the interest rate on advances to a per annum rate equal to the sum of, at the Company’s option, either (a) LIBOR for a one, two, three, six or, if available to all lenders, 12-month interest period plus 2.65% or (b) a base rate (which is the highest of a prime rate, the federal funds rate plus 0.50%, or one-month LIBOR plus 1.00%) plus 1.00%; provided that in no event shall the interest rate be less than 2.65%. Previously the interest rate on advances was a per annum rate equal to the sum of, at the Company’s option, either (a) LIBOR for a one, two, three, six or, if available to all lenders, 12-month interest period plus 3.00% or (b) a base rate (which is the highest of a prime rate, the federal funds rate plus 0.50%, or one-month LIBOR plus 1.00%) plus 1.25%. Unless at least 75% of the CNB Facility is used on average, unused commitments under the CNB Facility accrue non-utilization fees at the rate of 0.375% per annum. For the years ended December 31, 2020, 2019 and 2018, the Company incurred a non-utilization fee of $38 thousand, $136 thousand and $166 thousand, respectively. The non-utilization fee is included within interest expense in the Company’s consolidated statements of operations. The CNB Facility contains various affirmative and negative covenants and provisions regarding events of default that are applicable to the Company and certain of the Company’s subsidiaries, which are normal and customary for similar financing facilities, including the following: (a) limitations on the incurrence of additional indebtedness or liens, (b) limitations on how borrowed funds may be used, (c) limitations on certain distributions and dividend payments following a default or event of default, (d) limitations on dispositions of assets, (e) maintenance of minimum total asset value by the borrower under the CNB Facility and its subsidiaries and (f) prohibitions of certain change of control events. The agreements governing the CNB Facility also impose certain covenants on the Company, including the following: (i) maintaining a ratio of total debt to tangible net worth of not more than 4.00 to 1.00, (ii) maintaining a ratio of recourse debt to tangible net worth of not more than 3.00 to 1.00, (iii) maintaining a tangible net worth of at least 80% of the Company’s net worth as of September 30, 2013, plus 80% of the net cash proceeds raised in equity issuances by the Company after March 12, 2014, (iv) maintaining a fixed charge coverage ratio (expressed as the ratio of EBITDA (net income before net interest expense, income tax expense, depreciation and amortization), as defined, to fixed charges) for the immediately preceding 12-month period ending on the last date of the applicable reporting period of at least 1.25 to 1.00, (v) limitations on mergers, consolidations, transfers of assets and similar transactions and (vi) maintaining its status as a REIT. As of December 31, 2020, the Company was in compliance with all financial covenants of the CNB Facility. MetLife Facility The Company is party to a $180.0 million revolving master repurchase facility with Metropolitan Life Insurance Company (“MetLife”) (the “MetLife Facility”), pursuant to which the Company may sell, and later repurchase, commercial mortgage loans meeting defined eligibility criteria which are approved by MetLife in its sole discretion. In August 2020, the Company amended the MetLife Facility to, among other things, (1) extend the initial maturity date of the MetLife Facility to August 13, 2022, subject to two 12-month extensions, each of which may be exercised at the Company’s option, subject to the satisfaction of certain conditions, including payment of an extension fee, which, if both were exercised, would extend the maturity date of the MetLife Facility to August 13, 2024, (2) increase the interest rate on new advances subsequent to the date of the amendment to a per annum rate equal to the sum of one-month LIBOR plus a spread of 2.50%. The interest rate on advances with respect to existing loans financed under the MetLife Facility prior to the amendment will continue to accrue interest at a per annum rate equal to the sum of one-month LIBOR plus a spread of 2.30%, subject to certain exceptions and (3) waive the non-utilization fee of 25 basis points per annum on the average daily available balance of the MetLife Facility, which is owed if less than 65% of the MetLife Facility is utilized, for a period of nine months subsequent to the date of the amendment. For the years ended December 31, 2020, 2019 and 2018, the Company incurred a non-utilization fee of $7 thousand, $5 thousand and $7 thousand, respectively. The non-utilization fee is included within interest expense in the Company’s consolidated statements of operations. The MetLife Facility contains various affirmative and negative covenants and provisions regarding events of default that are applicable to the Company and certain of the Company’s subsidiaries, which are normal and customary for similar repurchase facilities, including the following: (a) limitations on the incurrence of additional indebtedness or liens, (b) limitations on how borrowed funds may be used, (c) limitations on certain distributions and dividend payments following a default or event of default and (d) limitations on dispositions of assets. The agreements governing the MetLife Facility also impose certain covenants on the Company, including the following: (i) maintaining a ratio of total debt to tangible net worth of not more than 4.00 to 1.00, (ii) maintaining a ratio of recourse debt to tangible net worth of not more than 3.00 to 1.00, (iii) maintaining a tangible net worth of at least 80% of the Company’s net worth as of September 30, 2013, plus 80% of the net cash proceeds raised in equity issuances by the Company after August 13, 2014, (iv) maintaining a fixed charge coverage ratio (expressed as the ratio of EBITDA (net income before net interest expense, income tax expense, depreciation and amortization), as defined, to fixed charges) for the immediately preceding 12-month period ending on the last date of the applicable reporting period of at least 1.25 to 1.00, and (v) if certain specific debt yield, loan to value or other credit based tests are not met with respect to assets on the MetLife Facility, the Company may be required to repay certain amounts under the MetLife Facility. As of December 31, 2020, the Company was in compliance with all financial covenants of the MetLife Facility. U.S. Bank Facility The Company was party to a $186.0 million master repurchase and securities contract with U.S. Bank National Association (“U.S. Bank”) (the “U.S. Bank Facility”). Pursuant to the U.S. Bank Facility, the Company was permitted to sell, and later repurchase, eligible commercial mortgage loans collateralized by retail, office, mixed-use, multifamily, industrial, hospitality, student housing, manufactured housing or self storage properties. U.S. Bank approved the mortgage loans that were subject to the U.S. Bank Facility in its sole discretion. On July 31, 2020, the U.S. Bank Facility matured and its term was not extended. The U.S. Bank Facility had been repaid in full prior to its maturity. Advances under the U.S. Bank Facility generally accrued interest at a per annum rate equal to the sum of one-month LIBOR plus a spread of 2.25%, unless otherwise agreed between U.S. Bank and the Company, depending upon the mortgage loan sold to U.S. Bank in the applicable transaction. The Company incurred a non-utilization fee of 25 basis points per annum on the average daily available balance of the U.S. Bank Facility to the extent less than 50% of the U.S. Bank Facility was utilized. For the years ended December 31, 2020 and 2019, the Company incurred a non-utilization fee of $216 thousand and $246 thousand, respectively. For the year ended December 31, 2018, the Company did not incur a non-utilization fee. The non-utilization fee is included within interest expense in the Company’s consolidated statements of operations. Morgan Stanley Facility In January 2020, the Company entered into a $150.0 million master repurchase and securities contract with Morgan Stanley Bank, N.A. (“Morgan Stanley”) (the “Morgan Stanley Facility”). Under the Morgan Stanley Facility, the Company is permitted to sell, and later repurchase, certain qualifying commercial mortgage loans collateralized by retail, office, mixed-use, multifamily, industrial, hospitality, student housing or self-storage properties. Morgan Stanley may approve the mortgage loans that are subject to the Morgan Stanley Facility in its sole discretion. The initial maturity date of the Morgan Stanley Facility is January 16, 2023, subject to two 12-month extensions, each of which may be exercised at the Company’s option, subject to the satisfaction of certain conditions, including payment of an extension fee, which, if both were exercised, would extend the maturity date of the Morgan Stanley Facility to January 16, 2025. Advances under the Morgan Stanley Facility generally accrue interest at a per annum rate equal to the sum of one-month LIBOR plus a spread ranging from 1.75% to 2.25%, determined by Morgan Stanley, depending upon the mortgage loan sold to Morgan Stanley in the applicable transaction. The Morgan Stanley Facility contains various affirmative and negative covenants and provisions regarding events of default that are applicable to the Company and certain of the Company’s subsidiaries, which are normal and customary for similar repurchase facilities, including the following: (a) maintaining tangible net worth of at least the sum of (1) 80% of the Company’s tangible net worth as of September 30, 2013, plus (2) 80% of the total net capital raised in all future equity issuances by the Company, (b) maintaining liquidity in an amount not less than the greater of (1) $5.0 million or (2) 5% of the Company’s recourse indebtedness, not to exceed $10.0 million (provided that in the event the Company’s total liquidity equals or exceeds $5.0 million, the Company may satisfy the difference between the minimum total liquidity requirement and the Company’s total liquidity with available borrowing capacity), (c) maintaining a fixed charge coverage ratio (expressed as the ratio of EBITDA (net income before net interest expense, income tax expense, depreciation and amortization), as defined, to fixed charges) for the immediately preceding 12-month period ending on the last date of the applicable reporting period to be at least 1.25 to 1.00, (d) maintaining a ratio of total debt to tangible net worth of not more than 4.00 to 1.00, (e) maintaining a ratio of recourse debt to tangible net worth of not more than 3.00 to 1.00 and (f) if certain specific debt yield and loan to value tests are not met with respect to assets on the Morgan Stanley Facility, the Company may be required to repay certain amounts under the Morgan Stanley Facility. The Morgan Stanley Facility also prohibits the Company from amending the management agreement with its Manager in a material respect without the prior consent of the lender. As of December 31, 2020, the Company was in compliance with all financial covenants of the Morgan Stanley Facility. Notes Payable Certain of the Company’s subsidiaries are party to three separate non-recourse note agreements (the “Notes Payable”) with the lenders referred to therein, consisting of (1) a $32.4 million note that was closed in May 2019, which is secured by a $40.5 million senior mortgage loan held by the Company on an industrial property located in North Carolina, (2) a $28.3 million note that was closed in June 2019, which is secured by a hotel property located in New York that is recognized as real estate owned in the Company’s consolidated balance sheets and (3) a $23.5 million note that was closed in November 2019, which is secured by a $34.6 million senior mortgage loan held by the Company on a multifamily property located in South Carolina. The initial maturity date of the $32.4 million note is March 5, 2024, subject to one 12-month extension, which may be exercised at the Company’s option, subject to the satisfaction of certain conditions, including payment of an extension fee, which, if exercised, would extend the maturity date to March 5, 2025. Advances under the $32.4 million note accrue interest at a per annum rate equal to the sum of one-month LIBOR plus a spread of 2.50%. As of December 31, 2020, the total outstanding principal balance of the note was $27.9 million. The maturity date of the $28.3 million note is June 10, 2024, subject to one 6-month extension, which may be exercised at the Company’s option, subject to the satisfaction of certain conditions, which, if exercised, would extend the maturity date to December 10, 2024. The loan may be prepaid at any time subject to the payment of a prepayment fee, if applicable. Initial advances under the $28.3 million note accrue interest at a per annum rate equal to the sum of one-month LIBOR plus a spread of 3.00%. If the hotel property that collateralizes the $28.3 million note achieves certain financial performance hurdles, the interest rate on advances will decrease to a per annum rate equal to the sum of one-month LIBOR plus a spread of 2.50%. The $28.3 million loan amount may be increased to up to $30.0 million to fund certain construction costs of improvements at the hotel, subject to the satisfaction of certain conditions and the payment of a commitment fee. As of December 31, 2020, the total outstanding principal balance of the note was $28.3 million. The initial maturity date of the $23.5 million note is September 5, 2022, subject to two 12-month extensions, each of which may be exercised at the Company’s option, subject to the satisfaction of certain conditions, including payment of an extension fee, which, if both were exercised, would extend the maturity date to September 5, 2024. Advances under the $23.5 million note accrue interest at a per annum rate equal to the sum of one-month LIBOR plus a spread of 3.75%. As of December 31, 2020, the total outstanding principal balance of the note was $7.0 million. Secured Term Loan The Company and certain of its subsidiaries are party to a $110.0 million Credit and Guaranty Agreement with the lenders referred to therein and Cortland Capital Market Services LLC, as administrative agent and collateral agent for the lenders (the “Secured Term Loan”). In December 2020, the Company exercised a 12-month extension option on the Secured Term Loan to extend the maturity date to December 22, 2021. During the extension period, the spread on advances under the Secured Term Loan increases every three months by 0.125%, 0.375% and 0.750% per annum, respectively, beginning after the third-month of the extension period. Advances under the Secured Term Loan accrue interest at a per annum rate equal to the sum of, at the Company’s option, one, two, three or six-month LIBOR plus a spread of 5.00%. The total original issue discount on the Secured Term Loan draws was $2.6 million, which represents a discount to the debt cost to be amortized into interest expense using the effective interest method over the term of the Secured Term Loan. For the years ended December 31, 2020, 2019 and 2018, the estimated per annum effective interest rate of the Secured Term Loan, which is equal to LIBOR plus the spread plus the accretion of the original issue discount and associated costs, was 6.4%, 8.0% and 7.6%, respectively. The Company's obligations under the Secured Term Loan are guaranteed by certain subsidiaries of the Company. Certain subsidiaries of the Company entered into a Pledge and Security Agreement with the collateral agent under the Secured Term Loan, pursuant to which the obligations of the Company and the subsidiary guarantors under the Secured Term Loan are each secured by equity interests in certain of the Company's indirect subsidiaries and other assets. In addition, the Company and certain of its subsidiaries entered into a Negative Pledge Agreement with the collateral agent under the Secured Term Loan, which prohibits pledging or otherwise encumbering, subject to permitted encumbrances, certain of the assets which were not subject to the Pledge and Security Agreement. The Secured Term Loan contains various affirmative and negative covenants and provisions regarding events of default that are applicable to the Company and certain of the Company’s subsidiaries, which are normal and customary for similar financing agreements, including the following: (a) limitations on the incurrence of additional indebtedness or liens, (b) limitations on how borrowed funds may be used, (c) limitations on certain distributions and dividend payments following a default or event of default, (d) limitations on dispositions of assets and (e) prohibitions of certain change of control events. The agreements governing the Secured Term Loan also impose certain covenants on the Company, including the following: (i) maintaining a ratio of total debt to tangible net worth of not more than 4.00 to 1.00, (ii) maintaining a tangible net worth of at least 80% of the Company’s net worth as of September 30, 2015, plus 80% of the net cash proceeds raised in subsequent equity issuances by the Company, (iii) maintaining an asset coverage ratio greater than 110%, (iv) maintaining an unencumbered asset ratio greater than 120%, (v) limitations on mergers, consolidations, transfers of assets and similar transactions, (vi) maintaining its status as a REIT and (vii) maintaining at least 65% of loans held for investment as senior commercial real estate loans, as measured by the average daily outstanding principa |
SECURED BORROWINGS
SECURED BORROWINGS | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
SECURED BORROWINGS | DEBT Financing Agreements The Company borrows funds, as applicable in a given period, under the Wells Fargo Facility, the Citibank Facility, the BAML Facility, the CNB Facility, the MetLife Facility, the U.S. Bank Facility and the Morgan Stanley Facility (individually defined below and collectively, the “Secured Funding Agreements”), Notes Payable (as defined below) and the Secured Term Loan (as defined below). The Company refers to the Secured Funding Agreements, Notes Payable and the Secured Term Loan as the “Financing Agreements.” The outstanding balance of the Financing Agreements in the table below are presented gross of debt issuance costs. As of December 31, 2020 and 2019, the outstanding balances and total commitments under the Financing Agreements consisted of the following ($ in thousands): As of December 31, 2020 2019 Outstanding Balance Total Outstanding Balance Total Secured Funding Agreements: Wells Fargo Facility $ 336,001 $ 350,000 (1) $ 360,354 $ 500,000 Citibank Facility 117,506 325,000 126,603 325,000 BAML Facility — — (2) 36,280 36,280 (2) CNB Facility 50,000 50,000 (3) 30,500 50,000 (3) MetLife Facility 104,124 180,000 131,807 180,000 U.S. Bank Facility — — (4) 43,045 185,989 Morgan Stanley Facility 147,921 150,000 — — Subtotal $ 755,552 $ 1,055,000 $ 728,589 $ 1,277,269 Notes Payable $ 63,122 $ 84,155 $ 56,155 $ 84,155 Secured Term Loan $ 110,000 $ 110,000 $ 110,000 $ 110,000 Total $ 928,674 $ 1,249,155 $ 894,744 $ 1,471,424 ______________________________ (1) In December 2020, the Company amended the Wells Fargo Facility (as defined below) to, among other things, reduce the maximum commitment under the Wells Fargo Facility from $500.0 million to $350.0 million, which the maximum commitment may be increased to up to $500.0 million at the Company’s option. (2) In May 2019, the Company’s borrowing period for new individual loans under the BAML Facility (as defined below) expired and its term was not extended. As such, the total commitment amount under the BAML Facility as of December 31, 2019 represented the outstanding balance under the facility at the time the borrowing period expired. In June 2020, the BAML Facility was repaid in full and its term was not extended. (3) The CNB Facility (as defined below) has an accordion feature that provides for, subject to approval by City National Bank in its sole discretion, an increase in the commitment amount from $50.0 million to $75.0 million for up to a period of 120 days once per calendar year. (4) In July 2020, the U.S. Bank Facility matured and its term was not extended. The U.S. Bank Facility had been repaid in full prior to its maturity. Some of the Company’s Financing Agreements are collateralized by (i) assignments of specific loans, preferred equity or a pool of loans held for investment or loans held for sale owned by the Company, (ii) interests in the subordinated portion of the Company’s securitization debt, or (iii) interests in wholly-owned entity subsidiaries that hold the Company’s loans held for investment. The Company is the borrower or guarantor under each of the Financing Agreements. Generally, the Company partially offsets interest rate risk by matching the interest index of loans held for investment with the Secured Funding Agreements used to fund them. The Company’s Financing Agreements contain various affirmative and negative covenants, including negative pledges, and provisions regarding events of default that are normal and customary for similar financing arrangements. Wells Fargo Facility The Company is party to a master repurchase funding facility with Wells Fargo Bank, National Association (“Wells Fargo”) (the “Wells Fargo Facility”), which allows the Company to borrow up to $350.0 million. Under the Wells Fargo Facility, the Company is permitted to sell, and later repurchase, certain qualifying senior commercial mortgage loans, A-Notes, pari-passu participations in commercial mortgage loans and mezzanine loans under certain circumstances, subject to available collateral approved by Wells Fargo in its sole discretion. In December 2020, the Company amended the Wells Fargo Facility to, among other things, (1) reduce the maximum commitment under the Wells Fargo Facility from $500.0 million to $350.0 million, which the maximum commitment may be increased to up to $500.0 million at the Company’s option, subject to the satisfaction of certain conditions, including payment of an upsize fee, (2) extend the funding period of the Wells Fargo Facility to December 14, 2022, subject to one 12-month extension at the Company’s option, which, if exercised, would extend the funding period to December 14, 2023, (3) extend the initial maturity date of the Wells Fargo Facility to December 14, 2022, subject to three 12-month extensions, each of which may be exercised at the Company’s option, subject to the satisfaction of certain conditions, including payment of an extension fee, which, if all three were exercised, would extend the maturity date of the Wells Fargo Facility to December 14, 2025, (4) update the interest rate on advances under the Wells Fargo Facility from a per annum rate equal to the sum of one-month LIBOR plus a pricing margin range of 1.50% to 2.25%, subject to certain exceptions, to a per annum rate equal to the sum of one-month LIBOR plus a pricing margin range of 1.50% to 2.75%, subject to certain exceptions and (5) eliminate the non-utilization fee on the Wells Fargo Facility. Prior to and including December 13, 2018, advances under the Wells Fargo Facility accrued interest at a per annum rate equal to the sum of one-month LIBOR plus a pricing margin range of 1.75% to 2.35%. Prior to the amendment, the Company incurred a non-utilization fee of 25 basis points per annum on the average daily available balance of the Wells Fargo Facility to the extent less than 75% of the Wells Fargo Facility was utilized. For the years ended December 31, 2020, 2019 and 2018, the Company incurred a non-utilization fee of $19 thousand, $618 thousand and $149 thousand, respectively. The non-utilization fee is included within interest expense in the Company’s consolidated statements of operations. The Wells Fargo Facility contains various affirmative and negative covenants and provisions regarding events of default that are applicable to the Company and certain of the Company’s subsidiaries, which are normal and customary for similar repurchase facilities, including the following: (a) limitations on the incurrence of additional indebtedness or liens, (b) limitations on how borrowed funds may be used, (c) limitations on certain distributions and dividend payments in excess of the minimum amount necessary to continue to qualify as a REIT and avoid the payment of income and excise taxes, (d) maintenance of adequate capital, (e) limitations on change of control, (f) maintaining a ratio of total debt to tangible net worth of not more than 4.00 to 1.00, (g) maintaining a ratio of recourse debt to tangible net worth of not more than 3.00 to 1.00, (h) maintaining a fixed charge coverage ratio (expressed as the ratio of EBITDA (net income before net interest expense, income tax expense, depreciation and amortization), as defined, to fixed charges) for the immediately preceding 12-month period ending on the last date of the applicable reporting period to be at least 1.25 to 1.00, (i) maintaining a tangible net worth of at least the sum of (1) approximately $135.5 million, plus (2) 80% of the net proceeds raised in all future equity issuances by the Company and (j) if certain specific debt yield, loan to value or other credit based tests are not met with respect to assets on the Wells Fargo Facility, the Company may be required to repay certain amounts under the Wells Fargo Facility. As of December 31, 2020, the Company was in compliance with all financial covenants of the Wells Fargo Facility. Citibank Facility The Company is party to a $325.0 million master repurchase facility with Citibank, N.A. (“Citibank”) (the “Citibank Facility”). Under the Citibank Facility, the Company is permitted to sell and later repurchase certain qualifying senior commercial mortgage loans and A-Notes approved by Citibank in its sole discretion. The initial maturity date of the Citibank Facility is December 13, 2021, subject to two 12-month extensions, each of which may be exercised at the Company’s option assuming no existing defaults under the Citibank Facility and applicable extension fees being paid, which, if both were exercised, would extend the maturity date of the Citibank Facility to December 13, 2023. Since December 13, 2018, advances under the Citibank Facility accrue interest at a per annum rate equal to the sum of one-month LIBOR plus an indicative pricing margin range of 1.50% to 2.25%, subject to certain exceptions. Prior to and including December 12, 2018, advances under the Citibank Facility accrued interest at a per annum rate equal to the sum of one-month LIBOR plus an indicative pricing margin range of 2.25% to 2.50%, subject to certain exceptions. Since December 13, 2018, the Company incurs a non-utilization fee of 25 basis points per annum on the average daily available balance of the Citibank Facility to the extent less than 75% of the Citibank Facility is utilized. Prior to and including December 12, 2018, the Company incurred a non-utilization fee of 25 basis points per annum on the average daily available balance of the Citibank Facility. For the years ended December 31, 2020, 2019 and 2018, the Company incurred a non-utilization fee of $516 thousand, $388 thousand and $143 thousand, respectively. The non-utilization fee is included within interest expense in the Company’s consolidated statements of operations. The Citibank Facility contains various affirmative and negative covenants and provisions regarding events of default that are applicable to the Company and certain of the Company’s subsidiaries, which are normal and customary for similar repurchase facilities, including the following: (a) maintaining tangible net worth of at least the sum of (1) 80% of the Company’s tangible net worth as of September 30, 2013, plus (2) 80% of the total net capital raised in all future equity issuances by the Company, (b) maintaining liquidity in an amount not less than the greater of (1) $5.0 million or (2) 5% of the Company’s recourse indebtedness, not to exceed $10.0 million (provided that in the event the Company’s total liquidity equals or exceeds $5.0 million, the Company may satisfy the difference between the minimum total liquidity requirement and the Company’s total liquidity with available borrowing capacity), (c) maintaining a fixed charge coverage ratio (expressed as the ratio of EBITDA (net income before net interest expense, income tax expense, depreciation and amortization), as defined, to fixed charges) for the immediately preceding 12-month period ending on the last date of the applicable reporting period to be at least 1.25 to 1.00, (d) maintaining a ratio of total debt to tangible net worth of not more than 4.00 to 1.00, (e) maintaining a ratio of recourse debt to tangible net worth of not more than 3.00 to 1.00 and (f) if certain specific debt yield and loan to value tests are not met with respect to assets on the Citibank Facility, the Company may be required to repay certain amounts under the Citibank Facility. The Citibank Facility also prohibits the Company from amending the management agreement with its Manager in a material respect without the prior consent of the lender. As of December 31, 2020, the Company was in compliance with all financial covenants of the Citibank Facility. BAML Facility The Company was party to a $125.0 million Bridge Loan Warehousing Credit and Security Agreement with Bank of America, N.A. (“Bank of America”) (the “BAML Facility”). Under the BAML Facility, the Company was able to obtain advances secured by eligible commercial mortgage loans collateralized by multifamily properties. Bank of America approved the loans on which advances were made under the BAML Facility in its sole discretion. The Company was able to request individual loans under the facility up to May 23, 2019 and the term of the borrowing period was not extended. Individual advances under the BAML Facility had a two-year maturity, subject to one 12-month extension at the Company’s option upon the satisfaction of certain conditions and applicable extension fees being paid. At the time the term of the borrowing period expired, the Company had one individual advance outstanding in the amount of $36.3 million that had a maturity date of September 5, 2019 per the original terms of the BAML Facility. In September 2019, the Company amended the BAML Facility to extend the maturity date for the one individual advance outstanding to December 4, 2019. In addition, in December 2019, the Company amended the BAML Facility to extend the maturity date for the one individual advance outstanding to March 3, 2020. In addition, effective February 2020, the Company amended the BAML Facility to extend the maturity date for the one individual advance outstanding to July 1, 2020. In June 2020, the BAML Facility was repaid in full and its term was not extended. Advances under the BAML Facility accrued interest at a per annum rate equal to the sum of one-month LIBOR plus a spread of 2.00%, subject to certain exceptions. The Company incurred a non-utilization fee of 12.5 basis points per annum up to May 23, 2019 on the average daily available balance of the BAML Facility to the extent less than 50% of the BAML Facility was utilized. For the year ended December 31, 2020, the Company did not incur a non-utilization fee. For the years ended December 31, 2019 and 2018, the Company incurred a non-utilization fee of $43 thousand and $21 thousand, respectively. The non-utilization fee is included within interest expense in the Company’s consolidated statements of operations. CNB Facility The Company is party to a $50.0 million secured revolving funding facility with City National Bank (the “CNB Facility”). The Company is permitted to borrow funds under the CNB Facility to finance investments and for other working capital and general corporate needs. In March 2020, the Company exercised a 12-month extension option on the CNB Facility to extend the initial maturity date to March 10, 2021. In June 2019, the Company amended the CNB Facility to, among other things, (1) add an accordion feature that provides for, subject to approval by City National Bank in its sole discretion, an increase in the commitment amount from $50.0 million to $75.0 million for up to a period of 120 days once per calendar year, (2) add two additional 12-month extensions, each of which may be exercised at the Company’s option, subject to the satisfaction of certain conditions, including payment of an extension fee, which, if both were exercised, would extend the maturity date of the CNB Facility to March 10, 2022 and (3) decrease the interest rate on advances to a per annum rate equal to the sum of, at the Company’s option, either (a) LIBOR for a one, two, three, six or, if available to all lenders, 12-month interest period plus 2.65% or (b) a base rate (which is the highest of a prime rate, the federal funds rate plus 0.50%, or one-month LIBOR plus 1.00%) plus 1.00%; provided that in no event shall the interest rate be less than 2.65%. Previously the interest rate on advances was a per annum rate equal to the sum of, at the Company’s option, either (a) LIBOR for a one, two, three, six or, if available to all lenders, 12-month interest period plus 3.00% or (b) a base rate (which is the highest of a prime rate, the federal funds rate plus 0.50%, or one-month LIBOR plus 1.00%) plus 1.25%. Unless at least 75% of the CNB Facility is used on average, unused commitments under the CNB Facility accrue non-utilization fees at the rate of 0.375% per annum. For the years ended December 31, 2020, 2019 and 2018, the Company incurred a non-utilization fee of $38 thousand, $136 thousand and $166 thousand, respectively. The non-utilization fee is included within interest expense in the Company’s consolidated statements of operations. The CNB Facility contains various affirmative and negative covenants and provisions regarding events of default that are applicable to the Company and certain of the Company’s subsidiaries, which are normal and customary for similar financing facilities, including the following: (a) limitations on the incurrence of additional indebtedness or liens, (b) limitations on how borrowed funds may be used, (c) limitations on certain distributions and dividend payments following a default or event of default, (d) limitations on dispositions of assets, (e) maintenance of minimum total asset value by the borrower under the CNB Facility and its subsidiaries and (f) prohibitions of certain change of control events. The agreements governing the CNB Facility also impose certain covenants on the Company, including the following: (i) maintaining a ratio of total debt to tangible net worth of not more than 4.00 to 1.00, (ii) maintaining a ratio of recourse debt to tangible net worth of not more than 3.00 to 1.00, (iii) maintaining a tangible net worth of at least 80% of the Company’s net worth as of September 30, 2013, plus 80% of the net cash proceeds raised in equity issuances by the Company after March 12, 2014, (iv) maintaining a fixed charge coverage ratio (expressed as the ratio of EBITDA (net income before net interest expense, income tax expense, depreciation and amortization), as defined, to fixed charges) for the immediately preceding 12-month period ending on the last date of the applicable reporting period of at least 1.25 to 1.00, (v) limitations on mergers, consolidations, transfers of assets and similar transactions and (vi) maintaining its status as a REIT. As of December 31, 2020, the Company was in compliance with all financial covenants of the CNB Facility. MetLife Facility The Company is party to a $180.0 million revolving master repurchase facility with Metropolitan Life Insurance Company (“MetLife”) (the “MetLife Facility”), pursuant to which the Company may sell, and later repurchase, commercial mortgage loans meeting defined eligibility criteria which are approved by MetLife in its sole discretion. In August 2020, the Company amended the MetLife Facility to, among other things, (1) extend the initial maturity date of the MetLife Facility to August 13, 2022, subject to two 12-month extensions, each of which may be exercised at the Company’s option, subject to the satisfaction of certain conditions, including payment of an extension fee, which, if both were exercised, would extend the maturity date of the MetLife Facility to August 13, 2024, (2) increase the interest rate on new advances subsequent to the date of the amendment to a per annum rate equal to the sum of one-month LIBOR plus a spread of 2.50%. The interest rate on advances with respect to existing loans financed under the MetLife Facility prior to the amendment will continue to accrue interest at a per annum rate equal to the sum of one-month LIBOR plus a spread of 2.30%, subject to certain exceptions and (3) waive the non-utilization fee of 25 basis points per annum on the average daily available balance of the MetLife Facility, which is owed if less than 65% of the MetLife Facility is utilized, for a period of nine months subsequent to the date of the amendment. For the years ended December 31, 2020, 2019 and 2018, the Company incurred a non-utilization fee of $7 thousand, $5 thousand and $7 thousand, respectively. The non-utilization fee is included within interest expense in the Company’s consolidated statements of operations. The MetLife Facility contains various affirmative and negative covenants and provisions regarding events of default that are applicable to the Company and certain of the Company’s subsidiaries, which are normal and customary for similar repurchase facilities, including the following: (a) limitations on the incurrence of additional indebtedness or liens, (b) limitations on how borrowed funds may be used, (c) limitations on certain distributions and dividend payments following a default or event of default and (d) limitations on dispositions of assets. The agreements governing the MetLife Facility also impose certain covenants on the Company, including the following: (i) maintaining a ratio of total debt to tangible net worth of not more than 4.00 to 1.00, (ii) maintaining a ratio of recourse debt to tangible net worth of not more than 3.00 to 1.00, (iii) maintaining a tangible net worth of at least 80% of the Company’s net worth as of September 30, 2013, plus 80% of the net cash proceeds raised in equity issuances by the Company after August 13, 2014, (iv) maintaining a fixed charge coverage ratio (expressed as the ratio of EBITDA (net income before net interest expense, income tax expense, depreciation and amortization), as defined, to fixed charges) for the immediately preceding 12-month period ending on the last date of the applicable reporting period of at least 1.25 to 1.00, and (v) if certain specific debt yield, loan to value or other credit based tests are not met with respect to assets on the MetLife Facility, the Company may be required to repay certain amounts under the MetLife Facility. As of December 31, 2020, the Company was in compliance with all financial covenants of the MetLife Facility. U.S. Bank Facility The Company was party to a $186.0 million master repurchase and securities contract with U.S. Bank National Association (“U.S. Bank”) (the “U.S. Bank Facility”). Pursuant to the U.S. Bank Facility, the Company was permitted to sell, and later repurchase, eligible commercial mortgage loans collateralized by retail, office, mixed-use, multifamily, industrial, hospitality, student housing, manufactured housing or self storage properties. U.S. Bank approved the mortgage loans that were subject to the U.S. Bank Facility in its sole discretion. On July 31, 2020, the U.S. Bank Facility matured and its term was not extended. The U.S. Bank Facility had been repaid in full prior to its maturity. Advances under the U.S. Bank Facility generally accrued interest at a per annum rate equal to the sum of one-month LIBOR plus a spread of 2.25%, unless otherwise agreed between U.S. Bank and the Company, depending upon the mortgage loan sold to U.S. Bank in the applicable transaction. The Company incurred a non-utilization fee of 25 basis points per annum on the average daily available balance of the U.S. Bank Facility to the extent less than 50% of the U.S. Bank Facility was utilized. For the years ended December 31, 2020 and 2019, the Company incurred a non-utilization fee of $216 thousand and $246 thousand, respectively. For the year ended December 31, 2018, the Company did not incur a non-utilization fee. The non-utilization fee is included within interest expense in the Company’s consolidated statements of operations. Morgan Stanley Facility In January 2020, the Company entered into a $150.0 million master repurchase and securities contract with Morgan Stanley Bank, N.A. (“Morgan Stanley”) (the “Morgan Stanley Facility”). Under the Morgan Stanley Facility, the Company is permitted to sell, and later repurchase, certain qualifying commercial mortgage loans collateralized by retail, office, mixed-use, multifamily, industrial, hospitality, student housing or self-storage properties. Morgan Stanley may approve the mortgage loans that are subject to the Morgan Stanley Facility in its sole discretion. The initial maturity date of the Morgan Stanley Facility is January 16, 2023, subject to two 12-month extensions, each of which may be exercised at the Company’s option, subject to the satisfaction of certain conditions, including payment of an extension fee, which, if both were exercised, would extend the maturity date of the Morgan Stanley Facility to January 16, 2025. Advances under the Morgan Stanley Facility generally accrue interest at a per annum rate equal to the sum of one-month LIBOR plus a spread ranging from 1.75% to 2.25%, determined by Morgan Stanley, depending upon the mortgage loan sold to Morgan Stanley in the applicable transaction. The Morgan Stanley Facility contains various affirmative and negative covenants and provisions regarding events of default that are applicable to the Company and certain of the Company’s subsidiaries, which are normal and customary for similar repurchase facilities, including the following: (a) maintaining tangible net worth of at least the sum of (1) 80% of the Company’s tangible net worth as of September 30, 2013, plus (2) 80% of the total net capital raised in all future equity issuances by the Company, (b) maintaining liquidity in an amount not less than the greater of (1) $5.0 million or (2) 5% of the Company’s recourse indebtedness, not to exceed $10.0 million (provided that in the event the Company’s total liquidity equals or exceeds $5.0 million, the Company may satisfy the difference between the minimum total liquidity requirement and the Company’s total liquidity with available borrowing capacity), (c) maintaining a fixed charge coverage ratio (expressed as the ratio of EBITDA (net income before net interest expense, income tax expense, depreciation and amortization), as defined, to fixed charges) for the immediately preceding 12-month period ending on the last date of the applicable reporting period to be at least 1.25 to 1.00, (d) maintaining a ratio of total debt to tangible net worth of not more than 4.00 to 1.00, (e) maintaining a ratio of recourse debt to tangible net worth of not more than 3.00 to 1.00 and (f) if certain specific debt yield and loan to value tests are not met with respect to assets on the Morgan Stanley Facility, the Company may be required to repay certain amounts under the Morgan Stanley Facility. The Morgan Stanley Facility also prohibits the Company from amending the management agreement with its Manager in a material respect without the prior consent of the lender. As of December 31, 2020, the Company was in compliance with all financial covenants of the Morgan Stanley Facility. Notes Payable Certain of the Company’s subsidiaries are party to three separate non-recourse note agreements (the “Notes Payable”) with the lenders referred to therein, consisting of (1) a $32.4 million note that was closed in May 2019, which is secured by a $40.5 million senior mortgage loan held by the Company on an industrial property located in North Carolina, (2) a $28.3 million note that was closed in June 2019, which is secured by a hotel property located in New York that is recognized as real estate owned in the Company’s consolidated balance sheets and (3) a $23.5 million note that was closed in November 2019, which is secured by a $34.6 million senior mortgage loan held by the Company on a multifamily property located in South Carolina. The initial maturity date of the $32.4 million note is March 5, 2024, subject to one 12-month extension, which may be exercised at the Company’s option, subject to the satisfaction of certain conditions, including payment of an extension fee, which, if exercised, would extend the maturity date to March 5, 2025. Advances under the $32.4 million note accrue interest at a per annum rate equal to the sum of one-month LIBOR plus a spread of 2.50%. As of December 31, 2020, the total outstanding principal balance of the note was $27.9 million. The maturity date of the $28.3 million note is June 10, 2024, subject to one 6-month extension, which may be exercised at the Company’s option, subject to the satisfaction of certain conditions, which, if exercised, would extend the maturity date to December 10, 2024. The loan may be prepaid at any time subject to the payment of a prepayment fee, if applicable. Initial advances under the $28.3 million note accrue interest at a per annum rate equal to the sum of one-month LIBOR plus a spread of 3.00%. If the hotel property that collateralizes the $28.3 million note achieves certain financial performance hurdles, the interest rate on advances will decrease to a per annum rate equal to the sum of one-month LIBOR plus a spread of 2.50%. The $28.3 million loan amount may be increased to up to $30.0 million to fund certain construction costs of improvements at the hotel, subject to the satisfaction of certain conditions and the payment of a commitment fee. As of December 31, 2020, the total outstanding principal balance of the note was $28.3 million. The initial maturity date of the $23.5 million note is September 5, 2022, subject to two 12-month extensions, each of which may be exercised at the Company’s option, subject to the satisfaction of certain conditions, including payment of an extension fee, which, if both were exercised, would extend the maturity date to September 5, 2024. Advances under the $23.5 million note accrue interest at a per annum rate equal to the sum of one-month LIBOR plus a spread of 3.75%. As of December 31, 2020, the total outstanding principal balance of the note was $7.0 million. Secured Term Loan The Company and certain of its subsidiaries are party to a $110.0 million Credit and Guaranty Agreement with the lenders referred to therein and Cortland Capital Market Services LLC, as administrative agent and collateral agent for the lenders (the “Secured Term Loan”). In December 2020, the Company exercised a 12-month extension option on the Secured Term Loan to extend the maturity date to December 22, 2021. During the extension period, the spread on advances under the Secured Term Loan increases every three months by 0.125%, 0.375% and 0.750% per annum, respectively, beginning after the third-month of the extension period. Advances under the Secured Term Loan accrue interest at a per annum rate equal to the sum of, at the Company’s option, one, two, three or six-month LIBOR plus a spread of 5.00%. The total original issue discount on the Secured Term Loan draws was $2.6 million, which represents a discount to the debt cost to be amortized into interest expense using the effective interest method over the term of the Secured Term Loan. For the years ended December 31, 2020, 2019 and 2018, the estimated per annum effective interest rate of the Secured Term Loan, which is equal to LIBOR plus the spread plus the accretion of the original issue discount and associated costs, was 6.4%, 8.0% and 7.6%, respectively. The Company's obligations under the Secured Term Loan are guaranteed by certain subsidiaries of the Company. Certain subsidiaries of the Company entered into a Pledge and Security Agreement with the collateral agent under the Secured Term Loan, pursuant to which the obligations of the Company and the subsidiary guarantors under the Secured Term Loan are each secured by equity interests in certain of the Company's indirect subsidiaries and other assets. In addition, the Company and certain of its subsidiaries entered into a Negative Pledge Agreement with the collateral agent under the Secured Term Loan, which prohibits pledging or otherwise encumbering, subject to permitted encumbrances, certain of the assets which were not subject to the Pledge and Security Agreement. The Secured Term Loan contains various affirmative and negative covenants and provisions regarding events of default that are applicable to the Company and certain of the Company’s subsidiaries, which are normal and customary for similar financing agreements, including the following: (a) limitations on the incurrence of additional indebtedness or liens, (b) limitations on how borrowed funds may be used, (c) limitations on certain distributions and dividend payments following a default or event of default, (d) limitations on dispositions of assets and (e) prohibitions of certain change of control events. The agreements governing the Secured Term Loan also impose certain covenants on the Company, including the following: (i) maintaining a ratio of total debt to tangible net worth of not more than 4.00 to 1.00, (ii) maintaining a tangible net worth of at least 80% of the Company’s net worth as of September 30, 2015, plus 80% of the net cash proceeds raised in subsequent equity issuances by the Company, (iii) maintaining an asset coverage ratio greater than 110%, (iv) maintaining an unencumbered asset ratio greater than 120%, (v) limitations on mergers, consolidations, transfers of assets and similar transactions, (vi) maintaining its status as a REIT and (vii) maintaining at least 65% of loans held for investment as senior commercial real estate loans, as measured by the average daily outstanding principa |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES As further discussed in Note 2, the full extent of the impact of the COVID-19 pandemic on the global economy and the Company’s business is uncertain. As of December 31, 2020, there were no contingencies recorded on the Company’s consolidated balance sheets as a result of the COVID-19 pandemic, however, if the global pandemic continues and market conditions worsen, it could adversely affect the Company’s business, financial condition and results of operations. As of December 31, 2020 and 2019, the Company had the following commitments to fund various senior mortgage loans, subordinated debt investments, as well as preferred equity investments accounted for as loans held for investment ($ in thousands): As of December 31, 2020 2019 Total commitments $ 2,013,993 $ 1,909,084 Less: funded commitments (1,826,241) (1,692,894) Total unfunded commitments $ 187,752 $ 216,190 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY At the Market Stock Offering Program On November 22, 2019, the Company entered into an equity distribution agreement (the “Equity Distribution Agreement”), pursuant to which the Company may offer and sell, from time to time, shares of the Company’s common stock, par value $0.01 per share, having an aggregate offering price of up to $100.0 million. Subject to the terms and conditions of the Equity Distribution Agreement, sales of common stock, if any, may be made in transactions that are deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended. During the years ended December 31, 2020 and 2019, the Company did not issue or sell any shares of common stock under the Equity Distribution Agreement. Equity Offerings On January 22, 2020, the Company entered into an underwriting agreement (the “Underwriting Agreement”), by and among the Company, ACREM, and Wells Fargo Securities, LLC, Citigroup Global Markets Inc. and Morgan Stanley & Co. LLC, as representatives of the several underwriters listed therein (collectively, the “Underwriters”). Pursuant to the terms of the Underwriting Agreement, the Company agreed to sell, and the Underwriters agreed to purchase, subject to the terms and conditions set forth in the Underwriting Agreement, an aggregate of 4,000,000 shares of the Company’s common stock, par value $0.01 per share. In addition, the Company granted to the Underwriters a 30-day option to purchase up to an additional 600,000 shares. The public offering closed on January 27, 2020 and generated net proceeds of approximately $63.3 million, after deducting transaction expenses. On January 30, 2020, the Company sold an additional 600,000 shares pursuant to the Underwriters option to purchase additional shares, generating additional net proceeds of approximately $9.6 million. Equity Incentive Plan On April 23, 2012, the Company adopted an equity incentive plan. In April 2018, the Company’s board of directors authorized, and in June 2018, the Company’s stockholders approved, an amended and restated equity incentive plan that increased the total amount of shares of common stock the Company may grant thereunder to 1,390,000 shares (the “Amended and Restated 2012 Equity Incentive Plan”). Pursuant to the Amended and Restated 2012 Equity Incentive Plan, the Company may grant awards consisting of restricted shares of the Company’s common stock, restricted stock units (“RSUs”) and/or other equity-based awards to the Company’s outside directors, employees of the Manager, officers, ACREM and other eligible awardees under the plan. Any restricted shares of the Company’s common stock and RSUs will be accounted for under FASB ASC Topic 718, Compensation—Stock Compensation , resulting in stock-based compensation expense equal to the grant date fair value of the underlying restricted shares of common stock or RSUs. Restricted stock and RSU grants generally vest ratably over a one The following tables summarize the (i) non-vested shares of restricted stock and RSUs and (ii) vesting schedule of shares of restricted stock and RSUs for the Company’s directors and officers and employees of the Manager as of December 31, 2020: Schedule of Non-Vested Share and Share Equivalents Restricted Stock Grants—Directors Restricted Stock Grants—Officers and Employees of the Manager RSUs—Officers and Employees of the Manager Total Balance at December 31, 2019 12,332 211,467 61,594 285,393 Granted 42,985 — 220,457 263,442 Vested (32,993) (65,742) (10,611) (109,346) Forfeited — (76,874) (3,933) (80,807) Balance at December 31, 2020 22,324 68,851 267,507 358,682 Future Anticipated Vesting Schedule Restricted Stock Grants—Directors Restricted Stock Grants—Officers and Employees of the Manager RSUs—Officers and Employees of the Manager Total 2021 22,324 39,775 35,509 97,608 2022 — 29,076 89,177 118,253 2023 — — 89,160 89,160 2024 — — 53,661 53,661 2025 — — — — Total 22,324 68,851 267,507 358,682 The following table summarizes the restricted stock and RSU compensation expense included within general and administrative expenses in the Company’s consolidated statements of operations, the total fair value of shares vested and the weighted average grant date fair value of the restricted stock and RSUs granted to the Company’s directors and officers and employees of the Manager for the years ended December 31, 2020, 2019 and 2018 ($ in thousands): For the years ended December 31, 2020 2019 2018 Restricted Stock and RSU Grants Restricted Stock and RSU Grants Restricted Stock Grants Directors Officers and Employees of the Manager Total Directors Officers and Employees of the Manager Total Directors Officers and Employees of the Manager Total Compensation expense $ 319 $ 1,020 $ 1,339 $ 343 $ 1,537 $ 1,880 $ 427 $ 675 $ 1,102 Total fair value of shares vested (1) 315 849 1,164 373 939 1,312 405 449 854 Weighted average grant date fair value 292 2,898 3,190 302 2,527 2,829 427 1,759 2,186 ___________________________ (1) Based on the closing price of the Company’s common stock on the NYSE on each vesting date. As of December 31, 2020, 2019 and 2018, the total compensation cost related to non-vested awards not yet recognized totaled $3.7 million, $3.1 million and $2.3 million, respectively, and the weighted average period over which the non-vested awards are expected to be recognized is 2.3 years, 2.3 years and 2.1 years, respectively. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The following information sets forth the computations of basic and diluted earnings per common share for the years ended December 31, 2020, 2019 and 2018 ($ in thousands, except share and per share data): For the years ended December 31, 2020 2019 2018 Net income attributable to common stockholders $ 21,840 $ 36,991 $ 38,596 Divided by: Basic weighted average shares of common stock outstanding: 32,977,462 28,609,282 28,529,439 Weighted average non-vested restricted stock and RSUs 219,046 237,359 127,221 Diluted weighted average shares of common stock outstanding: 33,196,508 28,846,641 28,656,660 Basic earnings per common share $ 0.66 $ 1.29 $ 1.35 Diluted earnings per common share $ 0.66 $ 1.28 $ 1.35 |
INCOME TAX
INCOME TAX | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAX | INCOME TAX The Company wholly owns ACRC Lender W TRS LLC, which is a taxable REIT subsidiary (“TRS”) formed to issue and hold certain loans intended for sale. The Company also wholly owns ACRC 2017-FL3 TRS LLC, which is a TRS formed to hold a portion of the CLO Securitization (as defined below), including the portion that generates excess inclusion income. Additionally, the Company wholly owns ACRC WM Tenant LLC, which is a TRS formed to lease from an affiliate the hotel property classified as real estate owned acquired on March 8, 2019. ACRC WM Tenant LLC engaged a third-party hotel management company to operate the hotel under a management contract. The income tax provision for the Company and the TRSs consisted of the following for the years ended December 31, 2020, 2019 and 2018 ($ in thousands): For the years ended December 31, 2020 2019 2018 Current $ 82 $ 114 $ 84 Deferred (99) 99 — Excise tax 369 302 362 Total income tax expense, including excise tax $ 352 $ 515 $ 446 For the years ended December 31, 2020, 2019 and 2018, the Company incurred an expense of $369 thousand, $302 thousand and $362 thousand, respectively, for U.S. federal excise tax. Excise tax represents a 4% tax on the sum of a portion of the Company’s ordinary income and net capital gains not distributed during the calendar year (including any distribution declared in the fourth quarter and paid following January) plus any prior year shortfall. If it is determined that an excise tax liability exists for the current year, the Company will accrue excise tax on estimated excess taxable income as such taxable income is earned. The annual expense is calculated in accordance with applicable tax regulations. The TRSs recognize interest and penalties related to unrecognized tax benefits within income tax expense in the Company’s consolidated statements of operations. Accrued interest and penalties, if any, are included within other liabilities in the Company’s consolidated balance sheets. As of December 31, 2020, tax years 2017 through 2020 remain subject to examination by taxing authorities. The Company does not have any unrecognized tax benefits and the Company does not expect that to change in the next 12 months. |
FAIR VALUE
FAIR VALUE | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | FAIR VALUE The Company follows FASB ASC Topic 820-10, Fair Value Measurement (“ASC 820-10”), which expands the application of fair value accounting. ASC 820-10 defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands disclosure requirements for fair value measurements. ASC 820-10 determines fair value to be the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. ASC 820-10 specifies a hierarchy of valuation techniques based on the inputs used in measuring fair value. In accordance with ASC 820-10, the inputs used to measure fair value are summarized in the three broad levels listed below: • Level 1-Quoted prices in active markets for identical assets or liabilities. • Level 2-Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants would use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others. • Level 3-Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. GAAP requires disclosure of fair value information about financial and nonfinancial assets and liabilities, whether or not recognized in the financial statements, for which it is practical to estimate the value. In cases where quoted market prices are not available, fair values are based upon the application of discount rates to estimated future cash flows using market yields, or other valuation methodologies. Any changes to the valuation methodology will be reviewed by the Company’s management to ensure the changes are appropriate. The methods used may produce a fair value calculation that is not indicative of net realizable value or reflective of future fair values. Furthermore, while the Company anticipates that the valuation methods are appropriate and consistent with other market participants, the use of different methodologies, or assumptions, to determine the fair value of certain financial and nonfinancial assets and liabilities could result in a different estimate of fair value at the reporting date. The Company uses inputs that are current as of the measurement date, which may fall within periods of market dislocation, during which price transparency may be reduced. As of December 31, 2020 and 2019, the Company did not have any financial and nonfinancial assets or liabilities required to be recorded at fair value on a recurring basis. Nonrecurring Fair Value Measurements The Company is required to record real estate owned, a nonfinancial asset, at fair value on a nonrecurring basis in accordance with GAAP. Real estate owned consists of a hotel property that was acquired by the Company on March 8, 2019 through a deed in lieu of foreclosure. See Note 5 included in these consolidated financial statements for more information on real estate owned. Real estate owned is recorded at fair value at acquisition using Level 3 inputs and is evaluated for indicators of impairment on a quarterly basis. Real estate owned is considered impaired when the sum of estimated future undiscounted cash flows expected to be generated by the real estate owned over the estimated remaining holding period is less than the carrying amount of such real estate owned. Cash flows include operating cash flows and anticipated capital proceeds generated by the real estate owned. An impairment charge is recorded equal to the excess of the carrying value of the real estate owned over the fair value. The fair value of the hotel property at acquisition was estimated using a third-party appraisal, which utilized standard industry valuation techniques such as the income and market approach. When determining the fair value of a hotel, certain assumptions are made including, but not limited to: (1) projected operating cash flows, including factors such as booking pace, growth rates, occupancy, daily room rates, hotel specific operating costs and future capital expenditures; and (2) projected cash flows from the eventual disposition of the hotel based upon the Company’s estimation of a hotel specific capitalization rate, hotel specific discount rates and comparable selling prices in the market. As of December 31, 2020 and 2019, the Company did not have any financial assets or liabilities or nonfinancial liabilities required to be recorded at fair value on a nonrecurring basis. Financial Assets and Liabilities Not Measured at Fair Value As of December 31, 2020 and 2019, the carrying values and fair values of the Company’s financial assets and liabilities recorded at cost are as follows ($ in thousands): As of December 31, 2020 2019 Level in Fair Value Hierarchy Carrying Value Fair Carrying Value Fair Financial assets: Loans held for investment 3 $ 1,815,219 $ 1,800,003 $ 1,682,498 $ 1,692,894 Financial liabilities: Secured funding agreements 2 $ 755,552 $ 755,552 $ 728,589 $ 728,589 Notes payable 3 61,837 63,122 54,708 56,155 Secured term loan 3 110,000 110,000 109,149 110,000 Collateralized loan obligation securitization debt (consolidated VIE) 3 443,871 443,467 443,177 445,600 Secured borrowings 3 59,790 60,215 — — The carrying values of cash and cash equivalents, restricted cash, interest receivable, due to affiliate liability and accrued expenses, which are all categorized as Level 2 within the fair value hierarchy, approximate their fair values due to their short-term nature. Loans held for investment are recorded at cost, net of unamortized loan fees and origination costs. To determine the fair value of the collateral, the Company may employ different approaches depending on the type of collateral. The Company determined the fair value of loans held for investment based on a discounted cash flow methodology, taking into consideration various factors including capitalization rates, discount rates, leasing, occupancy rates, availability and cost of financing, exit plan, sponsorship, actions of other lenders, and comparable selling prices in the market. The Secured Funding Agreements are recorded at outstanding principal, which is the Company’s best estimate of the fair value. The Company determined the fair value of the Notes Payable, Secured Term Loan, collateralized loan obligation (“CLO”) securitization debt and Secured Borrowings based on a discounted cash flow methodology, taking into consideration various factors including discount rates, actions of other lenders and comparable market quotes and recent trades for similar products. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Management Agreement The Company is party to a Management Agreement under which ACREM, subject to the supervision and oversight of the Company’s board of directors, is responsible for, among other duties, (a) performing all of the Company’s day-to-day functions, (b) determining the Company’s investment strategy and guidelines in conjunction with the Company’s board of directors, (c) sourcing, analyzing and executing investments, asset sales and financing, and (d) performing portfolio management duties. In addition, ACREM has an Investment Committee that oversees compliance with the Company’s investment strategy and guidelines, loans held for investment portfolio holdings and financing strategy. In exchange for its services, ACREM is entitled to receive a base management fee, an incentive fee and expense reimbursements. In addition, ACREM and its personnel may receive grants of equity-based awards pursuant to the Company’s Amended and Restated 2012 Equity Incentive Plan and a termination fee, if applicable. The base management fee is equal to 1.5% of the Company’s stockholders’ equity per annum, which is calculated and payable quarterly in arrears in cash. For purposes of calculating the base management fee, stockholders’ equity means: (a) the sum of (i) the net proceeds from all issuances of the Company’s equity securities since inception (allocated on a pro-rata daily basis for such issuances during the fiscal quarter of any such issuance), plus (ii) the Company’s retained earnings at the end of the most recently completed fiscal quarter determined in accordance with GAAP (without taking into account any non-cash equity compensation expense incurred in current or prior periods); less (b) (x) any amount that the Company has paid to repurchase the Company’s common stock since inception, (y) any unrealized gains and losses and other non-cash items that have impacted stockholders’ equity as reported in the Company’s consolidated financial statements prepared in accordance with GAAP, and (z) one-time events pursuant to changes in GAAP, and certain non-cash items not otherwise described above, in each case after discussions between ACREM and the Company’s independent directors and approval by a majority of the Company’s independent directors. As a result, the Company’s stockholders’ equity, for purposes of calculating the management fee, could be greater or less than the amount of stockholders’ equity shown in the Company’s consolidated financial statements. The incentive fee is an amount, not less than zero, equal to the difference between: (a) the product of (i) 20% and (ii) the difference between (A) the Company’s Core Earnings (as defined below) for the previous 12-month period, and (B) the product of (1) the weighted average of the issue price per share of the Company’s common stock of all of the Company’s public offerings of common stock multiplied by the weighted average number of all shares of common stock outstanding including any restricted shares of the Company’s common stock, RSUs, or any shares of the Company’s common stock not yet issued, but underlying other awards granted under the Company’s Amended and Restated 2012 Equity Incentive Plan (see Note 9 included in these consolidated financial statements) in the previous 12-month period, and (2) 8%; and (b) the sum of any incentive fees earned by ACREM with respect to the first three fiscal quarters of such previous 12-month period; provided, however, that no incentive fee is payable with respect to any fiscal quarter unless cumulative Core Earnings for the 12 most recently completed fiscal quarters is greater than zero. “Core Earnings” is defined in the Management Agreement as GAAP net income (loss) computed in accordance with GAAP, excluding non-cash equity compensation expense, the incentive fee, depreciation and amortization (to the extent that any of the Company’s target investments are structured as debt and the Company forecloses on any properties underlying such debt), any unrealized gains, losses or other non-cash items recorded in net income (loss) for the period, regardless of whether such items are included in other comprehensive income or loss, or in net income (loss), and one-time events pursuant to changes in GAAP and certain non-cash charges after discussions between ACREM and the Company’s independent directors and after approval by a majority of the Company’s independent directors. For the years ended December 31, 2020, 2019 and 2018, the Company incurred incentive fees of $0.8 million, $1.1 million and $1.2 million, respectively. The Company reimburses ACREM at cost for operating expenses that ACREM incurs on the Company’s behalf, including expenses relating to legal, financial, accounting, servicing, due diligence and other services, expenses in connection with the origination and financing of the Company’s investments, communications with the Company’s stockholders, information technology systems, software and data services used for the Company, travel, complying with legal and regulatory requirements, taxes, insurance maintained for the benefit of the Company as well as all other expenses actually incurred by ACREM that are reasonably necessary for the performance by ACREM of its duties and functions under the Management Agreement. Ares Management, from time to time, incurs fees, costs and expenses on behalf of more than one investment vehicle. To the extent such fees, costs and expenses are incurred for the account or benefit of more than one fund, each such investment vehicle, including the Company, will typically bear an allocable portion of any such fees, costs and expenses in proportion to the size of its investment in the activity or entity to which such expense relates (subject to the terms of each fund’s governing documents) or in such other manner as Ares Management considers fair and equitable under the circumstances, such as the relative fund size or capital available to be invested by such investment vehicles. Where an investment vehicle’s governing documents do not permit the payment of a particular expense, Ares Management will generally pay such investment vehicle’s allocable portion of such expense. In addition, the Company is responsible for its proportionate share of certain fees and expenses, including due diligence costs, as determined by ACREM and Ares Management, including legal, accounting and financial advisor fees and related costs, incurred in connection with evaluating and consummating investment opportunities, regardless of whether such transactions are ultimately consummated by the parties thereto. The Company will not reimburse ACREM for the salaries and other compensation of its personnel, except for the allocable share of the salaries and other compensation of the Company’s (a) Chief Financial Officer, based on the percentage of his time spent on the Company’s affairs and (b) other corporate finance, tax, accounting, internal audit, legal, risk management, operations, compliance and other non-investment professional personnel of ACREM or its affiliates who spend all or a portion of their time managing the Company’s affairs based on the percentage of their time spent on the Company’s affairs. The Company is also required to pay its pro-rata portion of rent, telephone, utilities, office furniture, equipment, machinery and other office, internal and overhead expenses of ACREM and its affiliates that are required for the Company’s operations. Certain of the Company’s subsidiaries, along with the Company’s lenders under certain of the Company’s Secured Funding Agreements, as well as under the CLO transaction have entered into various servicing agreements with ACREM’s subsidiary servicer, Ares Commercial Real Estate Servicer LLC (“ACRES”). The Company’s Manager will specially service, as needed, certain of the Company’s investments. Effective May 1, 2012, ACRES agreed that no servicing fees pursuant to these servicing agreements would be charged to the Company or its subsidiaries by ACRES or the Manager for so long as the Management Agreement remains in effect, but that ACRES will continue to receive reimbursement for overhead related to servicing and operational activities pursuant to the terms of the Management Agreement. The term of the Management Agreement ends on May 1, 2021, with automatic one-year renewal terms thereafter. Except under limited circumstances, upon a termination of the Management Agreement, the Company will pay ACREM a termination fee equal to three times the average annual base management fee and incentive fee received by ACREM during the 24-month period immediately preceding the most recently completed fiscal quarter prior to the date of termination, each as described above. The following table summarizes the related party costs incurred by the Company for the years ended December 31, 2020, 2019 and 2018 and amounts payable to the Company’s Manager as of December 31, 2020 and 2019 ($ in thousands): Incurred Payable For the years ended December 31, As of December 31, 2020 2019 2018 2020 2019 Affiliate Payments Management fees $ 7,323 $ 6,311 $ 6,268 $ 1,854 $ 1,581 Incentive fees 836 1,052 1,150 533 378 General and administrative expenses 3,653 3,026 3,570 762 789 Direct costs (1) 100 192 224 1 13 Total $ 11,912 $ 10,581 $ 11,212 $ 3,150 $ 2,761 _______________________________ (1) For the years ended December 31, 2020, 2019 and 2018, direct costs incurred are included within general and administrative expenses in the Company’s consolidated statements of operations. Investments in Loans From time to time, the Company may co-invest with other investment vehicles managed by Ares Management or its affiliates, including the Manager, and their portfolio companies, including by means of splitting investments, participating in investments or other means of syndication of investments. For such co-investments, the Company expects to act as the administrative agent for the holders of such investments provided that the Company maintains a majority of the aggregate investment. No fees will be received by the Company for performing such service. The Company will be responsible for its pro-rata share of costs and expenses for such co-investments, including due diligence costs for transactions which fail to close. The Company’s investment in such co-investments are made on a pari-passu basis with the other Ares managed investment vehicles and the Company is not obligated to provide, nor has it provided, any financial support to the other Ares managed investment vehicles. As such, the Company’s risk is limited to the carrying value of its investment and the Company recognizes only the carrying value of its investment in its consolidated balance sheets. As of December 31, 2020 and 2019, the total outstanding principal balance for co-investments held by the Company was $45.1 million and $40.9 million, respectively. Loan Purchases From Affiliate An affiliate of the Company’s Manager maintains a $200 million real estate debt warehouse investment vehicle (the “Ares Warehouse Vehicle”) that holds Ares Management originated commercial real estate loans, which are made available to purchase by other investment vehicles, including the Company and other Ares Management managed investment vehicles. From time to time, the Company may purchase loans from the Ares Warehouse Vehicle. The Company’s Manager will approve the purchase of such loans only on terms, including the consideration to be paid, that are determined by the Company’s Manager in good faith to be appropriate for the Company once the Company has sufficient liquidity. The Company is not obligated to purchase any loans originated by the Ares Warehouse Vehicle. Loans purchased by the Company from the Ares Warehouse Vehicle are purchased at fair value as determined by an independent third-party valuation expert and are subject to approval by a majority of the Company’s independent directors. In January 2020, the Company purchased a senior mortgage loan from the Ares Warehouse Vehicle with a commitment amount of $132.6 million on a portfolio of office properties located across multiple states. At the January 2020 purchase date, the senior mortgage loan had a total outstanding principal balance of $107.1 million, which is included within loans held for investment in the Company’s consolidated balance sheets. In June 2020, the Company purchased a senior mortgage loan from the Ares Warehouse Vehicle with a commitment amount of $46.7 million on a multifamily property located in Florida. At the June 2020 purchase date, the senior mortgage loan had a total outstanding principal balance of $46.2 million, which is included within loans held for investment in the Company’s consolidated balance sheets. In November 2020, the Company purchased a senior mortgage loan from the Ares Warehouse Vehicle with a commitment amount of $8.5 million on an office property located in Illinois. At the November 2020 purchase date, the senior mortgage loan was fully funded with a total outstanding principal balance of $8.5 million, which is included within loans held for investment in the Company’s consolidated balance sheets. At origination, the Illinois office loan was structured as both a senior and mezzanine loan with the Company originating and holding the entire mezzanine position, which has a total commitment amount of $37.6 million, and the Ares Warehouse vehicle originating and holding the entire senior position, which has a total commitment amount of $114.0 million. In November 2020, the senior position was split into two separate pari-passu notes with the Company purchasing an $8.5 million note and the remaining $105.5 million continuing to be held by the Ares Warehouse Vehicle. The mezzanine position of this loan, which had an outstanding principal balance of $37.6 million as of December 31, 2020, also continues to be held by the Company. See Note 16 included in these consolidated financial statements for a subsequent event related to the purchase of the remaining $105.5 million senior mortgage loan. |
DIVIDENDS AND DISTRIBUTIONS
DIVIDENDS AND DISTRIBUTIONS | 12 Months Ended |
Dec. 31, 2020 | |
DIVIDENDS AND DISTRIBUTIONS | |
DIVIDENDS AND DISTRIBUTIONS | DIVIDENDS AND DISTRIBUTIONS The following table summarizes the Company’s dividends declared during the years ended December 31, 2020, 2019 and 2018 ($ in thousands, except per share data): Date Declared Record Date Payment Date Per Share Amount Total Amount December 15, 2020 December 30, 2020 January 15, 2021 $ 0.33 $ 11,124 September 16, 2020 September 30, 2020 October 15, 2020 0.33 11,072 June 19, 2020 June 30, 2020 July 15, 2020 0.33 11,072 February 20, 2020 March 31, 2020 April 15, 2020 0.33 11,057 Total cash dividends declared for the year ended December 31, 2020 $ 1.32 $ 44,325 November 8, 2019 December 30, 2019 January 15, 2020 $ 0.33 $ 9,546 July 26, 2019 September 30, 2019 October 15, 2019 0.33 9,526 May 1, 2019 June 28, 2019 July 16, 2019 0.33 9,527 February 21, 2019 March 29, 2019 April 16, 2019 0.33 9,520 Total cash dividends declared for the year ended December 31, 2019 $ 1.32 $ 38,119 October 30, 2018 December 28, 2018 January 15, 2019 $ 0.31 $ 8,914 July 26, 2018 September 28, 2018 October 16, 2018 0.29 8,323 May 1, 2018 June 29, 2018 July 17, 2018 0.28 8,036 March 1, 2018 March 29, 2018 April 17, 2018 0.28 8,008 Total cash dividends declared for the year ended December 31, 2018 $ 1.16 $ 33,281 |
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
VARIABLE INTEREST ENTITIES | VARIABLE INTEREST ENTITIES Consolidated VIEs As discussed in Note 2, the Company evaluates all of its investments and other interests in entities for consolidation, including its investment in the CLO Securitization (as defined below), which is considered to be a variable interest in a VIE. CLO Securitization On January 11, 2019, ACRE Commercial Mortgage 2017-FL3 Ltd. (the “Issuer”) and ACRE Commercial Mortgage 2017-FL3 LLC (the “Co-Issuer”), both wholly-owned indirect subsidiaries of the Company, entered into an Amended and Restated Indenture (the “Amended Indenture”) with Wells Fargo Bank, National Association, as advancing agent and note administrator, and Wilmington Trust, National Association, as trustee, which governs the approximately $504.1 million principal balance of secured floating rate notes (the “Notes”) issued by the Issuer and $52.9 million of preferred equity in the Issuer (the “CLO Securitization”). The Amended Indenture amends and restates, and replaces in its entirety, the indenture for the CLO securitization issued in March 2017, which governed the issuance of approximately $308.8 million principal balance of secured floating rate notes and $32.4 million of preferred equity in the Issuer. As of December 31, 2020, the Notes were collateralized by interests in a pool of 15 mortgage assets having a total principal balance of $550.6 million (the “Mortgage Assets”) that were originated by a wholly-owned subsidiary of the Company and approximately $6.4 million of receivables related to repayments of outstanding principal on previous mortgage assets. As of December 31, 2019, the Notes were collateralized by interests in a pool of 16 mortgage assets having a total principal balance of approximately $515.9 million that were originated by a wholly-owned subsidiary of the Company and approximately $41.1 million of receivables related to repayments of outstanding principal on previous mortgage assets. During the reinvestment period ending on March 31, 2021, the Company may direct the Issuer to acquire additional mortgage assets meeting applicable reinvestment criteria using the principal repayments from the Mortgage Assets, subject to the satisfaction of certain conditions, including receipt of a Rating Agency Confirmation and investor approval of the new mortgage assets. The contribution of the Mortgage Assets to the Issuer is governed by a Mortgage Asset Purchase Agreement between ACRC Lender LLC (the “Seller”), a wholly-owned subsidiary of the Company, and the Issuer, and acknowledged by the Company solely for purposes of confirming its status as a REIT, in which the Seller made certain customary representations, warranties and covenants. In connection with the securitization, the Issuer and Co-Issuer offered and issued the following classes of Notes: Class A, Class A-S, Class B, Class C and Class D Notes (collectively, the “Offered Notes”) to a third party. The Company retained (through one of its wholly-owned subsidiaries) approximately $58.5 million of the Notes and all of the $52.9 million of preferred equity in the Issuer, which totaled $111.4 million. The Company, as the holder of the subordinated Notes and all of the preferred equity in the Issuer, has the obligation to absorb losses of the CLO, since the Company has a first loss position in the capital structure of the CLO. After January 16, 2023, the Issuer may redeem the Offered Notes subject to paying a make whole prepayment fee of 1.0% of the then outstanding balance of the Offered Notes. In addition, once the Class A Notes, Class A-S Notes, Class B Notes and Class C Notes have been repaid in full, the Issuer has the right to redeem the Class D Notes, subject to paying a make whole prepayment fee of 1.0% on the Class D Notes. As the directing holder of the CLO Securitization, the Company has the ability to direct activities that could significantly impact the CLO Securitization’s economic performance. ACRES is designated as special servicer of the CLO Securitization and has the power to direct activities during the loan workout process on defaulted and delinquent loans, which is the activity that most significantly impacts the CLO Securitization’s economic performance. ACRES did not waive the special servicing fee, and the Company pays its overhead costs. If an unrelated third party had the right to unilaterally remove the special servicer, then the Company would not have the power to direct activities that most significantly impact the CLO Securitization’s economic performance. In addition, there were no substantive kick-out rights of any unrelated third party to remove the special servicer without cause. The Company’s subsidiaries, as directing holders, have the ability to remove the special servicer without cause. Based on these factors, the Company is determined to be the primary beneficiary of the CLO Securitization; thus, the CLO Securitization is consolidated into the Company’s consolidated financial statements. The CLO Securitization is consolidated in accordance with FASB ASC Topic 810 and is structured as a pass through entity that receives principal and interest on the underlying collateral and distributes those payments to the note holders, as applicable. The assets and other instruments held by the CLO Securitization are restricted and can only be used to fulfill the |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS The Company’s management has evaluated subsequent events through the date of issuance of the consolidated financial statements included herein. There have been no subsequent events that occurred during such period that would require disclosure in this Form 10-K or would be required to be recognized in the consolidated financial statements as of and for the year ended December 31, 2020, except as disclosed below. On January 28, 2021, ACRE Commercial Mortgage 2021-FL4 Ltd. (the “Issuer”) and ACRE Commercial Mortgage 2021-FL4 LLC (the “Co-Issuer”), both wholly owned indirect subsidiaries of the Company, entered into an Indenture (the “Indenture”) with ACRC Lender LLC, a wholly owned subsidiary of the Company (the “Seller”), as advancing agent, Wells Fargo Bank, National Association, as note administrator, and Wilmington Trust, National Association, as trustee, which governs the issuance of approximately $603.0 million principal balance secured floating rate notes (the “Notes”) and $64.3 million of preferred equity in the Issuer (the “FL4 CLO Securitization”). For U.S. federal income tax purposes, the Issuer and Co-Issuer are disregarded entities. The Notes are collateralized by interests in a pool of 23 mortgage assets having a total principal balance of approximately $667.3 million (the “Mortgage Assets”) that were originated by a subsidiary of the Company. During the period ending in April 2024 (the “Companion Participation Acquisition Period”), the Issuer may use certain principal proceeds from the Mortgage Assets to acquire additional funded pari-passu participations related to the Mortgage Assets that meet certain acquisition criteria. The sale of the Mortgage Assets to the Issuer is governed by a Mortgage Asset Purchase Agreement between ACRC Lender LLC and the Issuer, and acknowledged by the Company solely for purposes of confirming its status as a REIT, in which the Seller made certain customary representations, warranties and covenants. In connection with the FL4 CLO Securitization, the Issuer and Co-Issuer offered and issued the following classes of Notes to third party investors: Class A, Class A-S, Class B, Class C, Class D and Class E Notes (collectively, the “Offered Notes”). A wholly owned subsidiary of the Company retained approximately $62.5 million of the Notes and all of the $64.3 million of preferred equity in the Issuer, which totaled $126.8 million. The Company, as the holder of the subordinated Notes and all of the preferred equity in the Issuer, has the obligation to absorb losses of the FL4 CLO Securitization, since the Company has a first loss position in the capital structure of the FL4 CLO Securitization. On January 28, 2021, the Company purchased a $105.5 million senior mortgage loan on an office property located in Illinois from the Ares Warehouse Vehicle. At the purchase date, the outstanding principal balance was approximately $103.6 million. The loan has a per annum interest rate of LIBOR plus 2.15% (plus accretion of the purchase discount) and an initial term of three years. On January 28, 2021, the Company purchased a $5.6 million senior mortgage loan on a self storage property located in Illinois from the Ares Warehouse Vehicle. At the purchase date, the outstanding principal balance was approximately $5.4 million. The loan has a per annum interest rate of LIBOR plus 3.00% (plus accretion of the purchase discount) and an initial term of three years. On January 28, 2021, the Company purchased a fully funded $6.4 million senior mortgage loan on a self storage property located in Florida from the Ares Warehouse Vehicle. The loan has a per annum interest rate of LIBOR plus 2.90% (plus accretion of the purchase discount) and an initial term of three years. On January 28, 2021, the Company purchased a fully funded $4.4 million senior mortgage loan on a self storage property located in Florida from the Ares Warehouse Vehicle. The loan has a per annum interest rate of LIBOR plus 2.90% (plus accretion of the purchase discount) and an initial term of three years. On January 28, 2021, the Company purchased a fully funded $7.0 million senior mortgage loan on a self storage property located in Florida from the Ares Warehouse Vehicle. The loan has a per annum interest rate of LIBOR plus 2.90% (plus accretion of the purchase discount) and an initial term of three years. On January 28, 2021, the Company purchased a fully funded $10.8 million senior mortgage loan on a self storage property located in Florida from the Ares Warehouse Vehicle. The loan has a per annum interest rate of LIBOR plus 2.90% (plus accretion of the purchase discount) and an initial term of three years. On January 28, 2021, the Company purchased a $6.5 million senior mortgage loan on a self storage property located in Missouri from the Ares Warehouse Vehicle. At the purchase date, the outstanding principal balance was approximately $5.9 million. The loan has a per annum interest rate of LIBOR plus 3.00% (plus accretion of the purchase discount) and an initial term of three years. On February 16, 2021, the Company entered into an interest rate swap (the “Swap”) with Morgan Stanley Capital Services, LLC (“Morgan Stanley Capital”) for the initial notional amount of $870.0 million, which amortizes according to an agreed upon notional schedule. The Swap requires the Company to pay a fixed interest rate of 0.2075% and for Morgan Stanley Capital to pay a floating rate equal to one-month LIBOR, subject to a 0.00% floor. The Swap has a termination date of December 15, 2023. On February 16, 2021, the Company entered into an interest rate cap (the “Cap”) with Morgan Stanley Capital for the initial notional amount of $275.0 million, which amortizes according to an agreed upon notional schedule. The Cap is tied to one-month LIBOR with a strike rate of 0.50%. The Cap has a termination date of December 15, 2023. On February 17, 2021, the Company declared a cash dividend of $0.33 per common share for the first quarter of 2021 and a supplemental cash dividend of $0.02 per common share. The first quarter 2021 and supplemental cash dividend will be payable on April 15, 2021 to common stockholders of record as of March 31, 2021. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared on the accrual basis of accounting in conformity with United States generally accepted accounting principles (“GAAP”) and include the accounts of the Company, the consolidated variable interest entities (“VIEs”) that the Company controls and of which the Company is the primary beneficiary, and the Company’s wholly-owned subsidiaries. The consolidated financial statements reflect all adjustments and reclassifications that, in the opinion of management, are necessary for the fair presentation of the Company’s results of operations and financial condition as of and for the periods presented. All intercompany balances and transactions have been eliminated. |
Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. As of the filing date of this Annual Report, there is a continued outbreak of the novel Coronavirus pandemic (“COVID-19”), for which the World Health Organization has declared a global pandemic, the United States has declared a national emergency and every state in the United States is under a federal disaster declaration. Many states, including those in which the Company and its borrowers operate, have issued orders requiring the closure of, or certain restrictions on the operation of, non-essential businesses and/or requiring residents to stay at home. The COVID-19 pandemic and preventative measures taken to contain or mitigate its spread have caused, and are continuing to cause, business shutdowns or the re-introduction of business shutdowns, cancellations of events and restrictions on travel, significant reductions in demand for certain goods and services, reductions in business activity and financial transactions, supply chain interruptions and overall economic and financial market instability both globally and in the United States. While several countries, as well as certain states in the United States, have relaxed the public health restrictions with a view to partially or fully reopen their economies, recurring COVID-19 outbreaks have led to the re-introduction of such restrictions in certain states in the United States and globally and could continue to lead to the re-introduction of such restrictions elsewhere. |
Variable Interest Entities | Variable Interest Entities The Company evaluates all of its interests in VIEs for consolidation. When the Company’s interests are determined to be variable interests, the Company assesses whether it is deemed to be the primary beneficiary of the VIE. The primary beneficiary of a VIE is required to consolidate the VIE. Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810, Consolidation , defines the primary beneficiary as the party that has both (i) the power to direct the activities of the VIE that most significantly impact its economic performance, and (ii) the obligation to absorb losses and the right to receive benefits from the VIE which could be potentially significant. The Company considers its variable interests, as well as any variable interests of its related parties in making this determination. Where both of these factors are present, the Company is deemed to be the primary beneficiary and it consolidates the VIE. Where either one of these factors is not present, the Company is not the primary beneficiary and it does not consolidate the VIE. To assess whether the Company has the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, the Company considers all facts and circumstances, including its role in establishing the VIE and its ongoing rights and responsibilities. This assessment includes first, identifying the activities that most significantly impact the VIE’s economic performance; and second, identifying which party, if any, has power over those activities. In general, the parties that make the most significant decisions affecting the VIE or have the right to unilaterally remove those decision makers are deemed to have the power to direct the activities of a VIE. To assess whether the Company has the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE, the Company considers all of its economic interests, including debt and equity investments, servicing fees, and other arrangements deemed to be variable interests in the VIE. This assessment requires that the Company applies judgment in determining whether these interests, in the aggregate, are considered potentially significant to the VIE. Factors considered in assessing significance include: the design of the VIE, including its capitalization structure; subordination of interests; payment priority; relative share of interests held across various classes within the VIE’s capital structure; and the reasons why the interests are held by the Company. For VIEs of which the Company is determined to be the primary beneficiary, all of the underlying assets, liabilities, equity, revenue and expenses of the structures are consolidated into the Company’s consolidated financial statements. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents include funds on deposit with financial institutions, including demand deposits with financial institutions. Cash and short‑term investments with an original maturity of three months or less when acquired are considered cash and cash equivalents for the purpose of the consolidated balance sheets and statements of cash flows. Restricted cash includes deposits required under certain Secured Funding Agreements (each individually defined in Note 6 included in these consolidated financial statements). |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and restricted cash, loans held for investment and interest receivable. The Company places its cash and cash equivalents with financial institutions and, at times, cash held may exceed the Federal Deposit Insurance Corporation insured limit. The Company has exposure to credit risk on its loans held for investment. The Company and the Company’s Manager seek to manage credit risk by performing due diligence prior to origination or acquisition and through the use of non‑recourse financing, when and where available and appropriate. |
Loans Held for Investment | Loans Held for Investment The Company originates CRE debt and related instruments generally to be held for investment. Loans that are held for investment are carried at cost, net of unamortized loan fees and origination costs (the “carrying value”). Loans are generally collateralized by real estate. The extent of any credit deterioration associated with the performance and/or value of the underlying collateral property and the financial and operating capability of the borrower could impact the expected amounts received. The Company monitors performance of its loans held for investment portfolio under the following methodology: (1) borrower review, which analyzes the borrower’s ability to execute on its original business plan, reviews its financial condition, assesses pending litigation and considers its general level of responsiveness and cooperation; (2) economic review, which considers underlying collateral (i.e. leasing performance, unit sales and cash flow of the collateral and its ability to cover debt service, as well as the residual loan balance at maturity); (3) property review, which considers current environmental risks, changes in insurance costs or coverage, current site visibility, capital expenditures and market perception; and (4) market review, which analyzes the collateral from a supply and demand perspective of similar property types, as well as from a capital markets perspective. Such analyses are completed and reviewed by asset management and finance personnel who utilize various data sources, including periodic financial data such as property occupancy, tenant profile, rental rates, operating expenses, and the borrower’s exit plan, among other factors. Loans are generally placed on non-accrual status when principal or interest payments are past due 30 days or more or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed against interest income in the period the loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding the borrower’s ability to make pending principal and interest payments. Non-accrual loans are restored to accrual status when past due principal and interest are paid and, in management’s judgment, are likely to remain current. The Company may make exceptions to placing a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection. |
Current Expected Credit Losses | Current Expected Credit Losses In June 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
Loans Held for Sale | Loans Held for Sale Although the Company generally holds its target investments as long-term investments, the Company may occasionally classify some of its investments as held for sale. Investments held for sale are carried at fair value within loans held for sale, at fair value in the Company’s consolidated balance sheets, with changes in fair value recorded through earnings. |
Real Estate Owned | Real Estate Owned Real estate assets are carried at their estimated fair value at acquisition and are presented net of accumulated depreciation and impairment charges. The Company allocates the purchase price of acquired real estate assets based on the fair value of the acquired land, building, furniture, fixtures and equipment. Real estate assets are depreciated using the straight-line method over estimated useful lives of up to 40 years for buildings and improvements and up to 15 years for furniture, fixtures and equipment. Renovations and/or replacements that improve or extend the life of the real estate asset are capitalized and depreciated over their estimated useful lives. The cost of ordinary repairs and maintenance are expensed as incurred. Real estate assets are evaluated for indicators of impairment on a quarterly basis. Factors that the Company may consider in its impairment analysis include, among others: (1) significant underperformance relative to historical or anticipated operating results; (2) significant negative industry or economic trends; (3) costs necessary to extend the life or improve the real estate asset; (4) significant increase in competition; and (5) ability to hold and dispose of the real estate asset in the ordinary course of business. A real estate asset is considered impaired when the sum of estimated future undiscounted cash flows expected to be generated by the real estate asset over the estimated remaining holding period is less than the carrying amount of such real estate asset. Cash flows include operating cash flows and anticipated capital proceeds generated by the real estate asset. An impairment charge is recorded equal to the excess of the carrying value of the real estate asset over the fair value. When determining the fair value of a real estate asset, the Company makes certain assumptions including, but not limited to, consideration of projected operating cash flows, comparable selling prices and projected cash flows from the eventual disposition of the real estate asset based upon the Company’s estimate of a capitalization rate and discount rate. The Company reviews its real estate assets, from time to time, in order to determine whether to sell such assets. Real estate assets are classified as held for sale when the Company commits to a plan to sell the asset, when the asset is being marketed for sale at a reasonable price and the sale of the asset is probable and the transfer of the asset is expected to qualify for recognition as a completed sale within one year. Real estate assets that are held for sale are carried at the lower of the asset’s carrying amount or its fair value less costs to sell. |
Debt Issuance Costs | Debt Issuance Costs Debt issuance costs under the Company’s indebtedness are capitalized and amortized over the term of the respective debt instrument. Unamortized debt issuance costs are expensed when the associated debt is repaid prior to maturity. Debt issuance costs related to debt securitizations are capitalized and amortized over the term of the underlying loans using the effective interest method. When an underlying loan is prepaid in a debt securitization and the outstanding principal balance of the securitization debt is reduced, the related unamortized debt issuance costs are charged to expense based on a pro‑rata share of the debt issuance costs being allocated to the specific loans that were prepaid. Amortization of debt issuance costs is included within interest expense, except as noted below, in the Company’s consolidated statements of operations while the unamortized balance on (i) Secured Funding Agreements (each individually defined in Note 6 included in these consolidated financial statements) is included within other assets and (ii) Notes Payable, the Secured Term Loan (each defined in Note 6 included in these consolidated financial statements) and Secured Borrowings (defined in Note 7 included in these consolidated financial statements) and debt securitizations are each included as a reduction to the carrying amount of the liability, in the Company’s consolidated balance sheets. Amortization of debt issuance costs for the note payable on the hotel property that is recognized as real estate owned in the Company’s consolidated balance sheets (see Note 6 included in these consolidated financial statements for additional information on the note payable) is included within expenses from real estate owned in the Company’s consolidated statements of operations. The original issue discount (“OID”) on amounts drawn under the Company’s Secured Term Loan represents a discount to the face amount of the drawn debt obligations. The OID is amortized over the term of the Secured Term Loan using the effective interest method and is included within interest expense in the Company’s consolidated statements of operations while the unamortized balance is included as a reduction to the carrying amount of the Secured Term Loan in the Company’s consolidated balance sheets. |
Revenue Recognition | Revenue Recognition Interest income is accrued based on the outstanding principal amount and the contractual terms of each loan. For loans held for investment, the origination fees, contractual exit fees and direct loan origination costs are also recognized in interest income over the initial loan term as a yield adjustment using the effective interest method. Revenue from real estate owned represents revenue associated with the operations of a hotel property classified as real estate owned. Revenue from the operation of the hotel property is recognized when guestrooms are occupied, services have been rendered or fees have been earned. Revenues are recorded net of any discounts and sales and other taxes collected from customers. Revenues consist of room sales, food and beverage sales and other hotel revenues. |
Net Interest Margin and Interest Expense | Net Interest Margin and Interest Expense Net interest margin in the Company’s consolidated statements of operations serves to measure the performance of the Company’s loans as compared to its use of debt leverage. The Company includes interest income from its loans and interest expense related to its Secured Funding Agreements, Notes Payable, securitization debt, the Secured Term Loan (each individually defined in Note 6 included in these consolidated financial statements) and Secured Borrowings (defined in Note 7 included in these consolidated financial statements) in net interest margin. |
Income Taxes | Income Taxes The Company has elected and qualified for taxation as a REIT commencing with its taxable year ended December 31, 2012. As a result of the Company’s REIT qualification and its distribution policy, the Company does not generally pay United States federal corporate level income taxes. Many of the REIT requirements, however, are highly technical and complex. To continue to qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement that the Company distributes annually to its stockholders at least 90% of the Company’s REIT taxable income prior to the deduction for dividends paid. To the extent that the Company distributes less than 100% of its REIT taxable income in any tax year (taking into account any distributions made in a subsequent tax year under Sections 857(b)(9) or 858 of the Code), the Company will pay tax at regular corporate rates on that undistributed portion. Furthermore, if the Company distributes less than the sum of 1) 85% of its ordinary income for the calendar year, 2) 95% of its capital gain net income for the calendar year, and 3) any undistributed shortfall from its prior calendar year (the “Required Distribution”) to its stockholders during any calendar year (including any distributions declared by the last day of the calendar year but paid in the subsequent year), then it is required to pay a non-deductible excise tax equal to 4% of any shortfall between the Required Distribution and the amount that was actually distributed. The 90% distribution requirement does not require the distribution of net capital gains. However, if the Company elects to retain any of its net capital gain for any tax year, it must notify its stockholders and pay tax at regular corporate rates on the retained net capital gain. The stockholders must include their proportionate share of the retained net capital gain in their taxable income for the tax year, and they are deemed to have paid the REIT’s tax on their proportionate share of the retained capital gain. Furthermore, such retained capital gain may be subject to the nondeductible 4% excise tax. If it is determined that the Company’s estimated current year taxable income will be in excess of estimated dividend distributions (including capital gain dividend) for the current year from such income, the Company accrues excise tax on estimated excess taxable income as such taxable income is earned. The annual expense is calculated in accordance with applicable tax regulations. Excise tax expense is included in the line item income tax expense, including excise tax in the consolidated statements of operations included in this annual report on Form 10-K. The Company formed a wholly-owned subsidiary, ACRC Lender W TRS LLC (“ACRC W TRS”), in December 2013 in order to issue and hold certain loans intended for sale. The Company also formed a wholly-owned subsidiary, ACRC 2017-FL3 TRS LLC (“FL3 TRS”), in March 2017 in order to hold a portion of the CLO Securitization (as defined below), including the portion that generates excess inclusion income. Additionally, the Company also formed a wholly-owned subsidiary, ACRC WM Tenant LLC (“ACRC WM”), in March 2019 in order to lease the hotel property classified as real estate owned, which was acquired on March 8, 2019. Entity classification elections to be taxed as a corporation and taxable REIT subsidiary (“TRS”) elections were made with respect to ACRC W TRS, FL3 TRS and ACRC WM. A TRS is an entity taxed as a corporation that has not elected to be taxed as a REIT, in which a REIT directly or indirectly holds equity, and that has made a joint election with such REIT to be treated as a TRS. A TRS generally may engage in any business, including investing in assets and engaging in activities that could not be held or conducted directly by the Company without jeopardizing its qualification as a REIT. A TRS is subject to applicable United States federal, state and local income tax on its taxable income. In addition, as a REIT, the Company also may be subject to a 100% excise tax on certain transactions between it and its TRS that are not conducted on an arm’s-length basis. For financial reporting purposes, a provision for current and deferred taxes has been established for the portion of the Company’s GAAP consolidated earnings recognized by ACRC W TRS, FL3 TRS and ACRC WM. The income tax provision is included in the line item income tax expense, including excise tax in the consolidated statements of operations included in this annual report on Form 10-K. FASB ASC Topic 740, Income Taxes (“ASC 740”), prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company has analyzed its various federal and state filing positions and believes that its income tax filing positions and deductions are well documented and supported. As of December 31, 2020 and 2019, based on the Company’s evaluation, there is no reserve for any uncertain income tax positions. ACRC W TRS, FL3 TRS and ACRC WM recognize interest and penalties, if any, related to unrecognized tax benefits within income tax expense in the consolidated statements of operations. Accrued interest and penalties, if any, are included within other liabilities in the consolidated balance sheets. |
Comprehensive Income | Comprehensive Income For the years ended December 31, 2020, 2019 and 2018, comprehensive income equaled net income; therefore, a separate consolidated statement of comprehensive income is not included in the accompanying consolidated financial statements. |
Share-based Compensation | Stock-Based Compensation The Company recognizes the cost of stock‑based compensation, which is included within general and administrative expenses in the Company’s consolidated statements of operations. The fair value of the time vested restricted stock or restricted stock units (“RSUs”) granted is recorded to expense on a straight‑line basis over the vesting period for the award, with an offsetting increase in stockholders’ equity. For grants to directors and officers and employees of the Manager, the fair value is determined based upon the market price of the stock on the grant date. |
Earnings per Share | Earnings per ShareThe Company calculates basic earnings (loss) per share by dividing net income (loss) allocable to common stockholders for the period by the weighted average shares of common stock outstanding for that period after consideration of the earnings (loss) allocated to the Company’s restricted stock, which are participating securities as defined in GAAP. Diluted earnings (loss) per share takes into effect any dilutive instruments, such as restricted stock, RSUs and convertible debt, except when doing so would be anti‑dilutive. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements 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 optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. ASU No. 2020-04 is effective for all entities as of March 12, 2020 through December 31, 2022. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents and restricted cash in the consolidated balance sheets to the total amount shown in the consolidated statements of cash flows ($ in thousands): As of December 31, 2020 2019 2018 Cash and cash equivalents $ 74,776 $ 5,256 $ 11,089 Restricted cash — 379 379 Total cash, cash equivalents and restricted cash shown in the Company's consolidated statements of cash flows $ 74,776 $ 5,635 $ 11,468 |
Schedule of interest expense | For the years ended December 31, 2020, 2019 and 2018, interest expense is comprised of the following ($ in thousands): For the years ended December 31, 2020 2019 2018 Secured funding agreements $ 28,003 $ 32,859 $ 43,039 Notes payable (1) 1,317 867 — Securitization debt 12,384 19,950 11,434 Secured term loan 7,114 8,907 8,529 Secured borrowings 3,131 — — Interest expense $ 51,949 $ 62,583 $ 63,002 ____________________________ |
LOANS HELD FOR INVESTMENT (Tabl
LOANS HELD FOR INVESTMENT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
Schedule of loans held for investments | The Company’s investments in loans held for investment are accounted for at amortized cost. The following tables summarize the Company’s loans held for investment as of December 31, 2020 and 2019 ($ in thousands): As of December 31, 2020 Carrying Amount (1) Outstanding Principal (1) Weighted Average Unleveraged Effective Yield Weighted Average Remaining Life (Years) Senior mortgage loans $ 1,713,601 $ 1,723,638 5.9 % (2) 6.2 % (3) 1.2 Subordinated debt and preferred equity investments 101,618 102,603 13.4 % (2) 13.4 % (3) 1.9 Total loans held for investment portfolio $ 1,815,219 $ 1,826,241 6.3 % (2) 6.6 % (3) 1.2 As of December 31, 2019 Carrying Amount (1) Outstanding Principal (1) Weighted Average Unleveraged Effective Yield (2) Weighted Average Remaining Life (Years) Senior mortgage loans $ 1,622,666 $ 1,632,164 6.5% 1.5 Subordinated debt and preferred equity investments 59,832 60,730 15.1% 2.6 Total loans held for investment portfolio $ 1,682,498 $ 1,692,894 6.8% 1.6 ______________________________ (1) The difference between the Carrying Amount and the Outstanding Principal amount of the loans held for investment consists of unamortized purchase discount, deferred loan fees and loan origination costs. (2) Unleveraged Effective Yield is the compounded effective rate of return that would be earned over the life of the investment based on the contractual interest rate (adjusted for any deferred loan fees, costs, premiums or discounts) |
Schedule of current investment portfolio | A more detailed listing of the Company’s loans held for investment portfolio based on information available as of December 31, 2020 is as follows ($ in millions, except percentages): Loan Type Location Outstanding Principal (1) Carrying Amount (1) Interest Rate Unleveraged Effective Yield (2) Maturity Date (3) Payment Terms (4) Senior Mortgage Loans: Office Diversified $109.8 $109.4 L+3.65% 5.7% Jan 2023 I/O Mixed-use FL 99.0 98.9 L+4.25% 7.8% Feb 2021 I/O Multifamily FL 91.3 90.8 L+5.00% 6.7% Jun 2022 I/O Multifamily TX 75.0 74.8 L+2.85% 5.0% Oct 2022 I/O Hotel OR/WA 68.1 67.3 L+3.45% 4.6% (5) May 2021 I/O Office IL 67.8 67.6 L+3.75% 5.3% Dec 2021 (6) I/O Office NC 61.5 61.4 L+4.25% 8.4% Mar 2021 I/O Hotel Diversified 60.8 60.7 L+3.60% 6.2% Sep 2021 I/O Office IL 57.4 57.3 L+3.95% 6.3% Jun 2021 I/O Industrial NY 52.3 51.9 L+5.00% 8.1% Feb 2021 I/O Mixed-use CA 51.2 51.0 L+4.00% 6.2% Apr 2022 (7) I/O Multifamily FL 46.2 46.0 L+5.00% 6.6% Jun 2022 I/O Multifamily FL 43.4 43.3 L+2.60% 5.5% Jan 2022 I/O Office GA 43.1 42.7 L+3.05% 5.7% Dec 2022 I/O Student Housing TX 41.0 41.0 L+4.75% 5.4% Jan 2021 I/O Multifamily NJ 41.0 40.8 L+3.05% 4.9% Mar 2022 I/O Hotel CA 40.0 39.9 L+4.12% 5.9% Jan 2022 (8) I/O Student Housing CA 36.7 36.7 L+3.95% 4.3% Jul 2022 (9) I/O Multifamily KS 35.8 35.6 L+3.25% 5.5% Nov 2022 I/O Mixed-use TX 35.3 35.1 L+3.75% 6.7% Sep 2022 I/O Industrial NC 34.9 34.7 L+4.05% 5.9% Mar 2024 I/O Hotel MI 34.2 34.1 L+3.95% 4.3% Jul 2022 (10) I/O Hotel IL 32.9 32.1 L+4.40% —% (11) May 2021 I/O Office CA 31.6 31.4 L+3.35% 6.0% Nov 2022 I/O Multifamily NY 30.1 30.1 L+3.20% 4.8% Dec 2021 (12) I/O Student Housing NC 30.0 29.9 L+3.15% 5.9% Feb 2022 I/O Multifamily PA 29.3 29.2 L+3.00% 5.9% Dec 2021 I/O Office IL 28.5 28.3 L+3.80% 6.2% Jan 2023 I/O Office NC 28.5 27.9 L+3.52% 6.8% May 2023 I/O Multifamily TX 27.5 27.5 L+3.20% 4.6% Oct 2021 (13) I/O Mixed-use CA 26.9 26.6 L+4.10% 6.3% Mar 2023 I/O Student Housing TX 24.6 24.3 L+3.45% 5.6% Feb 2023 I/O Student Housing AL 24.1 22.7 L+4.45% —% (11) Feb 2021 (14) I/O Office CA 22.9 22.8 L+3.40% 6.2% Nov 2021 I/O Industrial CA 22.0 21.9 L+4.50% 7.4% Dec 2021 I/O Student Housing FL 22.0 21.9 L+3.25% 5.9% Aug 2022 I/O Self Storage FL 19.5 19.4 L+3.50% 6.0% Mar 2022 I/O Multifamily WA 18.7 18.5 L+3.00% 5.1% Mar 2023 I/O Office TX 17.4 17.3 L+4.05% 7.5% Nov 2021 I/O Multifamily SC 16.3 16.0 L+6.50% 10.1% Sep 2022 I/O Residential CA 14.2 14.2 13.00% 13.0% Feb 2021 (15) I/O Industrial CA 13.7 13.6 L+3.75% 6.3% Mar 2023 I/O Office NC 8.6 8.5 L+4.00% 6.7% Nov 2022 I/O Office IL 8.5 8.5 L+2.15% 3.7% Mar 2023 I/O Subordinated Debt and Preferred Equity Investments: Office IL 37.6 37.3 L+8.00% 10.0% Mar 2023 I/O Residential Condominium NY 17.6 17.5 L+14.00% (16) 17.9% May 2021 (16) I/O Office NJ 17.0 16.5 12.00% 12.8% Jan 2026 I/O (17) Mixed-use IL 16.0 15.9 L+12.25% 14.5% Nov 2021 I/O Residential Condominium HI 11.5 11.5 14.00% 17.9% Feb 2021 (18) I/O Office CA 2.9 2.9 L+8.25% 9.7% Nov 2021 I/O Total/Weighted Average $1,826.2 $1,815.2 6.3% _________________________ (1) The difference between the Carrying Amount and the Outstanding Principal amount of the loans held for investment consists of unamortized purchase discount, deferred loan fees and loan origination costs. For the loans held for investment that represent co-investments with other investment vehicles managed by Ares Management (see Note 13 included in these consolidated financial statements for additional information on co-investments), only the portion of Carrying Amount and Outstanding Principal held by the Company is reflected. (2) Unleveraged Effective Yield is the compounded effective rate of return that would be earned over the life of the investment based on the contractual interest rate (adjusted for any deferred loan fees, costs, premiums or discounts) and assumes no dispositions, early prepayments or defaults. Unleveraged Effective Yield for each loan is calculated based on LIBOR as of December 31, 2020 or the LIBOR floor, as applicable. The total Weighted Average Unleveraged Effective Yield is calculated based on the average of Unleveraged Effective Yield of all loans held by the Company as of December 31, 2020 as weighted by the outstanding principal balance of each loan. (3) Certain loans are subject to contractual extension options that generally vary between one and two 12-month extensions and may be subject to performance based or other conditions as stipulated in the loan agreement. Actual maturities may differ from contractual maturities stated herein as certain borrowers may have the right to prepay with or without paying a prepayment penalty. The Company may also extend contractual maturities and amend other terms of the loans in connection with loan modifications. (4) I/O = interest only, P/I = principal and interest. (5) At origination, the Oregon/Washington loan was structured as both a senior and mezzanine loan with the Company holding both positions. The mezzanine position of this loan, which had an outstanding principal balance of $13.1 million as of December 31, 2020, was on non-accrual status as of December 31, 2020 and therefore, the Unleveraged Effective Yield presented is for the senior position only as the mezzanine position is non-interest accruing. (6) In November 2020, the borrower exercised a one-year extension option in accordance with the loan agreement, which extended the maturity date on the senior Illinois loan to December 2021. (7) In May 2020, the Company and the borrower entered into a modification and extension agreement to, among other things, extend the maturity date on the senior California loan to April 2022. (8) In December 2020, the borrower exercised a one-year extension option in accordance with the loan agreement, which extended the maturity date on the senior California loan to January 2022. (9) In October 2020, the Company and the borrower entered into a modification and extension agreement to, among other things, extend the maturity date on the senior California loan to July 2022. (10) In August 2020, the Company and the borrower entered into a modification and extension agreement to, among other things, extend the maturity date on the senior Michigan loan to July 2022. (11) Loan was on non-accrual status as of December 31, 2020 and therefore, there is no Unleveraged Effective Yield as the loan is non-interest accruing. (12) In October 2020, the borrower exercised a one-year extension option in accordance with the loan agreement, which extended the maturity date on the senior New York loan to December 2021. (13) In September 2020, the borrower exercised a one-year extension option in accordance with the loan agreement, which extended the maturity date on the senior Texas loan to October 2021. (14) In July 2020, the Company and the borrower entered into a modification and extension agreement to, among other things, extend the maturity date on the senior Alabama loan to February 2021. (15) In August 2020, the Company and the borrowers entered into a modification and extension agreement to, among other things, extend the maturity date on the senior California loan to February 2021. (16) The subordinated New York loan includes a $2.5 million loan to the borrower, for which such amount accrues interest at a per annum rate of 20.00% and has an initial maturity date of April 2021 upon the borrower exercising a 6-month extension option in September 2020 in accordance with the loan agreement. The remaining outstanding principal balance of the subordinated New York loan accrues interest at L + 14.00% and has an initial maturity date of May 2021. (17) In February 2021, amortization will begin on the subordinated New Jersey loan, which had an outstanding principal balance of $17.0 million as of December 31, 2020. The remainder of the loans in the Company’s portfolio are non-amortizing through their primary terms. (18) In December 2020, the Company and the borrower entered into a modification and extension agreement to, among other things, extend the maturity date on the subordinated Hawaii loan to February 2021. |
Schedule of activity in loan portfolio | For the years ended December 31, 2020 and 2019, the activity in the Company’s loan portfolio was as follows ($ in thousands): Balance at December 31, 2018 $ 1,524,873 Initial funding 493,913 Origination fees and discounts, net of costs (7,539) Additional funding 185,281 Loan payoffs (482,407) Loan converted to real estate owned (see Note 5) (38,636) Origination fee accretion 7,013 Balance at December 31, 2019 $ 1,682,498 Initial funding 430,562 Origination fees and discounts, net of costs (5,778) Additional funding 107,767 Amortizing payments (2,728) Loan payoffs (304,028) Loans sold to third parties (1) (100,504) Origination fee accretion 7,430 Balance at December 31, 2020 $ 1,815,219 _________________________ (1) In July 2020, the Company closed the sale of a senior mortgage loan with outstanding principal of $31.5 million, which was collateralized by a hotel property located in Minnesota, to a third party. In addition, in August 2020, the Company closed the sale of two senior mortgage loans to a third party with outstanding principal of $39.9 million and $29.6 million, respectively, which were collateralized by multifamily properties located in Illinois and Texas, respectively. For the year ended December 31, 2020, the Company recognized an aggregate net realized loss of $4.0 million in the Company's consolidated statements of operations upon the sale of the three senior mortgage loans as the carrying value exceeded the sale prices of the loans. The three senior mortgage loans discussed above were previously classified as held for investment and were sold in order to rebalance and optimize the Company’s loan portfolio. |
CURRENT EXPECTED CREDIT LOSSES
CURRENT EXPECTED CREDIT LOSSES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Credit Loss [Abstract] | |
Financing Receivable, Allowance for Credit Loss | Activity related to the CECL Reserve for outstanding balances on the Company’s loans held for investment as of and for the year ended December 31, 2020 was as follows ($ in thousands): Balance at December 31, 2019 $ — Impact of adoption of CECL 4,440 Provision for current expected credit losses 19,164 Write-offs — Recoveries — Balance at December 31, 2020 (1) $ 23,604 __________________________ (1) As of December 31, 2020, the CECL Reserve related to outstanding balances on loans held for investment is recorded within current expected credit loss reserve in the Company's consolidated balance sheets. Current Expected Credit Loss Reserve for Unfunded Loan Commitments Activity related to the CECL Reserve for unfunded commitments on the Company’s loans held for investment as of and for the year ended December 31, 2020 was as follows ($ in thousands): Balance at December 31, 2019 $ — Impact of adoption of CECL 611 Provision for current expected credit losses 1,021 Write-offs — Recoveries — Balance at December 31, 2020 (1) $ 1,632 __________________________ (1) As of December 31, 2020, the CECL Reserve related to unfunded commitments on loans held for investment is recorded within other liabilities in the Company's consolidated balance sheets. |
Schedule of Company Loan Risk Definitions | Based on a 5-point scale, the Company’s loans are rated “1” through “5,” from less risk to greater risk, which ratings are defined as follows: Ratings Definition 1 Very Low Risk 2 Low Risk 3 Medium Risk 4 High Risk/Potential for Loss: Asset performance is trailing underwritten expectations. Loan at risk of impairment without material improvement to performance 5 Impaired/Loss Likely: A loan that has a significantly increased probability of default or principal loss |
Financing Receivable Credit Quality Indicators | As of December 31, 2020, the carrying value, excluding the CECL Reserve, of the Company’s loans held for investment within each risk rating by year of origination is as follows ($ in thousands): 2020 2019 2018 2017 2016 Prior Total Risk rating: 1 $ — $ — $ 8,547 $ — $ — $ — $ 8,547 2 — 109,429 66,055 68,438 — — 243,922 3 429,785 468,721 254,858 201,627 16,492 — 1,371,483 4 — 35,094 99,387 22,657 — 34,129 191,267 5 — — — — — — — Total $ 429,785 $ 613,244 $ 428,847 $ 292,722 $ 16,492 $ 34,129 $ 1,815,219 |
REAL ESTATE OWNED (Tables)
REAL ESTATE OWNED (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Real Estate Owned [Abstract] | |
Schedule of Real Estate Properties | The following table summarizes the Company’s real estate owned as of December 31, 2020 and December 31, 2019 ($ in thousands): As of December 31, 2020 2019 Land $ 10,200 $ 10,200 Buildings and improvements 24,281 24,281 Furniture, fixtures and equipment 4,362 4,087 38,843 38,568 Less: Accumulated depreciation (1,560) (667) Real estate owned, net $ 37,283 $ 37,901 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of outstanding balances and total commitments under Financing Agreements | As of December 31, 2020 and 2019, the outstanding balances and total commitments under the Financing Agreements consisted of the following ($ in thousands): As of December 31, 2020 2019 Outstanding Balance Total Outstanding Balance Total Secured Funding Agreements: Wells Fargo Facility $ 336,001 $ 350,000 (1) $ 360,354 $ 500,000 Citibank Facility 117,506 325,000 126,603 325,000 BAML Facility — — (2) 36,280 36,280 (2) CNB Facility 50,000 50,000 (3) 30,500 50,000 (3) MetLife Facility 104,124 180,000 131,807 180,000 U.S. Bank Facility — — (4) 43,045 185,989 Morgan Stanley Facility 147,921 150,000 — — Subtotal $ 755,552 $ 1,055,000 $ 728,589 $ 1,277,269 Notes Payable $ 63,122 $ 84,155 $ 56,155 $ 84,155 Secured Term Loan $ 110,000 $ 110,000 $ 110,000 $ 110,000 Total $ 928,674 $ 1,249,155 $ 894,744 $ 1,471,424 ______________________________ (1) In December 2020, the Company amended the Wells Fargo Facility (as defined below) to, among other things, reduce the maximum commitment under the Wells Fargo Facility from $500.0 million to $350.0 million, which the maximum commitment may be increased to up to $500.0 million at the Company’s option. (2) In May 2019, the Company’s borrowing period for new individual loans under the BAML Facility (as defined below) expired and its term was not extended. As such, the total commitment amount under the BAML Facility as of December 31, 2019 represented the outstanding balance under the facility at the time the borrowing period expired. In June 2020, the BAML Facility was repaid in full and its term was not extended. (3) The CNB Facility (as defined below) has an accordion feature that provides for, subject to approval by City National Bank in its sole discretion, an increase in the commitment amount from $50.0 million to $75.0 million for up to a period of 120 days once per calendar year. (4) In July 2020, the U.S. Bank Facility matured and its term was not extended. The U.S. Bank Facility had been repaid in full prior to its maturity. |
Schedule of Maturities of Long-term Debt | At December 31, 2020, approximate principal maturities of the Company’s Financing Agreements are as follows ($ in thousands): Wells Fargo Citibank CNB Facility MetLife Facility Morgan Stanley Facility Notes Payable Secured Term Loan Total 2021 $ — $ 117,506 $ 50,000 $ — $ — $ — $ 110,000 $ 277,506 2022 336,001 — — 104,124 — 6,967 — 447,092 2023 — — — — 147,921 — — 147,921 2024 — — — — — 56,155 — 56,155 2025 — — — — — — — — Thereafter — — — — — — — — $ 336,001 $ 117,506 $ 50,000 $ 104,124 $ 147,921 $ 63,122 $ 110,000 $ 928,674 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of loan commitments | As of December 31, 2020 and 2019, the Company had the following commitments to fund various senior mortgage loans, subordinated debt investments, as well as preferred equity investments accounted for as loans held for investment ($ in thousands): As of December 31, 2020 2019 Total commitments $ 2,013,993 $ 1,909,084 Less: funded commitments (1,826,241) (1,692,894) Total unfunded commitments $ 187,752 $ 216,190 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
Schedule of restricted stock award activity | The following tables summarize the (i) non-vested shares of restricted stock and RSUs and (ii) vesting schedule of shares of restricted stock and RSUs for the Company’s directors and officers and employees of the Manager as of December 31, 2020: Schedule of Non-Vested Share and Share Equivalents Restricted Stock Grants—Directors Restricted Stock Grants—Officers and Employees of the Manager RSUs—Officers and Employees of the Manager Total Balance at December 31, 2019 12,332 211,467 61,594 285,393 Granted 42,985 — 220,457 263,442 Vested (32,993) (65,742) (10,611) (109,346) Forfeited — (76,874) (3,933) (80,807) Balance at December 31, 2020 22,324 68,851 267,507 358,682 |
Future anticipated vesting schedule of restricted stock awards | Future Anticipated Vesting Schedule Restricted Stock Grants—Directors Restricted Stock Grants—Officers and Employees of the Manager RSUs—Officers and Employees of the Manager Total 2021 22,324 39,775 35,509 97,608 2022 — 29,076 89,177 118,253 2023 — — 89,160 89,160 2024 — — 53,661 53,661 2025 — — — — Total 22,324 68,851 267,507 358,682 |
Schedule of restricted stock and restricted stock unit, activity | The following table summarizes the restricted stock and RSU compensation expense included within general and administrative expenses in the Company’s consolidated statements of operations, the total fair value of shares vested and the weighted average grant date fair value of the restricted stock and RSUs granted to the Company’s directors and officers and employees of the Manager for the years ended December 31, 2020, 2019 and 2018 ($ in thousands): For the years ended December 31, 2020 2019 2018 Restricted Stock and RSU Grants Restricted Stock and RSU Grants Restricted Stock Grants Directors Officers and Employees of the Manager Total Directors Officers and Employees of the Manager Total Directors Officers and Employees of the Manager Total Compensation expense $ 319 $ 1,020 $ 1,339 $ 343 $ 1,537 $ 1,880 $ 427 $ 675 $ 1,102 Total fair value of shares vested (1) 315 849 1,164 373 939 1,312 405 449 854 Weighted average grant date fair value 292 2,898 3,190 302 2,527 2,829 427 1,759 2,186 ___________________________ (1) Based on the closing price of the Company’s common stock on the NYSE on each vesting date. |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of computations of basic and diluted earnings per share | The following information sets forth the computations of basic and diluted earnings per common share for the years ended December 31, 2020, 2019 and 2018 ($ in thousands, except share and per share data): For the years ended December 31, 2020 2019 2018 Net income attributable to common stockholders $ 21,840 $ 36,991 $ 38,596 Divided by: Basic weighted average shares of common stock outstanding: 32,977,462 28,609,282 28,529,439 Weighted average non-vested restricted stock and RSUs 219,046 237,359 127,221 Diluted weighted average shares of common stock outstanding: 33,196,508 28,846,641 28,656,660 Basic earnings per common share $ 0.66 $ 1.29 $ 1.35 Diluted earnings per common share $ 0.66 $ 1.28 $ 1.35 |
INCOME TAX (Tables)
INCOME TAX (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of the TRS's income tax provision | The income tax provision for the Company and the TRSs consisted of the following for the years ended December 31, 2020, 2019 and 2018 ($ in thousands): For the years ended December 31, 2020 2019 2018 Current $ 82 $ 114 $ 84 Deferred (99) 99 — Excise tax 369 302 362 Total income tax expense, including excise tax $ 352 $ 515 $ 446 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of carrying value and estimated fair value of the Company's financial instruments not carried at fair value on the consolidated balance sheet | As of December 31, 2020 and 2019, the carrying values and fair values of the Company’s financial assets and liabilities recorded at cost are as follows ($ in thousands): As of December 31, 2020 2019 Level in Fair Value Hierarchy Carrying Value Fair Carrying Value Fair Financial assets: Loans held for investment 3 $ 1,815,219 $ 1,800,003 $ 1,682,498 $ 1,692,894 Financial liabilities: Secured funding agreements 2 $ 755,552 $ 755,552 $ 728,589 $ 728,589 Notes payable 3 61,837 63,122 54,708 56,155 Secured term loan 3 110,000 110,000 109,149 110,000 Collateralized loan obligation securitization debt (consolidated VIE) 3 443,871 443,467 443,177 445,600 Secured borrowings 3 59,790 60,215 — — |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Summary of related-party costs incurred by the Company and amounts payable to the Manager | The following table summarizes the related party costs incurred by the Company for the years ended December 31, 2020, 2019 and 2018 and amounts payable to the Company’s Manager as of December 31, 2020 and 2019 ($ in thousands): Incurred Payable For the years ended December 31, As of December 31, 2020 2019 2018 2020 2019 Affiliate Payments Management fees $ 7,323 $ 6,311 $ 6,268 $ 1,854 $ 1,581 Incentive fees 836 1,052 1,150 533 378 General and administrative expenses 3,653 3,026 3,570 762 789 Direct costs (1) 100 192 224 1 13 Total $ 11,912 $ 10,581 $ 11,212 $ 3,150 $ 2,761 _______________________________ |
DIVIDENDS AND DISTRIBUTIONS (Ta
DIVIDENDS AND DISTRIBUTIONS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
DIVIDENDS AND DISTRIBUTIONS | |
Summary of the Company's dividends declared | The following table summarizes the Company’s dividends declared during the years ended December 31, 2020, 2019 and 2018 ($ in thousands, except per share data): Date Declared Record Date Payment Date Per Share Amount Total Amount December 15, 2020 December 30, 2020 January 15, 2021 $ 0.33 $ 11,124 September 16, 2020 September 30, 2020 October 15, 2020 0.33 11,072 June 19, 2020 June 30, 2020 July 15, 2020 0.33 11,072 February 20, 2020 March 31, 2020 April 15, 2020 0.33 11,057 Total cash dividends declared for the year ended December 31, 2020 $ 1.32 $ 44,325 November 8, 2019 December 30, 2019 January 15, 2020 $ 0.33 $ 9,546 July 26, 2019 September 30, 2019 October 15, 2019 0.33 9,526 May 1, 2019 June 28, 2019 July 16, 2019 0.33 9,527 February 21, 2019 March 29, 2019 April 16, 2019 0.33 9,520 Total cash dividends declared for the year ended December 31, 2019 $ 1.32 $ 38,119 October 30, 2018 December 28, 2018 January 15, 2019 $ 0.31 $ 8,914 July 26, 2018 September 28, 2018 October 16, 2018 0.29 8,323 May 1, 2018 June 29, 2018 July 17, 2018 0.28 8,036 March 1, 2018 March 29, 2018 April 17, 2018 0.28 8,008 Total cash dividends declared for the year ended December 31, 2018 $ 1.16 $ 33,281 |
ORGANIZATION (Details)
ORGANIZATION (Details) | 12 Months Ended |
Dec. 31, 2020segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 1 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES - Schedule of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 74,776 | $ 5,256 | $ 11,089 | |
Restricted cash | 0 | 379 | 379 | |
Total cash, cash equivalents and restricted cash shown in the Company's consolidated statements of cash flows | $ 74,776 | $ 5,635 | $ 11,468 | $ 28,722 |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - Schedule of Interest Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | |||
Interest expense | $ 51,949 | $ 62,583 | $ 63,002 |
Secured funding agreements | |||
Debt Instrument [Line Items] | |||
Interest expense | 28,003 | 32,859 | 43,039 |
Notes payable and secured borrowings | |||
Debt Instrument [Line Items] | |||
Interest expense | 1,317 | 867 | 0 |
Securitization debt | |||
Debt Instrument [Line Items] | |||
Interest expense | 12,384 | 19,950 | 11,434 |
Secured term loan | |||
Debt Instrument [Line Items] | |||
Interest expense | 7,114 | 8,907 | 8,529 |
Secured Borrowings | |||
Debt Instrument [Line Items] | |||
Interest expense | 3,131 | $ 0 | $ 0 |
Notes payable and secured borrowings | NEW YORK | Notes payable and secured borrowings | |||
Debt Instrument [Line Items] | |||
Interest expense from real estate owned | $ 28,300 |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | ||
Unrecognized tax benefits from uncertain tax positions | $ 0 | $ 0 |
Furniture, fixtures and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 15 years | |
Maximum | Buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 40 years |
LOANS HELD FOR INVESTMENT - Nar
LOANS HELD FOR INVESTMENT - Narrative (Details) $ in Millions | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020USD ($)loan | Dec. 31, 2020USD ($)loan | |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of loans originated or co-originated | loan | 50 | |
Number of loans repaid or sold, since inception | loan | 98 | |
Total commitment | $ 2,100 | $ 2,100 |
Loans held for investment | 1,800 | 1,800 |
Amount funded | 538.3 | |
Amount of repayments | $ 304 | |
Number of loans repaid or sold | loan | 3 | |
Principal amount outstanding | $ 101 | $ 101 |
Percentage of loans held for investment having LIBOR floors | 95.30% | |
Weighted average floor (as a percent) | 1.73% | |
Impact of COVID-19 | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of loan modification contracts | loan | 11 | |
Troubled debt restructuring | $ 494.8 | $ 494.8 |
Number of loans in non-accrual status | loan | 3 | 3 |
Financing receivable, nonaccrual | $ 67.1 | $ 67.1 |
LOANS HELD FOR INVESTMENT - Loa
LOANS HELD FOR INVESTMENT - Loans held for Investments (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Loans held for investment | $ 1,815,219 | $ 1,682,498 |
Outstanding principal | $ 1,826,241 | $ 1,692,894 |
Weighted Average Unleveraged Effective Yield, Including Non-accrual Loans | 6.30% | |
Weighted Average Unleveraged Effective Yield, Excluding Non-accrual Loans | 6.60% | |
Weighted Average Unleveraged Effective Yield | 6.80% | |
Weighted average remaining life | 1 year 2 months 12 days | 1 year 7 months 6 days |
Senior mortgage loans | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Loans held for investment | $ 1,713,601 | $ 1,622,666 |
Outstanding principal | $ 1,723,638 | $ 1,632,164 |
Weighted Average Unleveraged Effective Yield, Including Non-accrual Loans | 5.90% | |
Weighted Average Unleveraged Effective Yield, Excluding Non-accrual Loans | 6.20% | |
Weighted Average Unleveraged Effective Yield | 6.50% | |
Weighted average remaining life | 1 year 2 months 12 days | 1 year 6 months |
Subordinated debt and preferred equity investments | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Loans held for investment | $ 101,618 | $ 59,832 |
Outstanding principal | $ 102,603 | $ 60,730 |
Weighted Average Unleveraged Effective Yield, Including Non-accrual Loans | 13.40% | |
Weighted Average Unleveraged Effective Yield, Excluding Non-accrual Loans | 13.40% | |
Weighted Average Unleveraged Effective Yield | 15.10% | |
Weighted average remaining life | 1 year 10 months 24 days | 2 years 7 months 6 days |
LOANS HELD FOR INVESTMENT - Inv
LOANS HELD FOR INVESTMENT - Investment Portfolio (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020USD ($)extension_option | Dec. 31, 2019USD ($) | Mar. 07, 2019USD ($) | |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 1,826,241 | $ 1,692,894 | |
Loans held for investment | $ 1,815,219 | $ 1,682,498 | |
Fixed interest rate | 6.80% | ||
Unleveraged effective yield | 6.30% | ||
Minimum | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Number of extension options | extension_option | 1 | ||
Maximum | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Number of extension options | extension_option | 2 | ||
Extension period of maturity date | 12 months | ||
Senior Mortgage Loans | Hotel | NEW YORK | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 38,600 | ||
Senior Mortgage Loans | Residential | CALIFORNIA | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 14,200 | ||
Loans held for investment | $ 14,200 | ||
Fixed interest rate | 13.00% | ||
Unleveraged effective yield | 13.00% | ||
Senior Mortgage Loans | LIBOR Plus 3.65%, Due January 2023 | Office | Diversified | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 109,800 | ||
Loans held for investment | $ 109,400 | ||
Unleveraged effective yield | 5.70% | ||
Senior Mortgage Loans | LIBOR Plus 3.65%, Due January 2023 | Office | Diversified | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 3.65% | ||
Senior Mortgage Loans | LIBOR Plus 4.25% Due February 2021 | Mixed-use | FLORIDA | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 99,000 | ||
Loans held for investment | $ 98,900 | ||
Unleveraged effective yield | 7.80% | ||
Senior Mortgage Loans | LIBOR Plus 4.25% Due February 2021 | Mixed-use | FLORIDA | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 4.25% | ||
Senior Mortgage Loans | LIBOR Plus 5.00% Due June 2022 | Multifamily | FLORIDA | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 91,300 | ||
Loans held for investment | $ 90,800 | ||
Unleveraged effective yield | 6.70% | ||
Senior Mortgage Loans | LIBOR Plus 5.00% Due June 2022 | Multifamily | FLORIDA | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 5.00% | ||
Senior Mortgage Loans | LIBOR Plus 2.85% Percent, Due October 2022 | Multifamily | TEXAS | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 75,000 | ||
Loans held for investment | $ 74,800 | ||
Unleveraged effective yield | 5.00% | ||
Senior Mortgage Loans | LIBOR Plus 2.85% Percent, Due October 2022 | Multifamily | TEXAS | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 2.85% | ||
Senior Mortgage Loans | LIBOR Plus 3.45%, Due May 2021 | Hotel | OREGON / WASHINGTON | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 68,100 | ||
Loans held for investment | $ 67,300 | ||
Unleveraged effective yield | 4.60% | ||
Financing receivable, nonaccrual | $ 13,100 | ||
Senior Mortgage Loans | LIBOR Plus 3.45%, Due May 2021 | Hotel | OREGON / WASHINGTON | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 3.45% | ||
Senior Mortgage Loans | LIBOR Plus 3.75%, Due December 2021 | Office | ILLINOIS | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 67,800 | ||
Loans held for investment | $ 67,600 | ||
Unleveraged effective yield | 5.30% | ||
Senior Mortgage Loans | LIBOR Plus 3.75%, Due December 2021 | Office | ILLINOIS | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 3.75% | ||
Senior Mortgage Loans | LIBOR Plus 4.25%, Due March 2021 | Office | NORTH CAROLINA | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 61,500 | ||
Loans held for investment | $ 61,400 | ||
Unleveraged effective yield | 8.40% | ||
Senior Mortgage Loans | LIBOR Plus 4.25%, Due March 2021 | Office | NORTH CAROLINA | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 4.25% | ||
Senior Mortgage Loans | LIBOR Plus 3.60%, Due September 2021 | Hotel | Diversified | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 60,800 | ||
Loans held for investment | $ 60,700 | ||
Unleveraged effective yield | 6.20% | ||
Senior Mortgage Loans | LIBOR Plus 3.60%, Due September 2021 | Hotel | Diversified | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 3.60% | ||
Senior Mortgage Loans | LIBOR Plus 3.95%, Due June 2021 | Office | ILLINOIS | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 57,400 | ||
Loans held for investment | $ 57,300 | ||
Unleveraged effective yield | 6.30% | ||
Senior Mortgage Loans | LIBOR Plus 3.95%, Due June 2021 | Office | ILLINOIS | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 3.95% | ||
Senior Mortgage Loans | LIBOR Plus 5.00% Due February 2021 | Industrial Property | NEW YORK | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 52,300 | ||
Loans held for investment | $ 51,900 | ||
Unleveraged effective yield | 8.10% | ||
Senior Mortgage Loans | LIBOR Plus 5.00% Due February 2021 | Industrial Property | NEW YORK | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 5.00% | ||
Senior Mortgage Loans | LIBOR Plus 4.00%, Due April 2022 | Mixed-use | CALIFORNIA | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 51,200 | ||
Loans held for investment | $ 51,000 | ||
Unleveraged effective yield | 6.20% | ||
Senior Mortgage Loans | LIBOR Plus 4.00%, Due April 2022 | Mixed-use | CALIFORNIA | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 4.00% | ||
Senior Mortgage Loans | LIBOR Plus 5.00% Due June 2022, Instrument 2 | Multifamily | FLORIDA | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 46,200 | ||
Loans held for investment | $ 46,000 | ||
Unleveraged effective yield | 6.60% | ||
Senior Mortgage Loans | LIBOR Plus 5.00% Due June 2022, Instrument 2 | Multifamily | FLORIDA | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 5.00% | ||
Senior Mortgage Loans | LIBOR Plus 2.60%, Due January 2022 | Multifamily | FLORIDA | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 43,400 | ||
Loans held for investment | $ 43,300 | ||
Unleveraged effective yield | 5.50% | ||
Senior Mortgage Loans | LIBOR Plus 2.60%, Due January 2022 | Multifamily | FLORIDA | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 2.60% | ||
Senior Mortgage Loans | LIBOR Plus 3.05% Due December 2020 | Office | GEORGIA | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 43,100 | ||
Loans held for investment | $ 42,700 | ||
Unleveraged effective yield | 5.70% | ||
Senior Mortgage Loans | LIBOR Plus 3.05% Due December 2020 | Office | GEORGIA | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 3.05% | ||
Senior Mortgage Loans | LIBOR Plus 4.75% Due Jan 2021 | Student Housing | TEXAS | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 41,000 | ||
Loans held for investment | $ 41,000 | ||
Unleveraged effective yield | 5.40% | ||
Senior Mortgage Loans | LIBOR Plus 4.75% Due Jan 2021 | Student Housing | TEXAS | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 4.75% | ||
Senior Mortgage Loans | LIBOR Plus 3.05% Due March 2022 | Multifamily | NEW JERSEY | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 41,000 | ||
Loans held for investment | $ 40,800 | ||
Unleveraged effective yield | 4.90% | ||
Senior Mortgage Loans | LIBOR Plus 3.05% Due March 2022 | Multifamily | NEW JERSEY | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 3.05% | ||
Senior Mortgage Loans | LIBOR Plus 4.12%, Due January 2022 | Hotel | CALIFORNIA | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 40,000 | ||
Loans held for investment | $ 39,900 | ||
Unleveraged effective yield | 5.90% | ||
Senior Mortgage Loans | LIBOR Plus 4.12%, Due January 2022 | Hotel | CALIFORNIA | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 4.12% | ||
Senior Mortgage Loans | LIBOR Plus 3.95%, Due July 2022 | Student Housing | CALIFORNIA | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 36,700 | ||
Loans held for investment | $ 36,700 | ||
Unleveraged effective yield | 4.30% | ||
Senior Mortgage Loans | LIBOR Plus 3.95%, Due July 2022 | Student Housing | CALIFORNIA | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 3.95% | ||
Senior Mortgage Loans | LIBOR Plus 3.25% Due November 2022 | Multifamily | KANSAS | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 35,800 | ||
Loans held for investment | $ 35,600 | ||
Unleveraged effective yield | 5.50% | ||
Senior Mortgage Loans | LIBOR Plus 3.25% Due November 2022 | Multifamily | KANSAS | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 3.25% | ||
Senior Mortgage Loans | LIBOR Plus 3.75%, Due September 2022 | Mixed-use | TEXAS | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 35,300 | ||
Loans held for investment | $ 35,100 | ||
Unleveraged effective yield | 6.70% | ||
Senior Mortgage Loans | LIBOR Plus 3.75%, Due September 2022 | Mixed-use | TEXAS | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 3.75% | ||
Senior Mortgage Loans | LIBOR Plus 4.05%, Due March 2024 | Industrial Property | NORTH CAROLINA | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 34,900 | ||
Loans held for investment | $ 34,700 | ||
Unleveraged effective yield | 5.90% | ||
Senior Mortgage Loans | LIBOR Plus 4.05%, Due March 2024 | Industrial Property | NORTH CAROLINA | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 4.05% | ||
Senior Mortgage Loans | LIBOR Plus 3.95%, Due July 2022, Instrument 2 | Hotel | MICHIGAN | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 34,200 | ||
Loans held for investment | $ 34,100 | ||
Unleveraged effective yield | 4.30% | ||
Senior Mortgage Loans | LIBOR Plus 3.95%, Due July 2022, Instrument 2 | Hotel | MICHIGAN | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 3.95% | ||
Senior Mortgage Loans | LIBOR Plus 4.40%, Due May 2021 | Hotel | ILLINOIS | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 32,900 | ||
Loans held for investment | $ 32,100 | ||
Unleveraged effective yield | 0.00% | ||
Senior Mortgage Loans | LIBOR Plus 4.40%, Due May 2021 | Hotel | ILLINOIS | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 4.40% | ||
Senior Mortgage Loans | LIBOR Plus 3.35%, Due November 2022 | Office | CALIFORNIA | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 31,600 | ||
Loans held for investment | $ 31,400 | ||
Unleveraged effective yield | 6.00% | ||
Senior Mortgage Loans | LIBOR Plus 3.35%, Due November 2022 | Office | CALIFORNIA | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 3.35% | ||
Senior Mortgage Loans | LIBOR Plus 3.20%, Due December 2021 | Multifamily | NEW YORK | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 30,100 | ||
Loans held for investment | $ 30,100 | ||
Unleveraged effective yield | 4.80% | ||
Senior Mortgage Loans | LIBOR Plus 3.20%, Due December 2021 | Multifamily | NEW YORK | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 3.20% | ||
Senior Mortgage Loans | LIBOR Plus 3.15%, Due Feb 2022 | Student Housing | NORTH CAROLINA | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 30,000 | ||
Loans held for investment | $ 29,900 | ||
Unleveraged effective yield | 5.90% | ||
Senior Mortgage Loans | LIBOR Plus 3.15%, Due Feb 2022 | Student Housing | NORTH CAROLINA | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 3.15% | ||
Senior Mortgage Loans | LIBOR Plus 3.00%, Due December 2021 | Multifamily | PENNSYLVANIA | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 29,300 | ||
Loans held for investment | $ 29,200 | ||
Unleveraged effective yield | 5.90% | ||
Senior Mortgage Loans | LIBOR Plus 3.00%, Due December 2021 | Multifamily | PENNSYLVANIA | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 3.00% | ||
Senior Mortgage Loans | LIBOR Plus 3.80%, Due January 2023 | Office | ILLINOIS | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 28,500 | ||
Loans held for investment | $ 28,300 | ||
Unleveraged effective yield | 6.20% | ||
Senior Mortgage Loans | LIBOR Plus 3.80%, Due January 2023 | Office | ILLINOIS | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 3.80% | ||
Senior Mortgage Loans | LIBOR Plus 3.52%, Due May 2023 | Office | NORTH CAROLINA | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 28,500 | ||
Loans held for investment | $ 27,900 | ||
Unleveraged effective yield | 6.80% | ||
Senior Mortgage Loans | LIBOR Plus 3.52%, Due May 2023 | Office | NORTH CAROLINA | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 3.52% | ||
Senior Mortgage Loans | LIBOR Plus 3.20%, Due October 2021 | Multifamily | TEXAS | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 27,500 | ||
Loans held for investment | $ 27,500 | ||
Unleveraged effective yield | 4.60% | ||
Senior Mortgage Loans | LIBOR Plus 3.20%, Due October 2021 | Multifamily | TEXAS | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 3.20% | ||
Senior Mortgage Loans | LIBOR Plus 4.10%, Due March 2023 | Mixed-use | CALIFORNIA | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 26,900 | ||
Loans held for investment | $ 26,600 | ||
Unleveraged effective yield | 6.30% | ||
Senior Mortgage Loans | LIBOR Plus 4.10%, Due March 2023 | Mixed-use | CALIFORNIA | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 4.10% | ||
Senior Mortgage Loans | LIBOR Plus 3.45%, Due February 2023 | Student Housing | TEXAS | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 24,600 | ||
Loans held for investment | $ 24,300 | ||
Unleveraged effective yield | 5.60% | ||
Senior Mortgage Loans | LIBOR Plus 3.45%, Due February 2023 | Student Housing | TEXAS | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 3.45% | ||
Senior Mortgage Loans | LIBOR Plus 4.45%, Due February 2021 | Student Housing | ALABAMA | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 24,100 | ||
Loans held for investment | $ 22,700 | ||
Unleveraged effective yield | 0.00% | ||
Senior Mortgage Loans | LIBOR Plus 4.45%, Due February 2021 | Student Housing | ALABAMA | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 4.45% | ||
Senior Mortgage Loans | LIBOR Plus 3.40%, Due November 2021 | Office | CALIFORNIA | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 22,900 | ||
Loans held for investment | $ 22,800 | ||
Unleveraged effective yield | 6.20% | ||
Senior Mortgage Loans | LIBOR Plus 3.40%, Due November 2021 | Office | CALIFORNIA | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 3.40% | ||
Senior Mortgage Loans | LIBOR Plus 4.50%, Due December 2021 | Industrial Property | CALIFORNIA | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 22,000 | ||
Loans held for investment | $ 21,900 | ||
Unleveraged effective yield | 7.40% | ||
Senior Mortgage Loans | LIBOR Plus 4.50%, Due December 2021 | Industrial Property | CALIFORNIA | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 4.50% | ||
Senior Mortgage Loans | LIBOR Plus 3.25%, Due August 2022 | Student Housing | FLORIDA | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 22,000 | ||
Loans held for investment | $ 21,900 | ||
Unleveraged effective yield | 5.90% | ||
Senior Mortgage Loans | LIBOR Plus 3.25%, Due August 2022 | Student Housing | FLORIDA | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 3.25% | ||
Senior Mortgage Loans | LIBOR Plus 3.50%, Due March 2022 | Self Storage | FLORIDA | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 19,500 | ||
Loans held for investment | $ 19,400 | ||
Unleveraged effective yield | 6.00% | ||
Senior Mortgage Loans | LIBOR Plus 3.50%, Due March 2022 | Self Storage | FLORIDA | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 3.50% | ||
Senior Mortgage Loans | LIBOR Plus 3.00%, Due March 2023 | Multifamily | WASHINGTON | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 18,700 | ||
Loans held for investment | $ 18,500 | ||
Unleveraged effective yield | 5.10% | ||
Senior Mortgage Loans | LIBOR Plus 3.00%, Due March 2023 | Multifamily | WASHINGTON | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 3.00% | ||
Senior Mortgage Loans | LIBOR Plus 4.05%, Due November 2021 | Office | TEXAS | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 17,400 | ||
Loans held for investment | $ 17,300 | ||
Unleveraged effective yield | 7.50% | ||
Senior Mortgage Loans | LIBOR Plus 4.05%, Due November 2021 | Office | TEXAS | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 4.05% | ||
Senior Mortgage Loans | LIBOR Plus 6.50%, Due September 2022 | Multifamily | SOUTH CAROLINA | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 16,300 | ||
Loans held for investment | $ 16,000 | ||
Unleveraged effective yield | 10.10% | ||
Senior Mortgage Loans | LIBOR Plus 6.50%, Due September 2022 | Multifamily | SOUTH CAROLINA | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 6.50% | ||
Senior Mortgage Loans | LIBOR Plus 3.75%, Due March 2023 | Industrial Property | CALIFORNIA | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 13,700 | ||
Loans held for investment | $ 13,600 | ||
Unleveraged effective yield | 6.30% | ||
Senior Mortgage Loans | LIBOR Plus 3.75%, Due March 2023 | Industrial Property | CALIFORNIA | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 3.75% | ||
Senior Mortgage Loans | LIBOR Plus 4.00%, Due November 2022 | Office | NORTH CAROLINA | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 8,600 | ||
Loans held for investment | $ 8,500 | ||
Unleveraged effective yield | 6.70% | ||
Senior Mortgage Loans | LIBOR Plus 4.00%, Due November 2022 | Office | NORTH CAROLINA | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 4.00% | ||
Senior Mortgage Loans | LIBOR Plus 2.15%, Due March 2023 | Office | ILLINOIS | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 8,500 | ||
Loans held for investment | $ 8,500 | ||
Unleveraged effective yield | 3.70% | ||
Senior Mortgage Loans | LIBOR Plus 2.15%, Due March 2023 | Office | ILLINOIS | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 2.15% | ||
Subordinated debt and preferred equity investments | Office | NEW JERSEY | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 17,000 | ||
Loans held for investment | $ 16,500 | ||
Fixed interest rate | 12.00% | ||
Unleveraged effective yield | 12.80% | ||
Subordinated debt and preferred equity investments | Residential Condominium | NEW YORK | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Fixed interest rate | 20.00% | ||
Subordinated debt | $ 2,500 | ||
Subordinated debt and preferred equity investments | Residential Condominium | HAWAII | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | 11,500 | ||
Loans held for investment | $ 11,500 | ||
Fixed interest rate | 14.00% | ||
Unleveraged effective yield | 17.90% | ||
Subordinated debt and preferred equity investments | LIBOR Plus 8.00%, Due March 2023 | Office | ILLINOIS | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 37,600 | ||
Loans held for investment | $ 37,300 | ||
Unleveraged effective yield | 10.00% | ||
Subordinated debt and preferred equity investments | LIBOR Plus 8.00%, Due March 2023 | Office | ILLINOIS | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 8.00% | ||
Subordinated debt and preferred equity investments | LIBOR Plus 14.00%, Due May 2021 | Residential Condominium | NEW YORK | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 17,600 | ||
Loans held for investment | $ 17,500 | ||
Unleveraged effective yield | 17.90% | ||
Subordinated debt and preferred equity investments | LIBOR Plus 14.00%, Due May 2021 | Residential Condominium | NEW YORK | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 14.00% | ||
Subordinated debt and preferred equity investments | LIBOR Plus 12.25%, Due November 2021 | Mixed-use | ILLINOIS | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 16,000 | ||
Loans held for investment | $ 15,900 | ||
Unleveraged effective yield | 14.50% | ||
Subordinated debt and preferred equity investments | LIBOR Plus 12.25%, Due November 2021 | Mixed-use | ILLINOIS | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 12.25% | ||
Subordinated debt and preferred equity investments | LIBOR Plus 8.25%, Due November 2021 | Office | CALIFORNIA | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Outstanding principal | $ 2,900 | ||
Loans held for investment | $ 2,900 | ||
Unleveraged effective yield | 9.70% | ||
Subordinated debt and preferred equity investments | LIBOR Plus 8.25%, Due November 2021 | Office | CALIFORNIA | LIBOR | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Basis spread on variable rate | 8.25% |
LOANS HELD FOR INVESTMENT - Por
LOANS HELD FOR INVESTMENT - Portfolio Activity (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Aug. 31, 2020USD ($)loan | Jul. 31, 2020USD ($) | Dec. 31, 2020USD ($)loan | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Change in the activity of loan portfolio | |||||
Balance at the beginning of the period | $ 1,682,498 | $ 1,524,873 | |||
Initial funding | 430,562 | 493,913 | |||
Origination fees and discounts, net of costs | (5,778) | (7,539) | |||
Additional funding | 107,767 | 185,281 | |||
Amortizing payments | (2,728) | ||||
Loan payoffs | (304,028) | (482,407) | |||
Loans converted to real estate owned or sold to third parties | (100,504) | (38,636) | |||
Origination fee accretion | 7,430 | 7,013 | $ 6,949 | ||
Balance at the end of the period | $ 1,815,219 | 1,682,498 | 1,524,873 | ||
Number of loans repaid or sold | loan | 3 | ||||
Realized losses on loans sold | $ 4,008 | $ 0 | $ 0 | ||
Senior Mortgage Loans | |||||
Change in the activity of loan portfolio | |||||
Number of loans repaid or sold | loan | 3 | ||||
Realized losses on loans sold | $ 4,000 | ||||
Senior Mortgage Loans | Hotel | MINNESOTA | |||||
Change in the activity of loan portfolio | |||||
Mortgage loan with outstanding principal | $ 31,500 | ||||
Senior Mortgage Loans | Multifamily | ILLINOIS and TEXAS | |||||
Change in the activity of loan portfolio | |||||
Number of loans repaid or sold | loan | 2 | ||||
Senior Mortgage Loans | Multifamily | ILLINOIS | |||||
Change in the activity of loan portfolio | |||||
Mortgage loan with outstanding principal | $ 39,900 | ||||
Senior Mortgage Loans | Multifamily | TEXAS | |||||
Change in the activity of loan portfolio | |||||
Mortgage loan with outstanding principal | $ 29,600 |
CURRENT EXPECTED CREDIT LOSSE_2
CURRENT EXPECTED CREDIT LOSSES - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Financing receivable, allowance for credit loss | $ 25,200 | |
Allowance for credit loss, basis points | 125.00% | |
Commitments | $ 2,013,993 | $ 1,909,084 |
Loans Held for Investment | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Financing receivable, allowance for credit loss | 23,604 | 0 |
Unfunded Loan Commitment | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Financing receivable, allowance for credit loss | 1,632 | $ 0 |
Loans Held for Investment | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Financing receivable, allowance for credit loss | 23,600 | |
Other Assets | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Interest receivable | $ 11,200 |
CURRENT EXPECTED CREDIT LOSSE_3
CURRENT EXPECTED CREDIT LOSSES - Allowance for Credit Loss (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Provision for current expected credit losses | $ 20,185 | $ 0 | $ 0 |
Balance at end of the period | 25,200 | ||
Loans Held for Investment | |||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at beginning of the period | 0 | ||
Provision for current expected credit losses | 19,164 | ||
Write-offs | 0 | ||
Recoveries | 0 | ||
Balance at end of the period | 23,604 | 0 | |
Unfunded Loan Commitment | |||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at beginning of the period | 0 | ||
Provision for current expected credit losses | 1,021 | ||
Write-offs | 0 | ||
Recoveries | 0 | ||
Balance at end of the period | 1,632 | 0 | |
Impact of adoption of CECL | Loans Held for Investment | |||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at beginning of the period | 4,440 | ||
Balance at end of the period | 4,440 | ||
Impact of adoption of CECL | Unfunded Loan Commitment | |||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at beginning of the period | $ 611 | ||
Balance at end of the period | $ 611 |
CURRENT EXPECTED CREDIT LOSSE_4
CURRENT EXPECTED CREDIT LOSSES - Internal Credit Risk Rating (Details) - Loans Held for Investment $ in Thousands | Dec. 31, 2020USD ($) |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | $ 429,785 |
2019 | 613,244 |
2018 | 428,847 |
2017 | 292,722 |
2016 | 16,492 |
Prior | 34,129 |
Total | 1,815,219 |
1 - Very Low Risk | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 0 |
2019 | 0 |
2018 | 8,547 |
2017 | 0 |
2016 | 0 |
Prior | 0 |
Total | 8,547 |
2 - Low Risk | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 0 |
2019 | 109,429 |
2018 | 66,055 |
2017 | 68,438 |
2016 | 0 |
Prior | 0 |
Total | 243,922 |
3 - Medium risk | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 429,785 |
2019 | 468,721 |
2018 | 254,858 |
2017 | 201,627 |
2016 | 16,492 |
Prior | 0 |
Total | 1,371,483 |
4 - Higher Risk: Asset Performance is trailing underwritten expectations. Loan at risk of impairment without mater improvement to performance | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 0 |
2019 | 35,094 |
2018 | 99,387 |
2017 | 22,657 |
2016 | 0 |
Prior | 34,129 |
Total | 191,267 |
5 - Impaired/Loss Possible: A loan that has a significantly increased probability of default or principal loss | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2020 | 0 |
2019 | 0 |
2018 | 0 |
2017 | 0 |
2016 | 0 |
Prior | 0 |
Total | $ 0 |
REAL ESTATE OWNED - Narrative (
REAL ESTATE OWNED - Narrative (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Mar. 08, 2019 | Mar. 07, 2019 | |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||||
Outstanding principal | $ 1,826,241,000 | $ 1,692,894,000 | |||
Real estate owned, net | 37,283,000 | 37,901,000 | |||
Depreciation of real estate owned | 892,000 | 667,000 | $ 0 | ||
NEW YORK | Hotel | |||||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||||
Real estate owned, net | 37,283,000 | 37,901,000 | |||
Repossessed hotel property | 38,843,000 | 38,568,000 | |||
Impairment charges | 0 | ||||
Depreciation of real estate owned | $ 892,000 | $ 667,000 | |||
Senior Mortgage Loans | NEW YORK | Hotel | |||||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||||
Outstanding principal | $ 38,600,000 | ||||
Debt derecognized | $ 38,600,000 | ||||
Real estate owned, net | 36,900,000 | ||||
Other repossessed hotel assets | 1,700,000 | ||||
Repossessed hotel property | $ 38,600,000 |
REAL ESTATE OWNED - Schedule of
REAL ESTATE OWNED - Schedule of Real Estate Owned, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Real estate owned, net | $ 37,283 | $ 37,901 |
NEW YORK | Hotel | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Repossessed hotel property | 38,843 | 38,568 |
Less: Accumulated depreciation | (1,560) | (667) |
Real estate owned, net | 37,283 | 37,901 |
Land | NEW YORK | Hotel | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Repossessed hotel property | 10,200 | 10,200 |
Buildings and improvements | NEW YORK | Hotel | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Repossessed hotel property | 24,281 | 24,281 |
Furniture, fixtures and equipment | NEW YORK | Hotel | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Repossessed hotel property | $ 4,362 | $ 4,087 |
DEBT - Schedule of outstanding
DEBT - Schedule of outstanding balances and total commitments under Financing Agreements (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Outstanding balance | $ 928,674,000 | $ 894,744,000 |
Total Commitment | 1,249,155,000 | 1,471,424,000 |
Secured Term Loan | ||
Debt Instrument [Line Items] | ||
Outstanding balance | 110,000,000 | 110,000,000 |
Total Commitment | 110,000,000 | 110,000,000 |
CNB Facility | CNB Facility | ||
Debt Instrument [Line Items] | ||
Total Commitment | 50,000,000 | |
Secured funding facility | ||
Debt Instrument [Line Items] | ||
Outstanding balance | 755,552,000 | 728,589,000 |
Total Commitment | 1,055,000,000 | 1,277,269,000 |
Secured funding facility | Wells Fargo Facility | ||
Debt Instrument [Line Items] | ||
Outstanding balance | 336,001,000 | 360,354,000 |
Total Commitment | 350,000,000 | 500,000,000 |
Secured funding facility | Citibank Facility | ||
Debt Instrument [Line Items] | ||
Outstanding balance | 117,506,000 | 126,603,000 |
Total Commitment | 325,000,000 | 325,000,000 |
Secured funding facility | BAML Facility | ||
Debt Instrument [Line Items] | ||
Outstanding balance | 0 | 36,280,000 |
Total Commitment | 0 | 36,280,000 |
Secured funding facility | CNB Facility | ||
Debt Instrument [Line Items] | ||
Outstanding balance | 50,000,000 | 30,500,000 |
Total Commitment | 50,000,000 | 50,000,000 |
Secured funding facility | MetLife Facility | ||
Debt Instrument [Line Items] | ||
Outstanding balance | 104,124,000 | 131,807,000 |
Total Commitment | 180,000,000 | 180,000,000 |
Secured funding facility | U.S. Bank Facility | ||
Debt Instrument [Line Items] | ||
Outstanding balance | 0 | 43,045,000 |
Total Commitment | 0 | 185,989,000 |
Secured funding facility | Morgan Stanley Facility | ||
Debt Instrument [Line Items] | ||
Outstanding balance | 147,921,000 | 0 |
Total Commitment | 150,000,000 | 0 |
Notes Payable | ||
Debt Instrument [Line Items] | ||
Outstanding balance | 63,122,000 | 56,155,000 |
Total Commitment | $ 84,155,000 | $ 84,155,000 |
DEBT - Disclosures (Details)
DEBT - Disclosures (Details) | Dec. 31, 2020USD ($)extensionAdvance | Nov. 30, 2020USD ($) | Nov. 30, 2019USD ($)extension | May 31, 2019USD ($)extension | Dec. 12, 2018 | Nov. 30, 2018 | Dec. 31, 2020USD ($)extensionAdvance | Aug. 31, 2020extension | Jul. 31, 2020 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020USD ($)extensionAdvanceloan | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Jan. 31, 2020USD ($) | Apr. 30, 2019USD ($) |
Funding agreements | |||||||||||||||||
Line of credit facility, maximum borrowing capacity | $ 1,249,155,000 | $ 1,249,155,000 | $ 1,249,155,000 | $ 1,471,424,000 | |||||||||||||
Line of credit facility, accordion feature, length of extension period | 12 months | ||||||||||||||||
Number of non-recourse notes | loan | 3 | ||||||||||||||||
Outstanding balance | 928,674,000 | 928,674,000 | $ 928,674,000 | 894,744,000 | |||||||||||||
Debt issue discount on initial draw down | $ 2,600,000 | ||||||||||||||||
Maximum | |||||||||||||||||
Funding agreements | |||||||||||||||||
Extension period of maturity date | 12 months | ||||||||||||||||
Notes payable and secured borrowings | |||||||||||||||||
Funding agreements | |||||||||||||||||
Number of extension periods available for maturity date | extension | 2 | ||||||||||||||||
Extension period of maturity date | 12 months | ||||||||||||||||
Interest rate margin (as a percent) | 3.75% | ||||||||||||||||
Outstanding balance | 7,000,000 | $ 23,500,000 | 7,000,000 | $ 7,000,000 | |||||||||||||
Secured term loan | |||||||||||||||||
Funding agreements | |||||||||||||||||
Line of credit facility, maximum borrowing capacity | 110,000,000 | $ 110,000,000 | 110,000,000 | 110,000,000 | |||||||||||||
Extension period of maturity date | 12 months | ||||||||||||||||
Outstanding balance | 110,000,000 | $ 110,000,000 | 110,000,000 | $ 110,000,000 | |||||||||||||
Aggregate principal amount | 110,000,000 | 110,000,000 | $ 110,000,000 | ||||||||||||||
Debt discount on initial draw down (as a percent) | 6.40% | 8.00% | 7.60% | ||||||||||||||
Secured term loan | LIBOR | |||||||||||||||||
Funding agreements | |||||||||||||||||
Interest rate margin (as a percent) | 500.00% | ||||||||||||||||
Secured term loan | LIBOR | Forecast | |||||||||||||||||
Funding agreements | |||||||||||||||||
Interest rate, increase (decrease) | 75.00% | 37.50% | 12.50% | ||||||||||||||
Secured term loan | Minimum | |||||||||||||||||
Funding agreements | |||||||||||||||||
Covenant percentage of net proceeds raised in future equity issuances, used for computing tangible net worth to be maintained | 80.00% | ||||||||||||||||
Covenant percentage of tangible net worth at specified date used for computing tangible net worth to be maintained | 80.00% | ||||||||||||||||
Asset coverage ratio | 110.00% | ||||||||||||||||
Unencumbered asset ratio | 120.00% | ||||||||||||||||
Covenant percentage of tangible net worth required to be maintained | 65.00% | ||||||||||||||||
Secured term loan | Maximum | |||||||||||||||||
Funding agreements | |||||||||||||||||
Covenant ratio of debt to tangible net worth | 4 | ||||||||||||||||
Notes Payable, Due March 05, 2024 | |||||||||||||||||
Funding agreements | |||||||||||||||||
Number of extension periods available for maturity date | extension | 1 | ||||||||||||||||
Extension period of maturity date | 12 months | ||||||||||||||||
Interest rate margin (as a percent) | 2.50% | ||||||||||||||||
Outstanding balance | 27,900,000 | 27,900,000 | $ 27,900,000 | ||||||||||||||
Notes Payable, Due June 10, 2024 | |||||||||||||||||
Funding agreements | |||||||||||||||||
Interest rate margin (as a percent) | 2.50% | ||||||||||||||||
Wells Fargo Facility | Secured revolving funding facility | |||||||||||||||||
Funding agreements | |||||||||||||||||
Line of credit facility, maximum borrowing capacity | 350,000,000 | $ 500,000,000 | 350,000,000 | $ 350,000,000 | |||||||||||||
Non-utilization fee on average available balance (as a percent) | 0.25% | ||||||||||||||||
Facility used on average (at least) (as a percent) | 75.00% | ||||||||||||||||
Non-utilization fee | $ 19,000 | $ 618,000 | $ 149,000 | ||||||||||||||
Line of credit facility, accordion feature, increase limit | $ 500,000,000 | 500,000,000 | 500,000,000 | ||||||||||||||
Wells Fargo Facility | Secured revolving funding facility | Minimum | |||||||||||||||||
Funding agreements | |||||||||||||||||
Covenant specified amount for computing tangible net worth to be maintained | $ 135,500,000 | ||||||||||||||||
Covenant percentage of net proceeds raised in future equity issuances, used for computing tangible net worth to be maintained | 80.00% | ||||||||||||||||
Wells Fargo Facility | Secured revolving funding facility | Minimum | 30 day LIBOR | |||||||||||||||||
Funding agreements | |||||||||||||||||
Interest rate margin (as a percent) | 1.50% | 1.50% | 1.75% | ||||||||||||||
Wells Fargo Facility | Secured revolving funding facility | Maximum | |||||||||||||||||
Funding agreements | |||||||||||||||||
Covenant ratio of debt to tangible net worth | 4 | ||||||||||||||||
Covenant ratio of recourse debt to tangible net worth | 3 | ||||||||||||||||
Covenant ratio of EBITDA to fixed charges | 1.25 | ||||||||||||||||
Wells Fargo Facility | Secured revolving funding facility | Maximum | 30 day LIBOR | |||||||||||||||||
Funding agreements | |||||||||||||||||
Interest rate margin (as a percent) | 2.75% | 2.25% | 2.35% | ||||||||||||||
Wells Fargo Facility | Revolving credit facility, optional commitment amount | |||||||||||||||||
Funding agreements | |||||||||||||||||
Line of credit facility, maximum borrowing capacity | $ 500,000,000 | $ 500,000,000 | $ 500,000,000 | ||||||||||||||
Number of extension periods available for maturity date | extension | 1 | 1 | 1 | ||||||||||||||
Extension period of maturity date | 12 months | ||||||||||||||||
Wells Fargo Facility | Revolving credit facility, optional commitment amount, option 2 | |||||||||||||||||
Funding agreements | |||||||||||||||||
Number of extension periods available for maturity date | extension | 3 | 3 | 3 | ||||||||||||||
Extension period of maturity date | 12 months | ||||||||||||||||
Citibank Facility | Secured revolving funding facility | |||||||||||||||||
Funding agreements | |||||||||||||||||
Line of credit facility, maximum borrowing capacity | $ 325,000,000 | $ 325,000,000 | $ 325,000,000 | ||||||||||||||
Number of extension periods available for maturity date | extension | 2 | 2 | 2 | ||||||||||||||
Extension period of maturity date | 12 months | ||||||||||||||||
Non-utilization fee on average available balance (as a percent) | 0.25% | ||||||||||||||||
Facility used on average (at least) (as a percent) | 75.00% | ||||||||||||||||
Non-utilization fee | $ 516,000 | 388,000 | 143,000 | ||||||||||||||
Covenant liquidity to be maintained as percentage of recourse indebtedness | 5.00% | ||||||||||||||||
Covenant period immediately preceding on last date of applicable reporting period for maintaining fixed charge coverage ratio | 12 months | ||||||||||||||||
Citibank Facility | Secured revolving funding facility | Minimum | |||||||||||||||||
Funding agreements | |||||||||||||||||
Covenant percentage of net proceeds raised in future equity issuances, used for computing tangible net worth to be maintained | 80.00% | ||||||||||||||||
Covenant percentage of tangible net worth at specified date used for computing tangible net worth to be maintained | 80.00% | ||||||||||||||||
Covenant amount of liquidity to be maintained | $ 5,000,000 | ||||||||||||||||
Citibank Facility | Secured revolving funding facility | Minimum | 30 day LIBOR | |||||||||||||||||
Funding agreements | |||||||||||||||||
Interest rate margin (as a percent) | 2.25% | 1.50% | |||||||||||||||
Citibank Facility | Secured revolving funding facility | Maximum | |||||||||||||||||
Funding agreements | |||||||||||||||||
Covenant ratio of debt to tangible net worth | 4 | ||||||||||||||||
Covenant ratio of recourse debt to tangible net worth | 3 | ||||||||||||||||
Covenant ratio of EBITDA to fixed charges | 1.25 | ||||||||||||||||
Covenant amount of liquidity to be maintained | $ 10,000,000 | ||||||||||||||||
Citibank Facility | Secured revolving funding facility | Maximum | 30 day LIBOR | |||||||||||||||||
Funding agreements | |||||||||||||||||
Interest rate margin (as a percent) | 2.50% | 2.25% | |||||||||||||||
BAML Facility | Secured revolving funding facility | |||||||||||||||||
Funding agreements | |||||||||||||||||
Number of extension periods available for maturity date | extension | 1 | 1 | 1 | ||||||||||||||
Extension period of maturity date | 12 months | ||||||||||||||||
Non-utilization fee on average available balance (as a percent) | 0.125% | ||||||||||||||||
Facility used on average (at least) (as a percent) | 50.00% | ||||||||||||||||
BAML Facility | Secured revolving funding facility | 30 day LIBOR | |||||||||||||||||
Funding agreements | |||||||||||||||||
Interest rate margin (as a percent) | 2.00% | ||||||||||||||||
BAML Facility | Secured funding facility | |||||||||||||||||
Funding agreements | |||||||||||||||||
Line of credit facility, maximum borrowing capacity | $ 125,000,000 | $ 125,000,000 | $ 125,000,000 | ||||||||||||||
Non-utilization fee | $ 43,000 | 21,000 | |||||||||||||||
Term of debt | 2 years | ||||||||||||||||
Line of credit facility, number of advances | Advance | 1 | 1 | 1 | ||||||||||||||
Line of credit facility, amount outstanding | $ 36,300,000 | $ 36,300,000 | $ 36,300,000 | ||||||||||||||
CNB Facility | CNB Facility | |||||||||||||||||
Funding agreements | |||||||||||||||||
Line of credit facility, maximum borrowing capacity | 50,000,000 | 50,000,000 | $ 50,000,000 | ||||||||||||||
Extension period of maturity date | 12 months | ||||||||||||||||
Non-utilization fee on average available balance (as a percent) | 0.375% | ||||||||||||||||
Non-utilization fee | $ 38,000 | 136,000 | 166,000 | ||||||||||||||
Covenant period immediately preceding on last date of applicable reporting period for maintaining fixed charge coverage ratio | 12 months | ||||||||||||||||
Line of credit facility, accordion feature, increase limit | $ 75,000,000 | $ 75,000,000 | $ 75,000,000 | ||||||||||||||
Line of credit facility, accordion feature, increase in limit period per calendar year | 120 days | ||||||||||||||||
Line of credit facility, accordion feature, additional extensions | extension | 2 | 2 | 2 | ||||||||||||||
CNB Facility | CNB Facility | LIBOR | |||||||||||||||||
Funding agreements | |||||||||||||||||
Interest rate margin (as a percent) | 2.65% | ||||||||||||||||
CNB Facility | CNB Facility | LIBOR for a one, two, three, six or 12-month | |||||||||||||||||
Funding agreements | |||||||||||||||||
Interest rate margin (as a percent) | 3.00% | ||||||||||||||||
CNB Facility | CNB Facility | One-month LIBOR | |||||||||||||||||
Funding agreements | |||||||||||||||||
Interest rate margin (as a percent) | 1.00% | ||||||||||||||||
CNB Facility | CNB Facility | Federal funds rate | |||||||||||||||||
Funding agreements | |||||||||||||||||
Interest rate margin (as a percent) | 0.50% | ||||||||||||||||
CNB Facility | CNB Facility | Base rate | |||||||||||||||||
Funding agreements | |||||||||||||||||
Interest rate margin (as a percent) | 1.25% | ||||||||||||||||
CNB Facility | CNB Facility | Minimum | |||||||||||||||||
Funding agreements | |||||||||||||||||
Facility used on average (at least) (as a percent) | 75.00% | ||||||||||||||||
Covenant percentage of net proceeds raised in future equity issuances, used for computing tangible net worth to be maintained | 80.00% | ||||||||||||||||
Covenant percentage of tangible net worth at specified date used for computing tangible net worth to be maintained | 80.00% | ||||||||||||||||
CNB Facility | CNB Facility | Minimum | LIBOR for a one, two, three, six or 12-month | |||||||||||||||||
Funding agreements | |||||||||||||||||
Interest rate margin (as a percent) | 2.65% | ||||||||||||||||
CNB Facility | CNB Facility | Maximum | |||||||||||||||||
Funding agreements | |||||||||||||||||
Covenant ratio of debt to tangible net worth | 4 | ||||||||||||||||
Covenant ratio of recourse debt to tangible net worth | 3 | ||||||||||||||||
Covenant ratio of EBITDA to fixed charges | 1.25 | ||||||||||||||||
MetLife Facility | Secured revolving funding facility | |||||||||||||||||
Funding agreements | |||||||||||||||||
Non-utilization fee on average available balance (as a percent) | 0.25% | ||||||||||||||||
Non-utilization fee | $ 7,000 | 5,000 | $ 7,000 | ||||||||||||||
Non-utilization threshold percentage (less than) (as a percent) | 65.00% | ||||||||||||||||
MetLife Facility | Revolving master repurchase facility | |||||||||||||||||
Funding agreements | |||||||||||||||||
Line of credit facility, maximum borrowing capacity | $ 180,000,000 | $ 180,000,000 | $ 180,000,000 | ||||||||||||||
Number of extension periods available for maturity date | extension | 2 | ||||||||||||||||
Extension period of maturity date | 12 months | ||||||||||||||||
Covenant period immediately preceding on last date of applicable reporting period for maintaining fixed charge coverage ratio | 12 months | ||||||||||||||||
MetLife Facility | Revolving master repurchase facility | 30 day LIBOR | |||||||||||||||||
Funding agreements | |||||||||||||||||
Interest rate margin (as a percent) | 2.50% | 2.30% | |||||||||||||||
MetLife Facility | Revolving master repurchase facility | Minimum | |||||||||||||||||
Funding agreements | |||||||||||||||||
Covenant percentage of tangible net worth at specified date used for computing tangible net worth to be maintained | 80.00% | ||||||||||||||||
MetLife Facility | Revolving master repurchase facility | Maximum | |||||||||||||||||
Funding agreements | |||||||||||||||||
Covenant ratio of debt to tangible net worth | 4 | ||||||||||||||||
Covenant ratio of recourse debt to tangible net worth | 3 | ||||||||||||||||
Covenant ratio of EBITDA to fixed charges | 1.25 | ||||||||||||||||
U.S. Bank Facility | Secured revolving funding facility | |||||||||||||||||
Funding agreements | |||||||||||||||||
Non-utilization fee on average available balance (as a percent) | 0.25% | ||||||||||||||||
U.S. Bank Facility | Revolving master repurchase facility | 30 day LIBOR | |||||||||||||||||
Funding agreements | |||||||||||||||||
Line of credit facility, maximum borrowing capacity | $ 186,000,000 | $ 186,000,000 | $ 186,000,000 | ||||||||||||||
Interest rate margin (as a percent) | 50.00% | ||||||||||||||||
Non-utilization fee | $ 216,000 | $ 246,000 | |||||||||||||||
U.S. Bank Facility | Revolving master repurchase facility | One-month LIBOR | |||||||||||||||||
Funding agreements | |||||||||||||||||
Interest rate margin (as a percent) | 2.25% | ||||||||||||||||
Notes payable and secured borrowings | |||||||||||||||||
Funding agreements | |||||||||||||||||
Maximum amount outstanding during period | $ 30,000,000 | ||||||||||||||||
Morgan Stanley Facility | Secured revolving funding facility | |||||||||||||||||
Funding agreements | |||||||||||||||||
Covenant liquidity to be maintained as percentage of recourse indebtedness | 5.00% | ||||||||||||||||
Morgan Stanley Facility | Secured revolving funding facility | Minimum | |||||||||||||||||
Funding agreements | |||||||||||||||||
Covenant amount of liquidity to be maintained | $ 5,000,000 | ||||||||||||||||
Morgan Stanley Facility | Secured revolving funding facility | Maximum | |||||||||||||||||
Funding agreements | |||||||||||||||||
Covenant ratio of debt to tangible net worth | 4 | ||||||||||||||||
Covenant ratio of recourse debt to tangible net worth | 3 | ||||||||||||||||
Covenant ratio of EBITDA to fixed charges | 1.25 | ||||||||||||||||
Covenant amount of liquidity to be maintained | $ 10,000,000 | ||||||||||||||||
Morgan Stanley Facility | Revolving master repurchase facility | |||||||||||||||||
Funding agreements | |||||||||||||||||
Line of credit facility, maximum borrowing capacity | $ 150,000,000 | ||||||||||||||||
Number of extension periods available for maturity date | extension | 2 | 2 | 2 | ||||||||||||||
Extension period of maturity date | 12 months | ||||||||||||||||
Morgan Stanley Facility | Revolving master repurchase facility | One-month LIBOR | |||||||||||||||||
Funding agreements | |||||||||||||||||
Interest rate margin (as a percent) | 2.25% | ||||||||||||||||
Morgan Stanley Facility | Revolving master repurchase facility | Minimum | |||||||||||||||||
Funding agreements | |||||||||||||||||
Covenant percentage of tangible net worth at specified date used for computing tangible net worth to be maintained | 80.00% | ||||||||||||||||
Morgan Stanley Facility | Revolving master repurchase facility | Minimum | One-month LIBOR | |||||||||||||||||
Funding agreements | |||||||||||||||||
Interest rate margin (as a percent) | 1.75% | ||||||||||||||||
NORTH CAROLINA | Notes payable and secured borrowings | |||||||||||||||||
Funding agreements | |||||||||||||||||
Outstanding balance | $ 40,500,000 | $ 24,400,000 | |||||||||||||||
Aggregate principal amount | $ 30,500,000 | ||||||||||||||||
NORTH CAROLINA | Notes Payable, Due March 05, 2024 | |||||||||||||||||
Funding agreements | |||||||||||||||||
Outstanding balance | $ 32,400,000 | ||||||||||||||||
NEW YORK | Notes Payable, Due June 10, 2024 | |||||||||||||||||
Funding agreements | |||||||||||||||||
Interest rate margin (as a percent) | 3.00% | ||||||||||||||||
NEW YORK | Notes payable and secured borrowings | Notes payable and secured borrowings | |||||||||||||||||
Funding agreements | |||||||||||||||||
Interest expense from real estate owned | $ 28,300,000 | ||||||||||||||||
NEW YORK | Notes payable and secured borrowings | Notes Payable, Due June 10, 2024 | |||||||||||||||||
Funding agreements | |||||||||||||||||
Number of extension periods available for maturity date | extension | 1 | 1 | 1 | ||||||||||||||
Extension period of maturity date | 6 months | ||||||||||||||||
Interest expense from real estate owned | $ 28,300,000 | ||||||||||||||||
SOUTH CAROLINA | Notes payable and secured borrowings | |||||||||||||||||
Funding agreements | |||||||||||||||||
Outstanding balance | $ 34,600,000 |
DEBT - Schedule of Maturity (De
DEBT - Schedule of Maturity (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Debt Instrument [Line Items] | |
2021 | $ 277,506 |
2022 | 447,092 |
2023 | 147,921 |
2024 | 56,155 |
2025 | 0 |
Thereafter | 0 |
Long-term debt | 928,674 |
Wells Fargo Facility | |
Debt Instrument [Line Items] | |
2021 | 0 |
2022 | 336,001 |
2023 | 0 |
2024 | 0 |
2025 | 0 |
Thereafter | 0 |
Long-term debt | 336,001 |
Citibank Facility | |
Debt Instrument [Line Items] | |
2021 | 117,506 |
2022 | 0 |
2023 | 0 |
2024 | 0 |
2025 | 0 |
Thereafter | 0 |
Long-term debt | 117,506 |
CNB Facility | |
Debt Instrument [Line Items] | |
2021 | 50,000 |
2022 | 0 |
2023 | 0 |
2024 | 0 |
2025 | 0 |
Thereafter | 0 |
Long-term debt | 50,000 |
MetLife Facility | |
Debt Instrument [Line Items] | |
2021 | 0 |
2022 | 104,124 |
2023 | 0 |
2024 | 0 |
2025 | 0 |
Thereafter | 0 |
Long-term debt | 104,124 |
Morgan Stanley Facility | |
Debt Instrument [Line Items] | |
2021 | 0 |
2022 | 0 |
2023 | 147,921 |
2024 | 0 |
2025 | 0 |
Thereafter | 0 |
Long-term debt | 147,921 |
Notes payable and secured borrowings | |
Debt Instrument [Line Items] | |
2021 | 0 |
2022 | 6,967 |
2023 | 0 |
2024 | 56,155 |
2025 | 0 |
Thereafter | 0 |
Long-term debt | 63,122 |
Secured term loan | |
Debt Instrument [Line Items] | |
2021 | 110,000 |
2022 | 0 |
2023 | 0 |
2024 | 0 |
2025 | 0 |
Thereafter | 0 |
Long-term debt | $ 110,000 |
SECURED BORROWINGS (Details)
SECURED BORROWINGS (Details) | Nov. 30, 2019USD ($) | Jun. 30, 2020USD ($)loan | Apr. 30, 2019USD ($)extension | Dec. 31, 2020USD ($)loan | Apr. 30, 2020extension | Feb. 28, 2020USD ($) | Dec. 31, 2019USD ($) | May 31, 2019USD ($) |
Debt Instrument [Line Items] | ||||||||
Number of secured borrowing arrangements | loan | 3 | |||||||
Outstanding balance | $ 928,674,000 | $ 894,744,000 | ||||||
Notes Payable | ||||||||
Debt Instrument [Line Items] | ||||||||
Outstanding balance | $ 23,500,000 | $ 7,000,000 | ||||||
Interest rate margin (as a percent) | 3.75% | |||||||
Extension period of maturity date | 12 months | |||||||
NORTH CAROLINA | Senior Mortgage Loans | ||||||||
Debt Instrument [Line Items] | ||||||||
Outstanding balance | $ 24,400,000 | |||||||
Extension period of maturity date | 12 months | |||||||
Number of extensions | extension | 1 | |||||||
NORTH CAROLINA | Notes Payable | ||||||||
Debt Instrument [Line Items] | ||||||||
Outstanding balance | $ 24,400,000 | $ 40,500,000 | ||||||
Aggregate principal amount | 30,500,000 | |||||||
Multifamily | FLORIDA | Subordinated Participation | ||||||||
Debt Instrument [Line Items] | ||||||||
Outstanding balance | $ 24,900,000 | |||||||
Multifamily | FLORIDA | Notes Payable | ||||||||
Debt Instrument [Line Items] | ||||||||
Outstanding balance | $ 6,100,000 | |||||||
Multifamily | FLORIDA | Participating Mortgages | ||||||||
Debt Instrument [Line Items] | ||||||||
Outstanding balance | $ 66,900,000 | 91,800,000 | ||||||
Interest rate margin (as a percent) | 2.94% | |||||||
Multifamily | FLORIDA | Senior Mortgage Loan Purchased | Subordinated Participation | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate margin (as a percent) | 10.50% | |||||||
Multifamily | FLORIDA | Senior Mortgage Loan Purchased | Subordinated participation notes, one-month LIBOR Plus 10.50% | ||||||||
Debt Instrument [Line Items] | ||||||||
Outstanding balance | $ 12,600,000 | 12,600,000 | ||||||
Extension period of maturity date | 12 months | |||||||
Number of extensions | loan | 1 | |||||||
Multifamily | FLORIDA | Senior Mortgage Loan Purchased | Notes Payable | ||||||||
Debt Instrument [Line Items] | ||||||||
Outstanding balance | 24,900,000 | |||||||
Extension period of maturity date | 12 months | |||||||
Number of extensions | extension | 1 | |||||||
Multifamily | FLORIDA | Senior Mortgage Loan Purchased | Participating Mortgages | ||||||||
Debt Instrument [Line Items] | ||||||||
Outstanding balance | $ 34,100,000 | 46,700,000 | ||||||
Interest rate margin (as a percent) | 2.94% | |||||||
Office | NORTH CAROLINA | Senior Mortgage Loan, Due May 5, 2023 | ||||||||
Debt Instrument [Line Items] | ||||||||
Outstanding balance | $ 22,700,000 | |||||||
Interest rate margin (as a percent) | 2.50% |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Commitments to Fund (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||
Total commitments | $ 2,013,993 | $ 1,909,084 |
Less: funded commitments | (1,826,241) | (1,692,894) |
Total unfunded commitments | $ 187,752 | $ 216,190 |
STOCKHOLDERS' EQUITY - Narrativ
STOCKHOLDERS' EQUITY - Narrative (Details) - USD ($) | Jan. 30, 2020 | Jan. 22, 2020 | Nov. 22, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2018 |
Class of Stock [Line Items] | |||||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||||
Cost not yet recognized, amount | $ 3,700,000 | $ 3,100,000 | $ 2,300,000 | ||||
Period for recognition | 2 years 3 months 18 days | 2 years 3 months 18 days | 2 years 1 month 6 days | ||||
Restricted stock | Amended and Restated 2012 Equity Incentive Plan | |||||||
Class of Stock [Line Items] | |||||||
Shares available for grant (in shares) | 1,390,000 | ||||||
Common Stock | |||||||
Class of Stock [Line Items] | |||||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||||
Sale of common stock (in shares) | 600,000 | 4,000,000 | |||||
Proceeds from issuance of common stock | $ 9,600,000 | $ 63,300,000 | |||||
Over-Allotment Option | Common Stock | |||||||
Class of Stock [Line Items] | |||||||
Sale of common stock (in shares) | 600,000 | ||||||
Maximum | Restricted Stock and Restricted Stock Units | |||||||
Class of Stock [Line Items] | |||||||
Award vesting period | 4 years | ||||||
Maximum | Common Stock | |||||||
Class of Stock [Line Items] | |||||||
Sale of stock, consideration received on transaction | $ 100,000,000 | ||||||
Minimum | Restricted Stock and Restricted Stock Units | |||||||
Class of Stock [Line Items] | |||||||
Award vesting period | 1 year |
STOCKHOLDERS' EQUITY - Disclosu
STOCKHOLDERS' EQUITY - Disclosures (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Restricted stock activity | |||
Balance at the beginning of the period (in shares) | 285,393 | ||
Granted (in shares) | 263,442 | ||
Vested (in shares) | (109,346) | ||
Forfeited (in shares) | (80,807) | ||
Balance at the end of the period (in shares) | 358,682 | 285,393 | |
Future Anticipated Vesting Schedule | |||
2021 (in shares) | 97,608 | ||
2022 (in shares) | 118,253 | ||
2023 (in shares) | 89,160 | ||
2024 (in shares) | 53,661 | ||
2025 (in shares) | 0 | ||
Total (in shares) | 358,682 | ||
Restricted Stock and Restricted Stock Units | |||
Share-based Payment Arrangement, Noncash Expense [Abstract] | |||
Compensation expense | $ 1,339,000 | $ 1,880,000 | |
Total fair value of shares vested | 1,164,000 | 1,312,000 | |
Weighted average grant date fair value | 3,190,000 | 2,829,000 | |
Restricted Stock and Restricted Stock Units | Directors | |||
Share-based Payment Arrangement, Noncash Expense [Abstract] | |||
Compensation expense | 319,000 | 343,000 | |
Total fair value of shares vested | 315,000 | 373,000 | |
Weighted average grant date fair value | 292,000 | 302,000 | |
Restricted Stock and Restricted Stock Units | Officers and Employees of the Manager | |||
Share-based Payment Arrangement, Noncash Expense [Abstract] | |||
Compensation expense | 1,020,000 | 1,537,000 | |
Total fair value of shares vested | 849,000 | 939,000 | |
Weighted average grant date fair value | $ 2,898,000 | $ 2,527,000 | |
Restricted stock | |||
Share-based Payment Arrangement, Noncash Expense [Abstract] | |||
Compensation expense | $ 1,102,000 | ||
Total fair value of shares vested | 854,000 | ||
Weighted average grant date fair value | 2,186,000 | ||
Restricted stock | Directors | |||
Restricted stock activity | |||
Balance at the beginning of the period (in shares) | 12,332 | ||
Granted (in shares) | 42,985 | ||
Vested (in shares) | (32,993) | ||
Forfeited (in shares) | 0 | ||
Balance at the end of the period (in shares) | 22,324 | 12,332 | |
Future Anticipated Vesting Schedule | |||
2021 (in shares) | 22,324 | ||
2022 (in shares) | 0 | ||
2023 (in shares) | 0 | ||
2024 (in shares) | 0 | ||
2025 (in shares) | 0 | ||
Total (in shares) | 22,324 | ||
Share-based Payment Arrangement, Noncash Expense [Abstract] | |||
Compensation expense | 427,000 | ||
Total fair value of shares vested | 405,000 | ||
Weighted average grant date fair value | 427,000 | ||
Restricted stock | Officers and Employees of the Manager | |||
Restricted stock activity | |||
Balance at the beginning of the period (in shares) | 211,467 | ||
Granted (in shares) | 0 | ||
Vested (in shares) | (65,742) | ||
Forfeited (in shares) | (76,874) | ||
Balance at the end of the period (in shares) | 68,851 | 211,467 | |
Future Anticipated Vesting Schedule | |||
2021 (in shares) | 39,775 | ||
2022 (in shares) | 29,076 | ||
2023 (in shares) | 0 | ||
2024 (in shares) | 0 | ||
2025 (in shares) | 0 | ||
Total (in shares) | 68,851 | ||
Share-based Payment Arrangement, Noncash Expense [Abstract] | |||
Compensation expense | 675,000 | ||
Total fair value of shares vested | 449,000 | ||
Weighted average grant date fair value | $ 1,759,000 | ||
Restricted Stock Units (RSUs) | Officers and Employees of the Manager | |||
Restricted stock activity | |||
Balance at the beginning of the period (in shares) | 61,594 | ||
Granted (in shares) | 220,457 | ||
Vested (in shares) | (10,611) | ||
Forfeited (in shares) | (3,933) | ||
Balance at the end of the period (in shares) | 267,507 | 61,594 | |
Future Anticipated Vesting Schedule | |||
2021 (in shares) | 35,509 | ||
2022 (in shares) | 89,177 | ||
2023 (in shares) | 89,160 | ||
2024 (in shares) | 53,661 | ||
2025 (in shares) | 0 | ||
Total (in shares) | 267,507 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |||
Net income attributable to common stockholders | $ 21,840 | $ 36,991 | $ 38,596 |
Divided by: | |||
Basic weighted average shares of common stock outstanding (in shares) | 32,977,462 | 28,609,282 | 28,529,439 |
Weighted average non-vested restricted stock and RSUs (in shares) | 219,046 | 237,359 | 127,221 |
Diluted weighted average shares of common stock outstanding (in shares) | 33,196,508 | 28,846,641 | 28,656,660 |
Basic earnings per common share (in dollars per share) | $ 0.66 | $ 1.29 | $ 1.35 |
Diluted earnings per common share (in dollars per share) | $ 0.66 | $ 1.28 | $ 1.35 |
INCOME TAX - Schedule of Compon
INCOME TAX - Schedule of Components of Income Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Components of the company's income tax provision | |||
Total income tax expense, including excise tax | $ 352 | $ 515 | $ 446 |
Excise tax rate | 4.00% | ||
ACRE Capital Sale | |||
Components of the company's income tax provision | |||
Current | $ 82 | 114 | 84 |
Deferred | (99) | 99 | 0 |
Excise tax | 369 | 302 | 362 |
Total income tax expense, including excise tax | $ 352 | $ 515 | $ 446 |
FAIR VALUE - Carrying Value and
FAIR VALUE - Carrying Value and Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Financial assets: | ||
Loans held for investment | $ 1,815,219 | $ 1,682,498 |
Financial liabilities: | ||
Collateralized loan obligation securitization debt (consolidated VIE) | 443,871 | 443,177 |
Carrying Value | ||
Financial assets: | ||
Loans held for investment | 1,815,219 | 1,682,498 |
Financial liabilities: | ||
Secured funding agreements | 755,552 | 728,589 |
Notes payable | 61,837 | 54,708 |
Secured term loan | 110,000 | 109,149 |
Collateralized loan obligation securitization debt (consolidated VIE) | 443,871 | 443,177 |
Secured borrowings | 59,790 | 0 |
Fair Value | Level 2 | ||
Financial liabilities: | ||
Secured funding agreements | 755,552 | 728,589 |
Fair Value | Level 3 | ||
Financial assets: | ||
Loans held for investment | 1,800,003 | 1,692,894 |
Financial liabilities: | ||
Notes payable | 63,122 | 56,155 |
Secured term loan | 110,000 | 110,000 |
Collateralized loan obligation securitization debt (consolidated VIE) | 443,467 | 445,600 |
Secured borrowings | $ 60,215 | $ 0 |
RELATED PARTY TRANSACTIONS - Na
RELATED PARTY TRANSACTIONS - Narrative (Details) | Nov. 20, 2020USD ($)loan | Nov. 30, 2020USD ($) | Jan. 31, 2020USD ($) | Jun. 30, 2020USD ($) | Dec. 31, 2020USD ($)quarter | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Related Party Transaction [Line Items] | |||||||
Management fee renewal term | 1 year | ||||||
Management agreement termination, termination fee times average annual base management free and incentive fees received | 300.00% | ||||||
Management fee look back period | 24 months | ||||||
Loans held for investment | $ 1,815,219,000 | $ 1,682,498,000 | |||||
Outstanding principal | $ 1,826,241,000 | 1,692,894,000 | |||||
Number of related party loans | loan | 2 | ||||||
ACREM | |||||||
Related Party Transaction [Line Items] | |||||||
Base management fees as a percentage of stockholders' equity per annum | 1.50% | ||||||
Incentive fee payable (not less than) | $ 0 | ||||||
Percentage multiplied to arrive at first value affecting calculation of incentive fees | 20.00% | ||||||
Previous period for which core earnings are considered to arrive at first value affecting calculation of incentive fees | 12 months | ||||||
Previous period for product of weighted average price per share and weighted average number of shares of common stock and other shares | 12 months | ||||||
Percentage multiplied to arrive at difference of first value affecting calculation of incentive fees | 8.00% | ||||||
Period whose fiscal quarters are considered to arrive at first value affecting calculation of incentive fees | 12 months | ||||||
Minimum cumulative core earnings, number of quarters | quarter | 12 | ||||||
Minimum cumulative core earnings for calculation of incentive fee | $ 0 | ||||||
Residential | |||||||
Related Party Transaction [Line Items] | |||||||
Loans held for investment | 45,100,000 | 40,900,000 | |||||
Continuing Operations | ACREM | |||||||
Related Party Transaction [Line Items] | |||||||
Incentive fees incurred | 11,912,000 | 10,581,000 | $ 11,212,000 | ||||
Incentive fees | Continuing Operations | ACREM | |||||||
Related Party Transaction [Line Items] | |||||||
Incentive fees incurred | 836,000 | $ 1,052,000 | $ 1,150,000 | ||||
Senior Mortgage Loans | Loan Purchase Commitments | Industrial Property | |||||||
Related Party Transaction [Line Items] | |||||||
Outstanding principal | 200,000,000 | ||||||
Senior Mortgage Loans | NORTH CAROLINA | Loan Purchase Commitments | Industrial Property | |||||||
Related Party Transaction [Line Items] | |||||||
Outstanding principal | $ 107,100,000 | ||||||
Loan purchased from affiliate | $ 132,600,000 | ||||||
Senior Mortgage Loans | FLORIDA | Loan Purchase Commitments | Multifamily | |||||||
Related Party Transaction [Line Items] | |||||||
Outstanding principal | $ 46,200,000 | ||||||
Loan purchased from affiliate | $ 46,700,000 | ||||||
Senior Mortgage Loans | ILLINOIS | Loan Purchase Commitments | Office | |||||||
Related Party Transaction [Line Items] | |||||||
Outstanding principal | $ 8,500,000 | ||||||
Loan purchased from affiliate | 8,500,000 | ||||||
Senior Mortgage Loans | ILLINOIS | Loan Purchase Commitments | Office | Ares Warehouse Vehicle | |||||||
Related Party Transaction [Line Items] | |||||||
Outstanding principal | 114,000,000 | ||||||
Mezzanine Senior Mortgage Loan | ILLINOIS | Loan Purchase Commitments | Office | |||||||
Related Party Transaction [Line Items] | |||||||
Outstanding principal | 37,600,000 | $ 37,600,000 | |||||
Senior Pari-passu Notes | ILLINOIS | Loan Purchase Commitments | Office | |||||||
Related Party Transaction [Line Items] | |||||||
Outstanding principal | $ 8,500,000 | ||||||
Senior Pari-passu Notes | ILLINOIS | Loan Purchase Commitments | Office | Ares Warehouse Vehicle | |||||||
Related Party Transaction [Line Items] | |||||||
Outstanding principal | $ 105,500,000 |
RELATED PARTY TRANSACTIONS - Re
RELATED PARTY TRANSACTIONS - Related Party Costs Incurred (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Related Party Transaction [Line Items] | |||
Payable | $ 3,150 | $ 2,761 | |
ACREM | Continuing Operations | |||
Related Party Transaction [Line Items] | |||
Incurred | 11,912 | 10,581 | $ 11,212 |
Payable | 3,150 | 2,761 | |
ACREM | Continuing Operations | Management fees | |||
Related Party Transaction [Line Items] | |||
Incurred | 7,323 | 6,311 | 6,268 |
Payable | 1,854 | 1,581 | |
ACREM | Continuing Operations | Incentive fees | |||
Related Party Transaction [Line Items] | |||
Incurred | 836 | 1,052 | 1,150 |
Payable | 533 | 378 | |
ACREM | Continuing Operations | General and administrative expenses | |||
Related Party Transaction [Line Items] | |||
Incurred | 3,653 | 3,026 | 3,570 |
Payable | 762 | 789 | |
ACREM | Continuing Operations | Direct costs | |||
Related Party Transaction [Line Items] | |||
Incurred | 100 | 192 | $ 224 |
Payable | $ 1 | $ 13 |
DIVIDENDS AND DISTRIBUTIONS (De
DIVIDENDS AND DISTRIBUTIONS (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 15, 2020 | Sep. 16, 2020 | Jun. 19, 2020 | Feb. 20, 2020 | Nov. 08, 2019 | Jul. 26, 2019 | May 01, 2019 | Feb. 21, 2019 | Oct. 30, 2018 | Jun. 26, 2018 | May 01, 2018 | Mar. 01, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
DIVIDENDS AND DISTRIBUTIONS | |||||||||||||||
Dividends per share amount declared (in dollars per share) | $ 0.33 | $ 0.33 | $ 0.33 | $ 0.33 | $ 0.33 | $ 0.33 | $ 0.33 | $ 0.33 | $ 0.31 | $ 0.29 | $ 0.28 | $ 0.28 | $ 1.32 | $ 1.32 | $ 1.16 |
Total cash dividends | $ 11,124 | $ 11,072 | $ 11,072 | $ 11,057 | $ 9,546 | $ 9,526 | $ 9,527 | $ 9,520 | $ 8,914 | $ 8,323 | $ 8,036 | $ 8,008 | $ 44,325 | $ 38,119 | $ 33,281 |
VARIABLE INTEREST ENTITIES - Na
VARIABLE INTEREST ENTITIES - Narrative (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2019loan | Dec. 31, 2020USD ($)loan | Jan. 16, 2023 | Dec. 31, 2019USD ($) | Jan. 11, 2019USD ($) | Mar. 31, 2017USD ($) | |
Variable Interest Entity [Line Items] | ||||||
Debt commitment | $ 928,674 | |||||
Financing receivable, unpaid principal balance | 6,400 | |||||
Loans held for investment | 1,815,219 | $ 1,682,498 | ||||
Credit risk, financial instrument, maximum exposure | $ 111,400 | |||||
Floating Rate Notes, Weighted Average Coupon Rate, LIBOR Plus 1.85% | ||||||
Variable Interest Entity [Line Items] | ||||||
Number of properties collateralized for mortgage loan | loan | 16 | 15 | ||||
Receivables related to repayments of outstanding principal | $ 550,600 | 41,100 | ||||
Collateral amount | $ 515,900 | |||||
Parent Company | Offered Certificates | ||||||
Variable Interest Entity [Line Items] | ||||||
Preferred equity fully funded amount | 52,900 | |||||
Parent Company | Secured funding agreements | ||||||
Variable Interest Entity [Line Items] | ||||||
Loans held for investment | 111,400 | |||||
Holdco | Mortgaged Assets | ||||||
Variable Interest Entity [Line Items] | ||||||
Principal amount of certificates retained by wholly owned subsidiary of the entity | $ 58,500 | |||||
Wells Fargo Facility | Notes payable and secured borrowings | ||||||
Variable Interest Entity [Line Items] | ||||||
Debt commitment | $ 308,800 | |||||
Wells Fargo Facility | Notes payable and secured borrowings | 2019 FL3 CLO Securitization | ||||||
Variable Interest Entity [Line Items] | ||||||
Debt commitment | $ 504,100 | |||||
Wells Fargo Facility | ||||||
Variable Interest Entity [Line Items] | ||||||
Debt instrument, preferred equity component | $ 32,400 | |||||
Wells Fargo Facility | 2019 FL3 CLO Securitization | ||||||
Variable Interest Entity [Line Items] | ||||||
Debt instrument, preferred equity component | $ 52,900 | |||||
Forecast | Holdco | Offered Notes, Class A, A-S, Class B and Class C | ||||||
Variable Interest Entity [Line Items] | ||||||
Prepayment fee, percent | 1.00% | |||||
Forecast | Holdco | Offered Notes, Class D | ||||||
Variable Interest Entity [Line Items] | ||||||
Prepayment fee, percent | 1.00% |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) $ / shares in Units, $ in Thousands | Feb. 17, 2021$ / shares | Jan. 28, 2021USD ($)loan | Dec. 15, 2020$ / shares | Sep. 16, 2020$ / shares | Jun. 19, 2020$ / shares | Feb. 20, 2020$ / shares | Nov. 08, 2019$ / shares | Jul. 26, 2019$ / shares | May 01, 2019$ / shares | Feb. 21, 2019$ / shares | Oct. 30, 2018$ / shares | Jun. 26, 2018$ / shares | May 01, 2018$ / shares | Mar. 01, 2018$ / shares | Dec. 31, 2020USD ($)$ / shares | Dec. 31, 2019USD ($)$ / shares | Dec. 31, 2018$ / shares | Feb. 16, 2021USD ($) |
Subsequent Event [Line Items] | ||||||||||||||||||
Outstanding principal | $ 1,826,241 | $ 1,692,894 | ||||||||||||||||
Loans held for investment | 1,815,219 | $ 1,682,498 | ||||||||||||||||
Sale of common stock | $ 73,232 | |||||||||||||||||
Dividends per share amount declared (in dollars per share) | $ / shares | $ 0.33 | $ 0.33 | $ 0.33 | $ 0.33 | $ 0.33 | $ 0.33 | $ 0.33 | $ 0.33 | $ 0.31 | $ 0.29 | $ 0.28 | $ 0.28 | $ 1.32 | $ 1.32 | $ 1.16 | |||
Subsequent Event | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Dividends per share amount declared (in dollars per share) | $ / shares | $ 0.33 | |||||||||||||||||
Supplemental cash dividend declared (in dollars per share) | $ / shares | $ 0.02 | |||||||||||||||||
Subsequent Event | Interest Rate Swap | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Notional amount | $ 870,000 | |||||||||||||||||
Derivative, floor interest rate | 0.00% | |||||||||||||||||
Derivative, Fixed Interest Rate | 0.2075% | |||||||||||||||||
Subsequent Event | Interest Rate Cap | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Notional amount | $ 275,000 | |||||||||||||||||
Derivative, floor interest rate | 0.50% | |||||||||||||||||
Subsequent Event | ACRE Commercial Mortgage 2021-FL4 Ltd. and ACRE Commercial Mortgage 2021-FL4 LLC | Preferred Stock | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Sale of common stock | $ 64,300 | |||||||||||||||||
Subsequent Event | Wholly Owned Subsidiary To Parent Company | ACRE Commercial Mortgage 2021-FL4 Ltd. and ACRE Commercial Mortgage 2021-FL4 LLC | Preferred Stock | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Sale of common stock | 64,300 | |||||||||||||||||
Subsequent Event | Secured, Floating Rate Notes | ACRE Commercial Mortgage 2021-FL4 Ltd. and ACRE Commercial Mortgage 2021-FL4 LLC | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Collateral amount | $ 667,300 | |||||||||||||||||
Number of mortgage assets pooled for collateral | loan | 23 | |||||||||||||||||
Aggregate principal amount | $ 603,000 | |||||||||||||||||
Subsequent Event | Secured, Floating Rate Notes | Wholly Owned Subsidiary To Parent Company | ACRE Commercial Mortgage 2021-FL4 Ltd. and ACRE Commercial Mortgage 2021-FL4 LLC | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Collateral amount | 126,800 | |||||||||||||||||
Aggregate principal amount | 62,500 | |||||||||||||||||
Subsequent Event | Office | Senior Mortgage Loans | ILLINOIS | LIBOR Plus 2.15%, Due January 2024 | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Outstanding principal | 105,500 | |||||||||||||||||
Loans held for investment | $ 103,600 | |||||||||||||||||
Term of debt | 3 years | |||||||||||||||||
Subsequent Event | Office | Senior Mortgage Loans | ILLINOIS | LIBOR Plus 2.15%, Due January 2024 | LIBOR | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Basis spread on variable rate | 2.15% | |||||||||||||||||
Subsequent Event | Self Storage | Senior Mortgage Loans | ILLINOIS | LIBOR Plus 3.00%, Due January 2024 | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Outstanding principal | $ 5,600 | |||||||||||||||||
Loans held for investment | $ 5,400 | |||||||||||||||||
Term of debt | 3 years | |||||||||||||||||
Subsequent Event | Self Storage | Senior Mortgage Loans | ILLINOIS | LIBOR Plus 3.00%, Due January 2024 | LIBOR | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Basis spread on variable rate | 3.00% | |||||||||||||||||
Subsequent Event | Self Storage | Senior Mortgage Loans | FLORIDA | LIBOR Plus 2.90%, Due January 2024 | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Outstanding principal | $ 6,400 | |||||||||||||||||
Term of debt | 3 years | |||||||||||||||||
Subsequent Event | Self Storage | Senior Mortgage Loans | FLORIDA | LIBOR Plus 2.90%, Due January 2024 | LIBOR | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Basis spread on variable rate | 2.90% | |||||||||||||||||
Subsequent Event | Self Storage | Senior Mortgage Loans | FLORIDA | LIBOR Plus 2.90%, Due January 2024, Instrument Two | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Outstanding principal | $ 4,400 | |||||||||||||||||
Term of debt | 3 years | |||||||||||||||||
Subsequent Event | Self Storage | Senior Mortgage Loans | FLORIDA | LIBOR Plus 2.90%, Due January 2024, Instrument Two | LIBOR | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Basis spread on variable rate | 2.90% | |||||||||||||||||
Subsequent Event | Self Storage | Senior Mortgage Loans | FLORIDA | LIBOR Plus 2.90%, Due January 2024, Instrument Three | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Outstanding principal | $ 7,000 | |||||||||||||||||
Term of debt | 3 years | |||||||||||||||||
Subsequent Event | Self Storage | Senior Mortgage Loans | FLORIDA | LIBOR Plus 2.90%, Due January 2024, Instrument Three | LIBOR | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Basis spread on variable rate | 2.90% | |||||||||||||||||
Subsequent Event | Self Storage | Senior Mortgage Loans | FLORIDA | LIBOR Plus 2.90%, Due January 2024, Instrument Four | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Outstanding principal | $ 10,800 | |||||||||||||||||
Term of debt | 3 years | |||||||||||||||||
Subsequent Event | Self Storage | Senior Mortgage Loans | FLORIDA | LIBOR Plus 2.90%, Due January 2024, Instrument Four | LIBOR | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Basis spread on variable rate | 2.90% | |||||||||||||||||
Subsequent Event | Self Storage | Senior Mortgage Loans | MISSOURI | LIBOR Plus 3.00%, Due January 2024 | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Outstanding principal | $ 6,500 | |||||||||||||||||
Loans held for investment | $ 5,900 | |||||||||||||||||
Term of debt | 3 years | |||||||||||||||||
Subsequent Event | Self Storage | Senior Mortgage Loans | MISSOURI | LIBOR Plus 3.00%, Due January 2024 | LIBOR | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Basis spread on variable rate | 3.00% |