Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | Apr. 30, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Benefit Street Partners Realty Trust, Inc. | |
Entity Central Index Key | 1,562,528 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 31,759,537 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 | |
ASSETS | |||
Cash and cash equivalents | $ 148,372 | $ 118,048 | |
Restricted cash | 5,107 | 5,021 | |
Commercial mortgage loans, held for investment, net of allowance of $2,793 and $2,188 | [1] | 1,008,864 | 1,046,556 |
Commercial mortgage loans, held-for-sale, measured at fair value | 53,305 | 21,179 | |
Real estate securities, available for sale, at fair value | 25,733 | 49,049 | |
Receivable for loan repayment | 6,401 | 401 | |
Accrued interest receivable | [2] | 5,805 | 5,955 |
Prepaid expenses and other assets | 1,691 | 1,916 | |
Total assets | 1,255,278 | 1,248,125 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Collateralized loan obligations | 229,088 | 278,450 | |
Interest payable | [3] | 997 | 897 |
Distributions payable | 5,562 | 5,591 | |
Accounts payable and accrued expenses | 1,461 | 1,170 | |
Due to affiliates | 3,741 | 4,064 | |
Total liabilities | 633,971 | 614,475 | |
Commitments and Contingencies | |||
Preferred stock, $0.01 par value, 50,000,000 authorized, none issued and outstanding as of March 31, 2017 and December 31, 2016 | 0 | 0 | |
Common stock, $0.01 par value, 949,999,000 shares authorized, 31,673,924 and 31,884,631 shares issued and outstanding as of March 31, 2017 and December 31, 2016, respectively | 317 | 319 | |
Additional paid-in capital | 700,792 | 704,500 | |
Accumulated other comprehensive income (loss) | 888 | (500) | |
Accumulated deficit | (80,690) | (70,669) | |
Total stockholders' equity | 621,307 | 633,650 | |
Total liabilities and stockholders' equity | 1,255,278 | 1,248,125 | |
Allowance for loan losses | 2,793 | 2,181 | |
Commercial mortgage loans | |||
ASSETS | |||
Real estate securities, available for sale, at fair value | 25,733 | 49,049 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Repurchase agreements | 340,948 | 257,664 | |
Real estate securities | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Repurchase agreements | 52,174 | 66,639 | |
Variable Interest Entity, Primary Beneficiary | |||
ASSETS | |||
Cash and cash equivalents | 5 | 5 | |
Commercial mortgage loans, held for investment, net of allowance of $2,793 and $2,188 | 367,810 | 417,057 | |
Accrued interest receivable | 1,006 | 1,101 | |
Total assets | 368,821 | 418,163 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Interest payable | 535 | 564 | |
Total liabilities | 285,425 | 334,810 | |
Allowance for loan losses | 1,160 | 1,017 | |
Loans pledged as collateral | $ 367,800 | $ 417,100 | |
[1] | Includes $367.8 million and $417.1 million of loans net of allowance of $1.2 million and $1.0 million pledged as collateral on collateralized loan obligations ("CLO"), a variable interest entity ("VIE") as of March 31, 2017 and December 31, 2016, respectively. | ||
[2] | Includes $1.0 million and $1.1 million of interest receivable for loans pledged as collateral on CLO, a VIE as of March 31, 2017 and December 31, 2016, respectively. | ||
[3] | Includes $0.5 million and $0.6 million of interest payable for loans pledged as collateral on CLO, a VIE as of March 31, 2017 and December 31, 2016, respectively. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 | |
Allowance for loan losses | $ 2,793 | $ 2,181 | |
Preferred stock, par value per share (in dollars per share) | $ 0.01 | $ 0.01 | |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 | |
Preferred stock, shares issued (in shares) | 0 | 0 | |
Preferred stock, shares outstanding (in shares) | 0 | 0 | |
Common stock, par value per share (in dollars per share) | $ 0.01 | $ 0.01 | |
Common stock, shares authorized (in shares) | 949,999,000 | 949,999,000 | |
Common stock, shares issued (in shares) | 31,673,924 | 31,884,631 | |
Common stock, shares outstanding (in shares) | 31,673,924 | 31,884,631 | |
Interest receivable | [1] | $ 5,805 | $ 5,955 |
Interest payable | [2] | 997 | 897 |
Variable Interest Entity, Primary Beneficiary | |||
Allowance for loan losses | 1,160 | 1,017 | |
Interest receivable | 1,006 | 1,101 | |
Interest payable | $ 535 | $ 564 | |
[1] | Includes $1.0 million and $1.1 million of interest receivable for loans pledged as collateral on CLO, a VIE as of March 31, 2017 and December 31, 2016, respectively. | ||
[2] | Includes $0.5 million and $0.6 million of interest payable for loans pledged as collateral on CLO, a VIE as of March 31, 2017 and December 31, 2016, respectively. |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Interest Income: | ||
Interest income | $ 18,879 | $ 20,291 |
Less: Interest expense | 5,428 | 4,768 |
Net interest income | 13,451 | 15,523 |
Operating Expenses: | ||
Asset management and subordinated performance fee | 2,312 | 3,010 |
Acquisition fees and acquisition expenses | 624 | 157 |
Administrative services expenses | 855 | 816 |
Professional fees | 767 | 1,261 |
Other expenses | 606 | 694 |
Total Operating Expenses | 5,164 | 5,938 |
Loan loss provision | 612 | 165 |
Realized loss on loans held for sale | 247 | 0 |
Realized loss on sale of real estate securities | 29 | 0 |
Unrealized losses on loans held-for-sale | 1,350 | 0 |
Net income | $ 6,049 | $ 9,420 |
Basic net income per share (in dollars per share) | $ 0.19 | $ 0.30 |
Diluted net income per share (in dollars per share) | $ 0.19 | $ 0.30 |
Basic weighted average shares outstanding (in shares) | 31,740,256 | 31,548,897 |
Diluted weighted average shares outstanding (in shares) | 31,750,045 | 31,555,011 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 6,049 | $ 9,420 |
Unrealized gain/(loss) on available-for-sale securities | 1,388 | (4,964) |
Comprehensive income attributable to Benefit Street Partners Realty Trust, Inc. | $ 7,437 | $ 4,456 |
Consolidated Statement of Chang
Consolidated Statement of Changes In Stockholders' Equity (Unaudited) - 3 months ended Mar. 31, 2017 - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income | Accumulated Deficit |
Balance, shares at Dec. 31, 2016 | 31,884,631 | ||||
Balance at Dec. 31, 2016 | $ 633,650 | $ 319 | $ 704,500 | $ (500) | $ (70,669) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Common stock repurchases (in shares) | (496,678) | ||||
Common stock repurchases | (9,459) | $ (5) | (9,454) | ||
Common stock issued through distribution reinvestment plan (in shares) | 285,971 | ||||
Common stock issued through distribution reinvestment plan | 5,734 | $ 3 | 5,731 | ||
Share-based compensation (in shares) | 0 | ||||
Share-based compensation | 15 | 15 | |||
Net income | 6,049 | 6,049 | |||
Distributions declared | (16,070) | (16,070) | |||
Other comprehensive income | 1,388 | 1,388 | |||
Balance, shares at Mar. 31, 2017 | 31,673,924 | ||||
Balance at Mar. 31, 2017 | $ 621,307 | $ 317 | $ 700,792 | $ 888 | $ (80,690) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash flows from operating activities: | ||
Net income | $ 6,049 | $ 9,420 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Premium amortization and (discount accretion), net | (634) | (575) |
Accretion of deferred commitment fees | (538) | (382) |
Amortization of deferred financing costs | 694 | 541 |
Share-based compensation | 15 | 9 |
Change in unrealized losses on loans held for sale | 1,597 | 0 |
Change in unrealized losses on real estate securities | 29 | 0 |
Loan loss provision | 612 | 165 |
Changes in assets and liabilities: | ||
Accrued interest receivable | 688 | 582 |
Prepaid expenses and other assets | (41) | (35) |
Accounts payable and accrued expenses | 291 | 155 |
Due to affiliates | (323) | 76 |
Interest payable | 100 | 132 |
Net cash provided by operating activities | 8,539 | 10,088 |
Cash flows from investing activities: | ||
Origination and purchase of commercial mortgage loans | (93,884) | (9,697) |
Proceeds from sale of commercial mortgage loans | 24,681 | 0 |
Proceeds from sale of commercial mortgage loans | 11,790 | 0 |
Principal repayments received on commercial mortgage loans | 80,079 | 9,253 |
Principal repayments received on real estate securities | 0 | 928 |
Net cash provided by investing activities | 22,666 | 484 |
Cash flows from financing activities: | ||
Common stock repurchases | (9,459) | (6,003) |
Repayments of collateralized loan obligations | (49,456) | 0 |
Borrowings on repurchase agreements - commercial mortgage loans | 89,085 | 85,614 |
Repayments of repurchase agreements - commercial mortgage loans | (5,801) | (48,270) |
Borrowings on repurchase agreements - real estate securities | 196,503 | 319,001 |
Repayments of repurchase agreements - real estate securities | (210,968) | (315,763) |
Increase in restricted cash related to financing activities | (86) | (1,132) |
Payments of deferred financing costs | (334) | 0 |
Distributions paid | (10,365) | (9,619) |
Net cash (used in) provided by financing activities | (881) | 23,828 |
Net change in cash and cash equivalents | 30,324 | 34,400 |
Cash and cash equivalents, beginning of period | 118,048 | 14,807 |
Cash and cash equivalents, end of period | 148,372 | 49,207 |
Supplemental disclosures of cash flow information: | ||
Interest paid | 4,634 | 4,095 |
Supplemental disclosures of non-cash flow information: | ||
Distributions payable | 5,562 | 5,530 |
Common stock issued through distribution reinvestment plan | 5,734 | 6,582 |
Loans transferred to commercial real estate loans, held-for-sale, transferred at fair value | $ 45,513 | $ 0 |
Organization and Business Opera
Organization and Business Operations | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business Operations | Organization and Business Operations Benefit Street Partners Realty Trust, Inc. (the "Company"), formerly known as Realty Finance Trust, Inc., is a real estate finance company that primarily originates, acquires and manages a diversified portfolio of commercial real estate debt secured by properties located both within and outside of the United States. The Company was incorporated in Maryland on November 15, 2012. The Company made a tax election to be treated as a real estate investment trust ("REIT") for U.S. federal income tax purposes commencing with its taxable year ended December 31, 2013. The Company believes that it has qualified as a REIT and intends to continue to meet the requirements for qualification and taxation as a REIT. On May 14, 2013, the Company commenced business operations after raising in excess of $2.0 million of equity, the amount required for the Company to release equity proceeds from escrow. Substantially all of the Company's business is conducted through Benefit Street Partners Realty Operating Partnership, L.P. (the “OP”), a Delaware limited partnership. The Company is the sole general partner and directly or indirectly holds all of the units of limited partner interests in the OP. The Company has no direct employees. Benefit Street Partners L.L.C. serves as the Company's advisor (the "Advisor") pursuant to an advisory agreement executed on September 29, 2016 (the “Advisory Agreement”). The Advisor, an investment adviser registered with the U.S. Securities and Exchange Commission (“SEC”), is a credit-focused alternative asset management firm. Established in 2008, the Advisor's credit platform manages funds for institutions and high-net-worth investors across various credit funds and complementary strategies including high yield, levered loans, private / opportunistic debt, liquid credit, structured credit and commercial real estate debt. These strategies complement each other as they all leverage the sourcing, analytical, compliance, and operational capabilities that encompass the platform. The Advisor is in partnership with Providence Equity Partners L.L.C., a global private equity firm. The Advisor manages the Company's affairs on a day-to-day basis. The Advisor receives compensation and fees for services related to the investment and management of the Company's assets and the operations of the Company. Prior to September 29, 2016, Realty Finance Advisor, LLC ("Former Advisor") was the Company's advisor. The Former Advisor was controlled by AR Global Investments, LLC ("AR Global"). The Company invests in commercial real estate debt investments, which may include first mortgage loans, subordinated mortgage loans, mezzanine loans and participations in such loans. The Company also invests in commercial real estate securities. Real estate securities may include commercial mortgage-backed securities ("CMBS"), senior unsecured debt of publicly traded REITs, debt or equity securities of other publicly traded real estate companies and collateralized debt obligations ("CDOs"). Realty Capital Securities, LLC, (the “Former Dealer Manager”) served as the dealer manager of the Offering. The Former Advisor and Former Dealer Manager are under common control with AR Global, the parent of American Realty Capital VIII, LLC (the "Former Sponsor"). As a result they are related parties and each of them received compensation and fees for services related to the Offering, the investment and management of the Company's assets and the operations of the Company. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Accounting The accompanying consolidated financial statements and related footnotes are unaudited and have been prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and pursuant to the requirements for reporting on Form 10-Q and Regulation S-X, as appropriate. Accordingly, the consolidated financial statements may not include all of the information and notes required by GAAP for annual consolidated financial statements. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities as of the date of the financial statements and the reported amounts of income and expenses during the reported periods. Changes in the economic environment, financial markets and any other parameters used in determining these estimates could cause actual results to differ materially. In the opinion of management, the interim data includes all adjustments, of a normal and recurring nature, necessary for a fair statement of the results for the periods presented. The current period’s results of operations will not necessarily be indicative of results that ultimately may be achieved for the entire year or any subsequent interim periods. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of, and for the year ended December 31, 2016 , which are included in the Company's Annual Report on Form 10-K filed with the SEC on March 29, 2017. There have been no significant changes to the Company's significant accounting policies during the three months ended March 31, 2017 , as described below. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company, the OP and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a VIE for which the Company is the primary beneficiary. The Company has determined the OP is a VIE of which the Company is the primary beneficiary. Substantially all of the Company's assets and liabilities are held by the OP. The Company consolidates all entities that the Company controls through either majority ownership or voting rights. In addition, the Company consolidates all VIEs of which the Company is considered the primary beneficiary. VIEs are entities in which equity investors (i) do not have the characteristics of a controlling financial interest and/or (ii) do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The entity that consolidates a VIE is its primary beneficiary and is generally the entity with (i) the power to direct the activities that most significantly affect the VIE’s economic performance and (ii) the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE. The accompanying consolidated financial statements include the accounts of a collateralized loan obligation ("CLO") issued and securitized by a wholly owned subsidiary of the Company. The Company has determined the CLO is a VIE of which the Company's subsidiary is the primary beneficiary. The assets and liabilities of the CLO are consolidated in the accompanying consolidated balance sheet in accordance with ASC 810 - Consolidation. Acquisition Fees and Acquisition Expenses The Company incurs acquisition fees and acquisition expenses payable to the Advisor. The Company pays the Advisor an acquisition fee based on the principal amount funded by the Company to originate or acquire commercial mortgage loan investments or on the anticipated net equity funded by the Company to acquire real estate securities. Acquisition fees and acquisition expenses paid to the Company's Advisor in connection with the origination and acquisition of commercial mortgage loan investments and acquisition of real estate securities are evaluated based on the nature of the expense to determine if they should be expensed in the period incurred or capitalized and amortized over the life of the investment. The Company capitalizes certain direct costs relating to the loan origination activities and the cost is amortized over the life of the loan. The Advisor receives an acquisition fee of 1.0% of the principal amount funded by the Company to originate or acquire commercial mortgage loans and 1.0% of the anticipated net equity funded by the Company to acquire real estate securities; provided, however, that if and when the aggregate purchase price for all investments acquired after the date of the Advisory Agreement reaches $600,000,000 , the Company’s obligation to pay acquisition fees to the Advisor shall terminate. Commercial Mortgage Loans Commercial mortgage loans that are held for investment purposes and are anticipated to be held until maturity, are carried at cost, net of unamortized acquisition expenses, discounts or premiums and unfunded commitments. Commercial mortgage loans, held for investment purposes, that are deemed to be impaired will be carried at amortized cost less a specific allowance for loan losses. Interest income is recorded on the accrual basis and related discounts, premiums and acquisition expenses on investments are amortized over the life of the investment using the effective interest method. Amortization is reflected as an adjustment to interest income in the Company’s consolidated statements of operations. Guaranteed loan exit fees payable by the borrower upon maturity are accreted over the life of the investment using the effective interest method. The accretion of guaranteed loan exit fees is recognized in interest income in the Company's consolidated statements of operation. Commercial loans that are intended to be sold in the foreseeable future are reported as held-for-sale and are transferred at fair value and recorded at the lower of cost or fair value with changes recorded through the statement of operations. Unamortized loan origination costs for commercial loans held-for-sale are capitalized as part of the carrying value of the loans and recognized upon the sale of such loans. Amortization of origination costs ceases upon transfer of commercial loans to held-for-sale. Allowance for Loan Losses The allowance for loan losses reflects management's estimate of loan losses inherent in the loan portfolio as of the balance sheet date. The reserve is increased through the loan loss provision on the Company's consolidated statement of operations and is decreased by charge-offs when losses are confirmed through the receipt of assets, such as cash in a pre-foreclosure sale or upon ownership control of the underlying collateral in full satisfaction of the loan upon foreclosure or when significant collection efforts have ceased. The Company uses a uniform process for determining its allowance for loan losses. The allowance for loan losses includes a general, formula-based component and an asset-specific component. General reserves are recorded when (i) available information as of each balance sheet date indicates that it is probable a loss has occurred in the portfolio and (ii) the amount of the loss can be reasonably estimated. The Company currently estimates loss rates based on historical realized losses experienced in the industry, given the fact the Company has not experienced any losses, and takes into account current collateral and economic conditions affecting the probability and severity of losses when establishing the allowance for loan losses. The Company performs a comprehensive analysis of its loan portfolio and assigns risk ratings to loans that incorporate management's current judgments about their credit quality based on all known and relevant internal and external factors that may affect collectability. The Company considers, among other things, payment status, lien position, borrower financial resources and investment in collateral, collateral type, project economics and geographic location as well as national and regional economic factors. This methodology results in loans being segmented by risk classification into risk rating categories that are associated with estimated probabilities of default and principal loss. Ratings range from "1" to "5" with "1" representing the lowest risk of loss and "5" representing the highest risk of loss. The asset-specific reserve component relates to reserves for losses on individual impaired loans. The Company considers a loan to be impaired when, based upon current information and events, it believes that it is probable that the Company will be unable to collect all amounts due under the contractual terms of the loan agreement. This assessment is made on an individual loan basis each quarter based on such factors as payment status, lien position, borrower financial resources and investment in collateral, collateral type, project economics and geographical location as well as national and regional economic factors. A reserve is established for an impaired loan when the present value of payments expected to be received, observable market prices or the estimated fair value of the collateral (for loans that are dependent on the collateral for repayment) is lower than the carrying value of that loan. For collateral dependent impaired loans, impairment is measured using the estimated fair value of collateral less the estimated cost to sell. Valuations are performed or obtained at the time a loan is determined to be impaired and designated non-performing, and they are updated if circumstances indicate that a significant change in value has occurred. The Advisor generally will use the income approach through internally developed valuation models to estimate the fair value of the collateral for such loans. In more limited cases, the Advisor will obtain external "as is" appraisals for loan collateral, generally when third party participations exist. A loan is also considered impaired if its terms are modified in a troubled debt restructuring ("TDR"). A TDR occurs when a concession is granted and the debtor is experiencing financial difficulties. Impairments on TDR loans are generally measured based on the present value of expected future cash flows discounted at the effective interest rate of the original loans. The Company designates non-performing loans at such time as (i) loan payments become 90-days past due; (ii) the loan has a maturity default; or (iii) in the opinion of the Company, it is probable the Company will be unable to collect all amounts due according to the contractual terms of the loan. Income recognition will be suspended when a loan is designated non-performing and resumed only when the suspended loan becomes contractually current and performance is demonstrated to have resumed. A loan will be written off when it is no longer realizable and legally discharged. Per Share Data The Company calculates basic earnings per share by dividing net income attributable to the Company for the period by the weighted-average number of shares of common stock outstanding for that period. Diluted earnings per share reflects the potential dilution that could occur from shares issuable in connection with the restricted stock plan and if convertible shares were exercised, except when doing so would be anti-dilutive. Reportable Segments The Company conducts its business through the following segments: • The real estate debt business which is focused on originating, acquiring and asset managing commercial real estate debt investments, including first mortgage loans, subordinate mortgages, mezzanine loans and participations in such loans. • The real estate securities business which is focused on investing in and asset managing commercial real estate securities primarily consisting of CMBS and may include unsecured REIT debt, CDO notes and other securities. See Note 12 - Segment Reporting for further information regarding the Company's segments. Recently Issued Accounting Pronouncements In March 2016, the Financial Accounting Standards Board ("FASB") issued guidance which requires an entity to determine whether the nature of its promise to provide goods or services to a customer is performed in a principal or agent capacity and to recognize revenue in a gross or net manner based on its principal/agent designation. This guidance is effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted. The Company is currently evaluating the impact of this new guidance. In June 2016, the FASB issued guidance that changes how entities measure credit losses for financial assets carried at amortized cost. The update eliminates the requirement that a credit loss must be probable before it can be recognized and instead requires an entity to recognize the current estimate of all expected credit losses. Additionally, the update requires credit losses on available-for-sale debt securities to be carried as an allowance rather than as a direct write-down of the asset. The amendments become effective for reporting periods beginning after December 15, 2019. The amendments may be adopted early for reporting periods beginning after December 15, 2018. The Company is currently evaluating the impact of this new guidance. In August 2016, the FASB issued guidance on how certain transactions should be classified and presented in the statement of cash flows as either operating, investing or financing activities. Among other things, the update provides specific guidance on where to classify debt prepayment and extinguishment costs, payments for contingent consideration made after a business combination and distributions received from equity method investments. The revised guidance is effective for reporting periods beginning after December 15, 2017. Early adoption is permitted. The Company is currently evaluating the impact of this new guidance. In October 2016, the FASB issued guidance where a reporting entity will need to evaluate if it should consolidate a VIE. The amendments change the evaluation of whether a reporting entity is the primary beneficiary of a VIE by changing how a single decision maker of a VIE treats indirect interests in the entity held through related parties that are under common control with the reporting entity. The revised guidance is effective for reporting periods beginning after December 15, 2016. The Company adopted this revised guidance this reporting period which did not have any effect on the Company’s consolidated financial statements. In November 2016, the FASB issued guidance on the classification of restricted cash in the statement of cash flows. The amendment requires restricted cash to be included in the beginning-of-period and end-of-period total cash amounts. Therefore, transfers between cash and restricted cash will no longer be shown on the statement of cash flows. The guidance is effective for reporting periods beginning after December 15, 2017. Early adoption is permitted. We do not expect this guidance to have a material impact on the Company’s consolidated financial statements. |
Commercial Mortgage Loans
Commercial Mortgage Loans | 3 Months Ended |
Mar. 31, 2017 | |
Receivables [Abstract] | |
Commercial Mortgage Loans | Commercial Mortgage Loans The following table is a summary of the Company's commercial mortgage loans, held for investment, carrying values by class (in thousands): March 31, 2017 December 31, 2016 Senior loans $ 918,323 $ 901,907 Mezzanine loans 93,334 136,830 Subordinated loans — 10,000 Total gross carrying value of loans 1,011,657 1,048,737 Less: Allowance for loan losses 2,793 2,181 Total commercial mortgage loans, held for investment, net $ 1,008,864 $ 1,046,556 The following table presents the activity in the Company's allowance for loan losses (in thousands): Three Months Ended March 31, 2017 Three Months Ended March 31, 2016 Beginning of period $ 2,181 $ 888 Provision for loan losses 612 165 Charge-offs — — Recoveries — — Ending allowance for loan losses $ 2,793 $ 1,053 As of March 31, 2017 and December 31, 2016 , the Company's total commercial mortgage loan portfolio, including loans held-for-sale, comprised of 67 and 71 loans, respectively. March 31, 2017 December 31, 2016 Loan Type Par Value Percentage Par Value Percentage Office $ 361,289 33.7 % $ 340,944 31.6 % Multifamily 291,020 27.1 % 329,203 30.6 % Hospitality 125,291 11.7 % 143,582 13.3 % Retail 197,668 18.4 % 154,684 14.4 % Mixed Use 45,235 4.2 % 56,136 5.2 % Industrial 52,797 4.9 % 52,688 4.9 % $ 1,073,300 100.0 % $ 1,077,237 100.0 % Credit Characteristics As part of the Company's process for monitoring the credit quality of its loans, it performs a quarterly loan portfolio assessment and assigns risk ratings to each of its loans. The loans are rated on a 5-point scale as follows: Investment Rating Summary Description 1 Investment exceeding fundamental performance expectations and/or capital gain expected. Trends and risk factors since time of investment are favorable. 2 Performing consistent with expectations and a full return of principal and interest expected. Trends and risk factors are neutral to favorable. 3 Performing investments requiring closer monitoring. Trends and risk factors show some deterioration. 4 Underperforming investment with the potential of some interest loss but still expecting a positive return on investment. Trends and risk factors are negative. 5 Underperforming investment with expected loss of interest and some principal. All commercial mortgage loans are assigned an initial risk rating of 2.0 . As of March 31, 2017 and December 31, 2016 , the weighted average risk rating of loans was 2.2 and 2.1 , respectively. As of March 31, 2017 and December 31, 2016 , the Company did not have any loans that were past due on their payments, in non-accrual status or impaired. For the three months ended March 31, 2017 and March 31, 2016 , the activity in the Company's loan portfolio was as follows (in thousands): Three Months Ended March 31, 2017 Three Months Ended March 31, 2016 Balance at Beginning of Year $ 1,046,556 $ 1,124,201 Acquisitions and originations 93,140 9,697 Dispositions — — Principal repayments (86,079 ) (7,949 ) Discount accretion and premium amortization* 628 566 Loans transferred to commercial real estate loans, held-for-sale, at fair value (45,513 ) — Fees capitalized into carrying value of loans 744 — Provision for loan losses (612 ) (165 ) Balance at End of Period $ 1,008,864 $ 1,126,350 ________________________ * Includes amortization of capitalized acquisition fees and expenses. |
Real Estate Securities
Real Estate Securities | 3 Months Ended |
Mar. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Real Estate Securities | Real Estate Securities The following is a summary of the Company's real estate securities, CMBS (in thousands): Weighted Average Number of Investments Interest Rate Maturity Par Value Fair Value March 31, 2017 2 7.9 % May 2022 $ 25,000 $ 25,733 December 31, 2016 6 5.8 % February 2020 50,000 49,049 The Company classified its CMBS as available-for-sale as of March 31, 2017 and December 31, 2016 . These investments are reported at fair value in the consolidated balance sheet with changes in fair value recorded in "accumulated other comprehensive income or loss". The following table shows the amortized cost, unrealized gains/losses and fair value of the Company's CMBS investments as of March 31, 2017 and December 31, 2016 (in thousands): Amortized Cost Unrealized Gains Unrealized Losses Fair Value March 31, 2017 $ 24,845 $ 888 $ — $ 25,733 December 31, 2016 49,548 — (499 ) 49,049 As of March 31, 2017 , the Company held 2 CMBS positions for an aggregate carrying value of $24.8 million , with an unrealized gain of $0.9 million . As of December 31, 2016, the Company held 6 CMBS positions with an amortized cost of $49.5 million , with an unrealized loss of $0.5 million , of which 2 positions had a total unrealized loss of $0.2 million for a period greater than 12 months. The Company has recognized a loss of $28,281 for the three months ended March 31, 2017 , recorded within the realized loss on sale of real estate securities in the consolidated statement of operations. The Company did not have any realized losses during the three months ended March 31, 2016 . |
Debt
Debt | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Debt Repurchase Agreements - Commercial Mortgage Loans The Company entered into repurchase facilities with JPMorgan Chase Bank, National Association (the "JPM Repo Facility") and Goldman Sachs Bank USA (the "GS Repo Facility"). The JPM Repo Facility matures on June 17, 2017 and, as amended on October 5, 2016, provides up to $300.0 million in advances. The GS Repo Facility matures on December 27, 2018, with a one -year extension at the Company’s option, which may be exercised upon the satisfaction of certain conditions, and provides up to $250.0 million in advances. Both the JPM Repo Facility and GS Repo Facility are subject to various adjustments. Advances under the JPM Repo Facility accrue interest at per annum rates equal to the sum of (i) the applicable LIBOR index rate plus (ii) a margin of between 2.25% to 4.50% , depending on the attributes of the purchased assets. Borrowings under the GS Repo Facility accrue interest at per annum rates equal to the sum of (i) a spread over LIBOR of between 2.35% to 2.85% , depending on the attributes of the purchased asset, and (ii) 0.50% . The Company expects to use advances from the JPM Repo Facility and the GS Repo Facility to finance the acquisition or origination of eligible loans, including first mortgage loans, subordinated mortgage loans, mezzanine loans and participation interests therein. As of March 31, 2017 and December 31, 2016, the Company had $251.9 million and $257.7 million outstanding under the JPM Repo Facility. Advances under the JPM Repo Facility accrue interest at per annum rates equal to the sum of (i) the applicable LIBOR index rate plus (ii) a margin between 2.25% to 4.50% , depending on the attributes of the purchased assets. As of March 31, 2017 and December 31, 2016, the weighted average interest rate on advances was 3.29% and 3.08% , respectively. The Company incurred $2.6 million and $0.8 million in interest expense on the JPM Repo Facility for the three months ended March 31, 2017 and 2016, respectively, including amortization of deferred financing cost. As of March 31, 2017 , the Company had $89.1 million outstanding under the GS Repo Facility. Advances under the GS Repo Facility accrue interest at per annum rates equal to the sum of (i) the applicable LIBOR index rate plus (ii) a margin between 2.35% to 2.85% , depending on the attributes of the purchased assets. As of March 31, 2017, the weighted average interest rate on advances was 3.38% . The Company incurred $0.3 million of interest expense on the GS Repo Facility for the three months ended March 31, 2017 , including amortization of deferred financing cost. The Company had no advances under the GS Repo Facility as of December 31, 2016. The JPM Repo Facility and the GS Repo Facility generally provide that in the event of a decrease in the value of the Company's collateral, the lenders can demand additional collateral. Should the value of the Company’s collateral decrease, whether as a result of deteriorating credit quality, an increase in credit market spreads or otherwise, resulting margin calls may cause an adverse change in the Company’s liquidity position. As of March 31, 2017 and December 31, 2016, the Company is in compliance with all debt covenants. Repurchase Agreements - Real Estate Securities The Company has entered into various Master Repurchase Agreements (the "MRAs") that allow the Company to sell real estate securities while providing a fixed repurchase price for the same real estate securities in the future. The repurchase contracts on each security under an MRA generally mature in 30 to 90 days and terms are adjusted for current market rates as necessary. Below is a summary of the Company's MRAs as of March 31, 2017 and December 31, 2016 (in thousands): Weighted Average Counterparty Amount Outstanding Accrued Interest Collateral Pledged (*) Interest Rate Days to Maturity As of March 31, 2017 J.P. Morgan Securities LLC $ 52,174 $ 119 $ 80,376 3.10 % 90 Total/Weighted Average $ 52,174 $ 119 $ 80,376 3.10 % 90 As of December 31, 2016 J.P. Morgan Securities LLC $ 59,122 $ 96 $ 92,658 2.55 % 6 Citigroup Global Markets, Inc. 3,879 1 4,850 2.11 % 26 Wells Fargo Securities, LLC 3,638 4 4,850 2.05 % 13 Total/Weighted Average $ 66,639 $ 101 $ 102,358 2.50 % 8 * Includes $54.6 and $53.3 Tranche C of Company issued CLO held by the Company, which eliminates within the real estate securities, at fair value line of the consolidated balance sheets as of March 31, 2017 and December 31, 2016, respectively. Collateralized Loan Obligation On October 19, 2015, RFT 2015-FL1 Issuer, Ltd. (the “Issuer”) and RFT 2015-FL1 Co-Issuer, LLC (the “Co-Issuer”), both wholly owned indirect subsidiaries of the Company, entered into an indenture with the OP, as advancing agent, U.S. Bank National Association as note administrator and U.S. Bank National Association as trustee, which governs the issuance of approximately $350.2 million principal balance secured floating rate notes (the “Notes”). In addition, concurrently with the issuance of the Notes, the Issuer also issued 78,188,494 Preferred Shares, par value of $0.001 per share and with an aggregate liquidation preference and notional amount equal to $1,000 per share (the “Preferred Shares”), which were not offered as part of closing the indenture. For U.S. federal income tax purposes, the Issuer and Co-Issuer are disregarded entities. As of March 31, 2017 and December 31, 2016, the Notes are collateralized by interests in a pool of 22 and 27 mortgage assets having a total principal balance of $ 369.8 million and $419.3 million , respectively, (the “Mortgage Assets”) originated by a subsidiary of the Company. The sale of the Mortgage Assets to the Issuer is governed by a Mortgage Asset Purchase Agreement dated as of October 19, 2015, between the Company and the Issuer. In connection with the securitization, the Issuer and Co-Issuer offered and sold the following classes of Notes to third parties: Class A, Class B, Class C. A wholly owned subsidiary of the Company retained approximately $56.0 million of the total $76.0 million of Class C and all of the preferred equity in the Issuer. The retained Class C and its related interest income and the preferred equity are eliminated in the Company's consolidated financial statements. The Company, as the holder of preferred equity in the Issuer, will absorb the first losses of the CLO, which may have a negative impact to the Company's result of operations. The issuance of the CLO also results in an increase in interest expense within the consolidated statement of operations. The following table represents the terms of the CLO issued. Facility ($000s) Par Value Issued Par Value Outstanding (*) Interest Rate Maturity Date As of March 31, 2017 Tranche A $ 231,345 $ 172,739 1M LIBOR + 175 8/1/2030 Tranche B 42,841 42,841 1M LIBOR + 388 8/1/2030 Tranche C 76,044 20,000 1M LIBOR + 525 8/1/2030 $ 350,230 $ 235,580 As of December 31, 2016 Tranche A $ 231,345 $ 222,195 1M LIBOR + 175 8/1/2030 Tranche B 42,841 42,841 1M LIBOR + 388 8/1/2030 Tranche C 76,044 20,000 1M LIBOR + 525 8/1/2030 $ 350,230 $ 285,036 ________________________ * Excludes $56.0 million and $56.0 million of Tranche C of Company issued CLO held by the Company, which eliminates within the collateralized loan obligation line of the consolidated balance sheets as of March 31, 2017 and December 31, 2016, respectively. The below table reflects the total assets and liabilities of the Company's only CLO. The CLO is considered a VIE and is consolidated into the Company's consolidated financial statements as of March 31, 2017 and December 31, 2016 as the Company is the primary beneficiary of the VIE. The Company is the primary beneficiary of the CLO because (i) the Company has the power to direct the activities that most significantly affect the VIE’s economic performance and (ii) the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE. Assets ($000s) March 31, 2017 December 31, 2016 Cash $ 5 $ 5 Commercial mortgage loans, held for investment, net of allowance of $1,160 and $1,017 (1) 367,810 417,057 Accrued interest receivable 1,006 1,101 Total Assets $ 368,821 $ 418,163 Liabilities Notes payable (2)(3) $ 284,890 $ 334,246 Interest payable 535 564 Total Liabilities $ 285,425 $ 334,810 ________________________ (1) The balance is presented net of allowance for loan loss of $1.2 million and $1.0 million as of March 31, 2017 and December 31, 2016 , respectively. (2) Includes $55.8 million and $55.8 million of Tranche C of Company issued CLO held by the Company, which eliminates within the Collateral loan obligations line of the consolidated balance sheets as of March 31, 2017 and December 31, 2016 , respectively. (3) The balance is presented net of deferred financing cost and discount of $6.7 million and $6.8 million as of March 31, 2017 and December 31, 2016 , respectively. |
Net Income Per Share
Net Income Per Share | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Net Income Per Share The following table is a summary of the basic and diluted net income per share computation for the three months ended March 31, 2017 and 2016 , respectively: Three Months Ended March 31, 2017 2016 Net income (in thousands) $ 6,049 $ 9,420 Basic weighted average shares outstanding 31,740,256 31,548,897 Unvested restricted shares 9,789 6,114 Diluted weighted average shares outstanding 31,750,045 31,555,011 Basic net income per share $ 0.19 $ 0.30 Diluted net income per share $ 0.19 $ 0.30 |
Common Stock
Common Stock | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Common Stock | Common Stock As of March 31, 2017 and December 31, 2016 , the Company had 31,673,924 and 31,884,631 shares of common stock outstanding, respectively, including shares issued pursuant to the Dividend Reinvestment Plan ("DRIP") and unvested restricted shares. On December 30, 2014, the Company filed with the Maryland State Department of Assessments and Taxation articles supplementary to its charter that reclassified 1,000 authorized but unissued shares of the Company’s common stock as shares of convertible stock and set the terms of such convertible shares. The Company then issued 1,000 convertible shares to the Former Advisor for $ 1.00 per share. The convertible shares automatically converted to shares of common stock upon the first occurrence of certain triggering events, including the termination of the Advisory Agreement with the Former Advisor and the Company, with payouts dependent on the achievement of certain stockholder total return thresholds. Subsequent to September 30, 2016, the Company determined that as a result of the termination of the advisory agreement between the Former Advisor and the Company a triggering event had occurred. Based on the Company’s determination of the enterprise value of the Company on the date of the triggering event, the total distributions paid to the Company’s stockholders through the date of the triggering event, and the sum of the Company's stockholders’ invested capital as of the date of the triggering event, that the convertible shares converted into a number of common shares equal to zero . As a result, the convertible shares that were issued to the Former Advisor have been extinguished and no common shares were issued in connection with the conversion and the par value of the shares was transferred to Additional Paid In Capital upon extinguishment. Distributions In order to maintain its election to qualify as a REIT, the Company must currently distribute, at a minimum, an amount equal to 90% of its taxable income, without regard to the deduction for distributions paid and excluding net capital gains. The Company must distribute 100% of its taxable income (including net capital gains) to avoid paying corporate U.S. federal income taxes. On May 13, 2013, the Company's board of directors authorized and declared a distribution calculated daily at a rate of $ 0.00565068493 per day, which is equivalent to $2.0625 per annum, per share of common stock. In March 2016 , the Company's board of directors ratified the existing distribution amount equivalent to $2.0625 per annum for calendar year 2016. On November 10, 2016 the Company’s board of directors changed the DRIP offer price to $20.05 , which is equal to the estimated per-share NAV as of September 30, 2016 approved by the board of directors. The price change was applied to the reinvestment of distributions commencing with the October 2016 distributions. On March 28, 2017, the Company's board of directors authorized and declared a distribution calculated daily at a rate of $0.00565068493 per day, which is equivalent to $2.0625 per annum, per share of common stock. The Company's distributions are payable by the fifth day following each month end to stockholders of record at the close of business each day during the prior month. Distribution payments are dependent on the availability of funds. The Board may reduce the amount of distributions paid or suspend distribution payments at any time, and therefore, distributions payments are not assured. The Company distributed $16.1 million during the three months ended March 31, 2017 , comprised of $10.4 million in cash and $5.7 million in shares of common stock issued under the DRIP. The Company distributed $16.2 million during the three months ended March 31, 2016 . Share Repurchase Program The Company's Board unanimously approved an amended and restated share repurchase program (the “SRP”), which became effective on February 28, 2016. The SRP enables stockholders to sell their shares to the Company. Subject to certain conditions, stockholders that purchased shares of the Company's common stock or received their shares from us (directly or indirectly) through one or more non-cash transactions and have held their shares for a period of at least one year may request that the Company repurchase their shares of common stock so long as the repurchase otherwise complies with the provisions of Maryland law. Repurchase requests made following the death or qualifying disability of a stockholder will not be subject to any minimum holding period. The repurchase price per share for requests other than for death or disability will be equal to the most-recent estimated net asset value per share of the Company's common stock calculated by the Company's Advisor and approved by the Company's board of directors in accordance with the Company's valuation guidelines, or estimated per-share NAV, multiplied by a percentage equal to (i) 92.5% , if the person seeking repurchase has held his or her shares for a period greater than one year and less than two years; (ii) 95% , if the person seeking repurchase has held his or her shares for a period greater than two years and less than three years; (iii) 97.5% , if the person seeking repurchase has held his or her shares for a period greater than three years and less than four years; or (iv) 100% , if the person seeking repurchase has held his or her shares for a period greater than four years. In the case of requests for death or disability, the repurchase price per share will be equal to the estimated per-share NAV at the time of repurchase. Repurchases pursuant to the SRP, when requested, generally will be made semiannually (each six-month period ending June 30 or December 31, a “fiscal semester”). Repurchases for any fiscal semester will be limited to a maximum of 2.5% of the weighted average number of shares of common stock outstanding during the previous fiscal year, with a maximum for any fiscal year of 5.0% of the weighted average number of shares of common stock outstanding during the previous fiscal year. Funding for repurchases pursuant to the SRP for any given fiscal semester will be limited to proceeds received during that same fiscal semester through the issuance of common stock pursuant to any DRIP in effect from time to time, provided that the Board has the power, in its sole discretion, to determine the amount of shares repurchased during any fiscal semester as well as the amount of funds to be used for that purpose. Any repurchase requests received during such fiscal semester will be paid at a price based on the Company's estimated per share NAV applicable on the last day of such fiscal semester, as described above. Due to these limitations, the Company cannot guarantee that the Company will be able to accommodate all repurchase requests made during any fiscal semester or fiscal year. However, a stockholder may withdraw its request at any time or ask that the Company honors the request when funds are available. Pending repurchase requests will be honored on a pro rata basis. The Company will generally pay repurchase proceeds, less any applicable tax or other withholding required by law, by the 31st day following the end of the fiscal semester during which the repurchase request was made. Calculations of the Company's estimated per-share NAV will occur periodically, at the discretion of the Board, provided that such calculations will be made at least annually. Following its calculation, the Company's estimated per-share NAV will be disclosed in a periodic report. The most recent calculation of the Company's estimated per-share NAV approved by the Board occurred on November 10, 2016 based on the Company's net asset value as of September 30, 2016 and was equal to $20.05 . When a stockholder requests redemption and the redemption is approved, the Company will reclassify such obligation from equity to a liability based on the settlement value of the obligation. Shares repurchased under the SRP will have the status of authorized but unissued shares. The following table reflects the number of shares repurchased under the SRP cumulatively through March 31, 2017 : Number of Requests Number of Shares Repurchased Average Price per Share Cumulative as of December 31, 2016 985 918,683 $ 23.94 January 1 - March 31, 2017 502 496,678 19.04 Cumulative as of March 31, 2017 1,487 1,415,361 $ 22.22 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Unfunded Commitments for Commercial Mortgage Loans As of March 31, 2017 and December 31, 2016 , the Company had the below unfunded commitments to the Company's borrowers. Funding Expiration March 31, 2017 December 31, 2016 2016 $ — $ — 2017 7,367 7,794 2018 52,014 62,368 2019 13,954 9,072 2023 — — Total $ 73,335 $ 79,234 Litigation and Regulatory Matters In the ordinary course of business, the Company may become subject to litigation, claims and regulatory matters. Except as noted below, the Company has no knowledge of material legal or regulatory proceedings pending or known to be contemplated against the Company at this time. On June 6, 2016, an action was filed against the Company and two of its directors in the United States District Court for the Southern District of New York and styled Rurode v. Realty Finance Trust, Inc., et. al., No. 1:16-cv-04553. The plaintiff’s individual and derivative complaint alleged that the Company made material misstatements in the proxy statement for its 2016 annual stockholder’s meeting related to an alleged planned merger transaction between the Company and an affiliate of its former advisor. The plaintiff alleged violations of Section 14(a) of the Securities Exchange Act of 1934 and sought to enjoin the Company’s 2016 annual meeting. On June 28, 2016, the parties filed, and the court subsequently entered, a stipulation and order of dismissal of the action, but provided that the court would retain jurisdiction to consider any application by plaintiff for an award of attorneys’ fees. On October 20, 2016, the plaintiff submitted a request for $0.75 million in fees and expenses. On November 14, 2016, the defendants filed a memorandum of law in opposition to that fee request. No hearing date has been set on plaintiff’s request for fees. The Company did not record any accrual in the March 31, 2017 financial statements related fee and expense request as the Company does not believe it is probable there will be a judgment against the Company that would have a material effect on the Company’s financial statements. The Company estimates the range of possible loss to be between $0 and $ 750,000 . |
Related Party Transactions and
Related Party Transactions and Arrangements | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions and Arrangements | Related Party Transactions and Arrangements The Company entered into the Advisory Agreement with the Advisor on September 29, 2016. The Advisor receives an acquisition fee of 1.0% of the principal amount funded by the Company to originate or acquire commercial mortgage loans and 1.0% of the anticipated net equity funded by the Company to acquire real estate securities; provided, however, that if and when the aggregate purchase price for all investments acquired after the date of the Advisory Agreement reaches $600,000,000 , the Company’s obligation to pay acquisition fees to the Advisor shall terminate. The Company reimburses the Advisor for insourced expenses incurred by the Advisor on behalf of the Company related to selecting, evaluating, originating and acquiring investments in an amount up to 0.5% of the principal amount funded by the Company to originate or acquire commercial mortgage loans and up to 0.5% of the anticipated net equity funded by the Company to acquire real estate securities investments. In no event will the total of all acquisition fees and acquisition expenses exceed 4.5% of the principal amount funded with respect to the Company's total portfolio including subsequent funding to investments in the Company's portfolio. The Company pays the Advisor, or its affiliates, a monthly asset management fee equal to one-twelfth of 1.5% of stockholder’s equity as calculated pursuant to the Advisory Agreement. The Company will pay the Advisor, an annual subordinated performance fee calculated on the basis of total return to stockholders, payable monthly in arrears, such that for any year in which total return on stockholders’ capital exceeds 6.0% per annum, the Advisor will be entitled to 15.0% of the excess total return; provided that in no event will the annual subordinated performance fee payable to the Advisor exceed 10.0% of the aggregate total return for such year. The Company will reimburse the Advisor for expenses incurred related to administrative services such as accounting, legal and other services in accordance with the advisory agreement. Except as noted below, the Company did not make any payments to the Advisor prior to entering into the Advisory Agreement. Until September 29, 2016, the Former Advisor served as the Company’s advisor and the Company paid the Former Advisor certain fees and expense reimbursements pursuant to its advisory agreement with the Former Advisor. The fees and expense reimbursements reflected for the three months ended March 31, 2016 in the table below were paid to the Former Advisor. During the three months ended March 31, 2017 , and 2016, the Company paid acquisition fees and expenses of $1.4 million and $0.2 million respectively, of which $0.6 million and $ 0.2 million respectively, have been recognized in Acquisition fees on the Company's consolidated statement of operations. In addition, during the three months ended March 31, 2017 , the Company capitalized $ 0.8 million of acquisition expenses included in Commercial mortgage loans within the Company's consolidated balance sheets, which is amortized over the life of each investment using the effective interest method. The Company did not capitalize any acquisitions expenses for the three months ended March 31, 2016. The Company paid the Former Advisor, or its affiliates, a monthly asset management fee equal to one-twelfth of 0.75% of the cost of the Company's assets. The asset management fee was based on the lower of the cost of the Company's assets and the fair value of the Company's assets (fair value consist of the market value of each portfolio investment as determined by the Former Advisor in accordance with the Company's valuation guidelines). During the three months ended March 31, 2017 , and 2016 , the Company incurred $2.3 million and $2.4 million in asset management fees, respectively. These asset management fees are recorded in "Asset management and subordinated performance fee" within the consolidated statements of operations. The Company is required to pay the Advisor an annual subordinated performance fee calculated on the basis of total return to stockholders, payable monthly in arrears, such that for any year in which total return on stockholders’ capital exceeds 6.0% per annum, the Former Advisor will be entitled to 15.0% of the excess total return; provided that in no event will the annual subordinated performance fee payable to the Former Advisor exceed 10.0% of the aggregate total return for such year. This fee will be payable only upon the sale of assets, distributions or other event which results in the Company's return on stockholders’ capital exceeding 6.0% per annum. The Company did no t incur an annual subordinated performance fee during the three months ended March 31, 2017 . During the three months ended March 31, 2016 , the Company incurred an annual subordinated performance fee of $0.6 million . The subordinated performance fee is recorded in "Asset management and subordinated performance fees" within the Company's consolidated statements of operations. The table below depicts related party fees and reimbursements in connection with the operations of the Company for the three and nine months ended March 31, 2017 and 2016 and the associated payable as of March 31, 2017 and December 31, 2016 (in thousands): Three Months Ended March 31, Payable as of 2017 2016 March 31, 2017 December 31, 2016 Total compensation and reimbursement for services provided by the Former Advisor, its affiliates, entities under common control with the Former Advisor and the Former Dealer Manager $ — $ — $ 480 $ 480 Acquisition fees and expenses (1) 1,412 157 — — Administrative services expenses 855 816 855 1,000 Advisory and investment banking fee — 6 — — Asset management and subordinated performance fee 2,312 3,010 2,340 2,439 Other related party expenses 48 26 66 145 Total related party fees and reimbursements $ 4,627 $ 4,015 $ 3,741 $ 4,064 ________________________ 1 Includes amortization of capitalized acquisition fees and expenses. The payables as of March 31, 2017 and December 31, 2016 in the table above are included in "Due to affiliates" in the Company's consolidated balance sheets. Subject to the limitations outlined below, the Company reimbursed the Former Advisor's cost of providing administrative services and personnel costs in connection with other services provided, in addition to paying an asset management fee; however, the Company did not reimburse the Former Advisor for personnel costs in connection with services for which the Former Advisor received acquisition fees or disposition fees. For the three months ended March 31, 2017 and March 31, 2016 , the Company incurred $0.9 million and $0.8 million of administrative costs in connection with the operations of the Company, which is included in "Administrative services expenses" in the consolidated statements of operations. The Advisor is required to pay any expenses in which the Company's operating expenses as defined by North American Securities Administrators Association at the end of the four preceding fiscal quarters exceeds the greater of (i) 2.0% of average invested assets or (ii) 25.0% of net income for such expense year. For the preceding four fiscal quarters, the Company did not exceed the greater of the two aforementioned criteria as of March 31, 2017 . The Company has also established a restricted share plan for the benefit of employees, directors, employees of the Advisor and its affiliates. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments GAAP establishes a hierarchy of valuation techniques based on the observability of inputs used in measuring financial instruments at fair values. GAAP establishes market-based or observable inputs as the preferred source of values, followed by valuation models using management assumptions in the absence of market inputs. The three levels of the hierarchy are described below: • Level I - Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. • Level II - Inputs (other than quoted prices included in Level I) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life. • Level III - Unobservable inputs that reflect the entity’s own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques. The determination of where an asset or liability falls in the above hierarchy requires significant judgment and factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures each quarter and depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter. The Company has implemented valuation control processes to validate the fair value of the Company's financial instruments measured at fair value including those derived from pricing models. These control processes are designed to assure that the values used for financial reporting are based on observable inputs wherever possible. In the event that observable inputs are not available, the control processes are designed to assure that the valuation approach utilized is appropriate and consistently applied and the assumptions are reasonable. CMBS are valued utilizing both observable and unobservable market inputs. These factors include projected future cash flows, ratings, subordination levels, vintage, remaining lives, credit issues, recent trades of similar real estate securities and the spreads used in the prior valuation. Depending upon the significance of the fair value inputs used in determining these fair values, these real estate securities are classified in either Level II or Level III of the fair value hierarchy. The Company obtains current market spread information where available and uses this information in evaluating and validating the market price of all CMBS. Depending upon the significance of the fair value inputs used in determining these fair values, these real estate securities are classified in either Level II or Level III of the fair value hierarchy. As of March 31, 2017 and December 31, 2016 , the Company obtained broker quotes for determining the fair value of each CMBS investment used. As the broker quotes were both limited and non-binding, the Company has classified the CMBS as level III. The following table presents the Company's financial instruments carried at fair value on a recurring basis in the consolidated balance sheets by its level in the fair value hierarchy as of March 31, 2017 and December 31, 2016 (in thousands): Total Level I Level II Level III March 31, 2017 Real estate securities $ 25,733 $ — $ — $ 25,733 December 31, 2016 Real estate securities 49,049 — — 49,049 The following table presents additional information about CMBS investments which are measured at fair value on a recurring basis as of March 31, 2017 and December 31, 2016 for which the Company has used Level 3 inputs to determine fair value (dollars in thousands): March 31, 2017 Year Ended December 31, 2016 Beginning balance $ 49,049 $ — Transfers into Level III — 57,639 Total realized and unrealized gains (losses) included in earnings: Realized loss on sale of real estate securities (29 ) (874 ) Impairment losses on real estate securities — (310 ) Net accretion 6 — Unrealized gains (losses) included in OCI (1) 1,388 1,719 Purchases — — Sales (24,681 ) (9,125 ) Cash repayments/receipts — — Transfers out of Level III — — Ending balance $ 25,733 $ 49,049 ________________________ (1) - Unrealized gains included in Other comprehensive income ("OCI") are attributable to assets still held at March 31, 2017 and December 31, 2016. Financial Instruments Measured at Fair Value on a Non-Recurring Basis The following table presents the Company's financial instruments carried at fair value on a non-recurring basis in the consolidated balance sheets by its level in the fair value hierarchy as of December 31, 2016 (in thousands): Total Level I Level II Level III March 31, 2017 (*) Commercial mortgage loans, held-for-sale, measured at fair value $ 53,305 $ — $ — $ 53,305 December 31, 2016 (*) Commercial mortgage loans, held-for-sale, measured at fair value 21,179 — — 21,179 ________________________ * As of March 31, 2017 and December 31, 2016, the Company's portfolio of commercial real estate loans held-for-sale were carried at the lower of cost or market value. The fair value of certain held-for-sale loans were adjusted to reflect fair value of the assets based on the sales price received from a potential buyer. A review of the fair value hierarchy classification is conducted on a quarterly basis. Changes in the type of inputs may result in a reclassification for certain assets. The Company's policy with respect to transfers between levels of the fair value hierarchy is to recognize transfers into and out of each level as of the beginning of the reporting period. There were no transfers between levels within fair value hierarchy during the three months ended March 31, 2017 . The fair value of cash and cash equivalents and restricted cash are measured using observable quoted market prices, or Level I inputs and their carrying value approximates their fair value. The fair value of borrowings under repurchase agreements approximate their carrying value on the consolidated balance sheets due to their short-term nature, and are measured using Level II inputs. Financial Instruments Not Measured at Fair Value The fair values of the Company's commercial mortgage loans and collateralized loan obligations, which are not reported at fair value on the consolidated balance sheets are reported below as of March 31, 2017 and December 31, 2016 (in thousands): Level Carrying Amount Fair Value March 31, 2017 Commercial mortgage loans (1) Asset III $ 1,011,657 $ 987,810 Collateralized loan obligation Liability II 229,088 231,954 December 31, 2016 Commercial mortgage loans (1) Asset III 1,048,737 1,029,756 Collateralized loan obligation Liability II 278,450 282,001 ________________________ 1 The carrying value is gross of $2.8 million and $2.2 million of allowance for loan losses as of March 31, 2017 and December 31, 2016 , respectively. The fair value of the commercial mortgage loans is estimated using a discounted cash flow analysis, based on the Advisor's experience with similar types of investments. The Company received broker quotes for each tranche of CLO to determine the fair value of the debt. |
Offsetting Assets and Liabiliti
Offsetting Assets and Liabilities | 3 Months Ended |
Mar. 31, 2017 | |
Offsetting [Abstract] | |
Offsetting Assets and Liabilities | Offsetting Assets and Liabilities The Company's consolidated balance sheets used a gross presentation of repurchase agreements and collateral pledged. The table below provides a gross presentation, the effects of offsetting and a net presentation of the Company's repurchase agreements within the scope of ASC 210-20, Balance Sheet—Offsetting , as of March 31, 2017 and December 31, 2016 , (in thousands): Gross Amounts Not Offset on the Balance Sheet Repurchase Agreements Gross Amounts of Recognized Liabilities Gross Amounts Offset on the Balance Sheet Net Amount of Liabilities Presented on the Balance Sheet Financial Instruments as Collateral Pledged (*) Cash Collateral Pledged Net Amount March 31, 2017 Commercial mortgage loans $ 340,948 $ — $ 340,948 $ 510,972 $ 5,005 $ — Real estate securities 52,174 — 52,174 80,376 102 — December 31, 2016 Commercial mortgage loans 257,664 — 257,664 399,914 5,000 — Real estate securities 66,639 — 66,639 102,358 21 — * Includes $54.6 million and $53.3 million Tranche C of Company issued CLO held by the Company, which eliminates within the real estate securities, at fair value line of the consolidated balance sheets as of March 31, 2017 and December 31, 2016, respectively. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting The Company conducts its business through the following segments: • The real estate debt business focuses on originating, acquiring and asset managing commercial real estate debt investments, including first mortgage loans, subordinate mortgages, mezzanine loans and participations in such loans. • The real estate securities business focuses on investing in and asset managing commercial real estate securities primarily consisting of CMBS and may include unsecured REIT debt, CDO notes and other securities. The following table represents the Company's operations by segment for the three months ended March 31, 2017 and 2016 (in thousands): Three Months Ended March 31, 2017 Total Real Estate Debt Real Estate Securities Interest income $ 18,879 $ 18,208 $ 671 Interest expense 5,428 4,993 435 Net income 6,049 5,949 100 Three Months Ended March 31, 2016 Interest income 20,291 18,676 1,615 Interest expense 4,768 4,091 677 Net income 9,420 9,059 361 The following table represents the Company's total assets by segment as of March 31, 2017 and December 31, 2016 (in thousands): As of March 31, 2017 Total Real Estate Debt Real Estate Securities Total Assets $ 1,255,278 $ 1,229,244 $ 26,034 As of December 31, 2016 Total Assets 1,248,125 1,198,806 49,319 For the purposes of the table above, any expenses not associated with a specific segment have been allocated to the business segments using a percentage derived by using the sum of commercial mortgage loans, net and real estate securities, at fair value as the denominator and commercial mortgage loans, net and real estate securities, at fair value as the numerators. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On May 9, 2017, the Company’s loan servicer notified the Company of a maturity default on one of the Company’s mezzanine loans. The borrower of the loan had been current through April 2017. The Company is currently evaluating the impact of, and any actions it intends to take regarding, the maturity default. Based on the Company’s preliminary assessment, the Company does not believe there to be risk of any principal loss as of the filing of this form 10Q. Distributions Paid On April 3, 2017 , the Company paid a distribution of $5.5 million to stockholders of record during the month of March 2017 . The Company paid $3.6 million of the distribution in cash, while $1.9 million was used to purchase 96,082 shares through the DRIP. |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Accounting | Basis of Accounting The accompanying consolidated financial statements and related footnotes are unaudited and have been prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and pursuant to the requirements for reporting on Form 10-Q and Regulation S-X, as appropriate. Accordingly, the consolidated financial statements may not include all of the information and notes required by GAAP for annual consolidated financial statements. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities as of the date of the financial statements and the reported amounts of income and expenses during the reported periods. Changes in the economic environment, financial markets and any other parameters used in determining these estimates could cause actual results to differ materially. In the opinion of management, the interim data includes all adjustments, of a normal and recurring nature, necessary for a fair statement of the results for the periods presented. The current period’s results of operations will not necessarily be indicative of results that ultimately may be achieved for the entire year or any subsequent interim periods. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of, and for the year ended December 31, 2016 , which are included in the Company's Annual Report on Form 10-K filed with the SEC on March 29, 2017. There have been no significant changes to the Company's significant accounting policies during the three months ended March 31, 2017 , as described below. |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company, the OP and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a VIE for which the Company is the primary beneficiary. The Company has determined the OP is a VIE of which the Company is the primary beneficiary. Substantially all of the Company's assets and liabilities are held by the OP. The Company consolidates all entities that the Company controls through either majority ownership or voting rights. In addition, the Company consolidates all VIEs of which the Company is considered the primary beneficiary. VIEs are entities in which equity investors (i) do not have the characteristics of a controlling financial interest and/or (ii) do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The entity that consolidates a VIE is its primary beneficiary and is generally the entity with (i) the power to direct the activities that most significantly affect the VIE’s economic performance and (ii) the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE. The accompanying consolidated financial statements include the accounts of a collateralized loan obligation ("CLO") issued and securitized by a wholly owned subsidiary of the Company. The Company has determined the CLO is a VIE of which the Company's subsidiary is the primary beneficiary. The assets and liabilities of the CLO are consolidated in the accompanying consolidated balance sheet in accordance with ASC 810 - Consolidation. |
Acquisition Fees and Acquisition Expenses | Acquisition Fees and Acquisition Expenses The Company incurs acquisition fees and acquisition expenses payable to the Advisor. The Company pays the Advisor an acquisition fee based on the principal amount funded by the Company to originate or acquire commercial mortgage loan investments or on the anticipated net equity funded by the Company to acquire real estate securities. Acquisition fees and acquisition expenses paid to the Company's Advisor in connection with the origination and acquisition of commercial mortgage loan investments and acquisition of real estate securities are evaluated based on the nature of the expense to determine if they should be expensed in the period incurred or capitalized and amortized over the life of the investment. The Company capitalizes certain direct costs relating to the loan origination activities and the cost is amortized over the life of the loan. |
Commercial Mortgage Loans and Allowance for Loan Losses | Commercial Mortgage Loans Commercial mortgage loans that are held for investment purposes and are anticipated to be held until maturity, are carried at cost, net of unamortized acquisition expenses, discounts or premiums and unfunded commitments. Commercial mortgage loans, held for investment purposes, that are deemed to be impaired will be carried at amortized cost less a specific allowance for loan losses. Interest income is recorded on the accrual basis and related discounts, premiums and acquisition expenses on investments are amortized over the life of the investment using the effective interest method. Amortization is reflected as an adjustment to interest income in the Company’s consolidated statements of operations. Guaranteed loan exit fees payable by the borrower upon maturity are accreted over the life of the investment using the effective interest method. The accretion of guaranteed loan exit fees is recognized in interest income in the Company's consolidated statements of operation. Commercial loans that are intended to be sold in the foreseeable future are reported as held-for-sale and are transferred at fair value and recorded at the lower of cost or fair value with changes recorded through the statement of operations. Unamortized loan origination costs for commercial loans held-for-sale are capitalized as part of the carrying value of the loans and recognized upon the sale of such loans. Amortization of origination costs ceases upon transfer of commercial loans to held-for-sale. Allowance for Loan Losses The allowance for loan losses reflects management's estimate of loan losses inherent in the loan portfolio as of the balance sheet date. The reserve is increased through the loan loss provision on the Company's consolidated statement of operations and is decreased by charge-offs when losses are confirmed through the receipt of assets, such as cash in a pre-foreclosure sale or upon ownership control of the underlying collateral in full satisfaction of the loan upon foreclosure or when significant collection efforts have ceased. The Company uses a uniform process for determining its allowance for loan losses. The allowance for loan losses includes a general, formula-based component and an asset-specific component. General reserves are recorded when (i) available information as of each balance sheet date indicates that it is probable a loss has occurred in the portfolio and (ii) the amount of the loss can be reasonably estimated. The Company currently estimates loss rates based on historical realized losses experienced in the industry, given the fact the Company has not experienced any losses, and takes into account current collateral and economic conditions affecting the probability and severity of losses when establishing the allowance for loan losses. The Company performs a comprehensive analysis of its loan portfolio and assigns risk ratings to loans that incorporate management's current judgments about their credit quality based on all known and relevant internal and external factors that may affect collectability. The Company considers, among other things, payment status, lien position, borrower financial resources and investment in collateral, collateral type, project economics and geographic location as well as national and regional economic factors. This methodology results in loans being segmented by risk classification into risk rating categories that are associated with estimated probabilities of default and principal loss. Ratings range from "1" to "5" with "1" representing the lowest risk of loss and "5" representing the highest risk of loss. The asset-specific reserve component relates to reserves for losses on individual impaired loans. The Company considers a loan to be impaired when, based upon current information and events, it believes that it is probable that the Company will be unable to collect all amounts due under the contractual terms of the loan agreement. This assessment is made on an individual loan basis each quarter based on such factors as payment status, lien position, borrower financial resources and investment in collateral, collateral type, project economics and geographical location as well as national and regional economic factors. A reserve is established for an impaired loan when the present value of payments expected to be received, observable market prices or the estimated fair value of the collateral (for loans that are dependent on the collateral for repayment) is lower than the carrying value of that loan. For collateral dependent impaired loans, impairment is measured using the estimated fair value of collateral less the estimated cost to sell. Valuations are performed or obtained at the time a loan is determined to be impaired and designated non-performing, and they are updated if circumstances indicate that a significant change in value has occurred. The Advisor generally will use the income approach through internally developed valuation models to estimate the fair value of the collateral for such loans. In more limited cases, the Advisor will obtain external "as is" appraisals for loan collateral, generally when third party participations exist. A loan is also considered impaired if its terms are modified in a troubled debt restructuring ("TDR"). A TDR occurs when a concession is granted and the debtor is experiencing financial difficulties. Impairments on TDR loans are generally measured based on the present value of expected future cash flows discounted at the effective interest rate of the original loans. The Company designates non-performing loans at such time as (i) loan payments become 90-days past due; (ii) the loan has a maturity default; or (iii) in the opinion of the Company, it is probable the Company will be unable to collect all amounts due according to the contractual terms of the loan. Income recognition will be suspended when a loan is designated non-performing and resumed only when the suspended loan becomes contractually current and performance is demonstrated to have resumed. A loan will be written off when it is no longer realizable and legally discharged. |
Per Share Data | Per Share Data The Company calculates basic earnings per share by dividing net income attributable to the Company for the period by the weighted-average number of shares of common stock outstanding for that period. Diluted earnings per share reflects the potential dilution that could occur from shares issuable in connection with the restricted stock plan and if convertible shares were exercised, except when doing so would be anti-dilutive. |
Reportable Segments | Reportable Segments The Company conducts its business through the following segments: • The real estate debt business which is focused on originating, acquiring and asset managing commercial real estate debt investments, including first mortgage loans, subordinate mortgages, mezzanine loans and participations in such loans. • The real estate securities business which is focused on investing in and asset managing commercial real estate securities primarily consisting of CMBS and may include unsecured REIT debt, CDO notes and other securities. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In March 2016, the Financial Accounting Standards Board ("FASB") issued guidance which requires an entity to determine whether the nature of its promise to provide goods or services to a customer is performed in a principal or agent capacity and to recognize revenue in a gross or net manner based on its principal/agent designation. This guidance is effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted. The Company is currently evaluating the impact of this new guidance. In June 2016, the FASB issued guidance that changes how entities measure credit losses for financial assets carried at amortized cost. The update eliminates the requirement that a credit loss must be probable before it can be recognized and instead requires an entity to recognize the current estimate of all expected credit losses. Additionally, the update requires credit losses on available-for-sale debt securities to be carried as an allowance rather than as a direct write-down of the asset. The amendments become effective for reporting periods beginning after December 15, 2019. The amendments may be adopted early for reporting periods beginning after December 15, 2018. The Company is currently evaluating the impact of this new guidance. In August 2016, the FASB issued guidance on how certain transactions should be classified and presented in the statement of cash flows as either operating, investing or financing activities. Among other things, the update provides specific guidance on where to classify debt prepayment and extinguishment costs, payments for contingent consideration made after a business combination and distributions received from equity method investments. The revised guidance is effective for reporting periods beginning after December 15, 2017. Early adoption is permitted. The Company is currently evaluating the impact of this new guidance. In October 2016, the FASB issued guidance where a reporting entity will need to evaluate if it should consolidate a VIE. The amendments change the evaluation of whether a reporting entity is the primary beneficiary of a VIE by changing how a single decision maker of a VIE treats indirect interests in the entity held through related parties that are under common control with the reporting entity. The revised guidance is effective for reporting periods beginning after December 15, 2016. The Company adopted this revised guidance this reporting period which did not have any effect on the Company’s consolidated financial statements. In November 2016, the FASB issued guidance on the classification of restricted cash in the statement of cash flows. The amendment requires restricted cash to be included in the beginning-of-period and end-of-period total cash amounts. Therefore, transfers between cash and restricted cash will no longer be shown on the statement of cash flows. The guidance is effective for reporting periods beginning after December 15, 2017. Early adoption is permitted. We do not expect this guidance to have a material impact on the Company’s consolidated financial statements. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments GAAP establishes a hierarchy of valuation techniques based on the observability of inputs used in measuring financial instruments at fair values. GAAP establishes market-based or observable inputs as the preferred source of values, followed by valuation models using management assumptions in the absence of market inputs. The three levels of the hierarchy are described below: • Level I - Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. • Level II - Inputs (other than quoted prices included in Level I) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life. • Level III - Unobservable inputs that reflect the entity’s own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques. The determination of where an asset or liability falls in the above hierarchy requires significant judgment and factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures each quarter and depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter. The Company has implemented valuation control processes to validate the fair value of the Company's financial instruments measured at fair value including those derived from pricing models. These control processes are designed to assure that the values used for financial reporting are based on observable inputs wherever possible. In the event that observable inputs are not available, the control processes are designed to assure that the valuation approach utilized is appropriate and consistently applied and the assumptions are reasonable. CMBS are valued utilizing both observable and unobservable market inputs. These factors include projected future cash flows, ratings, subordination levels, vintage, remaining lives, credit issues, recent trades of similar real estate securities and the spreads used in the prior valuation. Depending upon the significance of the fair value inputs used in determining these fair values, these real estate securities are classified in either Level II or Level III of the fair value hierarchy. The Company obtains current market spread information where available and uses this information in evaluating and validating the market price of all CMBS. Depending upon the significance of the fair value inputs used in determining these fair values, these real estate securities are classified in either Level II or Level III of the fair value hierarchy. |
Commercial Mortgage Loans (Tabl
Commercial Mortgage Loans (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Receivables [Abstract] | |
Summary of the company's loans receivable by class | March 31, 2017 December 31, 2016 Loan Type Par Value Percentage Par Value Percentage Office $ 361,289 33.7 % $ 340,944 31.6 % Multifamily 291,020 27.1 % 329,203 30.6 % Hospitality 125,291 11.7 % 143,582 13.3 % Retail 197,668 18.4 % 154,684 14.4 % Mixed Use 45,235 4.2 % 56,136 5.2 % Industrial 52,797 4.9 % 52,688 4.9 % $ 1,073,300 100.0 % $ 1,077,237 100.0 % The following table presents the activity in the Company's allowance for loan losses (in thousands): Three Months Ended March 31, 2017 Three Months Ended March 31, 2016 Beginning of period $ 2,181 $ 888 Provision for loan losses 612 165 Charge-offs — — Recoveries — — Ending allowance for loan losses $ 2,793 $ 1,053 The following table is a summary of the Company's commercial mortgage loans, held for investment, carrying values by class (in thousands): March 31, 2017 December 31, 2016 Senior loans $ 918,323 $ 901,907 Mezzanine loans 93,334 136,830 Subordinated loans — 10,000 Total gross carrying value of loans 1,011,657 1,048,737 Less: Allowance for loan losses 2,793 2,181 Total commercial mortgage loans, held for investment, net $ 1,008,864 $ 1,046,556 |
Loans and Leases Receivable, Allowance for Loan Losses Policy | As part of the Company's process for monitoring the credit quality of its loans, it performs a quarterly loan portfolio assessment and assigns risk ratings to each of its loans. The loans are rated on a 5-point scale as follows: Investment Rating Summary Description 1 Investment exceeding fundamental performance expectations and/or capital gain expected. Trends and risk factors since time of investment are favorable. 2 Performing consistent with expectations and a full return of principal and interest expected. Trends and risk factors are neutral to favorable. 3 Performing investments requiring closer monitoring. Trends and risk factors show some deterioration. 4 Underperforming investment with the potential of some interest loss but still expecting a positive return on investment. Trends and risk factors are negative. 5 Underperforming investment with expected loss of interest and some principal. |
Real Estate Notes Receivable Rollforward | For the three months ended March 31, 2017 and March 31, 2016 , the activity in the Company's loan portfolio was as follows (in thousands): Three Months Ended March 31, 2017 Three Months Ended March 31, 2016 Balance at Beginning of Year $ 1,046,556 $ 1,124,201 Acquisitions and originations 93,140 9,697 Dispositions — — Principal repayments (86,079 ) (7,949 ) Discount accretion and premium amortization* 628 566 Loans transferred to commercial real estate loans, held-for-sale, at fair value (45,513 ) — Fees capitalized into carrying value of loans 744 — Provision for loan losses (612 ) (165 ) Balance at End of Period $ 1,008,864 $ 1,126,350 ________________________ * Includes amortization of capitalized acquisition fees and expenses. |
Real Estate Securities (Tables)
Real Estate Securities (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Fair Value Measurements, Recurring and Nonrecurring | The following is a summary of the Company's real estate securities, CMBS (in thousands): Weighted Average Number of Investments Interest Rate Maturity Par Value Fair Value March 31, 2017 2 7.9 % May 2022 $ 25,000 $ 25,733 December 31, 2016 6 5.8 % February 2020 50,000 49,049 The following table presents the Company's financial instruments carried at fair value on a recurring basis in the consolidated balance sheets by its level in the fair value hierarchy as of March 31, 2017 and December 31, 2016 (in thousands): Total Level I Level II Level III March 31, 2017 Real estate securities $ 25,733 $ — $ — $ 25,733 December 31, 2016 Real estate securities 49,049 — — 49,049 |
Available-for-Sale Securities | The following table shows the amortized cost, unrealized gains/losses and fair value of the Company's CMBS investments as of March 31, 2017 and December 31, 2016 (in thousands): Amortized Cost Unrealized Gains Unrealized Losses Fair Value March 31, 2017 $ 24,845 $ 888 $ — $ 25,733 December 31, 2016 49,548 — (499 ) 49,049 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Master Repurchase Agreements | Below is a summary of the Company's MRAs as of March 31, 2017 and December 31, 2016 (in thousands): Weighted Average Counterparty Amount Outstanding Accrued Interest Collateral Pledged (*) Interest Rate Days to Maturity As of March 31, 2017 J.P. Morgan Securities LLC $ 52,174 $ 119 $ 80,376 3.10 % 90 Total/Weighted Average $ 52,174 $ 119 $ 80,376 3.10 % 90 As of December 31, 2016 J.P. Morgan Securities LLC $ 59,122 $ 96 $ 92,658 2.55 % 6 Citigroup Global Markets, Inc. 3,879 1 4,850 2.11 % 26 Wells Fargo Securities, LLC 3,638 4 4,850 2.05 % 13 Total/Weighted Average $ 66,639 $ 101 $ 102,358 2.50 % 8 * Includes $54.6 and $53.3 Tranche C of Company issued CLO held by the Company, which eliminates within the real estate securities, at fair value line of the consolidated balance sheets as of March 31, 2017 and December 31, 2016, respectively. |
Schedule of Long-term Debt Instruments | The following table represents the terms of the CLO issued. Facility ($000s) Par Value Issued Par Value Outstanding (*) Interest Rate Maturity Date As of March 31, 2017 Tranche A $ 231,345 $ 172,739 1M LIBOR + 175 8/1/2030 Tranche B 42,841 42,841 1M LIBOR + 388 8/1/2030 Tranche C 76,044 20,000 1M LIBOR + 525 8/1/2030 $ 350,230 $ 235,580 As of December 31, 2016 Tranche A $ 231,345 $ 222,195 1M LIBOR + 175 8/1/2030 Tranche B 42,841 42,841 1M LIBOR + 388 8/1/2030 Tranche C 76,044 20,000 1M LIBOR + 525 8/1/2030 $ 350,230 $ 285,036 ________________________ * Excludes $56.0 million and $56.0 million of Tranche C of Company issued CLO held by the Company, which eliminates within the collateralized loan obligation line of the consolidated balance sheets as of March 31, 2017 and December 31, 2016, respectively. |
Schedule of Variable Interest Entities | The below table reflects the total assets and liabilities of the Company's only CLO. The CLO is considered a VIE and is consolidated into the Company's consolidated financial statements as of March 31, 2017 and December 31, 2016 as the Company is the primary beneficiary of the VIE. The Company is the primary beneficiary of the CLO because (i) the Company has the power to direct the activities that most significantly affect the VIE’s economic performance and (ii) the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE. Assets ($000s) March 31, 2017 December 31, 2016 Cash $ 5 $ 5 Commercial mortgage loans, held for investment, net of allowance of $1,160 and $1,017 (1) 367,810 417,057 Accrued interest receivable 1,006 1,101 Total Assets $ 368,821 $ 418,163 Liabilities Notes payable (2)(3) $ 284,890 $ 334,246 Interest payable 535 564 Total Liabilities $ 285,425 $ 334,810 ________________________ (1) The balance is presented net of allowance for loan loss of $1.2 million and $1.0 million as of March 31, 2017 and December 31, 2016 , respectively. (2) Includes $55.8 million and $55.8 million of Tranche C of Company issued CLO held by the Company, which eliminates within the Collateral loan obligations line of the consolidated balance sheets as of March 31, 2017 and December 31, 2016 , respectively. (3) The balance is presented net of deferred financing cost and discount of $6.7 million and $6.8 million as of March 31, 2017 and December 31, 2016 , respectively. |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Summary of the Basic and Diluted Earnings Per Share | The following table is a summary of the basic and diluted net income per share computation for the three months ended March 31, 2017 and 2016 , respectively: Three Months Ended March 31, 2017 2016 Net income (in thousands) $ 6,049 $ 9,420 Basic weighted average shares outstanding 31,740,256 31,548,897 Unvested restricted shares 9,789 6,114 Diluted weighted average shares outstanding 31,750,045 31,555,011 Basic net income per share $ 0.19 $ 0.30 Diluted net income per share $ 0.19 $ 0.30 |
Common Stock (Tables)
Common Stock (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Schedule of Share Repurchases | The following table reflects the number of shares repurchased under the SRP cumulatively through March 31, 2017 : Number of Requests Number of Shares Repurchased Average Price per Share Cumulative as of December 31, 2016 985 918,683 $ 23.94 January 1 - March 31, 2017 502 496,678 19.04 Cumulative as of March 31, 2017 1,487 1,415,361 $ 22.22 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Unfunded Commitments Under Commercial Mortgage Loans | As of March 31, 2017 and December 31, 2016 , the Company had the below unfunded commitments to the Company's borrowers. Funding Expiration March 31, 2017 December 31, 2016 2016 $ — $ — 2017 7,367 7,794 2018 52,014 62,368 2019 13,954 9,072 2023 — — Total $ 73,335 $ 79,234 |
Related Party Transactions an28
Related Party Transactions and Arrangements (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
Schedule of Amount Contractually Due and Forgiven in Connection With Operation Related Services | The table below depicts related party fees and reimbursements in connection with the operations of the Company for the three and nine months ended March 31, 2017 and 2016 and the associated payable as of March 31, 2017 and December 31, 2016 (in thousands): Three Months Ended March 31, Payable as of 2017 2016 March 31, 2017 December 31, 2016 Total compensation and reimbursement for services provided by the Former Advisor, its affiliates, entities under common control with the Former Advisor and the Former Dealer Manager $ — $ — $ 480 $ 480 Acquisition fees and expenses (1) 1,412 157 — — Administrative services expenses 855 816 855 1,000 Advisory and investment banking fee — 6 — — Asset management and subordinated performance fee 2,312 3,010 2,340 2,439 Other related party expenses 48 26 66 145 Total related party fees and reimbursements $ 4,627 $ 4,015 $ 3,741 $ 4,064 ________________________ 1 Includes amortization of capitalized acquisition fees and expenses. |
Fair Value of Financial Instr29
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements, Recurring and Nonrecurring | The following is a summary of the Company's real estate securities, CMBS (in thousands): Weighted Average Number of Investments Interest Rate Maturity Par Value Fair Value March 31, 2017 2 7.9 % May 2022 $ 25,000 $ 25,733 December 31, 2016 6 5.8 % February 2020 50,000 49,049 The following table presents the Company's financial instruments carried at fair value on a recurring basis in the consolidated balance sheets by its level in the fair value hierarchy as of March 31, 2017 and December 31, 2016 (in thousands): Total Level I Level II Level III March 31, 2017 Real estate securities $ 25,733 $ — $ — $ 25,733 December 31, 2016 Real estate securities 49,049 — — 49,049 |
Fair Value, Assets Measured on Recurring Basis | The following table presents additional information about CMBS investments which are measured at fair value on a recurring basis as of March 31, 2017 and December 31, 2016 for which the Company has used Level 3 inputs to determine fair value (dollars in thousands): March 31, 2017 Year Ended December 31, 2016 Beginning balance $ 49,049 $ — Transfers into Level III — 57,639 Total realized and unrealized gains (losses) included in earnings: Realized loss on sale of real estate securities (29 ) (874 ) Impairment losses on real estate securities — (310 ) Net accretion 6 — Unrealized gains (losses) included in OCI (1) 1,388 1,719 Purchases — — Sales (24,681 ) (9,125 ) Cash repayments/receipts — — Transfers out of Level III — — Ending balance $ 25,733 $ 49,049 ________________________ (1) - Unrealized gains included in Other comprehensive income ("OCI") are attributable to assets still held at March 31, 2017 and December 31, 2016. |
Fair Value Measurements, Nonrecurring | The following table presents the Company's financial instruments carried at fair value on a non-recurring basis in the consolidated balance sheets by its level in the fair value hierarchy as of December 31, 2016 (in thousands): Total Level I Level II Level III March 31, 2017 (*) Commercial mortgage loans, held-for-sale, measured at fair value $ 53,305 $ — $ — $ 53,305 December 31, 2016 (*) Commercial mortgage loans, held-for-sale, measured at fair value 21,179 — — 21,179 ________________________ * As of March 31, 2017 and December 31, 2016, the Company's portfolio of commercial real estate loans held-for-sale were carried at the lower of cost or market value. The fair value of certain held-for-sale loans were adjusted to reflect fair value of the assets based on the sales price received from a potential buyer. |
Fair Value by Balance Sheet Grouping | The fair values of the Company's commercial mortgage loans and collateralized loan obligations, which are not reported at fair value on the consolidated balance sheets are reported below as of March 31, 2017 and December 31, 2016 (in thousands): Level Carrying Amount Fair Value March 31, 2017 Commercial mortgage loans (1) Asset III $ 1,011,657 $ 987,810 Collateralized loan obligation Liability II 229,088 231,954 December 31, 2016 Commercial mortgage loans (1) Asset III 1,048,737 1,029,756 Collateralized loan obligation Liability II 278,450 282,001 ________________________ 1 The carrying value is gross of $2.8 million and $2.2 million of allowance for loan losses as of March 31, 2017 and December 31, 2016 , respectively. |
Offsetting Assets and Liabili30
Offsetting Assets and Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Offsetting [Abstract] | |
Offsetting Liabilities | The table below provides a gross presentation, the effects of offsetting and a net presentation of the Company's repurchase agreements within the scope of ASC 210-20, Balance Sheet—Offsetting , as of March 31, 2017 and December 31, 2016 , (in thousands): Gross Amounts Not Offset on the Balance Sheet Repurchase Agreements Gross Amounts of Recognized Liabilities Gross Amounts Offset on the Balance Sheet Net Amount of Liabilities Presented on the Balance Sheet Financial Instruments as Collateral Pledged (*) Cash Collateral Pledged Net Amount March 31, 2017 Commercial mortgage loans $ 340,948 $ — $ 340,948 $ 510,972 $ 5,005 $ — Real estate securities 52,174 — 52,174 80,376 102 — December 31, 2016 Commercial mortgage loans 257,664 — 257,664 399,914 5,000 — Real estate securities 66,639 — 66,639 102,358 21 — * Includes $54.6 million and $53.3 million Tranche C of Company issued CLO held by the Company, which eliminates within the real estate securities, at fair value line of the consolidated balance sheets as of March 31, 2017 and December 31, 2016, respectively. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following table represents the Company's operations by segment for the three months ended March 31, 2017 and 2016 (in thousands): Three Months Ended March 31, 2017 Total Real Estate Debt Real Estate Securities Interest income $ 18,879 $ 18,208 $ 671 Interest expense 5,428 4,993 435 Net income 6,049 5,949 100 Three Months Ended March 31, 2016 Interest income 20,291 18,676 1,615 Interest expense 4,768 4,091 677 Net income 9,420 9,059 361 The following table represents the Company's total assets by segment as of March 31, 2017 and December 31, 2016 (in thousands): As of March 31, 2017 Total Real Estate Debt Real Estate Securities Total Assets $ 1,255,278 $ 1,229,244 $ 26,034 As of December 31, 2016 Total Assets 1,248,125 1,198,806 49,319 |
Organization and Business Ope32
Organization and Business Operations - Narrative (Details) $ in Millions | May 14, 2013USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Proceeds from issuances of common stock | $ 2 |
Summary of Significant Accoun33
Summary of Significant Accounting Policies - Narrative (Details) - New Advisor - Affiliate - USD ($) | Mar. 31, 2017 | Sep. 29, 2016 |
Related Party Transaction [Line Items] | ||
Real estate acquisition fee, percentage | 1.00% | 1.00% |
Amount of purchase price to terminate Company's obligation to pay acquisition fees to the Advisor | $ 600,000,000 | $ 600,000,000 |
Commercial Mortgage Loans - Loa
Commercial Mortgage Loans - Loans Receivable by Class (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | |
Receivables [Abstract] | |||||
Senior loans | $ 918,323 | $ 901,907 | |||
Mezzanine loans | 93,334 | 136,830 | |||
Subordinated loans | 0 | 10,000 | |||
Total gross carrying value of loans | 1,011,657 | 1,048,737 | |||
Less: Allowance for loan losses | 2,793 | 2,181 | $ 1,053 | $ 888 | |
Total commercial mortgage loans, held for investment, net | [1] | $ 1,008,864 | $ 1,046,556 | ||
[1] | Includes $367.8 million and $417.1 million of loans net of allowance of $1.2 million and $1.0 million pledged as collateral on collateralized loan obligations ("CLO"), a variable interest entity ("VIE") as of March 31, 2017 and December 31, 2016, respectively. |
Commercial Mortgage Loans - Pro
Commercial Mortgage Loans - Provision for Loan Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Allowance for Loan and Lease Losses [Roll Forward] | ||
Beginning balance | $ 2,181 | $ 888 |
Provision for loan losses | 612 | 165 |
Charge-offs | 0 | 0 |
Recoveries | 0 | 0 |
Ending balance | $ 2,793 | $ 1,053 |
Commercial Mortgage Loans - Nar
Commercial Mortgage Loans - Narrative (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017ratingloan | Dec. 31, 2016ratingloan | |
Receivables [Abstract] | ||
Number of mezzanine loans funded (loan) | loan | 67 | 71 |
Initial risk rating of loans | 2 | |
Weighted average risk rating of loans | 2.2 | 2.1 |
Commercial Mortgage Loans - L37
Commercial Mortgage Loans - Loans Receivable Portfolio (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross carrying value of loans | $ 1,011,657 | $ 1,048,737 |
First Mortgage | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross carrying value of loans | $ 1,073,300 | $ 1,077,237 |
Loan type as a percent of total loans, percent | 100.00% | 100.00% |
First Mortgage | Office | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross carrying value of loans | $ 361,289 | $ 340,944 |
Loan type as a percent of total loans, percent | 33.70% | 31.60% |
First Mortgage | Multifamily | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross carrying value of loans | $ 291,020 | $ 329,203 |
Loan type as a percent of total loans, percent | 27.10% | 30.60% |
First Mortgage | Hospitality | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross carrying value of loans | $ 125,291 | $ 143,582 |
Loan type as a percent of total loans, percent | 11.70% | 13.30% |
First Mortgage | Retail | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross carrying value of loans | $ 197,668 | $ 154,684 |
Loan type as a percent of total loans, percent | 18.40% | 14.40% |
First Mortgage | Mixed Use | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross carrying value of loans | $ 45,235 | $ 56,136 |
Loan type as a percent of total loans, percent | 4.20% | 5.20% |
First Mortgage | Industrial | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross carrying value of loans | $ 52,797 | $ 52,688 |
Loan type as a percent of total loans, percent | 4.90% | 4.90% |
Commercial Mortgage Loans - Rea
Commercial Mortgage Loans - Real Estate Notes Receivable (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Movement in Mortgage Loans on Real Estate [Roll Forward] | ||
Balance at Beginning of Year | $ 1,046,556 | $ 1,124,201 |
Acquisitions and originations | 93,140 | 9,697 |
Dispositions | 0 | 0 |
Principal repayments | (86,079) | (7,949) |
Discount accretion and premium amortization | 628 | 566 |
Loans transferred to commercial real estate loans, held-for-sale, at fair value | (45,513) | 0 |
Fees capitalized into carrying value of loans | 744 | 0 |
Provision for loan losses | (612) | (165) |
Balance at End of Period | $ 1,008,864 | $ 1,126,350 |
Real Estate Securities - Fair V
Real Estate Securities - Fair Value Measurements, Recurring and Nonrecurring (Details) - Real estate securities $ in Thousands | Mar. 31, 2017USD ($)investment | Dec. 31, 2016USD ($)investment |
Schedule of Available-for-sale Securities [Line Items] | ||
Number of Investments | investment | 2 | 6 |
Interest Rate | 7.90% | 5.80% |
Par Value | $ 25,000 | $ 50,000 |
Fair Value | $ 25,733 | $ 49,049 |
Real Estate Securities - Availa
Real Estate Securities - Available-for-sale Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | $ 25,733 | $ 49,049 |
Real estate securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 24,845 | 49,548 |
Unrealized Gains | 888 | 0 |
Unrealized Losses | 0 | (499) |
Fair Value | $ 25,733 | $ 49,049 |
Real Estate Securities - Narrat
Real Estate Securities - Narrative (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2017USD ($)investment | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($)investment | |
Schedule of Available-for-sale Securities [Line Items] | |||
Change in unrealized losses on real estate securities | $ 29,000 | $ 0 | |
Real estate securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Number of Investments | investment | 2 | 6 | |
Aggregate carrying value | $ 24,845,000 | $ 49,548,000 | |
Unrealized gain | 888,000 | 0 | |
Unrealized loss | 0 | $ 499,000 | |
Number of investments in an unrealized loss position, 12 months or longer (investment) | investment | 2 | ||
Unrealized loss for 12 months or longer | $ 200,000 | ||
Change in unrealized losses on real estate securities | $ 28,281 | $ 0 |
Debt - Narrative (Details)
Debt - Narrative (Details) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2017USD ($)mortgage_asset$ / sharesshares | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($)mortgage_asset$ / sharesshares | Oct. 19, 2015USD ($)$ / sharesshares | |
Line of Credit Facility [Line Items] | ||||
Preferred stock, shares issued (in shares) | shares | 0 | 0 | ||
Preferred stock, par value per share (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | ||
U.S. Bank National Association | ||||
Line of Credit Facility [Line Items] | ||||
Preferred stock, shares issued (in shares) | shares | 78,188,494 | |||
Preferred stock, par value per share (in dollars per share) | $ / shares | $ 0.001 | |||
Preferred stock liquidation preference (in dollars per share) | $ / shares | $ 1,000 | |||
U.S. Bank National Association | Secured Debt | ||||
Line of Credit Facility [Line Items] | ||||
Notes payable | $ 350,230,000 | $ 350,230,000 | $ 350,200,000 | |
U.S. Bank National Association | Secured Debt | Class C Notes | ||||
Line of Credit Facility [Line Items] | ||||
Notes payable | $ 76,044,000 | $ 76,044,000 | ||
U.S. Bank National Association | Secured Debt | Collateralized Loan Obligations | ||||
Line of Credit Facility [Line Items] | ||||
Number of mortgage assets pledged as collateral (mortgage asset) | mortgage_asset | 22 | 27 | ||
Principal balance of collateral | $ 369,800,000 | $ 419,300,000 | ||
U.S. Bank National Association | Secured Debt | Collateralized Loan Obligations | Class C Notes | ||||
Line of Credit Facility [Line Items] | ||||
Principal balance of collateral | $ 56,000,000 | $ 56,000,000 | ||
U.S. Bank National Association | Secured Debt | Subsidiaries | Class C Notes | ||||
Line of Credit Facility [Line Items] | ||||
Notes payable | $ 56,000,000 | |||
London Interbank Offered Rate (LIBOR) | Secured Debt | Class C Notes | ||||
Line of Credit Facility [Line Items] | ||||
Variable interest rate | 5.25% | 5.25% | ||
Minimum | ||||
Line of Credit Facility [Line Items] | ||||
MRA maturity term (days) | 30 days | |||
Maximum | ||||
Line of Credit Facility [Line Items] | ||||
MRA maturity term (days) | 90 days | |||
GS Repo Facility | ||||
Line of Credit Facility [Line Items] | ||||
Extension on initial maturity date | 1 year | |||
Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Revolving line of credit | $ 52,174,000 | $ 66,639,000 | ||
Interest Rate | 3.10% | 2.50% | ||
Revolving Credit Facility | JPM Repo Facility | ||||
Line of Credit Facility [Line Items] | ||||
Unsecured line of credit | $ 300,000,000 | |||
Revolving line of credit | $ 251,900,000 | $ 257,700,000 | ||
Interest Rate | 3.29% | 3.08% | ||
Interest expense | $ 2,600,000 | $ 800,000 | ||
Revolving Credit Facility | JPM Repo Facility | Minimum | London Interbank Offered Rate (LIBOR) | ||||
Line of Credit Facility [Line Items] | ||||
Variable interest rate | 2.25% | |||
Revolving Credit Facility | JPM Repo Facility | Maximum | London Interbank Offered Rate (LIBOR) | ||||
Line of Credit Facility [Line Items] | ||||
Variable interest rate | 4.50% | |||
Revolving Credit Facility | GS Repo Facility | ||||
Line of Credit Facility [Line Items] | ||||
Unsecured line of credit | $ 250,000,000 | |||
Revolving line of credit | $ 89,100,000 | |||
Variable interest rate | 0.50% | |||
Interest Rate | 3.38% | |||
Interest expense | $ 300,000 | |||
Revolving Credit Facility | GS Repo Facility | Minimum | London Interbank Offered Rate (LIBOR) | ||||
Line of Credit Facility [Line Items] | ||||
Variable interest rate | 2.35% | |||
Revolving Credit Facility | GS Repo Facility | Maximum | London Interbank Offered Rate (LIBOR) | ||||
Line of Credit Facility [Line Items] | ||||
Variable interest rate | 2.85% |
Debt - Schedule of Master Repur
Debt - Schedule of Master Repurchase Agreements (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | ||
Assets Sold under Agreements to Repurchase [Line Items] | |||
Accrued Interest | [1] | $ 997 | $ 897 |
Real estate securities, available for sale, at fair value | 25,733 | 49,049 | |
Class C Notes | Secured Debt | U.S. Bank National Association | |||
Assets Sold under Agreements to Repurchase [Line Items] | |||
Real estate securities, available for sale, at fair value | 54,600 | 53,300 | |
Revolving Credit Facility | |||
Assets Sold under Agreements to Repurchase [Line Items] | |||
Amount Outstanding | 52,174 | 66,639 | |
Accrued Interest | 119 | 101 | |
Collateral Pledged | $ 80,376 | $ 102,358 | |
Interest Rate | 3.10% | 2.50% | |
Days to Maturity | 90 days | 8 days | |
Revolving Credit Facility | J.P. Morgan Securities LLC | |||
Assets Sold under Agreements to Repurchase [Line Items] | |||
Amount Outstanding | $ 52,174 | $ 59,122 | |
Accrued Interest | 119 | 96 | |
Collateral Pledged | $ 80,376 | $ 92,658 | |
Interest Rate | 3.10% | 2.55% | |
Days to Maturity | 90 days | 6 days | |
Revolving Credit Facility | Citigroup Global Markets, Inc. | |||
Assets Sold under Agreements to Repurchase [Line Items] | |||
Amount Outstanding | $ 3,879 | ||
Accrued Interest | 1 | ||
Collateral Pledged | $ 4,850 | ||
Interest Rate | 2.11% | ||
Days to Maturity | 26 days | ||
Revolving Credit Facility | Wells Fargo Securities, LLC | |||
Assets Sold under Agreements to Repurchase [Line Items] | |||
Amount Outstanding | $ 3,638 | ||
Accrued Interest | 4 | ||
Collateral Pledged | $ 4,850 | ||
Interest Rate | 2.05% | ||
Days to Maturity | 13 days | ||
[1] | Includes $0.5 million and $0.6 million of interest payable for loans pledged as collateral on CLO, a VIE as of March 31, 2017 and December 31, 2016, respectively. |
Debt - Schedule of CLO Issued (
Debt - Schedule of CLO Issued (Details) - Secured Debt - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | Oct. 19, 2015 | |
Tranche A | London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Variable interest rate | 1.75% | 1.75% | |
Tranche B | London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Variable interest rate | 3.88% | 3.88% | |
Tranche C | London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Variable interest rate | 5.25% | 5.25% | |
U.S. Bank National Association | |||
Debt Instrument [Line Items] | |||
Par value issued | $ 350,230 | $ 350,230 | $ 350,200 |
Par value outstanding | 235,580 | 285,036 | |
U.S. Bank National Association | Tranche A | |||
Debt Instrument [Line Items] | |||
Par value issued | 231,345 | 231,345 | |
Par value outstanding | 172,739 | 222,195 | |
U.S. Bank National Association | Tranche B | |||
Debt Instrument [Line Items] | |||
Par value issued | 42,841 | 42,841 | |
Par value outstanding | 42,841 | 42,841 | |
U.S. Bank National Association | Tranche C | |||
Debt Instrument [Line Items] | |||
Par value issued | 76,044 | 76,044 | |
Par value outstanding | 20,000 | 20,000 | |
Collateralized Loan Obligations | U.S. Bank National Association | |||
Debt Instrument [Line Items] | |||
Principal balance of collateral | 369,800 | 419,300 | |
Collateralized Loan Obligations | U.S. Bank National Association | Tranche C | |||
Debt Instrument [Line Items] | |||
Principal balance of collateral | $ 56,000 | $ 56,000 |
Debt - Assets and Liabilities o
Debt - Assets and Liabilities of the Company's VIE (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Oct. 19, 2015 | ||
Variable Interest Entity [Line Items] | ||||||
Cash | $ 148,372 | $ 118,048 | $ 49,207 | $ 14,807 | ||
Commercial mortgage loans, held for investment, net of allowance of $1,160 and $1,017 | [1] | 1,008,864 | 1,046,556 | |||
Accrued interest receivable | [2] | 5,805 | 5,955 | |||
Total Assets | 1,255,278 | 1,248,125 | ||||
Accrued Interest | [3] | 997 | 897 | |||
Total liabilities | 633,971 | 614,475 | ||||
Allowance for loan losses | 2,793 | 2,181 | $ 1,053 | $ 888 | ||
U.S. Bank National Association | Secured Debt | ||||||
Variable Interest Entity [Line Items] | ||||||
Notes payable | 350,230 | 350,230 | $ 350,200 | |||
U.S. Bank National Association | Secured Debt | Class C Notes | ||||||
Variable Interest Entity [Line Items] | ||||||
Notes payable | 76,044 | 76,044 | ||||
Variable Interest Entity, Primary Beneficiary | ||||||
Variable Interest Entity [Line Items] | ||||||
Cash | 5 | 5 | ||||
Commercial mortgage loans, held for investment, net of allowance of $1,160 and $1,017 | 367,810 | 417,057 | ||||
Accrued interest receivable | 1,006 | 1,101 | ||||
Total Assets | 368,821 | 418,163 | ||||
Notes payable | 284,890 | 334,246 | ||||
Accrued Interest | 535 | 564 | ||||
Total liabilities | 285,425 | 334,810 | ||||
Allowance for loan losses | 1,160 | 1,017 | ||||
Deferred financing cost and discount | 6,700 | 6,800 | ||||
Collateralized Loan Obligations | U.S. Bank National Association | Secured Debt | ||||||
Variable Interest Entity [Line Items] | ||||||
Principal balance of collateral | 369,800 | 419,300 | ||||
Collateralized Loan Obligations | U.S. Bank National Association | Secured Debt | Class C Notes | ||||||
Variable Interest Entity [Line Items] | ||||||
Principal balance of collateral | 56,000 | 56,000 | ||||
Collateralized Loan Obligations | Variable Interest Entity, Primary Beneficiary | U.S. Bank National Association | Secured Debt | Class C Notes | ||||||
Variable Interest Entity [Line Items] | ||||||
Principal balance of collateral | $ 55,800 | $ 55,800 | ||||
[1] | Includes $367.8 million and $417.1 million of loans net of allowance of $1.2 million and $1.0 million pledged as collateral on collateralized loan obligations ("CLO"), a variable interest entity ("VIE") as of March 31, 2017 and December 31, 2016, respectively. | |||||
[2] | Includes $1.0 million and $1.1 million of interest receivable for loans pledged as collateral on CLO, a VIE as of March 31, 2017 and December 31, 2016, respectively. | |||||
[3] | Includes $0.5 million and $0.6 million of interest payable for loans pledged as collateral on CLO, a VIE as of March 31, 2017 and December 31, 2016, respectively. |
Net Income Per Share - Summary
Net Income Per Share - Summary of the Basic and Diluted EPS (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Earnings Per Share [Abstract] | ||
Net income | $ 6,049 | $ 9,420 |
Basic weighted average shares outstanding (in shares) | 31,740,256 | 31,548,897 |
Unvested restricted shares (in shares) | 9,789 | 6,114 |
Diluted weighted average shares outstanding (in shares) | 31,750,045 | 31,555,011 |
Basic net income per share (in dollars per share) | $ 0.19 | $ 0.30 |
Diluted net income per share (in dollars per share) | $ 0.19 | $ 0.30 |
Common Stock - Narrative (Detai
Common Stock - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | Mar. 28, 2017 | Feb. 28, 2016 | Dec. 30, 2014 | Nov. 14, 2016 | Mar. 31, 2016 | May 31, 2013 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | Nov. 10, 2016 |
Class of Stock [Line Items] | ||||||||||
Minimum distribution percentage to qualify for REIT taxation status | 90.00% | |||||||||
Distribution percentage required to avoid paying federal income taxes | 100.00% | |||||||||
Common stock, dividends, per share per day, declared (in dollars per share) | $ 0.00565068493 | $ 0.00565068493 | ||||||||
Common stock, dividends, per share per year, declared (in dollars per share) | $ 2.0625 | $ 2.0625 | $ 2.0625 | |||||||
NAV per share (in dollars per share) | $ 20.05 | $ 20.05 | ||||||||
Total distributions | $ 16.1 | $ 16.2 | ||||||||
Cash distributions | 10.4 | |||||||||
Common stock distributions | $ 5.7 | |||||||||
Share repurchase program, period in force | 1 year | |||||||||
Maximum share repurchases per fiscal semester | 2.50% | |||||||||
Maximum share repurchases per fiscal year | 5.00% | |||||||||
Share Repurchase Program (SRP) | ||||||||||
Class of Stock [Line Items] | ||||||||||
Share repurchase program, NAV multiplier year one | 92.50% | |||||||||
Share repurchase program, NAV multiplier year two | 95.00% | |||||||||
Share repurchase program, NAV multiplier year three | 97.50% | |||||||||
Share repurchase program, NAV multiplier year four | 100.00% | |||||||||
Convertible Stock | ||||||||||
Class of Stock [Line Items] | ||||||||||
Issuance of convertible stock (in shares) | 1,000 | |||||||||
Convertible Stock | Former Advisor | ||||||||||
Class of Stock [Line Items] | ||||||||||
Issuance of convertible stock (in shares) | 1,000 | |||||||||
Convertible stock, per share value (in dollars per share) | $ 1 | |||||||||
Common Stock | ||||||||||
Class of Stock [Line Items] | ||||||||||
Common shares converted (shares) | 0 | |||||||||
Shares issued in connection with conversion (shares) | 0 | |||||||||
Common Stock | ||||||||||
Class of Stock [Line Items] | ||||||||||
Shares outstanding (in shares) | 31,673,924 | 31,884,631 |
Common Stock - Shares Repurchas
Common Stock - Shares Repurchased During the Period (Details) - Share Repurchase Program (SRP) - Common Stock | 3 Months Ended |
Mar. 31, 2017share_repurchase_request$ / sharesshares | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |
Beginning balance, number of requests (share repurchase request) | share_repurchase_request | 985 |
Number of requests during the period (share repurchase request) | share_repurchase_request | 502 |
Ending balance, number of requests (share repurchase request) | share_repurchase_request | 1,487 |
Beginning balance, number of shares repurchased (shares) | shares | 918,683 |
Number of shares repurchased (shares) | shares | 496,678 |
Ending balance, number of shares repurchased (shares) | shares | 1,415,361 |
Beginning balance, average price per share (usd per share) | $ / shares | $ 23.94 |
Repurchases, average price per share (usd per share) | $ / shares | 19.04 |
Ending balance, average price per share (usd per share) | $ / shares | $ 22.22 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Thousands | Oct. 20, 2016USD ($) | Jun. 06, 2016defendant | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Loan Origination Commitments | ||||
Unrecorded Unconditional Purchase Obligation [Line Items] | ||||
2,016 | $ 0 | $ 0 | ||
2,017 | 7,367 | 7,794 | ||
2,018 | 52,014 | 62,368 | ||
2,019 | 13,954 | 9,072 | ||
2,023 | 0 | 0 | ||
Total unfunded commitments | 73,335 | $ 79,234 | ||
Pending Litigation | Rurode v. Realty Finance Trust, Inc., et. al. | ||||
Unrecorded Unconditional Purchase Obligation [Line Items] | ||||
Plaintiff requested fees and expenses | $ 750 | |||
Director | Pending Litigation | Rurode v. Realty Finance Trust, Inc., et. al. | ||||
Unrecorded Unconditional Purchase Obligation [Line Items] | ||||
Number of defendants (defendant) | defendant | 2 | |||
Minimum | Pending Litigation | United States District Court for The Southern District of New York and Styled Rurode vs. Reality Finance Trust, Inc., et. al. [Member] | ||||
Unrecorded Unconditional Purchase Obligation [Line Items] | ||||
Estimate of possible loss | 0 | |||
Maximum | Pending Litigation | United States District Court for The Southern District of New York and Styled Rurode vs. Reality Finance Trust, Inc., et. al. [Member] | ||||
Unrecorded Unconditional Purchase Obligation [Line Items] | ||||
Estimate of possible loss | $ 750 |
Related Party Transactions an50
Related Party Transactions and Arrangements - Narrative (Details) - USD ($) | Sep. 29, 2016 | Mar. 31, 2017 | Mar. 31, 2016 |
Related Party Transaction [Line Items] | |||
Asset management and subordinated performance fee | $ 2,312,000 | $ 3,010,000 | |
Affiliate | |||
Related Party Transaction [Line Items] | |||
Related party expenses | 4,627,000 | 4,015,000 | |
Affiliate | Asset Management Fee | |||
Related Party Transaction [Line Items] | |||
Related party expenses | $ 2,300,000 | 2,400,000 | |
Affiliate | New Advisor | |||
Related Party Transaction [Line Items] | |||
Real estate acquisition fee, percentage | 1.00% | 1.00% | |
Amount of purchase price to terminate Company's obligation to pay acquisition fees to the Advisor | $ 600,000,000 | $ 600,000,000 | |
Maximum percent of principal amount funded given as acquisition fees and expenses | 4.50% | ||
Annual asset management fee, percent of stockholders' equity | 1.50% | ||
Subordinated performance fee, total return threshold | 6.00% | ||
Subordinated participation in asset sale fee | 15.00% | ||
Subordinated participation in asset sale fee maximum | 10.00% | ||
Monthly asset management fee as a percent of stockholders' equity | 0.125% | ||
Affiliate | New Advisor | Fee to Acquire and Originate Real Estate Debt | |||
Related Party Transaction [Line Items] | |||
Transaction rate | 0.50% | ||
Former Advisor | |||
Related Party Transaction [Line Items] | |||
Subordinated performance fee, total return threshold | 6.00% | ||
Subordinated participation in asset sale fee | 15.00% | ||
Subordinated participation in asset sale fee maximum | 10.00% | ||
Annual asset management fee, percentage based on the lower of total costs of assets or net asset value | 0.75% | ||
Asset management and subordinated performance fee | $ 0 | 600,000 | |
Related party expenses | 0 | ||
Percentage of average invested assets | 2.00% | ||
Percentage of net income | 25.00% | ||
Monthly asset management fee, percentage of cost of company's assets | 0.0625% | ||
Former Advisor | Acquisition fees and expenses | Incurred | |||
Related Party Transaction [Line Items] | |||
Related party expenses | $ 600,000 | 200,000 | |
Former Advisor | Capitalized Acquisition and Related Expenses | Payable | |||
Related Party Transaction [Line Items] | |||
Amount of capitalized acquisition expenses | 800,000 | 0 | |
Former Advisor | Administrative Service and Personnel Cost Reimbursements | |||
Related Party Transaction [Line Items] | |||
Related party expenses | $ 900,000 | $ 800,000 |
Related Party Transactions an51
Related Party Transactions and Arrangements - Schedule of Amount Contractually Due and Forgiven in Connection With Operation Related Services (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | |||
Payable to related party | $ 3,741 | $ 4,064 | |
Affiliate | |||
Related Party Transaction [Line Items] | |||
Related party expenses | 4,627 | $ 4,015 | |
Payable to related party | 3,741 | 4,064 | |
Affiliate | Nonrecurring Fees | Acquisition fees and expenses | |||
Related Party Transaction [Line Items] | |||
Related party expenses | 1,412 | 157 | |
Payable to related party | 0 | 0 | |
Affiliate | Nonrecurring Fees | Administrative services expenses | |||
Related Party Transaction [Line Items] | |||
Related party expenses | 855 | 816 | |
Payable to related party | 855 | 1,000 | |
Affiliate | Nonrecurring Fees | Advisory and investment banking fee | |||
Related Party Transaction [Line Items] | |||
Related party expenses | 0 | 6 | |
Payable to related party | 0 | 0 | |
Affiliate | Nonrecurring Fees | Asset management and subordinated performance fee | |||
Related Party Transaction [Line Items] | |||
Related party expenses | 2,312 | 3,010 | |
Payable to related party | 2,340 | 2,439 | |
Affiliate | Nonrecurring Fees | Other related party expenses | |||
Related Party Transaction [Line Items] | |||
Related party expenses | 48 | 26 | |
Payable to related party | 66 | 145 | |
Advisor and Dealer Manager | Total compensation and reimbursement for services provided by the Former Advisor, its affiliates, entities under common control with the Former Advisor and the Former Dealer Manager | |||
Related Party Transaction [Line Items] | |||
Related party expenses | 0 | $ 0 | |
Payable to related party | $ 480 | $ 480 |
Fair Value of Financial Instr52
Fair Value of Financial Instruments - Fair Value of Company's Financial Instruments on a Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | $ 25,733 | $ 49,049 |
Commercial mortgage loans | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 25,733 | 49,049 |
Fair Value, Measurements, Recurring | Commercial mortgage loans | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 25,733 | 49,049 |
Fair Value, Measurements, Recurring | Commercial mortgage loans | Level I | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Fair Value, Measurements, Recurring | Commercial mortgage loans | Level II | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Fair Value, Measurements, Recurring | Commercial mortgage loans | Level III | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | $ 25,733 | $ 49,049 |
Fair Value of Financial Instr53
Fair Value of Financial Instruments - Fair Value of Assets Measured on a Recurring Basis (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair Value | $ 25,733 | $ 49,049 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Net accretion | 634 | $ 575 | |
Cash repayments/receipts | 0 | (928) | |
Commercial mortgage loans | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair Value | 25,733 | 49,049 | |
Commercial mortgage loans | Fair Value, Measurements, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair Value | 25,733 | 49,049 | |
Commercial mortgage loans | Fair Value, Measurements, Recurring | Level III | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair Value | 25,733 | 49,049 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning balance | 49,049 | $ 0 | 0 |
Transfers into Level III | 0 | 57,639 | |
Realized loss on sale of real estate securities | (29) | (874) | |
Impairment losses on real estate securities | 0 | (310) | |
Net accretion | 6 | 0 | |
Unrealized gains (losses) included in OCI (1) | 1,388 | 1,719 | |
Purchases | 0 | 0 | |
Sales | (24,681) | (9,125) | |
Cash repayments/receipts | 0 | 0 | |
Transfers out of Level III | 0 | 0 | |
Ending balance | $ 25,733 | $ 49,049 |
Fair Value of Financial Instr54
Fair Value of Financial Instruments - Financial Instruments Measured at Fair Value on a Non-Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Commercial mortgage loans, held-for-sale, measured at fair value | $ 53,305 | $ 21,179 |
Level I | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Commercial mortgage loans, held-for-sale, measured at fair value | 0 | 0 |
Level II | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Commercial mortgage loans, held-for-sale, measured at fair value | 0 | 0 |
Level III | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Commercial mortgage loans, held-for-sale, measured at fair value | $ 53,305 | $ 21,179 |
Fair Value of Financial Instr55
Fair Value of Financial Instruments - Financial Instruments Not Measured at Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Commercial mortgage loans | [1] | $ 1,008,864 | $ 1,046,556 | ||
Collateralized loan obligation | 229,088 | 278,450 | |||
Allowance for loan losses | 2,793 | 2,181 | $ 1,053 | $ 888 | |
Carrying Amount | Level III | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Commercial mortgage loans | 1,011,657 | 1,048,737 | |||
Allowance for loan losses | 2,800 | 2,200 | |||
Carrying Amount | Level II | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Collateralized loan obligation | 229,088 | 278,450 | |||
Fair Value | Level III | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Commercial mortgage loans | 987,810 | 1,029,756 | |||
Fair Value | Level II | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Collateralized loan obligation | $ 231,954 | $ 282,001 | |||
[1] | Includes $367.8 million and $417.1 million of loans net of allowance of $1.2 million and $1.0 million pledged as collateral on collateralized loan obligations ("CLO"), a variable interest entity ("VIE") as of March 31, 2017 and December 31, 2016, respectively. |
Offsetting Assets and Liabili56
Offsetting Assets and Liabilities - Offsetting Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Offsetting Liabilities [Line Items] | ||
Real estate securities, available for sale, at fair value | $ 25,733 | $ 49,049 |
U.S. Bank National Association | Class C Notes | Secured Debt | ||
Offsetting Liabilities [Line Items] | ||
Real estate securities, available for sale, at fair value | 54,600 | 53,300 |
Commercial mortgage loans | ||
Offsetting Liabilities [Line Items] | ||
Gross Amounts of Recognized Liabilities | 340,948 | 257,664 |
Gross Amounts Offset on the Balance Sheet | 0 | 0 |
Net Amount of Liabilities Presented on the Balance Sheet | 340,948 | 257,664 |
Financial Instruments as Collateral Pledged () | 510,972 | 399,914 |
Cash Collateral Pledged | 5,005 | 5,000 |
Net Amount | 0 | 0 |
Real Estate Securities | ||
Offsetting Liabilities [Line Items] | ||
Gross Amounts of Recognized Liabilities | 52,174 | 66,639 |
Gross Amounts Offset on the Balance Sheet | 0 | 0 |
Net Amount of Liabilities Presented on the Balance Sheet | 52,174 | 66,639 |
Financial Instruments as Collateral Pledged () | 80,376 | 102,358 |
Cash Collateral Pledged | 21 | |
Net Amount | 0 | 0 |
Real Estate Securities | U.S. Bank National Association | Class C Notes | Secured Debt | ||
Offsetting Liabilities [Line Items] | ||
Real estate securities, available for sale, at fair value | $ 54,600 | $ 53,300 |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Segment Reporting Information, by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||
Interest income | $ 18,879 | $ 20,291 | |
Interest expense | 5,428 | 4,768 | |
Net income | 6,049 | 9,420 | |
Total Assets | 1,255,278 | $ 1,248,125 | |
Real Estate Debt | |||
Segment Reporting Information [Line Items] | |||
Interest income | 18,208 | 18,676 | |
Interest expense | 4,993 | 4,091 | |
Net income | 5,949 | 9,059 | |
Total Assets | 1,229,244 | 1,198,806 | |
Real Estate Securities | |||
Segment Reporting Information [Line Items] | |||
Interest income | 671 | 1,615 | |
Interest expense | 435 | 677 | |
Net income | 100 | $ 361 | |
Total Assets | $ 26,034 | $ 49,319 |
Subsequent Events - Narrative (
Subsequent Events - Narrative (Details) - USD ($) $ in Thousands | Apr. 03, 2017 | Mar. 31, 2017 | Mar. 31, 2016 |
Subsequent Event [Line Items] | |||
Distributions paid | $ 10,365 | $ 9,619 | |
Dividends in cash | 10,400 | ||
Common stock issued through distribution reinvestment plan | $ 5,734 | ||
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Distributions paid | $ 5,500 | ||
Dividends in cash | 3,600 | ||
Common stock issued through distribution reinvestment plan | $ 1,900 | ||
Shares issued under DRIP (in shares) | 96,082 |