Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 31, 2018 | |
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 | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding (in shares) | 37,673,804 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | |
ASSETS | |||
Cash and cash equivalents | $ 55,471 | $ 83,711 | |
Restricted cash | 10,570 | 7,997 | |
Commercial mortgage loans, held for investment, net of allowance of $4,968 and $1,466 | 2,135,734 | 1,402,046 | |
Commercial mortgage loans, held-for-sale, measured at fair value | 105,976 | 28,531 | |
Real estate securities, available-for-sale, at fair value | 27,048 | 0 | |
Derivative instruments, at fair value | 1,987 | 132 | |
Receivable for loan repayment | [1] | 35,453 | 49,085 |
Accrued interest receivable | 11,606 | 8,152 | |
Prepaid expenses and other assets | 3,545 | 4,007 | |
Total assets | 2,387,390 | 1,583,661 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Collateralized loan obligations | 983,546 | 826,150 | |
Other financing - commercial mortgage loans | 0 | 25,698 | |
Derivative instruments, at fair value | 565 | 357 | |
Interest payable | 2,484 | 1,544 | |
Distributions payable | 5,116 | 3,917 | |
Accounts payable and accrued expenses | 6,682 | 4,510 | |
Due to affiliates | 3,315 | 6,421 | |
Total liabilities | 1,589,309 | 973,322 | |
Commitments and Contingencies | |||
Preferred stock | 0 | 0 | |
Common stock, $0.01 par value, 949,999,000 shares authorized, 37,477,393 and 31,834,072 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively | 376 | 320 | |
Additional paid-in capital | 796,278 | 704,101 | |
Accumulated other comprehensive income (loss) | 171 | 0 | |
Accumulated deficit | (94,480) | (94,082) | |
Total stockholders' equity | 702,345 | 610,339 | |
Total liabilities and stockholders' equity | 2,387,390 | 1,583,661 | |
Variable Interest Entity, Primary Beneficiary | |||
ASSETS | |||
Cash and cash equivalents | 35,768 | 49,017 | |
Restricted cash | 35,500 | 48,700 | |
Commercial mortgage loans, held for investment, net of allowance of $4,968 and $1,466 | 1,239,811 | 1,033,427 | |
Accrued interest receivable | 3,768 | 4,212 | |
Total assets | 1,279,347 | 1,086,656 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Interest payable | 1,765 | 1,462 | |
Total liabilities | 1,074,109 | 914,262 | |
Redeemable Convertible Preferred Stock Series A | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Preferred stock | 95,736 | 0 | |
Commercial mortgage loans | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Repurchase agreements | 565,329 | 65,690 | |
Repurchase agreements - real estate securities | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Repurchase agreements | $ 22,272 | $ 39,035 | |
[1] | (1) Includes $35.5 million and $48.7 million of cash held by servicer related to CLO loan payoffs as of September 30, 2018 and December 31, 2017, respectively. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Allowance for loan losses | $ 4,968 | $ 1,466 |
Preferred stock, par value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 49,980,000 | 49,980,000 |
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) | 37,477,393 | 31,834,072 |
Common stock, shares outstanding (in shares) | 37,477,393 | 31,834,072 |
Redeemable Convertible Preferred Stock Series A | ||
Preferred stock, par value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 20,000 | 20,000 |
Preferred stock, shares issued (in shares) | 19,215 | 0 |
Preferred stock, shares outstanding (in shares) | 19,215 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues [Abstract] | ||||
Interest income | $ 42,943 | $ 22,195 | $ 106,478 | $ 61,917 |
Less: Interest expense | 17,120 | 8,845 | 50,183 | 21,990 |
Net interest income | 25,823 | 13,350 | 56,295 | 39,927 |
Operating Expenses [Abstract] | ||||
Asset management and subordinated performance fee | 2,720 | 2,299 | 7,227 | 6,952 |
Acquisition fees and acquisition expenses | 173 | 1,685 | 289 | 4,175 |
Administrative services expenses | 3,501 | 1,480 | 9,822 | 3,285 |
Professional fees | 2,556 | 1,348 | 6,803 | 3,320 |
Other expenses | 774 | 1,411 | 3,896 | 2,773 |
Total expenses | 9,724 | 8,223 | 28,037 | 20,505 |
Other Income and Expenses [Abstract] | ||||
Loan loss provision/(recovery) | 1,066 | (641) | 3,502 | (222) |
Realized (gain)/loss on commercial mortgage loans held-for-sale | 20 | (378) | 48 | 1,587 |
Realized (gain)/loss on commercial mortgage loans held-for-sale, measured at fair value | (3,419) | 0 | (9,765) | 0 |
Realized (gain)/loss on sale of real estate securities | 107 | 0 | 107 | (172) |
Unrealized (gain)/loss on commercial mortgage loans held-for-sale | 0 | 27 | 0 | (220) |
Unrealized (gain)/loss on commercial mortgage loans held-for-sale, measured at fair value | 231 | 0 | (474) | 0 |
Unrealized (gain)/loss on derivatives | (1,272) | (583) | (1,162) | (583) |
Realized (gain)/loss on derivatives | 41 | 18 | (1,476) | 18 |
Total other (income)/loss | (3,226) | (1,557) | (9,220) | 408 |
Income/(loss) before taxes | 19,325 | 6,684 | 37,478 | 19,014 |
Provision/(benefit) for income tax | 325 | (291) | 1,080 | (291) |
Net income | 19,000 | 6,975 | 36,398 | 19,305 |
Preferred Stock Dividends and Other Adjustments | 1,255 | 0 | 1,271 | 0 |
Net income applicable to common stock | $ 17,745 | $ 6,975 | $ 35,127 | $ 19,305 |
Basic net income per share (in dollars per share) | $ 0.49 | $ 0.22 | $ 1.07 | $ 0.61 |
Diluted net income per share (in dollars per share) | $ 0.49 | $ 0.22 | $ 1.07 | $ 0.61 |
Basic weighted-average shares outstanding (in shares) | 35,468,648 | 31,741,679 | 32,977,572 | 31,778,169 |
Diluted weighted average shares outstanding (in shares) | 38,942,428 | 31,756,503 | 34,168,274 | 31,790,267 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 19,000 | $ 6,975 | $ 36,398 | $ 19,305 |
Unrealized gain/(loss) on available-for-sale securities | 194 | (448) | 171 | 500 |
Comprehensive income attributable to Benefit Street Partners Realty Trust, Inc. | $ 19,194 | $ 6,527 | $ 36,569 | $ 19,805 |
Consolidated Statement of Chang
Consolidated Statement of Changes In Stockholders' Equity - 9 months ended Sep. 30, 2018 - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income | Accumulated Deficit |
Balance, shares at Dec. 31, 2017 | 31,834,072 | ||||
Balance at Dec. 31, 2017 | $ 610,339 | $ 320 | $ 704,101 | $ 0 | $ (94,082) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock (in shares) | 5,888,935 | ||||
Issuance of common stock | 96,840 | $ 59 | 96,781 | ||
Common stock repurchases (in shares) | (809,023) | ||||
Common stock repurchases | (15,085) | $ (8) | (15,077) | ||
Common stock issued through distribution reinvestment plan (in shares) | 557,634 | ||||
Common stock issued through distribution reinvestment plan | 10,596 | $ 5 | 10,591 | ||
Share-based compensation (in shares) | 5,775 | ||||
Share-based compensation | 118 | 118 | |||
Offering costs | (236) | (236) | |||
Net income | 36,398 | 36,398 | |||
Distributions declared | (36,796) | (36,796) | |||
Other comprehensive income | 171 | 171 | |||
Balance, shares at Sep. 30, 2018 | 37,477,393 | ||||
Balance at Sep. 30, 2018 | $ 702,345 | $ 376 | $ 796,278 | $ 171 | $ (94,480) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Cash flows from operating activities: | |||||
Net income | $ 19,000 | $ 6,975 | $ 36,398 | $ 19,305 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Premium amortization and (discount accretion), net | (3,456) | (1,617) | |||
Accretion of deferred commitment fees | (1,400) | (1,887) | |||
Amortization of deferred financing costs | 10,788 | 3,735 | |||
Share-based compensation | 118 | 56 | |||
Change in unrealized losses on commercial mortgage loans held-for-sale | (474) | (220) | |||
Change in unrealized (gain)/losses on derivative instruments | (1,162) | (583) | |||
Loan loss provision/(recovery) | 1,066 | (641) | 3,502 | (222) | $ (715) |
Deferred income taxes | 0 | (291) | |||
Origination of commercial mortgage loans, held-for-sale | (444,496) | (60,950) | |||
Proceeds from sale of commercial mortgage loans, held-for-sale | 377,263 | 88,352 | |||
Realized (gain)/loss from sale of real estate securities | 107 | 0 | |||
Realized (gain)/loss from sale of commercial mortgage loans held-for-sale | (9,717) | 1,587 | |||
Changes in assets and liabilities: | |||||
Accrued interest receivable | (2,054) | 1,240 | |||
Prepaid expenses and other assets | (2,553) | (4,717) | |||
Accounts payable and accrued expenses | 2,172 | 3,084 | |||
Due to affiliates | (3,106) | 519 | |||
Interest payable | 940 | 405 | |||
Net cash (used in)/provided by operating activities | (37,130) | 47,796 | |||
Cash flows from investing activities: | |||||
Origination and purchase of commercial mortgage loans, held for investment | (1,278,978) | (565,094) | |||
Proceeds from commercial mortgage loans, held for sale | 2,218 | ||||
Principal repayments received on commercial mortgage loans, held for investment | 556,465 | 176,138 | |||
Purchase of real estate securities | (39,511) | 0 | |||
Proceeds from sale of real estate securities | 12,456 | 34,888 | |||
Principal repayments received on real estate securities | 0 | 15,000 | |||
Purchase of derivative instruments | (520) | (383) | |||
Net cash (used in)/provided by investing activities | (747,870) | (339,451) | |||
Cash flows from financing activities: | |||||
Proceeds from issuances of redeemable convertible preferred stock | 96,075 | 0 | |||
Proceeds from issuances of common stock | 96,840 | 0 | |||
Common stock repurchases | (15,072) | (20,546) | |||
Payments of offering costs and fees related to common stock issuances | (236) | 0 | |||
Borrowings under collateralized loan obligations | 488,000 | 339,500 | |||
Repayments of collateralized loan obligations | (331,656) | (97,470) | |||
Borrowings on repurchase agreements - commercial mortgage loans | 1,566,956 | 368,745 | |||
Repayments of repurchase agreements - commercial mortgage loans | (1,067,282) | (307,024) | |||
Borrowings on repurchase agreements - real estate securities | 146,692 | 343,151 | |||
Repayments of repurchase agreements - real estate securities | (163,454) | (370,754) | |||
Borrowings on other financing - commercial mortgage loans | 0 | 36,200 | |||
Repayments on other financing - commercial mortgage loans | (26,182) | (5,274) | |||
Payments of deferred financing costs | (6,230) | (6,598) | |||
Distributions paid | (25,118) | (31,328) | |||
Net cash (used in)/provided by financing activities | 759,333 | 248,602 | |||
Net change in cash, cash equivalents and restricted cash | (25,667) | (43,053) | |||
Cash, cash equivalents and restricted cash beginning of period | 91,708 | 123,069 | 123,069 | ||
Cash, cash equivalents and restricted cash, end of period | 66,041 | 80,016 | 66,041 | 80,016 | 91,708 |
Supplemental disclosures of cash flow information: | |||||
Interest paid | 38,455 | 17,850 | |||
Taxes paid | 340 | 0 | |||
Supplemental disclosures of non-cash flow information: | |||||
Common stock issued through distribution reinvestment plan | 10,478 | 16,349 | |||
Loans transferred to commercial real estate loans, held-for-sale, transferred at fair value | 0 | 31,207 | |||
Reconciliation of cash, cash equivalents and restricted cash at end of period: | |||||
Cash and cash equivalents | 55,471 | 72,262 | 55,471 | 72,262 | 83,711 |
Restricted cash | $ 10,570 | $ 7,754 | $ 10,570 | $ 7,754 | $ 7,997 |
Organization and Business Opera
Organization and Business Operations | 9 Months Ended |
Sep. 30, 2018 | |
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 investments secured by properties located within and outside the United States. The Company was incorporated in Maryland on November 15, 2012 and commenced operations on May 14, 2013. The Company made a tax election to be treated as a real estate investment trust (a "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. The Company, through a subsidiary which is treated as a taxable REIT subsidiary (a "TRS") is indirectly subject to U.S federal, state and local income taxes. The majority 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”), as amended and restated by the Amended and Restated Advisory Agreement executed on January 19, 2018 (the "Amended and Restated 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 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 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 originates conduit loans which the Company intends to sell through its TRS into commercial mortgage-backed securities ("CMBS") at a profit. The Company may also invest in commercial real estate securities. Real estate securities may include CMBS, senior unsecured debt of publicly traded REITs, debt or equity securities of other publicly traded real estate companies and collateralized debt obligations ("CDOs"). |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies 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. Certain prior-period amounts have been reclassified to conform to current presentation. In the opinion of management, all normal recurring adjustments considered necessary for a fair statement of the results of the periods presented have been included. The current period’s results of operations will not necessarily be indicative of results in any subsequent reporting period. 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, 2017 , which are included in the Company's Annual Report on Form 10-K filed with the SEC on March 16, 2018 . There have been no significant changes to the Company's significant accounting policies during the three months and nine months ended September 30, 2018 . 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 variable interest entity ("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 it 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 collateralized loan obligations ("CLOs") issued and securitized by wholly owned subsidiaries of the Company. The Company has determined the CLOs are VIEs of which the Company's subsidiary is the primary beneficiary. The assets and liabilities of the CLOs are consolidated in the accompanying consolidated balance sheet in accordance with ASC 810, Consolidation . Acquisition Fees and Acquisition Expenses 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 loan origination and acquisition activities and real estate securities acquisitions. Such costs are amortized over the life of the investment. Until September 2017 ; the Company incurred both acquisition fees and acquisition expenses payable to the Advisor. Since September 2017 , pursuant to the terms of the Advisory Agreement, the Advisor is no longer entitled to acquisition fees but continues to be entitled to reimbursement for acquisition expenses. Commercial Mortgage Loans Held-for-Investment - Commercial mortgage loans that are held for investment are anticipated to be held until maturity and are carried at cost, net of unamortized acquisition expenses, discounts or premiums. Commercial mortgage loans, held for investment purposes, that are deemed to be impaired are 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 operations. Held-for-Sale - Commercial mortgage 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 statements of operations. Unamortized loan origination costs for commercial mortgage loans held-for-sale that are carried at the lower of cost or fair value 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 mortgage loans to held-for-sale. During the nine months ended September 30, 2018 , the Company originated $5.9 million of commercial mortgage loans held-for-sale and sold these loans during the period for net proceeds of approximately $5.9 million . Held-for-Sale, Accounted for Under the Fair Value Option - The fair value option provides an option to elect fair value as an alternative measurement for selected financial assets, financial liabilities, and written loan commitments. The Company has elected to measure commercial mortgage loans held-for-sale in the Company's TRS under the fair value option. These commercial mortgage loans are included in Commercial mortgage loans, held-for-sale, measured at fair value in the consolidated balance sheet. Interest income received on commercial mortgage loans held-for-sale is recorded on the accrual basis of accounting and is included in interest income in the consolidated statements of operations. As of September 30, 2018 , the fair value amount and the contractual principal outstanding of commercial mortgage loans accounted for under the fair value option was $ 106.0 million and $105.5 million , respectively. As of December 31, 2017 , the fair value amount and the contractual principal outstanding of commercial mortgage loans accounted for under the fair value option was $28.5 million . None of the Company's commercial mortgage loans accounted for under the fair value option are in default or are greater than ninety days past due. For the three and nine months ended September 30, 2018 , the Company realized a gain of $ 3.4 million and $ 9.8 million , respectively, relating to the sale of commercial mortgage loans that are accounted for under the fair value option. The Company did not have any realized gain or loss relating to the sale of commercial mortgage loans that are accounted for under the fair value option for the three and nine months ended September 30, 2017 . 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 or decreased through the loan loss provision or recovery on the Company's consolidated statements 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 estimates loss rates based on historical realized losses experienced in the industry, given the fact the Company has not experienced significant 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 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. 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. Any interest received for loans in non-performing status will be applied as a reduction to the unpaid principal balance. A loan will be written off when it is no longer realizable and legally discharged. Income Taxes The Company has conducted its operations to qualify as a REIT for U.S. federal income tax purposes commencing with its taxable year ended December 31, 2013. As a REIT, if the Company meets certain organizational and operational requirements and distributes at least 90% of its "REIT taxable income" (determined before the deduction of dividends paid and excluding net capital gains) to its stockholders in a taxable year, it will not be subject to U.S. federal income tax on the REIT taxable income that it distributes. The Company did not have any undistributed REIT taxable income for the period ended September 30, 2018 and therefore, has not provided for REIT U.S. federal income tax expense. However, even if the Company qualifies for taxation as a REIT, the Company and its subsidiaries may be subject to a variety of taxes, including payroll taxes and certain state and local income, property, excise and franchise taxes. The Company could also be subject to U.S. federal income tax in certain circumstances. The Company owns a subsidiary that has elected to be treated as a TRS for U.S. federal, state and local income taxes, where applicable, as a C-corporation. TRSs can participate in certain activities from which REITs are generally precluded, as long as these activities meet specific criteria and are conducted within the parameters of certain limitations established by the Internal Revenue Code ("the Code"). For U.S. federal income tax purposes, the Company’s TRS is not consolidated with the Company, but instead taxed as a separate C-corporation. For financial reporting purposes, a provision for current and deferred taxes is established for the portion of earnings recognized by the Company with respect to its interest in its TRS. The Company's TRS recognized pre-tax income of approximately $1.4 million and $4.7 million for the three and nine months ended September 30, 2018 , respectively, and U.S. federal, state and local income tax expense of $0.3 million and $1.1 million for the three and nine months ended September 30, 2018 . These amounts have been included on the accompanying consolidated statements of operations. The Company's TRS did not have any pre-tax income or tax expense for the three and nine months ended September 30, 2017 , respectively. The Company’s tax returns are subject to audit by taxing authorities. As of September 30, 2018 , the tax years 2014, 2015, 2016 and 2017 remain open to examination by the major taxing jurisdictions in which the Company is subject to taxes. Under GAAP, a tax benefit related to an income tax position may be recognized when it is more likely than not that the position will be sustained upon examination by the tax authorities based on the technical merits of the position. A position that meets this standard is measured at the largest amount of benefit that will more likely than not be realized upon settlement. The Company has assessed its tax positions for all open tax years beginning with its taxable year ended December 31, 2014 and concluded that there were no uncertainties to be recognized. The Company’s accounting policy with respect to interest and penalties related to tax uncertainties is to classify these amounts as provision for income taxes. Enacted on December 22, 2017, the recently passed Tax Cuts and Jobs Act ("TCJA") made many significant changes to the U.S. federal income tax laws applicable to businesses and their owners, including REITs and their stockholders, and may lessen the relative competitive advantage of operating as a REIT rather than as a C corporation. Pursuant to this legislation, as of January 1, 2018, the U.S. federal income tax rate applicable to corporations is reduced to 21%, and the corporate alternative minimum tax is repealed. In addition, through taxable years ending in 2025, the highest marginal income tax rate applicable to individuals, estates and trusts is reduced to 37% and those taxpayers may deduct up to 20% of certain pass-through income, including ordinary REIT dividends that are not "capital gain dividends" or "qualified dividend income," subject to certain limitations. For taxpayers qualifying for the full deduction, the effective maximum tax rate on ordinary REIT dividends would be 29.6% (excluding the 3.8% net investment income tax). The reduced corporate tax rate applies to the Company's TRS and any other TRS it forms. Changes in tax rates and tax laws are accounted for in the period of enactment. The amounts recorded in the consolidated statement of operations are provisional. Due to the timing of the enacted legislation, as well as the technical corrections, amendments or administrative guidance that could clarify the treatment of certain provisions, the Company will continue to evaluate its conclusions and update its estimates as necessary. Commencing in taxable years beginning after December 31, 2017, Section 163(j) of the Code, as amended by TCJA, limits the deductibility of net interest expense paid or accrued on debt properly allocable to a trade or business to 30% of “adjusted taxable income,” ("ATI") subject to certain exceptions. The Company does not expect to be subject to this limitation because it does not expect to have interest expense in excess of the sum of its interest income and 30% of its ATI. However, the limitation could cause the Company’s TRS or any other TRS it forms to have greater taxable income and thus potentially greater corporate tax liability. Derivatives and Hedging Activities In the normal course of business, the Company is exposed to the effect of interest rate changes and may undertake a strategy to limit these risks through the use of derivatives. The Company uses derivatives primarily to economically hedge against interest rates, CMBS spreads and macro market risk in order to minimize volatility. The Company may use a variety of derivative instruments that are considered conventional, such as interest rate swaps, Treasury note futures and credit derivatives on various indices including CMBX and CDX. The Company recognizes all derivatives on the consolidated balance sheets at fair value. The Company does not designate derivatives as hedges to qualify for hedge accounting for financial reporting purposes and therefore any net payments under, or fluctuations in the fair value of these derivatives have been recognized currently in unrealized gain/(loss) on derivative instruments in the accompanying consolidated statements of operations. The Company records derivative asset and liability positions on a gross basis with any collateral posted with or received from counterparties recorded separately on the Company’s consolidated balance sheets within the Restricted cash line of the consolidated balance sheets. Certain derivatives that the Company has entered into are subject to master netting agreements with its counterparties, allowing for netting of the same transaction, in the same currency, on the same date. Per Share Data The Company’s redeemable convertible preferred stock Series A (the "Preferred Stock") is considered a participating security. As such, the Company is required to include the Preferred Stock in the calculation of basic earnings per share and calculate basic earnings per share using the two-class method. The Company’s dilutive earnings per share calculation is computed using the more dilutive result of the treasury stock method, assuming the participating security is a potential common share, or the two-class method, assuming the participating security is not converted. The Company calculates basic earnings per share by dividing net income applicable to common stock 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 outstanding if potential shares of common stock with a dilutive effect have been issued in connection with the restricted stock plan or upon conversion of the outstanding shares of the Company’s Preferred Stock, except when doing so would be anti-dilutive. Reportable Segments The Company has determined that it has three reportable segments based on how the chief operating decision maker reviews and manages the business. The three reporting segments are as follows: • 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 consist of CMBS and may include unsecured REIT debt, CDO notes and other securities. • The real estate conduit operated business through the Company's TRS, which is focused on originating and subsequently selling fixed-rate commercial real estate loans into the CMBS securitization market at a profit. See Note 13 - Segment Reporting for further information regarding the Company's segments. Redeemable Convertible Preferred Stock The Company’s Preferred Stock is classified outside of permanent equity in the consolidated balance sheets. This classification is applicable because, subject to certain conditions, the Preferred Stock is redeemable at the option of the holder of Preferred Stock, outside of the control of the Company. As set forth in the Articles Supplementary (the “Articles Supplementary”) to the Company’s Articles of Amendment and Restatement, the Preferred Stock is redeemable for shares of the Company's common stock, $0.01 par value per share (the "Common Stock") at the option of the shareholder upon a change of control (as defined in the Articles Supplementary) or after the sixth anniversary of the date of issuance. A change in control of the Company outside of the Company’s control is possible if any person acquires more than 50% of the total economic interests or voting power of all securities of the Company, other than in a liquidity event. Shares of Preferred Stock rank senior to shares of Common Stock with respect to rights to receive dividends and to participate in distributions or payments upon any voluntary or involuntary liquidation, dissolution or winding up of the Company. Dividends payable on each share of Preferred Stock will be equal to the greater of (i) an amount equal to $16.67 per share and (ii) the monthly dividend that would have been paid had such share of Preferred Stock been converted to a share of Common Stock, subject to proration in the event that such share of Preferred Stock was not outstanding for the full month. Immediately prior to a “Liquidity Event”, each outstanding share of Preferred Stock shall convert (the “Mandatory Conversion”) into 299.2 shares of Common Stock, subject to anti-dilution adjustments (the “Conversion Rate”). A “Liquidity Event” is defined as (i) the listing of the Common Stock on a national securities exchange or quotation on an electronic inter-dealer quotation system; (ii) a merger or business combination involving the Company pursuant to which outstanding shares Common Stock are exchanged for securities of another company which are listed on a national securities exchange or quoted on an electronic inter-dealer quotation system; or (iii) any other transaction or series of transaction that results in all shares of Common Stock being transferred or exchange for cash or securities which are listed on a national securities exchange or quoted on an electronic inter-dealer quotation system. If there has not been a Liquidity Event within six years from the initial issuance of the Preferred Stock, each holder of Preferred Stock shall have the right to convert all, but not less than all, of the Preferred Stock held by such holder into Common Stock at the Conversion Rate. Each holder also has the option to convert its shares of Preferred Stock into Common Stock upon a change in control (as defined in the Articles Supplementary) of the Company. In addition, neither the Company nor a holder of shares of Preferred Stock may redeem shares of the Preferred Stock until six years from the initial issuance of the Preferred Stock, except in cases of a change in control (as defined in the Articles Supplementary). Holders of the Preferred Stock are entitled to vote on each matter submitted to a vote of the stockholders of the Company upon which the holders of Common Stock are entitled to vote, upon which the holders of the Preferred Stock and holders of the Common Stock shall vote together as a single class. The number of votes applicable to a share of Preferred Stock will be equal to the number of shares of Common Stock a share of Preferred Stock could have been converted into as of the record date set for purposes of such stockholder vote (rounded down to the nearest whole number of shares of Common Stock). In addition, the affirmative vote of the holders of two-thirds of the outstanding shares of Preferred Stock is required to approve the issuance of any equity securities senior to the Preferred Stock and to take certain actions materially adverse to the holders of the Preferred Stock. Recently Adopted Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” or ASU 2014-09. ASU 2014-09 broadly amends the accounting guidance for revenue recognition. ASU 2014-09 is effective for the first interim or annual period beginning after December 15, 2017, and is to be applied retrospectively. The Company adopted this guidance on January 1, 2018 and it did not have a material impact on our consolidated financial statements. 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 Company adopted this guidance on January 1, 2018. The adoption of this guidance did not have a material impact 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. As a result, entities will no longer present transfers between cash and cash equivalents and restricted cash in the statement of cash flows. The Company adopted this guidance on January 1, 2018 and applied the guidance retrospectively to our prior period consolidated statement of cash flows. Accounting Pronouncements Not Yet Adopted 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 February 2018, the FASB issued guidance that allows an entity to elect to reclassify the stranded tax effects related to the Tax Cuts and Jobs Act of 2017 from accumulated other comprehensive income into retained earnings. The amendments become effective for reporting periods beginning after December 15, 2018, and early adoption is permitted. The Company is currently evaluating the impact of this new guidance. In August 2018, the FASB issued guidance that is part of the FASB’s disclosure framework project, whose objective and primary focus are to improve the effectiveness of disclosures in the notes to financial statements. The ASU eliminates, amends and adds certain disclosure requirements for fair value measurements. The amendments become effective for reporting periods beginning after December 15, 2019, and early adoption is permitted for adoption of the entire standard or only the provisions that eliminate or modify the requirements. The Company is currently evaluating the impact of this new guidance. |
Commercial Mortgage Loans
Commercial Mortgage Loans | 9 Months Ended |
Sep. 30, 2018 | |
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 (dollars in thousands): September 30, 2018 December 31, 2017 Senior loans $ 2,113,557 $ 1,368,425 Mezzanine loans 27,145 35,087 Total gross carrying value of loans $ 2,140,702 $ 1,403,512 Less: Allowance for loan losses 4,968 1,466 Total commercial mortgage loans, held for investment, net $ 2,135,734 $ 1,402,046 The following table presents the activity in the Company's allowance for loan losses (dollars in thousands): Nine Months Ended September 30, 2018 Year Ended December 31, 2017 Beginning of period $ 1,466 $ 2,181 Loan loss provision/(recovery) (1) 3,502 (715 ) Charge-offs — — Recoveries — — Ending allowance for loan losses $ 4,968 $ 1,466 (1) Includes $4.1 million loan loss provision specifically reserved on one loan in non-performing status as of September 30, 2018 . As of September 30, 2018 and December 31, 2017 , the Company's total commercial mortgage loan portfolio, excluding commercial mortgage loans accounted for under the fair value option, was comprised of 100 and 69 loans, respectively. The following table represents the composition by loan type of the Company's commercial mortgage loans portfolio, excluding commercial mortgage loans, held-for-sale, measured at fair value (dollars in thousands). September 30, 2018 December 31, 2017 Loan Type Par Value Percentage Par Value Percentage Multifamily $ 875,134 40.7 % $ 505,189 35.9 % Office 481,086 22.4 % 455,698 32.4 % Retail 255,856 11.9 % 209,598 14.9 % Hospitality 336,064 15.6 % 184,025 13.1 % Industrial 53,871 2.5 % 53,208 3.7 % Mixed-Use 112,105 5.2 % — — % Self-Storage 36,057 1.7 % — — % Total $ 2,150,173 100.0 % $ 1,407,718 100.0 % As of September 30, 2018 and December 31, 2017 , the Company's total commercial mortgage loans, held-for-sale, measured at fair value comprised of 12 and 3 loans, respectively. The following table represents the composition by loan type of the Company's commercial mortgage loans, held-for-sale, measured at fair value (dollars in thousands). September 30, 2018 December 31, 2017 Loan Type Par Value Percentage Par Value Percentage Multifamily $ 27,700 26.3 % $ 28,531 100.0 % Retail 42,030 39.8 % — — % Hospitality 23,273 22.1 % — — % Self-Storage 12,500 11.8 % — — % Total $ 105,503 100.0 % $ 28,531 100.0 % Credit Characteristics As part of the Company's process for monitoring the credit quality of its commercial mortgage loans, excluding those held-for-sale, measured at fair value, it performs a quarterly loan portfolio assessment and assigns risk ratings to each of its loans. The loans are scored on a scale of 1 to 5 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, excluding loans classified as commercial mortgage loans, held-for-sale, measured at fair value within the consolidated balance sheet, are assigned an initial risk rating of 2.0 . As of September 30, 2018 and December 31, 2017 , the weighted average risk rating of loans was 2.1 and 2.2 , respectively. As of September 30, 2018 the Company had one loan with an unpaid principal balance of $16.8 million and fair value of $12.1 million in non-performing status. The Company applied six months of interest received of $0.6 million on this loan as a reduction to the unpaid principal balance. During the three and nine months ended September 30, 2018 , the Company recorded $1.3 million and $4.1 million respectively, of asset-specific reserve included in loan loss provision/(recovery) on the consolidated statement of operations. As of December 31, 2017 , the Company did not have any loans that were past due on their payments, in non-performing status or impaired. For the nine months ended September 30, 2018 and year ended December 31, 2017 , the activity in the Company's commercial mortgage loans, held-for-investment portfolio was as follows (dollars in thousands): Nine Months Ended September 30, 2018 Year Ended December 31, 2017 Balance at Beginning of Year $ 1,402,046 $ 1,046,556 Acquisitions and originations 1,286,948 837,861 Principal repayments (542,833 ) (381,933 ) Discount accretion and premium amortization 3,284 2,554 Loans transferred to commercial real estate loans, held-for-sale (2,250 ) (100,005 ) Net fees capitalized into carrying value of loans (7,959 ) (3,702 ) Loan loss recovery/(provision) (3,502 ) 715 Balance at End of Period $ 2,135,734 $ 1,402,046 |
Real Estate Securities
Real Estate Securities | 9 Months Ended |
Sep. 30, 2018 | |
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 September 30, 2018 2 4.7 % December 2023 $ 26,750 $ 27,048 December 31, 2017 — — % N/A — — The Company classified its CMBS as available-for-sale as of September 30, 2018 . The investment is reported at fair value in the consolidated balance sheet with changes in fair value recorded in Accumulated other comprehensive income or loss. During the quarter ended September 30, 2018 , the Company purchased and subsequently sold $15.8 million par amount of CMBS, and recognized a loss of $0.1 million . The following table shows the amortized cost, unrealized gains/losses and fair value of the Company's CMBS investments as of September 30, 2018 and December 31, 2017 (in thousands): Amortized Cost Unrealized Gains Unrealized Losses Fair Value September 30, 2018 $ 26,877 $ 171 $ — $ 27,048 December 31, 2017 — — — — As of September 30, 2018 , the Company held two CMBS positions with an aggregate carrying value of $26.9 million , and a net unrealized gain of $0.2 million . As of December 31, 2017 , the Company held no CMBS positions. The following table provides information on the amounts of gains (losses) on the Company's real estate securities, CMBS, available-for-sale (dollars in thousands): Three Months Ended September 30, Nine months ended September 30, 2018 2017 2018 2017 Unrealized gain (loss) available-for-sale securities $ 194 $ (448 ) $ 171 $ 19 Reclassification of net (gain) loss on available-for-sale securities included in net income (loss) — — — 481 Unrealized gain (loss) available-for-sale securities, net of reclassification adjustment $ 194 $ (448 ) $ 171 $ 500 The amounts reclassified for net (gain) loss on available-for-sale securities are included in the realized (gain) loss on sale of real estate securities in the Company's consolidated statements of operations. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2018 | |
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"), Goldman Sachs Bank USA (the "GS Repo Facility"), U.S Bank National Association (the "USB Repo Facility"), and Credit Suisse AG (the "CS Repo Facility" ) and together with JPM Repo Facility, GS Repo Facility, USB Repo Facility (the "Repo Facilities"). Advances under the JPM Repo Facility currently accrue interest at per annum rates generally equal to the sum of (i) the applicable LIBOR index rate plus (ii) a margin of 2.40% . Borrowings under the GS Repo Facility accrue interest at per annum rates generally 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% . Borrowings under the USB Repo Facility accrue interest at per annum rates generally equal to the sum of (i) the applicable LIBOR index rate plus (ii) a margin between 2.25% to 3.00% , depending on the attributes of the purchased assets. Borrowings under the CS Repo Facility accrue interest at per annum rates generally equal to the sum of (i) the applicable LIBOR index rate plus (ii) a margin of 2.50% depending on the attributes of the purchased assets. The Company entered into a repurchase facility with Barclays Bank PLC (the "Barclays Facility") on September 19, 2017. Borrowings under the Barclays Facility accrue interest, at the Company's option, at per annum rates equal to (i) a spread over the Base Rate of 1.75% or (ii) a spread over the Eurodollar Rate of 2.75% , and provides for quarterly interest-only payments, with all principal and interest outstanding being due on the maturity date. The details of the Company's Repo Facilities and the Barclays Facility at September 30, 2018 and December 31, 2017 are as follows (dollars in thousands): As of September 30, 2018 Ending Weighted Average Interest Rate Term Maturity Repurchase Facility Committed Financing Amount Outstanding Interest Expense (1) JPM Repo Facility (2) $ 520,000 $ 241,282 $ 6,601 4.32 % 1/30/2020 GS Repo Facility (3) 250,000 — 415 N/A 12/27/2018 USB Repo Facility (4) 100,000 14,651 502 3.91 % 6/15/2020 CS Repo Facility (5) 300,000 309,396 5,301 4.37 % 6/19/2019 Barclays Facility (6) 100,000 — 1,145 N/A 9/19/2019 Total $ 1,270,000 $ 565,329 $ 13,964 __________________________ (1) For the nine months ended September 30, 2018. Includes amortization of deferred financing costs. (2) On January 30, 2018 the committed financing amount was upsized from $300 million to $520 million and the maturity date was amended to January 30, 2020 . Includes a one -year extension at the Company's option. (3) Includes a one -year extension at the Company’s option, which may be exercised upon the satisfaction of certain conditions. (4) Includes two one -year extensions at the option of an indirect wholly-owned subsidiary of the Company, which may be exercised upon the satisfaction of certain conditions. (5) On July 19, 2018, the committed financing amount was upsized from $250 million to $300 million . On June 20, 2018, the Company exercised the extension option upon the satisfaction of certain conditions, and extended the term maturity to June 19, 2019. In September 2018, the CS Repo Facility lender agreed to a temporary increase to the committed financing amount on one specific pledged asset. (6) On July 30, 2018, the committed financing amount was upsized from $75 million to $100 million . Includes a one -year extension at the Company's option. As of December 31, 2017 Ending Weighted Average Interest Rate Term Maturity Repurchase Facility Committed Financing Amount Outstanding Interest Expense (1) JPM Repo Facility (2) $ 300,000 $ 42,042 $ 7,064 3.48 % 6/12/2019 GS Repo Facility (3) 250,000 13,500 3,213 3.74 % 12/27/2018 CS Repo Facility (5) 250,000 10,148 58 N/A 8/30/2018 USB Repo Facility (4) 100,000 — 163 N/A 6/15/2020 Barclays Facility (6) 75,000 — 14 N/A 9/19/2019 Total $ 975,000 $ 65,690 $ 10,512 _______________________ (1) For the nine months ended September 30, 2017. Includes amortization of deferred financing costs. (2) Includes a one -year extension at the Company's option. (3) Includes a one -year extension at the Company’s option, which may be exercised upon the satisfaction of certain conditions. (4) Includes two one -year extensions at the option of an indirect wholly-owned subsidiary of the Company, which may be exercised upon the satisfaction of certain conditions. (5) Prior to the end of each calendar quarter, the Company may request an extension of the termination date for an additional 364 days from the end of such calendar quarter subject to the satisfaction of certain conditions and approvals. (6) Includes a one -year extension at the Company's option. We expect to use the advances from the Repo Facilities and the Barclays Facility to finance the acquisition or origination of eligible loans, including first mortgage loans, subordinated mortgage loans, mezzanine loans and participation interests therein. The Repo Facilities 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 as a result of deteriorating credit quality, resulting margin calls may cause an adverse change in the Company’s liquidity position. As of September 30, 2018 and December 31, 2017 , the Company is in compliance with all debt covenants. Other financing - Commercial Mortgage Loans The Company entered into a financing arrangement with Pacific Western Bank for term financing (“PWB Financing”) on May 17, 2017. The PWB Financing provided the Company with $ 36.2 million and is collateralized by a portfolio asset of $ 54.2 million . The PWB Financing accrued interest at per annum rates equal to the sum of (i) the applicable LIBOR index rate plus (ii) a margin of 4.0% . The PWB Financing had a maturity date of June 9, 2019. The Company paid off the outstanding balance in June 2018. As of December 31, 2017 , the Company had $ 26.2 million of outstanding principal under the PWB Financing. The Company incurred $ 1.2 million of interest expense on the PWB Financing for the nine months ended September 30, 2018 , including amortization of deferred financing costs. 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 - 90 days and terms are adjusted for current market rates as necessary. Below is a summary of the Company's MRAs as of September 30, 2018 and December 31, 2017 (dollars in thousands): Weighted Average Counterparty Amount Outstanding Accrued Interest Collateral Pledged Interest Rate Days to Maturity As of September 30, 2018 JP Morgan Securities LLC $ 22,272 $ 5 $ 26,750 2.91 % 26 Total $ 22,272 $ 5 $ 26,750 2.91 % 26 Weighted Average Amount Outstanding Accrued Interest Collateral Pledged (*) Interest Rate Days to Maturity As of December 31, 2017 JP Morgan Securities LLC $ 39,035 $ 11 $ 56,044 3.32 % 26 Total $ 39,035 $ 11 $ 56,044 3.32 % 26 _______________________ * Includes $56.0 million Tranche C of RFT 2015-FL1 CLO held by the Company, which is eliminated within the Real estate securities, at fair value line of the consolidated balance sheets as of December 31, 2017 . Collateralized Loan Obligations On February 15, 2018, the Company called all of the outstanding notes issued by RFT 2015-FL1,a wholly owned indirect subsidiary of the Company. The outstanding principal of the notes on the date of the call was $145 million . The Company recognized all the remaining unamortized deferred financing costs of $6.4 million recorded within the Interest expense line of the consolidated statements of operations, which was a non-cash charge. As of September 30, 2018 and December 31, 2017 the notes issued by BSPRT 2017-FL1 Issuer, a wholly owned indirect subsidiary of the Company, are collateralized by interests in a pool of 20 mortgage assets having a total principal balance of $319.0 million (the “2017-FL1 Mortgage Assets”) originated by a subsidiary of the Company. The sale of the 2017-FL1 Mortgage Assets to BSPRT 2017-FL1 Issuer is governed by a Mortgage Asset Purchase Agreement dated as of June 29, 2017, between the Company and BSPRT 2017-FL1 Issuer. As of September 30, 2018 and December 31, 2017 the notes issued by BSPRT 2017-FL2 Issuer, a wholly owned indirect subsidiary of the Company, are collateralized by interests in a pool of 17 mortgage assets having a total principal balance of $341.9 million (the “2017-FL2 Mortgage Assets”) originated by a subsidiary of the Company and $ 8.2 million of cash held by the servicer related to loan payoffs, . The sale of the 2017-FL2 Mortgage Assets to BSPRT 2017-FL2 Issuer is governed by a Mortgage Asset Purchase Agreement dated as of November 29, 2017, between the Company and BSPRT 2017-FL2 Issuer. On April 5, 2018, BSPRT 2018-FL3 Issuer, Ltd. (the “Issuer”) and BSPRT 2018-FL3 Co-Issuer, LLC (the “Co-Issuer”), both wholly owned indirect subsidiaries of the Company, collateralized by interests in a pool of 39 mortgage assets having a principal balance of $582.8 million (the "2018-FL3 Mortgage Assets") and $27.3 million of of cash held by the servicer related to loan payoffs, 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 $546 million principal balance secured floating rate notes (the “Notes”), of which $488 million were purchased by third party investors and $58 million purchased by a wholly owned subsidiary of the OP. In addition, concurrently with the issuance of the Notes, the Issuer also issued 64,050,000 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. The Company, through its wholly-owned subsidiaries, holds the preferred equity tranches of BSPRT 2017-FL1, BSPRT 2017-FL2 and BSPRT 2018-FL3 of approximately $ 191 million . The following table represents the terms of the notes issued by BSPRT 2017-FL1 Issuer, BSPRT 2017-FL2 Issuer and BSPRT 2018-FL3, respectively (dollars in thousands): CLO Facility As of September 30, 2018 Par Value Issued Par Value Outstanding (1)(2) Interest Rate Maturity Date 2017-FL1 Issuer Tranche A $ 223,600 $ 124,489 1M LIBOR + 135 7/1/2027 2017-FL1 Issuer Tranche B 48,000 48,000 1M LIBOR + 240 7/1/2027 2017-FL1 Issuer Tranche C 67,900 67,900 1M LIBOR + 425 7/1/2027 2017-FL2 Issuer Tranche A 237,970 147,376 1M LIBOR + 82 10/15/2034 2017-FL2 Issuer Tranche A-S 36,357 36,357 1M LIBOR + 110 10/15/2034 2017-FL2 Issuer Tranche B 26,441 26,441 1M LIBOR + 140 10/15/2034 2017-FL2 Issuer Tranche C 25,339 25,339 1M LIBOR + 215 10/15/2034 2017-FL2 Issuer Tranche D 35,255 35,255 1M LIBOR + 345 10/15/2034 2018-FL3 Issuer Tranche A 286,700 286,700 1M LIBOR + 105 3/15/2028 2018-FL3 Issuer Tranche A-S 77,775 77,775 1M LIBOR + 135 3/15/2028 2018-FL3 Issuer Tranche B 41,175 41,175 1M LIBOR + 165 3/15/2028 2018-FL3 Issuer Tranche C 39,650 39,650 1M LIBOR + 255 3/15/2028 2018-FL3 Issuer Tranche D 42,700 42,700 1M LIBOR + 345 3/15/2028 $ 1,188,862 $ 999,157 CLO Facility As of December 31, 2017 Par Value Issued Par Value Outstanding (1)(3) Interest Rate Maturity Date 2015-FL1 Issuer Tranche A $ 231,345 $ 79,109 1M LIBOR + 175 8/1/2030 2015-FL1 Issuer Tranche B 42,841 42,841 1M LIBOR + 388 8/1/2030 2015-FL1 Issuer Tranche C 76,044 20,000 1M LIBOR + 525 8/1/2030 2017-FL1 Issuer Tranche A 223,600 223,600 1M LIBOR + 135 7/1/2027 2017-FL1 Issuer Tranche B 48,000 48,000 1M LIBOR + 240 7/1/2027 2017-FL1 Issuer Tranche C 67,900 67,900 1M LIBOR + 425 7/1/2027 2017-FL2 Issuer Tranche A 237,970 237,970 1M LIBOR + 82 10/15/2034 2017-FL2 Issuer Tranche A-S 36,357 36,357 1M LIBOR + 110 10/15/2034 2017-FL2 Issuer Tranche B 26,441 26,441 1M LIBOR + 140 10/15/2034 2017-FL2 Issuer Tranche C 25,339 25,339 1M LIBOR + 215 10/15/2034 2017-FL2 Issuer Tranche D 35,255 35,255 1M LIBOR + 345 10/15/2034 $ 1,051,092 $ 842,812 ________________________ (1) Excludes $16.0 million of Tranche E notes and $14.9 million of Tranche F notes issued by BSPRT 2017-FL2 Issuer, held by the Company, which are eliminated within the collateralized loan obligation line of the consolidated balance sheets as of September 30, 2018 and December 31, 2017 . (2) Excludes $ 36.6 million of Tranche E notes and $21.4 million of Tranche F notes issued by BSPRT 2018-FL3 Issuer, held by the Company, which are eliminated within the collateralized loan obligation line of the consolidated balance sheets as of September 30, 2018 . (3) Excludes $ 56.0 million of Tranche C notes issued by RFT 2015-FL1 Issuer, held by the Company, which is eliminated within the collateralized loan obligation line of the consolidated balance sheets as of December 31, 2017 . The below table reflects the total assets and liabilities of the Company's three CLOs. The CLOs are considered VIEs and are consolidated into the Company's consolidated financial statements as of September 30, 2018 and December 31, 2017 as the Company is the primary beneficiary of the VIE. The Company is the primary beneficiary of the CLOs 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 VIEs or the obligation to absorb losses of the VIEs that could be significant to the VIE. Assets (dollars in thousands) September 30, 2018 December 31, 2017 Cash (1) $ 35,768 $ 49,017 Commercial mortgage loans, held for investment, net of allowance (2) 1,239,811 1,033,427 Accrued interest receivable 3,768 4,212 Total assets $ 1,279,347 $ 1,086,656 Liabilities Notes payable (3)(4) $ 1,072,344 $ 912,800 Interest payable 1,765 1,462 Total liabilities $ 1,074,109 $ 914,262 ________________________ (1) Includes $35.5 million and $48.7 million of cash held by the servicer related to CLO loan payoffs as of September 30, 2018 and December 31, 2017 . (2) The balance is presented net of allowance for loan loss of $0.6 million and $1.3 million as of September 30, 2018 and December 31, 2017 , respectively. (3) Includes $16.0 million of Tranche E notes and $14.9 million of Tranche F notes issued by 2017-FL2 Issuer held by the Company as of September 30, 2018 and December 31, 2017 ; $36.6 million of Tranche E notes and $21.4 million of Tranche F notes issued by 2018-FL3 Issuer held by the Company as of September 30, 2018 . The notes held by the Company are eliminated within the Collateral loan obligations line of the consolidated balance sheets. Includes $55.8 million of Tranche C of Company issued CLO held by the Company as of December 31, 2017 . (4) The balance is presented net of deferred financing cost and discount of $ 15.6 million and $16.9 million as of September 30, 2018 and December 31, 2017 , respectively. |
Net Income Per Share
Net Income Per Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Net Income Per Share The Company uses the two-class method in calculating basic and diluted EPS. The below table represents the Company's earnings per share and distribution per share for the three and nine months ended September 30, 2018 and 2017 (dollars in thousands, except share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Net income $ 19,000 $ 6,975 $ 36,398 $ 19,305 Less: Preferred stock dividends (1,255 ) — (1,271 ) — Less: Preferred stock undistributed income (451 ) — — — Net income applicable to common stock $ 17,294 $ 6,975 $ 35,127 $ 19,305 Basic weighted-average shares outstanding 35,468,648 31,741,679 32,977,572 31,778,169 Basic net income per share 0.49 0.22 1.07 0.61 Net income $ 19,000 $ 6,975 $ 36,398 $ 19,305 Basic weighted-average shares outstanding 35,468,648 31,741,679 32,977,572 31,778,169 Unvested restricted shares 14,209 14,824 10,007 12,098 Conversion of redeemable convertible preferred stock - weighted 3,459,571 — 1,180,695 — Diluted weighted average shares outstanding 38,942,428 31,756,503 34,168,274 31,790,267 Diluted net income per share 0.49 0.22 1.07 0.61 |
Stock Transactions
Stock Transactions | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Stock Transactions | Stock Transactions As of September 30, 2018 and December 31, 2017 , the Company had 37,477,393 and 31,834,072 shares of common stock outstanding, respectively, including shares issued pursuant to the Dividend Reinvestment Plan ("DRIP") and unvested restricted shares held by the Company’s independent directors. Private Placements Since February 2018 the Company has been conducting offerings of its common stock and Series A preferred stock in offerings exempt from the registration requirements of the Securities Act. The following table summarizes the sales of common stock in these offerings (dollars in thousands, except share amounts): As of September 30, 2018 Total Closing Date Shares Issued Purchase Price June 25, 2018 834,537 $ 13,723 July 13, 2018 1,669,074 27,446 August 20, 2018 3,370,362 55,421 September 10, 2018 14,962 250 Total 5,888,935 $ 96,840 The following table summarizes the sales of Series A preferred stock in these offerings (dollars in thousands, except share amounts): As of September 30, 2018 Total Closing Date Shares Issued Purchase Price (1) June 25, 2018 2,256 $ 11,278 July 13, 2018 4,498 22,554 August 20, 2018 9,083 45,619 August 28, 2018 3,378 17,000 Total 19,215 $ 96,451 ________________________ (1) Purchase price is $5,000 per share of Series A preferred stock plus accrued dividends as of the date of settlement. As of September 30, 2018, the Company had binding purchase commitments for $20 million of common stock at $16.71 per share and $ 15.1 million of Series A preferred stock at $5,000 per share plus accrued dividends. Pursuant to the applicable subscription agreements, the Company can determine the timing of the closing of these commitments in its sole discretion. 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. 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 Company's board of directors may reduce the amount of distributions paid or suspend distribution payments at any time, and therefore, distributions payments are not assured. For the three months ended September 30, 2018 and 2017, the Company declared daily common stock distributions equivalent to $1.44 per annum per share and $2.0625 per annum per share, respectively. As of September 30, 2018 and December 31, 2017, the Company had declared but unpaid common stock distributions of $5.1 million and $3.9 million , respectively. These amounts are included in Distributions payable on the Company’s unaudited Consolidated Balance Sheets. The Company distributed $35.0 million during the nine months ended September 30, 2018 , comprised of $24.4 million in cash and $10.6 million in shares of common stock issued under the DRIP. The Company distributed $ 32.6 million during the nine months ended September 30, 2017 , comprised of $ 21.2 million in cash and $ 11.4 million in shares of common stock issued under the DRIP. The Company maintains a DRIP which permits shareholders to reinvest their distributions in stock of the Company. The purchase price of DRIP investments is currently the lesser of (i) the Company’s most recent estimated per-share NAV, as approved by the Company’s board of directors from time to time, and (ii) the Company’s most recent book value per share, computed in accordance with GAAP. The DRIP price for September 2018 through October 2018 was $18.95 , which was the GAAP book value as of June 30, 2018. Starting with November 2018 distributions reinvested in December 2018, the DRIP offer price will be $18.75 , which is the estimated per-share NAV as of September 30, 2018. Share Repurchase Program The Company's board of directors 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 the Company (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. On August 10, 2017, the Company's board of directors amended the SRP to provide that the repurchase price per share for requests will be equal to (a) the lesser of (i) the Company’s most recent estimated per-share NAV, as approved by the Company’s board of directors from time to time, and (ii) the Company’s most recent book value per share, computed in accordance with GAAP, multiplied by (b) 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 or in the case of requests for death or qualifying disability. Repurchase requests related to death or a qualifying disability must satisfy certain conditions, each of which are assessed by and at the sole discretion of the Company, including the following conditions. In the case of death, the shareholder must be a natural person (or a revocable grantor trust) and the Company must receive a written notice from the estate of the shareholder, the recipient of the shares through bequest or inheritance, or the trustee in the case of a revocable grantor trust. In the case of a “qualifying disability”, the shareholder must be a natural person (or a revocable grantor trust) and the Company must receive a written notice from the shareholder, or the trustee in the case of a revocable grantor trust, that the condition was not pre-existing on the date the shares were acquired. In order for a disability to be considered a “qualifying disability”, the shareholder must receive and provide evidence (the shareholder application and the notice of final determination) of disability based upon a physical or mental condition or impairment made by a government agency responsible for reviewing and determining disability retirement benefits (e.g. the Social Security Administration). 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 Company's board of directors 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 the price, computed as described above on the last day of such fiscal semester. 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. For any repurchases made for the fiscal semester ending December 31, 2018, the repurchase price per share will be based on the estimated per-share NAV as of September 30, 2018 of $18.75 . 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 September 30, 2018 : Number of Requests Number of Shares Repurchased Average Price per Share Cumulative as of December 31, 2017 2,125 1,991,391 $ 21.36 January 1 - January 31, 2018 (1) 889 421,809 18.56 February 1 - February 28, 2018 — — — March 1 - March 31, 2018 — — — April 1 - April 30, 2018 — — — May 1 - May 31, 2018 — — — June 1 - June 30, 2018 — — — July 1 - July 31, 2018 831 387,214 18.74 August 1 - August 31, 2018 — — — September 1 - September 30, 2018 — — — Cumulative as of September 30, 2018 3,845 2,800,414 $ 20.65 ________________________ (1) Reflects shares repurchased in January 2018 pursuant to repurchase requests submitted for the fiscal semester ended December 31, 2017. As permitted under the SRP, the Board authorized repurchases up to the amount of proceeds reinvested through our DRIP. As a result, redemption requests in the amount of 185,689 shares were not fulfilled. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Unfunded Commitments for Commercial Mortgage Loans As of September 30, 2018 and December 31, 2017 , the Company had the below unfunded commitments to the Company's borrowers (dollars in thousands): Funding Expiration September 30, 2018 December 31, 2017 2018 $ 6,277 $ 36,475 2019 45,378 26,465 2020 173,162 20,598 2021 104,635 — Total $ 329,452 $ 83,538 Litigation and Regulatory Matters In the ordinary course of business, the Company may become subject to litigation, claims and regulatory matters. The Company has no knowledge of material legal or regulatory proceedings pending or known to be contemplated against the Company at this time. |
Related Party Transactions and
Related Party Transactions and Arrangements | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions and Arrangements | Related Party Transactions and Arrangements Advisory Agreement Fees and Reimbursements Pursuant to the Advisory Agreement, the Company makes or was required to make the following payments and reimbursements to the Advisor: • The Company reimburses the Advisor’s costs of providing services pursuant to the Advisory Agreement, except the salaries and benefits paid by the Advisor to the Company’s executive officers. • 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, our 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 our Advisor exceed 10.0% of the aggregate total return for such year. • Until September 2017, the Company paid its Advisor an acquisition fee of 1.0% of the principal amount funded by us to originate or acquire commercial mortgage loans and 1.0% of the anticipated net equity funded by the Company to acquire real estate securities. • The Company reimburses the Advisor for insourced expenses incurred by the Advisor on the Company‘s behalf 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. Until September 29, 2016, the Former Advisor served as the Company's advisor. Prior to January 2016, the Company paid dealer-manager fees and selling commissions to an affiliate ("Former Dealer Manager") of the Former Advisor. The table below shows the compensation and reimbursement payable to the Former Advisor, its affiliates, entities under common control with the Former Advisor and the Former Dealer Manager for services relating to the Company's public offering as of September 30, 2018 and December 31, 2017 (dollars in thousands): Payable as of September 30, 2018 December 31, 2017 Total commissions and fees incurred from the Former 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 480 480 The payables as of September 30, 2018 and December 31, 2017 in the table above are included in Due to affiliates on the Company's consolidated balance sheets. The table below shows the costs incurred due to arrangements with our Advisor and its affiliates during the three and nine months ended September 30, 2018 and September 30, 2017 , and the associated payable as of September 30, 2018 and December 31, 2017 (dollars in thousands): Three Months Ended September 30, Nine Months Ended September 30, Payable as of 2018 2017 2018 2017 September 30, 2018 December 31, 2017 Acquisition fees and expenses (1) $ 173 $ 1,685 $ 289 $ 4,175 $ — $ — Administrative services expenses 3,501 1,480 9,822 3,285 1,299 3,480 Asset management and subordinated performance fee 2,720 2,299 7,227 6,952 1,220 2,315 Other related party expenses (2) 315 87 785 183 316 146 Total $ 6,709 $ 5,551 $ 18,123 $ 14,595 $ 2,835 $ 5,941 ________________________ (1) Total acquisition fees and expenses paid during the three and nine months ended September 30, 2018 were $2.4 million and $6.6 million , respectively, of which $2.2 million and $6.3 million were capitalized within the commercial mortgage loans, held for investment line of the Company's consolidated balance sheet. For the three and nine months ended September 30, 2017 total acquisition fees and expenses paid during were $3.0 million and $9.0 million , respectively, of which $1.3 million and $4.8 million were capitalized. (2) Included in other expenses in the Company's consolidated statement of operations. The payables as of September 30, 2018 and December 31, 2017 in the table above are included in Due to affiliates on the Company's consolidated balance sheets. Purchases of Common Stock and Preferred Stock Refer to Note 7 - Stock Transactions for a description of the Company’s private placements. Officers of the Company and other employees of the Advisor and its affiliates (“Manager Investors”) have acquired common stock and Series A preferred stock in these private placements on substantially the same terms applying to purchases by third party accredited investors unaffiliated with the Company or the Advisor. As of September 30, 2018 , the Manager Investors have acquired in these private placements 1,893,569 shares of common stock for an aggregate purchase price of $31.6 million and 105 shares of Series A preferred stock for an aggregate purchase price (which includes accrued dividends) of $0.5 million . As of September 30, 2018 , the remaining commitments of Manager Investors for preferred stock was $0.05 million . There were no remaining Manager Investors commitments for common stock as of September 30, 2018 . Other Transactions On February 22, 2018, the Company purchased commercial mortgage loans, held-for-sale from an entity that is an affiliate of our Advisor, for an aggregate purchase price of $27.8 million . The purchase of the commercial mortgage loans and the $27.8 million purchase price were approved by the Company’s board of directors. On April 18, 2018 , the Company sold $23.3 million of these commercial mortgage loans into a CMBS securitization. The remaining $4.5 million of these commercial mortgage loans are recorded in commercial mortgage loans, held-for-sale, measured at fair value on the consolidated balance sheet as of September 30, 2018 . In December 2017, the Company purchased a commercial mortgage loan from an entity that is an affiliate of our Advisor, for an aggregate purchase price of $17.1 million and is included in Commercial mortgage loans, held-for-investment in the consolidated balance sheet. The purchase of the commercial mortgage loan and the $17.1 million purchase price were approved by the Company’s board of directors and the Nominating and Corporate Governance Committee, which consists solely of independent directors. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2018 | |
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. Financial Instruments Measured at Fair Value on a Recurring Basis CMBS, recorded in real estate securities, held-for-sale, measured at fair value on the consolidated balance sheet as of September 30, 2018 , 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. As of September 30, 2018 , the Company obtained broker quotes for determining the fair value of each CMBS investment. As the broker quotes were both limited and non-binding, the Company has classified the CMBS as Level III. As of December 31, 2017 the Company had no CMBS. Commercial mortgage loans held-for-sale, measured at fair value in the Company's TRS are initially recorded at transaction proceeds, which are considered to be the best initial estimate of fair value. The Company engaged the services of a third party independent valuation firm to determine fair value of investments held by the Company. Fair value is determined using a discounted cash flow model that primarily considers changes in interest rates and credit spreads, weighted average life and current performance of the underlying collateral. The Company classified the commercial mortgage loans held-for-sale, measured at fair value as Level III. The fair value for Treasury note futures is derived using observable market prices. Treasury note futures trade on the Chicago Mercantile Exchange (“CME”). The future contracts are liquid and are centrally cleared through the CME. Treasury note futures are generally categorized in Level I of the fair value hierarchy. The fair value for credit default swaps and interest rate swaps contracts are derived using pricing models that are widely accepted by marketplace participants. Credit default swaps and interest rate swaps are traded in the OTC market. The pricing models take into account multiple inputs including specific contract terms, interest rate yield curves, interest rates, credit curves, recovery rates, and/or current credit spreads obtained from swap counterparties and other market participants. Most inputs into the models are not subjective as they are observable in the marketplace or set per the contract. Valuation is primarily determined by the difference between the contract spread and the current market spread. The contract spread (or rate) is generally fixed and the market spread is determined by the credit risk of the underlying debt or reference entity. If the underlying indices are liquid and the OTC market for the current spread is active, credit default swaps and interest rate swaps are categorized in Level II of the fair value hierarchy. If the underlying indices are illiquid and the OTC market for the current spread is not active, credit default swaps are categorized in Level III of the fair value hierarchy. The credit default swaps and interest rate swaps are generally categorized in Level II of the fair value hierarchy. 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 quarter ended September 30, 2018 and December 31, 2017 . The following table presents information about 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 September 30, 2018 and December 31, 2017 (dollars in thousands): Total Level I Level II Level III September 30, 2018 Assets, at fair value Commercial mortgage loans, held-for-sale (1) $ 105,976 $ — $ — $ 105,976 Real estate securities 27,048 — — 27,048 Credit default swaps 319 — 319 — Interest rate swaps 375 — 375 — Treasury note futures 1,293 1,293 — — Total assets, at fair value $ 135,011 $ 1,293 $ 694 — $ 133,024 Liabilities, at fair value Credit default swaps $ 565 $ — $ 565 $ — Total liabilities, at fair value $ 565 $ — $ 565 $ — December 31, 2017 Assets, at fair value Commercial mortgage loans, held-for-sale (1) 28,531 — — 28,531 Treasury note futures 132 132 — — Total assets, at fair value $ 28,663 $ 132 $ — $ 28,531 Liabilities, at fair value Credit default swaps $ 357 $ — $ 357 $ — Total liabilities, at fair value $ 357 $ — $ 357 $ — ________________________ (1) Loans held in the Company's TRS, reported within Commercial mortgage loans, held-for-sale, measured at fair value on the consolidated balance sheets. Both observable and unobservable inputs may be used to determine the fair value of positions that the Company has classified within the Level III category. As a result, the unrealized gains and losses for assets and liabilities within the Level III category may include changes in fair value that were attributable to both observable and unobservable inputs. The following table summarizes the valuation method and significant unobservable inputs used for the Company’s financial instruments that are categorized within Level III of the fair value hierarchy as of September 30, 2018 and December 31, 2017 (dollars in thousands). Asset Category Fair Value Valuation Methodologies Unobservable Inputs (1) Weighted Average (2) Range September 30, 2018 Commercial mortgage loans, held-for-sale, measured at fair value $105,976 Discounted Cash Flow Yield 5.30% 4.4% - 13.5% Real estate securities, available-for-sale, at fair value 27,048 Broker Quotes Yield 4.93% 4.1% - 5.6% December 31, 2017 Commercial mortgage loans, held-for-sale, measured at fair value $28,531 Discounted Cash Flow Yield 4.93% 4.8% - 5.3% (1) In determining certain of these inputs, the Company evaluates a variety of factors including economic conditions, industry and market developments, market valuations of comparable companies and company specific developments including exit strategies and realization opportunities. The Company has determined that market participants would take these inputs into account when valuing the investments. (2) Inputs were weighted based on the fair value of the investments included in the range. The following table presents additional information about the Company’s financial instruments which are measured at fair value on a recurring basis as of September 30, 2018 and December 31, 2017 for which the Company has used Level III inputs to determine fair value (dollars in thousands): September 30, 2018 Commercial Mortgage Loans, held-for-sale, measured at fair value Real Estate Securities Beginning balance, January 1, 2018 $ 28,531 $ — Transfers into Level III — — Realized gain on sale of commercial mortgage loan held-for-sale 9,765 — Realized gain (loss) on sale of real estate securities — (107 ) Unrealized gain (loss) 474 — Unrealized gain (loss) included in OCI (1) — 171 Purchases 440,815 39,511 Sales / paydowns (373,609 ) (12,456 ) Discount accretion/(premium amortization) — (71 ) Transfers out of Level III — — Ending balance, September 30, 2018 $ 105,976 $ 27,048 December 31, 2017 Commercial Mortgage Loans, held-for-sale, measured at fair value Real Estate Securities Beginning balance, January 1, 2017 $ — $ 49,049 Transfers into Level III — — Realized gain on sale of real estate securities — 172 Realized gain on sale of commercial mortgage loan held-for-sale 4,523 — Net accretion — 167 Unrealized gain (loss) included in OCI (1) — 500 Purchases 156,101 — Sales (132,093 ) (34,888 ) Cash repayments/receipts — (15,000 ) Transfers out of Level III — — Ending balance, December 31, 2017 $ 28,531 $ — ________________________ (1) Unrealized gains included in Other comprehensive income ("OCI") are attributable to assets held at September 30, 2018 and December 31, 2017 . Financial Instruments Not Measured at Fair Value The fair values of the Company's commercial mortgage loans, held-for-investment and collateralized loan obligations, which are not reported at fair value on the consolidated balance sheets are reported below as of September 30, 2018 and December 31, 2017 (dollars in thousands): Level Carrying Amount Fair Value September 30, 2018 Commercial mortgage loans, held-for-investment (1) Asset III $ 2,140,702 $ 2,136,052 Collateralized loan obligation Liability II 983,546 1,002,313 December 31, 2017 Commercial mortgage loans, held-for-investment (1) Asset III $ 1,403,512 $ 1,396,406 Collateralized loan obligation Liability II 826,150 842,812 ________________________ (1) The carrying value is gross of $5.0 million and $1.5 million of allowance for loan losses as of September 30, 2018 and December 31, 2017 , respectively. The fair value of the commercial mortgage loans, held-for-investment is estimated using a discounted cash flow analysis, based on the Advisor's experience with similar types of investments. The Company estimates the fair value of the collateralized loan obligations using external broker quotes. |
Derivative Instruments
Derivative Instruments | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives Instruments | Derivative Instruments The Company uses derivative instruments primarily to economically manage the fair value variability of fixed rate assets caused by interest rate fluctuations and overall portfolio market risk. As of September 30, 2018 , the net premiums paid on derivative instrument assets were $ 0.3 million . The following derivative instruments were outstanding as of September 30, 2018 and December 31, 2017 (dollars in thousands): Fair Value Contract type Notional Assets (1) Liabilities (1) As of September 30, 2018 Credit default swaps $ 80,000 $ 319 $ 565 Interest rate swaps 18,000 375 — Treasury note futures 126,382 1,293 — Total $ 224,382 $ 1,987 $ 565 As of December 31, 2017 Credit default swaps $ 30,000 $ 32 $ 357 Treasury note futures 43,906 100 — Total $ 73,906 $ 132 $ 357 _______________________ (1) Shown as derivative instruments, at fair value, in the accompanying consolidated balance sheets. The following tables indicate the net realized and unrealized losses on derivatives, by primary underlying risk exposure, as included in loss on derivative instruments in the consolidated statements of operations for the three and nine months ended September 30, 2018 and 2017 (dollars in thousands). Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Unrealized Gain/(Loss) Realized Gain/(Loss) Total Unrealized Gain/(Loss) Realized Gain/(Loss) Total Contract type Credit default swaps $ (316 ) $ (64 ) $ (380 ) $ (106 ) $ 29 $ (77 ) Interest rate swaps 84 195 279 74 709 783 Treasury note futures 1,504 (172 ) 1,332 1,194 738 1,932 Total $ 1,272 $ (41 ) $ 1,231 $ 1,162 $ 1,476 $ 2,638 Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017 Unrealized Gain/(Loss) Realized Gain/(Loss) Total Unrealized Gain/(Loss) Realized Gain/(Loss) Total Contract type Credit default swaps $ (171 ) $ (18 ) $ (189 ) $ (171 ) $ (18 ) $ (189 ) Treasury note futures 754 754 754 — 754 Total $ 583 $ (18 ) $ 565 $ 583 $ (18 ) $ 565 |
Offsetting Assets and Liabiliti
Offsetting Assets and Liabilities | 9 Months Ended |
Sep. 30, 2018 | |
Offsetting [Abstract] | |
Offsetting Assets and Liabilities | Offsetting Assets and Liabilities The Company's consolidated balance sheets use a gross presentation of derivative instruments, repurchase agreements and collateral pledged. The table below provides a gross presentation, the effects of offsetting and a net presentation of the Company's derivative instruments and repurchase agreements within the scope of ASC 210-20, Balance Sheet—Offsetting , as of September 30, 2018 and December 31, 2017 (dollars in thousands): Gross Amounts Not Offset on the Balance Sheet Assets Gross Amounts of Recognized Assets Gross Amounts Offset on the Balance Sheet Net Amount of Assets Presented on the Balance Sheet Financial Instruments Cash Collateral Pledged Net Amount September 30, 2018 Derivative instruments, at fair value $ 1,987 $ — $ 1,987 $ — $ — $ 1,987 December 31, 2017 Derivative instruments, at fair value $ 132 $ — $ 132 $ — $ — $ 132 Gross Amounts Not Offset on the Balance Sheet Liabilities Gross Amounts of Recognized Liabilities Gross Amounts Offset on the Balance Sheet Net Amount of Liabilities Presented on the Balance Sheet Financial Instruments Cash Collateral Pledged (2) Net Amount September 30, 2018 Repurchase agreements, commercial mortgage loans $ 565,329 $ — $ 565,329 $ 779,745 $ 5,010 $ — Repurchase agreements - real estate securities 22,272 — 22,272 26,750 69 — Derivative instruments, at fair value 565 — 565 — 5,167 — December 31, 2017 Repurchase agreements, commercial mortgage loans $ 65,690 $ — $ 65,690 $ 163,235 $ 5,005 $ — Repurchase agreements, real estate securities (1) 39,035 — 39,035 56,044 — — Derivative instruments, at fair value 357 — 357 — 2,961 — ________________________ ( 1) Includes $56.0 million of Tranche C of Company issued CLO held by the Company, which el iminates within the real estate securities, at fair value line of the consolidated balance sheets as of December 31, 2017 . (2) These cash collateral amounts are recorded within the Restricted cash balance on the consolidated balance sheets. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting The Company conducts its business through the following reporting 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 real estate conduit business operated through the Company's TRS, which is focused on generating risk-adjusted returns by originating and subsequently selling fixed-rate commercial real estate loans into the CMBS securitization market at a profit. The following table represents the Company's operations by segment for the three and nine months ended September 30, 2018 and 2017 (dollars in thousands): Three Months Ended September 30, 2018 Total Real Estate Debt Real Estate Securities TRS Interest income $ 42,943 $ 41,046 $ 270 $ 1,627 Interest expense 17,120 15,694 192 1,234 Net income (loss) 19,000 17,275 (29 ) 1,754 Total assets as of September 30, 2018 2,387,390 2,246,251 27,647 113,492 Three Months Ended September 30, 2017 Interest income 22,195 21,795 269 131 Interest expense 8,845 8,386 409 50 Net income 6,975 7,588 (22 ) (591 ) Total assets as of December 31, 2017 1,583,661 1,517,021 389 66,251 Nine Months Ended September 30, 2018 Total Real Estate Debt Real Estate Securities TRS Interest income $ 106,478 $ 101,073 $ 317 $ 5,088 Interest expense 50,183 46,813 378 2,992 Net income (loss) 36,398 30,997 (168 ) 5,569 Total assets as of September 30, 2018 2,387,390 2,246,251 27,647 113,492 Nine Months Ended September 30, 2017 Interest income 61,917 60,435 1,351 131 Interest expense 21,990 20,686 1,254 50 Net income 19,305 19,627 269 (591 ) Total assets as of December 31, 2017 1,583,661 1,517,021 389 66,251 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 | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The Company has evaluated subsequent events through the filing of this Quarterly Report on Form 10-Q and determined that there have not been any events that have occurred that would require adjustments to disclosures in the consolidated financial statements except for the following transactions: Determination of Net Asset Value per Share On November 7, 2018 , the Company’s board of directors unanimously determined an estimated NAV per share of the Company’s common stock of $ 18.74 as of September 30, 2018 . The estimated NAV per share is based upon the estimated value of the Company’s assets less the Company’s liabilities as of September 30, 2018 . An independent third-party valuation firm was engaged to value the Company’s investment portfolio. The Advisor calculated the estimated NAV per share based in part on this valuation and recommended to the board of directors the estimated NAV per share calculated by the Advisor. The valuation was performed in accordance with the provisions of Practice Guideline 2013-01, Valuations of Publicly Registered Non-Listed REITs, issued by the Investment Program Association in April 2013. As a result of the approval by the board of directors of the estimated NAV per share as of September 30, 2018, and pursuant to the terms of the DRIP and SRP, the Company (i) will offer shares pursuant to the DRIP at a purchase price of $18.75 , beginning with November 2018 distributions which are reinvested in December 2018; and (ii) will repurchase shares pursuant to the SRP at a repurchase price of $18.75 , subject to discounts in certain circumstances and subject to the terms and conditions of the SRP. Private Placements Subsequent to September 30, 2018 , the Company sold an additional $1.5 million of common stock to accredited investors at $16.71 per share. The Company also entered into binding purchase commitments with Manager Investors for $2.0 million of common stock at $16.71 per share, with additional accredited investors for $ 2.9 million of common stock at $16.71 per share, and with accredited investors for $35 million of Series A preferred stock at $5,000 per share plus accrued dividends. Pursuant to the applicable subscription agreements, the Company can determine the timing of the closing of these commitments in its sole discretion Advisor Transaction On October 24, 2018 , the Advisor announced that it had entered into a definitive agreement with Franklin Resources, Inc. and Templeton International, Inc. (collectively, “Franklin Templeton”), whereby Franklin Templeton has agreed, subject to the satisfaction of the closing conditions contained in the agreement, to acquire the Advisor (the “Transaction”). The consummation of the Transaction is expected to occur in early 2019. Upon consummation of the Transaction, the key senior management of the Advisor will continue to operate in the same professional capacity as prior to the Transaction. The Transaction will not impact the terms of the Amended and Restated Advisory Agreement and the Transaction will not result in any changes to the executive officers of the Company. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
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. Certain prior-period amounts have been reclassified to conform to current presentation. In the opinion of management, all normal recurring adjustments considered necessary for a fair statement of the results of the periods presented have been included. The current period’s results of operations will not necessarily be indicative of results in any subsequent reporting period. |
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 variable interest entity ("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 it 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 collateralized loan obligations ("CLOs") issued and securitized by wholly owned subsidiaries of the Company. The Company has determined the CLOs are VIEs of which the Company's subsidiary is the primary beneficiary. The assets and liabilities of the CLOs are consolidated in the accompanying consolidated balance sheet in accordance with ASC 810, Consolidation . |
Acquisition Fees and Acquisition Expenses | Acquisition Fees and Acquisition Expenses 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 loan origination and acquisition activities and real estate securities acquisitions. Such costs are amortized over the life of the investment. Until September 2017 ; the Company incurred both acquisition fees and acquisition expenses payable to the Advisor. Since September 2017 , pursuant to the terms of the Advisory Agreement, the Advisor is no longer entitled to acquisition fees but continues to be entitled to reimbursement for acquisition expenses. |
Commercial Mortgage Loans and Allowance for Loan Losses | Commercial Mortgage Loans Held-for-Investment - Commercial mortgage loans that are held for investment are anticipated to be held until maturity and are carried at cost, net of unamortized acquisition expenses, discounts or premiums. Commercial mortgage loans, held for investment purposes, that are deemed to be impaired are 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 operations. Held-for-Sale - Commercial mortgage 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 statements of operations. Unamortized loan origination costs for commercial mortgage loans held-for-sale that are carried at the lower of cost or fair value 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 mortgage loans to held-for-sale. During the nine months ended September 30, 2018 , the Company originated $5.9 million of commercial mortgage loans held-for-sale and sold these loans during the period for net proceeds of approximately $5.9 million . Held-for-Sale, Accounted for Under the Fair Value Option - The fair value option provides an option to elect fair value as an alternative measurement for selected financial assets, financial liabilities, and written loan commitments. The Company has elected to measure commercial mortgage loans held-for-sale in the Company's TRS under the fair value option. These commercial mortgage loans are included in Commercial mortgage loans, held-for-sale, measured at fair value in the consolidated balance sheet. Interest income received on commercial mortgage loans held-for-sale is recorded on the accrual basis of accounting and is included in interest income in the consolidated statements of operations. As of September 30, 2018 , the fair value amount and the contractual principal outstanding of commercial mortgage loans accounted for under the fair value option was $ 106.0 million and $105.5 million , respectively. As of December 31, 2017 , the fair value amount and the contractual principal outstanding of commercial mortgage loans accounted for under the fair value option was $28.5 million . None of the Company's commercial mortgage loans accounted for under the fair value option are in default or are greater than ninety days past due. For the three and nine months ended September 30, 2018 , the Company realized a gain of $ 3.4 million and $ 9.8 million , respectively, relating to the sale of commercial mortgage loans that are accounted for under the fair value option. The Company did not have any realized gain or loss relating to the sale of commercial mortgage loans that are accounted for under the fair value option for the three and nine months ended September 30, 2017 . 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 or decreased through the loan loss provision or recovery on the Company's consolidated statements 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 estimates loss rates based on historical realized losses experienced in the industry, given the fact the Company has not experienced significant 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 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. 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. Any interest received for loans in non-performing status will be applied as a reduction to the unpaid principal balance. A loan will be written off when it is no longer realizable and legally discharged. |
Income Taxes | Income Taxes The Company has conducted its operations to qualify as a REIT for U.S. federal income tax purposes commencing with its taxable year ended December 31, 2013. As a REIT, if the Company meets certain organizational and operational requirements and distributes at least 90% of its "REIT taxable income" (determined before the deduction of dividends paid and excluding net capital gains) to its stockholders in a taxable year, it will not be subject to U.S. federal income tax on the REIT taxable income that it distributes. The Company did not have any undistributed REIT taxable income for the period ended September 30, 2018 and therefore, has not provided for REIT U.S. federal income tax expense. However, even if the Company qualifies for taxation as a REIT, the Company and its subsidiaries may be subject to a variety of taxes, including payroll taxes and certain state and local income, property, excise and franchise taxes. The Company could also be subject to U.S. federal income tax in certain circumstances. The Company owns a subsidiary that has elected to be treated as a TRS for U.S. federal, state and local income taxes, where applicable, as a C-corporation. TRSs can participate in certain activities from which REITs are generally precluded, as long as these activities meet specific criteria and are conducted within the parameters of certain limitations established by the Internal Revenue Code ("the Code"). For U.S. federal income tax purposes, the Company’s TRS is not consolidated with the Company, but instead taxed as a separate C-corporation. For financial reporting purposes, a provision for current and deferred taxes is established for the portion of earnings recognized by the Company with respect to its interest in its TRS. The Company's TRS recognized pre-tax income of approximately $1.4 million and $4.7 million for the three and nine months ended September 30, 2018 , respectively, and U.S. federal, state and local income tax expense of $0.3 million and $1.1 million for the three and nine months ended September 30, 2018 . These amounts have been included on the accompanying consolidated statements of operations. The Company's TRS did not have any pre-tax income or tax expense for the three and nine months ended September 30, 2017 , respectively. The Company’s tax returns are subject to audit by taxing authorities. As of September 30, 2018 , the tax years 2014, 2015, 2016 and 2017 remain open to examination by the major taxing jurisdictions in which the Company is subject to taxes. Under GAAP, a tax benefit related to an income tax position may be recognized when it is more likely than not that the position will be sustained upon examination by the tax authorities based on the technical merits of the position. A position that meets this standard is measured at the largest amount of benefit that will more likely than not be realized upon settlement. The Company has assessed its tax positions for all open tax years beginning with its taxable year ended December 31, 2014 and concluded that there were no uncertainties to be recognized. The Company’s accounting policy with respect to interest and penalties related to tax uncertainties is to classify these amounts as provision for income taxes. Enacted on December 22, 2017, the recently passed Tax Cuts and Jobs Act ("TCJA") made many significant changes to the U.S. federal income tax laws applicable to businesses and their owners, including REITs and their stockholders, and may lessen the relative competitive advantage of operating as a REIT rather than as a C corporation. Pursuant to this legislation, as of January 1, 2018, the U.S. federal income tax rate applicable to corporations is reduced to 21%, and the corporate alternative minimum tax is repealed. In addition, through taxable years ending in 2025, the highest marginal income tax rate applicable to individuals, estates and trusts is reduced to 37% and those taxpayers may deduct up to 20% of certain pass-through income, including ordinary REIT dividends that are not "capital gain dividends" or "qualified dividend income," subject to certain limitations. For taxpayers qualifying for the full deduction, the effective maximum tax rate on ordinary REIT dividends would be 29.6% (excluding the 3.8% net investment income tax). The reduced corporate tax rate applies to the Company's TRS and any other TRS it forms. Changes in tax rates and tax laws are accounted for in the period of enactment. The amounts recorded in the consolidated statement of operations are provisional. Due to the timing of the enacted legislation, as well as the technical corrections, amendments or administrative guidance that could clarify the treatment of certain provisions, the Company will continue to evaluate its conclusions and update its estimates as necessary. Commencing in taxable years beginning after December 31, 2017, Section 163(j) of the Code, as amended by TCJA, limits the deductibility of net interest expense paid or accrued on debt properly allocable to a trade or business to 30% of “adjusted taxable income,” ("ATI") subject to certain exceptions. The Company does not expect to be subject to this limitation because it does not expect to have interest expense in excess of the sum of its interest income and 30% of its ATI. However, the limitation could cause the Company’s TRS or any other TRS it forms to have greater taxable income and thus potentially greater corporate tax liability. |
Derivatives and Hedging Activities | Derivatives and Hedging Activities In the normal course of business, the Company is exposed to the effect of interest rate changes and may undertake a strategy to limit these risks through the use of derivatives. The Company uses derivatives primarily to economically hedge against interest rates, CMBS spreads and macro market risk in order to minimize volatility. The Company may use a variety of derivative instruments that are considered conventional, such as interest rate swaps, Treasury note futures and credit derivatives on various indices including CMBX and CDX. The Company recognizes all derivatives on the consolidated balance sheets at fair value. The Company does not designate derivatives as hedges to qualify for hedge accounting for financial reporting purposes and therefore any net payments under, or fluctuations in the fair value of these derivatives have been recognized currently in unrealized gain/(loss) on derivative instruments in the accompanying consolidated statements of operations. The Company records derivative asset and liability positions on a gross basis with any collateral posted with or received from counterparties recorded separately on the Company’s consolidated balance sheets within the Restricted cash line of the consolidated balance sheets. Certain derivatives that the Company has entered into are subject to master netting agreements with its counterparties, allowing for netting of the same transaction, in the same currency, on the same date. |
Per Share Data | Per Share Data The Company’s redeemable convertible preferred stock Series A (the "Preferred Stock") is considered a participating security. As such, the Company is required to include the Preferred Stock in the calculation of basic earnings per share and calculate basic earnings per share using the two-class method. The Company’s dilutive earnings per share calculation is computed using the more dilutive result of the treasury stock method, assuming the participating security is a potential common share, or the two-class method, assuming the participating security is not converted. The Company calculates basic earnings per share by dividing net income applicable to common stock 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 outstanding if potential shares of common stock with a dilutive effect have been issued in connection with the restricted stock plan or upon conversion of the outstanding shares of the Company’s Preferred Stock, except when doing so would be anti-dilutive. |
Reportable Segments | Reportable Segments The Company has determined that it has three reportable segments based on how the chief operating decision maker reviews and manages the business. The three reporting segments are as follows: • 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 consist of CMBS and may include unsecured REIT debt, CDO notes and other securities. • The real estate conduit operated business through the Company's TRS, which is focused on originating and subsequently selling fixed-rate commercial real estate loans into the CMBS securitization market at a profit. See Note 13 - Segment Reporting for further information regarding the Company's segments. |
Convertible Redeemable Preferred Stock | Redeemable Convertible Preferred Stock The Company’s Preferred Stock is classified outside of permanent equity in the consolidated balance sheets. This classification is applicable because, subject to certain conditions, the Preferred Stock is redeemable at the option of the holder of Preferred Stock, outside of the control of the Company. As set forth in the Articles Supplementary (the “Articles Supplementary”) to the Company’s Articles of Amendment and Restatement, the Preferred Stock is redeemable for shares of the Company's common stock, $0.01 par value per share (the "Common Stock") at the option of the shareholder upon a change of control (as defined in the Articles Supplementary) or after the sixth anniversary of the date of issuance. A change in control of the Company outside of the Company’s control is possible if any person acquires more than 50% of the total economic interests or voting power of all securities of the Company, other than in a liquidity event. Shares of Preferred Stock rank senior to shares of Common Stock with respect to rights to receive dividends and to participate in distributions or payments upon any voluntary or involuntary liquidation, dissolution or winding up of the Company. Dividends payable on each share of Preferred Stock will be equal to the greater of (i) an amount equal to $16.67 per share and (ii) the monthly dividend that would have been paid had such share of Preferred Stock been converted to a share of Common Stock, subject to proration in the event that such share of Preferred Stock was not outstanding for the full month. Immediately prior to a “Liquidity Event”, each outstanding share of Preferred Stock shall convert (the “Mandatory Conversion”) into 299.2 shares of Common Stock, subject to anti-dilution adjustments (the “Conversion Rate”). A “Liquidity Event” is defined as (i) the listing of the Common Stock on a national securities exchange or quotation on an electronic inter-dealer quotation system; (ii) a merger or business combination involving the Company pursuant to which outstanding shares Common Stock are exchanged for securities of another company which are listed on a national securities exchange or quoted on an electronic inter-dealer quotation system; or (iii) any other transaction or series of transaction that results in all shares of Common Stock being transferred or exchange for cash or securities which are listed on a national securities exchange or quoted on an electronic inter-dealer quotation system. If there has not been a Liquidity Event within six years from the initial issuance of the Preferred Stock, each holder of Preferred Stock shall have the right to convert all, but not less than all, of the Preferred Stock held by such holder into Common Stock at the Conversion Rate. Each holder also has the option to convert its shares of Preferred Stock into Common Stock upon a change in control (as defined in the Articles Supplementary) of the Company. In addition, neither the Company nor a holder of shares of Preferred Stock may redeem shares of the Preferred Stock until six years from the initial issuance of the Preferred Stock, except in cases of a change in control (as defined in the Articles Supplementary). Holders of the Preferred Stock are entitled to vote on each matter submitted to a vote of the stockholders of the Company upon which the holders of Common Stock are entitled to vote, upon which the holders of the Preferred Stock and holders of the Common Stock shall vote together as a single class. The number of votes applicable to a share of Preferred Stock will be equal to the number of shares of Common Stock a share of Preferred Stock could have been converted into as of the record date set for purposes of such stockholder vote (rounded down to the nearest whole number of shares of Common Stock). In addition, the affirmative vote of the holders of two-thirds of the outstanding shares of Preferred Stock is required to approve the issuance of any equity securities senior to the Preferred Stock and to take certain actions materially adverse to the holders of the Preferred Stock. |
Recently Adopted Accounting Pronouncements and Accounting Pronouncements not yet Adopted | Recently Adopted Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” or ASU 2014-09. ASU 2014-09 broadly amends the accounting guidance for revenue recognition. ASU 2014-09 is effective for the first interim or annual period beginning after December 15, 2017, and is to be applied retrospectively. The Company adopted this guidance on January 1, 2018 and it did not have a material impact on our consolidated financial statements. 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 Company adopted this guidance on January 1, 2018. The adoption of this guidance did not have a material impact 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. As a result, entities will no longer present transfers between cash and cash equivalents and restricted cash in the statement of cash flows. The Company adopted this guidance on January 1, 2018 and applied the guidance retrospectively to our prior period consolidated statement of cash flows. Accounting Pronouncements Not Yet Adopted 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 February 2018, the FASB issued guidance that allows an entity to elect to reclassify the stranded tax effects related to the Tax Cuts and Jobs Act of 2017 from accumulated other comprehensive income into retained earnings. The amendments become effective for reporting periods beginning after December 15, 2018, and early adoption is permitted. The Company is currently evaluating the impact of this new guidance. In August 2018, the FASB issued guidance that is part of the FASB’s disclosure framework project, whose objective and primary focus are to improve the effectiveness of disclosures in the notes to financial statements. The ASU eliminates, amends and adds certain disclosure requirements for fair value measurements. The amendments become effective for reporting periods beginning after December 15, 2019, and early adoption is permitted for adoption of the entire standard or only the provisions that eliminate or modify the requirements. The Company is currently evaluating the impact of this new guidance. |
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. |
Commercial Mortgage Loans (Tabl
Commercial Mortgage Loans (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
Summary of the company's loans receivable by class | The following table represents the composition by loan type of the Company's commercial mortgage loans, held-for-sale, measured at fair value (dollars in thousands). September 30, 2018 December 31, 2017 Loan Type Par Value Percentage Par Value Percentage Multifamily $ 27,700 26.3 % $ 28,531 100.0 % Retail 42,030 39.8 % — — % Hospitality 23,273 22.1 % — — % Self-Storage 12,500 11.8 % — — % Total $ 105,503 100.0 % $ 28,531 100.0 % The following table presents the activity in the Company's allowance for loan losses (dollars in thousands): Nine Months Ended September 30, 2018 Year Ended December 31, 2017 Beginning of period $ 1,466 $ 2,181 Loan loss provision/(recovery) (1) 3,502 (715 ) Charge-offs — — Recoveries — — Ending allowance for loan losses $ 4,968 $ 1,466 (1) Includes $4.1 million loan loss provision specifically reserved on one loan in non-performing status as of September 30, 2018 . The following table represents the composition by loan type of the Company's commercial mortgage loans portfolio, excluding commercial mortgage loans, held-for-sale, measured at fair value (dollars in thousands). September 30, 2018 December 31, 2017 Loan Type Par Value Percentage Par Value Percentage Multifamily $ 875,134 40.7 % $ 505,189 35.9 % Office 481,086 22.4 % 455,698 32.4 % Retail 255,856 11.9 % 209,598 14.9 % Hospitality 336,064 15.6 % 184,025 13.1 % Industrial 53,871 2.5 % 53,208 3.7 % Mixed-Use 112,105 5.2 % — — % Self-Storage 36,057 1.7 % — — % Total $ 2,150,173 100.0 % $ 1,407,718 100.0 % The following table is a summary of the Company's commercial mortgage loans, held-for-investment, carrying values by class (dollars in thousands): September 30, 2018 December 31, 2017 Senior loans $ 2,113,557 $ 1,368,425 Mezzanine loans 27,145 35,087 Total gross carrying value of loans $ 2,140,702 $ 1,403,512 Less: Allowance for loan losses 4,968 1,466 Total commercial mortgage loans, held for investment, net $ 2,135,734 $ 1,402,046 |
Allowance for losses rating policy | As part of the Company's process for monitoring the credit quality of its commercial mortgage loans, excluding those held-for-sale, measured at fair value, it performs a quarterly loan portfolio assessment and assigns risk ratings to each of its loans. The loans are scored on a scale of 1 to 5 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. |
Schedule of activity in Company's loan portfolio | For the nine months ended September 30, 2018 and year ended December 31, 2017 , the activity in the Company's commercial mortgage loans, held-for-investment portfolio was as follows (dollars in thousands): Nine Months Ended September 30, 2018 Year Ended December 31, 2017 Balance at Beginning of Year $ 1,402,046 $ 1,046,556 Acquisitions and originations 1,286,948 837,861 Principal repayments (542,833 ) (381,933 ) Discount accretion and premium amortization 3,284 2,554 Loans transferred to commercial real estate loans, held-for-sale (2,250 ) (100,005 ) Net fees capitalized into carrying value of loans (7,959 ) (3,702 ) Loan loss recovery/(provision) (3,502 ) 715 Balance at End of Period $ 2,135,734 $ 1,402,046 |
Real Estate Securities (Tables)
Real Estate Securities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of 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 September 30, 2018 2 4.7 % December 2023 $ 26,750 $ 27,048 December 31, 2017 — — % N/A — — The following table presents information about 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 September 30, 2018 and December 31, 2017 (dollars in thousands): Total Level I Level II Level III September 30, 2018 Assets, at fair value Commercial mortgage loans, held-for-sale (1) $ 105,976 $ — $ — $ 105,976 Real estate securities 27,048 — — 27,048 Credit default swaps 319 — 319 — Interest rate swaps 375 — 375 — Treasury note futures 1,293 1,293 — — Total assets, at fair value $ 135,011 $ 1,293 $ 694 — $ 133,024 Liabilities, at fair value Credit default swaps $ 565 $ — $ 565 $ — Total liabilities, at fair value $ 565 $ — $ 565 $ — December 31, 2017 Assets, at fair value Commercial mortgage loans, held-for-sale (1) 28,531 — — 28,531 Treasury note futures 132 132 — — Total assets, at fair value $ 28,663 $ 132 $ — $ 28,531 Liabilities, at fair value Credit default swaps $ 357 $ — $ 357 $ — Total liabilities, at fair value $ 357 $ — $ 357 $ — ________________________ (1) Loans held in the Company's TRS, reported within Commercial mortgage loans, held-for-sale, measured at fair value on the consolidated balance sheets. |
Schedule of Company's CMBS investments | The following table provides information on the amounts of gains (losses) on the Company's real estate securities, CMBS, available-for-sale (dollars in thousands): Three Months Ended September 30, Nine months ended September 30, 2018 2017 2018 2017 Unrealized gain (loss) available-for-sale securities $ 194 $ (448 ) $ 171 $ 19 Reclassification of net (gain) loss on available-for-sale securities included in net income (loss) — — — 481 Unrealized gain (loss) available-for-sale securities, net of reclassification adjustment $ 194 $ (448 ) $ 171 $ 500 The following table shows the amortized cost, unrealized gains/losses and fair value of the Company's CMBS investments as of September 30, 2018 and December 31, 2017 (in thousands): Amortized Cost Unrealized Gains Unrealized Losses Fair Value September 30, 2018 $ 26,877 $ 171 $ — $ 27,048 December 31, 2017 — — — — |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Master Repurchase Agreements | Below is a summary of the Company's MRAs as of September 30, 2018 and December 31, 2017 (dollars in thousands): Weighted Average Counterparty Amount Outstanding Accrued Interest Collateral Pledged Interest Rate Days to Maturity As of September 30, 2018 JP Morgan Securities LLC $ 22,272 $ 5 $ 26,750 2.91 % 26 Total $ 22,272 $ 5 $ 26,750 2.91 % 26 Weighted Average Amount Outstanding Accrued Interest Collateral Pledged (*) Interest Rate Days to Maturity As of December 31, 2017 JP Morgan Securities LLC $ 39,035 $ 11 $ 56,044 3.32 % 26 Total $ 39,035 $ 11 $ 56,044 3.32 % 26 _______________________ * Includes $56.0 million Tranche C of RFT 2015-FL1 CLO held by the Company, which is eliminated within the Real estate securities, at fair value line of the consolidated balance sheets as of December 31, 2017 . The details of the Company's Repo Facilities and the Barclays Facility at September 30, 2018 and December 31, 2017 are as follows (dollars in thousands): As of September 30, 2018 Ending Weighted Average Interest Rate Term Maturity Repurchase Facility Committed Financing Amount Outstanding Interest Expense (1) JPM Repo Facility (2) $ 520,000 $ 241,282 $ 6,601 4.32 % 1/30/2020 GS Repo Facility (3) 250,000 — 415 N/A 12/27/2018 USB Repo Facility (4) 100,000 14,651 502 3.91 % 6/15/2020 CS Repo Facility (5) 300,000 309,396 5,301 4.37 % 6/19/2019 Barclays Facility (6) 100,000 — 1,145 N/A 9/19/2019 Total $ 1,270,000 $ 565,329 $ 13,964 __________________________ (1) For the nine months ended September 30, 2018. Includes amortization of deferred financing costs. (2) On January 30, 2018 the committed financing amount was upsized from $300 million to $520 million and the maturity date was amended to January 30, 2020 . Includes a one -year extension at the Company's option. (3) Includes a one -year extension at the Company’s option, which may be exercised upon the satisfaction of certain conditions. (4) Includes two one -year extensions at the option of an indirect wholly-owned subsidiary of the Company, which may be exercised upon the satisfaction of certain conditions. (5) On July 19, 2018, the committed financing amount was upsized from $250 million to $300 million . On June 20, 2018, the Company exercised the extension option upon the satisfaction of certain conditions, and extended the term maturity to June 19, 2019. In September 2018, the CS Repo Facility lender agreed to a temporary increase to the committed financing amount on one specific pledged asset. (6) On July 30, 2018, the committed financing amount was upsized from $75 million to $100 million . Includes a one -year extension at the Company's option. As of December 31, 2017 Ending Weighted Average Interest Rate Term Maturity Repurchase Facility Committed Financing Amount Outstanding Interest Expense (1) JPM Repo Facility (2) $ 300,000 $ 42,042 $ 7,064 3.48 % 6/12/2019 GS Repo Facility (3) 250,000 13,500 3,213 3.74 % 12/27/2018 CS Repo Facility (5) 250,000 10,148 58 N/A 8/30/2018 USB Repo Facility (4) 100,000 — 163 N/A 6/15/2020 Barclays Facility (6) 75,000 — 14 N/A 9/19/2019 Total $ 975,000 $ 65,690 $ 10,512 _______________________ (1) For the nine months ended September 30, 2017. Includes amortization of deferred financing costs. (2) Includes a one -year extension at the Company's option. (3) Includes a one -year extension at the Company’s option, which may be exercised upon the satisfaction of certain conditions. (4) Includes two one -year extensions at the option of an indirect wholly-owned subsidiary of the Company, which may be exercised upon the satisfaction of certain conditions. (5) Prior to the end of each calendar quarter, the Company may request an extension of the termination date for an additional 364 days from the end of such calendar quarter subject to the satisfaction of certain conditions and approvals. (6) Includes a one -year extension at the Company's option. |
Schedule of Long-term Debt Instruments | The following table represents the terms of the notes issued by BSPRT 2017-FL1 Issuer, BSPRT 2017-FL2 Issuer and BSPRT 2018-FL3, respectively (dollars in thousands): CLO Facility As of September 30, 2018 Par Value Issued Par Value Outstanding (1)(2) Interest Rate Maturity Date 2017-FL1 Issuer Tranche A $ 223,600 $ 124,489 1M LIBOR + 135 7/1/2027 2017-FL1 Issuer Tranche B 48,000 48,000 1M LIBOR + 240 7/1/2027 2017-FL1 Issuer Tranche C 67,900 67,900 1M LIBOR + 425 7/1/2027 2017-FL2 Issuer Tranche A 237,970 147,376 1M LIBOR + 82 10/15/2034 2017-FL2 Issuer Tranche A-S 36,357 36,357 1M LIBOR + 110 10/15/2034 2017-FL2 Issuer Tranche B 26,441 26,441 1M LIBOR + 140 10/15/2034 2017-FL2 Issuer Tranche C 25,339 25,339 1M LIBOR + 215 10/15/2034 2017-FL2 Issuer Tranche D 35,255 35,255 1M LIBOR + 345 10/15/2034 2018-FL3 Issuer Tranche A 286,700 286,700 1M LIBOR + 105 3/15/2028 2018-FL3 Issuer Tranche A-S 77,775 77,775 1M LIBOR + 135 3/15/2028 2018-FL3 Issuer Tranche B 41,175 41,175 1M LIBOR + 165 3/15/2028 2018-FL3 Issuer Tranche C 39,650 39,650 1M LIBOR + 255 3/15/2028 2018-FL3 Issuer Tranche D 42,700 42,700 1M LIBOR + 345 3/15/2028 $ 1,188,862 $ 999,157 CLO Facility As of December 31, 2017 Par Value Issued Par Value Outstanding (1)(3) Interest Rate Maturity Date 2015-FL1 Issuer Tranche A $ 231,345 $ 79,109 1M LIBOR + 175 8/1/2030 2015-FL1 Issuer Tranche B 42,841 42,841 1M LIBOR + 388 8/1/2030 2015-FL1 Issuer Tranche C 76,044 20,000 1M LIBOR + 525 8/1/2030 2017-FL1 Issuer Tranche A 223,600 223,600 1M LIBOR + 135 7/1/2027 2017-FL1 Issuer Tranche B 48,000 48,000 1M LIBOR + 240 7/1/2027 2017-FL1 Issuer Tranche C 67,900 67,900 1M LIBOR + 425 7/1/2027 2017-FL2 Issuer Tranche A 237,970 237,970 1M LIBOR + 82 10/15/2034 2017-FL2 Issuer Tranche A-S 36,357 36,357 1M LIBOR + 110 10/15/2034 2017-FL2 Issuer Tranche B 26,441 26,441 1M LIBOR + 140 10/15/2034 2017-FL2 Issuer Tranche C 25,339 25,339 1M LIBOR + 215 10/15/2034 2017-FL2 Issuer Tranche D 35,255 35,255 1M LIBOR + 345 10/15/2034 $ 1,051,092 $ 842,812 ________________________ (1) Excludes $16.0 million of Tranche E notes and $14.9 million of Tranche F notes issued by BSPRT 2017-FL2 Issuer, held by the Company, which are eliminated within the collateralized loan obligation line of the consolidated balance sheets as of September 30, 2018 and December 31, 2017 . (2) Excludes $ 36.6 million of Tranche E notes and $21.4 million of Tranche F notes issued by BSPRT 2018-FL3 Issuer, held by the Company, which are eliminated within the collateralized loan obligation line of the consolidated balance sheets as of September 30, 2018 . (3) Excludes $ 56.0 million of Tranche C notes issued by RFT 2015-FL1 Issuer, held by the Company, which is eliminated within the collateralized loan obligation line of the consolidated balance sheets as of December 31, 2017 . |
Schedule of Variable Interest Entities | The below table reflects the total assets and liabilities of the Company's three CLOs. The CLOs are considered VIEs and are consolidated into the Company's consolidated financial statements as of September 30, 2018 and December 31, 2017 as the Company is the primary beneficiary of the VIE. The Company is the primary beneficiary of the CLOs 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 VIEs or the obligation to absorb losses of the VIEs that could be significant to the VIE. Assets (dollars in thousands) September 30, 2018 December 31, 2017 Cash (1) $ 35,768 $ 49,017 Commercial mortgage loans, held for investment, net of allowance (2) 1,239,811 1,033,427 Accrued interest receivable 3,768 4,212 Total assets $ 1,279,347 $ 1,086,656 Liabilities Notes payable (3)(4) $ 1,072,344 $ 912,800 Interest payable 1,765 1,462 Total liabilities $ 1,074,109 $ 914,262 ________________________ (1) Includes $35.5 million and $48.7 million of cash held by the servicer related to CLO loan payoffs as of September 30, 2018 and December 31, 2017 . (2) The balance is presented net of allowance for loan loss of $0.6 million and $1.3 million as of September 30, 2018 and December 31, 2017 , respectively. (3) Includes $16.0 million of Tranche E notes and $14.9 million of Tranche F notes issued by 2017-FL2 Issuer held by the Company as of September 30, 2018 and December 31, 2017 ; $36.6 million of Tranche E notes and $21.4 million of Tranche F notes issued by 2018-FL3 Issuer held by the Company as of September 30, 2018 . The notes held by the Company are eliminated within the Collateral loan obligations line of the consolidated balance sheets. Includes $55.8 million of Tranche C of Company issued CLO held by the Company as of December 31, 2017 . (4) The balance is presented net of deferred financing cost and discount of $ 15.6 million and $16.9 million as of September 30, 2018 and December 31, 2017 , respectively. |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Summary of the Basic and Diluted Earnings Per Share | The below table represents the Company's earnings per share and distribution per share for the three and nine months ended September 30, 2018 and 2017 (dollars in thousands, except share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Net income $ 19,000 $ 6,975 $ 36,398 $ 19,305 Less: Preferred stock dividends (1,255 ) — (1,271 ) — Less: Preferred stock undistributed income (451 ) — — — Net income applicable to common stock $ 17,294 $ 6,975 $ 35,127 $ 19,305 Basic weighted-average shares outstanding 35,468,648 31,741,679 32,977,572 31,778,169 Basic net income per share 0.49 0.22 1.07 0.61 Net income $ 19,000 $ 6,975 $ 36,398 $ 19,305 Basic weighted-average shares outstanding 35,468,648 31,741,679 32,977,572 31,778,169 Unvested restricted shares 14,209 14,824 10,007 12,098 Conversion of redeemable convertible preferred stock - weighted 3,459,571 — 1,180,695 — Diluted weighted average shares outstanding 38,942,428 31,756,503 34,168,274 31,790,267 Diluted net income per share 0.49 0.22 1.07 0.61 |
Stock Transactions (Tables)
Stock Transactions (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Schedule of Share Repurchases | The following table summarizes the sales of common stock in these offerings (dollars in thousands, except share amounts): As of September 30, 2018 Total Closing Date Shares Issued Purchase Price June 25, 2018 834,537 $ 13,723 July 13, 2018 1,669,074 27,446 August 20, 2018 3,370,362 55,421 September 10, 2018 14,962 250 Total 5,888,935 $ 96,840 The following table reflects the number of shares repurchased under the SRP cumulatively through September 30, 2018 : Number of Requests Number of Shares Repurchased Average Price per Share Cumulative as of December 31, 2017 2,125 1,991,391 $ 21.36 January 1 - January 31, 2018 (1) 889 421,809 18.56 February 1 - February 28, 2018 — — — March 1 - March 31, 2018 — — — April 1 - April 30, 2018 — — — May 1 - May 31, 2018 — — — June 1 - June 30, 2018 — — — July 1 - July 31, 2018 831 387,214 18.74 August 1 - August 31, 2018 — — — September 1 - September 30, 2018 — — — Cumulative as of September 30, 2018 3,845 2,800,414 $ 20.65 ________________________ (1) Reflects shares repurchased in January 2018 pursuant to repurchase requests submitted for the fiscal semester ended December 31, 2017. As permitted under the SRP, the Board authorized repurchases up to the amount of proceeds reinvested through our DRIP. As a result, redemption requests in the amount of 185,689 shares were not fulfilled. The following table summarizes the sales of Series A preferred stock in these offerings (dollars in thousands, except share amounts): As of September 30, 2018 Total Closing Date Shares Issued Purchase Price (1) June 25, 2018 2,256 $ 11,278 July 13, 2018 4,498 22,554 August 20, 2018 9,083 45,619 August 28, 2018 3,378 17,000 Total 19,215 $ 96,451 ________________________ (1) Purchase price is $5,000 per share of Series A preferred stock plus accrued dividends as of the date of settlement. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Unfunded Commitments Under Commercial Mortgage Loans | As of September 30, 2018 and December 31, 2017 , the Company had the below unfunded commitments to the Company's borrowers (dollars in thousands): Funding Expiration September 30, 2018 December 31, 2017 2018 $ 6,277 $ 36,475 2019 45,378 26,465 2020 173,162 20,598 2021 104,635 — Total $ 329,452 $ 83,538 |
Related Party Transactions an_2
Related Party Transactions and Arrangements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Schedule of Selling Commissions and Dealer Manager Fees Payable | The table below shows the compensation and reimbursement payable to the Former Advisor, its affiliates, entities under common control with the Former Advisor and the Former Dealer Manager for services relating to the Company's public offering as of September 30, 2018 and December 31, 2017 (dollars in thousands): Payable as of September 30, 2018 December 31, 2017 Total commissions and fees incurred from the Former 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 480 480 |
Schedule of Amount Contractually Due and Forgiven in Connection With Operation Related Services | The table below shows the costs incurred due to arrangements with our Advisor and its affiliates during the three and nine months ended September 30, 2018 and September 30, 2017 , and the associated payable as of September 30, 2018 and December 31, 2017 (dollars in thousands): Three Months Ended September 30, Nine Months Ended September 30, Payable as of 2018 2017 2018 2017 September 30, 2018 December 31, 2017 Acquisition fees and expenses (1) $ 173 $ 1,685 $ 289 $ 4,175 $ — $ — Administrative services expenses 3,501 1,480 9,822 3,285 1,299 3,480 Asset management and subordinated performance fee 2,720 2,299 7,227 6,952 1,220 2,315 Other related party expenses (2) 315 87 785 183 316 146 Total $ 6,709 $ 5,551 $ 18,123 $ 14,595 $ 2,835 $ 5,941 ________________________ (1) Total acquisition fees and expenses paid during the three and nine months ended September 30, 2018 were $2.4 million and $6.6 million , respectively, of which $2.2 million and $6.3 million were capitalized within the commercial mortgage loans, held for investment line of the Company's consolidated balance sheet. For the three and nine months ended September 30, 2017 total acquisition fees and expenses paid during were $3.0 million and $9.0 million , respectively, of which $1.3 million and $4.8 million were capitalized. (2) Included in other expenses in the Company's consolidated statement of operations. |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments Carried at Fair Value on a Recurring Basis | 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 September 30, 2018 2 4.7 % December 2023 $ 26,750 $ 27,048 December 31, 2017 — — % N/A — — The following table presents information about 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 September 30, 2018 and December 31, 2017 (dollars in thousands): Total Level I Level II Level III September 30, 2018 Assets, at fair value Commercial mortgage loans, held-for-sale (1) $ 105,976 $ — $ — $ 105,976 Real estate securities 27,048 — — 27,048 Credit default swaps 319 — 319 — Interest rate swaps 375 — 375 — Treasury note futures 1,293 1,293 — — Total assets, at fair value $ 135,011 $ 1,293 $ 694 — $ 133,024 Liabilities, at fair value Credit default swaps $ 565 $ — $ 565 $ — Total liabilities, at fair value $ 565 $ — $ 565 $ — December 31, 2017 Assets, at fair value Commercial mortgage loans, held-for-sale (1) 28,531 — — 28,531 Treasury note futures 132 132 — — Total assets, at fair value $ 28,663 $ 132 $ — $ 28,531 Liabilities, at fair value Credit default swaps $ 357 $ — $ 357 $ — Total liabilities, at fair value $ 357 $ — $ 357 $ — ________________________ (1) Loans held in the Company's TRS, reported within Commercial mortgage loans, held-for-sale, measured at fair value on the consolidated balance sheets. |
Valuation Method of Company's Level 3 Financial Instruments | The following table summarizes the valuation method and significant unobservable inputs used for the Company’s financial instruments that are categorized within Level III of the fair value hierarchy as of September 30, 2018 and December 31, 2017 (dollars in thousands). Asset Category Fair Value Valuation Methodologies Unobservable Inputs (1) Weighted Average (2) Range September 30, 2018 Commercial mortgage loans, held-for-sale, measured at fair value $105,976 Discounted Cash Flow Yield 5.30% 4.4% - 13.5% Real estate securities, available-for-sale, at fair value 27,048 Broker Quotes Yield 4.93% 4.1% - 5.6% December 31, 2017 Commercial mortgage loans, held-for-sale, measured at fair value $28,531 Discounted Cash Flow Yield 4.93% 4.8% - 5.3% (1) In determining certain of these inputs, the Company evaluates a variety of factors including economic conditions, industry and market developments, market valuations of comparable companies and company specific developments including exit strategies and realization opportunities. The Company has determined that market participants would take these inputs into account when valuing the investments. (2) Inputs were weighted based on the fair value of the investments included in the range. |
Investments Measured at Fair Value on a Recurring Basis | The following table presents additional information about the Company’s financial instruments which are measured at fair value on a recurring basis as of September 30, 2018 and December 31, 2017 for which the Company has used Level III inputs to determine fair value (dollars in thousands): September 30, 2018 Commercial Mortgage Loans, held-for-sale, measured at fair value Real Estate Securities Beginning balance, January 1, 2018 $ 28,531 $ — Transfers into Level III — — Realized gain on sale of commercial mortgage loan held-for-sale 9,765 — Realized gain (loss) on sale of real estate securities — (107 ) Unrealized gain (loss) 474 — Unrealized gain (loss) included in OCI (1) — 171 Purchases 440,815 39,511 Sales / paydowns (373,609 ) (12,456 ) Discount accretion/(premium amortization) — (71 ) Transfers out of Level III — — Ending balance, September 30, 2018 $ 105,976 $ 27,048 December 31, 2017 Commercial Mortgage Loans, held-for-sale, measured at fair value Real Estate Securities Beginning balance, January 1, 2017 $ — $ 49,049 Transfers into Level III — — Realized gain on sale of real estate securities — 172 Realized gain on sale of commercial mortgage loan held-for-sale 4,523 — Net accretion — 167 Unrealized gain (loss) included in OCI (1) — 500 Purchases 156,101 — Sales (132,093 ) (34,888 ) Cash repayments/receipts — (15,000 ) Transfers out of Level III — — Ending balance, December 31, 2017 $ 28,531 $ — ________________________ (1) Unrealized gains included in Other comprehensive income ("OCI") are attributable to assets held at September 30, 2018 and December 31, 2017 . |
Financial Instruments Not Measured at Fair Value | The fair values of the Company's commercial mortgage loans, held-for-investment and collateralized loan obligations, which are not reported at fair value on the consolidated balance sheets are reported below as of September 30, 2018 and December 31, 2017 (dollars in thousands): Level Carrying Amount Fair Value September 30, 2018 Commercial mortgage loans, held-for-investment (1) Asset III $ 2,140,702 $ 2,136,052 Collateralized loan obligation Liability II 983,546 1,002,313 December 31, 2017 Commercial mortgage loans, held-for-investment (1) Asset III $ 1,403,512 $ 1,396,406 Collateralized loan obligation Liability II 826,150 842,812 ________________________ (1) The carrying value is gross of $5.0 million and $1.5 million of allowance for loan losses as of September 30, 2018 and December 31, 2017 , respectively. |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Liabilities at Fair Value | The following derivative instruments were outstanding as of September 30, 2018 and December 31, 2017 (dollars in thousands): Fair Value Contract type Notional Assets (1) Liabilities (1) As of September 30, 2018 Credit default swaps $ 80,000 $ 319 $ 565 Interest rate swaps 18,000 375 — Treasury note futures 126,382 1,293 — Total $ 224,382 $ 1,987 $ 565 As of December 31, 2017 Credit default swaps $ 30,000 $ 32 $ 357 Treasury note futures 43,906 100 — Total $ 73,906 $ 132 $ 357 _______________________ (1) Shown as derivative instruments, at fair value, in the accompanying consolidated balance sheets. |
Schedule of Derivative Assets at Fair Value | The following derivative instruments were outstanding as of September 30, 2018 and December 31, 2017 (dollars in thousands): Fair Value Contract type Notional Assets (1) Liabilities (1) As of September 30, 2018 Credit default swaps $ 80,000 $ 319 $ 565 Interest rate swaps 18,000 375 — Treasury note futures 126,382 1,293 — Total $ 224,382 $ 1,987 $ 565 As of December 31, 2017 Credit default swaps $ 30,000 $ 32 $ 357 Treasury note futures 43,906 100 — Total $ 73,906 $ 132 $ 357 _______________________ (1) Shown as derivative instruments, at fair value, in the accompanying consolidated balance sheets. |
Net Realized and Unrealized Losses on Derivatives | The following tables indicate the net realized and unrealized losses on derivatives, by primary underlying risk exposure, as included in loss on derivative instruments in the consolidated statements of operations for the three and nine months ended September 30, 2018 and 2017 (dollars in thousands). Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Unrealized Gain/(Loss) Realized Gain/(Loss) Total Unrealized Gain/(Loss) Realized Gain/(Loss) Total Contract type Credit default swaps $ (316 ) $ (64 ) $ (380 ) $ (106 ) $ 29 $ (77 ) Interest rate swaps 84 195 279 74 709 783 Treasury note futures 1,504 (172 ) 1,332 1,194 738 1,932 Total $ 1,272 $ (41 ) $ 1,231 $ 1,162 $ 1,476 $ 2,638 Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017 Unrealized Gain/(Loss) Realized Gain/(Loss) Total Unrealized Gain/(Loss) Realized Gain/(Loss) Total Contract type Credit default swaps $ (171 ) $ (18 ) $ (189 ) $ (171 ) $ (18 ) $ (189 ) Treasury note futures 754 754 754 — 754 Total $ 583 $ (18 ) $ 565 $ 583 $ (18 ) $ 565 |
Offsetting Assets and Liabili_2
Offsetting Assets and Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Offsetting [Abstract] | |
Offsetting Liabilities | The table below provides a gross presentation, the effects of offsetting and a net presentation of the Company's derivative instruments and repurchase agreements within the scope of ASC 210-20, Balance Sheet—Offsetting , as of September 30, 2018 and December 31, 2017 (dollars in thousands): Gross Amounts Not Offset on the Balance Sheet Assets Gross Amounts of Recognized Assets Gross Amounts Offset on the Balance Sheet Net Amount of Assets Presented on the Balance Sheet Financial Instruments Cash Collateral Pledged Net Amount September 30, 2018 Derivative instruments, at fair value $ 1,987 $ — $ 1,987 $ — $ — $ 1,987 December 31, 2017 Derivative instruments, at fair value $ 132 $ — $ 132 $ — $ — $ 132 Gross Amounts Not Offset on the Balance Sheet Liabilities Gross Amounts of Recognized Liabilities Gross Amounts Offset on the Balance Sheet Net Amount of Liabilities Presented on the Balance Sheet Financial Instruments Cash Collateral Pledged (2) Net Amount September 30, 2018 Repurchase agreements, commercial mortgage loans $ 565,329 $ — $ 565,329 $ 779,745 $ 5,010 $ — Repurchase agreements - real estate securities 22,272 — 22,272 26,750 69 — Derivative instruments, at fair value 565 — 565 — 5,167 — December 31, 2017 Repurchase agreements, commercial mortgage loans $ 65,690 $ — $ 65,690 $ 163,235 $ 5,005 $ — Repurchase agreements, real estate securities (1) 39,035 — 39,035 56,044 — — Derivative instruments, at fair value 357 — 357 — 2,961 — ________________________ ( 1) Includes $56.0 million of Tranche C of Company issued CLO held by the Company, which el iminates within the real estate securities, at fair value line of the consolidated balance sheets as of December 31, 2017 . (2) These cash collateral amounts are recorded within the Restricted cash balance on the consolidated balance sheets. |
Offsetting Assets | The table below provides a gross presentation, the effects of offsetting and a net presentation of the Company's derivative instruments and repurchase agreements within the scope of ASC 210-20, Balance Sheet—Offsetting , as of September 30, 2018 and December 31, 2017 (dollars in thousands): Gross Amounts Not Offset on the Balance Sheet Assets Gross Amounts of Recognized Assets Gross Amounts Offset on the Balance Sheet Net Amount of Assets Presented on the Balance Sheet Financial Instruments Cash Collateral Pledged Net Amount September 30, 2018 Derivative instruments, at fair value $ 1,987 $ — $ 1,987 $ — $ — $ 1,987 December 31, 2017 Derivative instruments, at fair value $ 132 $ — $ 132 $ — $ — $ 132 Gross Amounts Not Offset on the Balance Sheet Liabilities Gross Amounts of Recognized Liabilities Gross Amounts Offset on the Balance Sheet Net Amount of Liabilities Presented on the Balance Sheet Financial Instruments Cash Collateral Pledged (2) Net Amount September 30, 2018 Repurchase agreements, commercial mortgage loans $ 565,329 $ — $ 565,329 $ 779,745 $ 5,010 $ — Repurchase agreements - real estate securities 22,272 — 22,272 26,750 69 — Derivative instruments, at fair value 565 — 565 — 5,167 — December 31, 2017 Repurchase agreements, commercial mortgage loans $ 65,690 $ — $ 65,690 $ 163,235 $ 5,005 $ — Repurchase agreements, real estate securities (1) 39,035 — 39,035 56,044 — — Derivative instruments, at fair value 357 — 357 — 2,961 — ________________________ ( 1) Includes $56.0 million of Tranche C of Company issued CLO held by the Company, which el iminates within the real estate securities, at fair value line of the consolidated balance sheets as of December 31, 2017 . (2) These cash collateral amounts are recorded within the Restricted cash balance on the consolidated balance sheets. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following table represents the Company's operations by segment for the three and nine months ended September 30, 2018 and 2017 (dollars in thousands): Three Months Ended September 30, 2018 Total Real Estate Debt Real Estate Securities TRS Interest income $ 42,943 $ 41,046 $ 270 $ 1,627 Interest expense 17,120 15,694 192 1,234 Net income (loss) 19,000 17,275 (29 ) 1,754 Total assets as of September 30, 2018 2,387,390 2,246,251 27,647 113,492 Three Months Ended September 30, 2017 Interest income 22,195 21,795 269 131 Interest expense 8,845 8,386 409 50 Net income 6,975 7,588 (22 ) (591 ) Total assets as of December 31, 2017 1,583,661 1,517,021 389 66,251 Nine Months Ended September 30, 2018 Total Real Estate Debt Real Estate Securities TRS Interest income $ 106,478 $ 101,073 $ 317 $ 5,088 Interest expense 50,183 46,813 378 2,992 Net income (loss) 36,398 30,997 (168 ) 5,569 Total assets as of September 30, 2018 2,387,390 2,246,251 27,647 113,492 Nine Months Ended September 30, 2017 Interest income 61,917 60,435 1,351 131 Interest expense 21,990 20,686 1,254 50 Net income 19,305 19,627 269 (591 ) Total assets as of December 31, 2017 1,583,661 1,517,021 389 66,251 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Narrative (Details) $ / shares in Units, $ in Thousands | Jun. 25, 2018 | Sep. 30, 2018USD ($)$ / shares | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)segment$ / shares | Sep. 30, 2017USD ($) | Jun. 01, 2018$ / sharesshares | Apr. 05, 2018$ / shares | Dec. 31, 2017USD ($)$ / shares |
Related Party Transaction [Line Items] | ||||||||
Realized gain on commercial mortgage loans accounted for under fair value option | $ 3,419 | $ 0 | $ 9,765 | $ 0 | ||||
Minimum distribution percentage to qualify for REIT taxation status | 90.00% | |||||||
Pre-tax income recognized by TRS | 19,325 | 6,684 | $ 37,478 | 19,014 | ||||
Income tax expense recognized by TRS | $ 325 | $ (291) | $ 1,080 | $ (291) | ||||
Number of reportable segments | segment | 3 | |||||||
Preferred stock, par value per share (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.001 | $ 0.01 | ||||
TRS | ||||||||
Related Party Transaction [Line Items] | ||||||||
Pre-tax income recognized by TRS | $ 1,400 | $ 4,700 | ||||||
Domestic Tax Authority | ||||||||
Related Party Transaction [Line Items] | ||||||||
Income tax expense recognized by TRS | 300 | 1,100 | ||||||
Fair Value | ||||||||
Related Party Transaction [Line Items] | ||||||||
Principal amount outstanding of commercial mortgage loans, fair value | 106,000 | 106,000 | $ 28,500 | |||||
Carrying Amount | ||||||||
Related Party Transaction [Line Items] | ||||||||
Principal amount outstanding of commercial mortgage loans, fair value | $ 105,500 | $ 105,500 | $ 28,500 | |||||
Redeemable Convertible Preferred Stock Series A | ||||||||
Related Party Transaction [Line Items] | ||||||||
Preferred stock, par value per share (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||||
Redeemable Convertible Preferred Stock Series A | Redeemable Convertible Preferred Stock Purchase Agreements | ||||||||
Related Party Transaction [Line Items] | ||||||||
Preferred stock, par value per share (in dollars per share) | $ / shares | $ 0.01 | |||||||
Dividend payable based on share price (in usd per share) | $ / shares | $ 16.67 | |||||||
Preferred stock conversion basis (in shares) | shares | 299.2 | |||||||
Liquidity event period | 6 years | |||||||
Amortization of beneficial conversion feature | $ 400 | |||||||
Commercial Mortgage Loans - Held for Sale | ||||||||
Related Party Transaction [Line Items] | ||||||||
Origination and purchase of commercial mortgage loans, held for sale | $ 5,900 | |||||||
Proceeds from sale of commercial mortgage loans | $ 5,900 |
Commercial Mortgage Loans - Car
Commercial Mortgage Loans - Carrying Value of Commercial Mortgage Loans Held for Investment (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Receivables [Abstract] | |||
Senior loans | $ 2,113,557 | $ 1,368,425 | |
Mezzanine loans | 27,145 | 35,087 | |
Total gross carrying value of loans | 2,140,702 | 1,403,512 | |
Less: Allowance for loan losses | 4,968 | 1,466 | $ 2,181 |
Total commercial mortgage loans, held for investment, net | $ 2,135,734 | $ 1,402,046 |
Commercial Mortgage Loans - All
Commercial Mortgage Loans - Allowance for Loan Losses (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)loan | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($)loan | |
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Beginning balance | $ 1,466 | $ 2,181 | $ 2,181 | ||
Loan loss provision/(recovery) | $ 1,066 | $ (641) | 3,502 | $ (222) | (715) |
Charge-offs | 0 | 0 | |||
Recoveries | 0 | 0 | |||
Ending balance | 4,968 | $ 4,968 | $ 1,466 | ||
Repurchase agreements, commercial mortgage loans | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Number of mezzanine loans funded (loan) | loan | 100 | 69 | |||
Non-accrual loans | Repurchase agreements, commercial mortgage loans | |||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Loan loss provision/(recovery) | $ 1,300 | $ 4,100 | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Number of mezzanine loans funded (loan) | loan | 1 | 0 |
Commercial Mortgage Loans - Nar
Commercial Mortgage Loans - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2018USD ($)ratingloan | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($)ratingloan | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Initial risk rating of loans | rating | 2 | |||||
Weighted average risk rating of loans | rating | 2.1 | 2.2 | ||||
Principal balance of the loan | $ 2,140,702 | $ 2,140,702 | $ 2,140,702 | $ 1,403,512 | ||
Loan loss provision/(recovery) | 1,066 | $ (641) | $ 3,502 | $ (222) | $ (715) | |
Repurchase agreements, commercial mortgage loans | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Number of mezzanine loans funded (loan) | loan | 100 | 69 | ||||
Principal balance of the loan | 2,150,173 | 2,150,173 | $ 2,150,173 | $ 1,407,718 | ||
Commercial Mortgage Loans - Held for Sale | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Number of mezzanine loans funded (loan) | loan | 12 | 3 | ||||
Principal balance of the loan | 105,503 | 105,503 | $ 105,503 | $ 28,531 | ||
Non-accrual loans | Repurchase agreements, commercial mortgage loans | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Number of mezzanine loans funded (loan) | loan | 1 | 0 | ||||
Proceeds from interest received | 600 | |||||
Principal balance of the loan | 16,800 | 16,800 | $ 16,800 | |||
Fair value of the loan | 12,100 | $ 12,100 | 12,100 | |||
Loan loss provision/(recovery) | $ 1,300 | $ 4,100 |
Commercial Mortgage Loans - Com
Commercial Mortgage Loans - Commercial Mortgage Loan Portfolio (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross carrying value of loans | $ 2,140,702 | $ 1,403,512 |
Repurchase agreements, commercial mortgage loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross carrying value of loans | $ 2,150,173 | $ 1,407,718 |
Loan type as a percent of total loans, percent | 100.00% | 100.00% |
Repurchase agreements, commercial mortgage loans | Multifamily | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross carrying value of loans | $ 875,134 | $ 505,189 |
Loan type as a percent of total loans, percent | 40.70% | 35.90% |
Repurchase agreements, commercial mortgage loans | Office | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross carrying value of loans | $ 481,086 | $ 455,698 |
Loan type as a percent of total loans, percent | 22.40% | 32.40% |
Repurchase agreements, commercial mortgage loans | Retail | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross carrying value of loans | $ 255,856 | $ 209,598 |
Loan type as a percent of total loans, percent | 11.90% | 14.90% |
Repurchase agreements, commercial mortgage loans | Hospitality | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross carrying value of loans | $ 336,064 | $ 184,025 |
Loan type as a percent of total loans, percent | 15.60% | 13.10% |
Repurchase agreements, commercial mortgage loans | Industrial | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross carrying value of loans | $ 53,871 | $ 53,208 |
Loan type as a percent of total loans, percent | 2.50% | 3.70% |
Repurchase agreements, commercial mortgage loans | Mixed-Use | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross carrying value of loans | $ 112,105 | $ 0 |
Loan type as a percent of total loans, percent | 5.20% | 0.00% |
Repurchase agreements, commercial mortgage loans | Self-Storage | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross carrying value of loans | $ 36,057 | $ 0 |
Loan type as a percent of total loans, percent | 1.70% | 0.00% |
Commercial Mortgage Loans - Held for Sale | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross carrying value of loans | $ 105,503 | $ 28,531 |
Loan type as a percent of total loans, percent | 100.00% | 100.00% |
Commercial Mortgage Loans - Held for Sale | Multifamily | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross carrying value of loans | $ 27,700 | $ 28,531 |
Loan type as a percent of total loans, percent | 26.30% | 100.00% |
Commercial Mortgage Loans - Held for Sale | Office | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross carrying value of loans | $ 12,500 | $ 0 |
Loan type as a percent of total loans, percent | 11.80% | 0.00% |
Commercial Mortgage Loans - Held for Sale | Retail | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross carrying value of loans | $ 42,030 | $ 0 |
Loan type as a percent of total loans, percent | 39.80% | 0.00% |
Commercial Mortgage Loans - Held for Sale | Hospitality | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross carrying value of loans | $ 23,273 | $ 0 |
Loan type as a percent of total loans, percent | 22.10% | 0.00% |
Commercial Mortgage Loans - Loa
Commercial Mortgage Loans - Loan Portfolio Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Movement in Mortgage Loans on Real Estate [Roll Forward] | |||||
Balance at Beginning of Year | $ 1,402,046 | $ 1,046,556 | $ 1,046,556 | ||
Acquisitions and originations | 1,286,948 | 837,861 | |||
Principal repayments | (542,833) | (381,933) | |||
Discount accretion and premium amortization | 3,284 | 2,554 | |||
Loans transferred to commercial real estate loans, held-for-sale | (2,250) | (100,005) | |||
Net fees capitalized into carrying value of loans | (7,959) | (3,702) | |||
Loan loss recovery/(provision) | $ (1,066) | $ 641 | (3,502) | $ 222 | 715 |
Balance at End of Period | $ 2,135,734 | $ 2,135,734 | $ 1,402,046 |
Real Estate Securities - Narrat
Real Estate Securities - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018USD ($)investment | Sep. 30, 2018USD ($)investment | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($)investment | |
Schedule of Available-for-sale Securities [Line Items] | ||||
Loss from sale of commercial loans | $ (9,717) | $ 1,587 | ||
CMBS | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Payments to acquire CMBS | $ 15,800 | |||
Loss from sale of commercial loans | $ 100 | |||
Number of CMBS positions | investment | 2 | 2 | 0 | |
Aggregate carrying value | $ 26,877 | $ 26,877 | $ 0 | |
Unrealized Gains | $ 171 | $ 171 | $ 0 |
Real Estate Securities - Summar
Real Estate Securities - Summary of Company's Real Estate Securities, CMBS (Details) - CMBS $ in Thousands | Sep. 30, 2018USD ($)investment | Dec. 31, 2017USD ($)investment |
Schedule of Available-for-sale Securities [Line Items] | ||
Number of Investments | investment | 2 | 0 |
Interest Rate | 4.70% | 0.00% |
Par Value | $ 26,750 | $ 0 |
Fair Value | $ 27,048 | $ 0 |
Real Estate Securities - Summ_2
Real Estate Securities - Summary of Changes in Fair Value of CMBS Investments (Details) - CMBS - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 26,877 | $ 0 |
Unrealized Gains | 171 | 0 |
Unrealized Losses | 0 | 0 |
Fair Value | $ 27,048 | $ 0 |
Real Estate Securities - Schedu
Real Estate Securities - Schedule of Gains (Losses) on Real Estate Securities (Details) - CMBS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Gain (Loss) on Investments [Line Items] | ||||
Unrealized gain (loss) available-for-sale securities | $ 194 | $ (448) | $ 171 | $ 19 |
Reclassification of net (gain) loss on available-for-sale securities included in net income (loss) | 0 | 0 | 0 | 481 |
Available-for-sale securities, realized and unrealized gains (losses) | $ 194 | $ (448) | $ 171 | $ 500 |
Debt - Narrative (Details)
Debt - Narrative (Details) | Apr. 05, 2018USD ($)mortgage_asset$ / sharesshares | Feb. 15, 2018USD ($) | Jan. 30, 2018USD ($) | May 17, 2017USD ($) | Sep. 30, 2018USD ($)loanmortgage_assetextension$ / sharesshares | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($)mortgage_assetextension$ / sharesshares | Jul. 30, 2018USD ($) | Jul. 29, 2018USD ($) | Jul. 19, 2018USD ($) | Jul. 18, 2018USD ($) | Jan. 29, 2018USD ($) |
Line of Credit Facility [Line Items] | ||||||||||||
Unsecured line of credit | $ 1,270,000,000 | $ 975,000,000 | ||||||||||
Amount outstanding | 565,329,000 | 65,690,000 | ||||||||||
Accrued interest | 13,964,000 | $ 10,512,000 | ||||||||||
Amortization of deferred financing costs | $ 10,788,000 | $ 3,735,000 | ||||||||||
Preferred stock, shares issued (in shares) | shares | 64,050,000 | 0 | 0 | |||||||||
Preferred stock, par value per share (in dollars per share) | $ / shares | $ 0.001 | $ 0.01 | $ 0.01 | |||||||||
Liquidation preference per share (in dollars per share) | $ / shares | $ 1,000 | |||||||||||
Number of CDO's | loan | 3 | |||||||||||
U.S. Bank National Association | Secured Debt | Collateralized Loan Obligations Issued in 2015 | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Principal balance of collateral | $ 145,000,000 | |||||||||||
Amortization of deferred financing costs | $ 6,400,000 | |||||||||||
U.S. Bank National Association | Secured Debt | Collateralized Loan Obligations Issued in 2017-FL1 | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Principal balance of collateral | $ 319,000,000 | $ 418,100,000 | ||||||||||
Number of mortgage assets pledged as collateral (mortgage asset) | mortgage_asset | 20 | 25 | ||||||||||
U.S. Bank National Association | Secured Debt | Collateralized Loan Obligations Issued in 2017-FL2 | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Principal balance of collateral | $ 341,900,000 | $ 440,700,000 | ||||||||||
Cash held by servicer | $ 8,200,000 | |||||||||||
Number of mortgage assets pledged as collateral (mortgage asset) | mortgage_asset | 17 | 20 | ||||||||||
U.S. Bank National Association | Secured Debt | 2018-FL3 Mortgage Assets | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Principal balance of collateral | $ 582,800,000 | |||||||||||
Cash held by servicer | $ 27,300,000 | |||||||||||
Number of mortgage assets pledged as collateral (mortgage asset) | mortgage_asset | 39 | |||||||||||
U.S. Bank National Association | Secured Debt | 2018-FL3 Notes | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Principal balance | $ 546,000,000 | |||||||||||
Proceeds from secured debt | 488,000,000 | |||||||||||
Proceeds from wholly owned subsidiary | $ 58,000,000 | |||||||||||
U.S. Bank National Association | Secured Debt | BSPRT 2017-FL1, BSPRT 2017-FL2 and BSPRT 2018-FL3 | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Principal balance of collateral | $ 191,000,000 | |||||||||||
Minimum | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Maturity term | 30 days | |||||||||||
Maximum | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Maturity term | 90 days | |||||||||||
JPM Repo Facility | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Extension on initial maturity date | 1 year | |||||||||||
GS Repo Facility | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Extension on initial maturity date | 1 year | 1 year | ||||||||||
USB Repo Facility | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Number of extension options | extension | 2 | 2 | ||||||||||
Extension on initial maturity date | 1 year | 1 year | ||||||||||
CS Repo Facility | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Extension on initial maturity date | 364 days | |||||||||||
Barclays Facility | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Extension on initial maturity date | 1 year | 1 year | ||||||||||
PWB Financing | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Accrued interest | $ 1,200,000 | |||||||||||
PWB Financing | London Interbank Offered Rate (LIBOR) | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Variable interest rate | 4.00% | |||||||||||
Revolving Credit Facility | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Amount outstanding | 22,272,000 | $ 39,035,000 | ||||||||||
Revolving Credit Facility | JPM Repo Facility | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Unsecured line of credit | $ 520,000,000 | 520,000,000 | 300,000,000 | $ 300,000,000 | ||||||||
Extension on initial maturity date | 1 year | |||||||||||
Amount outstanding | 241,282,000 | 42,042,000 | ||||||||||
Accrued interest | $ 6,601,000 | 7,064,000 | ||||||||||
Revolving Credit Facility | JPM Repo Facility | London Interbank Offered Rate (LIBOR) | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Variable interest rate | 2.40% | |||||||||||
Revolving Credit Facility | GS Repo Facility | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Variable interest rate | 0.50% | |||||||||||
Unsecured line of credit | $ 250,000,000 | 250,000,000 | ||||||||||
Amount outstanding | 0 | 13,500,000 | ||||||||||
Accrued interest | $ 415,000 | 3,213,000 | ||||||||||
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% | |||||||||||
Revolving Credit Facility | USB Repo Facility | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Unsecured line of credit | $ 100,000,000 | 100,000,000 | ||||||||||
Amount outstanding | 14,651,000 | 0 | ||||||||||
Accrued interest | $ 502,000 | 163,000 | ||||||||||
Revolving Credit Facility | USB Repo Facility | Minimum | London Interbank Offered Rate (LIBOR) | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Variable interest rate | 2.25% | |||||||||||
Revolving Credit Facility | USB Repo Facility | Maximum | London Interbank Offered Rate (LIBOR) | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Variable interest rate | 3.00% | |||||||||||
Revolving Credit Facility | CS Repo Facility | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Unsecured line of credit | $ 300,000,000 | 250,000,000 | $ 300,000,000 | $ 250,000,000 | ||||||||
Amount outstanding | 309,396,000 | 10,148,000 | ||||||||||
Accrued interest | $ 5,301,000 | 58,000 | ||||||||||
Revolving Credit Facility | CS Repo Facility | London Interbank Offered Rate (LIBOR) | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Variable interest rate | 2.50% | |||||||||||
Revolving Credit Facility | Barclays Facility | Secured Debt | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Unsecured line of credit | $ 100,000,000 | 75,000,000 | $ 100,000,000 | $ 75,000,000 | ||||||||
Amount outstanding | 0 | 0 | ||||||||||
Accrued interest | $ 1,145,000 | 14,000 | ||||||||||
Revolving Credit Facility | Barclays Facility | Base Rate | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Variable interest rate | 1.75% | |||||||||||
Revolving Credit Facility | Barclays Facility | Eurodollar Rate | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Variable interest rate | 2.75% | |||||||||||
Revolving Credit Facility | PWB Financing | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Unsecured line of credit | $ 36,200,000 | |||||||||||
Principal balance of collateral | $ 54,200,000 | |||||||||||
Amount outstanding | $ 26,200,000 |
Debt - Schedule of Repurchase A
Debt - Schedule of Repurchase Agreements - Commercial Mortgage Loans (Details) | Jan. 30, 2018USD ($) | Sep. 30, 2018USD ($)extension | Dec. 31, 2017USD ($)extension | Jul. 30, 2018USD ($) | Jul. 29, 2018USD ($) | Jul. 19, 2018USD ($) | Jul. 18, 2018USD ($) | Jan. 29, 2018USD ($) |
Debt Instrument [Line Items] | ||||||||
Committed Financing | $ 1,270,000,000 | $ 975,000,000 | ||||||
Amount Outstanding | 565,329,000 | 65,690,000 | ||||||
Interest Expense | 13,964,000 | 10,512,000 | ||||||
Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Amount Outstanding | $ 22,272,000 | $ 39,035,000 | ||||||
Ending Weighted Average Interest Rate | 2.91% | 3.32% | ||||||
JPM Repo Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Extension on initial maturity date | 1 year | |||||||
JPM Repo Facility | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Committed Financing | $ 520,000,000 | $ 520,000,000 | $ 300,000,000 | $ 300,000,000 | ||||
Amount Outstanding | 241,282,000 | 42,042,000 | ||||||
Interest Expense | $ 6,601,000 | $ 7,064,000 | ||||||
Ending Weighted Average Interest Rate | 4.32% | 3.48% | ||||||
Extension on initial maturity date | 1 year | |||||||
GS Repo Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Extension on initial maturity date | 1 year | 1 year | ||||||
GS Repo Facility | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Committed Financing | $ 250,000,000 | $ 250,000,000 | ||||||
Amount Outstanding | 0 | 13,500,000 | ||||||
Interest Expense | $ 415,000 | $ 3,213,000 | ||||||
Ending Weighted Average Interest Rate | 3.74% | |||||||
USB Repo Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Extension on initial maturity date | 1 year | 1 year | ||||||
Number of extension options | extension | 2 | 2 | ||||||
USB Repo Facility | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Committed Financing | $ 100,000,000 | $ 100,000,000 | ||||||
Amount Outstanding | 14,651,000 | 0 | ||||||
Interest Expense | $ 502,000 | $ 163,000 | ||||||
Ending Weighted Average Interest Rate | 3.91% | |||||||
CS Repo Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Extension on initial maturity date | 364 days | |||||||
CS Repo Facility | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Committed Financing | $ 300,000,000 | $ 250,000,000 | $ 300,000,000 | $ 250,000,000 | ||||
Amount Outstanding | 309,396,000 | 10,148,000 | ||||||
Interest Expense | $ 5,301,000 | $ 58,000 | ||||||
Ending Weighted Average Interest Rate | 4.37% | |||||||
Barclays Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Extension on initial maturity date | 1 year | 1 year | ||||||
Barclays Facility | Revolving Credit Facility | Secured Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Committed Financing | $ 100,000,000 | $ 75,000,000 | $ 100,000,000 | $ 75,000,000 | ||||
Amount Outstanding | 0 | 0 | ||||||
Interest Expense | $ 1,145,000 | $ 14,000 |
Debt - Schedule of Repurchase_2
Debt - Schedule of Repurchase Agreements - Real Estate Securities (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | ||
Amount Outstanding | $ 565,329 | $ 65,690 |
Accrued Interest | 2,484 | 1,544 |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Amount Outstanding | 22,272 | 39,035 |
Accrued Interest | 5 | 11 |
Collateral Pledged | $ 26,750 | $ 56,044 |
Interest Rate | 2.91% | 3.32% |
Days to Maturity | 26 days | 26 days |
Revolving Credit Facility | JP Morgan Securities LLC | ||
Debt Instrument [Line Items] | ||
Amount Outstanding | $ 22,272 | $ 39,035 |
Accrued Interest | 5 | 11 |
Collateral Pledged | $ 26,750 | $ 56,044 |
Interest Rate | 2.91% | 3.32% |
Days to Maturity | 26 days | 26 days |
U.S. Bank National Association | Secured Debt | Class C Notes | ||
Debt Instrument [Line Items] | ||
Fair Value | $ 56,000 |
Debt - Schedule of Collateraliz
Debt - Schedule of Collateralized Loan Obligations by Tranche (Details) - Secured Debt - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
U.S. Bank National Association | ||
Debt Instrument [Line Items] | ||
Par Value Issued | $ 1,188,862 | $ 1,051,092 |
Par Value Outstanding | 999,157 | 842,812 |
U.S. Bank National Association | Class A Notes - 2017-FL1 Issuer | ||
Debt Instrument [Line Items] | ||
Par Value Issued | 223,600 | 223,600 |
Par Value Outstanding | 124,489 | 223,600 |
U.S. Bank National Association | Class B Notes - 2017-FL1 Issuer | ||
Debt Instrument [Line Items] | ||
Par Value Issued | 48,000 | 48,000 |
Par Value Outstanding | 48,000 | 48,000 |
U.S. Bank National Association | Class C Notes - 2017-FL1 Issuer | ||
Debt Instrument [Line Items] | ||
Par Value Issued | 67,900 | 67,900 |
Par Value Outstanding | 67,900 | 67,900 |
U.S. Bank National Association | Class A Notes - 2017-FL2 Issuer | ||
Debt Instrument [Line Items] | ||
Par Value Issued | 237,970 | 237,970 |
Par Value Outstanding | 147,376 | 237,970 |
U.S. Bank National Association | Class A-S Notes - 2017-FL2 Issuer | ||
Debt Instrument [Line Items] | ||
Par Value Issued | 36,357 | 36,357 |
Par Value Outstanding | 36,357 | 36,357 |
U.S. Bank National Association | Class B Notes - 2017-FL2 Issuer | ||
Debt Instrument [Line Items] | ||
Par Value Issued | 26,441 | 26,441 |
Par Value Outstanding | 26,441 | 26,441 |
U.S. Bank National Association | Class C Notes - 2017-FL2 Issuer | ||
Debt Instrument [Line Items] | ||
Par Value Issued | 25,339 | 25,339 |
Par Value Outstanding | 25,339 | 25,339 |
U.S. Bank National Association | Class D Notes - 2017-FL2 Issuer | ||
Debt Instrument [Line Items] | ||
Par Value Issued | 35,255 | 35,255 |
Par Value Outstanding | 35,255 | 35,255 |
U.S. Bank National Association | Class A Notes - 2018-FL3 Issuer | ||
Debt Instrument [Line Items] | ||
Par Value Issued | 286,700 | |
Par Value Outstanding | 286,700 | |
U.S. Bank National Association | Class A-S Notes - 2018-FL3 Issuer | ||
Debt Instrument [Line Items] | ||
Par Value Issued | 77,775 | |
Par Value Outstanding | 77,775 | |
U.S. Bank National Association | Class B Notes - 2018-FL3 Issuer | ||
Debt Instrument [Line Items] | ||
Par Value Issued | 41,175 | |
Par Value Outstanding | 41,175 | |
U.S. Bank National Association | Class C Notes - 2018-FL3 Issuer | ||
Debt Instrument [Line Items] | ||
Par Value Issued | 39,650 | |
Par Value Outstanding | 39,650 | |
U.S. Bank National Association | Class D Notes - 2018-FL3 Issuer | ||
Debt Instrument [Line Items] | ||
Par Value Issued | 42,700 | |
Par Value Outstanding | 42,700 | |
U.S. Bank National Association | Class A Notes - 2015-FL1 Issuer | ||
Debt Instrument [Line Items] | ||
Par Value Issued | 231,345 | |
Par Value Outstanding | 79,109 | |
U.S. Bank National Association | Class B Notes - 2015-FL1 Issuer | ||
Debt Instrument [Line Items] | ||
Par Value Issued | 42,841 | |
Par Value Outstanding | 42,841 | |
U.S. Bank National Association | Class C Notes - 2015-FL1 Issuer | ||
Debt Instrument [Line Items] | ||
Par Value Issued | 76,044 | |
Par Value Outstanding | 20,000 | |
RFT issued Collaterized Loan Obligation | U.S. Bank National Association | Class C Notes - 2015-FL1 Issuer | ||
Debt Instrument [Line Items] | ||
Par Value Outstanding | 56,000 | |
RFT issued Collaterized Loan Obligation | U.S. Bank National Association | Class E Notes - 2017-FL2 Issuer | ||
Debt Instrument [Line Items] | ||
Par Value Outstanding | 16,000 | |
RFT issued Collaterized Loan Obligation | U.S. Bank National Association | Class F Notes - 2017-FL2 Issuer | ||
Debt Instrument [Line Items] | ||
Par Value Outstanding | $ 14,900 | |
RFT issued Collaterized Loan Obligation | U.S. Bank National Association | Class E Notes - 2018-FL3 Issuer | ||
Debt Instrument [Line Items] | ||
Par Value Outstanding | 36,600 | |
RFT issued Collaterized Loan Obligation | U.S. Bank National Association | Class F Notes - 2018-FL3 Issuer | ||
Debt Instrument [Line Items] | ||
Par Value Outstanding | $ 21,400 | |
London Interbank Offered Rate (LIBOR) | Class A Notes - 2017-FL1 Issuer | ||
Debt Instrument [Line Items] | ||
Variable interest rate | 1.35% | 1.35% |
London Interbank Offered Rate (LIBOR) | Class B Notes - 2017-FL1 Issuer | ||
Debt Instrument [Line Items] | ||
Variable interest rate | 2.40% | 2.40% |
London Interbank Offered Rate (LIBOR) | Class C Notes - 2017-FL1 Issuer | ||
Debt Instrument [Line Items] | ||
Variable interest rate | 4.25% | 4.25% |
London Interbank Offered Rate (LIBOR) | Class A Notes - 2017-FL2 Issuer | ||
Debt Instrument [Line Items] | ||
Variable interest rate | 0.82% | 0.82% |
London Interbank Offered Rate (LIBOR) | Class A-S Notes - 2017-FL2 Issuer | ||
Debt Instrument [Line Items] | ||
Variable interest rate | 1.10% | 1.10% |
London Interbank Offered Rate (LIBOR) | Class B Notes - 2017-FL2 Issuer | ||
Debt Instrument [Line Items] | ||
Variable interest rate | 1.40% | 1.40% |
London Interbank Offered Rate (LIBOR) | Class C Notes - 2017-FL2 Issuer | ||
Debt Instrument [Line Items] | ||
Variable interest rate | 2.15% | 2.15% |
London Interbank Offered Rate (LIBOR) | Class D Notes - 2017-FL2 Issuer | ||
Debt Instrument [Line Items] | ||
Variable interest rate | 3.45% | 3.45% |
London Interbank Offered Rate (LIBOR) | Class A Notes - 2018-FL3 Issuer | ||
Debt Instrument [Line Items] | ||
Variable interest rate | 1.05% | |
London Interbank Offered Rate (LIBOR) | Class A-S Notes - 2018-FL3 Issuer | ||
Debt Instrument [Line Items] | ||
Variable interest rate | 1.35% | |
London Interbank Offered Rate (LIBOR) | Class B Notes - 2018-FL3 Issuer | ||
Debt Instrument [Line Items] | ||
Variable interest rate | 1.65% | |
London Interbank Offered Rate (LIBOR) | Class C Notes - 2018-FL3 Issuer | ||
Debt Instrument [Line Items] | ||
Variable interest rate | 2.55% | |
London Interbank Offered Rate (LIBOR) | Class D Notes - 2018-FL3 Issuer | ||
Debt Instrument [Line Items] | ||
Variable interest rate | 3.45% | |
London Interbank Offered Rate (LIBOR) | Class A Notes - 2015-FL1 Issuer | ||
Debt Instrument [Line Items] | ||
Variable interest rate | 1.75% | |
London Interbank Offered Rate (LIBOR) | Class B Notes - 2015-FL1 Issuer | ||
Debt Instrument [Line Items] | ||
Variable interest rate | 3.88% | |
London Interbank Offered Rate (LIBOR) | Class C Notes - 2015-FL1 Issuer | ||
Debt Instrument [Line Items] | ||
Variable interest rate | 5.25% |
Debt - Collateralized Loan Obli
Debt - Collateralized Loan Obligations (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | ||||
Cash | $ 55,471 | $ 83,711 | $ 72,262 | |
Commercial mortgage loans, held for investment, net of allowance | 2,135,734 | 1,402,046 | ||
Accrued interest receivable | 11,606 | 8,152 | ||
Total assets | 2,387,390 | 1,583,661 | 1,583,661 | |
Interest payable | 2,484 | 1,544 | ||
Total liabilities | 1,589,309 | 973,322 | ||
Restricted cash | 10,570 | 7,997 | $ 7,754 | |
Allowance for loan losses | 4,968 | 1,466 | $ 2,181 | |
Variable Interest Entity, Primary Beneficiary | ||||
Debt Instrument [Line Items] | ||||
Cash | 35,768 | 49,017 | ||
Commercial mortgage loans, held for investment, net of allowance | 1,239,811 | 1,033,427 | ||
Accrued interest receivable | 3,768 | 4,212 | ||
Total assets | 1,279,347 | 1,086,656 | ||
Notes payable | 1,072,344 | 912,800 | ||
Interest payable | 1,765 | 1,462 | ||
Total liabilities | 1,074,109 | 914,262 | ||
Restricted cash | 35,500 | 48,700 | ||
Allowance for loan losses | 600 | 1,300 | ||
Deferred financing cost and discount | 15,600 | 16,900 | ||
U.S. Bank National Association | Secured Debt | ||||
Debt Instrument [Line Items] | ||||
Notes payable | 1,188,862 | 1,051,092 | ||
U.S. Bank National Association | Variable Interest Entity, Primary Beneficiary | Secured Debt | Class E Notes - 2017-FL2 Issuer | ||||
Debt Instrument [Line Items] | ||||
Notes payable | 16,000 | 16,000 | ||
U.S. Bank National Association | Variable Interest Entity, Primary Beneficiary | Secured Debt | Class F Notes - 2017-FL2 Issuer | ||||
Debt Instrument [Line Items] | ||||
Notes payable | 14,900 | 14,900 | ||
U.S. Bank National Association | Variable Interest Entity, Primary Beneficiary | Secured Debt | Class E Notes - 2018-FL2 Issuer | ||||
Debt Instrument [Line Items] | ||||
Notes payable | 36,600 | |||
U.S. Bank National Association | Variable Interest Entity, Primary Beneficiary | Secured Debt | Class F Notes - 2018-FL2 Issuer | ||||
Debt Instrument [Line Items] | ||||
Notes payable | $ 21,400 | |||
U.S. Bank National Association | Variable Interest Entity, Primary Beneficiary | Secured Debt | Class C Notes | ||||
Debt Instrument [Line Items] | ||||
Notes payable | $ 55,800 |
Net Income Per Share - Summary
Net Income Per Share - Summary of Earnings Per Share and Distribution Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Net income | $ 19,000 | $ 6,975 | $ 36,398 | $ 19,305 |
Less: Preferred stock dividends | (1,255) | 0 | (1,271) | 0 |
Net income applicable to common stock | $ 17,294 | $ 6,975 | $ 35,127 | $ 19,305 |
Basic weighted-average shares outstanding (in shares) | 35,468,648 | 31,741,679 | 32,977,572 | 31,778,169 |
Basic net income per share (in dollars per share) | $ 0.49 | $ 0.22 | $ 1.07 | $ 0.61 |
Unvested restricted shares | 14,209 | 14,824 | 10,007 | 12,098 |
Conversion of redeemable convertible preferred stock - weighted | 3,459,571 | 0 | 1,180,695 | 0 |
Diluted weighted average shares outstanding (in shares) | 38,942,428 | 31,756,503 | 34,168,274 | 31,790,267 |
Diluted net income per share (in dollars per share) | $ 0.49 | $ 0.22 | $ 1.07 | $ 0.61 |
Preferred Stock | ||||
Less: Preferred stock undistributed (income)/loss | $ (451) | $ 0 |
Stock Transactions - Narrative
Stock Transactions - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 30, 2018 | Sep. 10, 2018 | Aug. 28, 2018 | Aug. 20, 2018 | Jul. 13, 2018 | Jun. 25, 2018 | Aug. 10, 2017 | Feb. 28, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Class of Stock [Line Items] | |||||||||||||||
Proceeds from issuances of common stock | $ 96,840 | $ 0 | |||||||||||||
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 year, declared (in dollars per share) | $ 1.44 | $ 2.0625 | |||||||||||||
Distributions payable | $ 5,116 | $ 5,116 | $ 5,116 | $ 3,917 | |||||||||||
Total distributions | 35,000 | 32,600 | |||||||||||||
Cash distributions | 24,400 | 21,200 | |||||||||||||
Common stock distributions | $ 10,600 | $ 11,400 | |||||||||||||
DRIP offer price (in usd per share) | $ 18.75 | $ 18.75 | $ 18.75 | $ 18.95 | |||||||||||
Share repurchase program, period in force | 1 year | ||||||||||||||
Maximum share repurchases per fiscal semester | 2.50% | ||||||||||||||
Maximum share repurchases per fiscal year | 5.00% | ||||||||||||||
Forecast | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
DRIP offer price (in usd per share) | $ 18.75 | ||||||||||||||
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% | ||||||||||||||
Common Stock Purchase Agreements | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Proceeds from issuances of common stock | $ 20,000 | $ 250 | $ 55,421 | $ 27,446 | $ 13,723 | $ 96,840 | |||||||||
Stock purchase price (in dollars per share) | $ 16.71 | 16.71 | $ 16.71 | ||||||||||||
Number of shares issued | 14,962 | 3,370,362 | 1,669,074 | 834,537 | 5,888,935 | ||||||||||
Redeemable Convertible Preferred Stock Series A | Redeemable Convertible Preferred Stock Purchase Agreements | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Proceeds from issuances of common stock | $ 15,100 | ||||||||||||||
Stock purchase price (in dollars per share) | $ 5,000 | $ 5,000 | $ 5,000 | ||||||||||||
Number of shares issued | 3,378 | 9,083 | 4,498 | 2,256 | 19,215 | ||||||||||
Common Stock | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Shares outstanding (in shares) | 37,477,393 | 37,477,393 | 37,477,393 | 31,834,072 |
Stock Transactions - Share Tran
Stock Transactions - Share Transactions (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 30, 2018 | Sep. 10, 2018 | Aug. 28, 2018 | Aug. 20, 2018 | Jul. 13, 2018 | Jun. 25, 2018 | Sep. 30, 2018 | Sep. 30, 2017 |
Class of Stock [Line Items] | ||||||||
Proceeds from issuances of common stock | $ 96,840 | $ 0 | ||||||
Proceeds from issuances of redeemable convertible preferred stock | $ 96,075 | $ 0 | ||||||
Redeemable Convertible Preferred Stock Purchase Agreements | Redeemable Convertible Preferred Stock Series A | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares issued | 3,378 | 9,083 | 4,498 | 2,256 | 19,215 | |||
Proceeds from issuances of common stock | $ 15,100 | |||||||
Proceeds from issuances of redeemable convertible preferred stock | $ 17,000 | $ 45,619 | $ 22,554 | $ 11,278 | $ 96,451 | |||
Stock purchase price (in dollars per share) | $ 5,000 | $ 5,000 | ||||||
Common Stock Purchase Agreements | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares issued | 14,962 | 3,370,362 | 1,669,074 | 834,537 | 5,888,935 | |||
Proceeds from issuances of common stock | $ 20,000 | $ 250 | $ 55,421 | $ 27,446 | $ 13,723 | $ 96,840 | ||
Stock purchase price (in dollars per share) | $ 16.71 | $ 16.71 |
Stock Transactions - Shares Rep
Stock Transactions - Shares Repurchased During the Period (Details) - Share Repurchase Program (SRP) - Common Stock | 1 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2018share_repurchase_request$ / sharesshares | Aug. 31, 2018share_repurchase_request$ / sharesshares | Jul. 31, 2018share_repurchase_request$ / sharesshares | Jun. 30, 2018share_repurchase_request$ / sharesshares | May 31, 2018share_repurchase_request$ / sharesshares | Apr. 30, 2018share_repurchase_request$ / sharesshares | Mar. 31, 2018share_repurchase_request$ / sharesshares | Feb. 28, 2018share_repurchase_request$ / sharesshares | Jan. 31, 2018share_repurchase_request$ / sharesshares | Dec. 31, 2017share_repurchase_request$ / sharesshares | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Beginning balance, number of requests (share repurchase request) | share_repurchase_request | 2,125 | |||||||||
Number of requests during the period (share repurchase request) | share_repurchase_request | 0 | 0 | 831 | 0 | 0 | 0 | 0 | 0 | 889 | |
Ending balance, number of requests (share repurchase request) | share_repurchase_request | 3,845 | 2,125 | ||||||||
Beginning balance, number of shares repurchased (shares) | 1,991,391 | |||||||||
Number of shares repurchased (shares) | 0 | 0 | 387,214 | 0 | 0 | 0 | 0 | 0 | 421,809 | |
Ending balance, number of shares repurchased (shares) | 2,800,414 | 1,991,391 | ||||||||
Beginning balance, average price per share (usd per share) | $ / shares | $ 21.36 | |||||||||
Repurchases, average price per share (usd per share) | $ / shares | $ 0 | $ 0 | $ 18.74 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 18.56 | |
Ending balance, average price per share (usd per share) | $ / shares | $ 20.65 | $ 21.36 | ||||||||
Unfulfilled redemption requests (shares) | 185,689 |
Commitments and Contingencies -
Commitments and Contingencies - (Details) - Loan Origination Commitments - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Unrecorded Unconditional Purchase Obligation [Line Items] | ||
2,018 | $ 6,277 | $ 36,475 |
2,019 | 45,378 | 26,465 |
2,020 | 173,162 | 20,598 |
2,021 | 104,635 | 0 |
Total unfunded commitments | $ 329,452 | $ 83,538 |
Related Party Transactions an_3
Related Party Transactions and Arrangements - Narrative (Details) - USD ($) $ in Thousands | Aug. 28, 2018 | Aug. 20, 2018 | Jul. 13, 2018 | Jun. 25, 2018 | Feb. 22, 2018 | Sep. 29, 2016 | Dec. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 |
Related Party Transaction [Line Items] | |||||||||
Origination and purchase of commercial mortgage loans, held for investment | $ 1,278,978 | $ 565,094 | |||||||
Commercial mortgage loans, held-for-sale, measured at fair value | $ 28,531 | 105,976 | |||||||
Affiliate | The Advisor | |||||||||
Related Party Transaction [Line Items] | |||||||||
Monthly asset management fee, percent of stockholders' equity | 0.125% | ||||||||
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% | ||||||||
Real estate acquisition fee, percentage | 1.00% | ||||||||
Affiliate | The Advisor | Fee to Acquire and Originate Real Estate Debt | |||||||||
Related Party Transaction [Line Items] | |||||||||
Transaction rate | 0.50% | ||||||||
Commercial mortgage loans | Affiliate | |||||||||
Related Party Transaction [Line Items] | |||||||||
Origination and purchase of commercial mortgage loans, held for investment | $ 27,800 | $ 17,100 | |||||||
Commercial mortgage loans, held-for-sale, measured at fair value | $ 4,500 | ||||||||
Proceeds from commercial mortgage loans, held for investment | $ 23,300 | ||||||||
Redeemable Convertible Preferred Stock Purchase Agreements | Manager Investor | |||||||||
Related Party Transaction [Line Items] | |||||||||
Number of shares issued | 1,893,569 | ||||||||
Proceeds from issuances of redeemable convertible preferred stock | $ 31,600 | ||||||||
Redeemable Convertible Preferred Stock Series A | Redeemable Convertible Preferred Stock Purchase Agreements | |||||||||
Related Party Transaction [Line Items] | |||||||||
Number of shares issued | 3,378 | 9,083 | 4,498 | 2,256 | 19,215 | ||||
Redeemable Convertible Preferred Stock Series A | Redeemable Convertible Preferred Stock Purchase Agreements | Manager Investor | |||||||||
Related Party Transaction [Line Items] | |||||||||
Number of shares issued | 105 | ||||||||
Proceeds from issuances of redeemable convertible preferred stock | $ 500 | ||||||||
Commitments of Manager Investors | 50 | ||||||||
Common Stock | Redeemable Convertible Preferred Stock Purchase Agreements | Manager Investor | |||||||||
Related Party Transaction [Line Items] | |||||||||
Commitments of Manager Investors | $ 0 |
Related Party Transactions an_4
Related Party Transactions and Arrangements - Schedule of Compensation and Reimbursement Incurred and Associated Payables Relating to Public Offering (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Related Party Transaction [Line Items] | ||
Payable to related party | $ 3,315 | $ 6,421 |
Dealer Manager | ||
Related Party Transaction [Line Items] | ||
Payable to related party | 0 | 0 |
Fees and Expense Reimbursement, Stock Offering | Advisor and Dealer Manager | ||
Related Party Transaction [Line Items] | ||
Payable to related party | $ 480 | $ 480 |
Related Party Transactions an_5
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 | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Related Party Transaction [Line Items] | |||||
Payable to related party | $ 3,315 | $ 3,315 | $ 6,421 | ||
Affiliate | |||||
Related Party Transaction [Line Items] | |||||
Related party expenses | 6,709 | $ 5,551 | 18,123 | $ 14,595 | |
Payable to related party | 2,835 | 2,835 | 5,941 | ||
Affiliate | Nonrecurring Fees | Acquisition fees and expenses | |||||
Related Party Transaction [Line Items] | |||||
Related party expenses | 173 | 1,685 | 289 | 4,175 | |
Payable to related party | 0 | 0 | 0 | ||
Affiliate | Nonrecurring Fees | Administrative services expenses | |||||
Related Party Transaction [Line Items] | |||||
Related party expenses | 3,501 | 1,480 | 9,822 | 3,285 | |
Payable to related party | 1,299 | 1,299 | 3,480 | ||
Affiliate | Nonrecurring Fees | Asset management and subordinated performance fee | |||||
Related Party Transaction [Line Items] | |||||
Related party expenses | 2,720 | 2,299 | 7,227 | 6,952 | |
Payable to related party | 1,220 | 1,220 | 2,315 | ||
Affiliate | Nonrecurring Fees | Other related party expenses | |||||
Related Party Transaction [Line Items] | |||||
Related party expenses | 315 | 87 | 785 | 183 | |
Payable to related party | 316 | 316 | $ 146 | ||
Affiliate | Nonrecurring Fees | Acquisition fees and expenses including amount capitalized | |||||
Related Party Transaction [Line Items] | |||||
Related party expenses | 2,400 | 3,000 | 6,600 | 9,000 | |
Affiliate | Nonrecurring Fees | Acquisition fees and expenses, amount capitalized | |||||
Related Party Transaction [Line Items] | |||||
Related party expenses | $ 2,200 | $ 1,300 | $ 6,300 | $ 4,800 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Fair Value of Company's Financial Instruments on a Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Assets, Fair Value Disclosure [Abstract] | ||
Commercial mortgage loans, held-for-sale, measured at fair value | $ 105,976 | $ 28,531 |
Derivative instruments, at fair value | 1,987 | 132 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities | 565 | 357 |
Credit default swaps | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative instruments, at fair value | 319 | 32 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities | 565 | 357 |
Interest rate swaps | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative instruments, at fair value | 375 | |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities | 0 | |
Treasury note futures | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative instruments, at fair value | 1,293 | 100 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities | 0 | 0 |
Fair Value, Measurements, Recurring | ||
Assets, Fair Value Disclosure [Abstract] | ||
Commercial mortgage loans, held-for-sale, measured at fair value | 105,976 | 28,531 |
Total assets, at fair value | 135,011 | 28,663 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Total liabilities, at fair value | 565 | 357 |
Fair Value, Measurements, Recurring | Level I | ||
Assets, Fair Value Disclosure [Abstract] | ||
Commercial mortgage loans, held-for-sale, measured at fair value | 0 | 0 |
Total assets, at fair value | 1,293 | 132 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Total liabilities, at fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Level II | ||
Assets, Fair Value Disclosure [Abstract] | ||
Commercial mortgage loans, held-for-sale, measured at fair value | 0 | 0 |
Total assets, at fair value | 694 | 0 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Total liabilities, at fair value | 565 | 357 |
Fair Value, Measurements, Recurring | Level III | ||
Assets, Fair Value Disclosure [Abstract] | ||
Commercial mortgage loans, held-for-sale, measured at fair value | 105,976 | 28,531 |
Total assets, at fair value | 133,024 | 28,531 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Total liabilities, at fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Credit default swaps | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative instruments, at fair value | 319 | |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities | 565 | 357 |
Fair Value, Measurements, Recurring | Credit default swaps | Level I | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative instruments, at fair value | 0 | |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities | 0 | 0 |
Fair Value, Measurements, Recurring | Credit default swaps | Level II | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative instruments, at fair value | 319 | |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities | 565 | 357 |
Fair Value, Measurements, Recurring | Credit default swaps | Level III | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative instruments, at fair value | 0 | |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities | 0 | 0 |
Fair Value, Measurements, Recurring | Interest rate swaps | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative instruments, at fair value | 375 | |
Fair Value, Measurements, Recurring | Interest rate swaps | Level I | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative instruments, at fair value | 0 | |
Fair Value, Measurements, Recurring | Interest rate swaps | Level II | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative instruments, at fair value | 375 | |
Fair Value, Measurements, Recurring | Interest rate swaps | Level III | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative instruments, at fair value | 0 | |
Fair Value, Measurements, Recurring | Treasury note futures | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative instruments, at fair value | 1,293 | 132 |
Fair Value, Measurements, Recurring | Treasury note futures | Level I | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative instruments, at fair value | 1,293 | 132 |
Fair Value, Measurements, Recurring | Treasury note futures | Level II | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative instruments, at fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Treasury note futures | Level III | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative instruments, at fair value | 0 | $ 0 |
Fair Value, Measurements, Recurring | Repurchase agreements - real estate securities | ||
Assets, Fair Value Disclosure [Abstract] | ||
Real estate securities | 27,048 | |
Fair Value, Measurements, Recurring | Repurchase agreements - real estate securities | Level I | ||
Assets, Fair Value Disclosure [Abstract] | ||
Real estate securities | 0 | |
Fair Value, Measurements, Recurring | Repurchase agreements - real estate securities | Level II | ||
Assets, Fair Value Disclosure [Abstract] | ||
Real estate securities | 0 | |
Fair Value, Measurements, Recurring | Repurchase agreements - real estate securities | Level III | ||
Assets, Fair Value Disclosure [Abstract] | ||
Real estate securities | $ 27,048 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Valuation Method Of Level 3 Financial Instruments Measured on a Recurring Basis (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Commercial mortgage loans, held-for-sale, measured at fair value | $ 105,976 | $ 28,531 |
Real estate securities, available-for-sale, at fair value | 27,048 | 0 |
Fair Value, Measurements, Recurring | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Commercial mortgage loans, held-for-sale, measured at fair value | 105,976 | 28,531 |
Fair Value, Measurements, Recurring | Level III | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Commercial mortgage loans, held-for-sale, measured at fair value | $ 105,976 | $ 28,531 |
Weighted Average | Income Approach Valuation Technique | Fair Value, Measurements, Recurring | Level III | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Weighted average yield | 5.30% | 4.93% |
Weighted Average | Broker Quotes | Fair Value, Measurements, Recurring | Level III | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Weighted average yield | 4.93% | |
Minimum | Income Approach Valuation Technique | Fair Value, Measurements, Recurring | Level III | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Weighted average yield | 4.40% | 4.80% |
Minimum | Broker Quotes | Fair Value, Measurements, Recurring | Level III | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Weighted average yield | 4.10% | |
Maximum | Income Approach Valuation Technique | Fair Value, Measurements, Recurring | Level III | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Weighted average yield | 13.50% | 5.30% |
Maximum | Broker Quotes | Fair Value, Measurements, Recurring | Level III | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Weighted average yield | 5.60% |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Fair Value of Assets Measured on a Recurring Basis (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Net accretion | $ 3,456 | $ 1,617 | |
Commercial Mortgage Loans, held-for-sale, measured at fair value | Fair Value, Measurements, Recurring | Level III | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning balance | 28,531 | 0 | $ 0 |
Transfers into Level III | 0 | 0 | |
Realized gain on sale of commercial mortgage loans and real estate securities | 0 | 0 | |
Unrealized gain (loss) | 474 | ||
Purchases | 440,815 | 156,101 | |
Sales / paydowns | (373,609) | (132,093) | |
Discount accretion/(premium amortization) | 0 | ||
Transfers out of Level III | 0 | 0 | |
Net accretion | 0 | ||
Unrealized gains (losses) included in OCI | 0 | 0 | |
Cash repayments/receipts | 0 | ||
Ending balance | 105,976 | 28,531 | |
Real Estate Securities | Fair Value, Measurements, Recurring | Level III | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning balance | 0 | $ 49,049 | 49,049 |
Transfers into Level III | 0 | 0 | |
Realized gain on sale of commercial mortgage loans and real estate securities | (107) | 172 | |
Unrealized gain (loss) | 171 | ||
Purchases | 39,511 | 0 | |
Sales / paydowns | (12,456) | (34,888) | |
Discount accretion/(premium amortization) | (71) | ||
Transfers out of Level III | 0 | 0 | |
Net accretion | 167 | ||
Unrealized gains (losses) included in OCI | 500 | ||
Cash repayments/receipts | (15,000) | ||
Ending balance | 27,048 | 0 | |
Commercial Mortgage Loans | Fair Value, Measurements, Recurring | Level III | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Realized gain on sale of commercial mortgage loans and real estate securities | 0 | 0 | |
Commercial Mortgage Loans | Commercial Mortgage Loans, held-for-sale, measured at fair value | Fair Value, Measurements, Recurring | Level III | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Realized gain on sale of commercial mortgage loans and real estate securities | $ 9,765 | $ 4,523 |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments - Financial Instruments Not Measured at Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Commercial mortgage loans | $ 2,135,734 | $ 1,402,046 | |
Collateralized loan obligation | 983,546 | 826,150 | |
Allowance for loan losses | 4,968 | 1,466 | $ 2,181 |
Carrying Amount | Level III | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Commercial mortgage loans | 2,140,702 | 1,403,512 | |
Allowance for loan losses | 5,000 | 1,500 | |
Carrying Amount | Level II | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Collateralized loan obligation | 826,150 | ||
Fair Value | Level III | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Commercial mortgage loans | 2,136,052 | 1,396,406 | |
Fair Value | Level II | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Collateralized loan obligation | $ 1,002,313 | $ 842,812 |
Derivative Instruments - Schedu
Derivative Instruments - Schedule of Outstanding Derivatives (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Derivative [Line Items] | ||
Net premiums received on derivative instrument assets | $ 300 | |
Notional | 224,382 | $ 73,906 |
Derivative assets | 1,987 | 132 |
Derivative liabilities | 565 | 357 |
Credit default swaps | ||
Derivative [Line Items] | ||
Notional | 80,000 | 30,000 |
Derivative assets | 319 | 32 |
Derivative liabilities | 565 | 357 |
Interest rate swaps | ||
Derivative [Line Items] | ||
Notional | 18,000 | |
Derivative assets | 375 | |
Derivative liabilities | 0 | |
Treasury note futures | ||
Derivative [Line Items] | ||
Notional | 126,382 | 43,906 |
Derivative assets | 1,293 | 100 |
Derivative liabilities | $ 0 | $ 0 |
Derivative Instruments - Net Re
Derivative Instruments - Net Realized and Unrealized Losses on Derivatives (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Unrealized Gain/(Loss) | $ 1,272 | $ 583 | $ 1,162 | $ 583 |
Realized Gain/(Loss) | (41) | (18) | 1,476 | (18) |
Total | 1,231 | 565 | 2,638 | 565 |
Credit default swaps | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Unrealized Gain/(Loss) | (316) | (171) | (106) | (171) |
Realized Gain/(Loss) | (64) | (18) | 29 | (18) |
Total | (380) | (189) | (77) | (189) |
Interest rate swaps | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Unrealized Gain/(Loss) | 84 | 74 | ||
Realized Gain/(Loss) | 195 | 709 | ||
Total | 279 | 783 | ||
Treasury note futures | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Unrealized Gain/(Loss) | 1,504 | 754 | 1,194 | 754 |
Realized Gain/(Loss) | (172) | 738 | 0 | |
Total | $ 1,332 | $ 754 | $ 1,932 | $ 754 |
Offsetting Assets and Liabili_3
Offsetting Assets and Liabilities - Company's Repurchase Agreements (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Assets | ||
Gross Amounts of Recognized Assets | $ 1,987 | $ 132 |
Gross Amounts Offset on the Balance Sheet | 0 | 0 |
Net Amount of Assets Presented on the Balance Sheet | 1,987 | 132 |
Gross Amounts Not Offset on the Balance Sheet | ||
Financial Instruments | 0 | 0 |
Cash Collateral Pledged | 0 | 0 |
Net Amount | 1,987 | 132 |
Repurchase agreements - real estate securities | ||
Gross Amounts of Recognized Liabilities | 565 | 357 |
Gross Amounts Offset on the Balance Sheet | 0 | 0 |
Net Amount of Liabilities Presented on the Balance Sheet | 565 | 357 |
Gross Amounts Not Offset on the Balance Sheet | ||
Financial Instruments | 0 | 0 |
Cash Collateral Pledged | 5,167 | 2,961 |
Net Amount | 0 | 0 |
U.S. Bank National Association | Class C Notes | Secured Debt | ||
Gross Amounts Not Offset on the Balance Sheet | ||
Fair Value | 56,000 | |
Repurchase agreements, commercial mortgage loans | ||
Repurchase agreements | ||
Gross Amounts of Recognized Liabilities | 565,329 | 65,690 |
Gross Amounts Offset on the Balance Sheet | 0 | 0 |
Net Amount of Liabilities Presented on the Balance Sheet | 565,329 | 65,690 |
Gross Amounts Not Offset on the Balance Sheet | ||
Financial Instruments | 779,745 | 163,235 |
Cash Collateral Pledged | 5,010 | 5,005 |
Net Amount | 0 | 0 |
Repurchase agreements - real estate securities | ||
Repurchase agreements | ||
Gross Amounts of Recognized Liabilities | 22,272 | 39,035 |
Gross Amounts Offset on the Balance Sheet | 0 | 0 |
Net Amount of Liabilities Presented on the Balance Sheet | 22,272 | 39,035 |
Gross Amounts Not Offset on the Balance Sheet | ||
Financial Instruments | 26,750 | 56,044 |
Cash Collateral Pledged | 69 | 0 |
Net Amount | $ 0 | $ 0 |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Segment Reporting Information, by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | |||||
Interest income | $ 42,943 | $ 22,195 | $ 106,478 | $ 61,917 | |
Interest expense | 17,120 | 8,845 | 50,183 | 21,990 | |
Net income | 19,000 | 6,975 | 36,398 | 19,305 | |
Total Assets | 2,387,390 | 1,583,661 | 2,387,390 | 1,583,661 | $ 1,583,661 |
Real Estate Debt | |||||
Segment Reporting Information [Line Items] | |||||
Interest income | 41,046 | 21,795 | 101,073 | 60,435 | |
Interest expense | 15,694 | 8,386 | 46,813 | 20,686 | |
Net income | 17,275 | 7,588 | 30,997 | 19,627 | |
Total Assets | 2,246,251 | 1,517,021 | 2,246,251 | 1,517,021 | |
Real Estate Securities | |||||
Segment Reporting Information [Line Items] | |||||
Interest income | 270 | 269 | 317 | 1,351 | |
Interest expense | 192 | 409 | 378 | 1,254 | |
Net income | (29) | (22) | (168) | 269 | |
Total Assets | 27,647 | 389 | 27,647 | 389 | |
TRS | |||||
Segment Reporting Information [Line Items] | |||||
Interest income | 1,627 | 131 | 5,088 | 131 | |
Interest expense | 1,234 | 50 | 2,992 | 50 | |
Net income | 1,754 | (591) | 5,569 | (591) | |
Total Assets | $ 113,492 | $ 66,251 | $ 113,492 | $ 66,251 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 9 Months Ended | ||
Nov. 09, 2018 | Sep. 30, 2018 | Nov. 07, 2018 | Jun. 30, 2018 | |
Subsequent Event [Line Items] | ||||
DRIP offer price (in usd per share) | $ 18.75 | $ 18.95 | ||
Common Stock Purchase Agreements | ||||
Subsequent Event [Line Items] | ||||
Stock purchase price (in dollars per share) | $ 16.71 | |||
Redeemable Convertible Preferred Stock Purchase Agreements | Manager Investor | ||||
Subsequent Event [Line Items] | ||||
Proceeds from the sale of stock | $ 31.6 | |||
Redeemable Convertible Preferred Stock Series A | Redeemable Convertible Preferred Stock Purchase Agreements | ||||
Subsequent Event [Line Items] | ||||
Stock purchase price (in dollars per share) | $ 5,000 | |||
Redeemable Convertible Preferred Stock Series A | Redeemable Convertible Preferred Stock Purchase Agreements | Manager Investor | ||||
Subsequent Event [Line Items] | ||||
Proceeds from the sale of stock | $ 0.5 | |||
Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
NAV (in usd per share) | $ 18.74 | |||
DRIP offer price (in usd per share) | 18.75 | |||
SRP repurchase price (in usd per share) | $ 18.75 | |||
Subsequent Event | Common Stock Purchase Agreements | Manager Investor | ||||
Subsequent Event [Line Items] | ||||
Proceeds from the sale of stock | $ 2 | |||
Stock purchase price (in dollars per share) | $ 16.71 | |||
Subsequent Event | Common Stock Purchase Agreements | Accredited Investor | ||||
Subsequent Event [Line Items] | ||||
Proceeds from the sale of stock | $ 1.5 | |||
Stock purchase price (in dollars per share) | $ 16.71 | |||
Subsequent Event | Common Stock Purchase Agreements | Additional Accredited Investor | ||||
Subsequent Event [Line Items] | ||||
Proceeds from the sale of stock | $ 2.9 | |||
Stock purchase price (in dollars per share) | $ 16.71 | |||
Subsequent Event | Redeemable Convertible Preferred Stock Series A | Redeemable Convertible Preferred Stock Purchase Agreements | Accredited Investor | ||||
Subsequent Event [Line Items] | ||||
Proceeds from the sale of stock | $ 35 | |||
Stock purchase price (in dollars per share) | $ 5,000 |