Document Entity Information Doc
Document Entity Information Document - shares | 6 Months Ended | |
Jun. 30, 2017 | Aug. 11, 2017 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Terra Secured Income Fund 5, LLC | |
Entity Central Index Key | 1,581,874 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | true | |
Amendment Description | This Amendment No. 1 is filed solely for the purpose of furnishing as Exhibit 101 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017 the interactive data files formatted in XBRL (eXtensible Business Reporting Language). | |
Common Unit Outstanding | 6,826.5 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | No |
Consolidated Statements of Fina
Consolidated Statements of Financial Condition - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Assets | ||
Equity investment in Terra Property Trust, Inc. at fair value — controlled (cost of $286,148,649 and $291,468,567, respectively) | $ 285,591,393 | $ 290,419,317 |
Cash and cash equivalents | 49,302 | 41,520 |
Other assets | 5,853 | 7,447 |
Total assets | 285,646,548 | 290,468,284 |
Liabilities | ||
Accounts payable and accrued expenses | 217,890 | 441,388 |
Due to Terra Property Trust, Inc. | 0 | 438,249 |
Distributions payable | 0 | 2,243 |
Total liabilities | 217,890 | 881,880 |
Commitments and Contingencies | ||
Members' capital: | ||
Managing member | 0 | 0 |
Non-managing members | 285,428,658 | 289,586,404 |
Total members’ capital | 285,428,658 | 289,586,404 |
Total liabilities and members' capital | $ 285,646,548 | $ 290,468,284 |
Consolidated Statements of Fin3
Consolidated Statements of Financial Condition (Parentheticals) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Investment Owned, at Cost | $ 286,148,649 | $ 291,468,567 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Investment income - controlled | ||||
Dividend income | $ 5,123,787 | $ 11,794,049 | $ 11,254,379 | $ 15,218,010 |
Investment income | ||||
Other operating income | 273 | 637 | 953 | 7,957 |
Total investment income | 5,124,060 | 11,794,686 | 11,255,332 | 15,225,967 |
Operating expenses | ||||
Merger transaction fees | 0 | 71,835 | 0 | 384,027 |
Professional fees | 232,022 | 167,082 | 327,365 | 279,576 |
Other | 3,778 | 77,388 | 32,313 | 95,961 |
Total operating expenses | 235,800 | 316,305 | 359,678 | 759,564 |
Net investment income | 4,888,260 | 11,478,381 | 10,895,654 | 14,466,403 |
Net change in unrealized depreciation on investment — controlled | (50,870) | (1,694,489) | 491,994 | (670,021) |
Net increase in members’ capital resulting from operations | $ 4,837,390 | $ 9,783,892 | $ 11,387,648 | $ 13,796,382 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Members' Capital - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Changes in Members' Capital [Roll Forward] | ||||
Balance, beginning of period | $ 289,586,404 | $ 122,208,698 | ||
Capital contributions from Merger | 155,751,516 | |||
Capital contributions, net of selling commissions and dealer manager fees of $1,277,916 | 25,598,304 | |||
Capital distributions | (15,545,394) | (15,239,658) | ||
Capital redemptions | (6,771,430) | |||
Increase in members’ capital resulting from operations: | ||||
Net investment income | $ 4,888,260 | $ 11,478,381 | 10,895,654 | 14,466,403 |
Net change in unrealized depreciation on investment | (50,870) | (1,694,489) | 491,994 | (670,021) |
Net increase in members’ capital resulting from operations | 4,837,390 | 9,783,892 | 11,387,648 | 13,796,382 |
Balance, end of period | 285,428,658 | 295,343,812 | 285,428,658 | 295,343,812 |
Managing Member | ||||
Changes in Members' Capital [Roll Forward] | ||||
Balance, beginning of period | 0 | 0 | ||
Capital contributions from Merger | 0 | |||
Capital contributions, net of selling commissions and dealer manager fees of $1,277,916 | 0 | |||
Capital distributions | 0 | 0 | ||
Capital redemptions | 0 | |||
Increase in members’ capital resulting from operations: | ||||
Net investment income | 0 | 0 | ||
Net change in unrealized depreciation on investment | 0 | 0 | ||
Net increase in members’ capital resulting from operations | 0 | 0 | ||
Balance, end of period | 0 | 0 | 0 | 0 |
Non-managing Members | ||||
Changes in Members' Capital [Roll Forward] | ||||
Balance, beginning of period | 289,586,404 | 122,208,698 | ||
Capital contributions from Merger | 155,751,516 | |||
Capital contributions, net of selling commissions and dealer manager fees of $1,277,916 | 25,598,304 | |||
Capital distributions | (15,545,394) | (15,239,658) | ||
Capital redemptions | (6,771,430) | |||
Increase in members’ capital resulting from operations: | ||||
Net investment income | 10,895,654 | 14,466,403 | ||
Net change in unrealized depreciation on investment | 491,994 | (670,021) | ||
Net increase in members’ capital resulting from operations | 11,387,648 | 13,796,382 | ||
Balance, end of period | $ 285,428,658 | $ 295,343,812 | $ 285,428,658 | $ 295,343,812 |
Consolidated Statements of Cha6
Consolidated Statements of Changes in Members' Capital (Parentheticals) | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Selling Commissions And Dealer Manager Fees | $ 1,277,916 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Statement of Cash Flows [Abstract] | ||
Net increase in members’ capital resulting from operations | $ 11,387,648 | $ 13,796,382 |
Adjustments to reconcile net increase in members’ capital resulting from operations to net cash provided by (used in) operating activities: | ||
Purchase of common stock of Terra Property Trust, Inc. | 0 | (10,000,000) |
Cash transferred to Terra Property Trust, Inc. | 0 | (5,034,571) |
Return of capital on investment | 5,319,918 | 498,481 |
Net change in unrealized depreciation on investment | (491,994) | 670,021 |
Changes in operating assets and liabilities: | ||
Interest receivable | 0 | 351,883 |
Other assets | 0 | (129,397) |
Due to Manager | 0 | (705,389) |
Accounts payable and accrued expenses | (223,499) | (5,432,960) |
Due to Terra Property Trust, Inc. | (438,249) | 2,930,044 |
Taxes payable | 0 | (621,177) |
Interest payable | 0 | (172,051) |
Net cash provided by (used in) operating activities | 15,553,824 | (3,848,734) |
Cash flows from financing activities: | ||
Proceeds from capital contributions, net of selling commissions and dealer manager fees | 0 | 25,598,304 |
Distributions paid | (15,546,042) | (15,178,178) |
Payment for capital redemptions | 0 | (10,198,413) |
Cash acquired in the Merger | 0 | 3,480,981 |
Net cash (used in) provided by financing activities | (15,546,042) | 3,702,694 |
Net increase (decrease) in cash and cash equivalents | 7,782 | (146,040) |
Cash and cash equivalents at beginning of period | 41,520 | 1,862,798 |
Cash and cash equivalents at end of period | 49,302 | 1,716,758 |
Supplemental Disclosure of Cash Flows Information: | ||
Cash paid for income taxes | 0 | 0 |
Cash paid for interest | $ 0 | $ 681,033 |
Consolidated Statements of Cas8
Consolidated Statements of Cash Flows - Supplemental Statement | Jan. 01, 2016USD ($) |
Terra Funds | |
Fair value of units issued | $ 155,751,516 |
Fair value of units issued, Total | 155,751,516 |
Assets Acquired at Fair Value | |
Restricted cash | 7,119,078 |
Interest receivable | 1,412,840 |
Other assets | 35,695 |
Liabilities Assumed at Fair Value | |
Obligations under participation agreements | (8,154,822) |
Interest reserve and other deposits held on loans | (7,119,078) |
Accounts payable and accrued expenses | (3,113,022) |
Redemption liability | (3,426,983) |
Due to Manager | (1,343,020) |
Taxes payable | (232,040) |
Interest payable | (80,807) |
Other liabilities | (266,926) |
Net assets acquired excluding cash | 152,270,535 |
Cash acquired in the Merger | 3,480,981 |
Terra Funds | Investments | |
Assets Acquired at Fair Value | |
Investment Owned, at Fair Value | 142,768,001 |
Terra Funds | Participation Interests | |
Assets Acquired at Fair Value | |
Investment Owned, at Fair Value | 7,771,619 |
Terra Funds | Terra Park Green Member, LLC | |
Assets Acquired at Fair Value | |
Investment Owned, at Fair Value | 16,900,000 |
Terra Property Trust | |
Fair value of units issued | 288,259,804 |
Fair value of units issued, Total | 288,259,804 |
Assets Acquired at Fair Value | |
Restricted cash | 21,421,501 |
Interest receivable | 2,382,546 |
Due from Related Parties | 438,249 |
Other assets | 35,695 |
Liabilities Assumed at Fair Value | |
Obligations under participation agreements | (24,147,097) |
Interest reserve and other deposits held on loans | (21,421,501) |
Due to Manager | (2,011,003) |
Other liabilities | (909,516) |
Net assets acquired excluding cash | 283,225,233 |
Cash transferred to Terra Property Trust | 5,034,571 |
Terra Property Trust | Investments | |
Assets Acquired at Fair Value | |
Investment Owned, at Fair Value | 276,746,475 |
Terra Property Trust | Participation Interests | |
Assets Acquired at Fair Value | |
Investment Owned, at Fair Value | 13,789,884 |
Terra Property Trust | Terra Park Green Member, LLC | |
Assets Acquired at Fair Value | |
Investment Owned, at Fair Value | $ 16,900,000 |
Consolidated Scheules of Invest
Consolidated Scheules of Investments Statement - USD ($) | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2017 | Dec. 31, 2016 | ||||
Schedule of Investments | |||||
Cost | $ 286,148,649 | $ 291,468,567 | |||
Fair Value | 285,591,393 | 290,419,317 | |||
Terra Property Trust | US | |||||
Schedule of Investments | |||||
Principal Amount | 368,201,081 | 326,004,971 | |||
Cost | 372,332,464 | 330,875,543 | |||
Fair Value | $ 372,207,084 | [1] | $ 329,855,339 | [2] | |
% of Net Assets | 130.30% | [3] | 113.60% | [4] | |
Terra Property Trust | Controlled | |||||
Schedule of Investments | |||||
Equity Method Investment, Ownership Percentage | 100.00% | 100.00% | |||
Common Stock, Shares, Outstanding | 14,912,990 | 14,912,990 | |||
Cost | $ 286,148,649 | $ 291,468,567 | |||
Fair Value | $ 285,591,393 | $ 290,419,317 | |||
% of Net Assets | 100.10% | 100.30% | |||
Terra Property Trust | Controlled | Initial Acquisition | |||||
Schedule of Investments | |||||
Acquisition Date | Jan. 1, 2016 | Jan. 1, 2016 | |||
Terra Property Trust | Controlled | Subsequent Acquisition | |||||
Schedule of Investments | |||||
Acquisition Date | Mar. 7, 2016 | Mar. 7, 2016 | |||
Terra Property Trust | Non-controlled | US | |||||
Schedule of Investments | |||||
Principal Amount | $ 353,537,311 | $ 311,424,751 | |||
Cost | 357,664,279 | 316,174,017 | |||
Fair Value | $ 357,519,072 | [1] | $ 315,110,108 | [2] | |
% of Net Assets | 125.30% | [5] | 108.50% | [4] | |
Terra Property Trust | Non-controlled | US | AL | |||||
Schedule of Investments | |||||
Principal Amount | $ 3,700,000 | $ 3,700,000 | |||
Cost | 3,777,353 | 3,782,961 | |||
Fair Value | $ 3,736,507 | [1] | $ 3,736,537 | [2] | |
% of Net Assets | 1.30% | [3] | 1.30% | [4] | |
Terra Property Trust | Non-controlled | US | AL | ASA Mgt Holdings LLC | Preferred Equity Investment | Multifamily | |||||
Schedule of Investments | |||||
Interest Rate | 16.00% | 15.00% | |||
Acquisition Date | Apr. 7, 2012 | Apr. 7, 2012 | |||
Maturity Date | Aug. 1, 2022 | Aug. 1, 2022 | |||
Principal Amount | $ 2,100,000 | $ 2,100,000 | |||
Cost | 2,142,457 | 2,145,498 | |||
Fair Value | $ 2,120,720 | [1] | $ 2,120,737 | [2] | |
% of Net Assets | 0.70% | [3] | 0.70% | [4] | |
Terra Property Trust | Non-controlled | US | AL | SVA Mgt Holdings LLC | Preferred Equity Investment | Multifamily | |||||
Schedule of Investments | |||||
Interest Rate | 16.00% | 15.00% | |||
Acquisition Date | Apr. 7, 2012 | Apr. 7, 2012 | |||
Maturity Date | Aug. 1, 2022 | Aug. 1, 2022 | |||
Principal Amount | $ 1,600,000 | $ 1,600,000 | |||
Cost | 1,634,896 | 1,637,463 | |||
Fair Value | $ 1,615,787 | [1] | $ 1,615,800 | [2] | |
% of Net Assets | 0.60% | [3] | 0.60% | [4] | |
Terra Property Trust | Non-controlled | US | CA | |||||
Schedule of Investments | |||||
Principal Amount | $ 94,208,191 | $ 101,275,061 | |||
Cost | 95,432,827 | 102,699,779 | |||
Fair Value | $ 95,454,471 | [1] | $ 102,261,915 | [2] | |
% of Net Assets | 33.50% | [3] | 35.20% | [4] | |
Terra Property Trust | Non-controlled | US | CA | Palmer City-Core Stockton Street, LLC | Preferred Equity Investment | Hotel | |||||
Schedule of Investments | |||||
Interest Rate | 12.00% | 12.00% | |||
Acquisition Date | Jan. 17, 2014 | Jan. 17, 2014 | |||
Maturity Date | Dec. 17, 2017 | Dec. 17, 2017 | |||
Principal Amount | $ 4,325,000 | $ 4,325,000 | |||
Cost | 4,368,250 | 4,368,250 | |||
Fair Value | $ 4,365,888 | [1] | $ 4,369,096 | [2] | |
% of Net Assets | 1.50% | [3] | 1.50% | [4] | |
Terra Property Trust | Non-controlled | US | CA | Encino Courtyard Mezzanine, LLC | Mezzanine Loan | Retail | |||||
Schedule of Investments | |||||
Interest Rate | [6] | 13.50% | |||
Acquisition Date | [6] | Dec. 19, 2012 | |||
Maturity Date | [6] | Jan. 6, 2023 | |||
Principal Amount | [6] | $ 2,500,000 | |||
Cost | [6] | 2,609,852 | |||
Fair Value | [2],[6] | $ 2,529,828 | |||
% of Net Assets | [4],[6] | 0.90% | |||
Terra Property Trust | Non-controlled | US | CA | Maguire Partners-1733 Ocean, LLC | First Mortgage | Office Building | |||||
Schedule of Investments | |||||
Loans Receivable, Description of Variable Rate Basis | LIBOR | LIBOR | |||
Acquisition Date | Mar. 7, 2016 | Mar. 7, 2016 | |||
Maturity Date | Mar. 9, 2018 | Mar. 9, 2018 | |||
Principal Amount | $ 51,883,191 | $ 50,450,061 | |||
Cost | 52,368,713 | 50,902,766 | |||
Fair Value | $ 52,716,750 | [1] | $ 50,924,056 | [2] | |
% of Net Assets | 18.50% | [3] | 17.40% | [4] | |
Terra Property Trust | Non-controlled | US | CA | Maguire Partners-1733 Ocean, LLC | First Mortgage | Office Building | LIBOR | |||||
Schedule of Investments | |||||
Loans Receivable, Basis Spread on Variable Rate | 8.50% | 8.50% | |||
Terra Property Trust | Non-controlled | US | CA | L.A. Warner Hotel Partners, LLC | Preferred Equity Investment | Hotel | |||||
Schedule of Investments | |||||
Interest Rate | [8],[9] | 13.30% | [7],[10] | 13.30% | |
Acquisition Date | [8],[9] | Jul. 25, 2014 | [7],[10] | Jul. 25, 2014 | |
Maturity Date | [8],[9] | Aug. 4, 2017 | [7],[10] | Aug. 4, 2017 | |
Principal Amount | [8],[9] | $ 20,000,000 | [7],[10] | $ 20,000,000 | |
Cost | [8],[9] | 20,515,864 | [7],[10] | 20,579,513 | |
Fair Value | [8],[9] | $ 20,197,786 | [1],[7],[10] | $ 20,201,344 | [2] |
% of Net Assets | [8],[9] | 7.10% | [3],[7],[10] | 7.00% | [4] |
Terra Property Trust | Non-controlled | US | CA | SD Carmel Hotel Partners, LLC | Preferred Equity Investment | Hotel | |||||
Schedule of Investments | |||||
Interest Rate | [6],[8],[9] | 12.00% | |||
Acquisition Date | [6],[8],[9] | Mar. 13, 2015 | |||
Maturity Date | [6],[8],[9] | Jan. 31, 2017 | |||
Principal Amount | [6],[8],[9] | $ 6,000,000 | |||
Cost | [6],[8],[9] | 6,059,398 | |||
Fair Value | [2],[6],[8],[9] | $ 6,059,398 | |||
% of Net Assets | [4],[6],[8],[9] | 2.10% | |||
Terra Property Trust | Non-controlled | US | CA | TSG-Parcel 1, LLC | First Mortgage | Land | |||||
Schedule of Investments | |||||
Interest Rate | [9],[11] | 12.00% | [8] | 12.00% | [7] |
Acquisition Date | [9],[11] | Jul. 10, 2015 | [8] | Jul. 10, 2015 | [7] |
Maturity Date | [9],[11] | Oct. 10, 2017 | [8] | Apr. 10, 2017 | [7] |
Principal Amount | [9],[11] | $ 18,000,000 | [8] | $ 18,000,000 | [7] |
Cost | [9],[11] | 18,180,000 | [8] | 18,180,000 | [7] |
Fair Value | [9],[11] | $ 18,174,047 | [1],[8] | $ 18,178,193 | [2],[7] |
% of Net Assets | [9],[11] | 6.40% | [3],[8] | 6.30% | [4],[7] |
Terra Property Trust | Non-controlled | US | DE | BPG Office Partners III/IV LLC | Mezzanine Loan | Office Building | |||||
Schedule of Investments | |||||
Interest Rate | [8],[9] | 13.50% | [7] | 13.00% | |
Acquisition Date | [8],[9] | Jun. 5, 2015 | [7] | Jun. 5, 2015 | |
Maturity Date | [8],[9] | Jun. 5, 2018 | [7] | Jun. 5, 2018 | |
Principal Amount | [8],[9] | $ 10,000,000 | [7] | $ 10,000,000 | |
Cost | [8],[9] | 10,088,104 | [7] | 10,082,308 | |
Fair Value | [8],[9] | $ 10,093,411 | [1],[7] | $ 10,123,340 | [2] |
% of Net Assets | [8],[9] | 3.50% | [3],[7] | 3.50% | [4] |
Terra Property Trust | Non-controlled | US | FL | |||||
Schedule of Investments | |||||
Principal Amount | $ 47,762,271 | $ 54,484,022 | |||
Cost | 48,155,418 | 54,927,914 | |||
Fair Value | $ 48,004,595 | [1] | $ 54,677,210 | [2] | |
% of Net Assets | 16.90% | [3] | 18.80% | [4] | |
Terra Property Trust | Non-controlled | US | FL | Beach Resort Management, LLC | Mezzanine Loan | Hotel | |||||
Schedule of Investments | |||||
Interest Rate | 13.00% | [12] | 13.00% | ||
Acquisition Date | Jul. 16, 2012 | [12] | Jul. 16, 2012 | ||
Maturity Date | Aug. 1, 2017 | [12] | Aug. 1, 2017 | ||
Principal Amount | $ 4,500,000 | [12] | $ 4,500,000 | ||
Cost | 4,502,693 | [12] | 4,518,850 | ||
Fair Value | $ 4,504,576 | [1],[12] | $ 4,517,228 | [2] | |
% of Net Assets | 1.60% | [3],[12] | 1.60% | [4] | |
Terra Property Trust | Non-controlled | US | FL | CGI Mezz 55MM, LLC | Mezzanine Loan | Mixed Use | |||||
Schedule of Investments | |||||
Acquisition Date | [6],[8],[9] | Aug. 21, 2014 | |||
Maturity Date | [6],[8],[9] | Sep. 6, 2019 | |||
Principal Amount | [6],[8],[9] | $ 3,593,947 | |||
Cost | [6],[8],[9] | 3,619,217 | |||
Fair Value | [2],[6],[8],[9] | $ 3,610,816 | |||
% of Net Assets | [4],[6],[8],[9] | 1.20% | |||
Terra Property Trust | Non-controlled | US | FL | CGI Mezz 55MM, LLC | Mezzanine Loan | Mixed Use | Current | |||||
Schedule of Investments | |||||
Current rate | [6],[8],[9] | 12.00% | |||
Terra Property Trust | Non-controlled | US | FL | CGI Mezz 55MM, LLC | Mezzanine Loan | Mixed Use | PIK | |||||
Schedule of Investments | |||||
Deferred rate | [6],[8],[9] | 2.00% | |||
Terra Property Trust | Non-controlled | US | FL | 1100 Biscayne Management Holdco, LLC | Mezzanine Loan | Hotel | |||||
Schedule of Investments | |||||
Acquisition Date | [8],[9] | Apr. 24, 2015 | Apr. 24, 2015 | ||
Maturity Date | [8],[9] | Oct. 9, 2017 | Oct. 9, 2017 | ||
Principal Amount | [8],[9] | $ 15,652,271 | $ 15,359,671 | ||
Cost | [8],[9] | 15,791,368 | 15,488,644 | ||
Fair Value | [8],[9] | $ 15,626,292 | [1] | $ 15,257,412 | [2] |
% of Net Assets | [8],[9] | 5.50% | [3] | 5.20% | [4] |
Terra Property Trust | Non-controlled | US | FL | 1100 Biscayne Management Holdco, LLC | Mezzanine Loan | Hotel | Current | |||||
Schedule of Investments | |||||
Current rate | [8],[9] | 12.00% | 12.00% | ||
Terra Property Trust | Non-controlled | US | FL | 1100 Biscayne Management Holdco, LLC | Mezzanine Loan | Hotel | PIK | |||||
Schedule of Investments | |||||
Deferred rate | [8],[9] | 3.00% | 2.00% | ||
Terra Property Trust | Non-controlled | US | FL | Caton Mezz, LLC | Mezzanine Loan | Office Building | |||||
Schedule of Investments | |||||
Acquisition Date | [6],[8],[9] | Jul. 27, 2015 | |||
Maturity Date | [6],[8],[9] | Jan. 27, 2017 | |||
Principal Amount | [6],[8],[9] | $ 5,160,404 | |||
Cost | [6],[8],[9] | 5,210,404 | |||
Fair Value | [2],[6],[8],[9] | $ 5,189,222 | |||
% of Net Assets | [4],[6],[8],[9] | 1.80% | |||
Terra Property Trust | Non-controlled | US | FL | Caton Mezz, LLC | Mezzanine Loan | Office Building | Current | |||||
Schedule of Investments | |||||
Current rate | [6],[8],[9] | 12.00% | |||
Terra Property Trust | Non-controlled | US | FL | Caton Mezz, LLC | Mezzanine Loan | Office Building | PIK | |||||
Schedule of Investments | |||||
Deferred rate | [6],[8],[9] | 2.00% | |||
Terra Property Trust | Non-controlled | US | FL | 37 Gables Member LLC | Mezzanine Loan | Multifamily | |||||
Schedule of Investments | |||||
Interest Rate | 13.00% | [7],[9] | 13.00% | ||
Acquisition Date | Jun. 16, 2016 | [7],[9] | Jun. 16, 2016 | ||
Maturity Date | Jun. 16, 2019 | [7],[9] | Jun. 16, 2019 | ||
Principal Amount | $ 5,750,000 | [7],[9] | $ 5,750,000 | ||
Cost | 5,794,465 | [7],[9] | 5,791,644 | ||
Fair Value | $ 5,800,107 | [1],[7],[9] | $ 5,797,477 | [2] | |
% of Net Assets | 2.00% | [3],[7],[9] | 2.00% | [4] | |
Terra Property Trust | Non-controlled | US | FL | Greystone Gables Holdings Member LLC | Preferred Equity Investment | Multifamily | |||||
Schedule of Investments | |||||
Interest Rate | 13.00% | [7],[9] | 13.00% | ||
Acquisition Date | Jun. 16, 2016 | [7],[9] | Jun. 16, 2016 | ||
Maturity Date | Jun. 16, 2019 | [7],[9] | Jun. 16, 2019 | ||
Principal Amount | $ 500,000 | [7],[9] | $ 500,000 | ||
Cost | 503,867 | [7],[9] | 503,621 | ||
Fair Value | $ 504,357 | [1],[7],[9] | $ 504,128 | [2] | |
% of Net Assets | 0.20% | [3],[7],[9] | 0.20% | [4] | |
Terra Property Trust | Non-controlled | US | FL | RS JZ 2700 NW2, LLC | First Mortgage | Land | |||||
Schedule of Investments | |||||
Interest Rate | 12.00% | 12.00% | |||
Acquisition Date | Sep. 1, 2016 | Sep. 1, 2016 | |||
Maturity Date | Dec. 1, 2017 | Dec. 1, 2017 | |||
Principal Amount | $ 21,360,000 | $ 19,620,000 | |||
Cost | 21,563,025 | 19,795,534 | |||
Fair Value | $ 21,569,263 | [1] | $ 19,800,927 | [2] | |
% of Net Assets | 7.60% | [3] | 6.80% | [4] | |
Terra Property Trust | Non-controlled | US | GA | |||||
Schedule of Investments | |||||
Principal Amount | $ 28,750,000 | ||||
Cost | 29,244,335 | ||||
Fair Value | [1] | $ 29,019,811 | |||
% of Net Assets | [3] | 10.20% | |||
Terra Property Trust | Non-controlled | US | GA | YMP Georgia Portfolio Mezzanine, LLC | Mezzanine Loan | Multifamily | |||||
Schedule of Investments | |||||
Interest Rate | 14.00% | 14.00% | |||
Acquisition Date | Dec. 19, 2013 | Dec. 19, 2013 | |||
Maturity Date | Jan. 6, 2019 | Jan. 6, 2019 | |||
Principal Amount | $ 4,250,000 | $ 4,250,000 | |||
Cost | 4,526,537 | 4,604,941 | |||
Fair Value | $ 4,302,013 | [1] | $ 4,387,683 | [2] | |
% of Net Assets | 1.50% | [3] | 1.50% | [4] | |
Terra Property Trust | Non-controlled | US | GA | OHM Atlanta Owner, LLC | First Mortgage | Land | |||||
Schedule of Investments | |||||
Interest Rate | [11] | 12.00% | |||
Acquisition Date | [11] | Jun. 20, 2017 | |||
Maturity Date | [11] | Jun. 20, 2018 | |||
Principal Amount | [11] | $ 24,500,000 | |||
Cost | [11] | 24,717,798 | |||
Fair Value | [1],[11] | $ 24,717,798 | |||
% of Net Assets | [3],[11] | 8.70% | |||
Terra Property Trust | Non-controlled | US | IN | Muncie Mezz, LLC | Mezzanine Loan | Student Housing | |||||
Schedule of Investments | |||||
Interest Rate | 13.00% | 13.00% | |||
Acquisition Date | Aug. 29, 2013 | Aug. 29, 2013 | |||
Maturity Date | Sep. 6, 2023 | Sep. 6, 2023 | |||
Principal Amount | $ 2,700,000 | $ 2,700,000 | |||
Cost | 2,686,748 | 2,683,938 | |||
Fair Value | $ 3,061,501 | [1] | $ 3,039,674 | [2] | |
% of Net Assets | 1.10% | [3] | 1.00% | [4] | |
Terra Property Trust | Non-controlled | US | MA | Phoenix CR 2012A, LLC, Phoenix CR 2012B, LLC And Phoenix CR 2012C, LLC | Mezzanine Loan | Multifamily | |||||
Schedule of Investments | |||||
Interest Rate | 12.00% | ||||
Acquisition Date | Jul. 27, 2012 | ||||
Maturity Date | Aug. 11, 2022 | ||||
Principal Amount | $ 4,000,000 | ||||
Cost | 4,112,275 | ||||
Fair Value | [2] | $ 4,071,618 | |||
% of Net Assets | [4] | 1.40% | |||
Terra Property Trust | Non-controlled | US | NC | Milestone Greensboro Holdings, LLC | Mezzanine Loan | Hotel | |||||
Schedule of Investments | |||||
Interest Rate | 14.00% | 14.00% | |||
Acquisition Date | Mar. 1, 2013 | Mar. 1, 2013 | |||
Maturity Date | Mar. 1, 2018 | Mar. 1, 2018 | |||
Principal Amount | $ 3,500,000 | $ 3,500,000 | |||
Cost | 3,544,047 | 3,551,028 | |||
Fair Value | $ 3,534,591 | [1] | $ 3,550,732 | [2] | |
% of Net Assets | 1.20% | [3] | 1.20% | [4] | |
Terra Property Trust | Non-controlled | US | NJ | Essence 144 Urban Renewal, LLC | First Mortgage | Multifamily | |||||
Schedule of Investments | |||||
Interest Rate | 12.00% | ||||
Acquisition Date | Jan. 14, 2015 | ||||
Maturity Date | Mar. 14, 2017 | ||||
Principal Amount | $ 22,639,955 | ||||
Cost | 22,865,291 | ||||
Fair Value | [2] | $ 22,864,082 | |||
% of Net Assets | [4] | 7.90% | |||
Terra Property Trust | Non-controlled | US | NY | |||||
Schedule of Investments | |||||
Principal Amount | $ 98,577,811 | $ 35,586,832 | |||
Cost | 98,950,344 | 35,849,378 | |||
Fair Value | $ 98,851,715 | [1] | $ 35,846,727 | [2] | |
% of Net Assets | 34.70% | [5] | 12.30% | [4] | |
Terra Property Trust | Non-controlled | US | NY | Cape Church Mezz, LLC | Mezzanine Loan | Multifamily | |||||
Schedule of Investments | |||||
Interest Rate | 12.00% | [7],[9] | 12.00% | ||
Acquisition Date | Mar. 15, 2016 | [7],[9] | Mar. 15, 2016 | ||
Maturity Date | Jul. 15, 2019 | [7],[9] | Jul. 15, 2019 | ||
Principal Amount | $ 16,157,667 | [7],[9] | $ 15,207,664 | ||
Cost | 16,288,397 | [7],[9] | 15,323,482 | ||
Fair Value | $ 16,205,575 | [1],[7],[9] | $ 15,341,724 | [2] | |
% of Net Assets | 5.70% | [5],[7],[9] | 5.30% | [4] | |
Terra Property Trust | Non-controlled | US | NY | 140 Schermerhorn Street Mezz LLC | Mezzanine Loan | Hotel | |||||
Schedule of Investments | |||||
Interest Rate | 12.00% | [9],[11] | 12.00% | ||
Acquisition Date | Nov. 16, 2016 | [9],[11] | Nov. 16, 2016 | ||
Maturity Date | Dec. 1, 2019 | [9],[11] | Dec. 1, 2019 | ||
Principal Amount | $ 15,000,000 | [9],[11] | $ 15,000,000 | ||
Cost | 15,111,916 | [9],[11] | 15,105,343 | ||
Fair Value | $ 15,126,318 | [1],[9],[11] | $ 15,118,900 | [2] | |
% of Net Assets | 5.30% | [5],[9],[11] | 5.20% | [4] | |
Terra Property Trust | Non-controlled | US | NY | QPT 24th Street Development LLC | First Mortgage | Land | |||||
Schedule of Investments | |||||
Interest Rate | [8],[9],[11],[13] | 9.30% | |||
Acquisition Date | [8],[9],[11],[13] | Feb. 21, 2017 | |||
Maturity Date | [8],[9],[11],[13] | Jun. 15, 2017 | |||
Principal Amount | [8],[9],[11],[13] | $ 50,600,000 | |||
Cost | [8],[9],[11],[13] | 50,600,000 | |||
Fair Value | [1],[8],[9],[11],[13] | $ 50,600,000 | |||
% of Net Assets | [5],[8],[9],[11],[13] | 17.70% | |||
Terra Property Trust | Non-controlled | US | NY | 575 CAD I LLC | Mezzanine Loan | Land | |||||
Schedule of Investments | |||||
Acquisition Date | Jan. 31, 2017 | ||||
Maturity Date | Aug. 1, 2019 | ||||
Principal Amount | $ 9,218,528 | ||||
Cost | 9,285,968 | ||||
Fair Value | [1] | $ 9,287,631 | |||
% of Net Assets | [5] | 3.30% | |||
Terra Property Trust | Non-controlled | US | NY | 575 CAD I LLC | Mezzanine Loan | Land | Current | |||||
Schedule of Investments | |||||
Current rate | 12.00% | ||||
Terra Property Trust | Non-controlled | US | NY | 575 CAD I LLC | Mezzanine Loan | Land | PIK | |||||
Schedule of Investments | |||||
Deferred rate | 2.50% | ||||
Terra Property Trust | Non-controlled | US | NY | WWML96MEZZ, LLC | Mezzanine Loan | Multifamily | |||||
Schedule of Investments | |||||
Interest Rate | 13.00% | 13.00% | |||
Acquisition Date | Dec. 18, 2015 | Dec. 18, 2015 | |||
Maturity Date | Dec. 31, 2018 | Dec. 31, 2018 | |||
Principal Amount | $ 6,209,979 | $ 4,075,585 | |||
Cost | 6,260,994 | 4,106,941 | |||
Fair Value | $ 6,244,602 | [1] | $ 4,104,596 | [2] | |
% of Net Assets | 2.20% | [5] | 1.40% | [4] | |
Terra Property Trust | Non-controlled | US | NY | WWML96, LLC | Preferred Equity Investment | Multifamily | |||||
Schedule of Investments | |||||
Interest Rate | 13.00% | 13.00% | |||
Acquisition Date | Dec. 18, 2015 | Dec. 18, 2015 | |||
Maturity Date | Dec. 31, 2018 | Dec. 31, 2018 | |||
Principal Amount | $ 1,391,637 | $ 1,303,583 | |||
Cost | 1,403,069 | 1,313,612 | |||
Fair Value | $ 1,387,589 | [1] | $ 1,281,507 | [2] | |
% of Net Assets | 0.50% | [5] | 0.40% | [4] | |
Terra Property Trust | Non-controlled | US | OR | Pollin Hotels PDX Mezzanine, LLC | Mezzanine Loan | Hotel | |||||
Schedule of Investments | |||||
Interest Rate | 13.00% | [7],[9] | 13.00% | ||
Acquisition Date | Sep. 23, 2013 | [7],[9] | Sep. 23, 2013 | ||
Maturity Date | Oct. 6, 2018 | [7],[9] | Oct. 6, 2018 | ||
Principal Amount | $ 5,000,000 | [7],[9] | $ 5,000,000 | ||
Cost | 5,268,964 | [7],[9] | 5,356,923 | ||
Fair Value | $ 5,282,419 | [1],[7],[9] | $ 5,324,812 | [2] | |
% of Net Assets | 1.80% | [5],[7],[9] | 1.80% | [4] | |
Terra Property Trust | Non-controlled | US | PA | |||||
Schedule of Investments | |||||
Principal Amount | $ 17,722,000 | ||||
Cost | 17,899,220 | ||||
Fair Value | [2] | $ 17,891,155 | |||
% of Net Assets | [4] | 6.20% | |||
Terra Property Trust | Non-controlled | US | PA | PHL Hotel Partners, LLC | Preferred Equity Investment | Hotel | |||||
Schedule of Investments | |||||
Interest Rate | 13.00% | ||||
Acquisition Date | Oct. 8, 2013 | ||||
Maturity Date | Nov. 1, 2017 | ||||
Principal Amount | $ 3,742,000 | ||||
Cost | 3,779,420 | ||||
Fair Value | [2] | $ 3,772,758 | |||
% of Net Assets | [4] | 1.30% | |||
Terra Property Trust | Non-controlled | US | PA | Millennium Waterfront Associates, L.P. | First Mortgage | Land | |||||
Schedule of Investments | |||||
Interest Rate | 12.00% | [10] | 12.00% | ||
Acquisition Date | Jul. 2, 2015 | [10] | Jul. 2, 2015 | ||
Maturity Date | Jul. 2, 2017 | [10] | Jan. 2, 2017 | ||
Principal Amount | $ 14,150,000 | [10] | $ 13,980,000 | ||
Cost | 14,291,500 | [10] | 14,119,800 | ||
Fair Value | $ 14,287,190 | [1],[10] | $ 14,118,397 | [2] | |
% of Net Assets | 5.00% | [5],[10] | 4.90% | [4] | |
Terra Property Trust | Non-controlled | US | SC | High Pointe Mezzanine Investments,, LLC | Mezzanine Loan | Student Housing | |||||
Schedule of Investments | |||||
Interest Rate | 13.00% | [7],[9] | 13.00% | ||
Acquisition Date | Dec. 27, 2013 | [7],[9] | Dec. 27, 2013 | ||
Maturity Date | Jan. 6, 2024 | [7],[9] | Jan. 6, 2024 | ||
Principal Amount | $ 3,000,000 | [7],[9] | $ 3,000,000 | ||
Cost | 3,411,811 | [7],[9] | 3,441,697 | ||
Fair Value | $ 3,441,249 | [1],[7],[9] | $ 3,176,165 | [2] | |
% of Net Assets | 1.20% | [5],[7],[9] | 1.10% | [4] | |
Terra Property Trust | Non-controlled | US | TN | |||||
Schedule of Investments | |||||
Principal Amount | $ 9,877,843 | ||||
Cost | 10,179,485 | ||||
Fair Value | [2] | $ 10,047,055 | |||
% of Net Assets | [4] | 3.50% | |||
Terra Property Trust | Non-controlled | US | TN | Kingsport 925-Mezz LLC | Mezzanine Loan | Multifamily | |||||
Schedule of Investments | |||||
Interest Rate | 13.00% | [7],[9] | 13.00% | ||
Acquisition Date | Jan. 6, 2014 | [7],[9] | Jan. 6, 2014 | ||
Maturity Date | Dec. 5, 2018 | [7],[9] | Dec. 5, 2018 | ||
Principal Amount | $ 3,000,000 | [7],[9] | $ 3,000,000 | ||
Cost | 3,161,783 | [7],[9] | 3,208,266 | ||
Fair Value | $ 3,140,506 | [1],[7],[9] | $ 3,111,362 | [2] | |
% of Net Assets | 1.10% | [5],[7],[9] | 1.10% | [4] | |
Terra Property Trust | Non-controlled | US | TN | 315 JV, LLC | Mezzanine Loan | Office Building | |||||
Schedule of Investments | |||||
Acquisition Date | [11] | Nov. 15, 2013 | |||
Maturity Date | [11] | May 28, 2017 | |||
Principal Amount | [11] | $ 6,877,843 | |||
Cost | [11] | 6,971,219 | |||
Fair Value | [2],[11] | $ 6,935,693 | |||
% of Net Assets | [4],[11] | 2.40% | |||
Terra Property Trust | Non-controlled | US | TN | 315 JV, LLC | Mezzanine Loan | Office Building | Current | |||||
Schedule of Investments | |||||
Current rate | [11] | 12.00% | |||
Terra Property Trust | Non-controlled | US | TN | 315 JV, LLC | Mezzanine Loan | Office Building | PIK | |||||
Schedule of Investments | |||||
Deferred rate | [11] | 3.00% | |||
Terra Property Trust | Non-controlled | US | TX | |||||
Schedule of Investments | |||||
Principal Amount | $ 10,189,038 | $ 10,189,038 | |||
Cost | 10,413,973 | 10,420,209 | |||
Fair Value | $ 10,374,133 | [1] | $ 10,394,733 | [2] | |
% of Net Assets | 3.60% | [5] | 3.60% | [4] | |
Terra Property Trust | Non-controlled | US | TX | Northland Museo Member, LLC | Mezzanine Loan | Multifamily | |||||
Schedule of Investments | |||||
Interest Rate | 12.00% | [7],[9] | 12.00% | ||
Acquisition Date | Nov. 22, 2013 | [7],[9] | Nov. 22, 2013 | ||
Maturity Date | Dec. 6, 2018 | [7],[9] | Dec. 6, 2018 | ||
Principal Amount | $ 4,000,000 | [7],[9] | $ 4,000,000 | ||
Cost | 3,960,657 | [7],[9] | 3,946,771 | ||
Fair Value | $ 4,090,580 | [1],[7],[9] | $ 4,051,342 | [2] | |
% of Net Assets | 1.40% | [5],[7],[9] | 1.40% | [4] | |
Terra Property Trust | Non-controlled | US | TX | Austin H. I. Owner LLC | Mezzanine Loan | Hotel | |||||
Schedule of Investments | |||||
Interest Rate | [8],[9] | 12.50% | 12.50% | ||
Acquisition Date | [8],[9] | Sep. 30, 2015 | Sep. 30, 2015 | ||
Maturity Date | [8],[9] | Oct. 6, 2020 | Oct. 6, 2020 | ||
Principal Amount | [8],[9] | $ 3,500,000 | $ 3,500,000 | ||
Cost | [8],[9] | 3,523,185 | 3,521,769 | ||
Fair Value | [8],[9] | $ 3,545,594 | [1] | $ 3,549,105 | [2] |
% of Net Assets | [8],[9] | 1.20% | [5] | 1.20% | [4] |
Terra Property Trust | Non-controlled | US | TX | AHF-Heritage 1, LLC | Mezzanine Loan | Multifamily | |||||
Schedule of Investments | |||||
Interest Rate | 14.00% | 14.00% | |||
Acquisition Date | Jul. 30, 2012 | Jul. 30, 2012 | |||
Maturity Date | Aug. 11, 2022 | Aug. 11, 2022 | |||
Principal Amount | $ 2,689,038 | $ 2,689,038 | |||
Cost | 2,930,131 | 2,951,669 | |||
Fair Value | $ 2,737,959 | [1] | $ 2,794,286 | [2] | |
% of Net Assets | 1.00% | [5] | 1.00% | [4] | |
Terra Property Trust | Non-controlled | US | UT | NB Factory JV, LLC | Preferred Equity Investment | Student Housing | |||||
Schedule of Investments | |||||
Interest Rate | [11] | 15.00% | |||
Acquisition Date | [11] | Jun. 29, 2017 | |||
Maturity Date | [11] | Jun. 26, 2020 | |||
Principal Amount | [11] | $ 5,000,000 | |||
Cost | [11] | 5,000,000 | |||
Fair Value | [1],[11] | $ 5,000,000 | |||
% of Net Assets | [5],[11] | 1.70% | |||
Terra Property Trust | Non-controlled | US | Other States | |||||
Schedule of Investments | |||||
Principal Amount | $ 24,000,000 | $ 23,500,000 | |||
Cost | 24,237,072 | 23,716,670 | |||
Fair Value | $ 24,236,973 | [1] | $ 23,716,670 | [2] | |
% of Net Assets | 8.50% | [5] | 8.20% | [4] | |
Terra Property Trust | Non-controlled | US | Other States | Capital Square Realty Advisors, LLC | Credit Facility | Various | |||||
Schedule of Investments | |||||
Interest Rate | [12] | 13.00% | |||
Investment Interest Rate Range Start | 13.00% | ||||
Investment Interest Rate Range End | 14.00% | ||||
Acquisition Date | Dec. 17, 2013 | [12] | Dec. 17, 2013 | ||
Maturity Date | Jul. 29, 2017 | [12] | Jul. 29, 2017 | ||
Principal Amount | $ 16,000,000 | [12] | $ 15,500,000 | ||
Cost | 16,157,974 | [12] | 15,643,328 | ||
Fair Value | $ 16,157,974 | [1],[12] | $ 15,643,328 | [2] | |
% of Net Assets | 5.70% | [5],[12] | 5.40% | [4] | |
Terra Property Trust | Non-controlled | US | Other States | Nelson Brothers Professional Real Estate, LLC | Credit Facility | Various | |||||
Schedule of Investments | |||||
Interest Rate | 15.00% | [10] | 15.00% | ||
Acquisition Date | Aug. 31, 2016 | [10] | Aug. 31, 2016 | ||
Maturity Date | Jul. 27, 2017 | [10] | Jul. 27, 2017 | ||
Principal Amount | $ 8,000,000 | [10] | $ 8,000,000 | ||
Cost | 8,079,098 | [10] | 8,073,342 | ||
Fair Value | $ 8,078,999 | [1],[10] | $ 8,073,342 | [2] | |
% of Net Assets | 2.80% | [5],[10] | 2.80% | [4] | |
Terra Property Trust | Non-controlled | US | Participation Interests | |||||
Schedule of Investments | |||||
Principal Amount | [14] | $ 14,663,770 | $ 14,580,220 | ||
Cost | [14] | 14,668,185 | 14,701,526 | ||
Fair Value | [14] | $ 14,688,012 | [1] | $ 14,745,231 | [2] |
% of Net Assets | [14] | 5.10% | [3] | 5.10% | [4] |
Terra Property Trust | Non-controlled | US | Participation Interests | NY | QPT 24th Street Mezz LLC | Mezzanine Loan | Land | |||||
Schedule of Investments | |||||
Acquisition Date | [8],[9],[14] | Dec. 15, 2015 | [13] | Dec. 15, 2015 | |
Maturity Date | [8],[9],[14] | Jun. 15, 2017 | [13] | Jun. 15, 2017 | |
Principal Amount | [8],[9],[14] | $ 12,863,770 | [13] | $ 12,780,220 | |
Cost | [8],[9],[14] | 12,863,770 | [13] | 12,897,391 | |
Fair Value | [8],[9],[14] | $ 12,863,771 | [1],[13] | $ 12,897,392 | [2] |
% of Net Assets | [8],[9],[14] | 4.50% | [3],[13] | 4.50% | [4] |
Terra Property Trust | Non-controlled | US | Participation Interests | NY | QPT 24th Street Mezz LLC | Mezzanine Loan | Land | Current | |||||
Schedule of Investments | |||||
Current rate | [8],[9],[14] | 12.00% | [13] | 12.00% | |
Terra Property Trust | Non-controlled | US | Participation Interests | NY | QPT 24th Street Mezz LLC | Mezzanine Loan | Land | PIK | |||||
Schedule of Investments | |||||
Deferred rate | [8],[9],[14] | 2.00% | [13] | 2.00% | |
Terra Property Trust | Non-controlled | US | Participation Interests | PA | KOP Hotel XXXI Mezz LP | Mezzanine Loan | Hotel | |||||
Schedule of Investments | |||||
Interest Rate | [8],[9],[14] | 13.00% | 13.00% | ||
Acquisition Date | [8],[9],[14] | Nov. 24, 2015 | Nov. 24, 2015 | ||
Maturity Date | [8],[9],[14] | Dec. 6, 2022 | Dec. 6, 2022 | ||
Principal Amount | [8],[9],[14] | $ 1,800,000 | $ 1,800,000 | ||
Cost | [8],[9],[14] | 1,804,415 | 1,804,135 | ||
Fair Value | [8],[9],[14] | $ 1,824,241 | [1] | $ 1,847,839 | [2] |
% of Net Assets | [8],[9],[14] | 0.60% | [3] | 0.60% | [4] |
Obligations Under Participation Agreements | Terra Property Trust | US | |||||
Schedule of Investments | |||||
Principal Amount | [8],[11] | $ 77,914,792 | [7],[9] | $ 32,635,785 | |
Cost | [8],[11] | 78,480,646 | [7],[9] | 32,986,194 | |
Fair Value | [8],[11] | $ 78,729,079 | [1],[7],[9] | $ 32,904,955 | [2] |
% of Net Assets | [8],[11] | 27.60% | [3],[7],[9] | 11.30% | [4] |
Investment Net | Terra Property Trust | US | |||||
Schedule of Investments | |||||
Principal Amount | $ 290,286,289 | $ 293,369,186 | |||
Cost | 293,851,818 | 297,889,349 | |||
Fair Value | $ 293,478,005 | [1] | $ 296,950,384 | [2] | |
% of Net Assets | 102.70% | [3] | 102.30% | [4] | |
[1] | Because there is no readily available market for these investments, the fair values of these investments are approved in good faith by Terra Income Advisors, LLC (the “Manager”) pursuant to Terra Property Trust’s valuation policy. | ||||
[2] | Because there is no readily available market for these investments, the fair values of these investments are approved in good faith by the Manager pursuant to Terra Property Trust’s valuation policy. | ||||
[3] | Percentages are based on the fair value of the Company’s investment in Terra Property Trust of $285.6 million as of June 30, 2017. | ||||
[4] | Percentages are based on the fair value of the Company’s investment in Terra Property Trust of $290.4 million as of December 31, 2016. | ||||
[5] | The per unit data for distributions reflects the actual amount of distributions paid per share during the periods. | ||||
[6] | This investment was repaid in full. | ||||
[7] | Terra Property Trust sold a portion of its interests in these investments via participation agreements to Terra Income Fund International, an affiliated fund advised by the Manager. | ||||
[8] | Terra Property Trust sold a portion of its interests in these investments via participation agreements to Terra Secured Income Fund 5 International, an affiliated fund advised by the Manager. | ||||
[9] | The loan participations from Terra Property Trust do not qualify for sale accounting under Accounting Standards Codification (“ASC”) Topic 860, Transfers and Servicing, and therefore, the gross amount of these loans remain in the Consolidated Schedule of Investments. | ||||
[10] | The maturity of this loan was extended subsequent to June 30, 2017. | ||||
[11] | Terra Property Trust sold a portion of its interest in this investment through a participation agreement to Terra Income Fund 6, Inc., an affiliated fund advised by the Manager. | ||||
[12] | This loan was repaid subsequent to June 30, 2017. | ||||
[13] | For the three months ended June 30, 2017, Terra Property Trust suspended interest income accrual on these two loans and wrote off the related past due interest receivable and exit fee accrual for an aggregate amount of $1.4 million, net of interest expense on obligations under participation agreements, because recovery of such income and fee was doubtful. In July 2017, the principal balances of the loans were repaid in full. | ||||
[14] | Terra Property Trust purchased its interests in these investments from Terra Income Fund 6, Inc. via participation agreements. |
Business Business
Business Business | 6 Months Ended |
Jun. 30, 2017 | |
Business [Abstract] | |
Business | Note 1. Business Terra Secured Income Fund 5, LLC (and, together with its consolidated subsidiaries, the “Company”), a Delaware limited liability company, commenced operations on August 8, 2013. The Company was formed to originate, acquire and structure real estate-related loans, including mezzanine loans, first and second mortgage loans, subordinated mortgage loans, bridge loans, preferred equity investments and other loans related to high quality commercial real estate. The Company completed its original offering on January 31, 2015 and raised approximately $142 million in gross proceeds. The Company’s investment strategy is to invest substantially all of the net proceeds of membership interests in, and manage a diverse portfolio of, real estate-related loans. The Company seeks to create and maintain a portfolio of investments that generates a low volatility income stream for attractive and consistent cash distributions. The real-estate loans are typically investments between $3 million and $25 million, with unlevered yields on subordinated positions and levered yields on senior positions ranging from 12% to 16% and maturities between one to ten years. In December 2015, the members approved the merger of Terra Fund 1, Terra Fund 2, Terra Fund 3 and Terra Fund 4 with and into subsidiaries of the Company through a series of separate mergers effective January 1, 2016. Following the Merger, the Company contributed the consolidated portfolio of net assets of the five Terra Funds to Terra Property Trust, a newly-formed and wholly-owned subsidiary of the Company that elected to be taxed as a real estate investment trust (“REIT”), in exchange for the common shares of Terra Property Trust. Upon completion of the Merger, the Company became the parent company of Terra Funds 1 through 4 and the direct and indirect sole common stockholder of, and began conducting substantially all of its real estate lending business through, Terra Property Trust. The Company does not consolidate Terra Property Trust as Terra Property Trust is not an investment company. The Company’s investment activities are externally managed by Terra Income Advisors, LLC, a private investment firm affiliated with the Company. The Company does not currently have any employees and does not expect to have any employees. Services necessary for the Company’s business are provided by individuals who are employees of the Manager or by individuals who were contracted by the Company or by the Manager to work on behalf of the Company pursuant to the terms of the operating agreement, as amended. The Company will continue in existence until December 31, 2023 and expects to be terminated or to consummate an alternative liquidity transaction on or prior to the five-year anniversary of the completion of the Company’s original offering, which was January 31, 2015, unless extended for up to a maximum of two one-year extensions at the discretion of the Manager, in order to facilitate an orderly liquidation or to consummate such alternative liquidity transaction. |
Summary of Significant Accounti
Summary of Significant Accounting Policies Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and include all of the Company’s accounts and those of its consolidated subsidiaries. The consolidated financial statements reflect all adjustments and reclassifications that, in the opinion of management, are necessary for the fair presentation of the Company’s results of operations and financial condition as of and for the periods presented. All intercompany balances and transactions have been eliminated. The accompanying interim financial statements of the Company and related financial information have been prepared pursuant to the requirements for reporting on Form 10-Q and Articles 6 or 10 of Regulation S-X. The Company is an investment company, as defined under U.S. GAAP, and applies accounting and reporting guidance in accordance with Financial Accounting Standards Board (“FASB”) ASC Topic 946, Financial Services - Investment Companies . Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of gains (losses), income and expenses during the reporting period. Actual results could significantly differ from those estimates. The most significant estimates inherent in the preparation of the Company’s consolidated financial statements is the valuation of investments. Equity Investment in Terra Property Trust Equity investment in Terra Property Trust represents the Company’s equity interest in Terra Property Trust, which was initially recorded at cost. Subsequent to the asset contribution, the equity investment is reported, at each reporting date, at fair value on the consolidated statements of financial condition. Change in fair value is reported in net change in unrealized depreciation on Revenue Recognition Revenue is accounted for under ASC 605, Revenue Recognition , which provides among other things that revenue be recognized when there is persuasive evidence an arrangement exists, delivery and services have been rendered, price is fixed and determinable and collectability is reasonably assured. Dividend Income: Dividend income associated with the Company’s ownership of Terra Property Trust is recognized on the record date as declared by Terra Property Trust. Any excess of dividends over Terra Property Trust’s net income are recorded as return of capital. Other Operating Income: All other income is recognized when earned. Cash and Cash Equivalents The Company considers all highly liquid investments, with original maturities of ninety days or less when purchased, as cash equivalents. Cash and cash equivalents are exposed to concentrations of credit risk. The Company maintains all of its cash at financial institutions which, at times, may exceed the amount insured by the Federal Deposit Insurance Corporation. Income Taxes No provision for U.S. federal and state income taxes has been made in the accompanying consolidated financial statements, as individual members are responsible for their proportionate share of the Company’s taxable income. Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the consolidated financial statements and tax basis assets and liabilities using enacted tax rates in effect for the year in which differences are expected to reverse. Such deferred tax assets and liabilities were not material. The Company did not have any uncertain tax positions that met the recognition or measurement criteria of ASC 740-10-25, Income Taxes , nor did the Company have any unrecognized tax benefits as of the periods presented herein. The Company recognizes interest and penalties, if any, related to unrecognized tax liabilities as income tax expense in its consolidated statements of operations. For the three and six months ended June 30, 2017 and 2016 , the Company did not incur any interest or penalties. Although the Company files federal and state tax returns, its primary tax jurisdiction is federal. The Company’s inception-to-date federal tax years remain subject to examination by the Internal Revenue Service. Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). The core principle of the revenue model is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for the goods or services. The Company will adopt this standard on January 1, 2018 using either the retrospective or cumulative effect transition method. The Company does not expect the adoption of ASU 2014-09 to have a material impact on its consolidated financial statements and disclosures. In January 2016, the FASB issued ASU 2016-01, Financial Instruments — Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). ASU 2016-01 retains many current requirements for the classification and measurement of financial instruments; however, it significantly revises an entity’s accounting related to (i) the classification and measurement of investments in equity securities and (ii) the presentation of certain fair value changes for financial liabilities measured at fair value. ASU 2016-01 also amends certain disclosure requirements associated with the fair value of financial instruments. This guidance is effective for the Company beginning on January 1, 2018. Management is currently evaluating the impact these changes will have on the Company’s consolidated financial statements and disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 outlines a new model for accounting by lessees, whereby their rights and obligations under substantially all leases, existing and new, would be capitalized and recorded on the balance sheet. For lessors, however, the accounting remains largely unchanged from the current model, with the distinction between operating and financing leases retained, but updated to align with certain changes to the lessee model and the new revenue recognition standard. The new standard also replaces existing sale-leaseback guidance with a new model applicable to both lessees and lessors. Additionally, the new standard requires extensive quantitative and qualitative disclosures. ASU 2016-02 is effective for U.S. GAAP public companies for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application will be permitted for all entities. The new standard must be adopted using a modified retrospective transition of the new guidance and provides for certain practical expedients. Transition will require application of the new model at the beginning of the earliest comparative period presented. This ASU is not expected to have any impact on the Company’s consolidated financial statements as the Company does not have any lease arrangements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, a Consensus of the FASB’s Emerging Issues Task Force (“ASU 2016-15”). ASU 2016-15 provides guidance on how certain transactions are classified in the statement of cash flows. ASU 2016-15 is effective for annual and interim periods beginning after December 15, 2017. The guidance requires application using a retrospective transition method. The Company does not expect the adoption of ASU 2016-15 to have a material impact on its consolidated financial statements and disclosure. In October 2016, the U.S. Securities and Exchange Commission adopted new rules and amended rules (together, “final rules”) interned to modernize the reporting and disclosure of information by registered investment companies. In part, the final rules amend Regulation S-X and require standardized, enhanced disclosure about derivatives in investment company financial statements, as well as other amendments. The compliance date for the amendments to Regulation S-X was August 1, 2017. The Company does not expect the adoption of the amendments to Regulation S-X to have a material impact on its consolidated financial statements and disclosures. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”). ASU 2017-01 intends to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. Under the current implementation guidance in Topic 805, there are three elements of a business: inputs, processes, and outputs. While an integrated set of assets and activities, collectively referred to as a “set,” that is a business usually has outputs, outputs are not required to be present. ASU 2017-01 provides a screen to determine when a set is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. ASU 2017-01 will be effective for public business entities in fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. Management is currently evaluating the impact of this change will have on the Company’s consolidated financial statements and disclosures. |
Investment and Fair Value
Investment and Fair Value | 6 Months Ended |
Jun. 30, 2017 | |
Investments [Abstract] | |
Investments And Fair Value Measurements [Text Block] | Note 3. Investment and Fair Value Equity Investment in Terra Property Trust The Company invests substantially all of its equity capital in the purchase of common shares of Terra Property Trust and its primary investment position is the common shares of Terra Property Trust. The following table presents a summary of the Company’s investment at June 30, 2017 and December 31, 2016 : June 30, 2017 December 31, 2016 Investment Cost Fair Value % of Net Assets Cost Fair Value % of Net Assets 14,912,990 common shares of Terra Property Trust, Inc. $ 286,148,649 $ 285,591,393 100.1 % $ 291,468,567 $ 290,419,317 100.3 % For the three months ended June 30, 2017 and 2016 , the Company received approximately $7.8 million and $12.3 million of dividends from Terra Property Trust, respectively, of which $2.7 million and $0.5 million was a return of capital, respectively. For the six months ended June 30, 2017 and 2016 , the Company received approximately $16.6 million and $15.7 million of dividends from Terra Property Trust, respectively, of which $5.3 million and $0.5 million was a return of capital, respectively. The following tables present the summarized financial information of Terra Property Trust: June 30, 2017 December 31, 2016 Carrying value of investments $ 372,332,464 $ 330,683,840 Other assets 71,707,974 53,966,401 Total assets 444,040,438 384,650,241 Mortgage loan payable and obligations under participation agreements (112,475,848 ) (66,855,038 ) Accounts payable, accrued expenses and other liabilities (45,300,395 ) (26,203,277 ) Total liabilities (157,776,243 ) (93,058,315 ) Stockholder’s equity $ 286,264,195 $ 291,591,926 Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Revenues $ 8,263,429 $ 12,085,962 $ 18,545,597 $ 22,987,138 Expenses (3,119,142 ) (4,207,899 ) (7,781,178 ) (7,909,500 ) Realized gain on investments 4,500 132,795 489,960 140,375 Net income $ 5,148,787 $ 8,010,858 $ 11,254,379 $ 15,218,013 Fair Value Measurements The Company adopted the provisions of ASC 820, Fair Value Measurement (“ASC 820”), which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC 820 established a fair value hierarchy that prioritizes and ranks the level of market price observability used in measuring investments at fair value. Market price observability is impacted by a number of factors, including the type of investment, the characteristics specific to the investment, and the state of the marketplace (including the existence and transparency of transactions between market participants). Investments with readily available, actively quoted prices or for which fair value can be measured from actively quoted prices in an orderly market will generally have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Investments measured and reported at fair value are classified and disclosed into one of the following categories based on the inputs as follows: Level 1 — Quoted prices (unadjusted) in active markets for identical assets and liabilities that the Company has the ability to access. Level 2 — Pricing inputs are other than quoted prices in active markets, including, but not limited to, quoted prices for similar assets and liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market corroborated inputs. Level 3 — Significant unobservable inputs are based on the best information available in the circumstances, to the extent observable inputs are not available, including the Company’s own assumptions used in determining the fair value of investments. Fair value for these investments are determined using valuation methodologies that consider a range of factors, including but not limited to the price at which the investment was acquired, the nature of the investment, local market conditions, trading values on public exchanges for comparable securities, current and projected operating performance, and financing transactions subsequent to the acquisition of the investment. The inputs into the determination of fair value require significant management judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment. Assets and Liabilities Reported at Fair Value The following table summarizes the Company’s equity investment in Terra Property Trust at fair value on a recurring basis as of June 30, 2017 and December 31, 2016 : June 30, 2017 Fair Value Measurements Level 1 Level 2 Level 3 Total Investment: Equity investment in Terra Property Trust $ — $ — $ 285,591,393 $ 285,591,393 December 31, 2016 Fair Value Measurements Level 1 Level 2 Level 3 Total Investment: Equity investment in Terra Property Trust $ — $ — $ 290,419,317 $ 290,419,317 Changes in Level 3 investment for the six months ended June 30, 2017 and 2016 were as follows: Equity Investment in Terra Property Trust Six Months Ended June 30, 2017 2016 Beginning balance $ 290,419,317 $ — Shares of Terra Property Trust common stock received in exchange for the Company’s consolidated portfolio of net assets — 288,259,804 Shares of Terra Property Trust common stock purchased — 10,000,000 Return of capital (5,319,918 ) (498,481 ) Net change in unrealized depreciation on investment 491,994 (670,021 ) Ending balance $ 285,591,393 $ 297,091,302 Net change in unrealized depreciation on investment for the period relating to those Level 3 assets that were still held by the Company $ 491,994 $ (670,021 ) Transfers between levels, if any, are recognized at the beginning of the period in which transfers occur. For the six months ended June 30, 2017 and 2016 , there were no transfers. The Company estimated that its other financial assets and liabilities had fair values that approximated their carrying values at June 30, 2017 and December 31, 2016 due to their short-term nature. Valuation Process for Fair Value Measurement Market quotations are not readily available for the Company’s real estate-related investments through Terra Property Trust, all of which are included in Level 3 of the fair value hierarchy, and therefore these investments are valued utilizing a yield approach, i.e. a discounted cash flow methodology to arrive at an estimate of the fair value of each respective investment in the portfolio using an estimated market yield. In following this methodology, investments are evaluated individually, and management takes into account, in determining the risk-adjusted discount rate for each of the Company’s investments, relevant factors, including available current market data on applicable yields of comparable debt/preferred equity instruments; market credit spreads and yield curves; the investment’s yield; covenants of the investment, including prepayment provisions, the portfolio company’s ability to make payments, its net operating income, debt-service coverage ratio (“DSCR”), the nature, quality, and realizable value of any collateral (and loan-to-value ratio); and the forces that influence the local markets in which the asset (the collateral) is purchased and sold, such as capitalization rates, occupancy rates, rental rates, replacement costs and the anticipated duration of each real estate-related loan investment. The Manager designates a valuation committee to oversee the entire valuation process of the Company’s Level 3 investments. The valuation committee is comprised of members of the Manager’s senior management, deal and portfolio management teams, who meet on a quarterly basis, or more frequently as needed, to review the Company investments being valued as well as the inputs used in the proprietary valuation model. Valuations determined by the valuation committee are supported by pertinent data and, in addition to a proprietary valuation model, are based on market data, industry accepted third-party valuation models and discount rates or other methods the valuation committee deems to be appropriate. The following tables summarize the valuation techniques and significant unobservable inputs used by the Company to value the Level 3 investments as of June 30, 2017 and December 31, 2016 . The tables are not intended to be all-inclusive, but instead identify the significant unobservable inputs relevant to the determination of fair values. Fair Value Primary Valuation Technique Unobservable Inputs June 30, 2017 Asset Category Minimum Maximum Weighted Average Assets: Equity investment in Terra Property Trust $ 285,591,393 Discounted cash flow Discount rate 2.56 % 16.00 % 12.57 % Insert Title Here Fair Value Primary Valuation Technique Unobservable Inputs December 31, 2016 Asset Category Minimum Maximum Weighted Average Assets: Equity investment in Terra Property Trust $ 290,419,317 Discounted cash flow Discount rate 9.09 % 15.96 % 12.19 % |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | Note 4. Related Party Transactions Merger In December 2015, the members approved the merger of Terra Fund 1, Terra Fund 2, Terra Fund 3 and Terra Fund 4 with and into subsidiaries of the Company through a series of separate mergers effective January 1, 2016. Following the Merger, the Company contributed the consolidated portfolio of net assets of the five Terra Funds to Terra Property Trust in exchange for the common shares of Terra Property Trust. Upon completion of the Merger, the Company became the parent company of Terra Funds 1 through 4 and the direct and indirect sole common stockholder of, and began conducting substantially all of its real estate lending business through, Terra Property Trust. Consent Solicitation Terra Capital Markets, LLC (“Terra Capital Markets”), an affiliate of the manager, served as the dealer manager for the consent solicitation on the Merger, and was paid a voting advisory fee of $ 750 per initial unit sold to members in the Terra Funds and a dealer manager fee of 0.5% of the aggregate offering price of the units originally issued by the Terra Funds. Most of these fees were re-allowed to participating dealers. The Terra Funds also incurred costs for legal, accounting, and other professional services in connection with the consent solicitation. For the three and six months ended June 30, 2016 , the Company incurred $0.1 million and $0.4 million of merger transaction costs, respectively. Rights Offering In connection with the Merger, the Company offered existing members of the Terra Funds the opportunity to invest in the Company through purchase of additional membership units (the “Rights Offering”). Terra Capital Markets served as the dealer manager for the sale of the Company’s membership units and received compensation of 3% in selling commission, 1% in dealer manager fees and a 1% broker dealer fee. Most of these fees are re-allowed to independent broker dealers and financial advisors. These fees amounted to approximately $ 1.3 million for the six months ended June 30, 2016 and have been deducted from capital contributions received as selling commissions and dealer manager fees. Operating Agreement The Company entered into an operating agreement, as amended, with the Manager whereby the Manager is responsible for the Company’s day-to-day operations. The operating agreement, as amended is scheduled to terminate on December 31, 2023 unless the Company is dissolved earlier. Starting January 1, 2016, the Company conducts all of its real estate lending business through Terra Property Trust. As such, Terra Property Trust is responsible for management compensation paid and operating expenses reimbursed to the Manager pursuant to a management agreement with the Manager. Due to Terra Property Trust As of June 30, 2017 , there was no amount due to Terra Property Trust. As of December 31, 2016 , approximately $ 0.4 million was due to Terra Property Trust, as reflected on the consolidated statements of financial condition, primarily related to an adjustment to the contribution of the consolidated portfolio of net assets of the five Terra Funds to Terra Property Trust on January 1, 2016. Dividend Income As discussed in Note 3 , for the three months ended June 30, 2017 and 2016 , the Company received approximately $7.8 million and $12.3 million of dividends from Terra Property Trust, respectively, of which $2.7 million and $0.5 million was a return of capital, respectively. For the six months ended June 30, 2017 and 2016 , the Company received approximately $16.6 million and $15.7 million of dividends from Terra Property Trust, respectively, of which $5.3 million and $0.5 million was a return of capital, respectively. |
Significant Risk Factors
Significant Risk Factors | 6 Months Ended |
Jun. 30, 2017 | |
Investments, All Other Investments [Abstract] | |
Financial Instruments Disclosure [Text Block] | Note 5. Significant Risk Factors In the normal course of business, the Company enters into transactions in various financial instruments. The Company’s financial instruments are subject to, but are not limited to, the following risks: Market Risk The Company’s investments through Terra Property Trust are highly illiquid and there is no assurance that the Company will achieve its investment objectives, including targeted returns. Due to the illiquidity of the investments, valuation of the investments may be difficult, as there generally will be no established markets for these investments. As the Company’s investments were carried at fair value with fair value changes recognized in the consolidated statements of operations, all changes in market conditions would directly affect the Company’s members’ capital. Credit Risk Credit risk represents the potential loss that Terra Property Trust would incur if the borrowers failed to perform pursuant to the terms of their obligations to Terra Property Trust. Thus, the value of the underlying collateral, the creditworthiness of the borrower or other counterparty, and the priority of Terra Property Trust’s lien on the borrower’s assets are of importance. Terra Property Trust minimizes its exposure to credit risk by limiting exposure to any one individual borrower and any one asset class. Additionally, Terra Property Trust employs an asset management approach and monitors the portfolio of investments, through, at a minimum, quarterly financial review of property performance including net operating income, loan-to-value ratio, DSCR and the debt yield. Terra Property Trust also requires certain borrowers to establish a cash reserve, as a form of additional collateral, for the purpose of providing for future interest or property-related operating payments. Mezzanine loans and preferred equity investments are subordinate to senior mortgage loans and, therefore, involve a higher degree of risk. In the event of a default, mezzanine loans and preferred equity investments will be satisfied only after the senior lender’s investment is fully recovered. As a result, in the event of a default, Terra Property Trust may not recover all of its investment. The Company maintains all of its cash at financial institutions which, at times, may exceed the amount insured by the Federal Deposit Insurance Corporation. Concentration Risk Terra Property Trust holds real estate related investments. Thus, the investment portfolio of Terra Property Trust may be subject to a more rapid change in value than would be the case if Terra Property Trust maintained a wide diversification among industries, companies and types of investments. The result of such concentration in real estate assets is that a loss in such investments could materially reduce Terra Property Trust’s capital. Liquidity Risk Liquidity risk represents the possibility that the Company may not be able to sell its positions at a reasonable price in times of low trading volume, high volatility and financial stress. Interest Rate Risk Interest rate risk represents the effect from a change in interest rates, which could result in an adverse change in the fair value of Terra Property Trust’s interest-bearing financial instruments. Prepayment Risk Prepayments can either positively or adversely affect the yields on investments. Prepayments on debt instruments, where permitted under the debt documents, are influenced by changes in current interest rates and a variety of economic, geographic and other factors beyond Terra Property Trust’s control, and consequently, such prepayment rates cannot be predicted with certainty. If Terra Property Trust does not collect a prepayment fee in connection with a prepayment or is unable to invest the proceeds of such prepayments received, the yield on the portfolio will decline. In addition, Terra Property Trust may acquire assets at a discount or premium and if the asset does not repay when expected, the anticipated yield may be impacted. Under certain interest rate and prepayment scenarios, Terra Property Trust may fail to recoup fully its cost of acquisition of certain investments. Use of Leverage As part of Terra Property Trust’s investment strategy, Terra Property Trust may borrow and utilize leverage. While borrowing and leverage present opportunities for increasing total return, they may have the effect of potentially creating or increasing losses. Property Acquisitions Terra Property Trust may find it necessary to take possession of collateral including, without limitation, an asset or a business, through a purchase or foreclosure action. Borrowers may resist mortgage foreclosure or sales actions by asserting numerous claims and defenses, which delay both repayments of existing loan investments and acquisition of the collateral and add cost to such actions. There can be no assurance that Terra Property Trust will be able to successfully operate, hold or maintain the collateral in accordance with its expectations. Further, there can be no assurance that there will be a ready market for resale of foreclosed or acquired properties because investments in real estate generally are not liquid and holding periods are difficult to predict. In addition, there may be significant expenditures associated with holding real property, including real estate taxes and maintenance costs. The liquidation proceeds upon sale of the real estate may be less than the amount invested in the loan, and its fair value and such differences could be material. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | Note 6. Commitments and Contingencies The Company enters into contracts that contain a variety of indemnification provisions. The Company’s maximum exposure under these arrangements is unknown; however, the Company has not had prior claims or losses pursuant to these contracts. The Manager has reviewed the Company’s existing contracts and expects the risk of loss to the Company to be remote. The Company is not currently subject to any material legal proceedings and, to the Company’s knowledge, no material legal proceedings are threatened against the Company. From time to time, the Company may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of the Company’s rights under contracts with its portfolio companies. While the outcome of any legal proceedings cannot be predicted with certainty, the Company does not expect that any such proceedings will have a material adverse effect upon its financial condition or results of operations. |
Members' Capital
Members' Capital | 6 Months Ended |
Jun. 30, 2017 | |
Limited Liability Company (LLC) Members' Equity [Abstract] | |
Members' Capital | Note 7. Members’ Capital As of June 30, 2017 and December 31, 2016 , the Company had 6,826.5 units outstanding. The net asset value per unit was $41,812 and $ 42,423 as of June 30, 2017 and December 31, 2016 , respectively. Capital Contributions As of January 31, 2015, the offering period ended and the Company stopped accepting capital contributions. In connection with the Merger between the Terra Funds, original membership units of Terra Funds 1 through 4 were exchanged for 3,206.7 Continuing Income Units (regular units in the Company) and 463.6 Termination Units (membership interest in the Company offered to members of Terra Funds 1 through 4 who wish to enter the liquidation phase of their investments). The Company also offered existing members of the Terra Funds the opportunity to invest in the Company through the Rights Offering. For the six months ended June 30, 2016 , the Company sold 573.3 units and received capital contributions of approximately $25.6 million , net of selling commissions and dealer manager fees. Capital Distributions At the discretion of the Manager, the Company may make distributions from net cash flow from operations, net disposition proceeds, or other cash available for distribution. Distributions are made to holders of Continuing Income Units in proportion to their unit holdings until they receive a return of their initial Deemed Capital Contribution, as defined in the operating agreement, plus a preferred return ranging from 8.5% to 9.0% depending on the historical preferred return applicable to their Terra Fund units, after which time distributions are made 15% to the Manager and 85% to the holders of Continuing Income Units. The preferred return applicable to the Continuing Income Units sold in the Rights Offering is 8.5% . As of June 30, 2017 and December 31, 2016, there was no carried interest. In addition, holders of Termination Units receive monthly distributions at a fixed rate of 6.0% per annum of the Unreturned Invested Capital, as defined in the operating agreement. For the six months ended June 30, 2017 and 2016 , the Company made total capital distribution to non-manager members of $15.5 million and $15.2 million , respectively. Capital Redemptions In the Merger, members of Terra Funds 1 through 4 who wished to enter the liquidation phase of their investments chose to receive Termination Units as merger consideration. These Termination Units will be redeemed on the original expected liquidation dates of the funds. For the six months ended June 30, 2017 , the Company had no redemptions. For the six months ended June 30, 2016 , 161.3 Termination Units of Terra Fund 1 were redeemed for approximately $6.8 million . These Termination Units were redeemed at book value as defined in the amended and restated operating agreement. Additionally, the Company paid $3.4 million to members the Manager was unable to establish their continuation to qualify as “accredited investors” under the Securities Act of 1933, as amended, and to members holding their interests through a qualified ERISA plan to redeem their units. The following table presents a summary of the Termination Units outstanding as of June 30, 2017 : Fund Number of Units Scheduled Redemption Date Terra Fund 3 120.5 September 2017 Terra Fund 4 50.4 July 2018 At the discretion of the Manager, a reserve of 5% of cash from operations may be established in order to repurchase units from non-managing members. The Manager is under no obligation to redeem non-managing members’ units. As of June 30, 2017 and December 31, 2016 , no such reserve was established. Allocation of Income (Loss) Profits and losses are allocated to the members in proportion to the units held in a given calendar year. Member Units Each membership interest through the original offering was offered for a price of $ 50,000 per unit. The membership interests in Terra Funds 1 through 4 were exchanged for units of the Company at a price of $ 43,410 per unit, which was the exchange value per unit of the Company on December 31, 2015, and the units in the Rights Offering was offered at a price of $ 47,000 per unit. The following table provides a roll forward of the units outstanding of the Company for the six months ended June 30, 2017 and 2016: Six Months Ended June 30, 2017 Six Months Ended June 30, 2016 Managing Member Non-Managing Members Total Managing Non-Managing Members Total Units outstanding, beginning of period — 6,826.5 6,826.5 — 2,878.9 2,878.9 Units issued in the Merger — — — — 3,670.4 3,670.4 Units admitted through the Rights Offering — — — — 573.3 573.3 Termination Units redeemed — — — — (161.3 ) (161.3 ) Units outstanding, end of period — 6,826.5 6,826.5 — 6,961.3 6,961.3 |
Financial Highlights
Financial Highlights | 6 Months Ended |
Jun. 30, 2017 | |
Investment Company, Financial Highlights [Abstract] | |
Financial Highlights | Note 8. Financial Highlights The financial highlights represent the per unit operating performance, return and ratios for the non-managing members’ class, taken as a whole, for the six months ended June 30, 2017 and 2016 . These financial highlights consist of the operating performance, the internal rate of return (“IRR”) since inception of the Company, and the expense and net investment income ratios. The IRR, net of all fees and carried interest (if any), is computed based on actual dates of the cash inflows (capital contributions), outflows (capital distributions), and the ending capital at the end of the respective period (residual value) of the non-managing members’ capital account. The following summarizes the Company’s financial highlights for the six months ended June 30, 2017 and 2016 : Six Months Ended June 30, 2017 2016 Per unit operating performance: Net asset value per unit, beginning of period $ 42,423 $ 42,451 Increase in members’ capital from operations (1) : Net investment income 1,596 2,089 Net change in unrealized depreciation on investment 72 (97 ) Total increase in members’ capital from operations 1,668 1,992 Distributions to member (2) : Capital distributions (2,277 ) (2,201 ) Net decrease in members’ capital resulting from distributions (2,277 ) (2,201 ) Capital share transactions: Other (3) (2 ) 185 Net (decrease) increase in members’ capital resulting from capital share transactions (2 ) 185 Net asset value per unit, end of period $ 41,812 42,427 Six Months Ended June 30, 2017 2016 Ratios to average net assets: Expenses 0.12 % 0.24 % Net investment income 3.79 % 5.00 % IRR, beginning of period 5.43 % 0.34 % IRR, end of period 5.99 % 3.54 % _______________ (1) The per unit data was derived by using the weighted average units outstanding during the applicable periods, which were 6,826 units and 6,923 units for the six months ended June 30, 2017 and 2016 , respectively. (2) The per unit data for distributions reflects the actual amount of distributions paid per share during the periods. (3) Represents the impact of the different unit amounts used in calculating per unit data as a result of calculating certain per unit data based upon the weighted average units outstanding during the period and certain per unit data based on the units outstanding as of a period end or transaction date. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | Note 9. Subsequent Events Management has evaluated subsequent events through the date the consolidated financial statements were available to be issued. Management has determined that there are no material events that would require adjustment to, or disclosure in, the Company’s consolidated financial statements. |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and include all of the Company’s accounts and those of its consolidated subsidiaries. The consolidated financial statements reflect all adjustments and reclassifications that, in the opinion of management, are necessary for the fair presentation of the Company’s results of operations and financial condition as of and for the periods presented. All intercompany balances and transactions have been eliminated. The accompanying interim financial statements of the Company and related financial information have been prepared pursuant to the requirements for reporting on Form 10-Q and Articles 6 or 10 of Regulation S-X. The Company is an investment company, as defined under U.S. GAAP, and applies accounting and reporting guidance in accordance with Financial Accounting Standards Board (“FASB”) ASC Topic 946, Financial Services - Investment Companies . |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of gains (losses), income and expenses during the reporting period. Actual results could significantly differ from those estimates. The most significant estimates inherent in the preparation of the Company’s consolidated financial statements is the valuation of investments. |
Equity Investment | Equity Investment in Terra Property Trust Equity investment in Terra Property Trust represents the Company’s equity interest in Terra Property Trust, which was initially recorded at cost. Subsequent to the asset contribution, the equity investment is reported, at each reporting date, at fair value on the consolidated statements of financial condition. Change in fair value is reported in net change in unrealized depreciation on |
Revenue Recognition | Revenue Recognition Revenue is accounted for under ASC 605, Revenue Recognition , which provides among other things that revenue be recognized when there is persuasive evidence an arrangement exists, delivery and services have been rendered, price is fixed and determinable and collectability is reasonably assured. Dividend Income: Dividend income associated with the Company’s ownership of Terra Property Trust is recognized on the record date as declared by Terra Property Trust. Any excess of dividends over Terra Property Trust’s net income are recorded as return of capital. Other Operating Income: All other income is recognized when earned. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments, with original maturities of ninety days or less when purchased, as cash equivalents. Cash and cash equivalents are exposed to concentrations of credit risk. The Company maintains all of its cash at financial institutions which, at times, may exceed the amount insured by the Federal Deposit Insurance Corporation. |
Income Taxes | Income Taxes No provision for U.S. federal and state income taxes has been made in the accompanying consolidated financial statements, as individual members are responsible for their proportionate share of the Company’s taxable income. Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the consolidated financial statements and tax basis assets and liabilities using enacted tax rates in effect for the year in which differences are expected to reverse. Such deferred tax assets and liabilities were not material. The Company did not have any uncertain tax positions that met the recognition or measurement criteria of ASC 740-10-25, Income Taxes , nor did the Company have any unrecognized tax benefits as of the periods presented herein. The Company recognizes interest and penalties, if any, related to unrecognized tax liabilities as income tax expense in its consolidated statements of operations. For the three and six months ended June 30, 2017 and 2016 , the Company did not incur any interest or penalties. Although the Company files federal and state tax returns, its primary tax jurisdiction is federal. The Company’s inception-to-date federal tax years remain subject to examination by the Internal Revenue Service. |
Fair Value Measurement | The Company adopted the provisions of ASC 820, Fair Value Measurement (“ASC 820”), which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC 820 established a fair value hierarchy that prioritizes and ranks the level of market price observability used in measuring investments at fair value. Market price observability is impacted by a number of factors, including the type of investment, the characteristics specific to the investment, and the state of the marketplace (including the existence and transparency of transactions between market participants). Investments with readily available, actively quoted prices or for which fair value can be measured from actively quoted prices in an orderly market will generally have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Investments measured and reported at fair value are classified and disclosed into one of the following categories based on the inputs as follows: Level 1 — Quoted prices (unadjusted) in active markets for identical assets and liabilities that the Company has the ability to access. Level 2 — Pricing inputs are other than quoted prices in active markets, including, but not limited to, quoted prices for similar assets and liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market corroborated inputs. Level 3 — Significant unobservable inputs are based on the best information available in the circumstances, to the extent observable inputs are not available, including the Company’s own assumptions used in determining the fair value of investments. Fair value for these investments are determined using valuation methodologies that consider a range of factors, including but not limited to the price at which the investment was acquired, the nature of the investment, local market conditions, trading values on public exchanges for comparable securities, current and projected operating performance, and financing transactions subsequent to the acquisition of the investment. The inputs into the determination of fair value require significant management judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment. |
New Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). The core principle of the revenue model is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for the goods or services. The Company will adopt this standard on January 1, 2018 using either the retrospective or cumulative effect transition method. The Company does not expect the adoption of ASU 2014-09 to have a material impact on its consolidated financial statements and disclosures. In January 2016, the FASB issued ASU 2016-01, Financial Instruments — Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). ASU 2016-01 retains many current requirements for the classification and measurement of financial instruments; however, it significantly revises an entity’s accounting related to (i) the classification and measurement of investments in equity securities and (ii) the presentation of certain fair value changes for financial liabilities measured at fair value. ASU 2016-01 also amends certain disclosure requirements associated with the fair value of financial instruments. This guidance is effective for the Company beginning on January 1, 2018. Management is currently evaluating the impact these changes will have on the Company’s consolidated financial statements and disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 outlines a new model for accounting by lessees, whereby their rights and obligations under substantially all leases, existing and new, would be capitalized and recorded on the balance sheet. For lessors, however, the accounting remains largely unchanged from the current model, with the distinction between operating and financing leases retained, but updated to align with certain changes to the lessee model and the new revenue recognition standard. The new standard also replaces existing sale-leaseback guidance with a new model applicable to both lessees and lessors. Additionally, the new standard requires extensive quantitative and qualitative disclosures. ASU 2016-02 is effective for U.S. GAAP public companies for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application will be permitted for all entities. The new standard must be adopted using a modified retrospective transition of the new guidance and provides for certain practical expedients. Transition will require application of the new model at the beginning of the earliest comparative period presented. This ASU is not expected to have any impact on the Company’s consolidated financial statements as the Company does not have any lease arrangements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, a Consensus of the FASB’s Emerging Issues Task Force (“ASU 2016-15”). ASU 2016-15 provides guidance on how certain transactions are classified in the statement of cash flows. ASU 2016-15 is effective for annual and interim periods beginning after December 15, 2017. The guidance requires application using a retrospective transition method. The Company does not expect the adoption of ASU 2016-15 to have a material impact on its consolidated financial statements and disclosure. In October 2016, the U.S. Securities and Exchange Commission adopted new rules and amended rules (together, “final rules”) interned to modernize the reporting and disclosure of information by registered investment companies. In part, the final rules amend Regulation S-X and require standardized, enhanced disclosure about derivatives in investment company financial statements, as well as other amendments. The compliance date for the amendments to Regulation S-X was August 1, 2017. The Company does not expect the adoption of the amendments to Regulation S-X to have a material impact on its consolidated financial statements and disclosures. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”). ASU 2017-01 intends to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. Under the current implementation guidance in Topic 805, there are three elements of a business: inputs, processes, and outputs. While an integrated set of assets and activities, collectively referred to as a “set,” that is a business usually has outputs, outputs are not required to be present. ASU 2017-01 provides a screen to determine when a set is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. ASU 2017-01 will be effective for public business entities in fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. Management is currently evaluating the impact of this change will have on the Company’s consolidated financial statements and disclosures. |
Investment and Fair Value (Tabl
Investment and Fair Value (Tables) - Terra Property Trust | 6 Months Ended |
Jun. 30, 2017 | |
Investments | |
Summary Investment Holdings | The following table presents a summary of the Company’s investment at June 30, 2017 and December 31, 2016 : June 30, 2017 December 31, 2016 Investment Cost Fair Value % of Net Assets Cost Fair Value % of Net Assets 14,912,990 common shares of Terra Property Trust, Inc. $ 286,148,649 $ 285,591,393 100.1 % $ 291,468,567 $ 290,419,317 100.3 % |
Summary of financial information | The following tables present the summarized financial information of Terra Property Trust: June 30, 2017 December 31, 2016 Carrying value of investments $ 372,332,464 $ 330,683,840 Other assets 71,707,974 53,966,401 Total assets 444,040,438 384,650,241 Mortgage loan payable and obligations under participation agreements (112,475,848 ) (66,855,038 ) Accounts payable, accrued expenses and other liabilities (45,300,395 ) (26,203,277 ) Total liabilities (157,776,243 ) (93,058,315 ) Stockholder’s equity $ 286,264,195 $ 291,591,926 Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Revenues $ 8,263,429 $ 12,085,962 $ 18,545,597 $ 22,987,138 Expenses (3,119,142 ) (4,207,899 ) (7,781,178 ) (7,909,500 ) Realized gain on investments 4,500 132,795 489,960 140,375 Net income $ 5,148,787 $ 8,010,858 $ 11,254,379 $ 15,218,013 |
Summary of Company's equity investment at fair value on a recurring basis | The following table summarizes the Company’s equity investment in Terra Property Trust at fair value on a recurring basis as of June 30, 2017 and December 31, 2016 : June 30, 2017 Fair Value Measurements Level 1 Level 2 Level 3 Total Investment: Equity investment in Terra Property Trust $ — $ — $ 285,591,393 $ 285,591,393 December 31, 2016 Fair Value Measurements Level 1 Level 2 Level 3 Total Investment: Equity investment in Terra Property Trust $ — $ — $ 290,419,317 $ 290,419,317 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | Changes in Level 3 investment for the six months ended June 30, 2017 and 2016 were as follows: Equity Investment in Terra Property Trust Six Months Ended June 30, 2017 2016 Beginning balance $ 290,419,317 $ — Shares of Terra Property Trust common stock received in exchange for the Company’s consolidated portfolio of net assets — 288,259,804 Shares of Terra Property Trust common stock purchased — 10,000,000 Return of capital (5,319,918 ) (498,481 ) Net change in unrealized depreciation on investment 491,994 (670,021 ) Ending balance $ 285,591,393 $ 297,091,302 Net change in unrealized depreciation on investment for the period relating to those Level 3 assets that were still held by the Company $ 491,994 $ (670,021 ) |
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis, Valuation Techniques | The following tables summarize the valuation techniques and significant unobservable inputs used by the Company to value the Level 3 investments as of June 30, 2017 and December 31, 2016 . The tables are not intended to be all-inclusive, but instead identify the significant unobservable inputs relevant to the determination of fair values. Fair Value Primary Valuation Technique Unobservable Inputs June 30, 2017 Asset Category Minimum Maximum Weighted Average Assets: Equity investment in Terra Property Trust $ 285,591,393 Discounted cash flow Discount rate 2.56 % 16.00 % 12.57 % Insert Title Here Fair Value Primary Valuation Technique Unobservable Inputs December 31, 2016 Asset Category Minimum Maximum Weighted Average Assets: Equity investment in Terra Property Trust $ 290,419,317 Discounted cash flow Discount rate 9.09 % 15.96 % 12.19 % |
Members' Capital (Tables)
Members' Capital (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Limited Liability Company (LLC) Members' Equity [Abstract] | |
Member Capital Termination Units Outstanding | The following table presents a summary of the Termination Units outstanding as of June 30, 2017 : Fund Number of Units Scheduled Redemption Date Terra Fund 3 120.5 September 2017 Terra Fund 4 50.4 July 2018 |
Schedule of Capital Units | Each membership interest through the original offering was offered for a price of $ 50,000 per unit. The membership interests in Terra Funds 1 through 4 were exchanged for units of the Company at a price of $ 43,410 per unit, which was the exchange value per unit of the Company on December 31, 2015, and the units in the Rights Offering was offered at a price of $ 47,000 per unit. The following table provides a roll forward of the units outstanding of the Company for the six months ended June 30, 2017 and 2016: Six Months Ended June 30, 2017 Six Months Ended June 30, 2016 Managing Member Non-Managing Members Total Managing Non-Managing Members Total Units outstanding, beginning of period — 6,826.5 6,826.5 — 2,878.9 2,878.9 Units issued in the Merger — — — — 3,670.4 3,670.4 Units admitted through the Rights Offering — — — — 573.3 573.3 Termination Units redeemed — — — — (161.3 ) (161.3 ) Units outstanding, end of period — 6,826.5 6,826.5 — 6,961.3 6,961.3 |
Financial Highlights (Tables)
Financial Highlights (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Investment Company, Financial Highlights [Abstract] | |
Financial Highlights | The following summarizes the Company’s financial highlights for the six months ended June 30, 2017 and 2016 : Six Months Ended June 30, 2017 2016 Per unit operating performance: Net asset value per unit, beginning of period $ 42,423 $ 42,451 Increase in members’ capital from operations (1) : Net investment income 1,596 2,089 Net change in unrealized depreciation on investment 72 (97 ) Total increase in members’ capital from operations 1,668 1,992 Distributions to member (2) : Capital distributions (2,277 ) (2,201 ) Net decrease in members’ capital resulting from distributions (2,277 ) (2,201 ) Capital share transactions: Other (3) (2 ) 185 Net (decrease) increase in members’ capital resulting from capital share transactions (2 ) 185 Net asset value per unit, end of period $ 41,812 42,427 Six Months Ended June 30, 2017 2016 Ratios to average net assets: Expenses 0.12 % 0.24 % Net investment income 3.79 % 5.00 % IRR, beginning of period 5.43 % 0.34 % IRR, end of period 5.99 % 3.54 % _______________ (1) The per unit data was derived by using the weighted average units outstanding during the applicable periods, which were 6,826 units and 6,923 units for the six months ended June 30, 2017 and 2016 , respectively. (2) The per unit data for distributions reflects the actual amount of distributions paid per share during the periods. (3) Represents the impact of the different unit amounts used in calculating per unit data as a result of calculating certain per unit data based upon the weighted average units outstanding during the period and certain per unit data based on the units outstanding as of a period end or transaction date. |
Business (Details)
Business (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2017USD ($)ExtensionNumber_of_Funds | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
Operation date | Aug. 8, 2013 |
LLC formation state | Delaware |
Gross proceeds of investment | $ 142 |
LLC exit date | Dec. 31, 2023 |
Number of investment funds | Number_of_Funds | 5 |
Number of extension | Extension | 2 |
Minimum | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
Investment in real estate loans | $ 3 |
Percentage of unlevered yields on subordinated positions and levered yields on senior position | 12.00% |
Loans term | 1 year |
Maximum | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
Investment in real estate loans | $ 25 |
Percentage of unlevered yields on subordinated positions and levered yields on senior position | 16.00% |
Loans term | 10 years |
Investment and Fair Value (Narr
Investment and Fair Value (Narratives) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Investments [Abstract] | ||||
Proceeds from Equity Method Investment, Distribution | $ 7,800,000 | $ 12,300,000 | $ 16,600,000 | $ 15,700,000 |
Return of capital on investment | $ 2,700,000 | $ 500,000 | $ 5,319,918 | $ 498,481 |
Investment and Fair Value (Summ
Investment and Fair Value (Summary of the Investments) (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Investments | ||
Cost | $ 286,148,649 | $ 291,468,567 |
Fair Value | $ 285,591,393 | $ 290,419,317 |
Terra Property Trust | Controlled | ||
Investments | ||
Common Stock, Shares, Outstanding | 14,912,990 | 14,912,990 |
Cost | $ 286,148,649 | $ 291,468,567 |
Fair Value | $ 285,591,393 | $ 290,419,317 |
% of Net Assets | 100.10% | 100.30% |
Investment and Fair Value (Su26
Investment and Fair Value (Summary of Financial Information of Terra Property Trust) (Details) - Terra Property Trust - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Investment | ||
Carrying value of investments | $ 372,332,464 | $ 330,683,840 |
Other assets | 71,707,974 | 53,966,401 |
Total assets | 444,040,438 | 384,650,241 |
Mortgage loan payable and obligations under participation agreements | (112,475,848) | (66,855,038) |
Accounts payable, accrued expenses and other liabilities | (45,300,395) | (26,203,277) |
Total liabilities | (157,776,243) | (93,058,315) |
Stockholder’s equity | $ 286,264,195 | $ 291,591,926 |
Investment and Fair Value (Su27
Investment and Fair Value (Summary of Financial Information 2) (Details) - Terra Property Trust - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Investments | ||||
Revenues | $ 8,263,429 | $ 12,085,962 | $ 18,545,597 | $ 22,987,138 |
Expenses | (3,119,142) | (4,207,899) | (7,781,178) | (7,909,500) |
Realized gain on investments | 4,500 | 132,795 | 489,960 | 140,375 |
Net income | $ 5,148,787 | $ 8,010,858 | $ 11,254,379 | $ 15,218,013 |
Investment and Fair Value (Equi
Investment and Fair Value (Equity Investment at Fair Value on a recurring basis) (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | $ 285,591,393 | $ 290,419,317 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | $ 285,591,393 | $ 290,419,317 |
Investments and Fair Value (Cha
Investments and Fair Value (Changes in Level 3) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Shares of Terra Property Trust common stock purchased | $ 0 | $ 10,000,000 | ||
Return of capital | $ (2,700,000) | $ (500,000) | (5,319,918) | (498,481) |
Net change in unrealized depreciation on investment | (50,870) | (1,694,489) | 491,994 | (670,021) |
Level 3 | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | 290,419,317 | 0 | ||
Shares of Terra Property Trust common stock received in exchange for the Company’s consolidated portfolio of net assets | 0 | 288,259,804 | ||
Shares of Terra Property Trust common stock purchased | 0 | 10,000,000 | ||
Return of capital | (5,319,918) | (498,481) | ||
Net change in unrealized depreciation on investment | 491,994 | (670,021) | ||
Ending balance | $ 285,591,393 | $ 297,091,302 | 285,591,393 | 297,091,302 |
Net Change in unrealized depreciation on investment | $ 491,994 | $ (670,021) | ||
Fair Value, Level 3 Transfers in, Description | None | None | ||
Fair Value, Level 3 Transfers out, Description | None | None |
Investment and Fair Value (Valu
Investment and Fair Value (Valuation techniques and significant unobservable inputs) (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Dec. 31, 2016 | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Fair Value | $ 285,591,393 | $ 290,419,317 |
Level 3 | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Fair Value | $ 285,591,393 | $ 290,419,317 |
Primary Valuation Techniques | Discounted cash flow | Discounted cash flow |
Level 3 | Minimum | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Discount rate | 2.56% | 9.09% |
Level 3 | Maximum | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Discount rate | 16.00% | 15.96% |
Level 3 | Weighted Average | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Discount rate | 12.57% | 12.19% |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Investments | |||||
Merger transaction fees | $ 0 | $ 71,835 | $ 0 | $ 384,027 | |
Percent Compensation In Selling Commision | 3.00% | ||||
Percent In Manager Fees | 1.00% | ||||
Percent In Broker Dealer Fee | 1.00% | ||||
Fees and Commissions | $ 1,300,000 | ||||
LLC exit date | Dec. 31, 2023 | ||||
Due to Related Parties | 0 | $ 0 | $ 438,249 | ||
Proceeds from Equity Method Investment, Distribution, Return of Capital | 2,700,000 | 500,000 | 5,319,918 | 498,481 | |
Proceeds from Equity Method Investment, Distribution | $ 7,800,000 | $ 12,300,000 | $ 16,600,000 | $ 15,700,000 | |
Terra Capital Markets LLC | |||||
Investments | |||||
Voting Advisory Fee Per Unit | $ 750 | ||||
Percent Of Aggregate Offering Price | 0.50% |
Members' Capital Members' Capit
Members' Capital Members' Capital (Narratives) (Details) - USD ($) | 6 Months Ended | ||||
Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | Jan. 01, 2016 | Dec. 31, 2015 | |
Members Capital | |||||
Common Unit, Outstanding | 6,826.5 | 6,961.3 | 6,826.5 | 2,878.9 | |
Net Asset Value Per Share | $ 41,812 | $ 42,423 | |||
Proceeds from capital contributions, net of selling commissions and dealer manager fees | $ 0 | $ 25,598,304 | |||
Number Of Termination Units | 0 | 161.3 | |||
Carried interest | $ 0 | $ 0 | |||
Total Capital Distribution to non-manager members | 15,545,394 | $ 15,239,658 | |||
Termination Units redemption value | $ 0 | $ 10,198,413 | |||
Minimum | |||||
Members Capital | |||||
Percent of distribution made to members depends on the historical preferred return applicale to Terra Fund units | 8.50% | 8.50% | |||
Maximum | |||||
Members Capital | |||||
Percent of distribution made to members depends on the historical preferred return applicale to Terra Fund units | 9.00% | 9.00% | |||
Continuing Income Units Holder | |||||
Members Capital | |||||
Common Unit, Outstanding | 3,206.7 | ||||
Distribution Percent | 85.00% | 85.00% | |||
Shares Issued, Price Per Share | $ 43,410 | ||||
Termination Units Holder | |||||
Members Capital | |||||
Common Unit, Outstanding | 463.6 | ||||
Percent of distribution made to members depends on the historical preferred return applicale to Terra Fund units | 6.00% | 6.00% | |||
Manager | |||||
Members Capital | |||||
Distribution Percent | 15.00% | 15.00% | |||
Non-managing Member | |||||
Members Capital | |||||
Cash Reserve For Member Units Repurchase | $ 0 | $ 0 | |||
Percent Of Cash Repurchase Capital Units | 5.00% | ||||
Rights Offering | |||||
Members Capital | |||||
Common Units Issued During Period | 0 | 573.3 | |||
Proceeds from capital contributions, net of selling commissions and dealer manager fees | $ 25,600,000 | ||||
Shares Issued, Price Per Share | $ 47,000 | ||||
Rights Offering | Continuing Income Units Holder | |||||
Members Capital | |||||
Percent of distribution made to members depends on the historical preferred return applicale to Terra Fund units | 8.50% | 8.50% | |||
Initial Offering | |||||
Members Capital | |||||
Shares Issued, Price Per Share | $ 50,000 | ||||
Non Convertible | |||||
Members Capital | |||||
Termination Units redemption value | $ 3,400,000 | ||||
Terra Fund 1 | Termination Units Holder | |||||
Members Capital | |||||
Number Of Termination Units | 0 | 161.3 | |||
Termination Units redemption value | $ 0 | $ 6,800,000 | |||
Terra Fund 3 | Termination Units Holder | |||||
Members Capital | |||||
Common Unit, Outstanding | 120.5 |
Members' Capital Members' Cap33
Members' Capital Members' Capital (Summary of the Termination Units Outstanding) (Details) - shares | 6 Months Ended | ||||
Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 | Jan. 01, 2016 | Dec. 31, 2015 | |
Members Capital | |||||
Common Unit, Outstanding | 6,826.5 | 6,826.5 | 6,961.3 | 2,878.9 | |
Continuing Income Units Holder | |||||
Members Capital | |||||
Common Unit, Outstanding | 3,206.7 | ||||
Termination Units Holder | |||||
Members Capital | |||||
Common Unit, Outstanding | 463.6 | ||||
Terra Fund 3 | Termination Units Holder | |||||
Members Capital | |||||
Common Unit, Outstanding | 120.5 | ||||
Member Capital Units Redemption Date | 2017-09 | ||||
Terra Fund 4 | Termination Units Holder | |||||
Members Capital | |||||
Common Unit, Outstanding | 50.4 | ||||
Member Capital Units Redemption Date | 2018-07 |
Members' Capital Members' Cap34
Members' Capital Members' Capital (Members' Units Outstanding) (Details) - shares | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Members Capital | ||
Units outstanding, beginning of period | 6,826.5 | 2,878.9 |
Termination Units redeemed | 0 | (161.3) |
Units outstanding, end of period | 6,826.5 | 6,961.3 |
Managing Member | ||
Members Capital | ||
Units outstanding, beginning of period | 0 | 0 |
Termination Units redeemed | 0 | 0 |
Units outstanding, end of period | 0 | 0 |
Non-managing Member | ||
Members Capital | ||
Units outstanding, beginning of period | 6,826.5 | 2,878.9 |
Termination Units redeemed | 0 | (161.3) |
Units outstanding, end of period | 6,826.5 | 6,961.3 |
Merger | ||
Members Capital | ||
Units issued | 0 | 3,670.4 |
Merger | Managing Member | ||
Members Capital | ||
Units issued | 0 | 0 |
Merger | Non-managing Member | ||
Members Capital | ||
Units issued | 0 | 3,670.4 |
Rights Offering | ||
Members Capital | ||
Units issued | 0 | 573.3 |
Rights Offering | Managing Member | ||
Members Capital | ||
Units issued | 0 | 0 |
Rights Offering | Non-managing Member | ||
Members Capital | ||
Units issued | 0 | 573.3 |
Financial Highlights (Details)
Financial Highlights (Details) - $ / shares | 6 Months Ended | 29 Months Ended | 35 Months Ended | 41 Months Ended | 47 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2016 | Dec. 31, 2016 | Jun. 30, 2017 | ||
Investment Company, Financial Highlights [Roll Forward] | |||||||
Net asset value per unit | $ 42,423 | ||||||
Capital share transactions: | |||||||
Net asset value per unit | 41,812 | $ 42,423 | $ 41,812 | ||||
Non-managing Member Class | |||||||
Investment Company, Financial Highlights [Roll Forward] | |||||||
Net asset value per unit | 42,423 | $ 42,451 | |||||
Increase in members’ capital from operations (1): | |||||||
Net investment income | [1] | 1,596 | 2,089 | ||||
Net change in unrealized depreciation on investment | [1] | 72 | (97) | ||||
Total increase in members’ capital from operations | [1] | 1,668 | 1,992 | ||||
Distributions to member (2): | |||||||
Capital distributions | [2] | (2,277) | (2,201) | ||||
Net decrease in members’ capital resulting from distributions | [2] | (2,277) | (2,201) | ||||
Capital share transactions: | |||||||
Other (3) | [3] | (2) | 185 | ||||
Net (decrease) increase in members’ capital resulting from capital share transactions | (2) | 185 | |||||
Net asset value per unit | $ 41,812 | $ 42,427 | $ 42,451 | $ 42,427 | $ 42,423 | $ 41,812 | |
Ratios to average net assets: | |||||||
Expenses | 0.12% | 0.24% | |||||
Net investment income | 3.79% | 5.00% | |||||
Internal Rate of Return since Inception | 0.34% | 3.54% | 5.43% | 5.99% | |||
Weighted Average Membership Units Outstanding | 6,826 | 6,923 | |||||
[1] | The per unit data was derived by using the weighted average units outstanding during the applicable periods, which were 6,826 units and 6,923 units for the six months ended June 30, 2017 and 2016, respectively. | ||||||
[2] | The per unit data for distributions reflects the actual amount of distributions paid per share during the periods. | ||||||
[3] | Represents the impact of the different unit amounts used in calculating per unit data as a result of calculating certain per unit data based upon the weighted average units outstanding during the period and certain per unit data based on the units outstanding as of a period end or transaction date. |