Document Entity Information Doc
Document Entity Information Document - USD ($) | 9 Months Ended | ||
Sep. 30, 2018 | Nov. 09, 2018 | Jun. 30, 2018 | |
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 | ||
Document Type | 10-Q | ||
Document Period End Date | Sep. 30, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | Q3 | ||
Amendment Flag | false | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Common Stock, Shares Outstanding | 6,643.4 | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 0 |
Consolidated Statements of Fina
Consolidated Statements of Financial Condition - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Assets | ||
Equity investment in Terra Property Trust, Inc. at fair value — controlled (cost of $268,335,112 and $275,401,972, respectively) | $ 268,006,493 | $ 275,428,953 |
Cash and cash equivalents | 130,899 | 212,366 |
Other assets | 20,551 | 3,864 |
Total assets | 268,157,943 | 275,645,183 |
Liabilities | ||
Accounts payable and accrued expenses | 165,048 | 95,728 |
Total liabilities | 165,048 | 95,728 |
Commitments and Contingencies | ||
Members' capital: | ||
Managing member | 0 | 0 |
Non-managing members | 267,992,895 | 275,549,455 |
Total members’ capital | 267,992,895 | 275,549,455 |
Total liabilities and members' capital | $ 268,157,943 | $ 275,645,183 |
Consolidated Statements of Fi_2
Consolidated Statements of Financial Condition (Parentheticals) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Investment Owned, at Cost | $ 268,335,112 | $ 275,401,972 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Investment income - controlled | ||||
Dividend income | $ 5,487,805 | $ 4,448,792 | $ 17,829,718 | $ 15,703,171 |
Investment income | ||||
Other operating income | 137 | 111 | 1,140 | 1,064 |
Total investment income | 5,487,942 | 4,448,903 | 17,830,858 | 15,704,235 |
Operating expenses | ||||
Professional fees | 126,966 | 104,100 | 334,802 | 431,465 |
Other | 2,891 | 3,448 | 10,832 | 35,761 |
Total operating expenses | 129,857 | 107,548 | 345,634 | 467,226 |
Net investment income | 5,358,085 | 4,341,355 | 17,485,224 | 15,237,009 |
Net change in unrealized (depreciation) appreciation on investment — controlled | (179,846) | 428,032 | (355,600) | 920,026 |
Net increase in members’ capital resulting from operations | $ 5,178,239 | $ 4,769,387 | $ 17,129,624 | $ 16,157,035 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Members' Capital - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Changes in Members' Capital [Roll Forward] | ||||
Balance, beginning of period | $ 275,549,455 | $ 289,586,404 | ||
Capital distributions | (22,497,394) | (23,127,464) | ||
Capital redemptions | (2,188,790) | (5,303,174) | ||
Increase in members’ capital resulting from operations: | ||||
Net investment income | $ 5,358,085 | $ 4,341,355 | 17,485,224 | 15,237,009 |
Net change in unrealized depreciation or appreciation on investment | (179,846) | 428,032 | (355,600) | 920,026 |
Net increase in members’ capital resulting from operations | 5,178,239 | 4,769,387 | 17,129,624 | 16,157,035 |
Balance, end of period | 267,992,895 | 277,312,801 | 267,992,895 | 277,312,801 |
Managing Member | ||||
Changes in Members' Capital [Roll Forward] | ||||
Balance, beginning of period | 0 | 0 | ||
Capital distributions | 0 | 0 | ||
Capital redemptions | 0 | 0 | ||
Increase in members’ capital resulting from operations: | ||||
Net investment income | 0 | 0 | ||
Net change in unrealized depreciation or appreciation 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 | 275,549,455 | 289,586,404 | ||
Capital distributions | (22,497,394) | (23,127,464) | ||
Capital redemptions | (2,188,790) | (5,303,174) | ||
Increase in members’ capital resulting from operations: | ||||
Net investment income | 17,485,224 | 15,237,009 | ||
Net change in unrealized depreciation or appreciation on investment | (355,600) | 920,026 | ||
Net increase in members’ capital resulting from operations | 17,129,624 | 16,157,035 | ||
Balance, end of period | $ 267,992,895 | $ 277,312,801 | $ 267,992,895 | $ 277,312,801 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Cash Flows [Abstract] | ||
Net increase in members’ capital resulting from operations | $ 17,129,624 | $ 16,157,035 |
Adjustments to reconcile net increase in members’ capital resulting from operations to net cash provided by operating activities: | ||
Return of capital on investment | 7,066,860 | 14,012,486 |
Net change in unrealized depreciation (appreciation) on investment | 355,600 | (920,026) |
Changes in operating assets and liabilities: | ||
(Increase) decrease in other assets | (16,716) | 898 |
Increase (decrease) in accounts payable and accrued expenses | 69,320 | (251,702) |
Decrease in due to Terra Property Trust, Inc. | 0 | (463,249) |
Net cash provided by operating activities | 24,604,688 | 28,535,442 |
Cash flows from financing activities: | ||
Distributions paid | (22,497,365) | (23,129,410) |
Payments for capital redemptions | (2,188,790) | (5,279,768) |
Net cash used in financing activities | (24,686,155) | (28,409,178) |
Net (decrease) increase in cash and cash equivalents | (81,467) | 126,264 |
Cash and cash equivalents at beginning of period | 212,366 | 41,520 |
Cash and cash equivalents at end of period | 130,899 | 167,784 |
Supplemental Disclosure of Cash Flows Information: | ||
Cash paid for income taxes | 0 | 0 |
Cash paid for interest | $ 0 | $ 0 |
Consolidated Scheules of Invest
Consolidated Scheules of Investments Statement - USD ($) | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Dec. 31, 2017 | ||||
Schedule of Investments | |||||
Common Stock, Shares, Outstanding | 14,912,990 | 14,912,990 | |||
Cost | $ 268,335,112 | $ 275,401,972 | |||
Fair Value | 268,006,493 | 275,428,953 | |||
Terra Property Trust | |||||
Schedule of Investments | |||||
Real estate | 56,756,051 | 0 | |||
Terra Property Trust | US | |||||
Schedule of Investments | |||||
Principal Amount | 337,134,835 | 353,060,995 | |||
Cost | 339,991,182 | 357,093,730 | |||
Fair Value | $ 339,339,196 | [1] | $ 357,234,672 | [2] | |
% of Members Capital | 126.60% | [3] | 130.00% | [4] | |
Allowance for loan losses | $ (375,603) | ||||
Terra Property Trust | Real Estate | |||||
Schedule of Investments | |||||
First mortgage | 54,000,000 | ||||
Real estate | 56,800,000 | ||||
Mortgage loan payable | 44,800,000 | ||||
Net real estate investment | $ 12,000,000 | ||||
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 | $ 268,335,112 | $ 275,401,972 | |||
Fair Value | $ 268,006,493 | $ 275,428,953 | |||
% of Members Capital | 100.00% | 100.00% | |||
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 | $ 351,260,995 | ||||
Cost | 355,289,015 | ||||
Fair Value | [2] | $ 355,427,169 | |||
% of Members Capital | [4] | 129.10% | |||
Terra Property Trust | Non-controlled | US | AL | |||||
Schedule of Investments | |||||
Principal Amount | $ 3,700,000 | ||||
Cost | 3,772,716 | ||||
Fair Value | [2] | $ 3,736,507 | |||
% of Members Capital | [4] | 1.40% | |||
Terra Property Trust | Non-controlled | US | CA | |||||
Schedule of Investments | |||||
Principal Amount | $ 110,957,267 | ||||
Cost | 112,268,669 | ||||
Fair Value | [2] | $ 112,051,726 | |||
% of Members Capital | [4] | 40.80% | |||
Terra Property Trust | Non-controlled | US | GA | |||||
Schedule of Investments | |||||
Principal Amount | $ 31,000,000 | ||||
Cost | 31,423,030 | ||||
Fair Value | [2] | $ 31,294,748 | |||
% of Members Capital | [4] | 11.40% | |||
Terra Property Trust | Non-controlled | US | FL | |||||
Schedule of Investments | |||||
Principal Amount | $ 52,132,523 | ||||
Cost | 52,593,063 | ||||
Fair Value | [2] | $ 52,614,536 | |||
% of Members Capital | [4] | 19.10% | |||
Terra Property Trust | Non-controlled | US | NY | |||||
Schedule of Investments | |||||
Principal Amount | $ 56,102,764 | ||||
Cost | 56,561,816 | ||||
Fair Value | [2] | $ 56,616,887 | |||
% of Members Capital | [4] | 20.50% | |||
Terra Property Trust | Non-controlled | US | TX | |||||
Schedule of Investments | |||||
Principal Amount | $ 8,631,243 | ||||
Cost | 8,722,871 | ||||
Fair Value | [2] | $ 8,724,485 | |||
% of Members Capital | [4] | 3.20% | |||
Terra Property Trust | Non-controlled | Mezzanine Loan | US | |||||
Schedule of Investments | |||||
Principal Amount | $ 120,400,703 | ||||
Cost | 121,655,948 | ||||
Fair Value | [1] | $ 121,251,127 | |||
% of Members Capital | [3] | 45.30% | |||
Terra Property Trust | Non-controlled | Mezzanine Loan | 150 Blackstone River Road, LLC | US | MA | Industrial | |||||
Schedule of Investments | |||||
Interest Rate | 8.50% | 8.50% | |||
Exit Fee | 0.00% | ||||
Acquisition Date | Sep. 21, 2017 | Sep. 21, 2017 | |||
Maturity Date | Sep. 6, 2027 | Sep. 6, 2027 | |||
Principal Amount | $ 7,000,000 | $ 7,000,000 | |||
Cost | 7,000,000 | 7,000,000 | |||
Fair Value | $ 6,799,810 | [1] | $ 7,000,000 | [2] | |
% of Members Capital | 2.50% | [3] | 2.50% | [4] | |
Terra Property Trust | Non-controlled | Mezzanine Loan | 140 Schermerhorn Street Mezz LLC | US | NY | Hotel | |||||
Schedule of Investments | |||||
Interest Rate | 12.00% | [5],[6],[7] | 12.00% | [8],[9],[10] | |
Exit Fee | [5],[6],[7] | 1.00% | |||
Acquisition Date | Nov. 16, 2016 | [5],[6],[7] | Nov. 16, 2016 | [8],[9],[10] | |
Maturity Date | Dec. 1, 2019 | [5],[6],[7] | Dec. 1, 2019 | [8],[9],[10] | |
Principal Amount | $ 15,000,000 | [5],[6],[7] | $ 15,000,000 | [8],[9],[10] | |
Cost | 15,130,200 | [5],[6],[7] | 15,118,900 | [8],[9],[10] | |
Fair Value | $ 15,174,078 | [1],[5],[6],[7] | $ 15,131,264 | [2],[8],[9],[10] | |
% of Members Capital | 5.70% | [3],[5],[6],[7] | 5.50% | [4],[8],[9],[10] | |
Terra Property Trust | Non-controlled | Mezzanine Loan | 221 W 17th Street Owner LLC | US | NY | Condominium | |||||
Schedule of Investments | |||||
Interest Rate | [6],[7],[11] | 12.80% | |||
Exit Fee | [6],[7],[11] | 1.00% | |||
Acquisition Date | [6],[7],[11] | Jan. 19, 2018 | |||
Maturity Date | [6],[7],[11] | Mar. 31, 2019 | |||
Principal Amount | [6],[7],[11] | $ 4,700,000 | |||
Cost | [6],[7],[11] | 4,744,073 | |||
Fair Value | [1],[6],[7],[11] | $ 4,745,028 | |||
% of Members Capital | [3],[6],[7],[11] | 1.80% | |||
Terra Property Trust | Non-controlled | Mezzanine Loan | 2539 Morse, LLC | US | CA | Student Housing | |||||
Schedule of Investments | |||||
Interest Rate | 11.00% | [6],[7],[11] | 11.00% | ||
Exit Fee | [6],[7],[11] | 1.00% | |||
Acquisition Date | Oct. 20, 2017 | [6],[7],[11] | Oct. 20, 2017 | ||
Maturity Date | Nov. 1, 2020 | [6],[7],[11] | Nov. 1, 2020 | ||
Principal Amount | $ 4,666,666 | [6],[7],[11] | $ 2,333,333 | ||
Cost | 4,703,686 | [6],[7],[11] | 2,350,365 | ||
Fair Value | $ 4,708,032 | [1],[6],[7],[11] | $ 2,352,364 | [2] | |
% of Members Capital | 1.80% | [3],[6],[7],[11] | 0.90% | [4] | |
Terra Property Trust | Non-controlled | Mezzanine Loan | 37 Gables Member LLC | US | FL | Multifamily | |||||
Schedule of Investments | |||||
Interest Rate | 13.00% | [7],[11] | 13.00% | [10],[12] | |
Exit Fee | [7],[11] | 1.00% | |||
Acquisition Date | Jun. 16, 2016 | [7],[11] | Jun. 16, 2016 | [10],[12] | |
Maturity Date | Jun. 16, 2019 | [7],[11] | Jun. 16, 2019 | [10],[12] | |
Principal Amount | $ 5,750,000 | [7],[11] | $ 5,750,000 | [10],[12] | |
Cost | 5,802,382 | [7],[11] | 5,797,477 | [10],[12] | |
Fair Value | $ 5,806,875 | [1],[7],[11] | $ 5,804,127 | [2],[10],[12] | |
% of Members Capital | 2.20% | [3],[7],[11] | 2.10% | [4],[10],[12] | |
Terra Property Trust | Non-controlled | Mezzanine Loan | 575 CAD I LLC | US | NY | Condominium | |||||
Schedule of Investments | |||||
Interest Rate | [6],[7],[11] | 14.50% | |||
Exit Fee | [6],[7],[11] | 1.00% | |||
Acquisition Date | Jan. 31, 2017 | [6],[7],[11] | Jan. 31, 2017 | ||
Maturity Date | Jul. 31, 2019 | [6],[7],[11] | Aug. 1, 2019 | ||
Principal Amount | $ 14,517,192 | [6],[7],[11] | $ 12,512,370 | ||
Cost | 14,641,091 | [6],[7],[11] | 12,609,885 | ||
Fair Value | $ 14,644,145 | [1],[6],[7],[11] | $ 12,612,289 | [2] | |
% of Members Capital | 5.50% | [3],[6],[7],[11] | 4.60% | [4] | |
Terra Property Trust | Non-controlled | Mezzanine Loan | 575 CAD I LLC | US | NY | Condominium | Current | |||||
Schedule of Investments | |||||
Current rate | 12.00% | [6],[7],[11] | 12.00% | ||
Terra Property Trust | Non-controlled | Mezzanine Loan | 575 CAD I LLC | US | NY | Condominium | PIK | |||||
Schedule of Investments | |||||
Deferred rate | 2.50% | [6],[7],[11] | 2.50% | ||
Terra Property Trust | Non-controlled | Mezzanine Loan | Austin H. I. Owner LLC | US | TX | Hotel | |||||
Schedule of Investments | |||||
Interest Rate | 12.50% | [6],[7] | 12.50% | [9],[10] | |
Exit Fee | [6],[7] | 1.00% | |||
Acquisition Date | Sep. 30, 2015 | [6],[7] | Sep. 30, 2015 | [9],[10] | |
Maturity Date | Oct. 6, 2020 | [6],[7] | Oct. 6, 2020 | [9],[10] | |
Principal Amount | $ 3,500,000 | [6],[7] | $ 3,500,000 | [9],[10] | |
Cost | 3,527,143 | [6],[7] | 3,524,694 | [9],[10] | |
Fair Value | $ 3,505,642 | [1],[6],[7] | $ 3,527,956 | [2],[9],[10] | |
% of Members Capital | 1.30% | [3],[6],[7] | 1.30% | [4],[9],[10] | |
Terra Property Trust | Non-controlled | Mezzanine Loan | CGI 1100 Biscayne Management Holdco, LLC | US | FL | Hotel | |||||
Schedule of Investments | |||||
Interest Rate | [5],[7],[13] | 16.00% | |||
Exit Fee | [5],[7],[13] | 1.00% | |||
Acquisition Date | Nov. 17, 2017 | [5],[7],[13] | Nov. 17, 2017 | [8],[10],[14] | |
Maturity Date | May 17, 2019 | [5],[7],[13] | May 17, 2019 | [8],[10],[14] | |
Principal Amount | $ 23,450,016 | [5],[7],[13] | $ 24,522,523 | [8],[10],[14] | |
Cost | 23,653,730 | [5],[7],[13] | 24,717,857 | [8],[10],[14] | |
Fair Value | $ 23,672,509 | [1],[5],[7],[13] | $ 24,734,246 | [2],[8],[10],[14] | |
% of Members Capital | 8.80% | [3],[5],[7],[13] | 9.00% | [4],[8],[10],[14] | |
Terra Property Trust | Non-controlled | Mezzanine Loan | CGI 1100 Biscayne Management Holdco, LLC | US | FL | Hotel | Current | |||||
Schedule of Investments | |||||
Current rate | 12.00% | [5],[7],[13] | 12.00% | [8],[10],[14] | |
Terra Property Trust | Non-controlled | Mezzanine Loan | CGI 1100 Biscayne Management Holdco, LLC | US | FL | Hotel | PIK | |||||
Schedule of Investments | |||||
Deferred rate | 4.00% | [5],[7],[13] | 4.00% | [8],[10],[14] | |
Terra Property Trust | Non-controlled | Mezzanine Loan | High Pointe Mezzanine Investments, LLC | US | SC | Student Housing | |||||
Schedule of Investments | |||||
Interest Rate | 13.00% | [7],[11] | 13.00% | [10],[12] | |
Exit Fee | [7],[11] | 1.00% | |||
Acquisition Date | Dec. 27, 2013 | [7],[11] | Dec. 27, 2013 | [10],[12] | |
Maturity Date | Jan. 6, 2024 | [7],[11] | Jan. 6, 2024 | [10],[12] | |
Principal Amount | $ 3,000,000 | [7],[11] | $ 3,000,000 | [10],[12] | |
Cost | 3,337,345 | [7],[11] | 3,381,980 | [10],[12] | |
Fair Value | $ 3,059,075 | [1],[7],[11] | $ 3,416,021 | [2],[10],[12] | |
% of Members Capital | 1.10% | [3],[7],[11] | 1.20% | [4],[10],[12] | |
Terra Property Trust | Non-controlled | Mezzanine Loan | Kingsport 925-Mezz LLC | US | TN | Multifamily | |||||
Schedule of Investments | |||||
Interest Rate | 13.00% | [7],[11] | 13.00% | [10],[12] | |
Exit Fee | [7],[11] | 1.00% | |||
Acquisition Date | Jan. 6, 2014 | [7],[11] | Jan. 6, 2014 | [10],[12] | |
Maturity Date | Dec. 5, 2018 | [7],[11] | Dec. 5, 2018 | [10],[12] | |
Principal Amount | $ 3,000,000 | [7],[11] | $ 3,000,000 | [10],[12] | |
Cost | 3,045,087 | [7],[11] | 3,115,146 | [10],[12] | |
Fair Value | $ 3,037,332 | [1],[7],[11] | $ 3,099,690 | [2],[10],[12] | |
% of Members Capital | 1.10% | [3],[7],[11] | 1.10% | [4],[10],[12] | |
Terra Property Trust | Non-controlled | Mezzanine Loan | KOP Hotel XXXI Mezz LP | US | PA | Hotel | |||||
Schedule of Investments | |||||
Interest Rate | [6],[7],[15] | 13.00% | |||
Exit Fee | [6],[7],[15] | 0.50% | |||
Acquisition Date | [6],[7],[15] | Nov. 24, 2015 | |||
Maturity Date | [6],[7],[15] | Dec. 6, 2022 | |||
Principal Amount | [6],[7],[15] | $ 1,800,000 | |||
Cost | [6],[7],[15] | 1,805,201 | |||
Fair Value | [1],[6],[7],[15] | $ 1,809,101 | |||
% of Members Capital | [3],[6],[7],[15] | 0.70% | |||
Terra Property Trust | Non-controlled | Mezzanine Loan | LD Milipitas Mezz, LLC | US | CA | Hotel | |||||
Schedule of Investments | |||||
Interest Rate | [15],[16] | 13.00% | |||
Loans Receivable, Description of Variable Rate Basis | [5],[7],[13] | LIBOR | |||
Exit Fee | [15],[16] | 1.00% | |||
Acquisition Date | [15],[16] | Jun. 27, 2018 | |||
Maturity Date | [15],[16] | Jun. 27, 2021 | |||
Principal Amount | [15],[16] | $ 0 | |||
Cost | [15],[16] | 0 | |||
Fair Value | [1],[15],[16] | $ 0 | |||
% of Members Capital | [3],[15],[16] | 0.00% | |||
Terra Property Trust | Non-controlled | Mezzanine Loan | LD Milipitas Mezz, LLC | US | CA | Hotel | LIBOR | |||||
Schedule of Investments | |||||
Loans Receivable, Basis Spread on Variable Rate | [5],[7],[13] | 10.25% | |||
LIBOR Floor | [5],[7],[13] | 2.80% | |||
Terra Property Trust | Non-controlled | Mezzanine Loan | Northland Museo Member, LLC | US | TX | Multifamily | |||||
Schedule of Investments | |||||
Interest Rate | 12.00% | [7],[11] | 12.00% | [10],[12] | |
Exit Fee | [7],[11] | 0.00% | |||
Acquisition Date | Nov. 22, 2013 | [7],[11] | Nov. 22, 2013 | [10],[12] | |
Maturity Date | Dec. 6, 2018 | [7],[11] | Dec. 6, 2018 | [10],[12] | |
Principal Amount | $ 4,000,000 | [7],[11] | $ 4,000,000 | [10],[12] | |
Cost | 3,995,372 | [7],[11] | 3,974,543 | [10],[12] | |
Fair Value | $ 4,000,000 | [1],[7],[11] | $ 4,054,106 | [2],[10],[12] | |
% of Members Capital | 1.50% | [3],[7],[11] | 1.50% | [4],[10],[12] | |
Terra Property Trust | Non-controlled | Mezzanine Loan | SparQ Mezz Borrower, LLC | US | CA | Multifamily | |||||
Schedule of Investments | |||||
Interest Rate | 12.00% | 12.00% | [17] | ||
Exit Fee | 1.00% | ||||
Acquisition Date | Sep. 29, 2017 | Sep. 29, 2017 | [17] | ||
Maturity Date | Oct. 1, 2020 | Oct. 1, 2020 | [17] | ||
Principal Amount | $ 7,620,000 | $ 449,140 | [17] | ||
Cost | 7,679,794 | 452,358 | [17] | ||
Fair Value | $ 7,687,489 | [1] | $ 452,772 | [2],[17] | |
% of Members Capital | 2.90% | [3] | 0.20% | [4],[17] | |
Total Commitment | $ 8,700,000 | ||||
Terra Property Trust | Non-controlled | Mezzanine Loan | Stonewall Station Mezz LLC | US | NC | Hotel | |||||
Schedule of Investments | |||||
Interest Rate | [5],[7] | 14.00% | |||
Exit Fee | [5],[7] | 1.00% | |||
Acquisition Date | [5],[7] | Jun. 1, 2018 | |||
Maturity Date | [5],[7] | May 20, 2021 | |||
Principal Amount | [5],[7] | $ 8,059,559 | |||
Cost | [5],[7] | 8,114,824 | |||
Fair Value | [1],[5],[7] | $ 8,122,926 | |||
% of Members Capital | [3],[5],[7] | 3.00% | |||
Terra Property Trust | Non-controlled | Mezzanine Loan | Stonewall Station Mezz LLC | US | NC | Hotel | Current | |||||
Schedule of Investments | |||||
Current rate | [5],[7] | 12.00% | |||
Terra Property Trust | Non-controlled | Mezzanine Loan | Stonewall Station Mezz LLC | US | NC | Hotel | PIK | |||||
Schedule of Investments | |||||
Current rate | [5],[7] | 2.00% | |||
Terra Property Trust | Non-controlled | Mezzanine Loan | WWML96MEZZ, LLC | US | NY | Condominium | |||||
Schedule of Investments | |||||
Interest Rate | 13.00% | 13.00% | |||
Exit Fee | 1.00% | ||||
Acquisition Date | Dec. 18, 2015 | Dec. 18, 2015 | |||
Maturity Date | Dec. 31, 2018 | Dec. 31, 2018 | |||
Principal Amount | $ 14,337,270 | $ 9,925,340 | |||
Cost | 14,476,020 | 10,012,399 | |||
Fair Value | $ 14,479,085 | [1] | $ 10,023,515 | [2] | |
% of Members Capital | 5.40% | [3] | 3.60% | [4] | |
Terra Property Trust | Non-controlled | Mezzanine Loan | AHF-Heritage 1, LLC | US | TX | Multifamily | |||||
Schedule of Investments | |||||
Interest Rate | 14.00% | ||||
Acquisition Date | Jul. 30, 2012 | ||||
Maturity Date | Aug. 11, 2022 | ||||
Principal Amount | $ 1,131,243 | ||||
Cost | 1,223,634 | ||||
Fair Value | [2] | $ 1,142,423 | |||
% of Members Capital | [4] | 0.40% | |||
Terra Property Trust | Non-controlled | Mezzanine Loan | BPG Office Partners III/IV LLC | US | DE | Office Building | |||||
Schedule of Investments | |||||
Interest Rate | [9],[10],[12] | 13.50% | |||
Acquisition Date | [9],[10],[12] | Jun. 5, 2015 | |||
Maturity Date | [9],[10],[12] | Jun. 5, 2018 | |||
Principal Amount | [9],[10],[12] | $ 10,000,000 | |||
Cost | [9],[10],[12] | 10,094,309 | |||
Fair Value | [2],[9],[10],[12] | $ 10,098,872 | |||
% of Members Capital | [4],[9],[10],[12] | 3.70% | |||
Terra Property Trust | Non-controlled | Mezzanine Loan | YMP Georgia Portfolio Mezzanine, LLC | US | GA | Multifamily | |||||
Schedule of Investments | |||||
Interest Rate | 14.00% | ||||
Acquisition Date | Dec. 19, 2013 | ||||
Maturity Date | Jan. 6, 2019 | ||||
Principal Amount | $ 3,500,000 | ||||
Cost | 3,663,309 | ||||
Fair Value | [2] | $ 3,535,027 | |||
% of Members Capital | [4] | 1.30% | |||
Terra Property Trust | Non-controlled | Mezzanine Loan | Muncie Mezz, LLC | US | IN | Student Housing | |||||
Schedule of Investments | |||||
Interest Rate | 13.00% | ||||
Acquisition Date | Aug. 29, 2013 | ||||
Maturity Date | Sep. 6, 2023 | ||||
Principal Amount | $ 2,700,000 | ||||
Cost | 2,689,608 | ||||
Fair Value | [2] | $ 3,033,655 | |||
% of Members Capital | [4] | 1.10% | |||
Terra Property Trust | Non-controlled | Mezzanine Loan | Milestone Greensboro Holdings, LLC | US | NC | Hotel | |||||
Schedule of Investments | |||||
Interest Rate | [10],[12] | 14.00% | |||
Acquisition Date | [10],[12] | Mar. 1, 2013 | |||
Maturity Date | [10],[12] | Mar. 1, 2018 | |||
Principal Amount | [10],[12] | $ 3,500,000 | |||
Cost | [10],[12] | 3,537,223 | |||
Fair Value | [2],[10],[12] | $ 3,534,591 | |||
% of Members Capital | [4],[10],[12] | 1.30% | |||
Terra Property Trust | Non-controlled | Mezzanine Loan | Cape Church Mezz, LLC | US | NY | Condominium | |||||
Schedule of Investments | |||||
Interest Rate | [10],[12],[18] | 12.00% | |||
Acquisition Date | [10],[12],[18] | Mar. 15, 2016 | |||
Maturity Date | [10],[12],[18] | Jul. 15, 2019 | |||
Principal Amount | [10],[12],[18] | $ 17,178,883 | |||
Cost | [10],[12],[18] | 17,321,426 | |||
Fair Value | [2],[10],[12],[18] | $ 17,348,948 | |||
% of Members Capital | [4],[10],[12],[18] | 6.30% | |||
Terra Property Trust | Non-controlled | Mezzanine Loan | Pollin Hotels PDX Mezzanine, LLC | US | OR | Hotel | |||||
Schedule of Investments | |||||
Interest Rate | [10],[12] | 13.00% | |||
Acquisition Date | [10],[12] | Sep. 23, 2013 | |||
Maturity Date | [10],[12] | Oct. 6, 2018 | |||
Principal Amount | [10],[12] | $ 5,000,000 | |||
Cost | [10],[12] | 5,181,187 | |||
Fair Value | [2],[10],[12] | $ 5,196,794 | |||
% of Members Capital | [4],[10],[12] | 1.90% | |||
Terra Property Trust | Non-controlled | Preferred Equity Investment | US | |||||
Schedule of Investments | |||||
Principal Amount | $ 156,909,132 | ||||
Cost | 157,911,984 | ||||
Fair Value | [1] | $ 157,670,863 | |||
% of Members Capital | [3] | 58.90% | |||
Terra Property Trust | Non-controlled | Preferred Equity Investment | ASA Mgt Holdings LLC | US | AL | Multifamily | |||||
Schedule of Investments | |||||
Interest Rate | 16.00% | 16.00% | |||
Exit Fee | 1.00% | ||||
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 | 2,136,357 | 2,139,967 | |||
Fair Value | $ 2,120,720 | [1] | $ 2,120,720 | [2] | |
% of Members Capital | 0.80% | [3] | 0.80% | [4] | |
Terra Property Trust | Non-controlled | Preferred Equity Investment | City Gardens 333 LLC | US | CA | Student Housing | |||||
Schedule of Investments | |||||
Interest Rate | [5],[7],[13] | 12.20% | |||
Loans Receivable, Description of Variable Rate Basis | [5],[7],[13] | LIBOR | |||
Exit Fee | [5],[7],[13] | 0.00% | |||
Acquisition Date | [5],[7],[13] | Apr. 11, 2018 | |||
Maturity Date | [5],[7],[13] | Apr. 1, 2021 | |||
Principal Amount | [5],[7],[13] | $ 19,497,232 | |||
Cost | [5],[7],[13] | 19,497,232 | |||
Fair Value | [1],[5],[7],[13] | $ 19,497,232 | |||
% of Members Capital | [3],[5],[7],[13] | 7.30% | |||
Terra Property Trust | Non-controlled | Preferred Equity Investment | City Gardens 333 LLC | US | CA | Student Housing | LIBOR | |||||
Schedule of Investments | |||||
Loans Receivable, Basis Spread on Variable Rate | [5],[7],[13] | 9.95% | |||
LIBOR Floor | [5],[7],[13] | 2.00% | |||
Terra Property Trust | Non-controlled | Preferred Equity Investment | Greystone Gables Holdings Member LLC | US | FL | Multifamily | |||||
Schedule of Investments | |||||
Interest Rate | 13.00% | [7],[11] | 13.00% | [10],[12] | |
Exit Fee | [7],[11] | 1.00% | |||
Acquisition Date | Jun. 16, 2016 | [7],[11] | Jun. 16, 2016 | [10],[12] | |
Maturity Date | Jun. 16, 2019 | [7],[11] | Jun. 16, 2019 | [10],[12] | |
Principal Amount | $ 500,000 | [7],[11] | $ 500,000 | [10],[12] | |
Cost | 504,555 | [7],[11] | 504,129 | [10],[12] | |
Fair Value | $ 504,946 | [1],[7],[11] | $ 504,707 | [2],[10],[12] | |
% of Members Capital | 0.20% | [3],[7],[11] | 0.20% | [4],[10],[12] | |
Terra Property Trust | Non-controlled | Preferred Equity Investment | L.A. Warner Hotel Partners, LLC | US | CA | Hotel | |||||
Schedule of Investments | |||||
Interest Rate | 12.00% | [6],[7],[11],[19] | 12.00% | [9],[10],[12] | |
Exit Fee | [6],[7],[11],[19] | 1.00% | |||
Acquisition Date | Jul. 25, 2014 | [6],[7],[11],[19] | Jul. 25, 2014 | [9],[10],[12] | |
Maturity Date | Aug. 2, 2019 | [6],[7],[11],[19] | Aug. 4, 2018 | [9],[10],[12] | |
Principal Amount | $ 32,100,000 | [6],[7],[11],[19] | $ 32,100,000 | [9],[10],[12] | |
Cost | 32,541,303 | [6],[7],[11],[19] | 32,640,675 | [9],[10],[12] | |
Fair Value | $ 32,417,778 | [1],[6],[7],[11],[19] | $ 32,417,778 | [2],[9],[10],[12] | |
% of Members Capital | 12.10% | [3],[6],[7],[11],[19] | 11.80% | [4],[9],[10],[12] | |
Terra Property Trust | Non-controlled | Preferred Equity Investment | NB Private Capital LLC | US | IL | Student Housing | |||||
Schedule of Investments | |||||
Interest Rate | [5],[7],[13] | 14.00% | |||
Loans Receivable, Description of Variable Rate Basis | [5],[7],[13] | LIBOR | |||
Exit Fee | [5],[7],[13] | 1.00% | |||
Acquisition Date | [5],[7],[13] | Jul. 27, 2018 | |||
Maturity Date | [5],[7],[13] | Jul. 27, 2020 | |||
Principal Amount | [5],[7],[13] | $ 25,500,000 | |||
Cost | [5],[7],[13] | 25,598,552 | |||
Fair Value | [1],[5],[7],[13] | $ 25,598,552 | |||
% of Members Capital | [3],[5],[7],[13] | 9.60% | |||
Terra Property Trust | Non-controlled | Preferred Equity Investment | NB Private Capital LLC | US | IL | Student Housing | LIBOR | |||||
Schedule of Investments | |||||
Loans Receivable, Basis Spread on Variable Rate | [5],[7],[13] | 10.50% | |||
LIBOR Floor | [5],[7],[13] | 3.50% | |||
Terra Property Trust | Non-controlled | Preferred Equity Investment | Nelson Brothers Professional Real Estate, LLC | US | OH | Student Housing | |||||
Schedule of Investments | |||||
Interest Rate | 14.00% | ||||
Exit Fee | 1.00% | ||||
Acquisition Date | Jul. 27, 2016 | ||||
Maturity Date | Feb. 1, 2019 | ||||
Principal Amount | $ 4,575,000 | ||||
Cost | 4,620,750 | ||||
Fair Value | [1] | $ 4,620,215 | |||
% of Members Capital | [3] | 1.70% | |||
Terra Property Trust | Non-controlled | Preferred Equity Investment | Orange Grove Property Investors LLC | US | CA | Condominium | |||||
Schedule of Investments | |||||
Interest Rate | [5],[7] | 12.00% | |||
Loans Receivable, Description of Variable Rate Basis | [5],[7] | LIBOR | |||
Exit Fee | [5],[7] | 1.00% | |||
Acquisition Date | [5],[7] | May 24, 2018 | |||
Maturity Date | [5],[7] | Jun. 1, 2021 | |||
Principal Amount | [5],[7] | $ 8,350,000 | |||
Cost | [5],[7] | 8,410,443 | |||
Fair Value | [1],[5],[7] | $ 8,414,279 | |||
% of Members Capital | [3],[5],[7] | 3.10% | |||
Terra Property Trust | Non-controlled | Preferred Equity Investment | Orange Grove Property Investors LLC | US | CA | Condominium | LIBOR | |||||
Schedule of Investments | |||||
Loans Receivable, Basis Spread on Variable Rate | [5],[7] | 8.00% | |||
LIBOR Floor | [5],[7] | 4.00% | |||
Terra Property Trust | Non-controlled | Preferred Equity Investment | REEC Harlem Holdings Company LLC | US | NY | Land | |||||
Schedule of Investments | |||||
Interest Rate | 14.80% | ||||
Loans Receivable, Description of Variable Rate Basis | LIBOR | ||||
Exit Fee | 0.00% | ||||
Acquisition Date | Mar. 9, 2018 | ||||
Maturity Date | Mar. 9, 2023 | ||||
Principal Amount | $ 20,619,375 | ||||
Cost | 20,619,375 | ||||
Fair Value | [1] | $ 20,619,375 | |||
% of Members Capital | [3] | 7.70% | |||
Terra Property Trust | Non-controlled | Preferred Equity Investment | REEC Harlem Holdings Company LLC | US | NY | Land | LIBOR | |||||
Schedule of Investments | |||||
Loans Receivable, Basis Spread on Variable Rate | 12.50% | ||||
Terra Property Trust | Non-controlled | Preferred Equity Investment | RS JZ Driggs, LLC | US | NY | Multifamily | |||||
Schedule of Investments | |||||
Interest Rate | 12.30% | ||||
Exit Fee | [5],[7] | 1.00% | |||
Acquisition Date | May 1, 2018 | ||||
Maturity Date | [5],[7] | May 1, 2020 | |||
Principal Amount | [5],[7] | $ 2,384,501 | |||
Cost | [5],[7] | 2,404,103 | |||
Fair Value | [1],[5],[7] | $ 2,404,103 | |||
% of Members Capital | [3],[5],[7] | 0.90% | |||
Terra Property Trust | Non-controlled | Preferred Equity Investment | SVA Mgt Holdings LLC | US | AL | Multifamily | |||||
Schedule of Investments | |||||
Interest Rate | 16.00% | 16.00% | |||
Exit Fee | 1.00% | ||||
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 | 1,629,622 | 1,632,749 | |||
Fair Value | $ 1,615,786 | [1] | $ 1,615,787 | [2] | |
% of Members Capital | 0.60% | [3] | 0.60% | [4] | |
Terra Property Trust | Non-controlled | Preferred Equity Investment | The Bristol at Southport, LLC | US | WA | Multifamily | |||||
Schedule of Investments | |||||
Interest Rate | [6],[7],[11],[13] | 12.00% | |||
Exit Fee | [6],[7],[11],[13] | 1.00% | |||
Acquisition Date | Sep. 22, 2017 | [6],[7],[11],[13] | Sep. 22, 2017 | [10],[14] | |
Maturity Date | Sep. 22, 2022 | [6],[7],[11],[13] | Sep. 22, 2022 | [10],[14] | |
Principal Amount | $ 22,984,018 | [6],[7],[11],[13] | $ 22,616,528 | [10],[14] | |
Cost | 23,123,032 | [6],[7],[11],[13] | 22,743,477 | [10],[14] | |
Fair Value | $ 23,030,885 | [1],[6],[7],[11],[13] | $ 22,807,927 | [2],[10],[14] | |
% of Members Capital | 8.60% | [3],[6],[7],[11],[13] | 8.30% | [4],[10],[14] | |
Terra Property Trust | Non-controlled | Preferred Equity Investment | The Bristol at Southport, LLC | US | WA | Multifamily | Current | |||||
Schedule of Investments | |||||
Current rate | 10.00% | [6],[7],[11],[13] | 10.00% | [10],[14] | |
Terra Property Trust | Non-controlled | Preferred Equity Investment | The Bristol at Southport, LLC | US | WA | Multifamily | PIK | |||||
Schedule of Investments | |||||
Current rate | 2.00% | [6],[7],[11],[13] | 2.00% | [10],[14] | |
Terra Property Trust | Non-controlled | Preferred Equity Investment | Windy Hill PV Seven CM LLC | US | CA | Office Building | |||||
Schedule of Investments | |||||
Interest Rate | 12.50% | ||||
Exit Fee | 1.00% | ||||
Acquisition Date | Jan. 9, 2018 | ||||
Maturity Date | Jan. 9, 2021 | ||||
Principal Amount | $ 15,149,586 | ||||
Cost | 15,262,246 | ||||
Fair Value | [1] | $ 15,262,246 | |||
% of Members Capital | [3] | 5.70% | |||
Terra Property Trust | Non-controlled | Preferred Equity Investment | Windy Hill PV Seven CM LLC | US | CA | Office Building | Current | |||||
Schedule of Investments | |||||
Current rate | 10.00% | ||||
Terra Property Trust | Non-controlled | Preferred Equity Investment | Windy Hill PV Seven CM LLC | US | CA | Office Building | PIK | |||||
Schedule of Investments | |||||
Current rate | 2.50% | ||||
Terra Property Trust | Non-controlled | Preferred Equity Investment | WWML96, LLC | US | NY | Condominium | |||||
Schedule of Investments | |||||
Interest Rate | 13.00% | 13.00% | |||
Exit Fee | 1.00% | ||||
Acquisition Date | Dec. 18, 2015 | Dec. 18, 2015 | |||
Maturity Date | Dec. 31, 2018 | Dec. 31, 2018 | |||
Principal Amount | $ 1,549,420 | $ 1,486,171 | |||
Cost | 1,564,414 | 1,499,206 | |||
Fair Value | $ 1,564,746 | [1] | $ 1,500,871 | [2] | |
% of Members Capital | 0.60% | [3] | 0.50% | [4] | |
Terra Property Trust | Non-controlled | Preferred Equity Investment | Palmer City-Core Stockton Street, LLC | US | CA | Hotel | |||||
Schedule of Investments | |||||
Interest Rate | [20] | 12.00% | |||
Acquisition Date | [20] | Jan. 17, 2014 | |||
Maturity Date | [20] | Jan. 17, 2018 | |||
Principal Amount | [20] | $ 4,325,000 | |||
Cost | [20] | 4,368,250 | |||
Fair Value | [2],[20] | $ 4,367,816 | |||
% of Members Capital | [4],[20] | 1.60% | |||
Terra Property Trust | Non-controlled | Preferred Equity Investment | NB Factory JV, LLC | US | UT | Student Housing | |||||
Schedule of Investments | |||||
Interest Rate | [8],[10] | 15.00% | |||
Acquisition Date | [8],[10] | Jun. 29, 2017 | |||
Maturity Date | [8],[10] | Jun. 26, 2020 | |||
Principal Amount | [8],[10] | $ 3,595,670 | |||
Cost | [8],[10] | 3,595,670 | |||
Fair Value | [2],[8],[10] | $ 3,595,670 | |||
% of Members Capital | [4],[8],[10] | 1.20% | |||
Terra Property Trust | Non-controlled | First Mortgage | US | |||||
Schedule of Investments | |||||
Principal Amount | $ 59,825,000 | ||||
Cost | 60,423,250 | ||||
Fair Value | [1] | $ 60,417,206 | |||
% of Members Capital | [3] | 22.60% | |||
Terra Property Trust | Non-controlled | First Mortgage | Millennium Waterfront Associates, L.P. | US | PA | Land | |||||
Schedule of Investments | |||||
Interest Rate | 12.00% | 12.00% | |||
Exit Fee | 1.00% | ||||
Acquisition Date | Jul. 2, 2015 | Jul. 2, 2015 | |||
Maturity Date | Dec. 28, 2018 | Dec. 28, 2018 | |||
Principal Amount | $ 14,325,000 | $ 14,325,000 | |||
Cost | 14,468,250 | 14,468,250 | |||
Fair Value | $ 14,466,812 | [1] | $ 14,466,812 | [2] | |
% of Members Capital | 5.40% | [3] | 5.30% | [4] | |
Terra Property Trust | Non-controlled | First Mortgage | OHM Atlanta Owner, LLC | US | GA | Land | |||||
Schedule of Investments | |||||
Interest Rate | 12.00% | [5],[7],[13] | 12.00% | [8],[10],[14] | |
Loans Receivable, Description of Variable Rate Basis | [5],[7],[13] | LIBOR | |||
Exit Fee | [5],[7],[13] | 1.00% | |||
Acquisition Date | Jun. 20, 2017 | [5],[7],[13] | Jun. 20, 2017 | [8],[10],[14] | |
Maturity Date | Dec. 20, 2018 | [5],[7],[13] | Jun. 20, 2018 | [8],[10],[14] | |
Principal Amount | $ 27,500,000 | [5],[7],[13] | $ 27,500,000 | [8],[10],[14] | |
Cost | 27,775,000 | [5],[7],[13] | 27,759,721 | [8],[10],[14] | |
Fair Value | $ 27,772,240 | [1],[5],[7],[13] | $ 27,759,721 | [2],[8],[10],[14] | |
% of Members Capital | 10.40% | [3],[5],[7],[13] | 10.10% | [4],[8],[10],[14] | |
Terra Property Trust | Non-controlled | First Mortgage | OHM Atlanta Owner, LLC | US | GA | Land | LIBOR | |||||
Schedule of Investments | |||||
Loans Receivable, Basis Spread on Variable Rate | [5],[7],[13] | 9.00% | |||
LIBOR Floor | [5],[7],[13] | 3.00% | |||
Terra Property Trust | Non-controlled | First Mortgage | TSG-Parcel 1, LLC | US | CA | Land | |||||
Schedule of Investments | |||||
Interest Rate | 12.30% | [5],[6],[7] | 12.00% | [8],[9],[10] | |
Loans Receivable, Description of Variable Rate Basis | [5],[6],[7] | LIBOR | |||
Exit Fee | [5],[6],[7] | 1.00% | |||
Acquisition Date | Jul. 10, 2015 | [5],[6],[7] | Jul. 10, 2015 | [8],[9],[10] | |
Maturity Date | Dec. 31, 2018 | [5],[6],[7] | Apr. 10, 2018 | [8],[9],[10] | |
Principal Amount | $ 18,000,000 | [5],[6],[7] | $ 18,000,000 | [8],[9],[10] | |
Cost | 18,180,000 | [5],[6],[7] | 18,180,000 | [8],[9],[10] | |
Fair Value | $ 18,178,154 | [1],[5],[6],[7] | $ 18,178,193 | [2],[8],[9],[10] | |
% of Members Capital | 6.80% | [3],[5],[6],[7] | 6.60% | [4],[8],[9],[10] | |
Terra Property Trust | Non-controlled | First Mortgage | TSG-Parcel 1, LLC | US | CA | Land | LIBOR | |||||
Schedule of Investments | |||||
Loans Receivable, Basis Spread on Variable Rate | [5],[6],[7] | 10.00% | |||
LIBOR Floor | [5],[6],[7] | 2.00% | |||
Terra Property Trust | Non-controlled | First Mortgage | Maguire Partners-1733 Ocean, LLC | US | CA | Office Building | |||||
Schedule of Investments | |||||
Loans Receivable, Description of Variable Rate Basis | LIBOR | ||||
Acquisition Date | Mar. 7, 2016 | ||||
Maturity Date | Mar. 9, 2018 | ||||
Principal Amount | $ 53,749,794 | ||||
Cost | 54,277,021 | ||||
Fair Value | [2] | $ 54,282,803 | |||
% of Members Capital | [4] | 19.70% | |||
Terra Property Trust | Non-controlled | First Mortgage | Maguire Partners-1733 Ocean, LLC | US | CA | Office Building | LIBOR | |||||
Schedule of Investments | |||||
Loans Receivable, Basis Spread on Variable Rate | 8.50% | ||||
Terra Property Trust | Non-controlled | First Mortgage | RS JZ 2700 NW2, LLC | US | FL | Land | |||||
Schedule of Investments | |||||
Interest Rate | [9],[10] | 12.00% | |||
Acquisition Date | [9],[10] | Sep. 1, 2016 | |||
Maturity Date | [9],[10] | Mar. 1, 2018 | |||
Principal Amount | [9],[10] | $ 21,360,000 | |||
Cost | [9],[10] | 21,573,600 | |||
Fair Value | [2],[9],[10] | $ 21,571,456 | |||
% of Members Capital | [4],[9],[10] | 7.80% | |||
Terra Property Trust | Non-controlled | Revolving Credit Facility | Nelson Brothers Professional Real Estate, LLC | US | Other States | Other Real Estate Type | |||||
Schedule of Investments | |||||
Interest Rate | 14.00% | ||||
Acquisition Date | Aug. 31, 2016 | ||||
Maturity Date | Feb. 1, 2019 | ||||
Principal Amount | $ 14,000,000 | ||||
Cost | 14,140,000 | ||||
Fair Value | [2] | $ 14,138,248 | |||
% of Members Capital | [4] | 5.10% | |||
Terra Property Trust | Non-controlled | Participation Interests | US | |||||
Schedule of Investments | |||||
Principal Amount | $ 1,800,000 | ||||
Cost | 1,804,715 | ||||
Fair Value | [2] | $ 1,807,503 | |||
% of Members Capital | [4] | 1.00% | |||
Terra Property Trust | Non-controlled | Participation Interests | Mezzanine Loan | KOP Hotel XXXI Mezz LP | US | PA | Hotel | |||||
Schedule of Investments | |||||
Interest Rate | [9],[10],[21] | 13.00% | |||
Acquisition Date | [9],[10],[21] | Nov. 24, 2015 | |||
Maturity Date | [9],[10],[21] | Dec. 6, 2022 | |||
Principal Amount | [9],[10],[21] | $ 1,800,000 | |||
Cost | [9],[10],[21] | 1,804,715 | |||
Fair Value | [2],[9],[10],[21] | $ 1,807,503 | |||
% of Members Capital | [4],[9],[10],[21] | 1.00% | |||
Terra Property Trust | Non-controlled | Participation Interests | Mezzanine Loan | LD Milipitas Mezz, LLC | US | CA | Hotel | |||||
Schedule of Investments | |||||
Total Commitment | $ 4,300,000 | ||||
Ownership Interest | 25.00% | ||||
Obligations Under Participation Agreements | Terra Property Trust | US | |||||
Schedule of Investments | |||||
Principal Amount | $ 99,800,355 | [5],[6],[7],[11],[13] | $ 75,077,891 | [8],[9],[10],[12],[14] | |
Cost | 100,740,686 | [5],[6],[7],[11],[13] | 76,053,279 | [8],[9],[10],[12],[14] | |
Fair Value | $ 100,562,730 | [1],[5],[6],[7],[11],[13] | $ 75,991,436 | [2],[8],[9],[10],[12],[14] | |
% of Members Capital | 37.50% | [3],[5],[6],[7],[11],[13] | 28.00% | [4],[8],[9],[10],[12],[14] | |
Investment Net | Terra Property Trust | US | |||||
Schedule of Investments | |||||
Principal Amount | $ 237,334,480 | [22] | $ 277,983,104 | ||
Cost | 238,874,893 | [22] | 281,040,451 | ||
Fair Value | $ 238,776,466 | [1],[22] | $ 281,243,236 | [2] | |
% of Members Capital | 89.10% | [22] | 102.00% | [4] | |
[1] | Because there is no readily available market for these loans, these loans were valued using significant unobservable inputs under Level 3 of the fair value hierarchy and were approved in good faith by Terra REIT Advisors, LLC (“Terra REIT Advisors”), Terra Property Trust’s manager, pursuant to Terra Property Trust’s valuation policy. | ||||
[2] | Because there is no readily available market for these loans, these loans were valued using significant unobservable inputs under Level 3 of the fair value hierarchy and were approved in good faith by Terra Income Advisors, Terra Property Trust’s 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 $268.0 million as of September 30, 2018. | ||||
[4] | Percentages are based on the fair value of the Company’s investment in Terra Property Trust of $275.4 million as of December 31, 2017. | ||||
[5] | Terra Property Trust sold a portion of its interest in this loan through a participation agreement to Terra Income Fund 6, Inc., an affiliated fund advised by Terra Income Advisors, LLC (“Terra Income Advisors”), an affiliate of our sponsor and Terra Property Trust’s manager. | ||||
[6] | Terra Property Trust sold a portion of its interests in these loans via participation agreements to Terra Secured Income Fund 5 International, an affiliated fund advised by Terra REIT Advisors. | ||||
[7] | 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 statements of financial condition. | ||||
[8] | Terra Property Trust sold a portion of its interest in this loan through a participation agreement to Terra Income Fund 6, Inc., an affiliated fund advised by Terra Income Advisors. | ||||
[9] | Terra Property Trust sold a portion of its interests in these loans via participation agreements to Terra Secured Income Fund 5 International, an affiliated fund advised by Terra Income Advisors. | ||||
[10] | The loan participations from Terra Property Trust do not qualify for sale accounting under ASC Topic 860, Transfers and Servicing, and therefore, the gross amount of these loans remain in the consolidated statements of financial condition. | ||||
[11] | Terra Property Trust sold a portion of its interests in these loans via participation agreements to Terra Income Fund International, an affiliated fund advised by Terra REIT Advisors. | ||||
[12] | Terra Property Trust sold a portion of its interests in these loans via participation agreements to Terra Income Fund International, an affiliated fund advised by Terra Income Advisors. | ||||
[13] | Terra Property Trust sold a portion of its interest in this loan through a participation agreement to Terra Property Trust 2, Inc., an affiliated fund managed by Terra REIT Advisors. | ||||
[14] | Terra Property Trust sold a portion of its interest in this loan through a participation agreement to Terra Property Trust 2, Inc., an affiliated fund managed by a subsidiary of Terra Income Advisors. | ||||
[15] | Terra Property Trust purchased its interest in this loan from Terra Income Fund 6, Inc. through a participation agreement. | ||||
[16] | On June 27, 2018, Terra Property Trust entered into a participation agreement with Terra Income Fund 6, Inc. to purchase a 25% interest, or $4.3 million, in a mezzanine loan. As of September 30, 2018, none of the commitment has been funded. | ||||
[17] | On September 29, 2017, Terra Property Trust entered into agreement with the borrower to provide funding commitment of up to $8.7 million. As of December 31, 2017, $0.4 million has been funded. | ||||
[18] | This loan was repaid on January 26, 2018. | ||||
[19] | This loan was repaid on October 17, 2018. | ||||
[20] | This loan was repaid on January 17, 2018. | ||||
[21] | Terra Property Trust purchased its interest in this loan from Terra Income Fund 6, Inc. through a participation agreement. | ||||
[22] | In addition to its net loan portfolio, on July 30, 2018, Terra Property Trust foreclosed on a multi-tenant office building encumbering a $54.0 million first mortgage in exchange for the relief of the first mortgage and related fees and expenses. As of September 30, 2018, the office building had a carrying value of $56.8 million and the mortgage loan payable encumbering the office building was $44.8 million for a net carrying value of approximately $12.0 million. |
Business
Business | 9 Months Ended |
Sep. 30, 2018 | |
Limited Liability Companies LLCs [Abstract] | |
Business | Note 1. Business Terra Secured Income Fund 5, LLC (and, together with its consolidated subsidiaries, the “Company”), is a specialized real estate finance company that originates, structures, funds and manages high yielding commercial real estate investments, including mezzanine loans, first mortgage loans, subordinated mortgage loans and preferred equity investments throughout the United States. The Company’s investments finance the acquisition, construction, development or redevelopment of quality commercial real estate in the United States. The Company focuses on smaller, middle market loans in the approximately $3 million to $50 million range which are financing properties in primary and secondary markets because it believes these loans are subject to less competition, offer higher risk adjusted returns than larger loans with similar risk metrics and facilitate portfolio diversification. The Company was formed as a Delaware limited liability company on April 24, 2013 and commenced operations on August 8, 2013. The Company makes substantially all of its investments and conduct substantially all of its real estate lending business through Terra Property Trust, which has elected to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes commencing with its taxable year ended December 31, 2016. The Company’s objectives are to (i) preserve its members’ capital contributions, (ii) realize income from its investments and (iii) make monthly distributions to its members from cash generated from investments. There can be no assurances that the Company will be successful in meeting its objectives. In December 2015, the members approved the merger of Terra Secured Income Fund, LLC (“Terra Fund 1”), Terra Secured Income Fund 2, LLC (“Terra Fund 2”), Terra Secured Income Fund 3, LLC (“Terra Fund 3”) and Terra Secured Income Fund 4, LLC (“Terra Fund 4”) with and into subsidiaries of the Company (individually, each a “Terra Fund” and collectively, the “Terra Funds”) through a series of separate mergers effective January 1, 2016 (collectively, the “Merger”). 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 REIT, in exchange for the shares of common stock 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 were externally managed by Terra Income Advisors, a private investment firm affiliated with the Company until February 8, 2018 when Terra Capital Partners, LLC (“Terra Capital Partners”), the Company’s sponsor, caused a new subsidiary of Terra Capital Partners, Terra Fund Advisors, LLC (“Terra Fund Advisors”), to be admitted as the replacement manager of the Company. When used herein the term “Manager” refers to Terra Income Advisors for periods prior to February 8, 2018 and refers to Terra Fund Advisors beginning on such date. 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 its affiliates or by individuals who were contracted by the Company or by the Manager or its affiliates 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; however, the Company 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 | 9 Months Ended |
Sep. 30, 2018 | |
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. 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 ( Note 3 ). 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 appreciation or depreciation on investment on the consolidated statements of operations. Revenue Recognition 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. The Company, however, may be liable for New York City Unincorporated Business Tax (the “NYC UBT”) and similar taxes of various other municipalities. New York City imposes the NYC UBT at a statutory rate of 4% on net income generated from ordinary business activities carried on in New York City. For the three and nine months ended September 30, 2018 and 2017 , none of the Company’s income was subject to the NYC UBT. 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 nine months ended September 30, 2018 and 2017 , 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 Pronouncement 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 adopted this standard on January 1, 2018 using the cumulative effect transition method. The adoption of ASU 2014-09 did not have any 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. The Company adopted this standard on January 1, 2018. The adoption of ASU 2016-01 did not have any impact on its 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 and disclosures 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 adopted this standard on January 1, 2018. The adoption of ASU 2016-15 did not have any impact on its consolidated financial statements and disclosures. In June 2018, the Securities and Exchange Commission (the “SEC”) adopted amendments that raise the thresholds in the smaller reporting company definition. Under the new definition, generally, a company qualifies as a “smaller reporting company” if: (i) it has public float of less than $250 million; or (ii) it has less than $100 million in annual revenues and no public float or public float of less than $700 million. These amendments did not have any impact on the Company. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure framework — Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). The objective of ASU 2018-13 is to improve the effectiveness of disclosures in the notes to financial statements by facilitating clear communication of information required by U.S. GAAP. The amendments in ASU 2018-13 added, removed and modified certain fair value measurement disclosure requirements. ASU 2018-13 is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted upon issuance of ASU 2018-13. The Company does not expect the adoption of ASU 2018-13 to have a material impact on its consolidated financial statements and disclosures. In August 2018, the SEC adopted a final rule that eliminates or amends disclosure requirements that have become duplicative, overlapping, or outdated in light of other SEC disclosure requirements, U.S. GAAP, or changes in the information environment (the “Final Rule”). The Final Rule is intended to simplify and update the disclosure of information to investors and reduce compliance burdens for companies, without significantly altering the total mix of information available to investors. Among other items, the Final Rule requires registrants to include in their interim financial statements a reconciliation of changes in net assets or stockholders’ equity in the notes or as a separate statement. The Final Rule is effective for all filings made on or after November 5, 2018; however, the SEC would not object if a filer’s first presentation of the changes in net assets or stockholders' equity was included in its Form 10-Q for the quarter that begins after the effective date of the Final Rule. The Company intends to adopt the Final Rule in the first quarter of 2019. The adoption of the Final Rule is not expected to have a material impact on the Company’s consolidated financial statements and disclosures. |
Investment and Fair Value
Investment and Fair Value | 9 Months Ended |
Sep. 30, 2018 | |
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. The following table presents a summary of the Company’s investment at September 30, 2018 and December 31, 2017 : September 30, 2018 December 31, 2017 Investment Cost Fair Value % of Members’ Capital Cost Fair Value % of Members’ Capital 14,912,990 common shares of Terra Property Trust, Inc. $ 268,335,112 $ 268,006,493 100.0 % $ 275,401,972 $ 275,428,953 100.0 % For the three months ended September 30, 2018 and 2017 , the Company received approximately $8.1 million and $13.1 million of distributions from Terra Property Trust, respectively, of which $2.6 million and $8.7 million was a return of capital, respectively. For the nine months ended September 30, 2018 and 2017 , the Company received approximately $24.9 million and $29.7 million of distributions from Terra Property Trust, respectively, of which $7.1 million and $14.0 million were returns of capital, respectively. The following tables present the summarized financial information of Terra Property Trust: September 30, 2018 December 31, 2017 Carrying value of loans held for investment $ 339,615,579 $ 357,093,730 Real estate owned, net 56,756,051 — Other assets 41,064,173 51,899,445 Total assets 437,435,803 408,993,175 Mortgage loan payable and obligations under participation agreements (145,573,187 ) (110,175,525 ) Accounts payable, accrued expenses and other liabilities (23,431,489 ) (23,307,944 ) Total liabilities (169,004,676 ) (133,483,469 ) Stockholder’s equity $ 268,431,127 $ 275,509,706 Three Months Ended September 30, Nine Months Ended September 30, 2018 2018 2017 2018 2017 Revenues $ 12,788,205 $ 9,651,677 $ 35,751,197 $ 28,197,274 Expenses (7,300,400 ) (4,598,716 ) (17,921,479 ) (12,379,894 ) Realized gain on investments — (604,169 ) — (114,209 ) Net income $ 5,487,805 $ 4,448,792 $ 17,829,718 $ 15,703,171 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 September 30, 2018 and December 31, 2017 : September 30, 2018 Fair Value Measurements Level 1 Level 2 Level 3 Total Investment: Equity investment in Terra Property Trust $ — $ — $ 268,006,493 $ 268,006,493 December 31, 2017 Fair Value Measurements Level 1 Level 2 Level 3 Total Investment: Equity investment in Terra Property Trust $ — $ — $ 275,428,953 $ 275,428,953 Changes in Level 3 investment for the nine months ended September 30, 2018 and 2017 were as follows: Equity Investment in Terra Property Trust Nine Months Ended September 30, 2018 2017 Beginning balance $ 275,428,953 $ 290,419,317 Return of capital (7,066,860 ) (14,012,486 ) Net change in unrealized (depreciation) appreciation on investment (355,600 ) 920,026 Ending balance $ 268,006,493 $ 277,326,857 Net change in unrealized (depreciation) appreciation on investment for the period relating to those Level 3 assets that were still held by the Company $ (355,600 ) $ 920,026 Transfers between levels, if any, are recognized at the beginning of the period in which transfers occur. For the three and nine months ended September 30, 2018 and 2017 , there were no transfers. The Company estimated that its other financial assets and liabilities had fair values that approximated their carrying values at September 30, 2018 and December 31, 2017 due to their short-term nature. Valuation Process for Fair Value Measurement Market quotations are not readily available for the Company’s investment in Terra Property Trust, which is included in Level 3 of the fair value hierarchy. The fair value of the Company’s sole investment takes into consideration the fair value of Terra Property Trust’s assets and liabilities which are valued utilizing a yield approach, i.e. a discounted cash flow methodology. Terra Property Trust’s valuation considers fair value of each respective loan held for investment in the portfolio using an estimated market yield. In following this methodology, loans are evaluated individually, and management takes into account, in determining the risk-adjusted discount rate for each of the Company’s loans, 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”); construction progress reports and construction budget analysis; 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. 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 September 30, 2018 and December 31, 2017 . 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 September 30, 2018 Asset Category Minimum Maximum Weighted Average Assets: Equity investment in Terra Property Trust $ 268,006,493 Discounted cash flow (1) Discount rate (1) 7.30 % 16.00 % 14.35 % Fair Value Primary Valuation Technique Unobservable Inputs December 31, 2017 Asset Category Minimum Maximum Weighted Average Assets: Equity investment in Terra Property Trust $ 275,428,953 Discounted cash flow (1) Discount rate (1) 2.56 % 16.00 % 13.50 % _______________ (1) Discounted cash flows and discount rates applied to Terra Property Trust’s assets and liabilities. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | Note 4. Related Party Transactions Axar Transaction On February 8, 2018, Terra Capital Partners caused (i) a new subsidiary of Terra Capital Partners, Terra REIT Advisors to become the external manager of Terra Property Trust, (ii) a new subsidiary of Terra Capital Partners, Terra Fund Advisors, to be admitted as the replacement manager of the Company and the equity interests in Terra Fund Advisors to be distributed to the equity owners of Terra Capital Partners on a pro rata basis and (iii) the equity interests in another subsidiary of Terra Capital Partners, Terra Income Advisors, which also serves as the external advisor to Terra Income Fund 6, Inc. (“Terra Fund 6”), to be distributed to the equity owners of Terra Capital Partners on a pro rata basis. After the completion of the above steps, an affiliate of Axar Capital Management L.P. (“Axar”) entered into an investment agreement with Terra Capital Partners and its affiliates (which is referred to collectively as the “Axar Transaction”), pursuant to which an affiliate of Axar acquired from the respective owners thereof: (i) a 49% economic interest in the Terra Fund Advisors; (ii) a 65.7% economic and voting interest in Terra Capital Partners (and thereby Terra REIT Advisors); and (iii) an initial 49% economic interest in Terra Income Advisors, with an agreement to acquire an additional 16.7% economic interest, and for the entire 65.7% stake to become a voting interest in Terra Income Advisors, subject to requisite approval by a majority of the outstanding voting securities (as defined by the Investment Company Act of 1940, as amended) of Terra Fund 6 of a new advisory and administrative services agreement between Terra Income Advisors and Terra Fund 6 and upon the satisfaction of certain other conditions. Operating Agreement The Company had an operating agreement, as amended, with Terra Income Advisors whereby Terra Income Advisors was responsible for the Company’s day-to-day operations. As part of the Axar Transaction, on February 8, 2018, Terra Income Advisors assigned all of its rights, title and interest in the Company pursuant to the Amended and Restated Limited Liability Company Agreement of the Company, dated January 1, 2016, to Terra Fund Advisors. 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 its manager pursuant to a management agreement with the manager. Management Agreement As part of the Axar Transaction, Terra Income Advisors, Terra Property Trust’s manager prior to February 8, 2018, assigned all of its rights, title and interest in and to its then current external management agreement with Terra Property Trust to Terra REIT Advisors and immediately thereafter, Terra REIT Advisors and Terra Property Trust amended and restated such management agreement. Such amended and restated management agreement has the same economic terms and is in all material respects otherwise on the same terms as the management agreement between Terra Income Advisors and Terra Property Trust in effect immediately prior to the Axar Transaction, except for the identity of the manager. Dividend Income As discussed in Note 3 , for the three months ended September 30, 2018 and 2017 , the Company received approximately $8.1 million and $13.1 million of distributions from Terra Property Trust, respectively, of which $2.6 million and $8.7 million was a return of capital, respectively. For the nine months ended September 30, 2018 and 2017 , the Company received approximately $24.9 million and $29.7 million of distributions from Terra Property Trust, respectively, of which $7.1 million and $14.0 million was a return of capital, respectively. |
Significant Risk Factors
Significant Risk Factors | 9 Months Ended |
Sep. 30, 2018 | |
Investments, All Other Investments [Abstract] | |
Financial Instruments Disclosure [Text Block] | Note 5. Risks and Uncertainties The Company’s investment in Terra Property Trust is highly illiquid and there is no assurance that the Company will achieve its investment objectives, including targeted returns. Terra Property Trust’s loans are highly illiquid. Due to the illiquidity of the loans, valuation of the loans may be difficult, as there generally will be no established markets for these loans. As the Company’s investment is 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. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
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 | 9 Months Ended |
Sep. 30, 2018 | |
Limited Liability Company (LLC) Members' Equity [Abstract] | |
Members' Capital | Note 7. Members’ Capital As of September 30, 2018 and December 31, 2017 , the Company had 6,643.4 units and 6,697.4 units outstanding, respectively, and the net asset value per unit was $40,340 and $41,143 , respectively. Capital Contributions As of January 31, 2015, the offering period ended and the Company stopped accepting capital contributions. 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 (regular units of limited liability company interest in the Company) 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 which the Company referred to as the carried interest distribution, and 85% to the holders of Continuing Income Units. The preferred return applicable to the Continuing Income Units sold in the offering concurrent with the Merger is 8.5% . In addition, holders of Termination Units (membership interest in the Company that were issued to members of Terra Funds 1 through 4 who chose to enter the liquidation phase of their investments) receive monthly distributions at a fixed rate of 6.0% per annum of the Unreturned Invested Capital (capital contributions less cumulative stated distributions of principal and less any amounts paid in redemption). For the nine months ended September 30, 2018 and 2017 , the Company made total distributions to non-manager members of $22.5 million and $23.1 million , respectively. For the nine months ended September 30, 2018 and 2017 , the Company did not make any carried interest distributions to the Manager. 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 nine months ended September 30, 2018 and 2017 , 3.6 and 7.9 Continuing Income Units, respectively, were redeemed for $0.1 million and $0.3 million , respectively, and 50.4 and 121.1 Termination Units, respectively, were redeemed for $2.1 million and $5.0 million , respectively. As of September 30, 2018 , there were no Termination Units outstanding. 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 September 30, 2018 and December 31, 2017 , 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 offering concurrent with the Merger 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 nine months ended September 30, 2018 and 2017 : Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 Managing Member Non-Managing Members Total Managing Non-Managing Members Total Units outstanding, beginning of period — 6,697.4 6,697.4 — 6,826.5 6,826.5 Early redemption of Continuing Income Units — (3.6 ) (3.6 ) — (7.9 ) (7.9 ) Termination Units redeemed — (50.4 ) (50.4 ) — (121.1 ) (121.1 ) Units outstanding, end of period — 6,643.4 6,643.4 — 6,697.5 6,697.5 |
Financial Highlights
Financial Highlights | 9 Months Ended |
Sep. 30, 2018 | |
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 nine months ended September 30, 2018 and 2017 . 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 which are annualized except for the non-recurring expenses. 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 nine months ended September 30, 2018 and 2017 : Nine Months Ended September 30, 2018 2017 Per unit operating performance: Net asset value per unit, beginning of period $ 41,143 $ 42,423 Increase in members’ capital from operations (1) : Net investment income 2,622 2,240 Net change in unrealized (depreciation) appreciation on investment (53 ) 135 Total increase in members’ capital from operations 2,569 2,375 Distributions to member (2) : Capital distributions (3,372 ) (3,401 ) Net decrease in members’ capital resulting from distributions (3,372 ) (3,401 ) Capital share transactions: Other (3) — 8 Net increase in members’ capital resulting from capital share transactions — 8 Net asset value per unit, end of period $ 40,340 $ 41,405 Ratios to average net assets: Expenses 0.17 % 0.22 % Net investment income 8.61 % 7.13 % IRR, beginning of period 6.26 % 5.43 % IRR, end of period 6.70 % 6.07 % _______________ (1) The per unit data was derived by using the weighted average units outstanding during the applicable periods, which were 6,670 units and 6,801 units for the nine months ended September 30, 2018 and 2017 , 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 | 9 Months Ended |
Sep. 30, 2018 | |
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 Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
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. 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 ( Note 3 ). |
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 appreciation or depreciation on investment on the consolidated statements of operations. |
Revenue Recognition | Revenue Recognition 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. The Company, however, may be liable for New York City Unincorporated Business Tax (the “NYC UBT”) and similar taxes of various other municipalities. New York City imposes the NYC UBT at a statutory rate of 4% on net income generated from ordinary business activities carried on in New York City. For the three and nine months ended September 30, 2018 and 2017 , none of the Company’s income was subject to the NYC UBT. 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 nine months ended September 30, 2018 and 2017 , 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 Pronouncement 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 adopted this standard on January 1, 2018 using the cumulative effect transition method. The adoption of ASU 2014-09 did not have any 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. The Company adopted this standard on January 1, 2018. The adoption of ASU 2016-01 did not have any impact on its 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 and disclosures 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 adopted this standard on January 1, 2018. The adoption of ASU 2016-15 did not have any impact on its consolidated financial statements and disclosures. In June 2018, the Securities and Exchange Commission (the “SEC”) adopted amendments that raise the thresholds in the smaller reporting company definition. Under the new definition, generally, a company qualifies as a “smaller reporting company” if: (i) it has public float of less than $250 million; or (ii) it has less than $100 million in annual revenues and no public float or public float of less than $700 million. These amendments did not have any impact on the Company. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure framework — Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). The objective of ASU 2018-13 is to improve the effectiveness of disclosures in the notes to financial statements by facilitating clear communication of information required by U.S. GAAP. The amendments in ASU 2018-13 added, removed and modified certain fair value measurement disclosure requirements. ASU 2018-13 is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted upon issuance of ASU 2018-13. The Company does not expect the adoption of ASU 2018-13 to have a material impact on its consolidated financial statements and disclosures. In August 2018, the SEC adopted a final rule that eliminates or amends disclosure requirements that have become duplicative, overlapping, or outdated in light of other SEC disclosure requirements, U.S. GAAP, or changes in the information environment (the “Final Rule”). The Final Rule is intended to simplify and update the disclosure of information to investors and reduce compliance burdens for companies, without significantly altering the total mix of information available to investors. Among other items, the Final Rule requires registrants to include in their interim financial statements a reconciliation of changes in net assets or stockholders’ equity in the notes or as a separate statement. The Final Rule is effective for all filings made on or after November 5, 2018; however, the SEC would not object if a filer’s first presentation of the changes in net assets or stockholders' equity was included in its Form 10-Q for the quarter that begins after the effective date of the Final Rule. The Company intends to adopt the Final Rule in the first quarter of 2019. The adoption of the Final Rule is not expected to have a material impact on the Company’s consolidated financial statements and disclosures. |
Investment and Fair Value (Tabl
Investment and Fair Value (Tables) - Terra Property Trust | 9 Months Ended |
Sep. 30, 2018 | |
Investments | |
Summary Investment Holdings | The following table presents a summary of the Company’s investment at September 30, 2018 and December 31, 2017 : September 30, 2018 December 31, 2017 Investment Cost Fair Value % of Members’ Capital Cost Fair Value % of Members’ Capital 14,912,990 common shares of Terra Property Trust, Inc. $ 268,335,112 $ 268,006,493 100.0 % $ 275,401,972 $ 275,428,953 100.0 % |
Summary of financial information | The following tables present the summarized financial information of Terra Property Trust: September 30, 2018 December 31, 2017 Carrying value of loans held for investment $ 339,615,579 $ 357,093,730 Real estate owned, net 56,756,051 — Other assets 41,064,173 51,899,445 Total assets 437,435,803 408,993,175 Mortgage loan payable and obligations under participation agreements (145,573,187 ) (110,175,525 ) Accounts payable, accrued expenses and other liabilities (23,431,489 ) (23,307,944 ) Total liabilities (169,004,676 ) (133,483,469 ) Stockholder’s equity $ 268,431,127 $ 275,509,706 Three Months Ended September 30, Nine Months Ended September 30, 2018 2018 2017 2018 2017 Revenues $ 12,788,205 $ 9,651,677 $ 35,751,197 $ 28,197,274 Expenses (7,300,400 ) (4,598,716 ) (17,921,479 ) (12,379,894 ) Realized gain on investments — (604,169 ) — (114,209 ) Net income $ 5,487,805 $ 4,448,792 $ 17,829,718 $ 15,703,171 |
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 September 30, 2018 and December 31, 2017 : September 30, 2018 Fair Value Measurements Level 1 Level 2 Level 3 Total Investment: Equity investment in Terra Property Trust $ — $ — $ 268,006,493 $ 268,006,493 December 31, 2017 Fair Value Measurements Level 1 Level 2 Level 3 Total Investment: Equity investment in Terra Property Trust $ — $ — $ 275,428,953 $ 275,428,953 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | Changes in Level 3 investment for the nine months ended September 30, 2018 and 2017 were as follows: Equity Investment in Terra Property Trust Nine Months Ended September 30, 2018 2017 Beginning balance $ 275,428,953 $ 290,419,317 Return of capital (7,066,860 ) (14,012,486 ) Net change in unrealized (depreciation) appreciation on investment (355,600 ) 920,026 Ending balance $ 268,006,493 $ 277,326,857 Net change in unrealized (depreciation) appreciation on investment for the period relating to those Level 3 assets that were still held by the Company $ (355,600 ) $ 920,026 |
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 September 30, 2018 and December 31, 2017 . 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 September 30, 2018 Asset Category Minimum Maximum Weighted Average Assets: Equity investment in Terra Property Trust $ 268,006,493 Discounted cash flow (1) Discount rate (1) 7.30 % 16.00 % 14.35 % Fair Value Primary Valuation Technique Unobservable Inputs December 31, 2017 Asset Category Minimum Maximum Weighted Average Assets: Equity investment in Terra Property Trust $ 275,428,953 Discounted cash flow (1) Discount rate (1) 2.56 % 16.00 % 13.50 % _______________ (1) Discounted cash flows and discount rates applied to Terra Property Trust’s assets and liabilities. |
Members' Capital (Tables)
Members' Capital (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Limited Liability Company (LLC) Members' Equity [Abstract] | |
Member Capital Termination Units Outstanding | Termination Units outstanding. |
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 offering concurrent with the Merger 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 nine months ended September 30, 2018 and 2017 : Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 Managing Member Non-Managing Members Total Managing Non-Managing Members Total Units outstanding, beginning of period — 6,697.4 6,697.4 — 6,826.5 6,826.5 Early redemption of Continuing Income Units — (3.6 ) (3.6 ) — (7.9 ) (7.9 ) Termination Units redeemed — (50.4 ) (50.4 ) — (121.1 ) (121.1 ) Units outstanding, end of period — 6,643.4 6,643.4 — 6,697.5 6,697.5 |
Financial Highlights (Tables)
Financial Highlights (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Investment Company, Financial Highlights [Abstract] | |
Financial Highlights | The following summarizes the Company’s financial highlights for the nine months ended September 30, 2018 and 2017 : Nine Months Ended September 30, 2018 2017 Per unit operating performance: Net asset value per unit, beginning of period $ 41,143 $ 42,423 Increase in members’ capital from operations (1) : Net investment income 2,622 2,240 Net change in unrealized (depreciation) appreciation on investment (53 ) 135 Total increase in members’ capital from operations 2,569 2,375 Distributions to member (2) : Capital distributions (3,372 ) (3,401 ) Net decrease in members’ capital resulting from distributions (3,372 ) (3,401 ) Capital share transactions: Other (3) — 8 Net increase in members’ capital resulting from capital share transactions — 8 Net asset value per unit, end of period $ 40,340 $ 41,405 Ratios to average net assets: Expenses 0.17 % 0.22 % Net investment income 8.61 % 7.13 % IRR, beginning of period 6.26 % 5.43 % IRR, end of period 6.70 % 6.07 % _______________ (1) The per unit data was derived by using the weighted average units outstanding during the applicable periods, which were 6,670 units and 6,801 units for the nine months ended September 30, 2018 and 2017 , 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 | 9 Months Ended |
Sep. 30, 2018USD ($)Number_of_FundsExtension | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
Operation date | Aug. 8, 2013 |
LLC formation state | Delaware |
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 |
Maximum | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
Investment in real estate loans | $ 50 |
Investment and Fair Value (Narr
Investment and Fair Value (Narratives) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Investments [Abstract] | ||||
Proceeds from Equity Method Investment, Distribution | $ 8,100,000 | $ 13,100,000 | $ 24,900,000 | $ 29,700,000 |
Return of capital on investment | $ 2,600,000 | $ 8,700,000 | $ 7,066,860 | $ 14,012,486 |
Investment and Fair Value (Summ
Investment and Fair Value (Summary of the Investments) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Investments | |||||
Proceeds from Equity Method Investment, Distribution | $ 8,100,000 | $ 13,100,000 | $ 24,900,000 | $ 29,700,000 | |
Common Stock, Shares, Outstanding | 14,912,990 | 14,912,990 | 14,912,990 | ||
Cost | $ 268,335,112 | $ 268,335,112 | $ 275,401,972 | ||
Fair Value | $ 268,006,493 | $ 268,006,493 | $ 275,428,953 | ||
Terra Property Trust | Controlled | |||||
Investments | |||||
Common Stock, Shares, Outstanding | 14,912,990 | 14,912,990 | 14,912,990 | ||
Cost | $ 268,335,112 | $ 268,335,112 | $ 275,401,972 | ||
Fair Value | $ 268,006,493 | $ 268,006,493 | $ 275,428,953 | ||
% of Members Capital | 100.00% | 100.00% | 100.00% |
Investment and Fair Value (Su_2
Investment and Fair Value (Summary of Financial Information of Terra Property Trust) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Investment | |||||
Proceeds from Equity Method Investment, Distribution | $ 8,100,000 | $ 13,100,000 | $ 24,900,000 | $ 29,700,000 | |
Return of capital on investment | 2,600,000 | $ 8,700,000 | 7,066,860 | $ 14,012,486 | |
Terra Property Trust | |||||
Investment | |||||
Carrying value of investments | 339,615,579 | 339,615,579 | $ 357,093,730 | ||
Real estate owned, net | 56,756,051 | 56,756,051 | 0 | ||
Other assets | 41,064,173 | 41,064,173 | 51,899,445 | ||
Total assets | 437,435,803 | 437,435,803 | 408,993,175 | ||
Mortgage loan payable and obligations under participation agreements | (145,573,187) | (145,573,187) | (110,175,525) | ||
Accounts payable, accrued expenses and other liabilities | (23,431,489) | (23,431,489) | (23,307,944) | ||
Total liabilities | (169,004,676) | (169,004,676) | (133,483,469) | ||
Stockholder’s equity | $ 268,431,127 | $ 268,431,127 | $ 275,509,706 |
Investment and Fair Value (Su_3
Investment and Fair Value (Summary of Financial Information 2) (Details) - Terra Property Trust - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Investments | ||||
Revenues | $ 12,788,205 | $ 9,651,677 | $ 35,751,197 | $ 28,197,274 |
Expenses | (7,300,400) | (4,598,716) | (17,921,479) | (12,379,894) |
Loss on sale of investments | 0 | (604,169) | 0 | (114,209) |
Net income | $ 5,487,805 | $ 4,448,792 | $ 17,829,718 | $ 15,703,171 |
Investment and Fair Value (Equi
Investment and Fair Value (Equity Investment at Fair Value on a recurring basis) (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | $ 268,006,493 | $ 275,428,953 |
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 | $ 268,006,493 | $ 275,428,953 |
Investments and Fair Value (Cha
Investments and Fair Value (Changes in Level 3) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Return of capital | $ (2,600,000) | $ (8,700,000) | $ (7,066,860) | $ (14,012,486) | ||
Net change in unrealized depreciation or appreciation on investment | $ (179,846) | 428,032 | $ (355,600) | 920,026 | ||
Common Stock, Shares, Outstanding | 14,912,990 | 14,912,990 | 14,912,990 | |||
Level 3 | ||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | $ 275,428,953 | 290,419,317 | $ 290,419,317 | |||
Return of capital | (7,066,860) | (14,012,486) | ||||
Net change in unrealized depreciation or appreciation on investment | (355,600) | 920,026 | ||||
Ending balance | $ 268,006,493 | $ 277,326,857 | 268,006,493 | 277,326,857 | $ 275,428,953 | |
Net Change in unrealized (depreciation) appreciation on investment | $ (355,600) | $ 920,026 | ||||
Fair Value, Level 3 Transfers in, Description | None | None | None | None | ||
Fair Value, Level 3 Transfers out, Description | None | None | None | None | ||
Weighted Average | Level 3 | ||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Discount rate | [1] | 14.35% | 13.50% | |||
Maximum | Level 3 | ||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Discount rate | [1] | 16.00% | 16.00% | |||
Minimum | Level 3 | ||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Discount rate | [1] | 2.56% | ||||
[1] | Discounted cash flows and discount rates applied to Terra Property Trust’s assets and liabilities. |
Investment and Fair Value (Valu
Investment and Fair Value (Valuation techniques and significant unobservable inputs) (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Fair Value | $ 268,006,493 | $ 275,428,953 | |
Level 3 | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Fair Value | $ 268,006,493 | $ 275,428,953 | |
Primary Valuation Techniques | [1] | Discounted cash flow (1) | Discounted cash flow (1) |
Level 3 | Minimum | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Discount rate | [1] | 2.56% | |
Level 3 | Maximum | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Discount rate | [1] | 16.00% | 16.00% |
Level 3 | Weighted Average | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Discount rate | [1] | 14.35% | 13.50% |
[1] | Discounted cash flows and discount rates applied to Terra Property Trust’s assets and liabilities. |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Investments | ||||
Proceeds from Equity Method Investment, Distribution | $ 8,100,000 | $ 13,100,000 | $ 24,900,000 | $ 29,700,000 |
Proceeds from Equity Method Investment, Distribution, Return of Capital | $ 2,600,000 | $ 8,700,000 | $ 7,066,860 | $ 14,012,486 |
LLC exit date | Dec. 31, 2023 | |||
Terra Fund Advisors | ||||
Investments | ||||
Ownership Interest | 49.00% | |||
Terra Capital Partners | ||||
Investments | ||||
Ownership Interest | 65.70% | |||
Terra REIT Advisors | ||||
Investments | ||||
Ownership Interest | 65.70% | |||
Terra Income Advisors | Initial Acquisition | ||||
Investments | ||||
Ownership Interest | 49.00% | |||
Terra Income Advisors | Additional Acquisition | ||||
Investments | ||||
Ownership Interest | 16.70% | |||
Terra Income Advisors | Total | ||||
Investments | ||||
Ownership Interest | 65.70% |
Members' Capital Members' Capit
Members' Capital Members' Capital (Narratives) (Details) - USD ($) | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Members Capital | ||||
Common Unit, Outstanding | 6,643.4 | 6,697.5 | 6,697.4 | 6,826.5 |
Net Asset Value Per Share | $ 40,340 | $ 41,143 | ||
Capital distributions | $ 22,497,394 | $ 23,127,464 | ||
Redemption value | $ 2,188,790 | $ 5,279,768 | ||
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 | ||||
Member units redemption | 3.6 | 7.9 | ||
Distribution Percent | 85.00% | 85.00% | ||
Shares Issued, Price Per Share | $ 43,410 | |||
Termination Units Holder | ||||
Members Capital | ||||
Member units redemption | 50.4 | 121.1 | ||
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% | 5.00% | ||
Rights Offering | ||||
Members Capital | ||||
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-managing Members | ||||
Members Capital | ||||
Capital distributions | $ 22,497,394 | $ 23,127,464 | ||
Managing Member | ||||
Members Capital | ||||
Capital distributions | $ 0 | $ 0 | ||
Non-managing Member | ||||
Members Capital | ||||
Common Unit, Outstanding | 6,643.4 | 6,697.5 | 6,697.4 | 6,826.5 |
Non-managing Member | Continuing Income Units Holder | ||||
Members Capital | ||||
Member units redemption | 3.6 | 7.9 | ||
Redemption value | $ 130,000 | $ 260,000 | ||
Non-managing Member | Termination Units Holder | ||||
Members Capital | ||||
Member units redemption | 50.4 | 121.1 | ||
Redemption value | $ 2,100,000 | $ 5,040,000 |
Members' Capital Members' Cap_2
Members' Capital Members' Capital (Members' Units Outstanding) (Details) - shares | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Members Capital | ||
Units outstanding, beginning of period | 6,697.4 | 6,826.5 |
Units outstanding, end of period | 6,643.4 | 6,697.5 |
Managing Member | ||
Members Capital | ||
Units outstanding, beginning of period | 0 | 0 |
Units outstanding, end of period | 0 | 0 |
Non-managing Member | ||
Members Capital | ||
Units outstanding, beginning of period | 6,697.4 | 6,826.5 |
Units outstanding, end of period | 6,643.4 | 6,697.5 |
Continuing Income Units Holder | ||
Members Capital | ||
Member units redemption | (3.6) | (7.9) |
Continuing Income Units Holder | Managing Member | ||
Members Capital | ||
Member units redemption | 0 | 0 |
Continuing Income Units Holder | Non-managing Member | ||
Members Capital | ||
Member units redemption | (3.6) | (7.9) |
Termination Units Holder | ||
Members Capital | ||
Member units redemption | (50.4) | (121.1) |
Termination Units Holder | Managing Member | ||
Members Capital | ||
Member units redemption | 0 | 0 |
Termination Units Holder | Non-managing Member | ||
Members Capital | ||
Member units redemption | (50.4) | (121.1) |
Financial Highlights (Details)
Financial Highlights (Details) - $ / shares | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Investment Company, Financial Highlights [Roll Forward] | |||||
Net asset value per unit | $ 41,143 | ||||
Capital share transactions: | |||||
Net asset value per unit | 40,340 | $ 41,143 | |||
Non-managing Member Class | |||||
Investment Company, Financial Highlights [Roll Forward] | |||||
Net asset value per unit | 41,143 | $ 42,423 | 42,423 | ||
Increase in members’ capital from operations (1): | |||||
Net investment income | [1] | 2,622 | 2,240 | ||
Net change in unrealized (depreciation) appreciation on investment | [1] | (53) | 135 | ||
Total increase in members’ capital from operations | [1] | 2,569 | 2,375 | ||
Distributions to member (2): | |||||
Capital distributions | [2] | (3,372) | (3,401) | ||
Net decrease in members’ capital resulting from distributions | [2] | (3,372) | (3,401) | ||
Capital share transactions: | |||||
Other (3) | [3] | 0 | 8 | ||
Net increase in members’ capital resulting from capital share transactions | [3] | 0 | 8 | ||
Net asset value per unit | $ 40,340 | $ 41,405 | $ 41,143 | $ 42,423 | |
Ratios to average net assets: | |||||
Expenses | 0.17% | 0.22% | |||
Net investment income | 8.61% | 7.13% | |||
Internal Rate of Return since Inception | 6.70% | 6.07% | 6.26% | 5.43% | |
Weighted Average Membership Units Outstanding | 6,670 | 6,801 | |||
[1] | The per unit data was derived by using the weighted average units outstanding during the applicable periods, which were 6,670 units and 6,801 units for the nine months ended September 30, 2018 and 2017, 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. |