Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 29, 2022 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Registrant Name | TPG RE Finance Trust, Inc. | |
Entity Central Index Key | 0001630472 | |
Current Fiscal Year End Date | --12-31 | |
Entity Incorporation, State or Country Code | MD | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 77,185,845 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity File Number | 001-38156 | |
Entity Tax Identification Number | 36-4796967 | |
Entity Address, Address Line One | 888 Seventh Avenue | |
Entity Address, Address Line Two | 35th Floor | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10106 | |
City Area Code | 212 | |
Local Phone Number | 601-4700 | |
Common Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | TRTX | |
Security Exchange Name | NYSE | |
6.25% Series C Cumulative Redeemable Preferred Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 6.25% Series C Cumulative Redeemable Preferred Stock, par value $0.001 per share | |
Trading Symbol | TRTX PRC | |
Security Exchange Name | NYSE |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | |
Assets | |||
Cash and cash equivalents | [1] | $ 351,572 | $ 260,635 |
Restricted cash | [1] | 847 | 404 |
Accounts receivable | [1] | 127 | 12 |
Collateralized loan obligation proceeds held at trustee | [1] | 260 | 204 |
Accounts receivable from servicer/trustee | [1] | 745 | 176 |
Accrued interest and fees receivable | [1] | 29,559 | 26,620 |
Loans held for investment | [1] | 5,115,788 | 4,909,202 |
Allowance for credit losses | [1] | (46,307) | (41,999) |
Loans held for investment, net (includes $1,633,812 and $1,697,481, respectively, pledged as collateral under secured financing agreements) | [1] | 5,069,481 | 4,867,203 |
Real estate owned | [1] | 60,622 | 60,622 |
Other assets | [1] | 1,843 | 2,144 |
Total assets | [1] | 5,515,056 | 5,218,020 |
Liabilities | |||
Accrued interest payable | [1] | 3,269 | 2,723 |
Accrued expenses and other liabilities | [1] | 13,659 | 11,563 |
Secured financing agreements (net of deferred financing costs of $5,097 and $4,005, respectively) | [1] | 1,192,956 | 1,162,206 |
Collateralized loan obligations (net of deferred financing costs of $14,489 and $10,297, respectively) | [1] | 2,810,626 | 2,545,691 |
Payable to affiliates | [1] | 6,153 | 5,609 |
Deferred revenue | [1] | 1,784 | 1,366 |
Dividends payable | [1] | 18,701 | 24,156 |
Total liabilities | [1] | 4,047,148 | 3,753,314 |
Commitments and contingencies - see Note 14 | [1] | ||
Permanent equity | |||
Common Stock Value | [1] | 77 | 77 |
Additional paid-in-capital | [1] | 1,713,152 | 1,711,886 |
Accumulated deficit | [1] | (245,329) | (247,265) |
Total stockholders' equity | [1] | 1,467,908 | 1,464,706 |
Total permanent equity | [1] | 1,467,908 | 1,464,706 |
Total liabilities and stockholders' equity | [1] | 5,515,056 | 5,218,020 |
Series B Preferred Stock | |||
Temporary equity | |||
Series B Preferred Stock ($0.001 par value per share; 13,000,000 and 13,000,000 shares authorized, respectively; 0 and 0 shares issued and outstanding, respectively) | [1] | 0 | 0 |
Series A Preferred Stock | |||
Permanent equity | |||
Preferred Stock Value | [1] | 0 | 0 |
Series C Preferred Stock | |||
Permanent equity | |||
Preferred Stock Value | [1] | $ 8 | $ 8 |
[1] | The Company’s consolidated Total Assets and Total Liabilities as of March 31, 2022 include assets and liabilities of variable interest entities (“VIEs”) of $ 3.4 billion and $ 2.8 billion, respectively. The Company’s consolidated Total Assets and Total Liabilities as of December 31, 2021 include assets and liabilities of VIEs of $ 3.2 billion and $ 2.6 billion, respectively. These assets can be used only to satisfy obligations of the VIEs, and creditors of the VIEs have recourse only to these assets, and not to TPG RE Finance Trust, Inc. See Note 5 to the Consolidated Financial Statements for details. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) (unaudited) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | |
Common stock, par value | $ 0.001 | $ 0.001 | |
Common stock, authorized shares | 302,500,000 | 302,500,000 | |
Common stock, shares issued | 77,185,845 | 77,183,892 | |
Common stock, shares outstanding | 77,185,845 | 77,183,892 | |
Total assets | [1] | $ 5,515,056 | $ 5,218,020 |
Total liabilities | [1] | 4,047,148 | 3,753,314 |
Variable Interest Entity, Primary Beneficiary | |||
Total assets | 3,399,175 | 3,173,889 | |
Total liabilities | $ 2,816,968 | $ 2,552,834 | |
Series B Preferred Stock | |||
Temporary equity, par value | $ 0.001 | $ 0.001 | |
Temporary equity, shares authorized | 13,000,000 | 13,000,000 | |
Temporary equity, shares issued | 0 | 0 | |
Temporary equity, shares outstanding | 0 | 0 | |
Series A Preferred Stock | |||
Preferred stock, par value | $ 0.001 | $ 0.001 | |
Preferred stock, authorized shares | 100,000,000 | 100,000,000 | |
Preferred stock, shares issued | 125 | 125 | |
Preferred stock, shares outstanding | 125 | 125 | |
Preferred stock, aggregate liquidation preference | $ 125 | $ 125 | |
Series C Preferred Stock | |||
Preferred stock, par value | $ 0.001 | $ 0.001 | |
Preferred stock, authorized shares | 8,050,000 | 8,050,000 | |
Preferred stock, shares issued | 8,050,000 | 8,050,000 | |
Preferred stock, shares outstanding | 8,050,000 | 8,050,000 | |
Preferred stock, aggregate liquidation preference | $ 201,250 | $ 201,250 | |
Repurchase Agreements | |||
Loans pledged as collateral | 1,633,812 | 1,697,481 | |
Deferred financing costs | 5,097 | 4,005 | |
Collateralized Loan Obligation | |||
Loans pledged as collateral | 3,372,859 | 3,138,603 | |
Deferred financing costs | $ 14,489 | $ 10,297 | |
[1] | The Company’s consolidated Total Assets and Total Liabilities as of March 31, 2022 include assets and liabilities of variable interest entities (“VIEs”) of $ 3.4 billion and $ 2.8 billion, respectively. The Company’s consolidated Total Assets and Total Liabilities as of December 31, 2021 include assets and liabilities of VIEs of $ 3.2 billion and $ 2.6 billion, respectively. These assets can be used only to satisfy obligations of the VIEs, and creditors of the VIEs have recourse only to these assets, and not to TPG RE Finance Trust, Inc. See Note 5 to the Consolidated Financial Statements for details. |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Interest income and interest expense | ||
Interest income | $ 61,017 | $ 58,148 |
Interest expense | (22,501) | (20,290) |
Net interest income | 38,516 | 37,858 |
Other revenue | ||
Other income, net | 18 | 96 |
Total other revenue | 18 | 96 |
Other expenses | ||
Professional fees | 1,146 | 1,198 |
General and administrative | 1,169 | 1,030 |
Stock compensation expense | 1,266 | 1,456 |
Servicing and asset management fees | 494 | 328 |
Management fee | 5,709 | 5,094 |
Total other expenses | 9,784 | 9,106 |
Credit loss (expense) benefit, net | (4,884) | 4,038 |
Income before income taxes | 23,866 | 32,886 |
Income tax expense, net | (85) | (931) |
Net income | 23,781 | 31,955 |
Preferred stock dividends and participating securities' share in earnings | (3,345) | (6,270) |
Series B Preferred Stock accretion, including allocated Warrant fair value and transaction costs | (1,452) | |
Net income attributable to common stockholders - see Note 11 | $ 20,436 | $ 24,233 |
Earnings per common share, basic | $ 0.26 | $ 0.32 |
Earnings per common share, diluted | $ 0.25 | $ 0.30 |
Weighted average number of common shares outstanding | ||
Basic: | 77,183,957 | 76,895,615 |
Diluted: | 81,788,723 | 80,673,236 |
Other comprehensive income | ||
Net income | $ 23,781 | $ 31,955 |
Comprehensive net income | $ 23,781 | $ 31,955 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Equity (Unaudited) - USD ($) | Total | Preferred StockSeries A Preferred Stock | Preferred StockSeries C Preferred Stock | Preferred StockSeries B Preferred Stock | Common Stock | Additional Paid-in-Capital | Accumulated Deficit | |
Balance at Dec. 31, 2020 | $ 1,266,900,000 | $ 77 | $ 1,559,681,000 | $ (292,858,000) | ||||
Balance, Shares at Dec. 31, 2020 | 125 | 76,787,006 | ||||||
Temporary Equity, Balance at Dec. 31, 2020 | $ 199,551,000 | |||||||
Issuance of Common Stock, Shares | 110,096 | |||||||
Amortization of Share-Based Compensation | 1,456,000 | 1,456,000 | ||||||
Net income | 31,955,000 | 31,955,000 | ||||||
Dividends on Preferred Stock | (6,124,000) | (6,124,000) | ||||||
Series B Preferred Stock Accretion, Including Allocated Warrant Fair Value and Transaction Costs | (1,452,000) | (1,452,000) | ||||||
Temporary Equity, Series B Preferred Stock Accretion, Including Allocated Warrant Fair Value and Transaction Costs | (1,452,000) | |||||||
Dividends on Common Stock (Dividends Declared per Share) | (15,507,000) | (15,507,000) | ||||||
Balance at Mar. 31, 2021 | 1,277,228,000 | $ 77 | 1,559,685,000 | (282,534,000) | ||||
Balance, Shares at Mar. 31, 2021 | 125 | 76,897,102 | ||||||
Temporary Equity, Balance at Mar. 31, 2021 | $ 201,003,000 | |||||||
Balance at Dec. 31, 2021 | 1,464,706,000 | [1] | $ 8 | $ 77 | 1,711,886,000 | (247,265,000) | ||
Balance, Shares at Dec. 31, 2021 | 125 | 8,050,000 | 77,183,892 | |||||
Issuance of Common Stock, Shares | 1,953 | |||||||
Amortization of Share-Based Compensation | 1,266,000 | 1,266,000 | ||||||
Net income | 23,781,000 | 23,781,000 | ||||||
Dividends on Preferred Stock | (3,148,000) | (3,148,000) | ||||||
Dividends on Common Stock (Dividends Declared per Share) | (18,697,000) | (18,697,000) | ||||||
Balance at Mar. 31, 2022 | $ 1,467,908,000 | [1] | $ 8 | $ 77 | $ 1,713,152,000 | $ (245,329,000) | ||
Balance, Shares at Mar. 31, 2022 | 125 | 8,050,000 | 77,185,845 | |||||
[1] | The Company’s consolidated Total Assets and Total Liabilities as of March 31, 2022 include assets and liabilities of variable interest entities (“VIEs”) of $ 3.4 billion and $ 2.8 billion, respectively. The Company’s consolidated Total Assets and Total Liabilities as of December 31, 2021 include assets and liabilities of VIEs of $ 3.2 billion and $ 2.6 billion, respectively. These assets can be used only to satisfy obligations of the VIEs, and creditors of the VIEs have recourse only to these assets, and not to TPG RE Finance Trust, Inc. See Note 5 to the Consolidated Financial Statements for details. |
Consolidated Statement of Cha_2
Consolidated Statement of Changes in Equity (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement Of Stockholders Equity [Abstract] | ||
Common stock dividends declared per share | $ 0.24 | $ 0.20 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Cash flows from operating activities: | |||
Net income | $ 23,781 | $ 31,955 | |
Adjustment to reconcile net income to net cash flows from operating activities: | |||
Amortization and accretion of premiums, discounts and loan origination fees, net | (1,491) | (1,600) | |
Amortization of deferred financing costs | 4,521 | 3,818 | |
Decrease (increase) of accrued capitalized interest | 313 | (816) | |
Stock compensation expense | 1,266 | 1,456 | |
(Decrease) increase of allowance for credit losses, net (see Note 3) | 4,884 | (4,038) | |
Cash flows due to changes in operating assets and liabilities: | |||
Accounts receivable | 35 | 30 | |
Accrued interest receivable | (3,310) | (1,447) | |
Accrued expenses and other liabilities | 809 | (3,329) | |
Accrued interest payable | 546 | (250) | |
Payable to affiliates | 544 | (478) | |
Deferred fee income | 418 | 264 | |
Other assets | 301 | 775 | |
Net cash provided by operating activities | 32,617 | 26,340 | |
Cash flows from investing activities: | |||
Origination of loans held for investment | (223,871) | (37,091) | |
Advances on loans held for investment | (29,235) | (29,566) | |
Principal repayments of loans held for investment | 47,294 | 4,314 | |
Net cash (used in) investing activities | (205,812) | (62,343) | |
Cash flows from financing activities: | |||
Payments on collateralized loan obligations | (637,906) | (4,212) | |
Proceeds from collateralized loan obligation | 907,031 | 728,434 | |
Payments on secured financing agreements | (567,993) | (661,991) | |
Proceeds from secured financing agreements | 599,835 | ||
Payment of deferred financing costs | (9,092) | (7,875) | |
Net cash provided by financing activities | 264,575 | 18,754 | |
Net change in cash, cash equivalents, and restricted cash | 91,380 | (17,249) | |
Cash, cash equivalents and restricted cash at beginning of period | 261,039 | 319,669 | |
Cash, cash equivalents and restricted cash at end of period | 352,419 | 302,420 | |
Supplemental disclosure of cash flow information: | |||
Interest paid | 17,490 | 16,723 | |
Taxes paid | 20 | 852 | |
Supplemental disclosure of non-cash investing and financing activities: | |||
Collateralized loan obligation proceeds held at trustee | 56 | 308,916 | |
Dividends declared, not paid | 18,701 | [1] | 15,510 |
Principal repayments of loans held for investment held by servicer/trustee, net | 348 | 1,154 | |
Accrued deferred financing costs | 711 | 58 | |
Common Stock, Undefined Class | |||
Cash flows from financing activities: | |||
Dividends paid | (24,156) | (29,482) | |
Preferred Stock, Undefined Class | |||
Cash flows from financing activities: | |||
Dividends paid | $ (3,144) | $ (6,120) | |
[1] | The Company’s consolidated Total Assets and Total Liabilities as of March 31, 2022 include assets and liabilities of variable interest entities (“VIEs”) of $ 3.4 billion and $ 2.8 billion, respectively. The Company’s consolidated Total Assets and Total Liabilities as of December 31, 2021 include assets and liabilities of VIEs of $ 3.2 billion and $ 2.6 billion, respectively. These assets can be used only to satisfy obligations of the VIEs, and creditors of the VIEs have recourse only to these assets, and not to TPG RE Finance Trust, Inc. See Note 5 to the Consolidated Financial Statements for details. |
Business and Organization
Business and Organization | 3 Months Ended |
Mar. 31, 2022 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Business and Organization | (1) Business and Organization TPG RE Finance Trust, Inc. (together with its consolidated subsidiaries, “we,” “us,” “our” or the “Company”) is organized as a holding company and conducts its operations primarily through TPG RE Finance Trust Holdco, LLC (“Holdco”), a Delaware limited liability company that is wholly owned by the Company, and Holdco’s direct and indirect subsidiaries. The Company conducts its operations as a real estate investment trust (“REIT”) for U.S. federal income tax purposes. The Company is generally not subject to U.S. federal income taxes on its REIT taxable income to the extent that it annually distributes all of its REIT taxable income to stockholders and maintains its qualification as a REIT. The Company also operates its business in a manner that permits it to maintain an exclusion from registration under the Investment Company Act of 1940, as amended. The Company’s principal business activity is to directly originate and acquire a diversified portfolio of commercial real estate related credit investments, consisting primarily of first mortgage loans and senior participation interests in first mortgage loans secured by institutional-quality properties in primary and select secondary markets in the United States. The Company has in the past invested in commercial real estate debt securities (“CRE debt securities”), primarily investment-grade commercial real estate collateralized loan obligation securities (“CRE CLOs”). |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | (2) Summary of Significant Accounting Policies Basis of Presentation The interim consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The interim consolidated financial statements include the Company’s accounts, consolidated variable interest entities for which the Company is the primary beneficiary, and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated. The Company believes it has made all necessary adjustments, consisting of only normal recurring items, so that the consolidated financial statements are presented fairly and that estimates made in preparing the consolidated financial statements are reasonable and prudent. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These interim consolidated financial statements should be read in conjunction with the Company’s Form 10-K filed with the SEC on February 23, 2022. Reclassifications Certain amounts in the Company’s prior period consolidated financial statements have been reclassified to conform to the presentation of the Company’s current period consolidated financial statements. These reclassifications had no effect on the Company’s previously reported net income or total assets in the consolidated statements of income and comprehensive income and consolidated balance sheets, respectively. Prior period amounts related to preferred stock dividends and participating securities’ share in earnings were reclassified to conform with the current period presentation of net income attributable to common stockholders in the consolidated statements of income and comprehensive income. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires estimates of assets, liabilities, revenues, expenses and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Actual results could differ from management’s estimates, and such differences could be material. Significant estimates made in the consolidated financial statements include, but are not limited to, the adequacy of our allowance for credit losses and the valuation inputs related thereto and the valuation of financial instruments. Actual amounts and values as of the balance sheet dates may be materially different from the amounts and values reported due to the inherent uncertainty in the estimation process and the limited availability of observable pricing inputs due to the nature of transitional mortgage loans. Also, future amounts and values could differ materially from those estimates due to changes in values and circumstances after the balance sheet date and the limited availability of observable prices. Principles of Consolidation Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810—Consolidation (“ASC 810”) provides guidance on the identification of a variable interest entity (“VIE”), for which control is achieved through means other than voting rights, and the determination of which business enterprise, if any, should consolidate the VIE. An entity is considered a VIE if any of the following applies: (1) the equity investors (if any) lack one or more of the essential characteristics of a controlling financial interest; (2) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support; or (3) the equity investors have voting rights that are not proportionate to their economic interests and the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest. The Company consolidates VIEs in which the Company is considered to be the primary beneficiary. The primary beneficiary is defined as the entity having both of the following characteristics: (1) the power to direct the activities that, when taken together, most significantly impact the VIE’s performance; and (2) the obligation to absorb losses and right to receive the returns from the VIE that would be significant to the VIE. At each reporting date, the Company reconsiders its primary beneficiary conclusions for all its VIEs to determine if its obligation to absorb losses of, or its rights to receive benefits from, the VIE could potentially be more than insignificant, and will consolidate or not consolidate in accordance with GAAP. See Note 5 for details. Revenue Recognition Interest income on loans is accrued using the interest method based on the contractual terms of the loan, adjusted for expected or realized credit losses, if any. The objective of the interest method is to arrive at periodic interest income, including recognition of fees and costs, at a constant effective yield. Premiums, discounts, and origination fees are amortized or accreted into interest income over the lives of the loans using the interest method, or on a straight-line basis when it approximates the interest method. Extension and modification fees are accreted into interest income on a straight-line basis, when it approximates the interest method, over the related extension or modification period. Exit fees are accreted into interest income on a straight-line basis, when it approximates the interest method, over the lives of the loans to which they relate unless they can be waived by the Company or a co-lender in connection with a loan refinancing, or if timely collection of principal and interest is doubtful. Prepayment penalties from borrowers are recognized as interest income when received. Certain of the Company’s loan investments have in the past, and may in the future, provide for additional interest based on the borrower’s operating cash flow or appreciation in the value of the underlying collateral. Such amounts are considered contingent interest and are reflected as interest income only upon certainty of collection. Certain of the Company’s loan investments have in the past, and may in the future, provide for the accrual of interest (in part, or in whole) instead of its current payment in cash, with the accrued interest (“PIK interest”) added to the unpaid principal balance of the loan. Such PIK interest is recognized currently as interest income unless the Company concludes eventual collection is unlikely, in which case the PIK interest is written off. All interest accrued but not received for loans placed on non-accrual status is subtracted from interest income at the time the loan is placed on non-accrual status. Based on the Company’s judgment as to the collectability of principal, a loan on non-accrual status is either accounted for on a cash basis, where interest income is recognized only upon receipt of cash for interest payments, or on a cost-recovery basis, where all cash receipts reduce the loan’s carrying value, and interest income is only recorded when such carrying value has been fully recovered. Loans Held for Investment Loans that the Company has the intent and ability to hold for the foreseeable future, or until maturity or repayment, are reported at their outstanding principal balances net of cumulative charge-offs, interest applied to principal (for loans accounted for using the cost recovery method), unamortized premiums, discounts, loan origination fees and costs. Loan origination fees and direct loan origination costs are deferred and recognized in interest income over the estimated life of the loans using the interest method, or on a straight-line basis when it approximates the interest method, adjusted for actual prepayments. Accrued but not yet collected interest is separately reported as accrued interest and fees receivable on the Company’s consolidated balance sheets. Non-Accrual Loans Loans are placed on non-accrual status when the full and timely collection of principal and interest is doubtful, generally when: management determines that the borrower is incapable of, or has ceased efforts toward, curing the cause of a default; the loan becomes 90 days or more past due for principal and interest; or the loan experiences a maturity default. The Company considers an account past due when an obligor fails to pay substantially all (defined as 90%) of the scheduled contractual payments by the due date. In each case, the period of delinquency is based on the number of days payments are contractually past due. A loan may be returned to accrual status if all delinquent principal and interest payments are brought current, and collectability of the remaining principal and interest payments in accordance with the loan agreement is reasonably assured. Loans that in the judgment of the Company’s external manager, TPG RE Finance Trust Management, L.P., a Delaware limited partnership (the “Manager”), are adequately secured and in the process of collection are maintained on accrual status, even if they are 90 days or more past due. Troubled Debt Restructurings A loan is accounted for and reported as a troubled debt restructuring (“TDR”) when, for economic or legal reasons, the Company grants a concession to a borrower experiencing financial difficulty that the Company would not otherwise consider. The Company does not consider a restructuring that includes an insignificant delay in payment as a concession. A delay may be considered insignificant if the payments subject to the delay are insignificant relative to the unpaid principal balance of the loan or collateral value, and the contractual amount due, or the delay in timing of the restructured payment period, is insignificant relative to the frequency of payments, the debt’s original contractual maturity or original expected duration. TDRs that are performing and on accrual status as of the date of the modification remain on accrual status. TDRs that are non-performing as of the date of modification usually remain on non-accrual status until the prospect of future payments in accordance with the modified loan agreement is reasonably assured, which is generally demonstrated when the borrower maintains compliance with the restructured terms for a predetermined period. TDRs with temporary below-market concessions remain designated as a TDR regardless of the accrual or performance status until the loan is paid off. However, if the TDR loan has been modified in a subsequent restructure with market terms and the borrower is not currently experiencing financial difficulty, then the loan may be de-designated as a TDR. Loans Held for Sale The Company may change its intent, or its assessment of its ability, to hold for the foreseeable future loans held for investment based on changes in the real estate market, capital markets, or when a shift in its loan portfolio construction occurs. Once a determination is made to sell a loan, or the Company determines it no longer has the intent and ability to hold a loan held for investment for the foreseeable future, it is transferred to loans held for sale. In accordance with GAAP, loans classified as held for sale are recorded at the lower of cost or fair value, net of estimated selling costs, and the loan is excluded from the determination of the current expected credit loss ("CECL") reserve. Credit Losses Allowance for Credit Losses for Loans Held for Investment The Company accounts for its allowance for credit losses on loans held for investment using the Current Expected Credit Loss model of ASC Topic 326, Financial Instruments-Credit Losses (“ASC 326”). Periodic changes to the CECL reserve are recognized through net income on the Company’s consolidated statements of income and comprehensive income. The allowance for credit losses measured under the CECL accounting framework represents an estimate of current expected losses for the Company’s existing portfolio of loans held for investment, and is presented as a valuation reserve on the Company’s consolidated balance sheets. Expected credit losses related to non-cancelable unfunded loan commitments are accounted for as separate liabilities included in accrued expenses and other liabilities on the consolidated balance sheets. The allowance for credit losses for loans held for investment, as reported in the Company’s consolidated balance sheets, is adjusted by a credit loss benefit (expense), which is reported in earnings in the consolidated statements of income and comprehensive income and reduced by the charge-off of loan amounts, net of recoveries and additions related to purchased credit-deteriorated (“PCD”) assets, if relevant. The allowance for credit losses includes a modeled component and an individually-assessed component. The Company has elected to not measure an allowance for credit losses on accrued interest receivables related to all of its loans held for investment because it writes off uncollectable accrued interest receivable in a timely manner pursuant to its non-accrual policy, described above. The Company considers key credit quality indicators in underwriting loans and estimating credit losses, including but not limited to: the capitalization of borrowers and sponsors; the expertise of the borrowers and sponsors in a particular real estate sector and geographic market; collateral type; geographic region; use and occupancy of the property; property market value; loan-to-value (“LTV”) ratio; loan amount and lien position; debt service coverage ratio; the Company’s risk rating for the same and similar loans; and prior experience with the borrower and sponsor. This information is used to assess the financial and operating capability, experience and profitability of the sponsor/borrower. Ultimate repayment of the Company’s loans is sensitive to interest rate changes, general economic conditions, liquidity, LTV ratio, existence of a liquid investment sales market for commercial properties, and availability of replacement short-term or long-term financing. The loans in the Company’s commercial mortgage loan portfolio are secured by collateral of the following property types: office; life science; multifamily; hotel; industrial; mixed-use; condominium; and retail. The Company’s loans are typically collateralized by real estate, or in the case of mezzanine loans, by a partnership interest or similar equity interest in an entity that owns real estate. The Company regularly evaluates on a loan-by-loan basis, typically no less frequently than quarterly, the extent and impact of any credit deterioration associated with the performance and/or value of the underlying collateral property, and the financial and operating capability of the borrower/sponsor. The Company also evaluates the financial strength of loan guarantors, if any, and the borrower’s competency in managing and operating the property or properties. In addition, the Company considers the overall economic environment, real estate sector, and geographic sub-market in which the borrower operates. Such analyses are completed and reviewed by asset management personnel and evaluated by senior management, who utilize various data sources, including, to the extent available (i) periodic financial data such as property occupancy, tenant profile, rental rates, operating expenses, the borrower’s exit plan, and capitalization and discount rates, (ii) site inspections, (iii) sales and financing comparables, (iv) current credit spreads for refinancing and (v) other market data. Quarterly, the Company evaluates the risk of all loans and assigns a risk rating based on a variety of factors, grouped as follows: (i) loan and credit structure, including the as-is LTV structural features; (ii) quality and stability of real estate value and operating cash flow, including debt yield, property type, dynamics of the geography, local market, physical condition, stability of cash flow, leasing velocity and quality and diversity of tenancy; (iii) performance against underwritten business plan; (iv) the frequency and materiality of loan modifications or waivers occasioned by unfavorable variances between the underwritten business plan and actual performance; (v) changes in the capital markets that may impact the refinancing or sale of the loan; and (vi) quality, experience and financial condition of sponsor, borrower and guarantor(s). Based on a 5-point scale, the Company’s loans are rated “1” through “5,” from least risk to greatest risk, respectively, which ratings are defined as follows: 1 - Outperform—Exceeds performance metrics (for example, technical milestones, occupancy, rents, net operating income) included in original or current credit underwriting and business plan; 2 - Meets or Exceeds Expectations—Collateral performance meets or exceeds substantially all performance metrics included in original or current underwriting / business plan; 3 - Satisfactory—Collateral performance meets or is on track to meet underwriting; business plan is met or can reasonably be achieved; 4 - Underperformance—Collateral performance falls short of original underwriting, material differences exist from business plan, or both; technical milestones have been missed; defaults may exist, or may soon occur absent material improvement; and 5 - Default/Possibility of Loss—Collateral performance is significantly worse than underwriting; major variance from business plan; loan covenants or technical milestones have been breached; the loan is in default or substantially in default; timely exit from loan via sale or refinancing is questionable; significant risk of principal loss. The Company generally assigns a risk rating of “3” to all loan investments upon origination, except in the case of specific circumstances warranting an exception. The Company’s CECL reserve also reflects its estimates of the current and future economic conditions that impact the performance of the commercial real estate assets securing the Company’s loans. These estimates include unemployment rates, inflation rates, interest rates, price indices for commercial property, current and expected future availability of liquidity in the commercial property debt and equity capital markets, and other macroeconomic factors that may influence the likelihood and magnitude of potential credit losses for the Company’s loans during their anticipated term. The Company licenses certain macroeconomic financial forecasts to inform its view of the potential future impact that broader economic conditions may have on its loan portfolio’s performance. Selection of the economic forecast or forecasts used, in conjunction with loan level inputs, to determine the CECL reserve requires significant judgment about future events that, while based on the information available to the Company as of the balance sheet date, are ultimately unknowable with certainty. The actual economic conditions impacting the Company’s portfolio could vary significantly from the estimates the Company made for the periods presented. The key inputs to the Company's estimation of its allowance for credit losses as of March 31, 2022 were impacted by dislocations in the global economy, changes in interest rates, and geopolitical conflicts. Inherent uncertainty in the estimation process and the limited availability of observable pricing inputs due to the nature of transitional mortgage loans also constrain the Company's ability to estimate key inputs utilized to calculate its allowance for credit losses. Key inputs to the estimate include, but are not limited to: LTV; debt service coverage ratio; current and future operating cash flow and performance of collateral properties; the financial strength and liquidity of borrowers and sponsors; capitalization rates and discount rates used to value commercial real estate properties; and market liquidity based on market indices or observable transactions involving the sale or financing of commercial properties. Estimates made by the Company are subject to change. Actual results could differ from management’s estimates, and such differences could be material. Credit Loss Measurement The amount of allowance for credit losses is influenced by the size of the Company’s loan portfolio, loan quality and duration, collateral operating performance, risk rating, delinquency status, historic loss experience and other conditions influencing loss expectations, such as reasonable and supportable forecasts of economic conditions. The Company employs two methods to estimate credit losses in its loan portfolio: a loss-given-default (“LGD”) model-based approach utilized for substantially all of its loans; and an individually-assessed approach for loans that the Company concludes are ill-suited for use in the model-based approach, or are individually-assessed based on accounting guidance contained in the CECL framework. Once the expected credit loss amount is determined, an allowance for credit losses equal to the calculated expected credit loss is established. A loan will be written off through credit loss (expense) benefit, net in the consolidated statements of income and comprehensive income when it is deemed non-recoverable upon a realization event. This is generally at the time the loan receivable is settled, transferred or exchanged, but non-recoverability may also be concluded by the Company if, in its determination, it is nearly certain that all amounts due will not be collected. This loss shall equal the difference between the cash received, or expected to be received, and the book value of the asset. Factors considered by management in determining whether the expected credit loss is permanent or not recoverable include whether management judges the loan to be uncollectible, which means repayment is deemed to be delayed beyond reasonable time frames, or the loss becomes evident due to the borrower’s lack of assets and liquidity, or the borrower’s sponsor is unwilling or unable to support the loan. Allowance for Credit Losses for Loans Held for Investment – Model-Based Approach The model-based approach to measure the allowance for credit losses relates to loans which are not individually-assessed. The Company licenses from Trepp, LLC historical loss information, incorporating loan performance data for over 120,000 commercial real estate loans dating back to 1998, in an analytical model to compute statistical credit loss factors (i.e., probability-of-default, loss severity, and loss-given-default). These statistical credit loss factors are utilized together with loan data and collateral operating performance information for individual loans to estimate the allowance for credit losses. This methodology considers the unique characteristics of the Company’s commercial mortgage loan portfolio and individual assets within the portfolio by considering delinquency status, indicators of credit quality, and other credit trends and risk characteristics. Further, the Company incorporates its expectations about the impact of current conditions and reasonable and supportable forecasts on expected future credit losses in deriving its estimate. For the period beyond which the Company is able to make reasonable and supportable forecasts, the Company reverts to unadjusted historical loan loss information. Determining the appropriateness of the allowance is complex and requires judgment by management about the effect of matters that are inherently uncertain. In future periods, evaluations of the overall loan portfolio, in light of the factors and forecasts then prevailing, may result in significant changes in the allowance and credit loss expense. Allowance for Credit Losses for Loans Held for Investment – Individually-Assessed Approach In instances where the unique attributes of a loan investment render it ill-suited for the model-based approach because it no longer shares risk characteristics with other loans, or because the Company concludes repayment of the loan is entirely collateral-dependent, or when it is deemed probable that the Company will not be able to collect all amounts due according to the contractual terms of the loan, the Company separately evaluates the amount of expected credit loss using other real estate valuation techniques (most commonly, discounted cash flow), considering substantially the same credit factors as utilized in the model-dependent method. In these cases, expected credit loss is measured as the difference between the amortized cost basis of the loan and the fair value of the collateral. The fair value of the collateral is adjusted for the estimated cost to sell if repayment or satisfaction of a loan is dependent on the sale (rather than the operation) of the collateral. Unfunded Loan Commitments The Company’s first mortgage loans often contain provisions for future funding of a pre-determined portion of capital and other costs incurred by the borrower in executing its business plan. These deferred fundings are conditioned upon the borrower’s execution of its business plan with respect to the underlying collateral property securing the loan. These deferred fundings are typically for base building work, tenant improvement costs and leasing commissions, interest reserves, and occasionally to fund forecasted operating deficits during lease-up. These deferred funding commitments may be for specific periods, often require satisfaction by the borrower of conditions precedent, and may contain termination clauses at the option of the borrower or, more rarely, at the Company’s option. The total amount of unfunded commitments does not necessarily represent actual amounts that may be funded in cash in the future, since commitments may expire without being drawn, may be cancelled if certain conditions are not satisfied by the borrower, or borrowers may elect not to borrow some or all of the unused commitment. The Company does not recognize these unfunded loan commitments in its consolidated financial statements. The Company applies its expected credit loss estimates to all future funding commitments that cannot be contractually terminated at the Company’s option. The Company maintains a separate allowance for expected credit losses from unfunded loan commitments, which is included in accrued expenses and other liabilities on the consolidated balance sheets. The Company estimates the amount of expected losses by calculating a commitment usage factor over the contractual period for exposures that are not unconditionally cancellable by the Company and applies the loss factors used in the allowance for credit loss methodology described above to the results of the usage calculation to estimate the liability for credit losses related to unfunded commitments for each loan. Real Estate Owned Real estate acquired through a foreclosure or by deed-in-lieu of foreclosure is classified as real estate owned (“REO”) and held for investment on the Company’s consolidated balance sheet until a pending sales transaction meets the criteria of ASC 360-10-45-9 after which the real estate is considered to be held for sale, or is sold. The Company's cost basis in REO is equal to the estimated fair value of the collateral at the date of acquisition, less estimated selling costs. The estimated fair value of REO is determined using a discounted cash flow model and inputs that include the highest and best use for each asset, estimated future values based on extensive discussions with local brokers, investors and other market participants, the estimated holding period for the asset, and discount rates that reflect estimated investor return requirements for the risks associated with the expected use of each asset. If the estimated fair value of REO is lower than the carrying value of the related loan upon acquisition, the difference, along with any previously recorded specific CECL reserve, is recorded through Credit Loss (Benefit) Expense in the consolidated statements of income and comprehensive income. REO is initially measured at fair value and is thereafter subject to an ongoing impairment analysis. Subsequent to a REO acquisition, events or circumstances may occur that result in a material and sustained decrease in the cash flows generated from the asset. REO is evaluated for recoverability, on a fair value basis, when impairment indicators are identified. Any impairment loss, revenue and expenses from operations of the properties, and resulting gains or losses on sale are included in the consolidated statements of income and comprehensive income. Investment Portfolio Financing Arrangements The Company finances its portfolio of loans, or participation interests therein, and REO using secured financing agreements, including secured credit agreements, secured revolving credit facilities, mortgage loans payable, and collateralized loan obligations. The related borrowings are recorded as separate liabilities on the Company’s consolidated balance sheets. Interest income earned on the investments and interest expense incurred on the related borrowings are reported separately on the Company’s consolidated statements of income and comprehensive income. In certain instances, the Company creates structural leverage through the co-origination or non-recourse syndication of a senior loan interest to a third party. For all such syndications the Company has completed through March 31, 2022, the Company transferred, on a non-recourse basis, 100 % of the senior mortgage loan that the Company originated to a third-party lender, and retained as a loan investment a separate mezzanine loan investment secured by a pledge of the equity in the mortgage borrower. With respect to the senior mortgage loans transferred, the Company retains: no control over the mortgage loan; no economic interest in the mortgage loan; and no recourse to the purchaser or the borrower. Consequently, based on these circumstances and because the Company does not have any continuing involvement with the transferred senior mortgage loan, these syndications are accounted for as sales under GAAP and are removed from the Company’s consolidated financial statements at the time of transfer. The Company’s consolidated balance sheets only include the separate mezzanine loan remaining after the transfer. For more information regarding the Company’s investment portfolio financing arrangements, see Note 6. Fair Value Measurements The Company follows ASC 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”), for its holdings of financial instruments. ASC 820-10 defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands disclosure of fair value measurements. ASC 820-10 determines fair value to be the price that would be received for a financial instrument in a current sale, which assumes an orderly transaction between market participants on the measurement date. The Company determines the estimated fair value of financial assets and liabilities using the three-tier fair value hierarchy established by GAAP, which prioritizes the inputs used in measuring fair value. GAAP establishes market-based or observable inputs as the preferred source of values followed by valuation models using management assumptions in the absence of market inputs. The financial instruments recorded at fair value on a recurring basis in the Company’s consolidated financial statements are cash and cash equivalents and restricted cash. The three levels of inputs that may be used to measure fair value are as follows: Level I —Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Level II —Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. Level III —Valuations based on inputs that are unobservable and significant to the overall fair value measurement. For certain financial instruments, the inputs used by management to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for such financial instrument is based on the lowest level of input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument. The Company may use valuation techniques consistent with the market and income approaches to measure the fair value of its assets and liabilities. The market approach uses third-party valuations and information obtained from market transactions involving ident |
Loans Held for Investment and t
Loans Held for Investment and the Allowance for Credit Losses | 3 Months Ended |
Mar. 31, 2022 | |
Receivables [Abstract] | |
Loans Held for Investment and the Allowance for Credit Losses | (3) Loans Held for Investment and the Allowance for Credit Losses The Company originates and acquires first mortgage and mezzanine loans secured by commercial properties. The Company considers these loans to comprise a single portfolio of mortgage loans, and the Company has developed its systematic methodology to determine the allowance for credit losses based on a single portfolio. For purposes of certain disclosures herein, the Company disaggregates this portfolio segment into the following classes of finance receivables: senior loans; and subordinated and mezzanine loans. These loans can potentially subject the Company to concentrations of credit risk, including, without limitation: property type collateralizing the loan; loan category; loan size; loans to a single sponsor; and loans in a single geographic area. The Company’s loans held for investment are accounted for at amortized cost. Interest accrued but not yet collected is separately reported within accrued interest and fees receivable on the Company’s consolidated balance sheets. Amounts within that caption relating to loans held for investment were $ 15.6 million and $ 14.3 million as of March 31, 2022 and December 31, 2021, respectively. During the three months ended March 31, 2022, the Company originated five mortgage loans with a total commitment of $ 233.0 million, an initial unpaid principal balance of $ 224.6 million, and unfunded commitments at closing of $ 8.4 million. During the three months ended March 31, 2021, the Company originated one mortgage loan with a total commitment of $ 45.4 million, an initial unpaid principal balance of $ 37.5 million, and unfunded commitments at closing of $ 7.9 million. During the three months ended March 31, 2022, the Company r eceived one full loan repayment of $ 40.3 million, and partial principal payments including accrued PIK interest payments of $ 7.7 million across eight loans, for total loan repayments of $ 48.0 million. During the three months ended March 31, 2021, the Company received partial loan repayments of $ 5.3 million on four loans, and no repayments in full. The following table details overall statistics for the Company’s loans held for investment portfolio as of March 31, 2022 and December 31, 2021 (dollars in thousands): March 31, 2022 December 31, 2021 Balance sheet portfolio Total loan portfolio Balance sheet portfolio Total loan portfolio Number of loans 73 74 69 70 Floating rate loans 100.0 % 100.0 % 100.0 % 100.0 % Total loan commitment (1) $ 5,593,350 $ 5,725,350 $ 5,411,944 $ 5,543,944 Unpaid principal balance (2) $ 5,125,167 $ 5,125,167 $ 4,919,343 $ 4,919,343 Unfunded loan commitments (3) $ 463,042 $ 463,042 $ 487,773 $ 487,773 Amortized cost $ 5,115,788 $ 5,115,788 $ 4,909,202 $ 4,909,202 Weighted average credit spread (4) 3.4 % 3.4 % 3.4 % 3.4 % Weighted average all-in yield (4) 4.9 % 4.9 % 4.8 % 4.8 % Weighted average term to extended maturity (in years) (5) 2.7 2.7 2.8 2.8 (1) In certain instances, the Company creates structural leverage through the co-origination or non-recourse syndication of a senior loan interest to a third-party. In either case, the senior mortgage loan (i.e., the non-consolidated senior interest) is not included on the Company’s balance sheet. When the Company creates structural leverage through the co-origination or non-recourse syndication of a senior loan interest to a third-party, the Company retains on its balance sheet a mezzanine loan. Total loan commitment encompasses the entire loan portfolio the Company originated, acquired and financed. As of March 31, 2022 and December 31, 2021, the Company had outstanding one non-consolidated senior interest of $ 132.0 million. (2) Unpaid principal balance includes PIK interest of $ 2.7 million and $ 3.0 million as of March 31, 2022 and December 31, 2021, respectively. (3) Unfunded loan commitments may be funded over the term of each loan, subject in certain cases to an expiration date or a force-funding date, primarily to finance property improvements or lease-related expenditures by the Company’s borrowers, to finance operating deficits during renovation and lease-up, and in limited instances to finance construction. (4) As of March 31, 2022, all of the Company’s loans were floating rate. Loans originated by the Company before December 31, 2021 are indexed to LIBOR, while loans originated after January 1, 2022 are indexed to Term SOFR. As of March 31, 2022, based on the total loan commitments of the Company’s loan portfolio, 4.2 % (or $ 0.2 billion) of the Company’s loans were subject to Term SOFR and 95.8 % (or $ 5.4 billion) were subject to LIBOR as the benchmark interest rate. In addition to credit spread, all-in yield includes the amortization of deferred origination fees, purchase price premium and discount if any, loan origination costs and accrual of both extension and exit fees. Credit spread and all-in yield for the total portfolio assumes the applicable floating benchmark interest rate as of March 31, 2022 for weighted average calculations. (5) Extended maturity assumes all extension options are exercised by the borrower; provided, however, that the Company’s loans may be repaid prior to such date. As of March 31, 2022, based on the unpaid principal balance of the Company’s total loan exposure, 42.0 % of the Company’s loans were subject to yield maintenance or other prepayment restrictions and 58.0 % were open to repayment by the borrower without penalty. The following tables present an overview of the Company’s loans held for investment portfolio by loan seniority as of March 31, 2022 and December 31, 2021 (dollars in thousands): March 31, 2022 Loans held for investment, net Outstanding principal Unamortized premium (discount) and Amortized cost Senior loans $ 5,090,167 $ ( 9,370 ) $ 5,080,797 Subordinated and mezzanine loans 35,000 ( 9 ) 34,991 Total $ 5,125,167 $ ( 9,379 ) $ 5,115,788 Allowance for credit losses ( 46,307 ) Loans held for investment, net $ 5,069,481 December 31, 2021 Loans held for investment, net Outstanding principal Unamortized premium (discount) and Amortized cost Senior loans $ 4,884,343 $ ( 10,101 ) $ 4,874,242 Subordinated and mezzanine loans 35,000 ( 40 ) 34,960 Total $ 4,919,343 $ ( 10,141 ) $ 4,909,202 Allowance for credit losses ( 41,999 ) Loans held for investment, net $ 4,867,203 For the three months ended March 31, 2022, the Company’s loans held for investment portfolio activity was as follows (dollars in thousands): Carrying value Balance as of January 1, 2022 $ 4,867,203 Additions during the period: Loans originated 223,871 Additional fundings 29,235 Amortization of origination fees 1,491 Deductions during the period: Collection of principal ( 47,698 ) Collection of accrued PIK interest ( 313 ) (Increase) of allowance for credit losses ( 4,308 ) Balance as of March 31, 2022 $ 5,069,481 As of March 31, 2022 and December 31, 2021, there was $ 9.4 million and $ 10.1 million, respectively, of unamortized loan fees included in loans held for investment, net in the consolidated balance sheets. As of March 31, 2022 and December 31, 2021, there were no unamortized discounts included in loans held for investment at amortized cost on the consolidated balance sheets. Loan Risk Ratings The Company evaluates all of its loans to assign risk ratings on a quarterly basis on a 5-point scale. As described in Note 2, the Company’s loans are rated “1” through “5,” from least risk to greatest risk, respectively. The Company generally assigns a risk rating of “3” to all loan investments upon origination, except when specific circumstances warrant an exception. The following tables present the Company's loans held for investment portfolio on an amortized cost basis by origination year, grouped by risk rating, as of March 31, 2022 and December 31, 2021 (dollars in thousands): March 31, 2022 Amortized cost by origination year 2022 2021 2020 2019 2018 Prior Total Senior loans by internal risk ratings: 1 $ — $ — $ — $ — $ — $ — $ — 2 — 33,650 — 146,799 189,702 173,250 543,401 3 224,160 1,614,009 96,914 960,458 335,023 95,285 3,325,849 4 — — 78,231 497,332 307,208 305,776 1,188,547 5 — — — — 23,000 — 23,000 Total senior loans $ 224,160 $ 1,647,659 $ 175,145 $ 1,604,589 $ 854,933 $ 574,311 $ 5,080,797 Subordinated and mezzanine loans by internal risk ratings: 1 $ — $ — $ — $ — $ — $ — $ — 2 — — — — — — — 3 — — — 34,991 — — 34,991 4 — — — — — — — 5 — — — — — — — Total subordinated and mezzanine loans — — — 34,991 — — 34,991 Total $ 224,160 $ 1,647,659 $ 175,145 $ 1,639,580 $ 854,933 $ 574,311 $ 5,115,788 December 31, 2021 Amortized cost by origination year 2021 2020 2019 2018 2017 Prior Total Senior loans by internal risk ratings: 1 $ — $ — $ — $ — $ — $ — $ — 2 33,621 — 82,461 242,614 168,355 — 527,051 3 1,600,659 95,858 1,400,670 407,509 169,934 17,163 3,691,793 4 — 78,013 154,093 183,750 216,542 — 632,398 5 — — — 23,000 — — 23,000 Total senior loans $ 1,634,280 $ 173,871 $ 1,637,224 $ 856,873 $ 554,831 $ 17,163 $ 4,874,242 Subordinated and mezzanine loans by internal risk ratings: 1 $ — $ — $ — $ — $ — $ — $ — 2 — — — — — — — 3 — — 34,960 — — — 34,960 4 — — — — — — — 5 — — — — — — — Total subordinated and mezzanine loans — — 34,960 — — — 34,960 Total $ 1,634,280 $ 173,871 $ 1,672,184 $ 856,873 $ 554,831 $ 17,163 $ 4,909,202 Loans acquired rather than originated are presented in the table above in the column corresponding to the year of origination, not acquisition. The table below summarizes the Company’s loans held for investment portfolio on an amortized cost basis, by the results of its internal risk rating review process performed as of March 31, 2022 and December 31, 2021 (dollars in thousands): Risk rating March 31, 2022 December 31, 2021 1 $ — $ — 2 543,401 527,051 3 3,360,840 3,726,753 4 1,188,547 632,398 5 23,000 23,000 Total $ 5,115,788 $ 4,909,202 Allowance for credit losses ( 46,307 ) ( 41,999 ) Carrying value $ 5,069,481 $ 4,867,203 Weighted average risk rating (1) 3.1 3.0 (1) Weighted average risk rating calculated based on the amortized cost balance at period end. The weighted average risk rating of the Company’s loans held for investment portfolio increased to 3.1 as of March 31, 2022 compared to 3.0 as of December 31, 2021. During the three months ended March 31, 2022, the Company downgraded nine loans and upgraded one loan as part of its quarterly loan risk rating process. Of the Company's nine downgraded loans, eight loans related to office properties and one loan related to a mixed-use property. The Company downgraded seven office loans from risk category "3" to "4" and one office loan from risk category "2" to "3" because of ongoing concerns about shifting office market fundamentals, the impact on property-level operating performance of slower-than-expected return-to-office trends, and increased market volatility. Additionally, the Company downgraded one mixed-use loan from risk category "3" to "4" because of plateauing property-level operating performance, local market economic conditions, and concerns regarding the borrower’s ability to repay the loan upon or prior to its maturity later this year. During the three months ended March 31, 2022, the Company upgraded one hotel loan from risk category "3" to "2" due to continued improvement in property-level operating performance and strong debt service coverage that exceeds original underwriting. During the three months ended March 31, 2022, the Company received repayment in full of one office loan with a total unpaid principal balance of $ 40.3 million and a risk rating of 3.0 as of December 31, 2021. Allowance for Credit Losses The Company’s allowance for credit losses developed pursuant to ASC 326 reflects its current estimate of potential credit losses related to its loans held for investment portfolio as of March 31, 2022. As part of its allowance for credit losses, the Company maintains a separate allowance for credit losses related to unfunded loan commitments which is included in accrued expenses and other liabilities on the consolidated balance sheets. See Note 2 for additional details regarding the Company's accounting policies and estimation of its allowance for credit losses. The following tables present activity in the allowance for credit losses for loans by finance receivable class for the three months ended March 31, 2022 and 2021 (dollars in thousands): For the three months ended March 31, 2022 Senior loans Subordinated and Total Allowance for credit losses for loans held for investment: Beginning balance at January 1, 2022 $ 41,193 $ 806 $ 41,999 Allowance for (reversal of) credit losses, net 4,747 ( 439 ) 4,308 Subtotal 45,940 367 46,307 Allowance for credit losses on unfunded loan commitments: Beginning balance at January 1, 2022 4,210 — 4,210 Allowance for (reversal of) credit losses, net 576 — 576 Subtotal 4,786 — 4,786 Total allowance for credit losses $ 50,726 $ 367 $ 51,093 For the three months ended March 31, 2021 Senior loans Subordinated and Total Allowance for credit losses for loans held for investment: Beginning balance at January 1, 2021 $ 58,210 $ 1,730 $ 59,940 Allowance for (reversal of) credit losses, net ( 3,055 ) ( 244 ) ( 3,299 ) Subtotal 55,155 1,486 56,641 Allowance for credit losses on unfunded loan commitments: Beginning balance at January 1, 2021 2,756 132 2,888 Allowance for (reversal of) credit losses, net ( 672 ) ( 67 ) ( 739 ) Subtotal 2,084 65 2,149 Total allowance for credit losses $ 57,239 $ 1,551 $ 58,790 The Company’s allowance for credit losses is influenced by the size and maturity dates of its loans, loan quality, credit indicators including risk ratings, delinquency status, historical loss experience and other conditions influencing loss expectations, such as reasonable and supportable forecasts of economic conditions. For the three months ended March 31, 2022, the Company increased its allowance for credit losses to $ 51.1 million, from $ 46.2 million as of December 31, 2021. The $ 4.9 million increase to the Company's allowance for credit losses was due to new loan originations offset by one loan repayment in-full, weakening credit indicators as described under "—Loan Risk Ratings" above, and an uncertain macroeconomic outlook. The uncertain macroeconomic outlook is caused by surging inflationary pressures, rising short term interest rates, continuing supply chain disruptions, a slower-than-expected return-to-office by office workers, widening credit spreads in the fixed income markets, and Russia’s invasion of Ukraine. These factors, and slowing business plan execution for certain of our office loans, contributed to the increase in the Company’s allowance for credit losses during the three months ended March 31, 2022. While the ultimate impact of the macroeconomic outlook and property-level performance trends of our office loans remain uncertain, the Company's macroeconomic outlook is intended to address these uncertainties, and the Company has made specific forward-looking valuation adjustments to the inputs of its allowance for credit loss calculation to reflect the variability associated with the timing, strength, and breadth of a sustained economic recovery or the potential impact of an uncertain economic outlook that may result in a post-COVID environment. During the three months ended March 31, 2021, the Company recorded a decrease of $ 4.0 million in the allowance for credit losses from December 31, 2020, reducing the total CECL reserve to $ 58.8 million. This decline was primarily due to use of a more optimistic macroeconomic forecast and improvements in operating results for many collateral properties adversely affected by COVID-19, in particular hotels. One loan secured by a retail property was on non-accrual status as of March 31, 2022 and December 31, 2021 due to a default caused by non-payment of interest in December 2020. The amortized cost basis of the loan was $ 23.0 million as of March 31, 2022 and December 31, 2021. In accordance with the Company’s revenue recognition and allowance for credit losses accounting policies, the Company suspended its accrual of interest income when the loan was placed on non-accrual status and continues to believe that the amortized cost basis of the loan is collectible as of March 31, 2022. Loan Modification Activity The Company may amend or modify a loan depending on the loan’s specific facts and circumstances. These loan modifications typically include additional time for the borrower to refinance or sell the collateral property, adjustment or waiver of performance tests that are prerequisite to the extension of a loan maturity, and/or deferral of scheduled principal payments. In exchange for a modification, the Company often receives a partial repayment of principal, a short-term accrual of PIK interest for a portion of interest due, a cash infusion to replenish interest or capital improvement reserves, termination of all or a portion of the remaining unfunded loan commitment, additional call protection, and/or an increase in the loan coupon. None of the Company’s loan modifications triggered the accounting requirements of a troubled debt restructuring. As of March 31, 2022, the total amount of accrued PIK interest in the loans held for investment portfolio was $ 2.7 million with respect to four first mortgage loans. The following table presents the accrued PIK interest activity for the three months ended March 31, 2022 for the Company’s loans held for investment portfolio (dollars in thousands): March 31, 2022 Balance as of January 1, 2022 $ 3,028 Accrued PIK interest — Repayments of accrued PIK interest ( 313 ) Balance as of March 31, 2022 $ 2,715 No accrued PIK interest was recorded and deferred during the three months ended March 31, 2022. As of March 31, 2022 and December 31, 2021, none of the Company's loans accrued interest income is 90 days or more past due. The following table presents an aging analysis for the Company’s loans held for investment portfolio, by class of loans, as of March 31, 2022 and December 31, 2021 on amortized cost basis (dollars in thousands): Days Outstanding as of March 31, 2022 Current Days: 30-59 Days: 60-89 Days: 90 or more Total loans past due Total loans Loans receivable: Senior loans $ 5,057,797 $ — $ — $ 23,000 $ 23,000 $ 5,080,797 Subordinated and mezzanine loans 34,991 — — — — 34,991 Total $ 5,092,788 $ — $ — $ 23,000 $ 23,000 $ 5,115,788 Days Outstanding as of December 31, 2021 Current Days: 30-59 Days: 60-89 Days: 90 or more Total loans past due Total loans Loans receivable: Senior loans $ 4,851,242 $ — $ — $ 23,000 $ 23,000 $ 4,874,242 Subordinated and mezzanine loans 34,960 — — — — 34,960 Total $ 4,886,202 $ — $ — $ 23,000 $ 23,000 $ 4,909,202 |
Real Estate Owned
Real Estate Owned | 3 Months Ended |
Mar. 31, 2022 | |
Real Estate Owned Disclosure Of Detailed Components [Abstract] | |
Real Estate Owned | (4) Real Estate Owned In December 2020, the Company acquired two largely undeveloped commercially-zoned land parcels on the Las Vegas Strip comprising 27 acres (the “REO Property”) pursuant to a negotiated deed-in-lieu of foreclosure. The Company's cost basis in the REO Property was $ 99.2 million, equal to the estimated fair value of the collateral at the date of acquisition, net of estimated selling costs. The Company obtained from a third party a $ 50.0 million non-recourse first mortgage loan secured by the REO Property which it repaid on November 12, 2021. See Note 6 for additional information regarding the related mortgage loan. During the three months ended December 31, 2021, the Company sold a 17 acre parcel of the REO Property for net cash proceeds of $ 54.4 million and recognized a gain on sale of real estate owned, net of $ 15.8 million on the consolidated statements of income and comprehensive income. As of March 31, 2022 and December 31, 2021, the Company held the remaining 10 acre parcel of REO Property at its estimated fair value at the time of acquisition, net of estimated selling costs, of $ 60.6 million. On April 4, 2022, the Company sold the remaining 10 acre parcel of REO Property for total proceeds of $ 75.0 million. See Note 16 for additional information regarding the sale of the remaining portion of the REO Property. For the three months ended March 31, 2022 and 2021, operating revenues from the REO Property were sufficient to cover the operating expenses and were immaterial to the financial results of the Company. |
Variable Interest Entities and
Variable Interest Entities and Collateralized Loan Obligations | 3 Months Ended |
Mar. 31, 2022 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Variable Interest Entities and Collateralized Loan Obligations | (5) Variable Interest Entities and Collateralized Loan Obligations Subsidiaries of the Company have outstanding as of March 31, 2022 three collateralized loan obligations to finance approximately $ 3.4 billion, or 66.3 %, of the Company’s loans held for investment portfolio measured by unpaid principal balance. On February 16, 2022 (the “FL5 Closing Date”), TPG RE Finance Trust CLO Sub-REIT (“Sub-REIT”), a subsidiary of the Company, entered into a collateralized loan obligation (“TRTX 2022-FL5” or “FL5”) through its wholly-owned subsidiaries TRTX 2022-FL5 Issuer, Ltd., an exempted company incorporated in the Cayman Islands with limited liability, as issuer (the “FL5 Issuer”), and TRTX 2022-FL5 Co-Issuer, LLC, a Delaware limited liability company, as co-issuer (the “FL5 Co-Issuer” and together with the FL5 Issuer, the “FL5 Issuers”). On the FL5 Closing Date, FL5 Issuer issued $ 1.075 billion principal amount of notes (the “FL5 Notes”). The FL5 Co-Issuer co-issued $ 907.0 million principal amount of investment grade-rated notes which were purchased by third party investors. Concurrently with the issuance of the FL5 Notes, the FL5 Issuer also issued 76,594 preferred shares, par value $ 0.001 per share and with an aggregate liquidation preference and notional amount equal to $ 1,000 per share (the “FL5 Preferred Shares” and, together with the FL5 Notes, the “FL5 Securities”), to TRTX Master Retention Holder, LLC, a Delaware limited liability company and indirect wholly-owned subsidiary of the Company (“FL5 Retention Holder”). Proceeds from the issuance of the FL5 Securities were used to (i) purchase one commercial real estate whole loan (the “FL5 Closing Date Whole Loan”) and 26 pari passu participations in 19 separate commercial real estate whole loans (the “FL5 Closing Date Pari Passu Participations” and, together with the FL5 Closing Date Whole Loan, the “FL5 Closing Date Collateral Interests”), (ii) refinance in part TRTX 2018-FL2, and (iii) to distribute to the Company $ 110.1 million of cash for investment or other corporate uses. The FL5 Closing Date Collateral Interests were purchased by the FL5 Issuer from the FL5 Seller, a wholly-owned subsidiary of the Company and an affiliate of the FL5 Issuers. As of March 31, 2022, FL5 Mortgage Assets represented 21.0 % of the aggregate unpaid principal balance of the Company’s loans held for investment portfolio and had an aggregate principal balance of $ 1.1 billion. TRTX 2022-FL5 permits the Company, during the 24 months after closing, to contribute eligible new loans or participation interests (the “FL5 Additional Interests”) in loans to TRTX 2022-FL5 in exchange for cash, which provides additional liquidity to the Company to originate new loan investments as underlying loans repay. The Company did not utilize the reinvestment feature during the first quarter of 2022. As of March 31, 2022, TRTX 2022-FL5 had $ 0.1 million of cash available to acquire eligible assets which is included in Collateralized Loan Obligation Proceeds Held at Trustee on the Company’s consolidated balance sheets. In connection with TRTX 2022-FL5, the Company incurred $ 6.5 million of deferred financing costs, including issuance, legal, and accounting related costs, which are amortized on an effective yield basis over the expected life of the issued investment-grade notes. The expected life of the issued investment-grade notes is based upon the anticipated repayment behavior of the loans collateralizing the notes after giving effect to the reinvestment period, which was initially assessed on the FL5 Closing Date. On a quarterly basis, the Company reassesses the expected life of the issued investment-grade notes based upon current repayment behavior after giving effect to reinvestment activity, and prospectively adjusts its amortization expense, if necessary. For the three months ended March 31, 2022, amortization of deferred financing costs of $ 0.3 million is included in the Company’s consolidated statements of income and comprehensive income. As of March 31, 2022, the Company’s unamortized deferred financing costs related to TRTX 2022-FL5 were $ 6.2 million. Interest expense on the outstanding FL5 Notes is benchmarked to Compounded SOFR and is payable monthly. As of March 31, 2022, the FL5 mortgage assets are primarily indexed to LIBOR and the borrowings under FL5 were indexed to Compounded SOFR, creating a difference between benchmark interest rates (a basis difference), for FL5 assets and liabilities. The Company has the right to transition the FL5 mortgage assets to a similar benchmark interest rate, eliminating the basis difference between FL5 assets and liabilities, and will make the determination as to whether or when to transition the FL5 mortgage assets taking into account the loan portfolio as a whole and such other factors as the Company deems relevant in its sole discretion. The transition to Term SOFR or Compounded SOFR is not expected to have a material impact to FL5’s assets and liabilities and related interest expense. For the three months ended March 31, 2022, interest expense on the outstanding FL5 Notes (excluding amortization of deferred financing costs) of $ 2.3 million is included in the Company’s consolidated statements of income and comprehensive income. On March 31, 2021 (the “FL4 Closing Date”), TPG RE Finance Trust CLO Sub-REIT (“Sub-REIT”), a subsidiary of the Company, entered into a collateralized loan obligation (“TRTX 2021-FL4” or “FL4”) through its wholly-owned subsidiaries TRTX 2021-FL4 Issuer, Ltd., an exempted company incorporated in the Cayman Islands with limited liability, as issuer (the “FL4 Issuer”), and TRTX 2021-FL4 Co-Issuer, LLC, a Delaware limited liability company, as co-issuer (the “FL4 Co-Issuer” and together with the FL4 Issuer, the “FL4 Issuers”). On the FL4 Closing Date, FL4 Issuer issued $ 1.25 billion principal amount of notes (the “FL4 Notes”). The FL4 Co-Issuer co-issued $ 1.04 billion principal amount of investment grade-rated notes which were purchased by third party investors. Concurrently with the issuance of the FL4 Notes, the FL4 Issuer also issued 112,500 preferred shares, par value $ 0.001 per share and with an aggregate liquidation preference and notional amount equal to $ 1,000 per share (the “FL4 Preferred Shares” and, together with the FL4 Notes, the “FL4 Securities”), to TRTX Master Retention Holder, LLC, a Delaware limited liability company and indirect wholly-owned subsidiary of the Company (“FL4 Retention Holder”). As of March 31, 2022, FL4 Mortgage Assets represented 24.4 % of the aggregate unpaid principal balance of the Company’s loans held for investment portfolio and had an aggregate principal balance of $ 1.3 billion. Proceeds from the issuance of the FL4 Securities were used to (i) purchase one commercial real estate whole loan (the “FL4 Closing Date Whole Loan”) and 17 pari passu participations in 17 separate commercial real estate whole loans (the “FL4 Closing Date Pari Passu Participations” and, together with the FL4 Closing Date Whole Loan, the “FL4 Closing Date Collateral Interests”), (ii) fund an account (the “FL4 Ramp-Up Account”) in an amount of approximately $ 308.9 million to be used to purchase eligible collateral interests during a ramp-up period of approximately six months following the Closing Date (the “FL4 Ramp-Up Collateral Interests,” and, together with the FL4 Whole Loans, the “FL4 Initial Collateral Interests”) and (iii) to distribute to the Company $ 104.8 million of cash for investment or other corporate uses. The FL4 Closing Date Collateral Interests were purchased by the FL4 Issuer from the FL4 Seller, a wholly-owned subsidiary of the Company and an affiliate of the FL4 Issuers. The Company fully invested the FL4 Ramp-Up Account of $ 308.9 million during the three months ended June 30, 2021. TRTX 2021-FL4 permits the Company, during the 24 months after closing, to contribute eligible new loans or participation interests (the “FL4 Additional Interests”) in loans to TRTX 2021-FL4 in exchange for cash, which provides additional liquidity to the Company to originate new loan investments as underlying loans repay. As of March 31, 2022, TRTX 2019-FL4 had $ 0.2 million of cash available to acquire eligible assets which is included in Collateralized Loan Obligation Proceeds Held at Trustee on the Company’s consolidated balance sheets. During the three months ended March 31, 2022 and 2021, the Company did not utilize the reinvestment feature in TRTX 2021-FL4. In connection with TRTX 2021-FL4, the Company incurred $ 8.3 million of deferred financing costs, including issuance, legal, and accounting related costs, which are amortized on an effective yield basis over the expected life of the issued investment-grade notes. For the three months ended March 31, 2022 amortization of deferred financing costs of $ 0.7 million are included in the Company’s consolidated statements of income and comprehensive income. No deferred financing costs we recognized during the three months ended March 31, 2021. As of March 31, 2022 and December 31, 2021, the Company’s unamortized deferred financing costs related to TRTX 2021-FL4 were $ 6.0 million and $ 6.7 million, respectively. Interest expense on the outstanding FL4 Notes is payable monthly. As of March 31, 2022, the FL4 mortgage assets and liabilities are indexed to LIBOR. For the three months ended March 31, 2022 interest expense on the outstanding FL4 Notes (excluding amortization of deferred financing costs) of $ 4.6 million is included in the Company’s consolidated statements of income and comprehensive income. No interest expense was recorded during the three months ended March 31, 2021. On October 25, 2019 (the “FL3 Closing Date”), Sub-REIT entered into a collateralized loan obligation (“TRTX 2019-FL3” or “FL3”). TRTX 2019-FL3 provided for reinvestment, during the 24 months after closing of FL3, whereby eligible new loans or participation interests (the “FL3 Additional Interests”) in loans could be contributed to TRTX 2019-FL3 in exchange for cash, which provided liquidity to the Company to originate new loan investments as underlying loans repay. The reinvestment period for TRTX 2019-FL3 ended on October 11, 2021 and the Company did not utilize the reinvestment feature during the three months ended March 31, 2021. As of March 31, 2022 FL3 Mortgage Assets represented 20.9 % of the aggregate unpaid principal balance of the Company’s loans held for investment portfolio and had an aggregate principal balance of approximately $ 1.1 billion. In connection with TRTX 2019-FL3, the Company incurred $ 7.8 million of deferred financing costs, including issuance, legal, and accounting related costs, which are amortized on an effective yield basis over the expected life of the issued investment-grade notes. For the three months ended March 31, 2022 and 2021 amortization of deferred financing costs of $ 0.7 million and $ 0.6 million, respectively, are included in the Company’s consolidated statements of income and comprehensive income. As of March 31, 2022 and December 31, 2021, the Company’s unamortized deferred financing costs related to TRTX 2019-FL3 were $ 2.3 million and $ 3.0 million, respectively. Interest expense on the outstanding FL3 Notes is benchmarked to Term SOFR and is payable monthly. As of March 31, 2022, the FL3 mortgage assets are indexed to LIBOR and the borrowings under FL3 were indexed to Term SOFR, creating a difference between benchmark interest rates (a basis difference) for FL3 assets and liabilities. The Company has the right to change the benchmark interest rate of the FL3 mortgage assets to Term SOFR to eliminate the basis difference between FL3 assets and liabilities, and will make the determination as to whether or when to transition the FL3 mortgage assets taking into account the loan portfolio as a whole and such other factors as the Company deems relevant in its sole discretion. The transition to Term SOFR is not expected to have a material impact to FL3’s assets and liabilities and related interest expense. For the three months ended March 31, 2022 and 2021, interest expense on the outstanding FL3 Notes (excluding amortization of deferred financing costs) of $ 3.8 million and $ 3.8 million is included in the Company’s consolidated statements of income and comprehensive income. On November 29, 2018 (the “FL2 Closing Date”), Sub-REIT entered into a collateralized loan obligation (“TRTX 2018-FL2” or “FL2”). TRTX 2018-FL2 provides for reinvestment, during the 24 months after closing of FL2, whereby eligible new loans or participation interests in loans may be contributed to TRTX 2018-FL2 in exchange for cash, which provided additional liquidity to the Company to originate new loan investments as underlying loans repay. The reinvestment period for TRTX 2018-FL2 ended on December 11, 2020. In connection with TRTX 2018-FL2, the Company incurred $ 8.7 million of deferred financing costs, including issuance, legal, and accounting related costs, which are amortized on an effective yield basis over the expected life of the issued investment-grade notes (the “FL2 Notes”). The expected life of the issued investment-grade notes is based upon the expected repayment behavior of the loans collateralizing the notes and the reinvestment period, both of which were initially assessed on the FL2 Closing Date. On February 17, 2022, the Company redeemed TRTX 2018-FL2, which at its redemption had $ 600.0 million of investment-grade bonds outstanding. The 17 loans or participation interests therein with an aggregate unpaid principal balance of $ 805.7 million held by the trust were refinanced in part by the issuance of TRTX 2022-FL5 and in part with the expansion of an existing secured credit agreement. In connection with the redemption of TRTX 2018-FL2, the Company exercised an option under an existing secured credit agreement to increase the commitment amount by $ 250.0 million, pledge additional collateral with an aggregate unpaid principal balance of $ 463.8 million and borrow an additional $ 359.1 million. For the three months ended March 31, 2022, amortization of deferred financing costs of $ 0.6 million is included in the Company's consolidated statements of income and comprehensive income. For the three months ended March 31, 2022, interest expense on the outstanding FL2 Notes (excluding amortization of deferred financing costs) of $ 1.4 million is included in the Company’s consolidated statements of income and comprehensive income. For the three months ended March 31, 2021, amortization of deferred financing costs of $ 0.6 million is included in the Company’s consolidated statements of income and comprehensive income. For the three months ended March 31, 2021, interest expense on the outstanding FL2 Notes (excluding amortization of deferred financing costs) of $ 3.1 million is included in the Company’s consolidated statements of income and comprehensive income. In accordance with ASC 810, the Company evaluated the key attributes of the issuers of the FL5 Notes (the "FL5 Issuers"), FL4 Notes (the “FL4 Issuers”), FL3 Notes (the “FL3 Issuers”) and FL2 Notes (the “FL2 Issuers”) to determine if they were VIEs and, if so, whether the Company was the primary beneficiary of their operating activities. This analysis caused the Company to conclude that the FL5 Issuers, FL4 Issuers, FL3 Issuers and the FL2 Issuers were VIEs and that the Company was the primary beneficiary. The Company is the primary beneficiary because it has the ability to control the most significant activities of the FL5 Issuers, FL4 Issuers, FL3 Issuers and the FL2 Issuers, the obligation to absorb losses to the extent of its equity investments, and the right to receive benefits, that could potentially be significant to these entities. Accordingly, as of March 31, 2022 and December 31, 2021 the Company consolidated the FL5 Issuers (as of March 31, 2022 subsequent to its issuance on February 16, 2022), FL4 Issuers, FL3 Issuers and the FL2 Issuers (as of December 31, 2021 prior to its redemption on February 17, 2022). The Company’s total assets and total liabilities as of March 31, 2022 included VIE assets and liabilities related to TRTX 2022-FL5, TRTX 2021-FL4, TRTX 2019-FL3, and one loan held for investment with an unpaid principal balance of $ 0.6 million in the Sub-REIT structure. The Company’s total assets and total liabilities as of December 31, 2021 included VIE assets and liabilities related to TRTX 2021-FL4, TRTX 2019-FL3, TRTX 2018-FL2, and one loan with an unpaid principal balance of $ 0.1 million in the Sub-REIT structure. The following table outlines the total assets and liabilities within the Sub-REIT structure (dollars in thousands): March 31, 2022 December 31, 2021 Assets Cash and cash equivalents $ 20,022 $ 28,167 Collateralized loan obligation proceeds held at trustee 260 204 Accounts receivable from servicer/trustee 700 150 Accrued interest receivable 6,406 6,765 Loans held for investment, net 3,371,787 3,138,603 Total assets $ 3,399,175 $ 3,173,889 Liabilities Accrued interest payable $ 2,192 $ 1,823 Accrued expenses 320 1,490 Collateralized loan obligations 2,810,626 2,545,691 Payable to affiliates 3,830 3,830 Total liabilities $ 2,816,968 $ 2,552,834 The following tables detail the loan collateral and borrowings under the Company's CRE CLO investment structures as of March 31, 2022 and December 31, 2021 (dollars in thousands): March 31, 2022 Collateral (loan investments) Debt (notes issued) Benchmark interest rate Outstanding principal Carrying value (1) Benchmark interest rate Face value Carrying value CRE CLO investment structure TRTX 2019-FL3 LIBOR $ 1,071,319 $ 1,060,807 Term SOFR $ 880,584 $ 878,309 TRTX 2021-FL4 LIBOR 1,249,483 1,243,879 LIBOR 1,037,500 1,031,504 TRTX 2022-FL5 LIBOR (2) 1,074,944 1,068,173 Compounded SOFR 907,031 900,813 Totals $ 3,395,746 $ 3,372,859 $ 2,825,115 $ 2,810,626 December 31, 2021 Collateral (loan investments) Debt (notes issued) Benchmark interest rate Outstanding principal Carrying value Benchmark interest rate Face value Carrying value CRE CLO investment structure TRTX 2018-FL2 LIBOR $ 805,685 $ 795,815 Term SOFR $ 600,001 $ 599,394 TRTX 2019-FL3 LIBOR 1,109,229 1,100,497 LIBOR 918,487 915,451 TRTX 2021-FL4 LIBOR 1,249,796 1,242,291 LIBOR 1,037,500 1,030,846 Totals $ 3,164,710 $ 3,138,603 $ 2,555,988 $ 2,545,691 (1) Carrying value includes loan amounts held in the Company's CRE CLO investment structures and does not include other loans held for investment, net of $ 1.1 million held within the Sub-REIT structure. (2) As of March 31, 2022, the TRTX 2022-FL5 mortgage assets are indexed to LIBOR, with the exception of one $16.8 million participation interest which is indexed to Term SOFR. As of March 31, 2022 and December 31, 2021, assets held by the FL5 Issuers, FL4 Issuers, FL3 Issuers, and the FL2 Issuers (as of December 31, 2021 prior to its redemption on February 17, 2022) are restricted and can only be used to settle obligations of the related VIE. The liabilities of the FL5 Issuers, FL4 Issuers, FL3 Issuers and the FL2 Issuers (as of December 31, 2021 prior to its redemption on February 17, 2022) are non-recourse to the Company and can only be satisfied from the then-current assets of the related VIE. The following table outlines the weighted average spreads and maturities for TRTX 2022-FL5, TRTX 2021-FL4, TRTX 2019-FL3 and TRTX 2018-FL2 loan collateral and borrowings under the TRTX 2022-FL5, TRTX 2021-FL4, TRTX 2019-FL3 and TRTX 2018-FL2 collateralized loan obligations as of March 31, 2022 and December 31, 2021: March 31, 2022 December 31, 2021 Weighted average spread (%) (1) Weighted average maturity (years) (2) Weighted average spread (%) (1) Weighted average maturity (years) (2) Collateral (loan investments) TRTX 2018-FL2 n.a. n.a. 3.39 % 2.0 TRTX 2019-FL3 3.26 % 1.9 3.19 % 2.2 TRTX 2021-FL4 3.22 % 2.8 3.19 % 3.1 TRTX 2022-FL5 3.36 % 3.3 n.a. n.a. Debt (notes issued) (3) TRTX 2018-FL2 n.a. n.a. 1.56 % 15.9 TRTX 2019-FL3 1.49 % 12.5 1.48 % 12.8 TRTX 2021-FL4 1.60 % 16.0 1.60 % 16.2 TRTX 2022-FL5 2.02 % 16.9 n.a. n.a. (1) Yield on collateral is based on cash coupon. (2) Loan term represents weighted-average final maturity, assuming extension options are exercised by the borrower. Repayments of CRE CLO notes are dependent on timing of related loan repayments post-reinvestment period. The term of the CRE CLO notes represents the rated final distribution date. (3) On October 1, 2021, the benchmark index interest rate for borrowings under TRTX 2019-FL3 was changed from Compounded SOFR to Term SOFR by the designated transaction representative under the FL3 indenture. The benchmark interest rate for TRTX 2021-FL4 and TRTX 2022-FL5 is LIBOR and Compounded SOFR, respectively. |
Investment Portfolio Financing
Investment Portfolio Financing | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Investment Portfolio Financing | (6) Investment Portfolio Financing As of March 31, 2022 and December 31, 2021, the Company had secured credit agreements used to finance certain of the Company’s loan investments. These financing arrangements bear interest at rates equal to LIBOR or Term SOFR plus a credit spread negotiated between the Company and each lender, often a separate credit spread for each pledge of collateral, which is primarily based on property type and advance rate against the unpaid principal balance of the pledged loan. These borrowing arrangements contain defined mark-to-market provisions that permit our lenders to issue margin calls to the Company only in the event that the collateral properties underlying the Company’s loans pledged to the Company’s lenders experience a non-temporary decline in value (“credit marks”) due to reasons other than capital markets events that result in changing credit spreads for similar borrowing obligations. In connection with one of these borrowing arrangements, the lender is also permitted to issue margin calls to the Company in the event the lender determines capital markets events have caused credit spreads to change for similar borrowing obligations (“spread marks”). The following table presents certain information regarding the Company’s secured credit agreements as of March 31, 2022 and December 31, 2021. Except as otherwise noted, all agreements are on a partial (25%) recourse basis (dollars in thousands): March 31, 2022 Secured credit agreements (1) Initial Extended Index Weighted average Interest Commitment Maximum Balance Principal balance Amortized cost Goldman Sachs 08/19/22 08/19/24 1 Month BR 1.8 % 2.1 % $ 500,000 $ 44,555 $ 455,445 $ 599,302 $ 598,450 Wells Fargo (2) 04/18/25 04/18/25 1 Month BR 1.6 % 1.9 % 500,000 213,547 286,453 372,590 367,224 Barclays 08/13/22 08/13/23 1 Month BR 1.5 % 2.0 % 750,000 699,899 50,101 71,011 70,759 Morgan Stanley 05/04/22 05/04/23 1 Month BR 2.1 % 2.6 % 500,000 420,916 79,084 115,085 114,658 JP Morgan 10/30/23 10/30/25 1 Month BR 1.6 % 2.1 % 400,000 273,058 126,942 180,526 180,217 US Bank 07/09/22 07/09/24 1 Month BR 1.4 % 1.9 % 33,982 — 33,982 59,060 59,060 Bank of America (3) 09/29/22 09/29/22 1 Month BR 1.8 % 2.1 % 250,000 — 110,250 179,603 179,603 Institutional financing 10/30/23 10/30/25 1 Month BR 4.5 % 5.0 % 249,546 226,000 23,546 42,390 42,390 Totals $ 3,183,528 $ 1,877,975 $ 1,165,803 $ 1,619,567 $ 1,612,361 (1) Borrowings under secured credit agreements with a guarantee for 25 % recourse from Holdco. Index rate is the underlying benchmark interest rate ("BR"), currently LIBOR or Term SOFR, for the Company's borrowings on each secured credit agreement. (2) On February 9, 2022 the secured credit agreement’s initial maturity was extended to April 18, 2025. (3) Effective February 1, 2022 and March 30, 2022, for the sole loan pledged to the secured credit agreement, the Company amended its financing arrangement to reduce its borrowing by $ 9.4 million and $ 9.2 million, respectively, reduce its maximum current availability to zero , and extend its term on a non-mark-to-market basis through April 15, 2022. On April 14, 2022, for the sole loan pledged to the secured credit agreement, the Company amended its financing arrangement to further reduce its borrowing by $ 11.8 million and extend its term on a non-mark-to-market basis through May 2, 2022. The borrowing was repaid in full on April 25, 2022. December 31, 2021 Secured credit agreements (1) Initial Extended Index Weighted average Interest Commitment Maximum Balance Principal balance Amortized cost Goldman Sachs 08/19/22 08/19/24 1 Month 2.0 % 2.1 % $ 250,000 $ 153,680 $ 96,320 $ 158,177 $ 157,550 Wells Fargo (2) 04/18/22 04/18/24 1 Month 1.6 % 1.7 % 750,000 179,784 570,216 779,791 773,868 Barclays 08/13/22 08/13/23 1 Month 1.5 % 1.7 % 750,000 726,686 23,314 41,294 41,058 Morgan Stanley 05/04/22 05/04/23 1 Month 2.0 % 2.1 % 500,000 319,269 180,731 255,125 254,559 JP Morgan 10/30/23 10/30/25 1 Month 1.7 % 1.8 % 400,000 290,523 109,477 200,148 199,246 US Bank 07/09/22 07/09/24 1 Month 1.4 % 1.7 % 44,730 10,748 33,982 59,060 59,060 Bank of America (3) 09/29/22 09/29/22 1 Month 1.8 % 1.9 % 128,625 — 128,625 183,750 183,750 Institutional financing 10/30/23 10/30/25 1 Month 4.5 % 4.8 % 249,546 226,000 23,546 42,390 42,366 Totals $ 3,072,901 $ 1,906,690 $ 1,166,211 $ 1,719,735 $ 1,711,457 (1) Borrowings under secured credit agreements with a guarantee for 25 % recourse from Holdco. (2) On February 9, 2022 the secured credit agreement’s initial maturity was extended to April 18, 2025. (3) Effective February 1, 2022 for the sole loan pledged to the secured credit agreement, the Company amended its financing arrangement to reduce its borrowing by $ 9.4 million and extend its term on a non-mark-to-market basis through March 31, 2022, with an option to further extend its maturity through April 15, 2022 in exchange for a further reduction in borrowings of $ 9.4 million. The Company’s secured credit agreements contain defined mark-to-market provisions that permit the lenders to issue margin calls in the event collateral properties securing the Company’s borrowings experience a non-temporary decline in value or net cash flow (“credit marks”). In connection with one of these borrowing arrangements, the lender is also permitted to issue margin calls to the Company in the event the lender determines capital markets events have caused credit spreads to change for similar borrowing obligations (“spread marks”). Furthermore, in connection with one of these borrowing arrangements, the lender has the right to re-margin the secured credit agreement based solely on appraised loan-to-values after the second anniversary date of the facility on October 30, 2022. The following table presents the recourse and mark-to-market provisions for the Company’s secured credit agreements as of March 31, 2022: Secured credit agreements Basis of margin calls Recourse percentage Initial maturity date Extended maturity date Goldman Sachs Credit 25.0 % 08/19/22 08/19/24 Wells Fargo (1) Credit 25.0 % 04/18/25 04/18/25 Barclays Credit 25.0 % 08/13/22 08/13/23 Morgan Stanley Credit 25.0 % 05/04/22 05/04/23 JP Morgan Credit and Spread 25.0 % 10/30/23 10/30/25 US Bank Credit 25.0 % 07/09/22 07/09/24 Bank of America (2) Credit 25.0 % 09/29/22 09/29/22 Institutional financing (3) Credit 25.0 % 10/30/23 10/30/25 (1) On February 9, 2022 the secured credit agreement’s initial maturity was extended to April 18, 2025. (2) Effective February 1, 2022 and March 30, 2022, for the sole loan pledged to the secured credit agreement, the Company amended its financing arrangement to reduce its borrowing by $ 9.4 million and $ 9.2 million, respectively, and extend its term on a non-mark-to-market basis through April 15, 2022. On April 14, 2022, for the sole loan pledged to the secured credit agreement, the Company amended its financing arrangement to reduce its borrowing by $ 11.8 million and extend its term on a non-mark-to-market basis through May 2, 2022. The borrowing was repaid in full on April 25, 2022. (3) The secured credit agreement may be re-margined beginning after its second anniversary date on October 30, 2022 based on an LTV test; otherwise, no credit or spread-based marks apply. The following table presents the recourse and mark-to-market provisions for the Company’s secured credit agreements as of December 31, 2021: Secured credit agreements Basis of margin calls Recourse percentage Initial maturity date Extended maturity date Goldman Sachs Credit 25.0 % 08/19/22 08/19/24 Wells Fargo (1) Credit 25.0 % 04/18/22 04/18/24 Barclays Credit 25.0 % 08/13/22 08/13/23 Morgan Stanley Credit 25.0 % 05/04/22 05/04/23 JP Morgan Credit and Spread 25.0 % 10/30/23 10/30/25 US Bank Credit 25.0 % 07/09/22 07/09/24 Bank of America (2) Credit 25.0 % 09/29/22 09/29/22 Institutional financing (3) Credit 25.0 % 10/30/23 10/30/25 (1) On February 9, 2022 the secured credit agreement’s initial maturity was extended to April 18, 2025. (2) Effective February 1, 2022 for the sole loan pledged to the credit facility the Company amended its financing arrangement to reduce its borrowing by $ 9.4 million and extend its term on a non-mark-to-market basis through March 31, 2022, with an option to further extend its maturity through April 15, 2022 in exchange for a further reduction in borrowings of $ 9.4 million. (3) The secured credit agreement may be re-margined beginning after its second anniversary date on October 30, 2022 based on an LTV test; otherwise, no credit or spread-based marks apply. Secured Credit Agreements As of March 31, 2022 and December 31, 2021, the Company had seven secured credit agreements to finance its loan investing activities. Credit spreads vary depending upon the collateral type, advance rate and other factors. Assets pledged as of March 31, 2022 and December 31, 2021 consisted of 58 and 53 mortgage loans, or participation interests therein, respectively. Under six of the seven secured credit agreements, the Company transfers all of its rights, title and interest in the loans to the secured credit agreement counterparty in exchange for cash, and simultaneously agrees to reacquire the asset at a future date for an amount equal to the cash exchanged plus an interest factor. The secured credit agreement lender collects all principal and interest on related loans and remits to the Company the net amount after the lender collects its interest and other fees. For the seventh secured credit agreement, which is a mortgage warehouse facility, the lender receives a security interest (pledge) in the loans financed under the arrangement. The secured credit agreements used to finance loan investments are 25 % recourse to Holdco. Under each of the Company’s secured credit agreements, including the mortgage warehouse facility, the Company is required to post margin for changes in conditions to specific loans that serve as collateral for those secured credit agreements. The lender’s margin amount is in all but one instance limited to collateral-specific credit marks based on other-than-temporary declines in the value of the properties securing the underlying loan collateral. Market value determinations and redeterminations may be made by the repurchase lender in its sole discretion subject to certain specified parameters. These considerations include credit-based factors (which are generally based on factors other than those related to the capital markets). In only one instance do the considerations include changes in observable credit spreads in the market for these assets. These factors are described in the immediately preceding table. The following table summarizes certain characteristics of the Company’s secured credit agreements secured by mortgage loan investments, including counterparty concentration risks, as of March 31, 2022 (dollars in thousands): March 31, 2022 Secured credit agreements Commitment UPB of Amortized cost (1) Amount (2) Net counterparty exposure (3) Percent of Days to Goldman Sachs Bank $ 500,000 $ 599,302 $ 600,858 $ 455,752 $ 145,106 9.9 % 872 Wells Fargo 500,000 372,590 369,314 286,951 82,363 5.6 % 1,114 Barclays 750,000 71,011 70,837 50,171 20,666 1.4 % 500 Morgan Stanley Bank 500,000 115,085 115,836 79,161 36,675 2.5 % 399 JP Morgan Chase Bank 649,546 222,916 224,398 150,687 73,711 5.0 % 1,309 US Bank 33,982 59,060 59,435 34,037 25,398 1.7 % 831 Bank of America 250,000 179,603 180,942 110,237 70,705 4.8 % 182 Total / weighted average $ 3,183,528 $ 1,619,567 $ 1,621,620 $ 1,166,996 $ 454,623 873 (1) Loan amounts include interest receivable of $ 9.3 million and are net of premium, discount and origination fees of $ 7.2 million. (2) Loan amounts include interest payable of $ 1.2 million and do not reflect unamortized deferred financing fees of $ 5.1 million. (3) Loan amounts represent the net carrying value of the commercial real estate assets sold under agreements to repurchase, including accrued interest plus any cash or assets on deposit to secure the repurchase obligation, less the amount of the repurchase liability, including accrued interest. The following table summarizes certain characteristics of the Company’s secured credit agreements secured by mortgage loan investments, including counterparty concentration risks, as of December 31, 2021 (dollars in thousands): December 31, 2021 Secured credit agreements Commitment UPB of Amortized cost (1) Amount (2) Net counterparty exposure (3) Percent of Days to Goldman Sachs Bank $ 250,000 $ 158,177 $ 159,269 $ 96,389 $ 62,880 4.3 % 962 Wells Fargo 750,000 779,791 776,196 570,839 205,357 14.0 % 839 Barclays 750,000 41,294 41,019 23,330 17,689 1.2 % 590 Morgan Stanley Bank 500,000 255,125 255,858 180,891 74,967 5.1 % 489 JP Morgan Chase Bank 649,546 242,538 243,181 133,191 109,990 7.5 % 1,399 US Bank 44,730 59,060 59,435 34,035 25,400 1.7 % 921 Bank of America 128,625 183,750 184,531 128,648 55,883 3.8 % 272 Total / weighted average $ 3,072,901 $ 1,719,735 $ 1,719,489 $ 1,167,323 $ 552,165 794 (1) Loan amounts include interest receivable of $ 8.0 million and are net of premium, discount and origination fees of $ 8.8 million. (2) Loan amounts include interest payable of $ 1.1 million and do not reflect unamortized deferred financing fees of $ 4.0 million. (3) Loan amounts represent the net carrying value of the commercial real estate assets sold under agreements to repurchase, including accrued interest plus any cash or assets on deposit to secure the repurchase obligation, less the amount of the repurchase liability, including accrued interest. As a result of contributing collateral into TRTX 2022-FL5 upon its issuance during the three months ended March 31, 2022, the Company wrote-off $ 1.1 million of unamortized deferred transaction costs related to its secured credit agreements to interest expense in its consolidated statements of income and comprehensive income. See Note 5 for details regarding the Company's issuance of TRTX 2022-FL5. Secured Revolving Credit Facility On February 22, 2022, the Company closed a $ 250.0 million secured revolving credit facility with a syndicate of 5 lenders. This facility has an initial term of 3 years, an interest rate of Term SOFR plus 2.00 % that is payable monthly in arrears, and an unused fee of 15 or 20 basis points, depending upon whether utilization exceeds 50.0 %. As of March 31, 2022, the unused fee is 20 bps. The facility generally provides the Company with interim financing of eligible loans for up to 180 days at an initial advance rate of 75.0 %, which declines to 65.0 %, 45.0 %, and 0.0 % after 90, 135, and 180 days from initial borrowing, respectively, depending on the permanent financing asset classification. This facility is 100 % recourse to Holdco. As of March 31, 2022, the Company pledged one loan investment with an aggregate collateral principal balance of $ 43.0 million and outstanding Term SOFR-based borrowings of $ 32.3 million. Mortgage Loan Payable The Company through a special purpose entity subsidiary was a borrower under a $ 50.0 million mortgage loan secured by a first deed of trust against the REO Property. The loan had an interest rate of LIBOR plus 4.50 % and was subject to a LIBOR interest rate floor of 0.50 % and a rate cap of 0.50 %. The Company posted cash of $ 2.4 million to pre-fund interest payments due under the note during its initial term through December 15, 2021. On November 12, 2021, the Company repaid the mortgage loan. See Note 4 for additional information. Financial Covenant Compliance The financial covenants and guarantees for outstanding borrowings related to the Company’s secured credit agreements and secured revolving credit facility require Holdco to maintain compliance with certain financial covenants. The uncertain long-term impact of COVID-19 and other macroeconomic factors on the commercial real estate markets and global capital markets may make it more difficult to meet or satisfy these covenants, and there can be no assurance that the Company will remain in compliance with these covenants in the future. Financial Covenant relating to the Series B Preferred Stock For as long as the Series B Preferred Stock was outstanding, the Company was required to maintain a debt-to-equity ratio not greater than 3.0 to 1.0. For the purpose of determining this ratio, the aggregate liquidation preference of the outstanding shares of Series B Preferred Stock was excluded from the calculation of total indebtedness of the Company and its subsidiaries, and was included in the calculation of total stockholders’ equity. On June 16, 2021, the Company redeemed all 9,000,000 outstanding shares of the Series B Preferred Stock and this covenant no longer applied. Financial Covenant Compliance The Company was in compliance with all financial covenants for its secured credit agreements and secured revolving credit facility to the extent of outstanding balances as of March 31, 2022 and December 31, 2021. |
Schedule of Maturities
Schedule of Maturities | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Maturities | (7) Schedule of Maturities As of March 31, 2022 future principal payments for the following five years and thereafter are as follows (dollars in thousands): Total indebtedness Collateralized loan obligations (1) Secured credit agreements (2) Secured revolving credit facility (2) 2022 $ 243,994 $ 133,744 $ 110,250 $ — 2023 449,399 131,632 317,767 — 2024 1,317,104 865,771 451,333 — 2025 514,391 195,688 286,453 32,250 2026 1,109,130 1,109,130 — — Thereafter 389,150 389,150 — — Total $ 4,023,168 $ 2,825,115 $ 1,165,803 $ 32,250 (1) The scheduled maturities for the investment grade bonds issued by the Company's CRE CLOs are based upon the fully extended maturity of the underlying mortgage loan collateral, considering the reinvestment window of the specific CRE CLO. (2) The scheduled maturities of the Company's secured credit agreement liabilities is based on the extended maturity date for the specific credit agreement where extension options are at its option, subject to standard default provisions, or the current maturity date of those credit agreements where extension options are subject to counterparty approval. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | (8) Fair Value Measurements The Company’s consolidated balance sheet includes Level I fair value measurements related to cash equivalents, restricted cash, accounts receivable, and accrued liabilities. As of March 31, 2022 and December 31, 2021, the Company had $ 286.9 million and $ 199.3 million, respectively, invested in money market funds with original maturities of less than 90 days. The carrying values of these financial assets and liabilities are reasonable estimates of fair value because of the short-term maturities of these instruments. The consolidated balance sheet also includes loans held for investment, the assets and liabilities of its CLOs, and secured credit agreements that are considered Level III fair value measurements that are not measured at fair value on a recurring basis but are subject to fair value adjustments utilizing the fair value of the underlying collateral when there is evidence of impairment and when the loan is dependent solely on the collateral for payment of principal and interest. The following tables provide information about the fair value of the Company’s financial assets and liabilities on the Company’s consolidated balance sheets as of March 31, 2022 and December 31, 2021 (dollars in thousands): March 31, 2022 Fair value Carrying value Level I Level II Level III Financial assets Loans held for investment $ 5,069,481 $ — $ — $ 5,091,160 Financial liabilities Collateralized loan obligations 2,810,626 — — 2,828,618 Secured credit agreements 1,162,576 — — 1,165,000 Secured revolving credit facility 30,380 — — 30,380 December 31, 2021 Fair value Carrying value Level I Level II Level III Financial assets Loans held for investment $ 4,867,203 $ — $ — $ 4,899,666 Financial liabilities Collateralized loan obligations 2,545,691 — — 2,558,544 Secured credit agreements 1,162,206 — — 1,169,710 As of March 31, 2022 and December 31, 2021, the estimated fair value of the Company’s loans held for investment portfolio was $ 5.1 billion and $ 4.9 billion, respectively, which approximated carrying value. The weighted average gross credit spread for the Company’s loans held for investment portfolio as of March 31, 2022 and December 31, 2021 was 3.44 % and 3.39 %, respectively. The weighted average years to maturity as of March 31, 2022 and December 31, 2021 was 2.7 years and 2.8 years, respectively, assuming full extension of all loans held for investment. As of March 31, 2022 and December 31, 2021, the estimated fair value of the collateralized loan obligation liabilities and secured credit agreements approximated fair value as current borrowing spreads and duration reflect market terms. Level III fair values are determined based on standardized valuation models and significant unobservable market inputs, including holding period, discount rates based on LTV, property type and loan pricing expectations developed by the Company’s Manager that were corroborated with other institutional lenders to determine market spreads that are added to the forward curve of the underlying benchmark interest rate. There were no transfers of financial assets or liabilities within the levels of the fair value hierarchy during the three months ended March 31, 2022. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | (9) Income Taxes The Company indirectly owns 100 % of the equity of TRSs. TRSs are subject to applicable U.S. federal, state, local and foreign income tax on their taxable income. In addition, as a REIT, the Company also may be subject to a 100 % excise tax on certain transactions between it and its TRSs that are not conducted on an arm’s-length basis. The Company files income tax returns in the United States federal jurisdiction as well as various state and local jurisdictions. The filings are subject to normal reviews by tax authorities until the related statute of limitations expires. The years open to examination generally range from 2017 to present. ASC 740 also prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company has analyzed its various federal and state filing positions and believes that its income tax filing positions and deductions are well documented and supported. As of March 31, 2022 and December 31, 2021, based on the Company’s evaluation, the Company did no t have any material uncertain income tax positions. The Company’s policy is to classify interest and penalties associated with underpayment of U.S. federal and state income taxes, if any, as a component of general and administrative expense on its consolidated statements of income and comprehensive income. For the three months ended March 31, 2022 and 2021, the Company did no t have interest or penalties associated with the underpayment of any income taxes. The Company owns, through an entity classified as a partnership for U.S. federal tax purposes (“Parent LLC”), 100 % of the common equity in Sub-REIT, which qualifies as a REIT for U.S. federal income tax purposes and is a separate taxpayer from both the Company and Parent LLC. Parent LLC is owned by the Company both directly and indirectly through a TRS. The Company, through Sub-REIT, issues CRE CLOs to finance on a non-recourse, non-mark-to-market basis a large proportion of its loan investment portfolio. Due to unusually low LIBOR rates beginning in March 2020 coupled with high interest rate floors relating to many loans and participation interests pledged to Sub-REIT’s CLOs, certain of Sub-REIT’s CRE CLOs currently generate EII, which is treated as UBTI. Published IRS guidance requires that Sub-REIT allocate its EII in accordance with its dividends paid. Accordingly, EII generated by Sub-REIT’s CRE CLOs is allocated to Parent LLC. Pursuant to the Parent LLC operating agreement, any EII allocated from Sub-REIT to Parent LLC is allocated further to the TRS. Consequently, no EII is allocated to the Company and, as a result, the Company’s shareholders will not be allocated any EII (or UBTI attributable to such EII) by the Company. The tax liability borne by the TRS on the EII is at the highest U.S. federal corporate tax rate (currently 21 %). This tax liability is included in the consolidated statements of income and comprehensive income and balance sheets of the Company. For the three months ended March 31, 2022 and 2021, the Company recognized $ 0.1 million and $ 0.9 million, respectively, of federal, state, and local tax expense. As of March 31, 2022 and 2021, the Company’s effective tax rate was 0.4 % and 2.8 %, respectively. As of March 31, 2022, the Company had no income tax assets and a $ 0.1 million income tax liability recorded for the operating activities of the Company’s TRSs. As of December 31, 2021, the Company had no income tax assets and a $ 0.3 million income tax liability recorded for the operating activities of the Company’s TRSs. During the year ended December 31, 2020, the Company sold all of its CRE debt securities and recorded losses from these sales of $ 203.4 million, which became available to offset qualifying capital gains of the Company in 2020 and, to the extent those capital losses exceeded the Company’s capital gains for 2020, such losses were carried forward to offset capital gains in future years. The Company recognized no capital gains during the year ended December 31, 2020 and recognized capital gains of $ 15.8 million during the year ended December 31, 2021, utilizing its capital loss carryforwards to offset an equal amount for income tax purposes. As of March 31, 2022 and December 31, 2021, the Company had $ 187.6 million of remaining capital losses that it can carryforward into future years. The Company does not expect these losses to reduce the amount that the Company will be required to distribute in accordance with the requirement that the Company distribute to its stockholders at least 90 % of the Company’s REIT taxable income (computed without regard to the deduction for dividends paid and excluding net capital gain) each year in order to continue to qualify as a REIT. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | (10) Related Party Transactions Management Agreement The Company is externally managed and advised by the Manager pursuant to the terms of a management agreement between the Company and the Manager (as amended, the “Management Agreement”). Pursuant to the Management Agreement, the Company pays the Manager a base management fee equal to the greater of $ 250,000 per annum ($ 62,500 per quarter) or 1.50 % per annum ( 0.375 % per quarter) of the Company’s “Equity” as defined in the Management Agreement. Net proceeds from the issuance of Series B and Series C Preferred Stock are included in the Company’s Equity for purposes of determining the base management fee using the same daily weighted average method as is utilized for common equity. The base management fee is payable in cash, quarterly in arrears. The Manager is also entitled to incentive compensation which is calculated and payable in cash with respect to each calendar quarter in arrears in an amount, not less than zero, equal to the difference between: (1) the product of (a) 20 % and (b) the difference between (i) the Company’s Core Earnings for the most recent 12-month period, including the calendar quarter (or part thereof) for which the calculation of incentive compensation is being made (the “applicable period”), and (ii) the product of (A) the Company’s Equity in the most recent 12-month period, including the applicable period, and (B) 7 % per annum; and (2) the sum of any incentive compensation paid to the Manager with respect to the first three calendar quarters of the most recent 12-month period. No incentive compensation is payable to the Manager with respect to any calendar quarter unless Core Earnings for the 12 most recently completed calendar quarters is greater than zero. For purposes of calculating the Manager’s incentive compensation, the Management Agreement specifies that equity securities of the Company or any of the Company’s subsidiaries that are entitled to a specified periodic distribution or have other debt characteristics will not constitute equity securities and will not be included in “Equity” for the purpose of calculating incentive compensation. Instead, the aggregate distribution amount that accrues to such equity securities during the calendar quarter of such calculation will be subtracted from Core Earnings, before incentive compensation for purposes of calculating incentive compensation, unless such distribution is otherwise excluded from Core Earnings. Core Earnings, as defined in the Management Agreement, means the net income (loss) attributable to the holders of the Company’s common stock and Class A common stock (in those periods in which such Class A shares were outstanding) and, without duplication, the holders of the Company’s subsidiaries’ equity securities (other than the Company or any of the Company’s subsidiaries), computed in accordance with GAAP, including realized gains and losses not otherwise included in net income (loss), and excluding (i) non-cash equity compensation expense, (ii) the incentive compensation, (iii) depreciation and amortization, (iv) any unrealized gains or losses, including an allowance for credit losses, or other similar non-cash items that are included in net income for the applicable period, regardless of whether such items are included in other comprehensive income or loss or in net income and (v) one-time events pursuant to changes in GAAP and certain material non-cash income or expense items, in each case after discussions between the Manager and the Company’s independent directors and approved by a majority of the Company’s independent directors. For so long as any shares of Series B Preferred Stock remain issued and outstanding, the Manager agreed to reduce by 50 % the base management fee attributable to the Series B Preferred Stock net proceeds included in the Company’s Equity, such that the base management fee rate will equal 0.75 % per annum instead of 1.50 % per annum as provided in the Management Agreement. On June 16, 2021, the Company redeemed all 9,000,000 outstanding shares of the Series B Preferred Stock, incorporating the impact of the redemption into its Equity calculation. The reduced base management fee rate will apply until the Series B Preferred Stock issuance and redemption no longer impact the Company’s Equity used to calculate the base management fee payable to its Manager. Management Fees Incurred and Paid for the three months ended March 31, 2022 and 2021 For the three months ended March 31, 2022 and 2021, the Company incurred and paid the following management fees and incentive management fees pursuant to the Management Agreement (dollars in thousands): Three Months Ended March 31, 2022 2021 Incurred Management fees $ 5,709 $ 5,094 Incentive management fee — — Total management and incentive fees incurred $ 5,709 $ 5,094 Paid Management fees 5,609 5,358 Incentive management fee — — Total management and incentive fees paid $ 5,609 $ 5,358 Management fees and incentive management fees included in payable to affiliates on the consolidated balance sheets as of March 31, 2022 and December 31, 2021 are $ 5.7 million and $ 5.6 million, respectively. No incentive management fee was earned during the three months ended March 31, 2022 and 2021. Termination Fee A termination fee would be due to the Manager upon termination of the Management Agreement by the Company absent a cause event. The termination fee would also be payable to the Manager upon termination of the Management Agreement by the Manager if the Company materially breaches the Management Agreement. The termination fee is equal to three times the sum of (x) the average annual base management fee and (y) the average annual incentive compensation earned by the Manager, in each case during the 24-month period immediately preceding the most recently completed calendar quarter prior to the date of termination. Other Related Party Transactions The Manager or its affiliates is responsible for the expenses related to the personnel of the Manager and its affiliates who provide services to the Company. However, the Company does reimburse the Manager for agreed-upon amounts based upon the Company’s allocable share of the compensation (including, without limitation, annual base salary, bonus, any related withholding taxes and employee benefits) paid to (1) the Manager’s personnel serving as the Company’s chief financial officer based on the percentage of his or her time spent managing the Company’s affairs and (2) other corporate finance, tax, accounting, internal audit, legal risk management, operations, compliance and other non-investment personnel of the Manager or its affiliates who spend all or a portion of their time managing the Company’s affairs, based on the percentage of time devoted by such personnel to the Company’s and the Company’s subsidiaries’ affairs. For the three months ended March 31, 2022 and 2021, the Company reimbursed to the Manager $ 0.3 million and $ 0.3 million, respectively, of expenses for services rendered on its behalf by the Manager and its affiliates. For as long as any shares of Series B Preferred Stock remained issued and outstanding, the Manager agreed that it would not seek reimbursement for reimbursable expenses in excess of the greater of (x) $ 1.0 million per fiscal year and (y) twenty percent ( 20 %) of the Company’s allocable share of such reimbursable expenses pursuant to the Management Agreement per fiscal year. On June 16, 2021, the Company redeemed all 9,000,000 outstanding shares of the Series B Preferred Stock and no shares of Series B Preferred Stock remained outstanding. As a result of the Series B Preferred Stock redemption, this agreement was terminated and there can be no assurance that the Manager will not seek reimbursement of such expenses in future quarters. The Company is required to pay the Manager or its affiliates for documented costs and expenses incurred with third parties by the Manager or its affiliates on behalf of the Company, subject to the Company’s review and approval of such costs and expenses. The Company’s obligation to pay for costs and expenses incurred on its behalf is not subject to a dollar limitation. As of March 31, 2022, $ 0.4 million remained outstanding and payable to the Manager or its affiliates for third party expenses that were incurred on behalf of the Company. As of December 31, 2021, no amounts remained outstanding and payable to the Manager or its affiliates for third party expenses that were incurred on behalf of the Company. All expenses due and payable to the Manager are reflected in the respective expense category of the consolidated statements of income and comprehensive income or consolidated balance sheets based on the nature of the item. |
Earnings per Share
Earnings per Share | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings per Share | (11) Earnings per Share The Company calculates its basic and diluted earnings (loss) per share using the two-class method for all periods presented, which defines unvested stock-based compensation awards that contain nonforfeitable rights to dividends as participating securities. The two-class method is an allocation formula that determines earnings per share for each share of common stock and participating securities according to dividends declared and participation rights in undistributed earnings. Under this method, all earnings (distributed and undistributed) are allocated to common shares and participating securities based on their respective rights to receive dividends. The unvested restricted shares of its common stock granted to certain current and former employees and affiliates of the Manager qualify as participating securities. These restricted shares have the same rights as the Company’s other shares of common stock, including participating in any dividends, and therefore are included in the Company’s basic and diluted earnings per share calculation. For the three months ended March 31, 2022 and 2021, $ 0.2 million and $ 0.1 million, respectively, of common stock dividends declared and undistributed net income attributable to common stockholders were allocated to unvested shares of our common stock pursuant to stock grants made under the Company’s Incentive Plan. See Note 12 for details. In connection with the issuance of Series B Preferred Stock and the Warrants described in Note 13, the Company elected the accreted redemption value method whereby the discount created based on the relative fair value of the Warrants to the fair value of the Series B Preferred Stock and the related issuance costs were accreted as a non-cash dividend on preferred stock over four years using the effective interest method. Such adjustments are included in Accretion of Discount on Series B Cumulative Redeemable Preferred Stock on the Company’s consolidated statements of changes in equity and treated as a deemed dividend on preferred stock for GAAP and income tax purposes. For the three months ended March 31, 2021 this adjustment totaled $ 1.5 million. The computation of diluted earnings per common share is based on the weighted average number of participating securities outstanding plus the incremental shares that would be outstanding assuming exercise of the Warrants. The number of incremental common shares is calculated utilizing the treasury stock method. For the three months ended March 31, 2022 and 2021, the Warrants are included in the calculation of diluted earnings per common share because the Company generated earnings on a per common share basis, and the average market price of the Company’s common stock during the three months ended March 31, 2022 and 2021 was $ 12.17 and $ 10.95 , respectively, which exceeds the strike price of $ 7.50 per common share for Warrants currently outstanding. The following table sets forth the calculation of basic and diluted earnings per common share based on the weighted-average number of shares of common stock outstanding for the three months ended March 31, 2022 and 2021 (dollars in thousands, except share and per share data): Three Months Ended March 31, 2022 2021 Net income $ 23,781 $ 31,955 Preferred stock dividends (1) ( 3,148 ) ( 6,124 ) Participating securities' share in earnings ( 197 ) ( 146 ) Series B Preferred Stock accretion, including allocated Warrant fair value and transaction costs (2) — ( 1,452 ) Net income attributable to common stockholders $ 20,436 $ 24,233 Weighted average common shares outstanding, basic 77,183,957 76,895,615 Incremental shares of common stock issued from the assumed exercise of the Warrants 4,604,766 3,777,621 Weighted average common shares outstanding, diluted 81,788,723 80,673,236 Earnings per common share, basic (3) $ 0.26 $ 0.32 Earnings per common share, diluted (3) $ 0.25 $ 0.30 (1) Includes preferred stock dividends declared and paid for Series A preferred stock, Series C Preferred Stock, and Series B Preferred Stock shares outstanding for the three months ended March 31, 2022 and 2021, respectively. (2) Series B Preferred Stock Accretion, including Allocated Warrant Fair Value and Transaction Costs includes amounts recorded as deemed dividends of amortized transaction costs and the accreted portion of the allocated Warrant fair value related to the Company’s Series B Preferred Stock. (3) Basic and diluted earnings per common share are computed independently based on the weighted-average shares of common stock outstanding. Diluted earnings per common share also includes the impact of participating securities outstanding plus any incremental shares that would be outstanding assuming the exercise of the Warrants. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2022 | |
Stockholders Equity Note [Abstract] | |
Stockholders' Equity | (12) Stockholders’ Equity Series C Cumulative Redeemable Preferred Stock On June 14, 2021, the Company received net proceeds of $ 194.4 million from the sale of the 8,050,000 shares of Series C Preferred Stock after deducting the underwriting discount and commissions of $ 6.3 million and issuance costs of $ 0.6 million. The Company used the net proceeds from the offering to partially fund the redemption of all of the outstanding shares of the Company’s Series B Preferred Stock. The Series C Preferred Stock is currently listed on the NYSE under the symbol “TRTX PRC.” In connection with the Series C Preferred Stock issuance the Company paid TPG Capital BD, LLC a $ 0.7 million underwriting discount and commission for its services as joint bookrunner. The underwriting discount and commission was settled net of the preferred stock issuance proceeds and recorded as a reduction to additional paid-in-capital in the Company’s consolidated statement of changes in equity at closing. The Company’s Series C Preferred Stock has a liquidation preference of $ 25.00 per share. When, as, and if authorized by the Company’s board of directors and declared by the Company, dividends on Series C Preferred Stock will be payable quarterly in arrears on or about March 30, June 30, September 30, and December 30 of each year at a rate per annum equal to 6.25 % per annum of the $ 25.00 per share liquidation preference ($ 1.5624 per share annually or $ 0.3906 per share quarterly). Dividends on the Series C Preferred Stock are cumulative. The first dividend on the Series C Preferred Stock was payable on September 30, 2021 , and covered the period from, and including, June 14, 2021 to, but not including, September 30, 2021 and was in the amount of $ 0.4601 per share. On and after June 14, 2026, the Company, at its option, upon not fewer than 30 days’ nor more than 60 days’ written notice, may redeem the Series C Preferred Stock, in whole, at any time, or in part, from time to time, for cash, at a redemption price of $ 25.00 per share, plus any accrued and unpaid dividends (whether or not declared) on such shares of Series C Preferred Stock to, but not including, the redemption date (other than any dividend with a record date before the applicable redemption date and a payment date after the applicable redemption date, which shall be paid on the payment date notwithstanding prior redemption of such shares. Upon the occurrence of a Change of Control event, the holders of Series C Preferred Stock have the right to convert their shares solely into common stock at their request and do not have the right to request that their shares convert into cash or a combination of cash and common stock. The Company, upon the occurrence of a Change of Control event, at its option, upon not fewer than 30 days’ nor more than 60 days’ written notice, may redeem the shares of Series C Preferred Stock, in whole or in part, within 120 days after the first date on which such Change of Control occurred, for cash at a redemption price equal to $ 25.00 per share, plus any accrued and unpaid dividends (whether or not declared) to, but not including, the redemption date (other than any dividend with a record date before the applicable redemption date and a payment date after the applicable redemption date, which will be paid on the payment date notwithstanding prior redemption of such shares). Holders of Series C Preferred Stock will not have any voting rights except as set forth in the Articles Supplementary for the Series C Preferred Stock. Series B Cumulative Redeemable Preferred Stock and Warrants to Purchase Shares of Common Stock On May 28, 2020, the Company entered into an Investment Agreement (the “Investment Agreement”) with PE Holder L.L.C., a Delaware limited liability company (the “Purchaser”), an affiliate of Starwood Capital Group Global II, L.P., under which the Company agreed to issue and sell to the Purchaser up to 13,000,000 shares of 11.0 % Series B Preferred Stock, par value $ 0.001 per share (plus any additional such shares paid as dividends pursuant to the Articles Supplementary for the Series B Preferred Stock), and Warrants to purchase, in the aggregate, up to 15,000,000 shares (subject to adjustment) of the Company’s Common Stock, for an aggregate cash purchase price of up to $ 325,000,000 . Such purchases could occur in up to three tranches prior to December 31, 2020. The Investment Agreement contains market standard provisions regarding board representation, voting agreements, rights to information, and a standstill agreement and registration rights agreement regarding common stock acquired via exercise of Warrants. At closing, the Purchaser acquired the initial tranche consisting of 9,000,000 shares of Series B Preferred Stock and Warrants to purchase up to 12,000,000 shares of Common Stock, for an aggregate price of $ 225.0 million. The Company elected to allow its option to issue additional shares of Series B Preferred Stock to expire unused. Series B Preferred Stock The Company’s Series B Preferred Stock had a liquidation preference of $ 25.00 per share over all other classes of the Company’s equity other than Series A preferred stock, which had liquidation preference over the Series B Preferred Stock. Series B Preferred Stock bore a dividend at 11 % per annum, accrued daily and compounded semi-annually, which was payable quarterly in cash; provided that up to 2.0 % per annum of the liquidation preference could be paid, at the option of the Company, in the form of additional shares of Series B Preferred Stock. On June 16, 2021, the Company redeemed all 9,000,000 outstanding shares of the Series B Preferred Stock at an aggregate redemption price of approximately $ 247.5 million. Dividends on all shares of Series B Preferred Stock were paid in full as of the redemption date and no shares of Series B Preferred Stock remained outstanding. Warrants to Purchase Common Stock The Warrants have an initial exercise price of $ 7.50 per share. The exercise price of the Warrants and shares of Common Stock issuable upon exercise of the Warrants are subject to customary adjustments. The Warrants are exercisable on a net-settlement basis and expire on May 28, 2025 . The Warrants are classified as equity and were initially recorded at their estimated fair value of $ 14.4 million with no subsequent remeasurement. None of the Warrants have been exercised as of March 31, 2022. On the issuance date, the Company retained third party valuation experts to assist with estimating the fair value of the Series B Preferred Stock and the Warrants using a binomial lattice model. Based on the Warrants’ relative fair value to the fair value of the Series B Preferred Stock, $ 14.4 million of the $ 225.0 million proceeds was allocated to the Warrants, creating a corresponding preferred stock discount in the same amount. The Company elected the accreted redemption value method whereby this discount was accreted over four years using the effective interest method, resulting in an increase in the carrying value of the Series B Preferred Stock. Additionally, $ 14.2 million of costs directly related to the issuance was accreted using the effective interest method. Such adjustments were included in Accretion of Discount on Series B Cumulative Redeemable Preferred Stock on the Company’s consolidated statements of changes in equity and treated similarly to a dividend on preferred stock for GAAP purposes, but only the accretion of the Warrant allocated fair value was treated as a dividend for income tax purposes. Equity Distribution Agreement On March 7, 2019, the Company and the Manager entered into an equity distribution agreement with each of Citigroup Global Markets Inc., J.P. Morgan Securities LLC, JMP Securities LLC, Wells Fargo Securities, LLC and TPG Capital BD, LLC (each a “Sales Agent” and, collectively, the “Sales Agents”) relating to the issuance and sale by the Company of shares of its common stock pursuant to a continuous offering program. As of March 31, 2022, cumulative gross proceeds issued under the equity distribution agreement totaled $ 50.9 million, leaving $ 74.1 million available for future issuance subject to the direction of management, and market conditions. Each Sales Agent will be entitled to commissions in an amount not to exceed 1.75 % of the gross sales prices of shares of the Company’s common stock sold through it, as the Company’s agent. For the three months ended March 31, 2022 and 2021, the Company sold no shares of common stock under this arrangement. Dividends Upon the approval of the Company’s Board of Directors, the Company accrues dividends. Dividends are paid first to the holders of the Company’s Series A preferred stock at the rate of 12.5 % of the total $ 0.001 million liquidation preference per annum plus all accumulated and unpaid dividends thereon, then to the holder of the Company’s Series B Preferred Stock (which was redeemed in-full on June 16, 2021) at the rate of 11.0 % per annum of the $ 25.00 per share liquidation preference, then to the holders of the Company’s Series C Preferred Stock at the rate of 6.25 % per annum of the $ 25.00 per share liquidation preference, and then to the holders of the Company’s common stock, in each case, to the extent outstanding. The Company intends to distribute each year not less than 90 % of its taxable income to its stockholders to comply with the REIT provisions of the Internal Revenue Code. The Board of Directors will determine whether to pay future dividends, entirely in cash, or in a combination of stock and cash based on facts and circumstances at the time such decisions are made. On March 14, 2022 , the Company’s Board of Directors declared and approved a cash dividend of $ 0.24 per share of common stock, or $ 18.7 million in the aggregate, for the first quarter of 2022. The common stock dividend was paid on April 25, 2022 to the holders of record of the Company’s common stock as of March 29, 2022 . On March 8, 2022 , the Company’s Board of Directors declared a cash dividend of $ 0.3906 per share of Series C Preferred Stock, or $ 3.1 million in the aggregate, for the first quarter of 2022. The Series C Preferred Stock dividend was paid on March 30, 2022 to the preferred stockholders of record as of March 18, 2022 . On March 15, 2021 , the Company’s Board of Directors declared and approved a cash dividend of $ 0.20 per share of common stock, or $ 15.5 million in the aggregate, for the first quarter of 2021. The common stock dividend was paid on April 23, 2021 to the holders of record of the Company’s common stock as of March 26, 2021 . On March 15, 2021 , the Company’s Board of Directors declared and approved a cash dividend of $ 0.68 per share of Series B Preferred Stock, or $ 6.1 million in the aggregate, for the first quarter of 2021. The Series B Preferred Stock dividend was paid on March 31, 2021 to the Series B Preferred Stock holder of record as of March 15, 2021 . As of March 31, 2022 and December 31, 2021, common stock dividends of $ 18.7 million and $ 24.2 million, respectively, were unpaid and are reflected in dividends payable on the Company’s consolidated balance sheets. |
Stock-based Compensation
Stock-based Compensation | 3 Months Ended |
Mar. 31, 2022 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-based Compensation | (13) Stock-based Compensation The Company does not have any employees. As of March 31, 2022, certain individuals employed by an affiliate of the Manager and certain members of the Company’s Board of Directors were compensated, in part, through the issuance of stock-based instruments. The Company’s Board of Directors has adopted, and the Company’s stockholders have approved, the TPG RE Finance Trust, Inc. 2017 Equity Incentive Plan (the “Incentive Plan”). The Incentive Plan provides for the grant of equity-based compensation awards to the Company’s, and its affiliates’, directors, officers, employees (if any) and consultants, and the members, officers, directors, employees and consultants of our Manager or its affiliates, as well as to our Manager and other entities that provide services to us and our affiliates and the employees of such entities. The total number of shares of common stock or long-term incentive plan (“LTIP”) units that may be awarded under the Incentive Plan is 4,600,463 . The Incentive Plan will automatically expire on the tenth anniversary of its effective date, unless terminated earlier by the Company’s Board of Directors. Generally, common shares vest over a four-year period pursuant to the terms of the award and the Incentive Plan with the exception of deferred stock units granted to certain members of the Company's Board of Directors that are vested upon issuance. Over the next four years the number of common shares associated with outstanding stock-based compensation awards that will vest include the following: 278,821 in 2022, 243,993 in 2023, 190,710 in 2024, and 106,811 in 2025. No common shares vested, from January 1, 2022 to March 31, 2022, and as a result did not impact the common shares presented for the year ended December 31, 2022. For the three months ended March 31, 2022, the Company issued no common shares and forfeited 15,594 common shares related to certain individuals employed by an affiliate of the Manager pursuant to the terms of the Incentive Plan. During the three months ended March 31, 2022, the Company accrued 1,953 shares of common stock for dividends that are paid-in kind to non-management members of its Board of Directors related to the dividend payable to holders of record of our common stock as of March 29, 2022. Dividends payable to holders of such grants made on December 17, 2021 and thereafter will be paid in cash. As of March 31, 2022, total unrecognized compensation costs relating to unvested stock-based compensation arrangements was $ 8.1 million. These compensation costs are expected to be recognized over a weighted average period of 1.4 years from March 31, 2022. For the three months ended March 31, 2022 and 2021, the Company recognized $ 1.3 million and $ 1.5 million, respectively, of stock-based compensation expense. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | (14) Commitments and Contingencies Impact of COVID-19 Certain of the Company’s borrowers and their tenants, the properties securing the Company’s investments, and the economy as a whole have been, and may continue to be, adversely impacted by the COVID-19 pandemic. The impact of COVID-19 and resulting changes in behavior have and could further materially disrupt the Company’s business operations and impact its financial performance. As of March 31, 2022, no contingencies have been recorded on our consolidated balance sheet as a result of COVID-19; however, if the global pandemic continues and the economic consequences of the pandemic worsen or extend, it may have long-term impacts on our financial condition, results of operations, and cash flows. Unfunded Commitments As part of its lending activities, the Company commits to certain funding obligations which are not advanced at loan closing and that have not been recognized in the Company’s consolidated financial statements. These commitments to extend credit are made as part of the Company’s loans held for investment portfolio and are generally utilized for base building work, tenant improvement costs and leasing commissions, and interest reserves. The aggregate amount of unrecognized unfunded loan commitments existing as of March 31, 2022 and December 31, 2021 was $ 463.0 million and $ 487.8 million, respectively. The Company recorded an allowance for credit losses on loan commitments that are not unconditionally cancellable by the Company of $ 4.8 million and $ 4.2 million as of March 31, 2022 and December 31, 2021 which is included in accrued expenses and other liabilities on the Company’s consolidated balance sheets. Litigation From time to time, the Company may be involved in various claims and legal actions arising in the ordinary course of business. The Company establishes an accrued liability for loss contingencies when a settlement arising from a legal proceeding is both probable and reasonably estimable. If a legal matter is not probable and reasonably estimable, no such liability is recorded. Examples of this include (i) early stages of a legal proceeding, (ii) damages that are unspecified or cannot be determined, (iii) discovery has not started or is incomplete or (iv) there is uncertainty as to the outcome of pending appeals or motions. If these items exist, an estimated range of potential loss cannot be determined and as such the Company does not record an accrued liability. As of March 31, 2022 and December 31, 2021, the Company was not involved in any material legal proceedings and has not recorded an accrued liability for loss contingencies. |
Concentration of Credit Risk
Concentration of Credit Risk | 3 Months Ended |
Mar. 31, 2022 | |
Risks And Uncertainties [Abstract] | |
Concentration of Credit Risk | (15) Concentration of Credit Risk Impact of COVID-19 on Concentration of Credit Risk The potential negative impacts on the Company’s business caused by COVID-19 may be heightened because the Company is not required to observe specific diversification criteria, which means that the Company’s investments may be concentrated in certain property types, geographical areas or loan categories that are more adversely affected by COVID-19 than other property types, geographical areas or loan categories. For example, certain of the loans in the Company’s loan portfolio are secured by office buildings, hotels and retail properties. At the onset of the COVID-19 pandemic, hotels were disproportionately affected. As the pandemic has evolved, and the ways people use real estate has changed, much of the Company's focus has shifted to its office exposure. For example, office buildings may be adversely impacted by a slowdown in return-to-office or a reversal in the pre-COVID trend toward increased densification of office space, or a preference by office users for suburban properties less reliant on public transportation to safely deliver their employees to and from the workplace. Additionally, entrenched work-from-home behavior by employees may cause a slow return to office, or permanent reduction in demand for office space. Property Type A summary of the Company’s loans held for investment portfolio by property type as of March 31, 2022 and December 31, 2021 based on total loan commitment and current unpaid principal balance (“UPB”) is as follows (dollars in thousands): March 31, 2022 Property type Loan commitment Unfunded commitment % of loan commitment Loan UPB % of loan UPB Office $ 2,216,171 $ 165,191 39.6 % $ 2,050,980 40.0 % Multifamily 1,715,643 113,372 30.7 1,602,571 31.3 Hotel 658,942 4,000 11.8 657,358 12.8 Life Science 494,600 156,939 8.8 337,661 6.6 Mixed-Use 347,409 15,230 6.2 332,179 6.5 Industrial 113,000 6,167 2.0 106,833 2.1 Retail (1) 33,000 2,143 0.6 23,000 0.4 Condominium (2) 14,585 — 0.3 14,585 0.3 Total $ 5,593,350 $ 463,042 100.0 % $ 5,125,167 100.0 % December 31, 2021 Property type Loan commitment Unfunded commitment % of loan commitment Loan UPB % of loan UPB Office $ 2,265,187 $ 178,878 41.9 % $ 2,086,309 42.4 % Multifamily 1,595,643 121,211 29.5 1,474,731 30.0 Hotel 658,943 4,000 12.2 657,672 13.4 Life Science 494,600 163,860 9.1 330,740 6.7 Mixed-Use 347,408 17,681 6.4 329,728 6.7 Retail (1) 33,000 2,143 0.6 23,000 0.5 Condominium (2) 17,163 — 0.3 17,163 0.3 Total $ 5,411,944 $ 487,773 100.0 % $ 4,919,343 100.0 % (1) For the period ended March 31, 2022 and December 31, 2021, the Company's non-performing retail loan held for investment was in default of its loan agreement and as a result the $ 2.1 million of outstanding unfunded loan commitments could not be drawn upon by the borrower. (2) Condominium property type includes a 24 % pari passu participation interest in each of four whole mortgage loans related to one project to the same borrower. Loan commitments exclude (1) capitalized interest resulting from previously modified loans of $ 2.7 million and $ 3.0 million as of March 31, 2022 and December 31, 2021, respectively and include (2) a $ 7.8 million commitment related to a non-performing retail loan held for investment. The commitment cannot be drawn by the borrower. Geography All of the Company’s loans held for investment are secured by properties within the United States. The geographic composition of loans held for investment based on total loan commitment and current UPB as of March 31, 2022 and December 31, 2021 is as follows (dollars in thousands): March 31, 2022 Geographic region Loan commitment Unfunded commitment % of loan commitment Loan UPB % of loan UPB East $ 2,058,483 $ 50,628 36.8 % $ 2,009,028 39.2 % West (1) 1,503,608 235,822 26.9 1,260,631 24.6 South 1,283,455 110,144 22.9 1,173,852 22.9 Midwest 677,804 60,281 12.1 617,823 12.1 Various 70,000 6,167 1.3 63,833 1.2 Total $ 5,593,350 $ 463,042 100.0 % $ 5,125,167 100.0 % December 31, 2021 Geographic region Loan commitment Unfunded commitment % of loan commitment Loan UPB % of loan UPB East $ 1,925,457 $ 63,459 35.6 % $ 1,863,172 37.8 % West (1) 1,484,883 244,100 27.4 1,233,628 25.1 South 1,323,800 115,714 24.5 1,208,940 24.6 Midwest 677,804 64,500 12.5 613,603 12.5 Total $ 5,411,944 $ 487,773 100.0 % $ 4,919,343 100.0 % (1) For the period ended March 31, 2022 and December 31, 2021, the Company's unfunded loan commitments included $ 2.1 million of outstanding unfunded loan commitments that could not be drawn upon by the borrower related to a non-performing retail loan held for investment that was in default. Loan commitments exclude (1) capitalized interest resulting from previously modified loans of $ 2.7 million and $ 3.0 million as of March 31, 2022 and December 31, 2021, respectively and include (2) a $ 7.8 million commitment related to a non-performing retail loan held for investment. The commitment cannot be drawn by the borrower. Category A summary of the Company’s loans held for investment portfolio by loan category as of March 31, 2022 and December 31, 2021 based on total loan commitment and current UPB is as follows (dollars in thousands): March 31, 2022 Loan category Loan commitment Unfunded commitment % of loan commitment Loan UPB % of loan UPB Moderate Transitional $ 1,948,162 $ 277,464 34.8 % $ 1,671,871 32.6 % Bridge (1) 1,852,390 47,509 33.2 1,798,567 35.1 Light Transitional 1,757,798 138,069 31.4 1,619,729 31.6 Construction 35,000 — 0.6 35,000 0.7 Total $ 5,593,350 $ 463,042 100.0 % $ 5,125,167 100.0 % December 31, 2021 Loan category Loan commitment Unfunded commitment % of loan commitment Loan UPB % of loan UPB Moderate Transitional $ 1,950,739 $ 294,693 36.1 % $ 1,657,218 33.7 % Light Transitional 1,779,310 145,621 32.9 1,633,689 33.2 Bridge (1) 1,646,895 47,459 30.4 1,593,436 32.4 Construction 35,000 — 0.6 35,000 0.7 Total $ 5,411,944 $ 487,773 100.0 % $ 4,919,343 100.0 % (1) For the period ended March 31, 2022 and December 31, 2021, the Company's unfunded loan commitments included $ 2.1 million of outstanding unfunded loan commitments that could not be drawn upon by the borrower related to a non-performing retail loan held for investment that was in default. Loan commitments exclude (1) capitalized interest resulting from previously modified loans of $ 2.7 million and $ 3.0 million as of March 31, 2022 and December 31, 2021, respectively and include (2) a $ 7.8 million commitment related to a non-performing retail loan held for investment. The commitment cannot be drawn by the borrower. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | (16) Subsequent Events The following events occurred subsequent to March 31, 2022: • From April 1, 2022 through May 3, 2022, the Company closed, or is in the process of closing, five first mortgage loans with a total loan commitment amount of $ 304.2 million and initial fundings of $ 243.3 million. • From April 1, 2022 through May 3, 2022, the Company received full loan repayments related to three of its first mortgage loans with an aggregate loan commitment and unpaid principal balance of $ 215.4 million and $ 210.8 million, respectively. The first mortgage loans were secured by the following property types (as a percentage of total loan commitments retired): 71.2 % multifamily and 28.8 % mixed-use. • On April 4, 2022, the Company sold its remaining 10 acre parcel of REO Property for total proceeds of $ 75.0 million. After giving effect to transaction costs, the Company will recognize a gain on sale of real estate owned for GAAP and income tax purposes of $ 13.3 million during the three months ended June 30, 2022. The Company intends to utilize a portion of its capital loss carryforwards to fully offset the taxable gain realized from this sale. The Company no longer owns any REO Property. • From April 1, 2022 through May 3, 2022, the Company closed the following secured financing agreement transactions: • On April 11, 2022, the Company repaid $ 34.0 million outstanding under its secured credit agreement with US Bank and simultaneously terminated the financing arrangement prior to its July 9, 2022 initial maturity as part of the Company's program to streamline its portfolio of secured credit agreements. • On April 26, 2022, the Company extended the initial maturity date of its secured credit agreement with Barclays from August 13, 2022 to August 13, 2025 , and reduced the total commitment to $ 500.0 million. The secured credit agreement includes a $ 250.0 million accordion feature that is subject to Barclays's standard approval rights. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The interim consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The interim consolidated financial statements include the Company’s accounts, consolidated variable interest entities for which the Company is the primary beneficiary, and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated. The Company believes it has made all necessary adjustments, consisting of only normal recurring items, so that the consolidated financial statements are presented fairly and that estimates made in preparing the consolidated financial statements are reasonable and prudent. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These interim consolidated financial statements should be read in conjunction with the Company’s Form 10-K filed with the SEC on February 23, 2022. |
Reclassifications | Reclassifications Certain amounts in the Company’s prior period consolidated financial statements have been reclassified to conform to the presentation of the Company’s current period consolidated financial statements. These reclassifications had no effect on the Company’s previously reported net income or total assets in the consolidated statements of income and comprehensive income and consolidated balance sheets, respectively. Prior period amounts related to preferred stock dividends and participating securities’ share in earnings were reclassified to conform with the current period presentation of net income attributable to common stockholders in the consolidated statements of income and comprehensive income. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires estimates of assets, liabilities, revenues, expenses and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Actual results could differ from management’s estimates, and such differences could be material. Significant estimates made in the consolidated financial statements include, but are not limited to, the adequacy of our allowance for credit losses and the valuation inputs related thereto and the valuation of financial instruments. Actual amounts and values as of the balance sheet dates may be materially different from the amounts and values reported due to the inherent uncertainty in the estimation process and the limited availability of observable pricing inputs due to the nature of transitional mortgage loans. Also, future amounts and values could differ materially from those estimates due to changes in values and circumstances after the balance sheet date and the limited availability of observable prices. |
Principles of Consolidation | Principles of Consolidation Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810—Consolidation (“ASC 810”) provides guidance on the identification of a variable interest entity (“VIE”), for which control is achieved through means other than voting rights, and the determination of which business enterprise, if any, should consolidate the VIE. An entity is considered a VIE if any of the following applies: (1) the equity investors (if any) lack one or more of the essential characteristics of a controlling financial interest; (2) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support; or (3) the equity investors have voting rights that are not proportionate to their economic interests and the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest. The Company consolidates VIEs in which the Company is considered to be the primary beneficiary. The primary beneficiary is defined as the entity having both of the following characteristics: (1) the power to direct the activities that, when taken together, most significantly impact the VIE’s performance; and (2) the obligation to absorb losses and right to receive the returns from the VIE that would be significant to the VIE. At each reporting date, the Company reconsiders its primary beneficiary conclusions for all its VIEs to determine if its obligation to absorb losses of, or its rights to receive benefits from, the VIE could potentially be more than insignificant, and will consolidate or not consolidate in accordance with GAAP. See Note 5 for details. |
Revenue Recognition | Revenue Recognition Interest income on loans is accrued using the interest method based on the contractual terms of the loan, adjusted for expected or realized credit losses, if any. The objective of the interest method is to arrive at periodic interest income, including recognition of fees and costs, at a constant effective yield. Premiums, discounts, and origination fees are amortized or accreted into interest income over the lives of the loans using the interest method, or on a straight-line basis when it approximates the interest method. Extension and modification fees are accreted into interest income on a straight-line basis, when it approximates the interest method, over the related extension or modification period. Exit fees are accreted into interest income on a straight-line basis, when it approximates the interest method, over the lives of the loans to which they relate unless they can be waived by the Company or a co-lender in connection with a loan refinancing, or if timely collection of principal and interest is doubtful. Prepayment penalties from borrowers are recognized as interest income when received. Certain of the Company’s loan investments have in the past, and may in the future, provide for additional interest based on the borrower’s operating cash flow or appreciation in the value of the underlying collateral. Such amounts are considered contingent interest and are reflected as interest income only upon certainty of collection. Certain of the Company’s loan investments have in the past, and may in the future, provide for the accrual of interest (in part, or in whole) instead of its current payment in cash, with the accrued interest (“PIK interest”) added to the unpaid principal balance of the loan. Such PIK interest is recognized currently as interest income unless the Company concludes eventual collection is unlikely, in which case the PIK interest is written off. All interest accrued but not received for loans placed on non-accrual status is subtracted from interest income at the time the loan is placed on non-accrual status. Based on the Company’s judgment as to the collectability of principal, a loan on non-accrual status is either accounted for on a cash basis, where interest income is recognized only upon receipt of cash for interest payments, or on a cost-recovery basis, where all cash receipts reduce the loan’s carrying value, and interest income is only recorded when such carrying value has been fully recovered. |
Loans Held for Investment | Loans Held for Investment Loans that the Company has the intent and ability to hold for the foreseeable future, or until maturity or repayment, are reported at their outstanding principal balances net of cumulative charge-offs, interest applied to principal (for loans accounted for using the cost recovery method), unamortized premiums, discounts, loan origination fees and costs. Loan origination fees and direct loan origination costs are deferred and recognized in interest income over the estimated life of the loans using the interest method, or on a straight-line basis when it approximates the interest method, adjusted for actual prepayments. Accrued but not yet collected interest is separately reported as accrued interest and fees receivable on the Company’s consolidated balance sheets. |
Non-Accrual Loans | Non-Accrual Loans Loans are placed on non-accrual status when the full and timely collection of principal and interest is doubtful, generally when: management determines that the borrower is incapable of, or has ceased efforts toward, curing the cause of a default; the loan becomes 90 days or more past due for principal and interest; or the loan experiences a maturity default. The Company considers an account past due when an obligor fails to pay substantially all (defined as 90%) of the scheduled contractual payments by the due date. In each case, the period of delinquency is based on the number of days payments are contractually past due. A loan may be returned to accrual status if all delinquent principal and interest payments are brought current, and collectability of the remaining principal and interest payments in accordance with the loan agreement is reasonably assured. Loans that in the judgment of the Company’s external manager, TPG RE Finance Trust Management, L.P., a Delaware limited partnership (the “Manager”), are adequately secured and in the process of collection are maintained on accrual status, even if they are 90 days or more past due. |
Troubled Debt Restructurings | Troubled Debt Restructurings A loan is accounted for and reported as a troubled debt restructuring (“TDR”) when, for economic or legal reasons, the Company grants a concession to a borrower experiencing financial difficulty that the Company would not otherwise consider. The Company does not consider a restructuring that includes an insignificant delay in payment as a concession. A delay may be considered insignificant if the payments subject to the delay are insignificant relative to the unpaid principal balance of the loan or collateral value, and the contractual amount due, or the delay in timing of the restructured payment period, is insignificant relative to the frequency of payments, the debt’s original contractual maturity or original expected duration. TDRs that are performing and on accrual status as of the date of the modification remain on accrual status. TDRs that are non-performing as of the date of modification usually remain on non-accrual status until the prospect of future payments in accordance with the modified loan agreement is reasonably assured, which is generally demonstrated when the borrower maintains compliance with the restructured terms for a predetermined period. TDRs with temporary below-market concessions remain designated as a TDR regardless of the accrual or performance status until the loan is paid off. However, if the TDR loan has been modified in a subsequent restructure with market terms and the borrower is not currently experiencing financial difficulty, then the loan may be de-designated as a TDR. |
Loans Held for Sale | Loans Held for Sale The Company may change its intent, or its assessment of its ability, to hold for the foreseeable future loans held for investment based on changes in the real estate market, capital markets, or when a shift in its loan portfolio construction occurs. Once a determination is made to sell a loan, or the Company determines it no longer has the intent and ability to hold a loan held for investment for the foreseeable future, it is transferred to loans held for sale. In accordance with GAAP, loans classified as held for sale are recorded at the lower of cost or fair value, net of estimated selling costs, and the loan is excluded from the determination of the current expected credit loss ("CECL") reserve. |
Allowance for Credit Losses for Loans Held for Investment | Credit Losses Allowance for Credit Losses for Loans Held for Investment The Company accounts for its allowance for credit losses on loans held for investment using the Current Expected Credit Loss model of ASC Topic 326, Financial Instruments-Credit Losses (“ASC 326”). Periodic changes to the CECL reserve are recognized through net income on the Company’s consolidated statements of income and comprehensive income. The allowance for credit losses measured under the CECL accounting framework represents an estimate of current expected losses for the Company’s existing portfolio of loans held for investment, and is presented as a valuation reserve on the Company’s consolidated balance sheets. Expected credit losses related to non-cancelable unfunded loan commitments are accounted for as separate liabilities included in accrued expenses and other liabilities on the consolidated balance sheets. The allowance for credit losses for loans held for investment, as reported in the Company’s consolidated balance sheets, is adjusted by a credit loss benefit (expense), which is reported in earnings in the consolidated statements of income and comprehensive income and reduced by the charge-off of loan amounts, net of recoveries and additions related to purchased credit-deteriorated (“PCD”) assets, if relevant. The allowance for credit losses includes a modeled component and an individually-assessed component. The Company has elected to not measure an allowance for credit losses on accrued interest receivables related to all of its loans held for investment because it writes off uncollectable accrued interest receivable in a timely manner pursuant to its non-accrual policy, described above. The Company considers key credit quality indicators in underwriting loans and estimating credit losses, including but not limited to: the capitalization of borrowers and sponsors; the expertise of the borrowers and sponsors in a particular real estate sector and geographic market; collateral type; geographic region; use and occupancy of the property; property market value; loan-to-value (“LTV”) ratio; loan amount and lien position; debt service coverage ratio; the Company’s risk rating for the same and similar loans; and prior experience with the borrower and sponsor. This information is used to assess the financial and operating capability, experience and profitability of the sponsor/borrower. Ultimate repayment of the Company’s loans is sensitive to interest rate changes, general economic conditions, liquidity, LTV ratio, existence of a liquid investment sales market for commercial properties, and availability of replacement short-term or long-term financing. The loans in the Company’s commercial mortgage loan portfolio are secured by collateral of the following property types: office; life science; multifamily; hotel; industrial; mixed-use; condominium; and retail. The Company’s loans are typically collateralized by real estate, or in the case of mezzanine loans, by a partnership interest or similar equity interest in an entity that owns real estate. The Company regularly evaluates on a loan-by-loan basis, typically no less frequently than quarterly, the extent and impact of any credit deterioration associated with the performance and/or value of the underlying collateral property, and the financial and operating capability of the borrower/sponsor. The Company also evaluates the financial strength of loan guarantors, if any, and the borrower’s competency in managing and operating the property or properties. In addition, the Company considers the overall economic environment, real estate sector, and geographic sub-market in which the borrower operates. Such analyses are completed and reviewed by asset management personnel and evaluated by senior management, who utilize various data sources, including, to the extent available (i) periodic financial data such as property occupancy, tenant profile, rental rates, operating expenses, the borrower’s exit plan, and capitalization and discount rates, (ii) site inspections, (iii) sales and financing comparables, (iv) current credit spreads for refinancing and (v) other market data. Quarterly, the Company evaluates the risk of all loans and assigns a risk rating based on a variety of factors, grouped as follows: (i) loan and credit structure, including the as-is LTV structural features; (ii) quality and stability of real estate value and operating cash flow, including debt yield, property type, dynamics of the geography, local market, physical condition, stability of cash flow, leasing velocity and quality and diversity of tenancy; (iii) performance against underwritten business plan; (iv) the frequency and materiality of loan modifications or waivers occasioned by unfavorable variances between the underwritten business plan and actual performance; (v) changes in the capital markets that may impact the refinancing or sale of the loan; and (vi) quality, experience and financial condition of sponsor, borrower and guarantor(s). Based on a 5-point scale, the Company’s loans are rated “1” through “5,” from least risk to greatest risk, respectively, which ratings are defined as follows: 1 - Outperform—Exceeds performance metrics (for example, technical milestones, occupancy, rents, net operating income) included in original or current credit underwriting and business plan; 2 - Meets or Exceeds Expectations—Collateral performance meets or exceeds substantially all performance metrics included in original or current underwriting / business plan; 3 - Satisfactory—Collateral performance meets or is on track to meet underwriting; business plan is met or can reasonably be achieved; 4 - Underperformance—Collateral performance falls short of original underwriting, material differences exist from business plan, or both; technical milestones have been missed; defaults may exist, or may soon occur absent material improvement; and 5 - Default/Possibility of Loss—Collateral performance is significantly worse than underwriting; major variance from business plan; loan covenants or technical milestones have been breached; the loan is in default or substantially in default; timely exit from loan via sale or refinancing is questionable; significant risk of principal loss. The Company generally assigns a risk rating of “3” to all loan investments upon origination, except in the case of specific circumstances warranting an exception. The Company’s CECL reserve also reflects its estimates of the current and future economic conditions that impact the performance of the commercial real estate assets securing the Company’s loans. These estimates include unemployment rates, inflation rates, interest rates, price indices for commercial property, current and expected future availability of liquidity in the commercial property debt and equity capital markets, and other macroeconomic factors that may influence the likelihood and magnitude of potential credit losses for the Company’s loans during their anticipated term. The Company licenses certain macroeconomic financial forecasts to inform its view of the potential future impact that broader economic conditions may have on its loan portfolio’s performance. Selection of the economic forecast or forecasts used, in conjunction with loan level inputs, to determine the CECL reserve requires significant judgment about future events that, while based on the information available to the Company as of the balance sheet date, are ultimately unknowable with certainty. The actual economic conditions impacting the Company’s portfolio could vary significantly from the estimates the Company made for the periods presented. The key inputs to the Company's estimation of its allowance for credit losses as of March 31, 2022 were impacted by dislocations in the global economy, changes in interest rates, and geopolitical conflicts. Inherent uncertainty in the estimation process and the limited availability of observable pricing inputs due to the nature of transitional mortgage loans also constrain the Company's ability to estimate key inputs utilized to calculate its allowance for credit losses. Key inputs to the estimate include, but are not limited to: LTV; debt service coverage ratio; current and future operating cash flow and performance of collateral properties; the financial strength and liquidity of borrowers and sponsors; capitalization rates and discount rates used to value commercial real estate properties; and market liquidity based on market indices or observable transactions involving the sale or financing of commercial properties. Estimates made by the Company are subject to change. Actual results could differ from management’s estimates, and such differences could be material. |
Credit Loss Measurement | Credit Loss Measurement The amount of allowance for credit losses is influenced by the size of the Company’s loan portfolio, loan quality and duration, collateral operating performance, risk rating, delinquency status, historic loss experience and other conditions influencing loss expectations, such as reasonable and supportable forecasts of economic conditions. The Company employs two methods to estimate credit losses in its loan portfolio: a loss-given-default (“LGD”) model-based approach utilized for substantially all of its loans; and an individually-assessed approach for loans that the Company concludes are ill-suited for use in the model-based approach, or are individually-assessed based on accounting guidance contained in the CECL framework. Once the expected credit loss amount is determined, an allowance for credit losses equal to the calculated expected credit loss is established. A loan will be written off through credit loss (expense) benefit, net in the consolidated statements of income and comprehensive income when it is deemed non-recoverable upon a realization event. This is generally at the time the loan receivable is settled, transferred or exchanged, but non-recoverability may also be concluded by the Company if, in its determination, it is nearly certain that all amounts due will not be collected. This loss shall equal the difference between the cash received, or expected to be received, and the book value of the asset. Factors considered by management in determining whether the expected credit loss is permanent or not recoverable include whether management judges the loan to be uncollectible, which means repayment is deemed to be delayed beyond reasonable time frames, or the loss becomes evident due to the borrower’s lack of assets and liquidity, or the borrower’s sponsor is unwilling or unable to support the loan. Allowance for Credit Losses for Loans Held for Investment – Model-Based Approach The model-based approach to measure the allowance for credit losses relates to loans which are not individually-assessed. The Company licenses from Trepp, LLC historical loss information, incorporating loan performance data for over 120,000 commercial real estate loans dating back to 1998, in an analytical model to compute statistical credit loss factors (i.e., probability-of-default, loss severity, and loss-given-default). These statistical credit loss factors are utilized together with loan data and collateral operating performance information for individual loans to estimate the allowance for credit losses. This methodology considers the unique characteristics of the Company’s commercial mortgage loan portfolio and individual assets within the portfolio by considering delinquency status, indicators of credit quality, and other credit trends and risk characteristics. Further, the Company incorporates its expectations about the impact of current conditions and reasonable and supportable forecasts on expected future credit losses in deriving its estimate. For the period beyond which the Company is able to make reasonable and supportable forecasts, the Company reverts to unadjusted historical loan loss information. Determining the appropriateness of the allowance is complex and requires judgment by management about the effect of matters that are inherently uncertain. In future periods, evaluations of the overall loan portfolio, in light of the factors and forecasts then prevailing, may result in significant changes in the allowance and credit loss expense. Allowance for Credit Losses for Loans Held for Investment – Individually-Assessed Approach In instances where the unique attributes of a loan investment render it ill-suited for the model-based approach because it no longer shares risk characteristics with other loans, or because the Company concludes repayment of the loan is entirely collateral-dependent, or when it is deemed probable that the Company will not be able to collect all amounts due according to the contractual terms of the loan, the Company separately evaluates the amount of expected credit loss using other real estate valuation techniques (most commonly, discounted cash flow), considering substantially the same credit factors as utilized in the model-dependent method. In these cases, expected credit loss is measured as the difference between the amortized cost basis of the loan and the fair value of the collateral. The fair value of the collateral is adjusted for the estimated cost to sell if repayment or satisfaction of a loan is dependent on the sale (rather than the operation) of the collateral. |
Unfunded Loan Commitments | Unfunded Loan Commitments The Company’s first mortgage loans often contain provisions for future funding of a pre-determined portion of capital and other costs incurred by the borrower in executing its business plan. These deferred fundings are conditioned upon the borrower’s execution of its business plan with respect to the underlying collateral property securing the loan. These deferred fundings are typically for base building work, tenant improvement costs and leasing commissions, interest reserves, and occasionally to fund forecasted operating deficits during lease-up. These deferred funding commitments may be for specific periods, often require satisfaction by the borrower of conditions precedent, and may contain termination clauses at the option of the borrower or, more rarely, at the Company’s option. The total amount of unfunded commitments does not necessarily represent actual amounts that may be funded in cash in the future, since commitments may expire without being drawn, may be cancelled if certain conditions are not satisfied by the borrower, or borrowers may elect not to borrow some or all of the unused commitment. The Company does not recognize these unfunded loan commitments in its consolidated financial statements. The Company applies its expected credit loss estimates to all future funding commitments that cannot be contractually terminated at the Company’s option. The Company maintains a separate allowance for expected credit losses from unfunded loan commitments, which is included in accrued expenses and other liabilities on the consolidated balance sheets. The Company estimates the amount of expected losses by calculating a commitment usage factor over the contractual period for exposures that are not unconditionally cancellable by the Company and applies the loss factors used in the allowance for credit loss methodology described above to the results of the usage calculation to estimate the liability for credit losses related to unfunded commitments for each loan. |
Real Estate Owned | Real Estate Owned Real estate acquired through a foreclosure or by deed-in-lieu of foreclosure is classified as real estate owned (“REO”) and held for investment on the Company’s consolidated balance sheet until a pending sales transaction meets the criteria of ASC 360-10-45-9 after which the real estate is considered to be held for sale, or is sold. The Company's cost basis in REO is equal to the estimated fair value of the collateral at the date of acquisition, less estimated selling costs. The estimated fair value of REO is determined using a discounted cash flow model and inputs that include the highest and best use for each asset, estimated future values based on extensive discussions with local brokers, investors and other market participants, the estimated holding period for the asset, and discount rates that reflect estimated investor return requirements for the risks associated with the expected use of each asset. If the estimated fair value of REO is lower than the carrying value of the related loan upon acquisition, the difference, along with any previously recorded specific CECL reserve, is recorded through Credit Loss (Benefit) Expense in the consolidated statements of income and comprehensive income. REO is initially measured at fair value and is thereafter subject to an ongoing impairment analysis. Subsequent to a REO acquisition, events or circumstances may occur that result in a material and sustained decrease in the cash flows generated from the asset. REO is evaluated for recoverability, on a fair value basis, when impairment indicators are identified. Any impairment loss, revenue and expenses from operations of the properties, and resulting gains or losses on sale are included in the consolidated statements of income and comprehensive income. |
Investment Portfolio Financing Arrangements | Investment Portfolio Financing Arrangements The Company finances its portfolio of loans, or participation interests therein, and REO using secured financing agreements, including secured credit agreements, secured revolving credit facilities, mortgage loans payable, and collateralized loan obligations. The related borrowings are recorded as separate liabilities on the Company’s consolidated balance sheets. Interest income earned on the investments and interest expense incurred on the related borrowings are reported separately on the Company’s consolidated statements of income and comprehensive income. In certain instances, the Company creates structural leverage through the co-origination or non-recourse syndication of a senior loan interest to a third party. For all such syndications the Company has completed through March 31, 2022, the Company transferred, on a non-recourse basis, 100 % of the senior mortgage loan that the Company originated to a third-party lender, and retained as a loan investment a separate mezzanine loan investment secured by a pledge of the equity in the mortgage borrower. With respect to the senior mortgage loans transferred, the Company retains: no control over the mortgage loan; no economic interest in the mortgage loan; and no recourse to the purchaser or the borrower. Consequently, based on these circumstances and because the Company does not have any continuing involvement with the transferred senior mortgage loan, these syndications are accounted for as sales under GAAP and are removed from the Company’s consolidated financial statements at the time of transfer. The Company’s consolidated balance sheets only include the separate mezzanine loan remaining after the transfer. For more information regarding the Company’s investment portfolio financing arrangements, see Note 6. |
Fair Value Measurements | Fair Value Measurements The Company follows ASC 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”), for its holdings of financial instruments. ASC 820-10 defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands disclosure of fair value measurements. ASC 820-10 determines fair value to be the price that would be received for a financial instrument in a current sale, which assumes an orderly transaction between market participants on the measurement date. The Company determines the estimated fair value of financial assets and liabilities using the three-tier fair value hierarchy established by GAAP, which prioritizes the inputs used in measuring fair value. GAAP establishes market-based or observable inputs as the preferred source of values followed by valuation models using management assumptions in the absence of market inputs. The financial instruments recorded at fair value on a recurring basis in the Company’s consolidated financial statements are cash and cash equivalents and restricted cash. The three levels of inputs that may be used to measure fair value are as follows: Level I —Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Level II —Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. Level III —Valuations based on inputs that are unobservable and significant to the overall fair value measurement. For certain financial instruments, the inputs used by management to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for such financial instrument is based on the lowest level of input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument. The Company may use valuation techniques consistent with the market and income approaches to measure the fair value of its assets and liabilities. The market approach uses third-party valuations and information obtained from market transactions involving identical or similar assets or liabilities. The income approach uses projections of the future economic benefits of an instrument to determine its fair value, such as in the discounted cash flow methodology. The inputs or methodology used for valuing financial instruments are not necessarily an indication of the risk associated with investing in these financial instruments. Transfers between levels of the fair value hierarchy are assumed to occur at the end of the reporting period. The following methods and assumptions are used by our Manager to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value: • Cash and cash equivalents: the carrying amount of cash and cash equivalents approximates fair value. • Loans held for investment, net: using a discounted cash flow methodology employing a discount rate for loans of comparable credit quality, structure, and LTV based upon appraisal information and current estimates of the value of collateral property performed by the Manager, and credit spreads for loans of comparable risk (as determined by the Manager based on the factors previously described) as corroborated by inquiry of other market participants. • Loans held for sale: estimated fair market value based on sale comparables as corroborated by inquiry of other market participants or independent market data providers. • Secured revolving credit facilities and mortgage loan payable (if any): based on the rate at which a similar secured revolving credit facility or mortgage loan payable (if any) would currently be priced, as corroborated by inquiry of other market participants. • CRE Collateralized Loan Obligations, net: indications of value from dealers active in trading similar or substantially similar securities, observable quotes from market data services, reported prices and spreads for recent new issues, and Manager estimates of the credit spread at which similar bonds would be issued, or traded, in the new issue and secondary markets. • Other assets and liabilities subject to fair value measurement, including receivables, payables and accrued liabilities have carrying values that approximate fair value due to their short-term nature. As discussed above, market-based or observable inputs are generally the preferred source of values for purposes of measuring the fair value of the Company’s assets under GAAP. The commercial property investment sales and commercial mortgage loan markets continue to experience uneven liquidity due to the lingering aftereffects of COVID-19 and global geopolitical concerns, which has made it more difficult to rely on market-based inputs in connection with the valuation of the Company’s assets under GAAP. Key valuation inputs include, but are not limited to, future operating cash flow and performance of collateral properties, the financial strength and liquidity of borrowers and sponsors, capitalization rates and discount rates used to value commercial real estate properties, and observable transactions involving the sale or financing of commercial properties. In the absence of plentiful market inputs, GAAP permits the use of management assumptions to measure fair value. Inherent uncertainty in the estimation process, and the limited availability of observable pricing inputs due to the nature of transitional mortgage loans, also constrain the Company's ability to estimate key inputs utilized to calculate its estimated fair value measurements. |
Income Taxes | Income Taxes The Company qualifies and has elected to be taxed as a REIT for U.S. federal income tax purposes under the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), commencing with its initial taxable year ended December 31, 2014. To the extent that it annually distributes at least 90% of its REIT taxable income to stockholders and complies with various other requirements as a REIT, the Company generally will not be subject to U.S. federal income taxes on its distributed REIT taxable income. In 2017, the Internal Revenue Service issued a revenue procedure permitting “publicly offered” REITs to make elective stock dividends (i.e., dividends paid in a mixture of stock and cash), with at least 20% of the total distribution being paid in cash, to satisfy their REIT distribution requirements. On November 30, 2021, the Internal Revenue Service issued another revenue procedure which temporarily reduces (through June 30, 2022) the minimum amount of the total distribution that must be available in cash to 10%. Pursuant to these revenue procedures, the Company may elect to make future distributions of its taxable income in a mixture of stock and cash. If the Company fails to continue to qualify as a REIT in any taxable year and does not qualify for certain statutory relief provisions, the Company will be subject to U.S. federal and state income taxes at regular corporate rates beginning with the year in which it fails to qualify and may be precluded from being able to elect to be treated as a REIT for the Company’s four subsequent taxable years. Even though the Company currently qualifies for taxation as a REIT, the Company may be subject to certain U.S. federal, state, local and foreign taxes on the Company’s income and property and to U.S. federal income and excise taxes on the Company’s undistributed REIT taxable income. In certain instances, the Company may generate excess inclusion income (“EII”) within the Sub-REIT structure it established for the purpose of issuing collateralized loan obligations (“CRE CLOs”). EII is present in certain of the Company’s CRE CLOs due to the sharp decline in LIBOR since the issuance of the CRE CLOs' liabilities, loans with high interest rate floors that are contributed into the CRE CLOs, and liabilities are largely based on unfloored LIBOR or Compounded SOFR. EII, which is treated as unrelated business taxable income (“UBTI”), is an obligation of the Company and is allocated only to a taxable REIT subsidiary (“TRS”) and not to its common stockholders. Deferred tax assets and liabilities are recognized for future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the periods in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period in which the enactment date occurs. Under ASC Topic 740, Income Taxes (“ASC 740”), a valuation allowance is established when management believes it is more likely than not that a deferred tax asset will not be realized. Currently, the Company has no temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. The Company intends to continue to operate in a manner consistent with, and to continue to meet the requirements to be treated as, a REIT for tax purposes and to distribute all of its REIT taxable income. Accordingly, the Company does not expect to pay corporate-level federal taxes. |
Earnings per Common Share | Earnings per Common Share The Company calculates basic earnings per share using the two-class method which defines unvested stock-based compensation awards that contain nonforfeitable rights to dividends as participating securities. The two-class method is an allocation formula that determines earnings per share for each share of common stock and participating securities according to dividends declared and participation rights in undistributed earnings. Under this method, all earnings (distributed and undistributed) are allocated to common shares and participating securities based on their respective rights to receive dividends. Basic earnings per common share is calculated by dividing earnings allocated to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed under the more dilutive of the treasury stock method or the two-class method. The computation of diluted earnings per share is based on the weighted average number of participating securities outstanding plus the incremental shares that would be outstanding assuming exercise of warrants to purchase common stock (the “Warrants”, see Note 12) issued in connection with the Company’s Series B Cumulative Redeemable Preferred Stock (the “Series B Preferred Stock”), which are exercisable on a net-share settlement basis. The number of incremental shares is calculated utilizing the treasury stock method. The Company accounts for unvested stock-based compensation awards that contain non-forfeitable dividend rights or dividend equivalents (whether paid or unpaid) as participating securities, which are included in the computation of earnings per share pursuant to the two-class method. The Company excludes participating securities and Warrants from the calculation of diluted weighted average shares outstanding in periods of net losses since their effect would be anti-dilutive. |
Stock-based Compensation | Stock-based Compensation Stock-based compensation consists of awards issued by the Company to certain employees of affiliates of the Manager and certain members of the Company’s Board of Directors. The stock-based compensation awards to certain employees of affiliates of the Manager generally vest in installments over a fixed period. Deferred stock units granted to the Company’s Board of Directors prior to December 2021 fully vested on the grant date and accrued, and will continue to accrue, common stock dividends that are paid-in kind through additional deferred stock units on a quarterly basis. Deferred stock units granted in December 2021 and in future periods will fully vest on the grant date, and will continue to accrue and be paid, cash common stock dividends on a quarterly basis. Stock-based compensation expense is recognized in net income on a straight-line basis over the applicable award’s vesting period. Forfeitures of stock-based compensation awards are recognized as they occur. |
Deferred Financing Costs | Deferred Financing Costs Deferred financing costs are reflected net of the liabilities to which they relate, currently collateralized loan obligations and secured financing agreements, which include secured credit agreements and a secured revolving credit facility, on the Company’s consolidated balance sheets. These costs are amortized in interest expense using the interest method, or on a straight-line basis when it approximates the interest method, as follows: (i) for secured financing agreements other than CRE CLOs, the initial term of the financing agreement, or in the case of costs directly associated with the loan, over the life of the financing agreement or the loan, whichever is shorter; and (ii) for CRE CLOs, over the estimated life of the liabilities issued based on the underlying loans’ initial maturity dates, considering the expected repayment behavior of the loans collateralizing the notes and the impact of any reinvestment periods, as of the closing date. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash held in banks or invested in money market funds with original maturities of less than 90 days. The Company deposits its cash and cash equivalents with high credit quality institutions to minimize credit risk exposure. The Company maintains cash accounts at several financial institutions, which are insured up to a maximum of $ 250,000 per account as of March 31, 2022 and December 31, 2021. The balances in these accounts may exceed the insured limits. Pursuant to financial covenants applicable to Holdco, which is the guarantor of the Company’s recourse indebtedness, the Company is required to maintain minimum cash equal to the greater of (i) $15 million or (ii) the product of 5% and the aggregate recourse indebtedness of the Company. As of March 31, 2022 and December 31, 2021, the Company held as part of its total cash balances $ 16.2 million and 15.0 million to comply with this covenant, respectively. |
Restricted Cash | Restricted Cash Restricted cash primarily represents deposits paid by potential borrowers to cover certain costs incurred by the Company in connection with loan originations. These deposits may be returned to borrowers, after deducting eligible transaction costs paid by the Company for the benefit of the borrowers, upon the closing of a loan transaction, or if a loan transaction does not close and deposit proceeds remain. As of March 31, 2022, cash and cash equivalents of $ 351.6 million has been combined with $ 0.8 million of restricted cash in the consolidated statement of cash flows. As of December 31, 2021, cash and cash equivalents of $ 260.6 million has been combined with $ 0.4 million of restricted cash in the consolidated statement of cash flows. |
Collateralized Loan Obligation Proceeds Held at Trustee | Collateralized Loan Obligation Proceeds Held at Trustee Collateralized Loan Obligation Proceeds Held at Trustee represent cash held by the Company’s collateralized loan obligations pending reinvestment in eligible collateral. See Note 5 for additional details. |
Accounts Receivable from Servicer/Trustee | Accounts Receivable from Servicer/Trustee Accounts receivable from Servicer/Trustee represents cash proceeds from loan activities that have not been remitted to the Company based on established servicing and borrowing procedures. Such amounts are generally held by the Servicer/Trustee for less than 30 days before being remitted to the Company. |
Stockholders' Equity | Stockholders’ Equity Total Stockholders’ Equity may include preferred stock, common stock, and derivative instruments indexed to the Company's common stock such as warrants or other embedded options within financing arrangements that may be classified as temporary or permanent equity. Common shares generally represent a basic ownership interest in an entity and a residual corporate interest in liquidation, bearing the ultimate risk of loss and receiving the benefit of success. Common shares are usually perpetual in nature with voting rights and dividend rights. Preferred shares are usually characterized by the life of the instrument (i.e., perpetual or redeemable) and the ability of a holder to convert the equity instrument into cash, common shares, or a combination thereof. The terms of preferred shares can vary significantly, including but not limited to, an equity instrument’s dividend rate, term (e.g., inclusion of a stated redemption date), conversion features, voting rights, and liquidation preferences. Derivative instruments indexed to the Company's common stock such as warrants or other embedded options within financing arrangements are generally classified based on which party controls the contract settlement mechanism and the nature of the settlement terms that may require, or allow, the Company to make a cash payment, issue common shares, or a combination thereof to satisfy its obligation of the underlying contract. |
Temporary Equity | Temporary Equity Equity instruments that are redeemable for cash or other assets are classified as temporary equity if the instrument is redeemable, at the option of the holder, at a fixed or determinable price on a fixed or determinable date or upon the occurrence of an event that is not solely within the control of the issuer. Redeemable equity instruments are initially carried at the relative fair value of the equity instrument at the issuance date, which is subsequently adjusted at each balance sheet date if the instrument is currently redeemable or probable of becoming redeemable. The Series B Preferred Stock issued in connection with the Investment Agreement described in Note 12 is classified as temporary equity in the accompanying financial statements. The Company elected the accreted redemption value method under which it accreted changes in the redemption value over the period from the date of issuance of the Series B Preferred Stock to the earliest costless redemption date (May 28, 2024, the fourth anniversary) using the effective interest method. Such adjustments are included in Accretion of Discount on Series B Cumulative Redeemable Preferred Stock on the Company’s consolidated statements of changes in equity and treated similarly to a dividend on preferred stock for GAAP purposes. On June 16, 2021, the Company redeemed all 9,000,000 outstanding shares of the Series B Preferred Stock and accelerated the accretion of the redemption value. As of March 31, 2022 and December 31, 2021, the Company had no shares of Series B Preferred Stock outstanding. The Series B Preferred Stock issuance, including details related to the Warrants, and redemption are described in Note 12. |
Permanent Equity | Permanent Equity The Company has preferred stock, common stock, and Warrants issued in connection with the Series B Preferred Stock transaction that are outstanding and classified as permanent equity. The Company’s common stock is perpetual with voting rights and dividend rights. On June 14, 2021, the Company issued 8,050,000 shares of Series C Cumulative Redeemable Preferred Stock (the “Series C Preferred Stock”) that is classified as permanent equity. The outstanding shares of Series C Preferred Stock have a 6.25 % dividend rate and may be redeemed by the Company at its option on and after June 14, 2026. The Warrants are exercisable on a net-settlement basis and expire on May 28, 2025 . None of the Warrants have been exercised as of March 31, 2022. The Series C Preferred Stock issuance and Warrants are described in Note 12. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In March 2022, the FASB issued ASU 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. The amendments in this ASU eliminate the accounting guidance for TDRs by creditors in Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. Additionally, for public business entities, the amendments in this ASU require that an entity disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, Financial Instruments—Credit Losses—Measured at Amortized Cost. The ASU’s amendments are effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. The Company is currently evaluating the impact of ASU 2022-02 on its consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ("ASU 2020-04"). ASU 2020-04 provides optional expedients and exceptions to GAAP requirements for modifications to debt agreements, leases, derivatives, and other contracts, related to the market transition from LIBOR, and certain other floating rate benchmark indices, or collectively, IBORs, to alternative reference rates. ASU 2020-04 generally considers contract modifications related to reference rate reform to be an event that does not require contract remeasurement at the modification date nor a reassessment of a previous accounting determination. In January 2021, the FASB clarified the scope of that guidance with the issuance of ASU 2021-01, “Reference Rate Reform: Scope.” This ASU provides optional guidance for a limited period to ease the burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. This would apply to companies meeting certain criteria that have contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. This standard is effective for the Company immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company continues to evaluate the documentation and control processes associated with its assets and liabilities to manage the transition away from LIBOR to an alternative rate endorsed by the Alternative Reference Rates Committee of the Federal Reserve System, and continues to utilize required resources to revise its control and risk management systems to ensure there is no disruption to our day-to-day operations from the transition as it occurs. The Company will continue to employ prudent risk management as it relates to the potential financial, operational and legal risks associated with the expected cessation of LIBOR, and to ensure that its assets and liabilities generally remain match-indexed following this event. For the three months ended March 31, 2022, the Company has not elected to apply the temporary optional expedients and exceptions and will be reevaluating the application each quarter. Recently Adopted Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815 – 40) (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU is part of the FASB’s simplification initiative, which aims to reduce unnecessary complexity in GAAP. The ASU’s amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. The Company's adoption of ASU 2020-06 on January 1, 2022 did not have a material impact on the Company's consolidated financial statements. In April 2021, the FASB issued ASU 2021-04, which included Topic 260 “Earnings Per Share”. This guidance clarifies and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options due to a lack of explicit guidance in the FASB Codification. The ASU 2021-04 is effective for all entities for fiscal years beginning after December 15, 2021. Early adoption was permitted. The Company's adoption of ASU 2021-04 on January 1, 2022 did not have a material impact on the Company's consolidated financial statements. |
Loans Held for Investment and_2
Loans Held for Investment and the Allowance for Credit Losses (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Receivables [Abstract] | |
Schedule of Overall Statistics for Loan Held for Investment Portfolio | The following table details overall statistics for the Company’s loans held for investment portfolio as of March 31, 2022 and December 31, 2021 (dollars in thousands): March 31, 2022 December 31, 2021 Balance sheet portfolio Total loan portfolio Balance sheet portfolio Total loan portfolio Number of loans 73 74 69 70 Floating rate loans 100.0 % 100.0 % 100.0 % 100.0 % Total loan commitment (1) $ 5,593,350 $ 5,725,350 $ 5,411,944 $ 5,543,944 Unpaid principal balance (2) $ 5,125,167 $ 5,125,167 $ 4,919,343 $ 4,919,343 Unfunded loan commitments (3) $ 463,042 $ 463,042 $ 487,773 $ 487,773 Amortized cost $ 5,115,788 $ 5,115,788 $ 4,909,202 $ 4,909,202 Weighted average credit spread (4) 3.4 % 3.4 % 3.4 % 3.4 % Weighted average all-in yield (4) 4.9 % 4.9 % 4.8 % 4.8 % Weighted average term to extended maturity (in years) (5) 2.7 2.7 2.8 2.8 (1) In certain instances, the Company creates structural leverage through the co-origination or non-recourse syndication of a senior loan interest to a third-party. In either case, the senior mortgage loan (i.e., the non-consolidated senior interest) is not included on the Company’s balance sheet. When the Company creates structural leverage through the co-origination or non-recourse syndication of a senior loan interest to a third-party, the Company retains on its balance sheet a mezzanine loan. Total loan commitment encompasses the entire loan portfolio the Company originated, acquired and financed. As of March 31, 2022 and December 31, 2021, the Company had outstanding one non-consolidated senior interest of $ 132.0 million. (2) Unpaid principal balance includes PIK interest of $ 2.7 million and $ 3.0 million as of March 31, 2022 and December 31, 2021, respectively. (3) Unfunded loan commitments may be funded over the term of each loan, subject in certain cases to an expiration date or a force-funding date, primarily to finance property improvements or lease-related expenditures by the Company’s borrowers, to finance operating deficits during renovation and lease-up, and in limited instances to finance construction. (4) As of March 31, 2022, all of the Company’s loans were floating rate. Loans originated by the Company before December 31, 2021 are indexed to LIBOR, while loans originated after January 1, 2022 are indexed to Term SOFR. As of March 31, 2022, based on the total loan commitments of the Company’s loan portfolio, 4.2 % (or $ 0.2 billion) of the Company’s loans were subject to Term SOFR and 95.8 % (or $ 5.4 billion) were subject to LIBOR as the benchmark interest rate. In addition to credit spread, all-in yield includes the amortization of deferred origination fees, purchase price premium and discount if any, loan origination costs and accrual of both extension and exit fees. Credit spread and all-in yield for the total portfolio assumes the applicable floating benchmark interest rate as of March 31, 2022 for weighted average calculations. (5) Extended maturity assumes all extension options are exercised by the borrower; provided, however, that the Company’s loans may be repaid prior to such date. As of March 31, 2022, based on the unpaid principal balance of the Company’s total loan exposure, 42.0 % of the Company’s loans were subject to yield maintenance or other prepayment restrictions and 58.0 % were open to repayment by the borrower without penalty. |
Schedule of Loans Held for Investment Portfolio by Loan Seniority | The following tables present an overview of the Company’s loans held for investment portfolio by loan seniority as of March 31, 2022 and December 31, 2021 (dollars in thousands): March 31, 2022 Loans held for investment, net Outstanding principal Unamortized premium (discount) and Amortized cost Senior loans $ 5,090,167 $ ( 9,370 ) $ 5,080,797 Subordinated and mezzanine loans 35,000 ( 9 ) 34,991 Total $ 5,125,167 $ ( 9,379 ) $ 5,115,788 Allowance for credit losses ( 46,307 ) Loans held for investment, net $ 5,069,481 December 31, 2021 Loans held for investment, net Outstanding principal Unamortized premium (discount) and Amortized cost Senior loans $ 4,884,343 $ ( 10,101 ) $ 4,874,242 Subordinated and mezzanine loans 35,000 ( 40 ) 34,960 Total $ 4,919,343 $ ( 10,141 ) $ 4,909,202 Allowance for credit losses ( 41,999 ) Loans held for investment, net $ 4,867,203 |
Summary of Loans Held for Investment Portfolio Activity | For the three months ended March 31, 2022, the Company’s loans held for investment portfolio activity was as follows (dollars in thousands): Carrying value Balance as of January 1, 2022 $ 4,867,203 Additions during the period: Loans originated 223,871 Additional fundings 29,235 Amortization of origination fees 1,491 Deductions during the period: Collection of principal ( 47,698 ) Collection of accrued PIK interest ( 313 ) (Increase) of allowance for credit losses ( 4,308 ) Balance as of March 31, 2022 $ 5,069,481 |
Summary of Amortized Cost by Origination Year Grouped by Risk Rating for Loans Held for Investment Portfolio | The following tables present the Company's loans held for investment portfolio on an amortized cost basis by origination year, grouped by risk rating, as of March 31, 2022 and December 31, 2021 (dollars in thousands): March 31, 2022 Amortized cost by origination year 2022 2021 2020 2019 2018 Prior Total Senior loans by internal risk ratings: 1 $ — $ — $ — $ — $ — $ — $ — 2 — 33,650 — 146,799 189,702 173,250 543,401 3 224,160 1,614,009 96,914 960,458 335,023 95,285 3,325,849 4 — — 78,231 497,332 307,208 305,776 1,188,547 5 — — — — 23,000 — 23,000 Total senior loans $ 224,160 $ 1,647,659 $ 175,145 $ 1,604,589 $ 854,933 $ 574,311 $ 5,080,797 Subordinated and mezzanine loans by internal risk ratings: 1 $ — $ — $ — $ — $ — $ — $ — 2 — — — — — — — 3 — — — 34,991 — — 34,991 4 — — — — — — — 5 — — — — — — — Total subordinated and mezzanine loans — — — 34,991 — — 34,991 Total $ 224,160 $ 1,647,659 $ 175,145 $ 1,639,580 $ 854,933 $ 574,311 $ 5,115,788 December 31, 2021 Amortized cost by origination year 2021 2020 2019 2018 2017 Prior Total Senior loans by internal risk ratings: 1 $ — $ — $ — $ — $ — $ — $ — 2 33,621 — 82,461 242,614 168,355 — 527,051 3 1,600,659 95,858 1,400,670 407,509 169,934 17,163 3,691,793 4 — 78,013 154,093 183,750 216,542 — 632,398 5 — — — 23,000 — — 23,000 Total senior loans $ 1,634,280 $ 173,871 $ 1,637,224 $ 856,873 $ 554,831 $ 17,163 $ 4,874,242 Subordinated and mezzanine loans by internal risk ratings: 1 $ — $ — $ — $ — $ — $ — $ — 2 — — — — — — — 3 — — 34,960 — — — 34,960 4 — — — — — — — 5 — — — — — — — Total subordinated and mezzanine loans — — 34,960 — — — 34,960 Total $ 1,634,280 $ 173,871 $ 1,672,184 $ 856,873 $ 554,831 $ 17,163 $ 4,909,202 |
Summary of Amortized Cost and Results of Internal Risk Rating Review Performed for Loans Held for Investment Portfolio | The table below summarizes the Company’s loans held for investment portfolio on an amortized cost basis, by the results of its internal risk rating review process performed as of March 31, 2022 and December 31, 2021 (dollars in thousands): Risk rating March 31, 2022 December 31, 2021 1 $ — $ — 2 543,401 527,051 3 3,360,840 3,726,753 4 1,188,547 632,398 5 23,000 23,000 Total $ 5,115,788 $ 4,909,202 Allowance for credit losses ( 46,307 ) ( 41,999 ) Carrying value $ 5,069,481 $ 4,867,203 Weighted average risk rating (1) 3.1 3.0 (1) Weighted average risk rating calculated based on the amortized cost balance at period end. |
Summary of Activity in Allowance for Credit Losses for Loans Held for Investment Portfolio by Class of Financing Receivable | The following tables present activity in the allowance for credit losses for loans by finance receivable class for the three months ended March 31, 2022 and 2021 (dollars in thousands): For the three months ended March 31, 2022 Senior loans Subordinated and Total Allowance for credit losses for loans held for investment: Beginning balance at January 1, 2022 $ 41,193 $ 806 $ 41,999 Allowance for (reversal of) credit losses, net 4,747 ( 439 ) 4,308 Subtotal 45,940 367 46,307 Allowance for credit losses on unfunded loan commitments: Beginning balance at January 1, 2022 4,210 — 4,210 Allowance for (reversal of) credit losses, net 576 — 576 Subtotal 4,786 — 4,786 Total allowance for credit losses $ 50,726 $ 367 $ 51,093 For the three months ended March 31, 2021 Senior loans Subordinated and Total Allowance for credit losses for loans held for investment: Beginning balance at January 1, 2021 $ 58,210 $ 1,730 $ 59,940 Allowance for (reversal of) credit losses, net ( 3,055 ) ( 244 ) ( 3,299 ) Subtotal 55,155 1,486 56,641 Allowance for credit losses on unfunded loan commitments: Beginning balance at January 1, 2021 2,756 132 2,888 Allowance for (reversal of) credit losses, net ( 672 ) ( 67 ) ( 739 ) Subtotal 2,084 65 2,149 Total allowance for credit losses $ 57,239 $ 1,551 $ 58,790 |
Schedule of Paid-in-Kind Interest | The following table presents the accrued PIK interest activity for the three months ended March 31, 2022 for the Company’s loans held for investment portfolio (dollars in thousands): March 31, 2022 Balance as of January 1, 2022 $ 3,028 Accrued PIK interest — Repayments of accrued PIK interest ( 313 ) Balance as of March 31, 2022 $ 2,715 |
Summary of Aging Analysis for Loans Held for Investment Portfolio by Class of Loans | The following table presents an aging analysis for the Company’s loans held for investment portfolio, by class of loans, as of March 31, 2022 and December 31, 2021 on amortized cost basis (dollars in thousands): Days Outstanding as of March 31, 2022 Current Days: 30-59 Days: 60-89 Days: 90 or more Total loans past due Total loans Loans receivable: Senior loans $ 5,057,797 $ — $ — $ 23,000 $ 23,000 $ 5,080,797 Subordinated and mezzanine loans 34,991 — — — — 34,991 Total $ 5,092,788 $ — $ — $ 23,000 $ 23,000 $ 5,115,788 Days Outstanding as of December 31, 2021 Current Days: 30-59 Days: 60-89 Days: 90 or more Total loans past due Total loans Loans receivable: Senior loans $ 4,851,242 $ — $ — $ 23,000 $ 23,000 $ 4,874,242 Subordinated and mezzanine loans 34,960 — — — — 34,960 Total $ 4,886,202 $ — $ — $ 23,000 $ 23,000 $ 4,909,202 |
Variable Interest Entities an_2
Variable Interest Entities and Collateralized Loan Obligations (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Summary of Variable Interest Entities Assets and Liabilities | The following table outlines the total assets and liabilities within the Sub-REIT structure (dollars in thousands): March 31, 2022 December 31, 2021 Assets Cash and cash equivalents $ 20,022 $ 28,167 Collateralized loan obligation proceeds held at trustee 260 204 Accounts receivable from servicer/trustee 700 150 Accrued interest receivable 6,406 6,765 Loans held for investment, net 3,371,787 3,138,603 Total assets $ 3,399,175 $ 3,173,889 Liabilities Accrued interest payable $ 2,192 $ 1,823 Accrued expenses 320 1,490 Collateralized loan obligations 2,810,626 2,545,691 Payable to affiliates 3,830 3,830 Total liabilities $ 2,816,968 $ 2,552,834 |
Collateralized Loan Obligation | |
Schedule of Borrowings and Corresponding Collateral | The following tables detail the loan collateral and borrowings under the Company's CRE CLO investment structures as of March 31, 2022 and December 31, 2021 (dollars in thousands): March 31, 2022 Collateral (loan investments) Debt (notes issued) Benchmark interest rate Outstanding principal Carrying value (1) Benchmark interest rate Face value Carrying value CRE CLO investment structure TRTX 2019-FL3 LIBOR $ 1,071,319 $ 1,060,807 Term SOFR $ 880,584 $ 878,309 TRTX 2021-FL4 LIBOR 1,249,483 1,243,879 LIBOR 1,037,500 1,031,504 TRTX 2022-FL5 LIBOR (2) 1,074,944 1,068,173 Compounded SOFR 907,031 900,813 Totals $ 3,395,746 $ 3,372,859 $ 2,825,115 $ 2,810,626 December 31, 2021 Collateral (loan investments) Debt (notes issued) Benchmark interest rate Outstanding principal Carrying value Benchmark interest rate Face value Carrying value CRE CLO investment structure TRTX 2018-FL2 LIBOR $ 805,685 $ 795,815 Term SOFR $ 600,001 $ 599,394 TRTX 2019-FL3 LIBOR 1,109,229 1,100,497 LIBOR 918,487 915,451 TRTX 2021-FL4 LIBOR 1,249,796 1,242,291 LIBOR 1,037,500 1,030,846 Totals $ 3,164,710 $ 3,138,603 $ 2,555,988 $ 2,545,691 (1) Carrying value includes loan amounts held in the Company's CRE CLO investment structures and does not include other loans held for investment, net of $ 1.1 million held within the Sub-REIT structure. (2) As of March 31, 2022, the TRTX 2022-FL5 mortgage assets are indexed to LIBOR, with the exception of one $16.8 million participation interest which is indexed to Term SOFR. |
Schedule of Weighted Average Spreads and Maturities for Loan Collateral and Borrowings | The following table outlines the weighted average spreads and maturities for TRTX 2022-FL5, TRTX 2021-FL4, TRTX 2019-FL3 and TRTX 2018-FL2 loan collateral and borrowings under the TRTX 2022-FL5, TRTX 2021-FL4, TRTX 2019-FL3 and TRTX 2018-FL2 collateralized loan obligations as of March 31, 2022 and December 31, 2021: March 31, 2022 December 31, 2021 Weighted average spread (%) (1) Weighted average maturity (years) (2) Weighted average spread (%) (1) Weighted average maturity (years) (2) Collateral (loan investments) TRTX 2018-FL2 n.a. n.a. 3.39 % 2.0 TRTX 2019-FL3 3.26 % 1.9 3.19 % 2.2 TRTX 2021-FL4 3.22 % 2.8 3.19 % 3.1 TRTX 2022-FL5 3.36 % 3.3 n.a. n.a. Debt (notes issued) (3) TRTX 2018-FL2 n.a. n.a. 1.56 % 15.9 TRTX 2019-FL3 1.49 % 12.5 1.48 % 12.8 TRTX 2021-FL4 1.60 % 16.0 1.60 % 16.2 TRTX 2022-FL5 2.02 % 16.9 n.a. n.a. (1) Yield on collateral is based on cash coupon. (2) Loan term represents weighted-average final maturity, assuming extension options are exercised by the borrower. Repayments of CRE CLO notes are dependent on timing of related loan repayments post-reinvestment period. The term of the CRE CLO notes represents the rated final distribution date. (3) On October 1, 2021, the benchmark index interest rate for borrowings under TRTX 2019-FL3 was changed from Compounded SOFR to Term SOFR by the designated transaction representative under the FL3 indenture. The benchmark interest rate for TRTX 2021-FL4 and TRTX 2022-FL5 is LIBOR and Compounded SOFR, respectively. |
Investment Portfolio Financing
Investment Portfolio Financing (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Instrument [Line Items] | |
Schedule of Information Related to Secured Credit Agreements | The following table presents certain information regarding the Company’s secured credit agreements as of March 31, 2022 and December 31, 2021. Except as otherwise noted, all agreements are on a partial (25%) recourse basis (dollars in thousands): March 31, 2022 Secured credit agreements (1) Initial Extended Index Weighted average Interest Commitment Maximum Balance Principal balance Amortized cost Goldman Sachs 08/19/22 08/19/24 1 Month BR 1.8 % 2.1 % $ 500,000 $ 44,555 $ 455,445 $ 599,302 $ 598,450 Wells Fargo (2) 04/18/25 04/18/25 1 Month BR 1.6 % 1.9 % 500,000 213,547 286,453 372,590 367,224 Barclays 08/13/22 08/13/23 1 Month BR 1.5 % 2.0 % 750,000 699,899 50,101 71,011 70,759 Morgan Stanley 05/04/22 05/04/23 1 Month BR 2.1 % 2.6 % 500,000 420,916 79,084 115,085 114,658 JP Morgan 10/30/23 10/30/25 1 Month BR 1.6 % 2.1 % 400,000 273,058 126,942 180,526 180,217 US Bank 07/09/22 07/09/24 1 Month BR 1.4 % 1.9 % 33,982 — 33,982 59,060 59,060 Bank of America (3) 09/29/22 09/29/22 1 Month BR 1.8 % 2.1 % 250,000 — 110,250 179,603 179,603 Institutional financing 10/30/23 10/30/25 1 Month BR 4.5 % 5.0 % 249,546 226,000 23,546 42,390 42,390 Totals $ 3,183,528 $ 1,877,975 $ 1,165,803 $ 1,619,567 $ 1,612,361 (1) Borrowings under secured credit agreements with a guarantee for 25 % recourse from Holdco. Index rate is the underlying benchmark interest rate ("BR"), currently LIBOR or Term SOFR, for the Company's borrowings on each secured credit agreement. (2) On February 9, 2022 the secured credit agreement’s initial maturity was extended to April 18, 2025. (3) Effective February 1, 2022 and March 30, 2022, for the sole loan pledged to the secured credit agreement, the Company amended its financing arrangement to reduce its borrowing by $ 9.4 million and $ 9.2 million, respectively, reduce its maximum current availability to zero , and extend its term on a non-mark-to-market basis through April 15, 2022. On April 14, 2022, for the sole loan pledged to the secured credit agreement, the Company amended its financing arrangement to further reduce its borrowing by $ 11.8 million and extend its term on a non-mark-to-market basis through May 2, 2022. The borrowing was repaid in full on April 25, 2022. December 31, 2021 Secured credit agreements (1) Initial Extended Index Weighted average Interest Commitment Maximum Balance Principal balance Amortized cost Goldman Sachs 08/19/22 08/19/24 1 Month 2.0 % 2.1 % $ 250,000 $ 153,680 $ 96,320 $ 158,177 $ 157,550 Wells Fargo (2) 04/18/22 04/18/24 1 Month 1.6 % 1.7 % 750,000 179,784 570,216 779,791 773,868 Barclays 08/13/22 08/13/23 1 Month 1.5 % 1.7 % 750,000 726,686 23,314 41,294 41,058 Morgan Stanley 05/04/22 05/04/23 1 Month 2.0 % 2.1 % 500,000 319,269 180,731 255,125 254,559 JP Morgan 10/30/23 10/30/25 1 Month 1.7 % 1.8 % 400,000 290,523 109,477 200,148 199,246 US Bank 07/09/22 07/09/24 1 Month 1.4 % 1.7 % 44,730 10,748 33,982 59,060 59,060 Bank of America (3) 09/29/22 09/29/22 1 Month 1.8 % 1.9 % 128,625 — 128,625 183,750 183,750 Institutional financing 10/30/23 10/30/25 1 Month 4.5 % 4.8 % 249,546 226,000 23,546 42,390 42,366 Totals $ 3,072,901 $ 1,906,690 $ 1,166,211 $ 1,719,735 $ 1,711,457 (1) Borrowings under secured credit agreements with a guarantee for 25 % recourse from Holdco. (2) On February 9, 2022 the secured credit agreement’s initial maturity was extended to April 18, 2025. (3) Effective February 1, 2022 for the sole loan pledged to the secured credit agreement, the Company amended its financing arrangement to reduce its borrowing by $ 9.4 million and extend its term on a non-mark-to-market basis through March 31, 2022, with an option to further extend its maturity through April 15, 2022 in exchange for a further reduction in borrowings of $ 9.4 million. |
Summary of Recourse and Market-to-Market Provisions | The following table presents the recourse and mark-to-market provisions for the Company’s secured credit agreements as of March 31, 2022: Secured credit agreements Basis of margin calls Recourse percentage Initial maturity date Extended maturity date Goldman Sachs Credit 25.0 % 08/19/22 08/19/24 Wells Fargo (1) Credit 25.0 % 04/18/25 04/18/25 Barclays Credit 25.0 % 08/13/22 08/13/23 Morgan Stanley Credit 25.0 % 05/04/22 05/04/23 JP Morgan Credit and Spread 25.0 % 10/30/23 10/30/25 US Bank Credit 25.0 % 07/09/22 07/09/24 Bank of America (2) Credit 25.0 % 09/29/22 09/29/22 Institutional financing (3) Credit 25.0 % 10/30/23 10/30/25 (1) On February 9, 2022 the secured credit agreement’s initial maturity was extended to April 18, 2025. (2) Effective February 1, 2022 and March 30, 2022, for the sole loan pledged to the secured credit agreement, the Company amended its financing arrangement to reduce its borrowing by $ 9.4 million and $ 9.2 million, respectively, and extend its term on a non-mark-to-market basis through April 15, 2022. On April 14, 2022, for the sole loan pledged to the secured credit agreement, the Company amended its financing arrangement to reduce its borrowing by $ 11.8 million and extend its term on a non-mark-to-market basis through May 2, 2022. The borrowing was repaid in full on April 25, 2022. (3) The secured credit agreement may be re-margined beginning after its second anniversary date on October 30, 2022 based on an LTV test; otherwise, no credit or spread-based marks apply. The following table presents the recourse and mark-to-market provisions for the Company’s secured credit agreements as of December 31, 2021: Secured credit agreements Basis of margin calls Recourse percentage Initial maturity date Extended maturity date Goldman Sachs Credit 25.0 % 08/19/22 08/19/24 Wells Fargo (1) Credit 25.0 % 04/18/22 04/18/24 Barclays Credit 25.0 % 08/13/22 08/13/23 Morgan Stanley Credit 25.0 % 05/04/22 05/04/23 JP Morgan Credit and Spread 25.0 % 10/30/23 10/30/25 US Bank Credit 25.0 % 07/09/22 07/09/24 Bank of America (2) Credit 25.0 % 09/29/22 09/29/22 Institutional financing (3) Credit 25.0 % 10/30/23 10/30/25 (1) On February 9, 2022 the secured credit agreement’s initial maturity was extended to April 18, 2025. (2) Effective February 1, 2022 for the sole loan pledged to the credit facility the Company amended its financing arrangement to reduce its borrowing by $ 9.4 million and extend its term on a non-mark-to-market basis through March 31, 2022, with an option to further extend its maturity through April 15, 2022 in exchange for a further reduction in borrowings of $ 9.4 million. (3) The secured credit agreement may be re-margined beginning after its second anniversary date on October 30, 2022 based on an LTV test; otherwise, no credit or spread-based marks apply. |
Commercial Mortgage Loans | |
Debt Instrument [Line Items] | |
Summary of Secured Credit Agreements Secured by Mortgage Loan Investments, CRE Debt Securities and Counterparty Concentration Risks | The following table summarizes certain characteristics of the Company’s secured credit agreements secured by mortgage loan investments, including counterparty concentration risks, as of March 31, 2022 (dollars in thousands): March 31, 2022 Secured credit agreements Commitment UPB of Amortized cost (1) Amount (2) Net counterparty exposure (3) Percent of Days to Goldman Sachs Bank $ 500,000 $ 599,302 $ 600,858 $ 455,752 $ 145,106 9.9 % 872 Wells Fargo 500,000 372,590 369,314 286,951 82,363 5.6 % 1,114 Barclays 750,000 71,011 70,837 50,171 20,666 1.4 % 500 Morgan Stanley Bank 500,000 115,085 115,836 79,161 36,675 2.5 % 399 JP Morgan Chase Bank 649,546 222,916 224,398 150,687 73,711 5.0 % 1,309 US Bank 33,982 59,060 59,435 34,037 25,398 1.7 % 831 Bank of America 250,000 179,603 180,942 110,237 70,705 4.8 % 182 Total / weighted average $ 3,183,528 $ 1,619,567 $ 1,621,620 $ 1,166,996 $ 454,623 873 (1) Loan amounts include interest receivable of $ 9.3 million and are net of premium, discount and origination fees of $ 7.2 million. (2) Loan amounts include interest payable of $ 1.2 million and do not reflect unamortized deferred financing fees of $ 5.1 million. (3) Loan amounts represent the net carrying value of the commercial real estate assets sold under agreements to repurchase, including accrued interest plus any cash or assets on deposit to secure the repurchase obligation, less the amount of the repurchase liability, including accrued interest. The following table summarizes certain characteristics of the Company’s secured credit agreements secured by mortgage loan investments, including counterparty concentration risks, as of December 31, 2021 (dollars in thousands): December 31, 2021 Secured credit agreements Commitment UPB of Amortized cost (1) Amount (2) Net counterparty exposure (3) Percent of Days to Goldman Sachs Bank $ 250,000 $ 158,177 $ 159,269 $ 96,389 $ 62,880 4.3 % 962 Wells Fargo 750,000 779,791 776,196 570,839 205,357 14.0 % 839 Barclays 750,000 41,294 41,019 23,330 17,689 1.2 % 590 Morgan Stanley Bank 500,000 255,125 255,858 180,891 74,967 5.1 % 489 JP Morgan Chase Bank 649,546 242,538 243,181 133,191 109,990 7.5 % 1,399 US Bank 44,730 59,060 59,435 34,035 25,400 1.7 % 921 Bank of America 128,625 183,750 184,531 128,648 55,883 3.8 % 272 Total / weighted average $ 3,072,901 $ 1,719,735 $ 1,719,489 $ 1,167,323 $ 552,165 794 (1) Loan amounts include interest receivable of $ 8.0 million and are net of premium, discount and origination fees of $ 8.8 million. (2) Loan amounts include interest payable of $ 1.1 million and do not reflect unamortized deferred financing fees of $ 4.0 million. (3) Loan amounts represent the net carrying value of the commercial real estate assets sold under agreements to repurchase, including accrued interest plus any cash or assets on deposit to secure the repurchase obligation, less the amount of the repurchase liability, including accrued interest. As a result of contributing collateral into TRTX 2022-FL5 upon its issuance during the three months ended March 31, 2022, the Company wrote-off $ 1.1 million of unamortized deferred transaction costs related to its secured credit agreements to interest expense in its consolidated statements of income and comprehensive income. See Note 5 for details regarding the Company's issuance of TRTX 2022-FL5. |
Schedule of Maturities (Tables)
Schedule of Maturities (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Future Principal Payments | As of March 31, 2022 future principal payments for the following five years and thereafter are as follows (dollars in thousands): Total indebtedness Collateralized loan obligations (1) Secured credit agreements (2) Secured revolving credit facility (2) 2022 $ 243,994 $ 133,744 $ 110,250 $ — 2023 449,399 131,632 317,767 — 2024 1,317,104 865,771 451,333 — 2025 514,391 195,688 286,453 32,250 2026 1,109,130 1,109,130 — — Thereafter 389,150 389,150 — — Total $ 4,023,168 $ 2,825,115 $ 1,165,803 $ 32,250 (1) The scheduled maturities for the investment grade bonds issued by the Company's CRE CLOs are based upon the fully extended maturity of the underlying mortgage loan collateral, considering the reinvestment window of the specific CRE CLO. (2) The scheduled maturities of the Company's secured credit agreement liabilities is based on the extended maturity date for the specific credit agreement where extension options are at its option, subject to standard default provisions, or the current maturity date of those credit agreements where extension options are subject to counterparty approval. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Value of Financial Assets and Liabilities | The following tables provide information about the fair value of the Company’s financial assets and liabilities on the Company’s consolidated balance sheets as of March 31, 2022 and December 31, 2021 (dollars in thousands): March 31, 2022 Fair value Carrying value Level I Level II Level III Financial assets Loans held for investment $ 5,069,481 $ — $ — $ 5,091,160 Financial liabilities Collateralized loan obligations 2,810,626 — — 2,828,618 Secured credit agreements 1,162,576 — — 1,165,000 Secured revolving credit facility 30,380 — — 30,380 December 31, 2021 Fair value Carrying value Level I Level II Level III Financial assets Loans held for investment $ 4,867,203 $ — $ — $ 4,899,666 Financial liabilities Collateralized loan obligations 2,545,691 — — 2,558,544 Secured credit agreements 1,162,206 — — 1,169,710 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
Summary of Management Fees and Incentive Management Fees Incurred and Paid Pursuant to Management Agreement | For the three months ended March 31, 2022 and 2021, the Company incurred and paid the following management fees and incentive management fees pursuant to the Management Agreement (dollars in thousands): Three Months Ended March 31, 2022 2021 Incurred Management fees $ 5,709 $ 5,094 Incentive management fee — — Total management and incentive fees incurred $ 5,709 $ 5,094 Paid Management fees 5,609 5,358 Incentive management fee — — Total management and incentive fees paid $ 5,609 $ 5,358 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Calculation of Basic and Diluted Earnings per Common Share | The following table sets forth the calculation of basic and diluted earnings per common share based on the weighted-average number of shares of common stock outstanding for the three months ended March 31, 2022 and 2021 (dollars in thousands, except share and per share data): Three Months Ended March 31, 2022 2021 Net income $ 23,781 $ 31,955 Preferred stock dividends (1) ( 3,148 ) ( 6,124 ) Participating securities' share in earnings ( 197 ) ( 146 ) Series B Preferred Stock accretion, including allocated Warrant fair value and transaction costs (2) — ( 1,452 ) Net income attributable to common stockholders $ 20,436 $ 24,233 Weighted average common shares outstanding, basic 77,183,957 76,895,615 Incremental shares of common stock issued from the assumed exercise of the Warrants 4,604,766 3,777,621 Weighted average common shares outstanding, diluted 81,788,723 80,673,236 Earnings per common share, basic (3) $ 0.26 $ 0.32 Earnings per common share, diluted (3) $ 0.25 $ 0.30 (1) Includes preferred stock dividends declared and paid for Series A preferred stock, Series C Preferred Stock, and Series B Preferred Stock shares outstanding for the three months ended March 31, 2022 and 2021, respectively. (2) Series B Preferred Stock Accretion, including Allocated Warrant Fair Value and Transaction Costs includes amounts recorded as deemed dividends of amortized transaction costs and the accreted portion of the allocated Warrant fair value related to the Company’s Series B Preferred Stock. (3) Basic and diluted earnings per common share are computed independently based on the weighted-average shares of common stock outstanding. Diluted earnings per common share also includes the impact of participating securities outstanding plus any incremental shares that would be outstanding assuming the exercise of the Warrants. |
Concentration of Credit Risk (T
Concentration of Credit Risk (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Loans And Leases Receivable Disclosure [Line Items] | |
Summary of Loans Held for Investment Portfolio by Property/ Loan Category Type | A summary of the Company’s loans held for investment portfolio by property type as of March 31, 2022 and December 31, 2021 based on total loan commitment and current unpaid principal balance (“UPB”) is as follows (dollars in thousands): March 31, 2022 Property type Loan commitment Unfunded commitment % of loan commitment Loan UPB % of loan UPB Office $ 2,216,171 $ 165,191 39.6 % $ 2,050,980 40.0 % Multifamily 1,715,643 113,372 30.7 1,602,571 31.3 Hotel 658,942 4,000 11.8 657,358 12.8 Life Science 494,600 156,939 8.8 337,661 6.6 Mixed-Use 347,409 15,230 6.2 332,179 6.5 Industrial 113,000 6,167 2.0 106,833 2.1 Retail (1) 33,000 2,143 0.6 23,000 0.4 Condominium (2) 14,585 — 0.3 14,585 0.3 Total $ 5,593,350 $ 463,042 100.0 % $ 5,125,167 100.0 % December 31, 2021 Property type Loan commitment Unfunded commitment % of loan commitment Loan UPB % of loan UPB Office $ 2,265,187 $ 178,878 41.9 % $ 2,086,309 42.4 % Multifamily 1,595,643 121,211 29.5 1,474,731 30.0 Hotel 658,943 4,000 12.2 657,672 13.4 Life Science 494,600 163,860 9.1 330,740 6.7 Mixed-Use 347,408 17,681 6.4 329,728 6.7 Retail (1) 33,000 2,143 0.6 23,000 0.5 Condominium (2) 17,163 — 0.3 17,163 0.3 Total $ 5,411,944 $ 487,773 100.0 % $ 4,919,343 100.0 % (1) For the period ended March 31, 2022 and December 31, 2021, the Company's non-performing retail loan held for investment was in default of its loan agreement and as a result the $ 2.1 million of outstanding unfunded loan commitments could not be drawn upon by the borrower. (2) Condominium property type includes a 24 % pari passu participation interest in each of four whole mortgage loans related to one project to the same borrower. |
Summary of Geographic Composition of Loans Held for Investment Based on Current UPB and Loan Commitment | All of the Company’s loans held for investment are secured by properties within the United States. The geographic composition of loans held for investment based on total loan commitment and current UPB as of March 31, 2022 and December 31, 2021 is as follows (dollars in thousands): March 31, 2022 Geographic region Loan commitment Unfunded commitment % of loan commitment Loan UPB % of loan UPB East $ 2,058,483 $ 50,628 36.8 % $ 2,009,028 39.2 % West (1) 1,503,608 235,822 26.9 1,260,631 24.6 South 1,283,455 110,144 22.9 1,173,852 22.9 Midwest 677,804 60,281 12.1 617,823 12.1 Various 70,000 6,167 1.3 63,833 1.2 Total $ 5,593,350 $ 463,042 100.0 % $ 5,125,167 100.0 % December 31, 2021 Geographic region Loan commitment Unfunded commitment % of loan commitment Loan UPB % of loan UPB East $ 1,925,457 $ 63,459 35.6 % $ 1,863,172 37.8 % West (1) 1,484,883 244,100 27.4 1,233,628 25.1 South 1,323,800 115,714 24.5 1,208,940 24.6 Midwest 677,804 64,500 12.5 613,603 12.5 Total $ 5,411,944 $ 487,773 100.0 % $ 4,919,343 100.0 % (1) For the period ended March 31, 2022 and December 31, 2021, the Company's unfunded loan commitments included $ 2.1 million of outstanding unfunded loan commitments that could not be drawn upon by the borrower related to a non-performing retail loan held for investment that was in default. |
Loan Category | |
Loans And Leases Receivable Disclosure [Line Items] | |
Summary of Loans Held for Investment Portfolio by Property/ Loan Category Type | A summary of the Company’s loans held for investment portfolio by loan category as of March 31, 2022 and December 31, 2021 based on total loan commitment and current UPB is as follows (dollars in thousands): March 31, 2022 Loan category Loan commitment Unfunded commitment % of loan commitment Loan UPB % of loan UPB Moderate Transitional $ 1,948,162 $ 277,464 34.8 % $ 1,671,871 32.6 % Bridge (1) 1,852,390 47,509 33.2 1,798,567 35.1 Light Transitional 1,757,798 138,069 31.4 1,619,729 31.6 Construction 35,000 — 0.6 35,000 0.7 Total $ 5,593,350 $ 463,042 100.0 % $ 5,125,167 100.0 % December 31, 2021 Loan category Loan commitment Unfunded commitment % of loan commitment Loan UPB % of loan UPB Moderate Transitional $ 1,950,739 $ 294,693 36.1 % $ 1,657,218 33.7 % Light Transitional 1,779,310 145,621 32.9 1,633,689 33.2 Bridge (1) 1,646,895 47,459 30.4 1,593,436 32.4 Construction 35,000 — 0.6 35,000 0.7 Total $ 5,411,944 $ 487,773 100.0 % $ 4,919,343 100.0 % (1) For the period ended March 31, 2022 and December 31, 2021, the Company's unfunded loan commitments included $ 2.1 million of outstanding unfunded loan commitments that could not be drawn upon by the borrower related to a non-performing retail loan held for investment that was in default. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Details) | Mar. 31, 2022USD ($)shares | Jun. 16, 2021shares | Jun. 14, 2021shares | Mar. 31, 2022USD ($)Loanshares | Dec. 31, 2021USD ($)shares | May 28, 2020 | |
Significant Accounting Policies [Line Items] | |||||||
Percentage of senior mortgage loan transferred to third-party | 100.00% | ||||||
Maximum insured amount of each cash account | $ | $ 250,000 | $ 250,000 | $ 250,000 | ||||
Cash | $ | 16,200,000 | 16,200,000 | 15,000,000 | ||||
Cash and cash equivalents | $ | [1] | 351,572,000 | 351,572,000 | 260,635,000 | |||
Restricted cash | $ | [1] | $ 847,000 | $ 847,000 | $ 404,000 | |||
Series B Preferred Stock | |||||||
Significant Accounting Policies [Line Items] | |||||||
Temporary equity, shares redeemed | shares | 9,000,000 | ||||||
Temporary equity, shares outstanding | shares | 0 | 0 | 0 | ||||
Series C Preferred Stock | |||||||
Significant Accounting Policies [Line Items] | |||||||
Preferred stock, shares issued | shares | 8,050,000 | 8,050,000 | 8,050,000 | 8,050,000 | |||
Preferred stock, dividend rate | 6.25% | ||||||
Commercial Real Estate Loans | Maximum | |||||||
Significant Accounting Policies [Line Items] | |||||||
Number of performance loan | Loan | 120,000 | ||||||
Warrants | |||||||
Significant Accounting Policies [Line Items] | |||||||
Warrants expiration date | May 28, 2025 | ||||||
Warrants exercised | shares | 0 | ||||||
[1] | The Company’s consolidated Total Assets and Total Liabilities as of March 31, 2022 include assets and liabilities of variable interest entities (“VIEs”) of $ 3.4 billion and $ 2.8 billion, respectively. The Company’s consolidated Total Assets and Total Liabilities as of December 31, 2021 include assets and liabilities of VIEs of $ 3.2 billion and $ 2.6 billion, respectively. These assets can be used only to satisfy obligations of the VIEs, and creditors of the VIEs have recourse only to these assets, and not to TPG RE Finance Trust, Inc. See Note 5 to the Consolidated Financial Statements for details. |
Loans Held for Investment and_3
Loans Held for Investment and the Allowance for Credit Losses - Additional Information (Details) | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2022USD ($)RatingsLoan | Mar. 31, 2021USD ($)Loan | Dec. 31, 2021USD ($) | Dec. 31, 2021Loan | Dec. 31, 2021Ratings | Dec. 31, 2021Rate | |
Accounts Notes And Loans Receivable [Line Items] | ||||||
Loans Held for Investment, Net (includes $1,305,947 and $2,259,467, respectively, pledged as collateral under secured credit facilities) | $ 5,069,481,000 | $ 4,867,203,000 | ||||
Total loan commitment amount | 5,593,350,000 | 5,411,944,000 | ||||
Unfunded loan commitments | 463,042,000 | 487,773,000 | ||||
Total loan repayments | $ 0 | |||||
Unamortized loan fees included in Loans Held for Investment | 9,400,000 | 10,100,000 | ||||
Unamortized discounts included in loans held for investment at amortized cost | $ 0 | 0 | ||||
Weighted Average Risk Rating | 3.1 | 3 | 3 | |||
Number of loans selected for risk rate changes | Loan | 1 | |||||
Number of loans downgraded for risk rate changes | Loan | 9 | |||||
Allowance for credit loss increase (decrease) | $ 51,100,000 | (4,000,000) | 46,200,000 | |||
Allowance for credit losses increase (decrease) due to increased loan origination | 4,900,000 | |||||
Allowance for credit loss reserve | 51,093,000 | $ 58,790,000 | ||||
Amortized cost | 5,115,788,000 | 4,909,202,000 | ||||
Total PIK interest | 0 | |||||
Loans accrued interest income | $ 0 | 0 | ||||
Real Estate | ||||||
Accounts Notes And Loans Receivable [Line Items] | ||||||
Number of loans on non-accrual status | Loan | 1 | 1 | ||||
Amortized cost of loan | $ 23,000,000 | 23,000,000 | ||||
Hotel | ||||||
Accounts Notes And Loans Receivable [Line Items] | ||||||
Total loan commitment amount | 658,942,000 | 658,943,000 | ||||
Unfunded loan commitments | 4,000,000 | 4,000,000 | ||||
Office Building | ||||||
Accounts Notes And Loans Receivable [Line Items] | ||||||
Total loan commitment amount | 2,216,171,000 | 2,265,187,000 | ||||
Unfunded loan commitments | $ 165,191,000 | 178,878,000 | ||||
Number of first mortgage loans originated | Loan | 1 | |||||
Mixed-Use Property | ||||||
Accounts Notes And Loans Receivable [Line Items] | ||||||
Number of loans selected for risk rate changes | Loan | 1 | |||||
Multi Family and Office Property | ||||||
Accounts Notes And Loans Receivable [Line Items] | ||||||
Number of loans selected for risk rate changes | Loan | 8 | |||||
Moved From Three Risk Rating Into Four Risk Rating | Office Building | ||||||
Accounts Notes And Loans Receivable [Line Items] | ||||||
Number of loans selected for risk rate changes | Loan | 7 | |||||
Moved From Three Risk Rating Into Four Risk Rating | Mixed-Use Property | ||||||
Accounts Notes And Loans Receivable [Line Items] | ||||||
Number of loans selected for risk rate changes | Loan | 1 | |||||
Moved From Two Risk Rating Into Three Risk Rating | ||||||
Accounts Notes And Loans Receivable [Line Items] | ||||||
Number of loans selected for risk rate changes | Loan | 1 | |||||
Moved from Category 3 Risk Rating to Category 2 Risk Rating | Hotel | ||||||
Accounts Notes And Loans Receivable [Line Items] | ||||||
Number of loans selected for risk rate changes | Loan | 1 | |||||
Moved from Category 3 Risk Rating to Category 2 Risk Rating | Office Building | ||||||
Accounts Notes And Loans Receivable [Line Items] | ||||||
Total loan commitment amount | $ 40,300,000 | |||||
Weighted Average Risk Rating | Ratings | 3 | |||||
Five Loan | ||||||
Accounts Notes And Loans Receivable [Line Items] | ||||||
Number of mortgage loans originated or acquired | Loan | 5 | |||||
Total loan commitment amount | $ 233,000,000 | |||||
Loans and leases receivable unpaid principal balance | 224,600,000 | |||||
Unfunded loan commitments | $ 8,400,000 | |||||
One Loan | ||||||
Accounts Notes And Loans Receivable [Line Items] | ||||||
Number of mortgage loans originated or acquired | Loan | 1 | 1 | ||||
Total loan commitment amount | $ 45,400,000 | |||||
Loans and leases receivable unpaid principal balance | 37,500,000 | |||||
Unfunded loan commitments | 7,900,000 | |||||
Loan repayment principal amount | $ 40,300,000 | |||||
Eight loan | ||||||
Accounts Notes And Loans Receivable [Line Items] | ||||||
Interest received in kind | 7,700,000 | |||||
Total loan repayments | 48,000,000 | |||||
Four Loan | ||||||
Accounts Notes And Loans Receivable [Line Items] | ||||||
Loan repayment principal amount | $ 5,300,000 | |||||
Accrued Interest and Fees Receivable | ||||||
Accounts Notes And Loans Receivable [Line Items] | ||||||
Loans Held for Investment, Net (includes $1,305,947 and $2,259,467, respectively, pledged as collateral under secured credit facilities) | 15,600,000 | $ 14,300,000 | ||||
Accrued PIK interest | ||||||
Accounts Notes And Loans Receivable [Line Items] | ||||||
Loans Held for Investment, Net (includes $1,305,947 and $2,259,467, respectively, pledged as collateral under secured credit facilities) | $ 2,700,000 | |||||
Number of first mortgage loans held for investment | Loan | 4 |
Loans Held for Investment and_4
Loans Held for Investment and the Allowance for Credit Losses - Schedule of Overall Statistics for Loan Held for Investment Portfolio (Details) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022USD ($)Loan | Dec. 31, 2021USD ($)Loan | |
Loans And Leases Receivable Disclosure [Line Items] | ||
Total loan commitment amount | $ 5,593,350 | $ 5,411,944 |
Unpaid principal balance | 5,125,167 | 4,919,343 |
Unfunded loan commitments | 463,042 | 487,773 |
Amortized cost | $ 5,115,788 | $ 4,909,202 |
Balance Sheet Portfolio | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Number of loans | Loan | 73 | 69 |
Floating rate loans | 100.00% | 100.00% |
Total loan commitment amount | $ 5,593,350 | $ 5,411,944 |
Unpaid principal balance | 5,125,167 | 4,919,343 |
Unfunded loan commitments | 463,042 | 487,773 |
Amortized cost | $ 5,115,788 | $ 4,909,202 |
Weighted average credit spread | 3.40% | 3.40% |
Weighted average all-in yield | 4.90% | 4.80% |
Weighted average term to extended maturity (in years) | 2 years 8 months 12 days | 2 years 9 months 18 days |
Total Loan Portfolio | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Number of loans | Loan | 74 | 70 |
Floating rate loans | 100.00% | 100.00% |
Total loan commitment amount | $ 5,725,350 | $ 5,543,944 |
Unpaid principal balance | 5,125,167 | 4,919,343 |
Unfunded loan commitments | 463,042 | 487,773 |
Amortized cost | $ 5,115,788 | $ 4,909,202 |
Weighted average credit spread | 3.40% | 3.40% |
Weighted average all-in yield | 4.90% | 4.80% |
Weighted average term to extended maturity (in years) | 2 years 8 months 12 days | 2 years 9 months 18 days |
Loans Held for Investment and_5
Loans Held for Investment and the Allowance for Credit Losses - Schedule of Overall Statistics for Loan Held for Investment Portfolio (Parenthetical) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Loans And Leases Receivable Disclosure [Line Items] | ||
Non-consolidated senior interest outstanding | $ 132,000 | $ 132,000 |
PIK interest | 2,700 | 3,000 |
Loan commitment | $ 5,593,350 | $ 5,411,944 |
Percentage of loans subject to yield maintenance or other prepayment restrictions | 42.00% | |
Percentage of loans open to repayment by borrower without penalty | 58.00% | |
Secured Overnight Financing Rate | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Percentage of loan commitment subject to benchmark interest rate | 4.20% | |
Loan commitment | $ 200,000 | |
LIBOR | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Percentage of loan commitment subject to benchmark interest rate | 95.80% | |
Loan commitment | $ 5,400,000 |
Loans Held for Investment and_6
Loans Held for Investment and the Allowance for Credit Losses - Schedule of Loans Held for Investment Portfolio by Loan Seniority (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | |
Loans And Leases Receivable Disclosure [Line Items] | |||
Outstanding principal | $ 5,125,167 | $ 4,919,343 | |
Unamortized premium (discount) and loan origination fees, net | (9,379) | (10,141) | |
Amortized cost | [1] | 5,115,788 | 4,909,202 |
Allowance for credit losses | [1] | (46,307) | (41,999) |
Loans held for investment, net | [1] | 5,069,481 | 4,867,203 |
Senior Loans | |||
Loans And Leases Receivable Disclosure [Line Items] | |||
Outstanding principal | 5,090,167 | 4,884,343 | |
Unamortized premium (discount) and loan origination fees, net | (9,370) | (10,101) | |
Amortized cost | 5,080,797 | 4,874,242 | |
Subordinated and Mezzanine Loans | |||
Loans And Leases Receivable Disclosure [Line Items] | |||
Outstanding principal | 35,000 | 35,000 | |
Unamortized premium (discount) and loan origination fees, net | (9) | (40) | |
Amortized cost | $ 34,991 | $ 34,960 | |
[1] | The Company’s consolidated Total Assets and Total Liabilities as of March 31, 2022 include assets and liabilities of variable interest entities (“VIEs”) of $ 3.4 billion and $ 2.8 billion, respectively. The Company’s consolidated Total Assets and Total Liabilities as of December 31, 2021 include assets and liabilities of VIEs of $ 3.2 billion and $ 2.6 billion, respectively. These assets can be used only to satisfy obligations of the VIEs, and creditors of the VIEs have recourse only to these assets, and not to TPG RE Finance Trust, Inc. See Note 5 to the Consolidated Financial Statements for details. |
Loans Held for Investment and_7
Loans Held for Investment and the Allowance for Credit Losses - Summary of Loans Held for Investment Portfolio Activity (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Loans And Leases Receivable Disclosure [Abstract] | |
Balance as of January 1, 2022 | $ 4,867,203 |
Loans originated | 223,871 |
Additional fundings | 29,235 |
Amortization of origination fees | 1,491 |
Collection of principal | (47,698) |
Collection of accrued PIK interest | (313) |
(Increase) of allowance for credit losses | (4,308) |
Balance as of March 31, 2022 | $ 5,069,481 |
Loans Held For Investment And_8
Loans Held For Investment And The Allowance For Credit Losses - Summary Of Amortized Cost By Origination Year Grouped By Risk Rating for Loans Held for Investment Portfolio (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Accounts Notes And Loans Receivable [Line Items] | ||
Amortized cost basis of loans by origination year, One | $ 224,160 | $ 1,634,280 |
Amortized cost basis of loans by origination year, Two | 1,647,659 | 173,871 |
Amortized cost basis of loans by origination year, Three | 175,145 | 1,672,184 |
Amortized cost basis of loans by origination year, Four | 1,639,580 | 856,873 |
Amortized cost basis of loans by origination year, Five | 854,933 | 554,831 |
Amortized cost basis of loans by origination year, Prior | 574,311 | 17,163 |
Amortized cost basis of loans by origination year, Total | 5,115,788 | 4,909,202 |
Rating 2 | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Amortized cost basis of loans by origination year, Total | 543,401 | 527,051 |
Rating 3 | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Amortized cost basis of loans by origination year, Total | 3,360,840 | 3,726,753 |
Rating 4 | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Amortized cost basis of loans by origination year, Total | 1,188,547 | 632,398 |
Rating 5 | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Amortized cost basis of loans by origination year, Total | 23,000 | 23,000 |
Senior Loans | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Amortized cost basis of loans by origination year, One | 224,160 | 1,634,280 |
Amortized cost basis of loans by origination year, Two | 1,647,659 | 173,871 |
Amortized cost basis of loans by origination year, Three | 175,145 | 1,637,224 |
Amortized cost basis of loans by origination year, Four | 1,604,589 | 856,873 |
Amortized cost basis of loans by origination year, Five | 854,933 | 554,831 |
Amortized cost basis of loans by origination year, Prior | 574,311 | 17,163 |
Amortized cost basis of loans by origination year, Total | 5,080,797 | 4,874,242 |
Senior Loans | Rating 2 | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Amortized cost basis of loans by origination year, One | 33,621 | |
Amortized cost basis of loans by origination year, Two | 33,650 | |
Amortized cost basis of loans by origination year, Three | 82,461 | |
Amortized cost basis of loans by origination year, Four | 146,799 | 242,614 |
Amortized cost basis of loans by origination year, Five | 189,702 | 168,355 |
Amortized cost basis of loans by origination year, Prior | 173,250 | |
Amortized cost basis of loans by origination year, Total | 543,401 | 527,051 |
Senior Loans | Rating 3 | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Amortized cost basis of loans by origination year, One | 224,160 | 1,600,659 |
Amortized cost basis of loans by origination year, Two | 1,614,009 | 95,858 |
Amortized cost basis of loans by origination year, Three | 96,914 | 1,400,670 |
Amortized cost basis of loans by origination year, Four | 960,458 | 407,509 |
Amortized cost basis of loans by origination year, Five | 335,023 | 169,934 |
Amortized cost basis of loans by origination year, Prior | 95,285 | 17,163 |
Amortized cost basis of loans by origination year, Total | 3,325,849 | 3,691,793 |
Senior Loans | Rating 4 | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Amortized cost basis of loans by origination year, Two | 78,013 | |
Amortized cost basis of loans by origination year, Three | 78,231 | 154,093 |
Amortized cost basis of loans by origination year, Four | 497,332 | 183,750 |
Amortized cost basis of loans by origination year, Five | 307,208 | 216,542 |
Amortized cost basis of loans by origination year, Prior | 305,776 | |
Amortized cost basis of loans by origination year, Total | 1,188,547 | 632,398 |
Senior Loans | Rating 5 | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Amortized cost basis of loans by origination year, Four | 23,000 | |
Amortized cost basis of loans by origination year, Five | 23,000 | |
Amortized cost basis of loans by origination year, Total | 23,000 | 23,000 |
Subordinated and Mezzanine Loans | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Amortized cost basis of loans by origination year, Three | 34,960 | |
Amortized cost basis of loans by origination year, Four | 34,991 | |
Amortized cost basis of loans by origination year, Total | 34,991 | 34,960 |
Subordinated and Mezzanine Loans | Rating 3 | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Amortized cost basis of loans by origination year, Three | 34,960 | |
Amortized cost basis of loans by origination year, Four | 34,991 | |
Amortized cost basis of loans by origination year, Total | $ 34,991 | $ 34,960 |
Loans Held for Investment and_9
Loans Held for Investment and the Allowance for Credit Losses - Summary of Amortized Cost and Results of Internal Risk Rating Review Performed for Loans Held for Investment Portfolio (Details) $ in Thousands | Mar. 31, 2022USD ($)Ratings | Dec. 31, 2021USD ($) | Dec. 31, 2021Ratings | Dec. 31, 2021Rate |
Accounts Notes And Loans Receivable [Line Items] | ||||
Carrying Value, Gross | $ 5,115,788 | $ 4,909,202 | ||
Allowance for credit losses | (46,307) | (41,999) | ||
Carrying value | $ 5,069,481 | 4,867,203 | ||
Weighted Average Risk Rating | 3.1 | 3 | 3 | |
Rating 2 | ||||
Accounts Notes And Loans Receivable [Line Items] | ||||
Carrying Value, Gross | $ 543,401 | 527,051 | ||
Rating 3 | ||||
Accounts Notes And Loans Receivable [Line Items] | ||||
Carrying Value, Gross | 3,360,840 | 3,726,753 | ||
Rating 4 | ||||
Accounts Notes And Loans Receivable [Line Items] | ||||
Carrying Value, Gross | 1,188,547 | 632,398 | ||
Rating 5 | ||||
Accounts Notes And Loans Receivable [Line Items] | ||||
Carrying Value, Gross | $ 23,000 | $ 23,000 |
Loans Held for Investment an_10
Loans Held for Investment and the Allowance for Credit Losses - Summary of Activity in Allowance for Credit Losses for Loans Held for Investment Portfolio by Class of Financing Receivable (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Accounts Notes And Loans Receivable [Line Items] | ||
Beginning balance | $ 41,999 | |
Allowance for credit losses for loans held for investment | 46,307 | |
Total allowance for credit losses | 51,093 | $ 58,790 |
Loans Held for Investment | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Beginning balance | 41,999 | 59,940 |
Allowance for (reversal of) credit losses, net | 4,308 | (3,299) |
Allowance for credit losses for loans held for investment | 46,307 | 56,641 |
Unfunded Loan Commitment | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Beginning balance | 4,210 | 2,888 |
Allowance for (reversal of) credit losses, net | 576 | (739) |
Allowance for credit losses on unfunded loan commitments | 4,786 | 2,149 |
Senior Loans | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Total allowance for credit losses | 50,726 | 57,239 |
Senior Loans | Loans Held for Investment | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Beginning balance | 41,193 | 58,210 |
Allowance for (reversal of) credit losses, net | 4,747 | (3,055) |
Allowance for credit losses for loans held for investment | 45,940 | 55,155 |
Senior Loans | Unfunded Loan Commitment | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Beginning balance | 4,210 | 2,756 |
Allowance for (reversal of) credit losses, net | 576 | (672) |
Allowance for credit losses on unfunded loan commitments | 4,786 | 2,084 |
Subordinated and Mezzanine Loans | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Total allowance for credit losses | 367 | 1,551 |
Subordinated and Mezzanine Loans | Loans Held for Investment | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Beginning balance | 806 | 1,730 |
Allowance for (reversal of) credit losses, net | (439) | (244) |
Allowance for credit losses for loans held for investment | $ 367 | 1,486 |
Subordinated and Mezzanine Loans | Unfunded Loan Commitment | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Beginning balance | 132 | |
Allowance for (reversal of) credit losses, net | (67) | |
Allowance for credit losses on unfunded loan commitments | $ 65 |
Loans Held for Investment an_11
Loans Held for Investment and the Allowance for Credit Losses - Schedule of Paid-in-Kind Interest (Details) | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Paid In Kind Interest [Abstract] | |
Balance | $ 3,028,000 |
Accrued PIK interest | 0 |
Repayments of accrued PIK interest | (313,000) |
Balance | $ 2,715,000 |
Loans Held for Investment an_12
Loans Held for Investment and the Allowance for Credit Losses - Summary of Aging Analysis for Loans Held for Investment Portfolio by Class of Loans (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Accounts Notes And Loans Receivable [Line Items] | ||
Total loans past due | $ 5,115,788 | $ 4,909,202 |
Current | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Total loans past due | 5,092,788 | 4,886,202 |
Days: 90 or More | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Total loans past due | 23,000 | 23,000 |
Total Loans Past Due | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Total loans past due | 23,000 | 23,000 |
Senior Loans | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Total loans past due | 5,080,797 | 4,874,242 |
Senior Loans | Current | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Total loans past due | 5,057,797 | 4,851,242 |
Senior Loans | Days: 90 or More | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Total loans past due | 23,000 | 23,000 |
Senior Loans | Total Loans Past Due | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Total loans past due | 23,000 | 23,000 |
Subordinated and Mezzanine Loans | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Total loans past due | 34,991 | 34,960 |
Subordinated and Mezzanine Loans | Current | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Total loans past due | $ 34,991 | $ 34,960 |
Real Estate Owned - Additional
Real Estate Owned - Additional Information (Details) - First Mortgage Loan $ in Millions | Apr. 04, 2022USD ($)a | Dec. 31, 2020USD ($)aProperty | Mar. 31, 2022USD ($)a | Dec. 31, 2021USD ($)a |
Real Estate Owned [Line Items] | ||||
Number of undeveloped commercially-zoned land parcel | Property | 2 | |||
Acres of land | a | 27 | 10 | 10 | |
Acres of land sold | a | 17 | |||
Net cash proceeds from sale of property | $ 54.4 | |||
Cost basis property value | $ 60.6 | |||
Property held for investment | $ 99.2 | |||
Mortgage loan payable | $ 50 | |||
Gain on Sale of Real Estate Owned, net | $ 15.8 | |||
Subsequent Events | ||||
Real Estate Owned [Line Items] | ||||
Acres of land sold | a | 10 | |||
Net cash proceeds from sale of property | $ 75 |
Available-for-Sale Debt Securit
Available-for-Sale Debt Securities - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Schedule Of Available For Sale Securities [Line Items] | ||
Payments on secured financing | $ 567,993 | $ 661,991 |
CRE Debt Securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Aggregate losses from the sales | $ 203,400 |
Variable Interest Entities an_3
Variable Interest Entities and Collateralized Loan Obligations - Additional Information (Details) | Feb. 17, 2022USD ($)CreditFacility | Feb. 16, 2022USD ($)LoanParticipation$ / sharesshares | Mar. 31, 2021USD ($)LoanParticipation$ / sharesshares | Mar. 31, 2022USD ($)Loan | Mar. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2021USD ($) | Jun. 30, 2021USD ($) |
Variable Interest Entities And Collateralized Loan Obligation [Line Items] | |||||||
Collateral (loans), Outstanding principal | $ 1,619,567,000 | $ 1,719,735,000 | |||||
Aggregate principal balance | 1,166,996,000 | 1,167,323,000 | |||||
Amortization of deferred financing costs | 4,521,000 | $ 3,818,000 | |||||
Total loan commitment amount | 5,593,350,000 | 5,411,944,000 | |||||
Total loans past due | 5,115,788,000 | 4,909,202,000 | |||||
Interest Expense | |||||||
Variable Interest Entities And Collateralized Loan Obligation [Line Items] | |||||||
Unamortized deferred transaction costs written off | 600,000 | ||||||
Secured Overnight Financing Rate | |||||||
Variable Interest Entities And Collateralized Loan Obligation [Line Items] | |||||||
Total loan commitment amount | 200,000,000 | ||||||
FL3 Mortgage Assets | |||||||
Variable Interest Entities And Collateralized Loan Obligation [Line Items] | |||||||
Aggregate principal balance | $ 1,100,000,000 | ||||||
Loans held for investment, aggregate unpaid principal balance percentage | 20.90% | ||||||
FL2 Mortgage Assets | |||||||
Variable Interest Entities And Collateralized Loan Obligation [Line Items] | |||||||
Redemption of investment-grade bonds outstanding | $ 600,000,000 | ||||||
FL2 Mortgage Assets | Goldman, Sachs & Co. | |||||||
Variable Interest Entities And Collateralized Loan Obligation [Line Items] | |||||||
Loans and leases receivable unpaid principal balance | 463,800,000 | ||||||
Total loan commitment amount | $ 250,000,000 | ||||||
Borrowing | $ 359,100,000 | ||||||
FL5 Mortgage Assets | |||||||
Variable Interest Entities And Collateralized Loan Obligation [Line Items] | |||||||
Number of secured credit facilities | CreditFacility | 17 | ||||||
Loans and leases receivable unpaid principal balance | $ 805,700,000 | ||||||
Variable Interest Entity, Primary Beneficiary | |||||||
Variable Interest Entities And Collateralized Loan Obligation [Line Items] | |||||||
Number of loans held for investment | Loan | 1 | ||||||
Total loans past due | $ 600,000 | 100,000 | |||||
FL5 Notes | |||||||
Variable Interest Entities And Collateralized Loan Obligation [Line Items] | |||||||
Amortization of deferred financing costs | $ 1,100,000 | ||||||
Collateralized Loan Obligation | |||||||
Variable Interest Entities And Collateralized Loan Obligation [Line Items] | |||||||
Number of mortgage loans originated or acquired | Loan | 3 | ||||||
Principal amount of mortgage assets issued | $ 3,400,000,000 | ||||||
Percentage of loans held for investment portfolio collateralized | 66.30% | ||||||
Collateral (loans), Outstanding principal | $ 3,395,746,000 | 3,164,710,000 | |||||
Deferred financing costs, including issuance, legal, and accounting related costs | 14,489,000 | 10,297,000 | |||||
Collateralized Loan Obligation | FL5 Notes | |||||||
Variable Interest Entities And Collateralized Loan Obligation [Line Items] | |||||||
Notes issued | $ 1,075,000,000 | ||||||
Preferred stock, shares issued | shares | 76,594 | ||||||
Preferred stock, par value | $ / shares | $ 0.001 | ||||||
Derivative, notional amount | $ 1,000 | ||||||
Deferred financing costs, including issuance, legal, and accounting related costs | 6,500,000 | ||||||
Amortization of deferred financing costs | 300,000 | ||||||
Unamortized deferred financing costs | 6,200,000 | ||||||
Interest expense excluding amortization of deferred financing costs | 2,300,000 | ||||||
Collateralized Loan Obligation | FL5 Investment Grade Rated Notes | |||||||
Variable Interest Entities And Collateralized Loan Obligation [Line Items] | |||||||
Notes issued | 907,000,000 | ||||||
Collateralized Loan Obligation | FL5 Securities | |||||||
Variable Interest Entities And Collateralized Loan Obligation [Line Items] | |||||||
Amount used to purchase eligible collateral interests | $ 110,100,000 | ||||||
Number of commercial real estate whole loan | Loan | 1 | ||||||
Number of pari passu participations | Participation | 26 | ||||||
Number of separate commercial real estate whole loans | Loan | 19 | ||||||
Aggregate principal balance | $ 1,100,000,000 | ||||||
Loans held for investment, aggregate unpaid principal balance percentage | 21.00% | ||||||
Cash available to acquire eligible assets | $ 100,000 | ||||||
Collateralized Loan Obligation | FL4 Notes | |||||||
Variable Interest Entities And Collateralized Loan Obligation [Line Items] | |||||||
Notes issued | $ 1,250,000,000 | ||||||
Preferred stock, shares issued | shares | 112,500 | 112,500 | |||||
Preferred stock, par value | $ / shares | $ 0.001 | $ 0.001 | |||||
Derivative, notional amount | $ 1,000 | $ 1,000 | |||||
Deferred financing costs, including issuance, legal, and accounting related costs | 8,300,000 | ||||||
Amortization of deferred financing costs | 700,000 | ||||||
Unamortized deferred financing costs | 6,000,000 | 6,700,000 | |||||
Interest expense excluding amortization of deferred financing costs | 4,600,000 | 0 | |||||
Collateralized Loan Obligation | FL4 Investment Grade Rated Notes | |||||||
Variable Interest Entities And Collateralized Loan Obligation [Line Items] | |||||||
Notes issued | 1,040,000,000 | ||||||
Collateralized Loan Obligation | FL4 Securities | |||||||
Variable Interest Entities And Collateralized Loan Obligation [Line Items] | |||||||
Amount used to purchase eligible collateral interests | $ 308,900,000 | ||||||
Ramp-up period | 6 months | ||||||
Cash distributed for investment or other corporate uses | $ 104,800,000 | ||||||
Number of commercial real estate whole loan | Loan | 1 | ||||||
Number of pari passu participations | Participation | 17 | ||||||
Number of separate commercial real estate whole loans | Loan | 17 | ||||||
Debt securities | $ 308,900,000 | ||||||
Aggregate principal balance | $ 1,300,000,000 | ||||||
Loans held for investment, aggregate unpaid principal balance percentage | 24.40% | ||||||
Cash available to acquire eligible assets | $ 200,000 | ||||||
Collateralized Loan Obligation | FL3-Notes | |||||||
Variable Interest Entities And Collateralized Loan Obligation [Line Items] | |||||||
Deferred financing costs, including issuance, legal, and accounting related costs | 7,800,000 | ||||||
Amortization of deferred financing costs | 700,000 | 600,000 | |||||
Unamortized deferred financing costs | 2,300,000 | $ 3,000,000 | |||||
Interest expense excluding amortization of deferred financing costs | 3,800,000 | 3,800,000 | |||||
Collateralized Loan Obligation | FL2-Notes | |||||||
Variable Interest Entities And Collateralized Loan Obligation [Line Items] | |||||||
Deferred financing costs, including issuance, legal, and accounting related costs | 8,700,000 | ||||||
Amortization of deferred financing costs | 600,000 | ||||||
Interest expense excluding amortization of deferred financing costs | $ 1,400,000 | $ 3,100,000 |
Variable Interest Entities an_4
Variable Interest Entities and Collateralized Loan Obligations - Summary of Variable Interest Entities Assets and Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | |
Assets | |||
Cash and cash equivalents | [1] | $ 351,572 | $ 260,635 |
Collateralized loan obligation proceeds held at trustee | [1] | 260 | 204 |
Accounts receivable from servicer/trustee | [1] | 745 | 176 |
Loans held for investment, net | 5,069,481 | 4,867,203 | |
Total assets | [1] | 5,515,056 | 5,218,020 |
Liabilities | |||
Accrued interest payable | [1] | 3,269 | 2,723 |
Collateralized loan obligations | [1] | 2,810,626 | 2,545,691 |
Payable to affiliates | [1] | 6,153 | 5,609 |
Total liabilities | [1] | 4,047,148 | 3,753,314 |
Variable Interest Entity, Primary Beneficiary | |||
Assets | |||
Cash and cash equivalents | 20,022 | 28,167 | |
Collateralized loan obligation proceeds held at trustee | 260 | 204 | |
Accounts receivable from servicer/trustee | 700 | 150 | |
Accrued interest receivable | 6,406 | 6,765 | |
Loans held for investment, net | 3,371,787 | 3,138,603 | |
Total assets | 3,399,175 | 3,173,889 | |
Liabilities | |||
Accrued interest payable | 2,192 | 1,823 | |
Accrued expenses | 320 | 1,490 | |
Collateralized loan obligations | 2,810,626 | 2,545,691 | |
Payable to affiliates | 3,830 | 3,830 | |
Total liabilities | $ 2,816,968 | $ 2,552,834 | |
[1] | The Company’s consolidated Total Assets and Total Liabilities as of March 31, 2022 include assets and liabilities of variable interest entities (“VIEs”) of $ 3.4 billion and $ 2.8 billion, respectively. The Company’s consolidated Total Assets and Total Liabilities as of December 31, 2021 include assets and liabilities of VIEs of $ 3.2 billion and $ 2.6 billion, respectively. These assets can be used only to satisfy obligations of the VIEs, and creditors of the VIEs have recourse only to these assets, and not to TPG RE Finance Trust, Inc. See Note 5 to the Consolidated Financial Statements for details. |
Variable Interest Entities an_5
Variable Interest Entities and Collateralized Loan Obligations - Schedule of Borrowings and Corresponding Collateral (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | |||
Collateral (loans), Outstanding principal | $ 1,619,567 | $ 1,719,735 | |
Debt, Face value | 3,183,528 | 3,072,901 | |
Debt, Carrying value | [1] | 2,810,626 | 2,545,691 |
Collateralized Loan Obligation | |||
Debt Instrument [Line Items] | |||
Collateral (loans), Outstanding principal | 3,395,746 | 3,164,710 | |
Collateral (loans), Carrying value | 3,372,859 | 3,138,603 | |
Debt, Face value | 2,825,115 | 2,555,988 | |
Debt, Carrying value | 2,810,626 | 2,545,691 | |
Collateralized Loan Obligation | FL2-Notes | LIBOR | |||
Debt Instrument [Line Items] | |||
Collateral (loans), Outstanding principal | 805,685 | ||
Collateral (loans), Carrying value | 795,815 | ||
Collateralized Loan Obligation | FL2-Notes | Term SOFR | |||
Debt Instrument [Line Items] | |||
Debt, Face value | 600,001 | ||
Debt, Carrying value | 599,394 | ||
Collateralized Loan Obligation | FL3-Notes | LIBOR | |||
Debt Instrument [Line Items] | |||
Collateral (loans), Outstanding principal | 1,071,319 | 1,109,229 | |
Collateral (loans), Carrying value | 1,060,807 | 1,100,497 | |
Debt, Face value | 918,487 | ||
Debt, Carrying value | 915,451 | ||
Collateralized Loan Obligation | FL3-Notes | Term SOFR | |||
Debt Instrument [Line Items] | |||
Debt, Face value | 880,584 | ||
Debt, Carrying value | 878,309 | ||
Collateralized Loan Obligation | FL4 Notes | LIBOR | |||
Debt Instrument [Line Items] | |||
Collateral (loans), Outstanding principal | 1,249,483 | 1,249,796 | |
Collateral (loans), Carrying value | 1,243,879 | 1,242,291 | |
Debt, Face value | 1,037,500 | 1,037,500 | |
Debt, Carrying value | 1,031,504 | $ 1,030,846 | |
Collateralized Loan Obligation | FL5 Notes | LIBOR | |||
Debt Instrument [Line Items] | |||
Collateral (loans), Outstanding principal | 1,074,944 | ||
Collateral (loans), Carrying value | 1,068,173 | ||
Collateralized Loan Obligation | FL5 Notes | Compounded SOFR | |||
Debt Instrument [Line Items] | |||
Debt, Face value | 907,031 | ||
Debt, Carrying value | $ 900,813 | ||
[1] | The Company’s consolidated Total Assets and Total Liabilities as of March 31, 2022 include assets and liabilities of variable interest entities (“VIEs”) of $ 3.4 billion and $ 2.8 billion, respectively. The Company’s consolidated Total Assets and Total Liabilities as of December 31, 2021 include assets and liabilities of VIEs of $ 3.2 billion and $ 2.6 billion, respectively. These assets can be used only to satisfy obligations of the VIEs, and creditors of the VIEs have recourse only to these assets, and not to TPG RE Finance Trust, Inc. See Note 5 to the Consolidated Financial Statements for details. |
Variable Interest Entities an_6
Variable Interest Entities and Collateralized Loan Obligations - Schedule of Borrowings and Corresponding Collateral (Parenthetical) (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Other loan held for investment, net | $ 1,100 | |
Collateral (loans), Outstanding principal | 1,619,567 | $ 1,719,735 |
Collateralized Loan Obligation | ||
Debt Instrument [Line Items] | ||
Collateral (loans), Outstanding principal | $ 3,395,746 | $ 3,164,710 |
Variable Interest Entities an_7
Variable Interest Entities and Collateralized Loan Obligations - Schedule of Weighted Average Spreads and Maturities for Loan Collateral and Borrowings (Details) - Collateralized Loan Obligation | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
TRTX 2018-FL2 | Collateral (Loan Investments) | ||
Debt Instrument [Line Items] | ||
Weighted average spread (%) | 3.39% | |
Weighted average maturity (years) | 2 years | |
TRTX 2018-FL2 | Debt (Notes Issued) | ||
Debt Instrument [Line Items] | ||
Weighted average spread (%) | 1.56% | |
Weighted average maturity (years) | 15 years 10 months 24 days | |
TRTX 2019-FL3 | Collateral (Loan Investments) | ||
Debt Instrument [Line Items] | ||
Weighted average spread (%) | 3.26% | 3.19% |
Weighted average maturity (years) | 1 year 10 months 24 days | 2 years 2 months 12 days |
TRTX 2019-FL3 | Debt (Notes Issued) | ||
Debt Instrument [Line Items] | ||
Weighted average spread (%) | 1.49% | 1.48% |
Weighted average maturity (years) | 12 years 6 months | 12 years 9 months 18 days |
FL4 Notes | Collateral (Loan Investments) | ||
Debt Instrument [Line Items] | ||
Weighted average spread (%) | 3.22% | 3.19% |
Weighted average maturity (years) | 2 years 9 months 18 days | 3 years 1 month 6 days |
FL4 Notes | Debt (Notes Issued) | ||
Debt Instrument [Line Items] | ||
Weighted average spread (%) | 1.60% | 1.60% |
Weighted average maturity (years) | 16 years | 16 years 2 months 12 days |
FL5 Notes | Collateral (Loan Investments) | ||
Debt Instrument [Line Items] | ||
Weighted average spread (%) | 3.36% | |
Weighted average maturity (years) | 3 years 3 months 18 days | |
FL5 Notes | Debt (Notes Issued) | ||
Debt Instrument [Line Items] | ||
Weighted average spread (%) | 2.02% | |
Weighted average maturity (years) | 16 years 10 months 24 days |
Schedule of Information Related
Schedule of Information Related to Secured Credit Agreements (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | ||
Commitment amount | $ 3,183,528 | $ 3,072,901 |
Aggregate principal balance | 1,166,996 | 1,167,323 |
Principal balance of collateral | 1,619,567 | 1,719,735 |
Amortized cost of collateral | 1,621,620 | 1,719,489 |
Secured Credit Agreements and Secured Credit Facilities | ||
Debt Instrument [Line Items] | ||
Commitment amount | 3,183,528 | 3,072,901 |
Maximum current availability | 1,877,975 | 1,906,690 |
Aggregate principal balance | 1,165,803 | 1,166,211 |
Principal balance of collateral | 1,619,567 | 1,719,735 |
Amortized cost of collateral | $ 1,612,361 | $ 1,711,457 |
Goldman Sachs | Debt Instrument, Interest Rate at 2.1% | Secured Credit Agreements and Secured Credit Facilities | ||
Debt Instrument [Line Items] | ||
Initial maturity date | Aug. 19, 2022 | Aug. 19, 2022 |
Extended maturity date | Aug. 19, 2024 | Aug. 19, 2024 |
Index rate | 1 Month BR | 1 MonthLIBOR |
Weighted average credit spread | 1.80% | 2.00% |
Interest rate | 2.10% | 2.10% |
Commitment amount | $ 500,000 | $ 250,000 |
Maximum current availability | 44,555 | 153,680 |
Aggregate principal balance | 455,445 | 96,320 |
Principal balance of collateral | 599,302 | 158,177 |
Amortized cost of collateral | $ 598,450 | $ 157,550 |
Wells Fargo | Debt Instrument, Interest Rate at 2.0% | Secured Credit Agreements and Secured Credit Facilities | ||
Debt Instrument [Line Items] | ||
Initial maturity date | Apr. 18, 2025 | |
Extended maturity date | Apr. 18, 2025 | |
Index rate | 1 Month BR | |
Weighted average credit spread | 1.60% | |
Interest rate | 1.90% | |
Commitment amount | $ 500,000 | |
Maximum current availability | 213,547 | |
Aggregate principal balance | 286,453 | |
Principal balance of collateral | 372,590 | |
Amortized cost of collateral | $ 367,224 | |
Wells Fargo | Debt Instrument, Interest Rate at 1.7% | Secured Credit Agreements and Secured Credit Facilities | ||
Debt Instrument [Line Items] | ||
Initial maturity date | Apr. 18, 2022 | |
Extended maturity date | Apr. 18, 2024 | |
Index rate | 1 MonthLIBOR | |
Weighted average credit spread | 1.60% | |
Interest rate | 1.70% | |
Commitment amount | $ 750,000 | |
Maximum current availability | 179,784 | |
Aggregate principal balance | 570,216 | |
Principal balance of collateral | 779,791 | |
Amortized cost of collateral | $ 773,868 | |
Barclays | Debt Instrument, Interest Rate at 2.0% | Secured Credit Agreements and Secured Credit Facilities | ||
Debt Instrument [Line Items] | ||
Initial maturity date | Aug. 13, 2022 | |
Extended maturity date | Aug. 13, 2023 | |
Index rate | 1 Month BR | |
Weighted average credit spread | 1.50% | |
Interest rate | 2.00% | |
Commitment amount | $ 750,000 | |
Maximum current availability | 699,899 | |
Aggregate principal balance | 50,101 | |
Principal balance of collateral | 71,011 | |
Amortized cost of collateral | $ 70,759 | |
Barclays | Debt Instrument, Interest Rate at 1.7% | Secured Credit Agreements and Secured Credit Facilities | ||
Debt Instrument [Line Items] | ||
Initial maturity date | Aug. 13, 2022 | |
Extended maturity date | Aug. 13, 2023 | |
Index rate | 1 MonthLIBOR | |
Weighted average credit spread | 1.50% | |
Interest rate | 1.70% | |
Commitment amount | $ 750,000 | |
Maximum current availability | 726,686 | |
Aggregate principal balance | 23,314 | |
Principal balance of collateral | 41,294 | |
Amortized cost of collateral | $ 41,058 | |
Morgan Stanley | Debt Instrument, Interest Rate at 2.6% | Secured Credit Agreements and Secured Credit Facilities | ||
Debt Instrument [Line Items] | ||
Initial maturity date | May 4, 2022 | |
Extended maturity date | May 4, 2023 | |
Index rate | 1 Month BR | |
Weighted average credit spread | 2.10% | |
Interest rate | 2.60% | |
Commitment amount | $ 500,000 | |
Maximum current availability | 420,916 | |
Aggregate principal balance | 79,084 | |
Principal balance of collateral | 115,085 | |
Amortized cost of collateral | $ 114,658 | |
Morgan Stanley | Debt Instrument, Interest Rate at 2.1% | Secured Credit Agreements and Secured Credit Facilities | ||
Debt Instrument [Line Items] | ||
Initial maturity date | May 4, 2022 | |
Extended maturity date | May 4, 2023 | |
Index rate | 1 MonthLIBOR | |
Weighted average credit spread | 2.00% | |
Interest rate | 2.10% | |
Commitment amount | $ 500,000 | |
Maximum current availability | 319,269 | |
Aggregate principal balance | 180,731 | |
Principal balance of collateral | 255,125 | |
Amortized cost of collateral | $ 254,559 | |
JP Morgan | Debt Instrument, Interest Rate at 2.1% | Secured Credit Agreements and Secured Credit Facilities | ||
Debt Instrument [Line Items] | ||
Initial maturity date | Oct. 30, 2023 | |
Extended maturity date | Oct. 30, 2025 | |
Index rate | 1 Month BR | |
Weighted average credit spread | 1.60% | |
Interest rate | 2.10% | |
Commitment amount | $ 400,000 | |
Maximum current availability | 273,058 | |
Aggregate principal balance | 126,942 | |
Principal balance of collateral | 180,526 | |
Amortized cost of collateral | $ 180,217 | |
JP Morgan | Debt Instrument, Interest Rate at 1.8% | Secured Credit Agreements and Secured Credit Facilities | ||
Debt Instrument [Line Items] | ||
Initial maturity date | Oct. 30, 2023 | |
Extended maturity date | Oct. 30, 2025 | |
Index rate | 1 MonthLIBOR | |
Weighted average credit spread | 1.70% | |
Interest rate | 1.80% | |
Commitment amount | $ 400,000 | |
Maximum current availability | 290,523 | |
Aggregate principal balance | 109,477 | |
Principal balance of collateral | 200,148 | |
Amortized cost of collateral | $ 199,246 | |
US Bank | Debt Instrument, Interest Rate at 1.7% | Secured Credit Agreements and Secured Credit Facilities | ||
Debt Instrument [Line Items] | ||
Initial maturity date | Jul. 9, 2022 | |
Extended maturity date | Jul. 9, 2024 | |
Index rate | 1 MonthLIBOR | |
Weighted average credit spread | 1.40% | |
Interest rate | 1.70% | |
Commitment amount | $ 44,730 | |
Maximum current availability | 10,748 | |
Aggregate principal balance | 33,982 | |
Principal balance of collateral | 59,060 | |
Amortized cost of collateral | $ 59,060 | |
US Bank | Debt Instrument, Interest Rate at 1.9% | Secured Credit Agreements and Secured Credit Facilities | ||
Debt Instrument [Line Items] | ||
Initial maturity date | Jul. 9, 2022 | |
Extended maturity date | Jul. 9, 2024 | |
Index rate | 1 Month BR | |
Weighted average credit spread | 1.40% | |
Interest rate | 1.90% | |
Commitment amount | $ 33,982 | |
Aggregate principal balance | 33,982 | |
Principal balance of collateral | 59,060 | |
Amortized cost of collateral | $ 59,060 | |
Bank of America | Debt Instrument, Interest Rate at 2.0% | Secured Credit Agreements and Secured Credit Facilities | ||
Debt Instrument [Line Items] | ||
Initial maturity date | Sep. 29, 2022 | |
Extended maturity date | Sep. 29, 2022 | |
Index rate | 1 Month BR | |
Weighted average credit spread | 1.80% | |
Interest rate | 2.10% | |
Commitment amount | $ 250,000 | |
Aggregate principal balance | 110,250 | |
Principal balance of collateral | 179,603 | |
Amortized cost of collateral | $ 179,603 | |
Bank of America | Debt Instrument, Interest Rate at 1.9% | Secured Credit Agreements and Secured Credit Facilities | ||
Debt Instrument [Line Items] | ||
Initial maturity date | Sep. 29, 2022 | |
Extended maturity date | Sep. 29, 2022 | |
Index rate | 1 MonthLIBOR | |
Weighted average credit spread | 1.80% | |
Interest rate | 1.90% | |
Commitment amount | $ 128,625 | |
Aggregate principal balance | 128,625 | |
Principal balance of collateral | 183,750 | |
Amortized cost of collateral | $ 183,750 | |
Institutional Financing | Debt Instrument, Interest Rate at 4.8% | Secured Credit Agreements and Secured Credit Facilities | ||
Debt Instrument [Line Items] | ||
Initial maturity date | Oct. 30, 2023 | |
Extended maturity date | Oct. 30, 2025 | |
Index rate | 1 MonthLIBOR | |
Weighted average credit spread | 4.50% | |
Interest rate | 4.80% | |
Commitment amount | $ 249,546 | |
Maximum current availability | 226,000 | |
Aggregate principal balance | 23,546 | |
Principal balance of collateral | 42,390 | |
Amortized cost of collateral | $ 42,366 | |
Institutional Financing | Debt Instrument, Interest Rate at 5.0% | Secured Credit Agreements and Secured Credit Facilities | ||
Debt Instrument [Line Items] | ||
Initial maturity date | Oct. 30, 2023 | |
Extended maturity date | Oct. 30, 2025 | |
Index rate | 1 Month BR | |
Weighted average credit spread | 4.50% | |
Interest rate | 5.00% | |
Commitment amount | $ 249,546 | |
Maximum current availability | 226,000 | |
Aggregate principal balance | 23,546 | |
Principal balance of collateral | 42,390 | |
Amortized cost of collateral | $ 42,390 |
Schedule of Information Relat_2
Schedule of Information Related to Secured Credit Agreements (Parenthetical) (Details) - USD ($) $ in Millions | Apr. 15, 2022 | Apr. 14, 2022 | Mar. 30, 2022 | Feb. 01, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Secured Credit Facilities | ||||||
Debt Instrument [Line Items] | ||||||
Reduction in borrowings | $ 9.4 | |||||
Secured Credit Facilities | Subsequent Events | ||||||
Debt Instrument [Line Items] | ||||||
Reduction in borrowings | $ 9.4 | |||||
Secured Credit Facilities | Holdco | ||||||
Debt Instrument [Line Items] | ||||||
Recourse guarantee percentage | 25.00% | |||||
Secured Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Reduction in borrowings | $ 9.2 | $ 9.4 | ||||
Maximum current availability | $ 0 | |||||
Secured Credit Agreement | Subsequent Events | ||||||
Debt Instrument [Line Items] | ||||||
Reduction in borrowings | $ 9.4 | $ 11.8 | ||||
Secured Credit Agreement | Holdco | ||||||
Debt Instrument [Line Items] | ||||||
Recourse guarantee percentage | 25.00% |
Summary of Recourse and Market-
Summary of Recourse and Market-to-Market Provisions (Details) - Repurchase Agreements - Loans Investment | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Goldman Sachs | ||
Debt Instrument [Line Items] | ||
Recourse guarantee percentage | 25.00% | 25.00% |
Initial maturity date | Aug. 19, 2022 | Aug. 19, 2022 |
Extended maturity date | Aug. 19, 2024 | Aug. 19, 2024 |
Wells Fargo | ||
Debt Instrument [Line Items] | ||
Recourse guarantee percentage | 25.00% | 25.00% |
Initial maturity date | Apr. 18, 2025 | Apr. 18, 2022 |
Extended maturity date | Apr. 18, 2025 | Apr. 18, 2024 |
Barclays | ||
Debt Instrument [Line Items] | ||
Recourse guarantee percentage | 25.00% | 25.00% |
Initial maturity date | Aug. 13, 2022 | Aug. 13, 2022 |
Extended maturity date | Aug. 13, 2023 | Aug. 13, 2023 |
Morgan Stanley | ||
Debt Instrument [Line Items] | ||
Recourse guarantee percentage | 25.00% | 25.00% |
Initial maturity date | May 4, 2022 | May 4, 2022 |
Extended maturity date | May 4, 2023 | May 4, 2023 |
JP Morgan | ||
Debt Instrument [Line Items] | ||
Recourse guarantee percentage | 25.00% | 25.00% |
Initial maturity date | Oct. 30, 2023 | Oct. 30, 2023 |
Extended maturity date | Oct. 30, 2025 | Oct. 30, 2025 |
Institutional Financing | ||
Debt Instrument [Line Items] | ||
Recourse guarantee percentage | 25.00% | 25.00% |
Initial maturity date | Oct. 30, 2023 | Oct. 30, 2023 |
Extended maturity date | Oct. 30, 2025 | Oct. 30, 2025 |
US Bank | ||
Debt Instrument [Line Items] | ||
Recourse guarantee percentage | 25.00% | 25.00% |
Initial maturity date | Jul. 9, 2022 | |
Extended maturity date | Jul. 9, 2024 | Jul. 9, 2024 |
Bank of America | Senior Secured and Secured Credit Agreements | ||
Debt Instrument [Line Items] | ||
Recourse guarantee percentage | 25.00% | 25.00% |
Initial maturity date | Sep. 29, 2022 | Sep. 29, 2022 |
Extended maturity date | Sep. 29, 2022 | Sep. 29, 2022 |
Summary of Recourse and Marke_2
Summary of Recourse and Market-to-Market Provisions (Parenthetical) (Details) - USD ($) $ in Millions | Apr. 15, 2022 | Apr. 14, 2022 | Mar. 30, 2022 | Feb. 01, 2022 |
Secured Credit Facilities | ||||
Debt Instrument [Line Items] | ||||
Reduction in borrowings | $ 9.4 | |||
Secured Credit Facilities | Subsequent Events | ||||
Debt Instrument [Line Items] | ||||
Reduction in borrowings | $ 9.4 | |||
Secured Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Reduction in borrowings | $ 9.2 | $ 9.4 | ||
Secured Credit Agreement | Subsequent Events | ||||
Debt Instrument [Line Items] | ||||
Reduction in borrowings | $ 9.4 | $ 11.8 |
Investment Portfolio Financin_2
Investment Portfolio Financing - Additional Information (Details) $ in Thousands | Feb. 22, 2022USD ($)Lender | Mar. 31, 2022USD ($)CreditFacilityAgreement | Mar. 31, 2021USD ($) | Dec. 31, 2021CreditFacilityAgreement | Jun. 16, 2021shares |
Debt Instrument [Line Items] | |||||
Amortization of deferred financing costs | $ 4,521 | $ 3,818 | |||
Secured Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Maximum commitment amount | $ 250,000 | $ 43,000 | |||
Number of lenders provided credit facility | Lender | 5 | ||||
Credit facility term | 3 years | ||||
Unused fee, Target utilization percent | 50.00% | ||||
Percentage of unused fee | 0.20% | ||||
Maximum period Permits to finance eligible loans | 180 days | ||||
Initial advance rate | 75.00% | ||||
Outstanding borrowings | $ 32,300 | ||||
Secured Revolving Credit Facility | Minimum | |||||
Debt Instrument [Line Items] | |||||
Percentage of unused fee | 0.15% | ||||
Secured Revolving Credit Facility | Maximum | |||||
Debt Instrument [Line Items] | |||||
Percentage of unused fee | 0.20% | ||||
Term SOFR | Secured Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Line of credit, spread on variable rate | 2.00% | ||||
FL5 Notes | |||||
Debt Instrument [Line Items] | |||||
Amortization of deferred financing costs | 1,100 | ||||
Mortgages | |||||
Debt Instrument [Line Items] | |||||
Mortgage loan payable | 50,000 | ||||
Posted cash to pre-fund interest payments | $ 2,400 | ||||
Mortgages | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Line of credit, spread on variable rate | 4.50% | ||||
Series B Preferred Stock | |||||
Debt Instrument [Line Items] | |||||
Covenant maximum debt equity ratio | 3 | ||||
Redeemed outstanding shares | shares | 9,000,000 | ||||
Holdco | Secured Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Recourse guarantee percentage | 100.00% | ||||
Interest Rate Floor | Mortgages | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Line of credit, spread on variable rate | 0.50% | ||||
Rate Cap | Mortgages | |||||
Debt Instrument [Line Items] | |||||
Line of credit, spread on variable rate | 0.50% | ||||
After 90 days from initial borrowing | Secured Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Initial advance rate | 65.00% | ||||
After 135 days from initial borrowing | Secured Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Initial advance rate | 45.00% | ||||
After 180 days from initial borrowing | Secured Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Initial advance rate | 0.00% | ||||
Secured Credit Agreements | |||||
Debt Instrument [Line Items] | |||||
Number of secured credit agreements | Agreement | 7 | 7 | |||
Recourse guarantee percentage | 25.00% | ||||
Secured Credit Agreements | Commercial Mortgage Loans | |||||
Debt Instrument [Line Items] | |||||
Number of secured credit facilities | CreditFacility | 58 | 53 | |||
Secured Credit Facilities | Holdco | |||||
Debt Instrument [Line Items] | |||||
Recourse guarantee percentage | 25.00% |
Summary of Secured Credit Agree
Summary of Secured Credit Agreements Secured by Mortgage Loan Investments, CRE Debt Securities and Counterparty Concentration Risks (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Repurchase Agreement Counterparty [Line Items] | ||
Commitment amount | $ 3,183,528 | $ 3,072,901 |
UPB of collateral | 1,619,567 | 1,719,735 |
Amortized cost of collateral | 1,621,620 | 1,719,489 |
Amount payable | 1,166,996 | 1,167,323 |
Net counterparty exposure | $ 454,623 | $ 552,165 |
Days to extended maturity | 873 days | 794 days |
Goldman Sachs Bank | Commercial Mortgage Loans | ||
Repurchase Agreement Counterparty [Line Items] | ||
Commitment amount | $ 500,000 | $ 250,000 |
UPB of collateral | 599,302 | 158,177 |
Amortized cost of collateral | 600,858 | 159,269 |
Amount payable | 455,752 | 96,389 |
Net counterparty exposure | $ 145,106 | $ 62,880 |
Percent of stockholders' equity | 9.90% | 4.30% |
Days to extended maturity | 872 days | 962 days |
Wells Fargo | Commercial Mortgage Loans | ||
Repurchase Agreement Counterparty [Line Items] | ||
Commitment amount | $ 500,000 | $ 750,000 |
UPB of collateral | 372,590 | 779,791 |
Amortized cost of collateral | 369,314 | 776,196 |
Amount payable | 286,951 | 570,839 |
Net counterparty exposure | $ 82,363 | $ 205,357 |
Percent of stockholders' equity | 5.60% | 14.00% |
Days to extended maturity | 1114 days | 839 days |
Barclays | Commercial Mortgage Loans | ||
Repurchase Agreement Counterparty [Line Items] | ||
Commitment amount | $ 750,000 | $ 750,000 |
UPB of collateral | 71,011 | 41,294 |
Amortized cost of collateral | 70,837 | 41,019 |
Amount payable | 50,171 | 23,330 |
Net counterparty exposure | $ 20,666 | $ 17,689 |
Percent of stockholders' equity | 1.40% | 1.20% |
Days to extended maturity | 500 days | 590 days |
Morgan Stanley Bank | Commercial Mortgage Loans | ||
Repurchase Agreement Counterparty [Line Items] | ||
Commitment amount | $ 500,000 | $ 500,000 |
UPB of collateral | 115,085 | 255,125 |
Amortized cost of collateral | 115,836 | 255,858 |
Amount payable | 79,161 | 180,891 |
Net counterparty exposure | $ 36,675 | $ 74,967 |
Percent of stockholders' equity | 2.50% | 5.10% |
Days to extended maturity | 399 days | 489 days |
JP Morgan Chase Bank | Commercial Mortgage Loans | ||
Repurchase Agreement Counterparty [Line Items] | ||
Commitment amount | $ 649,546 | $ 649,546 |
UPB of collateral | 222,916 | 242,538 |
Amortized cost of collateral | 224,398 | 243,181 |
Amount payable | 150,687 | 133,191 |
Net counterparty exposure | $ 73,711 | $ 109,990 |
Percent of stockholders' equity | 5.00% | 7.50% |
Days to extended maturity | 1309 days | 1399 days |
US Bank | Commercial Mortgage Loans | ||
Repurchase Agreement Counterparty [Line Items] | ||
Commitment amount | $ 33,982 | $ 44,730 |
UPB of collateral | 59,060 | 59,060 |
Amortized cost of collateral | 59,435 | 59,435 |
Amount payable | 34,037 | 34,035 |
Net counterparty exposure | $ 25,398 | $ 25,400 |
Percent of stockholders' equity | 1.70% | 1.70% |
Days to extended maturity | 831 days | 921 days |
Bank of America | Commercial Mortgage Loans | ||
Repurchase Agreement Counterparty [Line Items] | ||
Commitment amount | $ 250,000 | $ 128,625 |
UPB of collateral | 179,603 | 183,750 |
Amortized cost of collateral | 180,942 | 184,531 |
Amount payable | 110,237 | 128,648 |
Net counterparty exposure | $ 70,705 | $ 55,883 |
Percent of stockholders' equity | 4.80% | 3.80% |
Days to extended maturity | 182 days | 272 days |
Summary of Secured Credit Agr_2
Summary of Secured Credit Agreements Secured by Mortgage Loan Investments, CRE Debt Securities and Counterparty Concentration Risks (Parenthetical) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | ||
Repurchase Agreement Counterparty [Line Items] | |||
Accrued interest payable | [1] | $ 3,269 | $ 2,723 |
Commercial Mortgage Loans | |||
Repurchase Agreement Counterparty [Line Items] | |||
Interest receivable | 9,300 | 8,000 | |
Premium, discount and origination fees | 7,200 | 8,800 | |
Accrued interest payable | 1,200 | 1,100 | |
Unamortized deferred financing fees | $ 5,100 | $ 4,000 | |
[1] | The Company’s consolidated Total Assets and Total Liabilities as of March 31, 2022 include assets and liabilities of variable interest entities (“VIEs”) of $ 3.4 billion and $ 2.8 billion, respectively. The Company’s consolidated Total Assets and Total Liabilities as of December 31, 2021 include assets and liabilities of VIEs of $ 3.2 billion and $ 2.6 billion, respectively. These assets can be used only to satisfy obligations of the VIEs, and creditors of the VIEs have recourse only to these assets, and not to TPG RE Finance Trust, Inc. See Note 5 to the Consolidated Financial Statements for details. |
Schedule of Maturities - Schedu
Schedule of Maturities - Schedule of Future Principal Payments (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Debt Instrument [Line Items] | |
2022 | $ 243,994 |
2023 | 449,399 |
2024 | 1,317,104 |
2025 | 514,391 |
2026 | 1,109,130 |
Thereafter | 389,150 |
Total | 4,023,168 |
Collateralized Loan Obligation | |
Debt Instrument [Line Items] | |
2022 | 133,744 |
2023 | 131,632 |
2024 | 865,771 |
2025 | 195,688 |
2026 | 1,109,130 |
Thereafter | 389,150 |
Total | 2,825,115 |
Secured Credit Agreement | |
Debt Instrument [Line Items] | |
2022 | 110,250 |
2023 | 317,767 |
2024 | 451,333 |
2025 | 286,453 |
Total | 1,165,803 |
Secured Revolving Credit Facility | |
Debt Instrument [Line Items] | |
2025 | 32,250 |
Total | $ 32,250 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | ||
Money market funds | $ 286,900,000 | $ 199,300,000 |
Threshold period of delinquency | 90 days | |
Estimated fair value of loans held for investment | $ 5,100,000,000 | $ 4,900,000,000 |
Weighted average gross spread percentage | 3.44% | 3.39% |
Weighted average maturity period | 2 years 8 months 12 days | 2 years 9 months 18 days |
Transfers of financial assets or liabilities with in fair value hierarchy | $ 0 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Fair Value of Financial Assets and Liabilities (Details) - Fair Value Measurements Nonrecurring - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Carrying Value | Loans Held for Investment | ||
Financial assets | ||
Financial assets, nonrecurring | $ 5,069,481 | $ 4,867,203 |
Carrying Value | Collateralized Loan Obligation | ||
Financial liabilities | ||
Financial liabilities, nonrecurring | 2,810,626 | 2,545,691 |
Carrying Value | Secured Credit Agreements | ||
Financial liabilities | ||
Financial liabilities, nonrecurring | 1,162,576 | 1,162,206 |
Carrying Value | Secured Revolving Credit Facility | ||
Financial liabilities | ||
Financial liabilities, nonrecurring | 30,380 | |
Estimate of Fair Value Measurement | Level III | Loans Held for Investment | ||
Financial assets | ||
Financial assets, nonrecurring | 5,091,160 | 4,899,666 |
Estimate of Fair Value Measurement | Level III | Collateralized Loan Obligation | ||
Financial liabilities | ||
Financial liabilities, nonrecurring | 2,828,618 | 2,558,544 |
Estimate of Fair Value Measurement | Level III | Secured Credit Agreements | ||
Financial liabilities | ||
Financial liabilities, nonrecurring | 1,165,000 | $ 1,169,710 |
Estimate of Fair Value Measurement | Level III | Secured Revolving Credit Facility | ||
Financial liabilities | ||
Financial liabilities, nonrecurring | $ 30,380 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax [Line Items] | ||||
Excise tax percentage | 100.00% | |||
Reserve for uncertain income tax positions | $ 0 | $ 0 | ||
Interest for underpayment of income taxes | 0 | |||
Penalties for underpayment of income taxes | 0 | |||
Current portion of income tax expense (benefit) | $ 100,000 | $ 900,000 | ||
Effective income tax rate | 0.40% | 2.80% | ||
CRE Debt Securities | ||||
Income Tax [Line Items] | ||||
Aggregate losses from the sales | $ 203,400,000 | |||
Capital gains | 15,800,000 | $ 0 | ||
Remaining capital loss carryforwards | $ 187,600,000 | 187,600,000 | ||
CRE Debt Securities | Minimum | ||||
Income Tax [Line Items] | ||||
Percentage of REIT taxable income distributed to stockholders | 90.00% | |||
TRSs | ||||
Income Tax [Line Items] | ||||
Deferred tax assets | $ 0 | 0 | ||
Deferred tax liabilities | $ 100,000 | $ 300,000 | ||
REIT Subsidiaries | ||||
Income Tax [Line Items] | ||||
Equity interest percentage by parent | 100.00% | |||
Sub-REIT | ||||
Income Tax [Line Items] | ||||
Equity interest percentage by parent | 100.00% | |||
U.S. federal corporate tax rate | 21.00% |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) | Jun. 16, 2021 | Jul. 25, 2017 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | ||||||
Incentive management fee percentage of Core Earnings less seven percent of stockholders equity | 20.00% | |||||
Payable to affiliates | [1] | $ 6,153,000 | $ 5,609,000 | |||
Termination fee, description | A termination fee would be due to the Manager upon termination of the Management Agreement by the Company absent a cause event. The termination fee would also be payable to the Manager upon termination of the Management Agreement by the Manager if the Company materially breaches the Management Agreement. The termination fee is equal to three times the sum of (x) the average annual base management fee and (y) the average annual incentive compensation earned by the Manager, in each case during the 24-month period immediately preceding the most recently completed calendar quarter prior to the date of termination. | |||||
Manager | ||||||
Related Party Transaction [Line Items] | ||||||
Maximum reimbursable expense per annum | $ 1,000,000 | |||||
Percentage of allocated reimbursable expense of management agreement | 20.00% | |||||
Series B Preferred Stock | ||||||
Related Party Transaction [Line Items] | ||||||
Percentage of annual base management fee | 0.75% | |||||
Decrease in annual base management fee percentage | 50.00% | |||||
Redemption of Series B preferred stock | 9,000,000 | |||||
Preferred stock shares outstanding | 0 | |||||
Series C Preferred Stock | ||||||
Related Party Transaction [Line Items] | ||||||
Preferred stock shares outstanding | 8,050,000 | 8,050,000 | ||||
Series C Preferred Stock | TPG Capital BD, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Payment for underwriting discount and commissions | $ 700,000 | |||||
Management Agreement | ||||||
Related Party Transaction [Line Items] | ||||||
Percentage of annual base management fee | 1.50% | 1.50% | ||||
Percentage of quarterly base management fee | 0.375% | |||||
Incentive management fee, description | The Manager is also entitled to incentive compensation which is calculated and payable in cash with respect to each calendar quarter in arrears in an amount, not less than zero, equal to the difference between: (1) the product of (a) 20% and (b) the difference between (i) the Company’s Core Earnings for the most recent 12-month period, including the calendar quarter (or part thereof) for which the calculation of incentive compensation is being made (the “applicable period”), and (ii) the product of (A) the Company’s Equity in the most recent 12-month period, including the applicable period, and (B) 7% per annum; and (2) the sum of any incentive compensation paid to the Manager with respect to the first three calendar quarters of the most recent 12-month period. No incentive compensation is payable to the Manager with respect to any calendar quarter unless Core Earnings for the 12 most recently completed calendar quarters is greater than zero. For purposes of calculating the Manager’s incentive compensation, the Management Agreement specifies that equity securities of the Company or any of the Company’s subsidiaries that are entitled to a specified periodic distribution or have other debt characteristics will not constitute equity securities and will not be included in “Equity” for the purpose of calculating incentive compensation. Instead, the aggregate distribution amount that accrues to such equity securities during the calendar quarter of such calculation will be subtracted from Core Earnings, before incentive compensation for purposes of calculating incentive compensation, unless such distribution is otherwise excluded from Core Earnings. | |||||
Percentage multiplied by stockholders equity included in incentive management fee | 7.00% | |||||
Payable to affiliates | $ 5,700,000 | $ 5,600,000 | ||||
Incentive management fee | 0 | $ 0 | ||||
Management Agreement | Minimum | ||||||
Related Party Transaction [Line Items] | ||||||
Management fee payable per annum | $ 250,000 | |||||
Management fee payable per quarter | $ 62,500 | |||||
Post-IPO Management Agreement | ||||||
Related Party Transaction [Line Items] | ||||||
Amount incurred and reimbursable | 300,000 | $ 300,000 | ||||
Reimbursable expenses remained outstanding | $ 400,000 | $ 0 | ||||
[1] | The Company’s consolidated Total Assets and Total Liabilities as of March 31, 2022 include assets and liabilities of variable interest entities (“VIEs”) of $ 3.4 billion and $ 2.8 billion, respectively. The Company’s consolidated Total Assets and Total Liabilities as of December 31, 2021 include assets and liabilities of VIEs of $ 3.2 billion and $ 2.6 billion, respectively. These assets can be used only to satisfy obligations of the VIEs, and creditors of the VIEs have recourse only to these assets, and not to TPG RE Finance Trust, Inc. See Note 5 to the Consolidated Financial Statements for details. |
Related Party Transactions - Su
Related Party Transactions - Summary of Management Fees and Incentive Management Fees Incurred and Paid Pursuant to Management Agreement (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Related Party Transaction [Line Items] | ||
Fees Incurred | $ 5,709 | $ 5,094 |
Fees Paid | 5,609 | 5,358 |
Management Agreement | ||
Related Party Transaction [Line Items] | ||
Fees Incurred | 5,709 | 5,094 |
Fees Paid | $ 5,609 | $ 5,358 |
Earnings per Share - Additional
Earnings per Share - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Earnings Per Share Basic [Line Items] | ||
Participating securities' share in earnings (loss) | $ 0.2 | $ 0.1 |
Undistributed net income attributable to common stockholders | $ 0.2 | $ 0.1 |
Warrants | ||
Earnings Per Share Basic [Line Items] | ||
Average market price of common stock | $ 12.17 | $ 10.95 |
Strike price of common share for warrants outstanding | $ 7.50 | |
Series B Preferred Stock | ||
Earnings Per Share Basic [Line Items] | ||
Adjustments to accretion of discount on preferred stock | $ 1.5 |
Earnings per Share - Schedule o
Earnings per Share - Schedule of Calculation of Basic and Diluted Earnings per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Earnings Per Share [Abstract] | ||
Net income | $ 23,781 | $ 31,955 |
Preferred stock dividends | (3,148) | (6,124) |
Participating securities' share in earnings | (197) | (146) |
Series B Preferred Stock accretion, including allocated Warrant fair value and transaction costs | 1,452 | |
Net income attributable to common stockholders | $ 20,436 | $ 24,233 |
Weighted average common shares outstanding, basic | 77,183,957 | 76,895,615 |
Incremental shares of common stock issued from the assumed exercise of the Warrants | 4,604,766 | 3,777,621 |
Weighted average common shares outstanding, diluted | 81,788,723 | 80,673,236 |
Earnings per common share, basic | $ 0.26 | $ 0.32 |
Earnings per common share, diluted | $ 0.25 | $ 0.30 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - USD ($) | Mar. 31, 2022 | Mar. 15, 2022 | Mar. 14, 2022 | Mar. 08, 2022 | Jun. 16, 2021 | Jun. 14, 2021 | May 28, 2020 | Mar. 07, 2019 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |||
Class Of Stock [Line Items] | ||||||||||||||
Accretion of remaining unamortized discount | $ 1,452,000 | |||||||||||||
Common stock, shares authorized | 302,500,000 | 302,500,000 | 302,500,000 | |||||||||||
Common stock, shares outstanding | 77,185,845 | 77,185,845 | 77,183,892 | |||||||||||
Dividends paid in cash | $ 15,500,000 | $ 18,700,000 | ||||||||||||
Unpaid dividends | $ 18,701,000 | [1] | $ 18,701,000 | [1] | $ 15,510,000 | $ 24,156,000 | [1] | |||||||
Warrants | ||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||
Warrants to purchase common stock, value | $ 225,000,000 | |||||||||||||
Strike price of common share for warrants outstanding | $ 7.50 | |||||||||||||
Warrants expiration date | May 28, 2025 | |||||||||||||
Fair value of warrants | $ 14,400,000 | |||||||||||||
Warrants exercised | 0 | |||||||||||||
Common Stock | ||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||
Number of common shares issued | 1,953 | 110,096 | ||||||||||||
Dividend declared per share | $ 0.20 | $ 0.24 | ||||||||||||
Dividend declared date | Mar. 15, 2021 | Mar. 14, 2022 | ||||||||||||
Dividend paid date | Apr. 23, 2021 | Apr. 25, 2022 | ||||||||||||
Dividend record date | Mar. 26, 2021 | Mar. 29, 2022 | ||||||||||||
Maximum | ||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||
Temporary equity taxable income percentage | 90.00% | |||||||||||||
PE Holder L.L.C | Investment Agreement | Tranche One | ||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||
Warrants to purchase common stock, value | $ 225,000,000 | |||||||||||||
PE Holder L.L.C | Investment Agreement | Maximum | ||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||
Warrants to purchase common stock, authorized | 15,000,000 | |||||||||||||
Aggregate cash purchase price | $ 325,000,000 | |||||||||||||
PE Holder L.L.C | Investment Agreement | Maximum | Tranche One | ||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||
Warrants to purchase common stock, shares | 12,000,000 | |||||||||||||
Equity Distribution Agreement | Common Stock | ||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||
Number of common shares issued | 0 | 0 | ||||||||||||
Aggregate gross sales price of common stock | $ 74,100,000 | $ 74,100,000 | ||||||||||||
Proceeds from issuance of common stock | $ 50,900,000 | |||||||||||||
Equity Distribution Agreement | Maximum | Common Stock | ||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||
Percentage of commission to each sales agent, on gross sales price of shares sold | 1.75% | |||||||||||||
Series C Preferred Stock | ||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||
Proceeds from Issuance of Preferred Stock | $ 194,400,000 | |||||||||||||
Number of common shares issued | 8,050,000 | |||||||||||||
Underwriting discount and commissions | $ 6,300,000 | |||||||||||||
Issuance costs | $ 600,000 | |||||||||||||
Temporary equity, liquidation preference per share | $ 25 | $ 25 | ||||||||||||
Temporary equity liquidation preference per share annually | 1.5624 | |||||||||||||
Temporary equity liquidation preference per share quarterly | $ 0.3906 | |||||||||||||
Temporary equity, dividend percentage | 6.25% | |||||||||||||
Dividend declared per share | 0.4601 | $ 0.3906 | $ 0.4601 | |||||||||||
Dividend payable date | Sep. 30, 2021 | |||||||||||||
Temporary equity, redemption terms | On and after June 14, 2026, the Company, at its option, upon not fewer than 30 days’ nor more than 60 days’ written notice, may redeem the Series C Preferred Stock, in whole, at any time, or in part, from time to time, for cash, at a redemption price of $25.00 per share, plus any accrued and unpaid dividends (whether or not declared) on such shares of Series C Preferred Stock to, but not including, the redemption date (other than any dividend with a record date before the applicable redemption date and a payment date after the applicable redemption date, which shall be paid on the payment date notwithstanding prior redemption of such shares. | |||||||||||||
Redemption price | $ 25 | $ 25 | ||||||||||||
Dividend rate | 6.25% | |||||||||||||
Preferred stock, liquidation preference per annum | $ 201,250,000 | $ 201,250,000 | $ 201,250,000 | |||||||||||
Dividends paid in cash | $ 3,100,000 | |||||||||||||
Dividend declared date | Mar. 8, 2022 | |||||||||||||
Dividend paid date | Mar. 30, 2022 | |||||||||||||
Dividend record date | Mar. 18, 2022 | |||||||||||||
Series C Preferred Stock | TPG Capital BD, LLC | ||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||
Payments For Underwriting Expense | $ 700,000 | |||||||||||||
Series C Preferred Stock | Change of Control Event | ||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||
Temporary equity, redemption terms | The Company, upon the occurrence of a Change of Control event, at its option, upon not fewer than 30 days’ nor more than 60 days’ written notice, may redeem the shares of Series C Preferred Stock, in whole or in part, within 120 days after the first date on which such Change of Control occurred, for cash at a redemption price equal to $25.00 per share, plus any accrued and unpaid dividends (whether or not declared) to, but not including, the redemption date (other than any dividend with a record date before the applicable redemption date and a payment date after the applicable redemption date, which will be paid on the payment date notwithstanding prior redemption of such shares). | |||||||||||||
Redemption price | $ 25 | $ 25 | ||||||||||||
Series B Preferred Stock | ||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||
Temporary equity, liquidation preference per share | $ 25 | $ 25 | ||||||||||||
Temporary equity, dividend percentage | 11.00% | 11.00% | ||||||||||||
Dividend declared per share | $ 0.68 | |||||||||||||
Dividend payable date | Mar. 15, 2021 | |||||||||||||
Temporary equity, shares authorized | 13,000,000 | 13,000,000 | 13,000,000 | |||||||||||
Temporary equity, par value | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||
Temporary equity, shares issued | 0 | 0 | 0 | |||||||||||
Outstanding shares redeemed | 9,000,000 | |||||||||||||
Cash redemption of Series B preferred stock | $ 247,500,000 | |||||||||||||
Temporary equity, shares outstanding | 0 | 0 | 0 | |||||||||||
Dividends paid in cash | $ 6,100 | |||||||||||||
Dividend paid date | Mar. 31, 2021 | |||||||||||||
Dividend record date | Mar. 15, 2021 | |||||||||||||
Series B Preferred Stock | Warrants | ||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||
Fair value of warrants | $ 14,400,000 | |||||||||||||
Issuance costs | $ 14,200,000 | |||||||||||||
Series B Preferred Stock | Maximum | ||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||
Temporary equity liquidation preference percentage | 2.00% | |||||||||||||
Series B Preferred Stock | PE Holder L.L.C | Investment Agreement | ||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||
Temporary equity, dividend percentage | 11.00% | |||||||||||||
Temporary equity, shares authorized | 13,000,000 | |||||||||||||
Temporary equity, par value | $ 0.001 | |||||||||||||
Series B Preferred Stock | PE Holder L.L.C | Investment Agreement | Tranche One | ||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||
Temporary equity, shares issued | 9,000,000 | |||||||||||||
Series A Preferred Stock | ||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||
Dividend rate | 12.50% | |||||||||||||
Preferred stock, liquidation preference per annum | $ 125,000 | $ 125,000 | $ 125,000 | |||||||||||
Preferred stock, liquidation preference per annum | $ 0.001 | $ 0.001 | ||||||||||||
[1] | The Company’s consolidated Total Assets and Total Liabilities as of March 31, 2022 include assets and liabilities of variable interest entities (“VIEs”) of $ 3.4 billion and $ 2.8 billion, respectively. The Company’s consolidated Total Assets and Total Liabilities as of December 31, 2021 include assets and liabilities of VIEs of $ 3.2 billion and $ 2.6 billion, respectively. These assets can be used only to satisfy obligations of the VIEs, and creditors of the VIEs have recourse only to these assets, and not to TPG RE Finance Trust, Inc. See Note 5 to the Consolidated Financial Statements for details. |
Stock-based Compensation - Addi
Stock-based Compensation - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Accrued shares of common stock for dividends | 1,953 | |
Stock compensation expense | $ 1,266 | $ 1,456 |
2017 Equity Incentive Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of shares authorized under the plan | 4,600,463 | |
Share vesting installment period | 4 years | |
Total unrecognized compensation cost relating to unvested share-based compensation arrangements | $ 8,100 | |
Unrecognized compensation cost, recognition period | 1 year 4 months 24 days | |
Stock compensation expense | $ 1,300 | $ 1,500 |
2017 Equity Incentive Plan | Common Stock | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of shares, issued | 0 | |
Number of shares, forfeited | 15,594 | |
Number of shares, vested | 0 | |
2017 Equity Incentive Plan | 2022 | Common Stock | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Shares of common stock expected to vest | 278,821 | |
2017 Equity Incentive Plan | 2023 | Common Stock | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Shares of common stock expected to vest | 243,993 | |
2017 Equity Incentive Plan | 2024 | Common Stock | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Shares of common stock expected to vest | 190,710 | |
2017 Equity Incentive Plan | 2025 | Common Stock | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Shares of common stock expected to vest | 106,811 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Long Term Purchase Commitment [Line Items] | ||
Unfunded commitments related to loans held for investment | $ 463,000,000 | $ 487,800,000 |
COVID-19 | ||
Long Term Purchase Commitment [Line Items] | ||
Contingencies | 0 | |
Accrued Expenses and Other Liabilities | ||
Long Term Purchase Commitment [Line Items] | ||
Allowance for credit losses on loan commitments | $ 4,800,000 | $ 4,200,000 |
Concentration of Credit Risk -
Concentration of Credit Risk - Summary of Loans Held for Investment Portfolio by Property Type (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Loans And Leases Receivable Disclosure [Line Items] | ||
Loan commitment | $ 5,593,350 | $ 5,411,944 |
Unfunded commitment | $ 463,042 | $ 487,773 |
% of loan commitment | 100.00% | 100.00% |
Loan UPB | $ 5,125,167 | $ 4,919,343 |
% of loan UPB | 100.00% | 100.00% |
Office | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Loan commitment | $ 2,216,171 | $ 2,265,187 |
Unfunded commitment | $ 165,191 | $ 178,878 |
% of loan commitment | 39.60% | 41.90% |
Loan UPB | $ 2,050,980 | $ 2,086,309 |
% of loan UPB | 40.00% | 42.40% |
Multifamily | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Loan commitment | $ 1,715,643 | $ 1,595,643 |
Unfunded commitment | $ 113,372 | $ 121,211 |
% of loan commitment | 30.70% | 29.50% |
Loan UPB | $ 1,602,571 | $ 1,474,731 |
% of loan UPB | 31.30% | 30.00% |
Hotel | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Loan commitment | $ 658,942 | $ 658,943 |
Unfunded commitment | $ 4,000 | $ 4,000 |
% of loan commitment | 11.80% | 12.20% |
Loan UPB | $ 657,358 | $ 657,672 |
% of loan UPB | 12.80% | 13.40% |
Life Science | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Loan commitment | $ 494,600 | $ 494,600 |
Unfunded commitment | $ 156,939 | $ 163,860 |
% of loan commitment | 8.80% | 9.10% |
Loan UPB | $ 337,661 | $ 330,740 |
% of loan UPB | 6.60% | 6.70% |
Mixed Use | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Loan commitment | $ 347,409 | $ 347,408 |
Unfunded commitment | $ 15,230 | $ 17,681 |
% of loan commitment | 6.20% | 6.40% |
Loan UPB | $ 332,179 | $ 329,728 |
% of loan UPB | 6.50% | 6.70% |
Industrial | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Loan commitment | $ 113,000 | |
Unfunded commitment | $ 6,167 | |
% of loan commitment | 2.00% | |
Loan UPB | $ 106,833 | |
% of loan UPB | 2.10% | |
Retail | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Loan commitment | $ 33,000 | $ 33,000 |
Unfunded commitment | $ 2,143 | $ 2,143 |
% of loan commitment | 0.60% | 0.60% |
Loan UPB | $ 23,000 | $ 23,000 |
% of loan UPB | 0.40% | 0.50% |
Condominium | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Loan commitment | $ 14,585 | $ 17,163 |
% of loan commitment | 0.30% | 0.30% |
Loan UPB | $ 14,585 | $ 17,163 |
% of loan UPB | 0.30% | 0.30% |
Concentration of Credit Risk _2
Concentration of Credit Risk - Summary of Loans Held for Investment Portfolio by Property Type (Parenthetical) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Retail | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Non-drawable outstanding unfunded loan commitments | $ 2.1 | $ 2.1 |
Condominium | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Participation interests in whole mortgage loans related to one project and borrower | 24.00% | 24.00% |
Concentration of Credit Risk _3
Concentration of Credit Risk - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Mar. 31, 2022 | |
Risks And Uncertainties [Abstract] | ||
Loan commitment capitalized interest | $ 3 | $ 2.7 |
Commitment related to non-performing retail loan held for investment | $ 7.8 |
Concentration of Credit Risk _4
Concentration of Credit Risk - Summary of Geographic Composition of Loans Held for Investment Based on Current UPB and Loan Commitment (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Loans And Leases Receivable Disclosure [Line Items] | ||
Loan commitment | $ 5,593,350 | $ 5,411,944 |
Unfunded commitment | $ 463,042 | $ 487,773 |
% of loan commitment | 100.00% | 100.00% |
Loan UPB | $ 5,125,167 | $ 4,919,343 |
% of loan UPB | 100.00% | 100.00% |
East | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Loan commitment | $ 2,058,483 | $ 1,925,457 |
Unfunded commitment | $ 50,628 | $ 63,459 |
% of loan commitment | 36.80% | 35.60% |
Loan UPB | $ 2,009,028 | $ 1,863,172 |
% of loan UPB | 39.20% | 37.80% |
West | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Loan commitment | $ 1,503,608 | $ 1,484,883 |
Unfunded commitment | $ 235,822 | $ 244,100 |
% of loan commitment | 26.90% | 27.40% |
Loan UPB | $ 1,260,631 | $ 1,233,628 |
% of loan UPB | 24.60% | 25.10% |
South | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Loan commitment | $ 1,283,455 | $ 1,323,800 |
Unfunded commitment | $ 110,144 | $ 115,714 |
% of loan commitment | 22.90% | 24.50% |
Loan UPB | $ 1,173,852 | $ 1,208,940 |
% of loan UPB | 22.90% | 24.60% |
Midwest | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Loan commitment | $ 677,804 | $ 677,804 |
Unfunded commitment | $ 60,281 | $ 64,500 |
% of loan commitment | 12.10% | 12.50% |
Loan UPB | $ 617,823 | $ 613,603 |
% of loan UPB | 12.10% | 12.50% |
Various | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Loan commitment | $ 70,000 | |
Unfunded commitment | $ 6,167 | |
% of loan commitment | 1.30% | |
Loan UPB | $ 63,833 | |
% of loan UPB | 1.20% |
Concentration of Credit Risk _5
Concentration of Credit Risk - Summary of Geographic Composition of Loans Held for Investment Based on Current UPB and Loan Commitment (Parenthetical) (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Retail | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Non-drawable outstanding unfunded loan commitments | $ 2.1 | $ 2.1 |
Concentration of Credit Risk _6
Concentration of Credit Risk - Summary of Loans Held for Investment Portfolio by Loan Category Type (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Loans And Leases Receivable Disclosure [Line Items] | ||
Loan commitment | $ 5,593,350 | $ 5,411,944 |
Unfunded commitment | $ 463,042 | $ 487,773 |
% of loan commitment | 100.00% | 100.00% |
Loan UPB | $ 5,125,167 | $ 4,919,343 |
% of loan UPB | 100.00% | 100.00% |
Moderate Transitional | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Loan commitment | $ 1,948,162 | $ 1,950,739 |
Unfunded commitment | $ 277,464 | $ 294,693 |
% of loan commitment | 34.80% | 36.10% |
Loan UPB | $ 1,671,871 | $ 1,657,218 |
% of loan UPB | 32.60% | 33.70% |
Bridge | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Loan commitment | $ 1,852,390 | $ 1,646,895 |
Unfunded commitment | $ 47,509 | $ 47,459 |
% of loan commitment | 33.20% | 30.40% |
Loan UPB | $ 1,798,567 | $ 1,593,436 |
% of loan UPB | 35.10% | 32.40% |
Light Transitional | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Loan commitment | $ 1,757,798 | $ 1,779,310 |
Unfunded commitment | $ 138,069 | $ 145,621 |
% of loan commitment | 31.40% | 32.90% |
Loan UPB | $ 1,619,729 | $ 1,633,689 |
% of loan UPB | 31.60% | 33.20% |
Construction | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Loan commitment | $ 35,000 | $ 35,000 |
% of loan commitment | 0.60% | 0.60% |
Loan UPB | $ 35,000 | $ 35,000 |
% of loan UPB | 0.70% | 0.70% |
Concentration of Credit Risk _7
Concentration of Credit Risk - Summary of Loans Held for Investment Portfolio by Loan Category Type (Parenthetical) (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Retail | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Non-drawable outstanding unfunded loan commitments | $ 2.1 | $ 2.1 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) $ in Thousands | Apr. 26, 2022USD ($) | Apr. 25, 2022 | Apr. 11, 2022USD ($) | Apr. 04, 2022USD ($) | Feb. 22, 2022USD ($) | May 03, 2022USD ($)Loan | Jun. 30, 2022USD ($) | Mar. 31, 2022USD ($) | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) |
Subsequent Event [Line Items] | ||||||||||
Total loan commitment amount | $ 5,593,350 | $ 5,411,944 | ||||||||
Amount payable | 1,166,996 | 1,167,323 | ||||||||
Payments on secured financing | 567,993 | $ 661,991 | ||||||||
Secured Overnight Financing Rate | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Total loan commitment amount | $ 200,000 | |||||||||
Secured Revolving Credit Facility | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Credit facility term | 3 years | |||||||||
Maximum commitment amount | $ 250,000 | $ 43,000 | ||||||||
Secured Revolving Credit Facility | Secured Overnight Financing Rate | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Line of credit, spread on variable rate | 2.00% | |||||||||
Multifamily | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Total loan commitment amount | 1,715,643 | 1,595,643 | ||||||||
Mixed Use | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Total loan commitment amount | $ 347,409 | $ 347,408 | ||||||||
Scenario Forecast | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Gain on sale of real estate owned | $ 13,300 | |||||||||
Subsequent Events | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Number of acre parcel sold | 10 acre parcel | |||||||||
Proceeds from sale of real estate | $ 75,000 | |||||||||
Subsequent Events | Secured Credit Facilities | Barclays | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Total loan commitment amount | $ 500,000 | |||||||||
Initial maturity date | Aug. 13, 2025 | Aug. 13, 2022 | ||||||||
Accordion feature subject to standard approval rights | $ 250,000 | |||||||||
Subsequent Events | Secured Credit Facilities | US Bank | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Payments on secured financing | $ 34,000 | |||||||||
Initial maturity date | Jul. 9, 2022 | |||||||||
Four First Mortgage | Subsequent Events | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Number of first mortgage loans originated | Loan | 5 | |||||||||
Total loan commitment amount | $ 304,200 | |||||||||
Loan commitment principal amount | $ 243,300 | |||||||||
First Mortgage Loan | Subsequent Events | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Number of first mortgage loans originated | Loan | 3 | |||||||||
Total loan commitment amount | $ 215,400 | |||||||||
Loan commitment principal amount | $ 210,800 | |||||||||
First Mortgage Loan | Subsequent Events | Multifamily | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Percentage of loan commitments retired | 71.20% | |||||||||
First Mortgage Loan | Subsequent Events | Mixed Use | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Percentage of loan commitments retired | 28.80% |