Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 03, 2017 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | TRTX | |
Entity Registrant Name | TPG RE Finance Trust, Inc. | |
Entity Central Index Key | 1,630,472 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 59,618,302 | |
Class A Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 1,213,026 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | |
ASSETS | |||
Cash and Cash Equivalents | [1] | $ 64,801 | $ 103,126 |
Restricted Cash | [1] | 499 | 849 |
Accounts Receivable | [1] | 141 | 644 |
Accounts Receivable from Servicer/Trustee | [1] | 51,076 | 34,743 |
Accrued Interest Receivable | [1] | 13,764 | 14,023 |
Loans Held for Investment (includes $2,313,036 and $1,397,610 pledged as collateral under repurchase agreements) | [1] | 2,824,713 | 2,449,990 |
Investment in Commercial Mortgage-Backed Securities, Available-for-Sale (includes $48,029 and $51,305 pledged as collateral under repurchase agreements) | [1] | 86,182 | 61,504 |
Other Assets, Net | [1] | 1,506 | 704 |
Total Assets | [1] | 3,042,682 | 2,665,583 |
Liabilities | |||
Accrued Interest Payable | [1] | 3,733 | 2,907 |
Accrued Expenses | [1] | 8,091 | 6,555 |
Collateralized Loan Obligation (net of deferred financing costs of $0 and $2,541) | [1] | 540,780 | |
Repurchase and Senior Secured Agreements (net of deferred financing costs of $8,753 and $8,159) | [1] | 1,531,345 | 1,013,370 |
Notes Payable (net of deferred financing costs of $2,917 and $2,883) | [1] | 261,875 | 108,499 |
Payable to Affiliates | [1] | 9,148 | 3,955 |
Deferred Revenue | [1] | 557 | 482 |
Dividends Payable | [1] | 20,135 | 18,346 |
Total Liabilities | [1] | 1,834,884 | 1,694,894 |
Commitments and Contingencies—See Note 14 | [1] | ||
Stockholders’ Equity: | |||
Preferred Stock ($0.001 par value; 100,000,000 and 125 shares authorized; 125 and 125 shares issued and outstanding, respectively) | [1] | ||
Additional Paid-in-Capital | [1] | 1,216,725 | 979,467 |
Accumulated Deficit | [1] | (8,968) | (10,068) |
Accumulated Other Comprehensive (Loss) Income | [1] | (20) | 1,250 |
Total Stockholders' Equity | [1],[2] | 1,207,798 | 970,689 |
Total Liabilities and Stockholders' Equity | [1] | 3,042,682 | 2,665,583 |
Common Stock, Undefined Class | |||
Stockholders’ Equity: | |||
Common Stock Value | [1] | 60 | 39 |
Class A Common Stock | |||
Stockholders’ Equity: | |||
Common Stock Value | [1] | 1 | 1 |
Total Stockholders' Equity | $ 1 | $ 1 | |
[1] | At September 30, 2017 there were no VIE assets or liabilities recorded in the Company’s Total Assets and Total Liabilities. The Company’s consolidated Total Assets and Total Liabilities at December 31, 2016 include VIE assets and liabilities of $743.5 million and $542.8 million, respectively. These assets can be used only to satisfy obligations of the VIE, and creditors of the VIE have recourse only to these assets, and not to TPG RE Finance Trust, Inc. See Note 5 to the Consolidated Financial Statements for details | ||
[2] | Shares issued and shares outstanding reflect the impact of the common stock and Class A common stock dividend which was paid upon completion of the Company’s initial public offering on July 25, 2017 to holders of record as of July 3, 2017. See Note 12 to the Consolidated Financial Statements for details. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) (unaudited) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | |
Preferred stock, par value | $ 0.001 | $ 0.001 | |
Preferred stock, authorized shares | 100,000,000 | 125 | |
Preferred stock, shares issued | 125 | 125 | |
Preferred stock, shares outstanding | 125 | 125 | |
Common stock, par value | $ 0.001 | $ 0.001 | |
Common stock, authorized shares | 300,000,000 | 95,500,000 | |
Common stock, shares issued | 59,791,742 | 47,251,165 | |
Common stock, shares outstanding | 59,791,742 | 47,251,165 | |
Total assets | [1] | $ 3,042,682 | $ 2,665,583 |
Total liabilities | [1] | 1,834,884 | 1,694,894 |
Variable Interest Entity, Primary Beneficiary | |||
Total assets | 0 | 743,500 | |
Total liabilities | $ 0 | $ 542,800 | |
Class A Common Stock | |||
Common stock, par value | $ 0.001 | $ 0.001 | |
Common stock, authorized shares | 2,500,000 | 2,500,000 | |
Common stock, shares issued | 1,213,026 | 1,194,863 | |
Common stock, shares outstanding | 1,213,026 | 1,194,863 | |
Repurchase Agreements | |||
Loans pledged as collateral | $ 2,313,036 | $ 1,397,610 | |
Deferred financing costs | 8,753 | 8,159 | |
Commercial Mortgage-Backed Securities | Repurchase Agreements | |||
Available-for-sale securities pledged as collateral | 48,029 | 51,305 | |
Collateralized Loan Obligation | |||
Loans pledged as collateral | 712,158 | ||
Deferred financing costs | 0 | 2,541 | |
Notes Payable | |||
Deferred financing costs | $ 2,917 | $ 2,883 | |
[1] | At September 30, 2017 there were no VIE assets or liabilities recorded in the Company’s Total Assets and Total Liabilities. The Company’s consolidated Total Assets and Total Liabilities at December 31, 2016 include VIE assets and liabilities of $743.5 million and $542.8 million, respectively. These assets can be used only to satisfy obligations of the VIE, and creditors of the VIE have recourse only to these assets, and not to TPG RE Finance Trust, Inc. See Note 5 to the Consolidated Financial Statements for details |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | ||
INTEREST INCOME | |||||
Interest Income | $ 46,734 | $ 40,419 | $ 146,411 | $ 112,551 | |
Interest Expense | (19,150) | (16,937) | (56,585) | (44,943) | |
Net Interest Income | 27,584 | 23,482 | 89,826 | 67,608 | |
OTHER REVENUE | |||||
Other Income, net | 669 | 15 | 1,036 | 326 | |
Total Other Revenue | 669 | 15 | 1,036 | 326 | |
OTHER EXPENSES | |||||
Professional Fees | 1,256 | 1,133 | 2,448 | 2,359 | |
General and Administrative | 1,003 | 387 | 2,192 | 1,833 | |
Servicing and Asset Management Fees | 720 | 1,232 | 3,061 | 2,742 | |
Management Fee | 4,133 | 2,244 | 9,489 | 6,377 | |
Collateral Management Fee | 23 | 207 | 225 | 700 | |
Incentive Management Fee | 327 | 716 | 3,713 | 2,790 | |
Total Other Expenses | 7,462 | 5,919 | 21,128 | 16,801 | |
Income Before Income Taxes | 20,791 | 17,578 | 69,734 | 51,133 | |
Income Taxes | (136) | (140) | (326) | ||
Net Income | 20,791 | 17,442 | 69,594 | 50,807 | |
Preferred Stock Dividends | (4) | (3) | (12) | (11) | |
Net Income Attributable to Common Stockholders | $ 20,787 | $ 17,439 | $ 69,582 | $ 50,796 | |
Basic Earnings per Common Share | [1] | $ 0.35 | $ 0.43 | $ 1.34 | $ 1.30 |
Diluted Earnings per Common Share | [1] | $ 0.35 | $ 0.43 | $ 1.34 | $ 1.30 |
Weighted Average Number of Common Shares Outstanding | |||||
Basic: | [1] | 58,685,979 | 40,946,029 | 51,969,733 | 39,096,974 |
Diluted: | [1] | 58,685,979 | 40,946,029 | 51,969,733 | 39,096,974 |
Dividends Declared per Common Share | [1] | $ 0.33 | $ 0.41 | $ 1.02 | $ 1.18 |
OTHER COMPREHENSIVE INCOME | |||||
Net Income | $ 20,791 | $ 17,442 | $ 69,594 | $ 50,807 | |
Unrealized (Loss) Gain on Commercial Mortgage-Backed Securities | (2,558) | 1,542 | (1,270) | 2,579 | |
Comprehensive Net Income | $ 18,233 | $ 18,984 | $ 68,324 | $ 53,386 | |
[1] | Share and per share data reflect the impact of the common stock and Class A common stock dividend which was paid upon completion of the Company’s initial public offering on July 25, 2017 to holders of record as of July 3, 2017. See Note 12 to the Consolidated Financial Statements for details. |
Consolidated Statement of Chang
Consolidated Statement of Changes in Equity (Unaudited) - USD ($) $ in Thousands | Total | Class A Common Stock | Preferred Stock | Common Stock | Additional Paid-in-Capital | Accumulated Deficit | Accumulated Other Comprehensive (Loss) Income | |
Balance at Dec. 31, 2015 | $ 716,350 | $ 1 | $ 29 | $ 729,477 | $ (13,157) | |||
Balance, Shares at Dec. 31, 2015 | 783,158 | 125 | 28,309,783 | |||||
Issuance of Class A Common Stock | 1,832 | 1,832 | ||||||
Issuance of Class A Common Stock, Shares | 74,401 | |||||||
Issuance of Common Stock | 98,168 | $ 4 | 98,164 | |||||
Issuance of Common Stock, Shares | 3,987,337 | |||||||
Net Income | 50,807 | 50,807 | ||||||
Other Comprehensive Income (Loss) | 2,579 | $ 2,579 | ||||||
Dividends on Preferred Stock | (11) | (11) | ||||||
Dividends on Common Stock | (47,292) | (47,292) | ||||||
Dividends on Class A Common Stock | (1,224) | (1,224) | ||||||
Balance at Sep. 30, 2016 | 821,209 | $ 1 | $ 33 | 829,473 | (10,877) | 2,579 | ||
Balance, Shares at Sep. 30, 2016 | 857,559 | 125 | 32,297,120 | |||||
Balance at Dec. 31, 2016 | 970,689 | [1],[2] | $ 1 | $ 39 | 979,467 | (10,068) | 1,250 | |
Balance, Shares at Dec. 31, 2016 | 967,500 | 125 | 38,260,053 | |||||
Issuance of Class A Common Stock | 365 | 365 | ||||||
Issuance of Class A Common Stock, Shares | 14,711 | |||||||
Issuance of Common Stock | 257,634 | $ 12 | 257,622 | |||||
Issuance of Common Stock, Shares | 12,642,166,000 | |||||||
Common Stock and Class A Common Stock Dividend | $ 9 | (9) | ||||||
Common Stock and Class A Common Stock Dividend, Shares | 230,815 | 9,224,268 | ||||||
Retired Common Stock | (6,558) | (7) | (6,551) | |||||
Retired Common Stock, Shares | (334,745) | |||||||
Initial Public Offering Transaction Costs | (20,713) | (20,713) | ||||||
Net Income | 69,594 | 69,594 | ||||||
Other Comprehensive Income (Loss) | (1,270) | (1,270) | ||||||
Dividends on Preferred Stock | (12) | (12) | ||||||
Dividends on Common Stock | (60,566) | (60,566) | ||||||
Dividends on Class A Common Stock | (1,365) | (1,365) | ||||||
Balance at Sep. 30, 2017 | $ 1,207,798 | [1],[2] | $ 1 | $ 60 | $ 1,216,725 | $ (8,968) | $ (20) | |
Balance, Shares at Sep. 30, 2017 | 1,213,026 | 125 | 59,791,742 | |||||
[1] | At September 30, 2017 there were no VIE assets or liabilities recorded in the Company’s Total Assets and Total Liabilities. The Company’s consolidated Total Assets and Total Liabilities at December 31, 2016 include VIE assets and liabilities of $743.5 million and $542.8 million, respectively. These assets can be used only to satisfy obligations of the VIE, and creditors of the VIE have recourse only to these assets, and not to TPG RE Finance Trust, Inc. See Note 5 to the Consolidated Financial Statements for details | |||||||
[2] | Shares issued and shares outstanding reflect the impact of the common stock and Class A common stock dividend which was paid upon completion of the Company’s initial public offering on July 25, 2017 to holders of record as of July 3, 2017. See Note 12 to the Consolidated Financial Statements for details. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | ||
Cash Flows from Operating Activities: | |||
Net Income | $ 69,594 | $ 50,807 | |
Adjustment to Reconcile Net Income to Net Cash Provided by (Used in) Operating Activities: | |||
Amortization and Accretion of Premiums, Discounts and Loan Origination Fees, Net | (15,867) | (5,327) | |
Amortization of Deferred Financing Costs | 9,160 | 6,843 | |
Capitalized Accrued Interest | 1,865 | 13,098 | |
Gain on Sales of Loans Held for Investment and Commercial Mortgage-Backed Securities, net | (185) | ||
Cash Flows Due to Changes in Operating Assets and Liabilities: | |||
Accounts Receivable | 503 | 2,699 | |
Accrued Interest Receivable | (776) | (3,792) | |
Accrued Expenses | (2,454) | 787 | |
Accrued Interest Payable | 826 | 1,062 | |
Payable to Affiliates | 5,193 | 1,650 | |
Deferred Fee Income / Gain | 75 | ||
Other Assets | (694) | ||
Net Cash Provided by (Used in) Operating Activities | 67,240 | 67,827 | |
Cash Flows from Investing Activities: | |||
Restricted Cash | 350 | (644) | |
Origination of Loans Held for Investment | (1,149,911) | (333,885) | |
Purchase of Loans Held for Investment | (339,118) | ||
Advances on Loans Held for Investment | (226,187) | (234,397) | |
Principal Advances Held by Servicer/Trustee | 496 | 3,021 | |
Principal Repayments of Loans Held for Investment | 975,258 | 362,314 | |
Proceeds from Sales of Loans Held for Investment | 65,054 | ||
Purchase of Commercial Mortgage-Backed Securities | (96,294) | (49,549) | |
Principal Repayments of Mortgage-Backed Securities | 29,802 | 1,166 | |
Purchases of Fixed Assets | (108) | ||
Net Cash Provided by (Used in) Investing Activities | (401,540) | (591,092) | |
Cash Flows from Financing Activities: | |||
Payments on Collateralized Loan Obligation | (559,574) | (269,561) | |
Proceeds from Collateralized Loan Obligation | 16,254 | 68,827 | |
Payments on Secured Financing Agreements | (621,552) | (282,044) | |
Proceeds from Secured Financing Agreements | 1,293,530 | 907,573 | |
Payment of Deferred Financing Costs | (6,207) | (5,776) | |
Capital Calls Received in Advance | 34,732 | ||
Payment to Retire Common Stock | (6,000) | ||
Net Cash Provided by (Used in) Financing Activities | 295,975 | 497,601 | |
Net Change in Cash and Cash Equivalents | (38,325) | (25,664) | |
Cash and Cash Equivalents at Beginning of Period | 103,126 | [1] | 104,936 |
Cash and Cash Equivalents at End of Period | 64,801 | [1] | 79,272 |
Supplemental Disclosure of Cash Flow Information: | |||
Interest Paid | 46,600 | 36,391 | |
Taxes Paid | 141 | 326 | |
Supplemental Disclosure of Non-Cash Investing and Financing Activities: | |||
Principal Repayments of Loans Held for Investment by Servicer/Trustee, Net | 51,076 | 131,118 | |
Dividends Declared, not paid | 20,135 | [1] | 16,978 |
Accrued Initial Public Offering Transaction Costs | 2,391 | ||
Accrued Deferred Financing Costs | 2,290 | 2,748 | |
Accrued Common Stock Retirement Costs | 559 | ||
Initial Public Offering | |||
Cash Flows from Financing Activities: | |||
Payment of Initial Public Offering Transaction Costs | (4,341) | ||
Commercial Mortgage-Backed Securities | |||
Supplemental Disclosure of Non-Cash Investing and Financing Activities: | |||
Unrealized Gain on Commercial Mortgage-Backed Securities, Available-for-Sale | 1,270 | 2,579 | |
Common Stock, Undefined Class | |||
Cash Flows from Financing Activities: | |||
Proceeds from Issuance of Common Stock | 243,654 | 98,168 | |
Dividends paid | (58,743) | (54,680) | |
Class A Common Stock | |||
Cash Flows from Financing Activities: | |||
Proceeds from Issuance of Common Stock | 365 | 1,832 | |
Dividends paid | (1,403) | (1,463) | |
Preferred Stock | |||
Cash Flows from Financing Activities: | |||
Dividends paid | $ (8) | $ (7) | |
[1] | At September 30, 2017 there were no VIE assets or liabilities recorded in the Company’s Total Assets and Total Liabilities. The Company’s consolidated Total Assets and Total Liabilities at December 31, 2016 include VIE assets and liabilities of $743.5 million and $542.8 million, respectively. These assets can be used only to satisfy obligations of the VIE, and creditors of the VIE 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 | 9 Months Ended |
Sep. 30, 2017 | |
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 a Maryland company incorporated on October 24, 2014 and commenced operations on December 18, 2014 (“Inception”). We are organized as a holding company and conduct our operations primarily through our various subsidiaries. We conduct our operations as a real estate investment trust (“REIT”) for U.S. federal income tax purposes. We generally will not be subject to U.S. federal income taxes on our taxable income to the extent that we annually distribute all of our net taxable income to stockholders and maintain our qualification as a REIT. We also operate our business in a manner that permits us 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 assets, primarily consisting 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, and commercial mortgage-backed securities (“CMBS”). As of September 30, 2017 and December 31, 2016, the Company conducted substantially all of its operations through a limited liability company, TPG RE Finance Trust Holdco, LLC (“Holdco”), and the Company’s other wholly-owned subsidiaries. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
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, a consolidated variable interest entity for which the Company was the primary beneficiary through August 23, 2017, and its wholly-owned subsidiaries (see Note 5 for details). All intercompany transactions and balances have been eliminated. Use of Estimates The preparation of the interim 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 interim consolidated financial statements include, but are not limited to: impairment; adequacy of provisions for loan losses; and valuation of financial instruments. Principles of Consolidation Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810—Consolidation (“ASC 810”) provides guidance on the identification of a VIE (a variable interest entity 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 it 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 conclusion 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 accordingly. Revenue Recognition Interest income on loans is accrued using the interest method based on the contractual terms of the loan, adjusted for credit impairment, 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. The Company considers a loan to be non-performing and places loans on non-accrual status at such time as: (1) management determines the borrower is incapable of, or has ceased efforts toward, curing the cause of a default; (2) the loan becomes 90 days delinquent; or (3) the loan has a maturity default. While on non-accrual status, based on the Company’s judgment as to collectability of principal, loans are either accounted for on a cash basis, where interest income is recognized only upon receipt of cash for principal and interest payments, or on a cost-recovery basis, where all cash receipts reduce a 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 payoff, are reported at their outstanding principal balances net of any premiums, discounts, loan origination fees and an allowance for loan losses. 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. The Company evaluates each loan classified as a loan receivable held for investment for impairment on a quarterly basis. Impairment occurs when it is deemed probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan. If the loan is considered to be impaired, an allowance is recorded to reduce the carrying value of the loan to the present value of the expected future cash flows discounted at the loan’s contractual effective rate, or the fair value of the collateral, less estimated costs to sell, if recovery of the Company’s investment is expected solely from the sale of the collateral. As part of the quarterly impairment review, we evaluate the risk of each loan and assign a risk rating based on a variety of factors, grouped as follows to include (without limitation): (i) loan and credit structure, including the as-is loan-to-value (“LTV”) and structural features; (ii) quality and stability of real estate value and operating cash flow, including debt yield, property type, dynamics of the geographic, property-type and local market, physical condition, stability of cash flow, leasing velocity and quality and diversity of tenancy; (iii) performance against underwritten business plan; and (iv) quality, experience and financial condition of sponsor, borrower and guarantor(s). Based on a 5-point scale, our 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, and material differences exist from business plan; technical milestones have been missed; defaults may exist, or may soon occur absent material improvement; and 5- Risk of Impairment/Default—Collateral performance is significantly worse than underwriting; major variance from business plan; loan covenants or technical milestones have been breached; timely exit from loan via sale or refinancing is questionable. Since Inception, the Company has not recorded asset-specific loan loss reserves, nor has it recognized any impairments on its loan portfolio. Our determination of asset-specific loan loss reserves, should any such reserves be necessary, relies on material estimates regarding the fair value of any loan collateral. Such losses could be caused by various factors, including, but not limited to, unanticipated adverse changes in the economy or events adversely affecting specific assets, borrowers, industries in which our borrowers operate or markets in which our borrowers or their properties are located. Significant judgment is required when evaluating loans for impairment. The Company’s loans are typically collateralized by real estate or a partnership, or similar, equity interest in an entity that owns real estate. As a result, the Company regularly evaluates on a loan-by-loan basis the extent and impact of any credit deterioration associated with the performance and/or value of the underlying collateral property as well as the financial and operating capability of the borrower/sponsor. The Company also evaluates the financial wherewithal of any loan guarantors 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 impairment analyses are completed and reviewed by asset management personnel and evaluated by senior management, who utilize various data sources, including (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. Commercial Mortgage-Backed Securities The Company invests in CMBS for cash management and investment purposes. The Company designates as available-for-sale its CMBS investments on the date of acquisition of the investment. CMBS that are not classified as held-to-maturity and which the Company does not hold for the purpose of selling in the near-term, but may dispose of prior to maturity, are also designated as available-for-sale and are carried at fair value. The Company’s recognition of interest income from its CMBS, including its amortization of premium and discount, follows the Company’s revenue recognition policy. The Company uses a specific identification method when determining the cost of security sold and the amount reclassified out of accumulated other comprehensive income into earnings. Unrealized losses on securities that, in the judgment of management, are other than temporary are charged against earnings as a loss in the consolidated statements of income. Significant valuation inputs are Level II in the fair value hierarchy as described under “Fair Value Measurements”. Portfolio Financing Arrangements The Company finances certain of its loan and CMBS investments using secured revolving repurchase agreements, asset-specific financing arrangements (notes payable on the consolidated balance sheets), a senior secured credit facility, and, prior to August 23, 2017, its private collateralized loan obligation (“CLO”). 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 September 30, 2017, the Company has transferred 100% of the senior mortgage loan that the Company originated on a non-recourse basis to a third-party lender and has 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 loan 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 and not the non-consolidated senior loan interest sold or co-originated that the Company transferred. Fair Value Measurements The Company follows ASC 820-10, Fair Value Measurements and Disclosures “ASC 820-10” Level I Level II Level III For certain financial instruments, the various inputs that management uses 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. 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, commencing with its 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. 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 (including any applicable alternative minimum tax) 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. 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 Earnings per Common Share The Company utilizes the two-class method when assessing participating securities to calculate earnings per common share. Basic and diluted earnings per common share is computed by dividing net income attributable to common stockholders (i.e., holders of common stock and Class A common stock), divided by the weighted-average number of common shares (both common stock and Class A common stock) outstanding during the period. The preferences, rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications and terms and conditions of redemption of the Class A common stock are identical to the common stock, except (1) the Class A common stock is not a “margin security” as defined in Regulation U of the Board of Governors of the U.S. Federal Reserve System (and rulings and interpretations thereunder) and may not be listed on a national securities exchange or a national market system and (2) each share of Class A common stock is convertible at any time or from time to time, at the option of the holder, for one fully paid and non-assessable share of common stock. The Class A common stock votes together with the common stock as a single class. Shares of Class A common stock have been issued to, and are owned by, certain individuals or entities affiliated with the Company’s external manager, TPG RE Finance Trust Management, L.P., a Delaware limited partnership (the “Manager”), and the sale or conversion to common stock by investors of such shares of Class A common stock is subject to certain restrictions. Diluted earnings per common share is calculated by including the effect of dilutive securities. The Company currently does not have any outstanding participating securities. Loan Origination Fees Loan origination fees are reflected in loans held for investment on the consolidated balance sheets and include fees charged to borrowers. These fees are amortized into interest income over the life of the related loans held. Deferred Financing Costs Deferred financing costs are reflected net of the collateralized loan obligation and secured financing agreements on the Company’s consolidated balance sheets. These costs are amortized in interest expense using the interest method or on a straight line basis which approximates the interest method over the life of the related obligations. 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 September 30, 2017 and December 31, 2016. The balances in these accounts may exceed the insured limits. Restricted Cash Restricted cash primarily represents deposit proceeds from potential borrowers which may be returned to borrowers, after deducting transaction costs paid by the Company for the benefit of the borrowers, upon the closing of a loan transaction. Recently Issued Accounting Pronouncements In November 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force) In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In May 2014, FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) Deferral of the Effective Date Principal versus Agent Considerations (Reporting Revenue Gross versus Net) Identifying Performance Obligations and Licensing Narrow-Scope Improvements and Practical Expedients |
Loans Held for Investment
Loans Held for Investment | 9 Months Ended |
Sep. 30, 2017 | |
Receivables [Abstract] | |
Loans Held for Investment | (3) Loans Held for Investment The Company currently originates and acquires first mortgage and mezzanine loans secured by commercial properties. These loans can potentially subject the Company to concentrations of credit risk as measured by various metrics, including the property type collateralizing the loan, loan size, loans to a single sponsor and loans in a single geographic area, among others. The Company’s loans held for investment are accounted for at amortized cost. During the nine months ended September 30, 2017, the Company’s subsidiaries originated or acquired 15 loans with a total commitment of approximately $1.5 billion, an unpaid principal balance of $1.1 billion, and unfunded commitments of $229.7 million. To fund these originations, the Company employed financing methods that included repurchase and secured financings, notes payable, and the non-recourse syndication of senior loan interests to third parties that were recognized as sales. Total commitments related to non-recourse senior loan interest syndications for the nine months ended September 30, 2017 were $91.5 million. The following tables present an overview of the loan investment portfolio as of September 30, 2017 and December 31, 2016 (in thousands): September 30, 2017 Loans Receivable Outstanding Principal Unamortized Premium (Discount), Loan Origination Fees, net Carrying Amount Senior loans $ 2,778,553 $ (20,622 ) $ 2,757,931 Subordinated and mezzanine loans 67,135 (353 ) 66,782 Subtotal before allowance 2,845,688 (20,975 ) 2,824,713 Allowance for loan losses — — — Total $ 2,845,688 $ (20,975 ) $ 2,824,713 December 31, 2016 Loans Receivable Outstanding Principal Unamortized Premium (Discount), Loan Origination Fees, net Carrying Amount Senior loans $ 2,429,632 $ (20,931 ) $ 2,408,701 Subordinated and mezzanine loans 41,446 (157 ) 41,289 Subtotal before allowance 2,471,078 (21,088 ) 2,449,990 Allowance for loan losses — — — Total $ 2,471,078 $ (21,088 ) $ 2,449,990 For the nine months ended September 30, 2017, loan portfolio activity was as follows (in thousands): Balance at December 31, 2016 $ 2,449,990 Loans originated 1,149,911 Additional fundings 228,217 Amortization of discount and origination fees 15,607 Deductions during the period: Collection of principal (1,016,246 ) Amortization of premium (2,766 ) Balance at September 30, 2017 $ 2,824,713 At September 30, 2017 and December 31, 2016, there was $0.1 million and $2.9 million, respectively, of unamortized premium and $2.8 million and $12.5 million, respectively, of unamortized discount included in loans held for investment at amortized cost on the consolidated balance sheets. The table below summarizes the carrying values and results of the Company’s internal risk rating review performed as of September 30, 2017 and December 31, 2016 (dollars in thousands): Carrying Value Rating September 30, 2017 December 31, 2016 1 $ — $ 261,261 2 1,073,455 745,340 3 1,695,009 1,205,994 4 56,249 237,395 5 — — Totals $ 2,824,713 $ 2,449,990 Weighted Average Risk Rating (1) 2.6 2.6 (1) Weighted Average Risk Rating calculated based on unpaid principal balance at period end. During the nine months ended September 30, 2017, two loans were moved from the Company’s category four risk rating, one into its category two risk rating and the other into its category three risk rating, as a result of improved operating performance of the underlying loan collateral. Additionally, the Company moved four loans that were classified in its category three risk rating to category four, resulting from a decline in collateral performance. During the nine months ended September 30, 2017, two loans classified in its category four risk rating and three loans classified in its category one risk rating as of December 31, 2016 were repaid during the ordinary course of business. The weighted average risk rating at both September 30, 2017 and December 31, 2016 was 2.6. At September 30, 2017 and December 31, 2016, there were no loans on non-accrual status or that were impaired; thus, the Company did not record a reserve for loan loss. See Note 15 for details about the Company’s mortgage loan originations subsequent to September 30, 2017. |
Commercial Mortgage-Backed Secu
Commercial Mortgage-Backed Securities | 9 Months Ended |
Sep. 30, 2017 | |
Investments Debt And Equity Securities [Abstract] | |
Commercial Mortgage-Backed Securities | (4) Commercial Mortgage-Backed Securities At each of September 30, 2017 and December 31, 2016, the Company had five CMBS designated as available-for-sale. During the three months ended September 30, 2017, the Company sold a CMBS investment for net proceeds of $43.8 million, recognizing in Other income, net a gain on sale of $0.3 million. Detailed information regarding the Company’s available-for-sale CMBS is as follows (dollars in thousands): September 30, 2017 Unamortized Gross Estimated Face Premium Unrealized Fair Amount (Discount) Loss Value Investments, at Fair Value Commercial mortgage-backed securities $ 85,866 $ 336 $ (20 ) $ 86,182 December 31, 2016 Face Amount Unamortized Premium (Discount) Gross Unrealized Gain Estimated Fair Value Investments, at Fair Value Commercial mortgage-backed securities $ 62,927 $ (2,673 ) $ 1,250 $ 61,504 The CMBS fair values are considered Level II fair value measurements within the fair value hierarchy of ASC 820-10. The CMBS fair values are based upon market, broker, counterparty or pricing services quotations, which provide valuation estimates based upon reasonable market order indications. These fair value quotations are subject to significant variability based on market conditions, such as interest rates, credit spreads and market liquidity. The amortized cost and estimated fair value of the Company’s available-for-sale CMBS by contractual maturity are shown in the following table (dollars in thousands): September 30, 2017 Amortized Cost Estimated Fair Value Expected Maturity Date After one, within five years $ 36,700 $ 36,872 After five, within ten years 49,509 49,310 Total investment in commercial mortgage-backed securities, at fair value $ 86,209 $ 86,182 December 31, 2016 Amortized Cost Estimated Fair Value Expected Maturity Date After one, within five years $ 58,962 $ 60,242 After five, within ten years 1,292 1,262 Total investment in commercial mortgage-backed securities, at fair value $ 60,254 $ 61,504 No other than temporary impairments were recognized through income during the nine months ended September 30, 2017 or year ended December 31, 2016. |
Variable Interest Entities and
Variable Interest Entities and Collateralized Loan Obligation | 9 Months Ended |
Sep. 30, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Variable Interest Entities and Collateralized Loan Obligation | (5) Variable Interest Entities and Collateralized Loan Obligation On December 18, 2014, the Company entered into a collateralized loan obligation through TPG RE Finance Trust CLO Issuer, L.P., a wholly-owned subsidiary of the Company (“CLO Issuer”) and on December 29, 2014, the Company acquired from German American Capital Corporation (“GACC”) a portfolio of 75% participation interests in certain loans secured primarily by first mortgages on commercial properties, with a face value of approximately $2.4 billion. To partially fund the investment, on December 18, 2014, the CLO Issuer issued a Class A Note secured by the Company’s 75% participation interests in the portfolio of loans acquired. The Company evaluated in accordance with ASC 810, the key attributes of the CLO Issuer to determine if it was a VIE and, if so, whether the Company was the primary beneficiary of the CLO Issuer’s operating activities. This analysis resulted in the Company concluding that the CLO Issuer was a VIE, that the Company was the primary beneficiary, and that it would consolidate the entity. The CLO Issuer invested in real estate-related loans which were substantially financed by the issuance of debt securities. The Manager was named collateral manager (“CLO Collateral Manager”) for all of the CLO Issuer’s collateral assets. The CLO Collateral Manager was responsible for the activities that most significantly impacted the performance of the underlying assets, including but not limited to monitoring, managing and disposing of collateral assets and managing the CLO Issuer’s compliance with provisions of the CLO indenture. The Company’s involvement with the CLO Issuer primarily affected its financial performance and operating cash flows through amounts recorded to interest income, interest expense and provision for loan losses. The Company consolidated the CLO Issuer because ultimately it had the ability to control the activities that most significantly impacted the economic performance of the entity through its contractual rights with the affiliated CLO Collateral Manager. The CLO Collateral Manager had a contractual duty to the CLO Issuer, which in turn benefited the Company as the owner of 100% of the equity in the CLO Issuer. Additionally, the Company had exposure to the CLO Issuer’s losses to the extent of its equity interests and also had rights to waterfall payments in excess of required payments to the CLO Issuer’s Class A Note holder which would both be significant to the CLO Issuer. At each reporting date, the Company reconsidered its primary beneficiary conclusion to determine if its obligation to absorb losses of, or its rights to receive benefits from, the CLO Issuer could potentially be more than insignificant and if it should consolidate the CLO Issuer. On August 16, 2017, the outstanding principal balance of the Class A Note issued by the CLO Issuer was approximately $118.0 million. On August 16, 2017, the CLO Issuer sold to GACC two first mortgage loan participation interests with an aggregate unpaid principal balance of $12.8 million that collateralized the Class A Note in part and recognized in Other income, net a $0.2 million loss on sale. The sales price of the two first mortgage loans was approximately par value. These loans were sold because they were determined to no longer be consistent with the Company’s current investment strategy. On August 18, 2017, one of the Company’s wholly-owned subsidiaries purchased from the CLO Issuer seven first mortgage loan participation interests with an aggregate unpaid principal balance of $138.5 million that collateralized the remainder of the Class A Note issued by the CLO Issuer. The first mortgage loan participation interests were sold by the CLO Issuer for approximately par value. On August 23, 2017, proceeds from both transactions were used in combination with approximately $3.0 million of Company cash to retire all amounts outstanding under the Class A Note issued by the CLO Issuer, which totaled $118.0 million. The collateralized loan obligation was subsequently terminated. The Company’s total assets and total liabilities at December 31, 2016 included the following VIE assets and liabilities (dollars in thousands): December 31, 2016 ASSETS Cash and Cash Equivalents $ 2,133 Accounts Receivable 479 Accounts Receivable from Servicer/Trustee 23,009 Accrued Interest Receivable 5,714 Loans Held for Investment 712,158 Total Assets $ 743,493 LIABILITIES Accrued Interest Payable $ 885 Accrued Expenses 32 Collateralized Loan Obligation 540,780 Payable to Affiliates 933 Deferred Revenue 198 Total Liabilities $ 542,828 Assets held by the CLO Issuer were restricted and could only be used to settle obligations of the entity. The liabilities of the CLO Issuer were non-recourse to the Company and could only be satisfied from the CLO Issuer’s asset pool. From inception of the CLO through its dissolution, the Company did not provide, and was not required to provide, financial support to the CLO Issuer through a liquidity arrangement or otherwise. The following table outlines borrowings and the corresponding collateral under the Company’s consolidated CLO Issuer as of December 31, 2016 (dollars in thousands): As of December 31, 2016 Debt Collateral (loans) Face Value Carrying Value Outstanding Principal Carrying Value $ 543,320 $ 540,780 $ 712,420 $ 712,158 The Company incurred approximately $13.2 million of issuance costs which were amortized on an effective yield basis over the shorter of the remaining life of the loans that collateralized the Class A Note, or the Class A Note. As a result of retiring all amounts outstanding under the Class A Note, the Company recognized an additional $0.9 million of issuance costs during the three months ended September 30, 2017. As of September 30, 2017 and December 31, 2016, the Company’s unamortized issuance costs were $0.0 million and $2.5 million, respectively. Interest on the Class A Note was payable monthly, beginning on December 18, 2014, and for the nine months ended September 30, 2017 and 2016, interest expense (excluding amortization of deferred financing costs) of $9.3 million and $21.8 million, respectively, is included in the Company’s consolidated statements of income as interest expense. |
Notes Payable, Repurchase Agree
Notes Payable, Repurchase Agreements, Senior Secured Credit Facility and Subscription Secured Facility | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Notes Payable, Repurchase Agreements, Senior Secured Credit Facility and Subscription Secured Facility | (6) Notes Payable, Repurchase Agreements, Senior Secured Credit Facility and Subscription Secured Facility At September 30, 2017 and December 31, 2016, the Company had notes payable and repurchase agreements for certain of the Company’s originated loans. In addition, at December 31, 2016, the Company had a subscription secured credit facility outstanding, which facility was terminated in July 2017. On September 29, 2017, the Company entered into a new senior secured credit facility agreement with Bank of America. These financing agreements bear interest at a rate equal to LIBOR plus a credit spread determined primarily by advance rate and property type, or in the case of the subscription secured facility before it was terminated, the creditworthiness of the irrevocable investor commitments that secured the facility. The agreements contain covenants that include certain financial requirements, including maintenance of minimum liquidity, minimum tangible net worth, maximum debt to net worth ratio, current ratio and limitations on capital expenditures, indebtedness, distributions, transactions with affiliates and maintenance of positive net income as defined in the agreements. The following table presents certain information regarding the Company’s notes payable, repurchase agreements, senior secured credit facility, and subscription secured facility as of September 30, 2017 and December 31, 2016, respectively. Except as otherwise noted, all other agreements are held on a non-recourse basis. Amounts included are shown in thousands: As of September 30, 2017 Notes Payable Maturity Date Index Rate Weighted Average Spread Interest Rate Commitment Amount Maximum Current Availability Balance Outstanding Principal Balance of Collateral Bank of the Ozarks 8/23/2019 1 Month Libor 4.5 % 5.7 % $ 92,400 $ 56,175 $ 36,225 $ 51,750 Bank of the Ozarks 8/31/2018 1 Month Libor 4.0 5.2 68,600 17,824 50,776 72,537 Deutsche Bank 9/25/2019 1 Month Libor 3.5 4.7 64,779 19,027 45,752 76,253 Deutsche Bank 6/29/2018 1 Month Libor 3.3 4.5 49,644 21,021 28,623 44,035 Bank of the Ozarks 5/22/2018 1 Month Libor 4.8 6.0 48,750 20,376 28,374 43,653 Deutsche Bank 12/9/2018 1 Month Libor 3.7 4.9 42,543 1 42,542 60,775 BMO Harris Bank (1) 4/9/2020 1 Month Libor 2.7 3.9 32,500 — 32,500 45,000 Subtotal 399,216 134,424 264,792 394,003 Repurchase Agreements Maturity Date Index Rate Weighted Average Spread Interest Rate Commitment Amount Maximum Current Availability Balance Outstanding Principal Balance of Collateral Goldman Sachs (1) 8/19/2018 1 Month Libor 2.2 % 3.4 % $ 750,000 $ 202,428 $ 547,572 $ 841,002 Wells Fargo (1) 5/25/2019 1 Month Libor 2.1 3.4 750,000 356,512 393,488 682,221 JP Morgan (1) 8/20/2018 1 Month Libor 2.5 3.7 417,250 155,382 261,868 380,621 Morgan Stanley (1) 5/3/2019 1 Month Libor 2.4 3.6 400,000 127,268 272,732 397,592 US Bank (1) 10/6/2019 1 Month Libor 2.3 3.5 150,000 129,000 21,000 30,000 Goldman Sachs (CMBS) (2) 10/30/2017 1 Month Libor 1.8 3.0 100,000 64,422 35,578 39,533 Royal Bank of Canada (CMBS) (2) 12/20/2017 1 Month Libor 1.0 2.2 100,000 92,140 7,860 8,418 Subtotal 2,667,250 1,127,152 1,540,098 2,379,387 Senior Secured Credit Facility Maturity Date Index Rate Weighted Average Spread Interest Rate Commitment Amount Maximum Current Availability Balance Outstanding Principal Balance of Collateral Bank of America (1) 9/29/2020 1 Month Libor N/A N/A $ 250,000 $ 250,000 — — Total $ 3,316,466 $ 1,511,576 $ 1,804,890 $ 2,773,390 (1) Borrowings under repurchase agreements, senior secured credit facility, and one note payable with a guarantee for 25% recourse. (2) Borrowings under repurchase agreements with a guarantee for 100% recourse. Maturity Date represents the sooner of the next maturity date of the CMBS repurchase agreement, or roll over date for the applicable underlying trade confirmation, subsequent to September 30, 2017. As of December 31, 2016 Notes Payable Maturity Date Index Rate Weighted Average Spread Interest Rate Commitment Amount Maximum Current Availability Balance Outstanding Principal Balance of Collateral Bank of the Ozarks 8/23/2019 1 Month Libor 4.5 % 5.1 % $ 92,400 $ 72,544 $ 19,856 $ 28,366 Deutsche Bank 9/25/2019 1 Month Libor 3.5 4.1 64,779 30,207 34,572 57,620 Deutsche Bank 12/9/2018 1 Month Libor 3.3 3.9 49,644 29,293 20,351 31,309 Deutsche Bank 9/29/2018 1 Month Libor 3.7 4.3 42,543 5,940 36,603 52,303 Subtotal 249,366 137,984 111,382 169,598 Repurchase Agreements Maturity Date Index Rate Weighted Average Spread Interest Rate Commitment Amount Maximum Current Availability Balance Outstanding Principal Balance of Collateral Goldman Sachs (1) 8/19/2017 1 Month Libor 2.2 % 2.9 % $ 500,000 $ 249,110 $ 250,890 $ 363,146 Wells Fargo (1) 5/25/2019 1 Month Libor 2.2 3.0 500,000 179,729 320,271 461,618 JP Morgan (1) 8/20/2018 1 Month Libor 2.7 3.4 313,750 25,001 288,749 414,269 Morgan Stanley (1) 5/3/2019 1 Month Libor 2.5 3.2 250,000 124,036 125,964 175,884 Goldman Sachs (CMBS) (2) 8/19/2017 1 Month Libor 2.0 2.6 100,000 73,195 26,805 43,500 Royal Bank of Canada (CMBS) (2) 2/9/2021 1 Month Libor 1.0 1.6 100,000 91,150 8,850 9,347 Subtotal 1,763,750 742,221 1,021,529 1,467,764 Subscription Secured Facility Maturity Date Index Rate Weighted Average Spread Interest Rate Commitment Amount Maximum Current Availability Balance Outstanding Principal Balance of Collateral Lloyds Bank 1/6/2018 1 Month Libor 1.8 % 2.5 % $ 250,000 $ 109,142 — — Total $ 2,263,116 $ 989,347 $ 1,132,911 $ 1,637,362 (1) Borrowings under repurchase agreements with a guarantee for 25% recourse. (2) Borrowings under repurchase agreements with a guarantee for 100% recourse. Notes Payable As of September 30, 2017 and December 31, 2016, the Company had seven and four note-on-note financing agreements, respectively, to finance certain of its lending activities. These loans allow for additional advances up to a specified cap and are secured by seven and four loans held for investment, respectively. The Company’s note-on-note agreements have the following guarantees: (1) Deutsche Bank and Bank of the Ozarks: Holdco has provided funding guarantees under which Holdco guarantees the funding obligations of the special purpose lending entity in limited circumstances. In addition, under the Deutsche Bank and Bank of the Ozarks asset-specific financings, Holdco has delivered limited non-recourse carve-out guarantees in favor of the lenders as additional credit support for the financings. These guarantees trigger recourse to Holdco as a result of certain “bad boy” defaults for actual losses incurred by such party, or the entire outstanding obligations of the financing borrower, depending on the nature of the “bad boy” default in question; and (2) BMO Harris: Holdco has delivered a payment guarantee in favor of the lender as additional credit support for the financing. The liability of Holdco under this guarantee is generally capped at 25% of the outstanding obligations of the special purpose subsidiary which is the primary obligor under the financing. In addition, Holdco has delivered a non-recourse carveout guarantee, which can trigger recourse to Holdco as a result of certain “bad boy” defaults for losses incurred by BMO Harris or the entire outstanding obligations of the financing borrower, depending on the nature of the “bad boy” default in question. All loans at September 30, 2017 are guaranteed by Holdco, and the agreements include guarantor covenants regarding liquid assets and net worth requirements. The Company believes it is in compliance with all covenants as of September 30, 2017 and December 31, 2016. One of these loans at September 30, 2017 is 25% recourse to Holdco. Repurchase Agreements The Company frequently utilizes repurchase agreements to finance the direct origination or acquisition of commercial real estate mortgage loans and CMBS. Under these repurchase agreements, the Company transfers all of its rights, title and interest in the loans or CMBS to the repurchase 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 repurchase counterparty collects all principal and interest on related loans or CMBS and remits to the Company only the net after collecting its interest and other fees. During the nine months ended September 30, 2017 and the year ended December 31, 2016, the Company entered into one and two additional repurchase agreements, respectively, to finance its lending activities. Credit spreads vary depending on property type and advance rate. Assets pledged are mortgage loans collateralized by commercial properties. These facilities are 25% recourse to Holdco. On July 21, 2017, the Company closed an amendment to its existing secured revolving repurchase facility with Morgan Stanley Bank, N.A. to increase the maximum facility amount to $400 million from $250 million. Additionally, the Company has the right to further upsize the facility to $500 million from $400 million upon at least five days’ notice, subject to customary conditions. The facility was also amended to provide for an extended maturity in May 2020 and can be extended by the Company for additional successive one year periods, subject to approval by the lender. As was the case prior to the amendment, the number of extension options is not limited by the terms of this facility. On August 18, 2017, and in connection with the repayment of the Class A Note and the termination of the collateralized loan obligation, the Company closed an amendment to its existing secured revolving repurchase facility with JPMorgan Chase Bank, N.A. to increase the maximum facility amount by $103.5 million, to $417.3 million, and to include as pledged collateral under the facility the seven first mortgage loan participation interests purchased from the CLO Issuer by one of our wholly-owned subsidiaries on August 18, 2017. With respect only to the upsize amount, amounts borrowed may not be repaid and reborrowed. All other material terms of the credit facility remain unchanged. At September 30, 2017 and December 31, 2016, the Company had two securities repurchase agreements to finance its CMBS investing activities. Credit spreads vary depending upon the CMBS and advance rate. Assets pledged at September 30, 2017 and December 31, 2016 consisted of three and three mortgage-backed securities, respectively. These facilities are 100% recourse to Holdco. The agreements include various covenants covering net worth, liquidity, recourse limitations, and debt coverage. The Company believes it is in compliance with all covenants as of September 30, 2017 and December 31, 2016. The following table summarizes certain characteristics of the Company’s repurchase agreements secured by commercial mortgage loans, all of which are considered long-term borrowings, and comprise counterparty concentration risks, at September 30, 2017 (in thousands): September 30, 2017 UPB of Collateral Carrying Value of Collateral (1) Amounts Payable under Repurchase Agreements (2) Net Counterparty Exposure (3) Percent of Stockholders Equity Days to Extended Maturity Goldman Sachs Bank $ 841,002 $ 836,913 $ 548,306 $ 288,607 23.9 % 688 Wells Fargo Bank 682,221 678,256 394,007 284,249 23.5 1,333 Morgan Stanley Bank (4) 397,592 396,370 273,144 123,226 10.2 N/A JP Morgan Chase Bank 380,621 381,178 262,403 118,775 9.8 1,055 US Bank 30,000 29,514 21,058 8,456 0.7 1,467 Subtotal / Weighted Average 2,331,436 2,322,231 1,498,918 823,313 987 (1) Amounts shown in the table include interest receivable of $9.2 million and are net of premium, discount and origination fees of $18.4 million. (2) Amounts shown in the table include interest payable of $2.3 million and do not reflect unamortized deferred financing fees of $8.7 million. (3) Represents 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. (4) The Morgan Stanley Bank credit facility is excluded from the Days to Extended Maturity calculation because it does not have a contractual maturity date. The following table summarizes certain characteristics of the Company’s repurchase agreements secured by CMBS, all of which are considered short-term borrowings, and comprise counterparty concentration risks, at September 30, 2017 (in thousands): September 30, 2017 UPB of Collateral Carrying Value of Collateral (1) Amounts Payable under Repurchase Agreements (2) Net Counterparty Exposure (3) Percent of Stockholders Equity Days to Extended Maturity (4) Goldman Sachs Bank $ 39,533 $ 39,398 $ 35,767 $ 3,631 0.3 % 30 Royal Bank of Canada 8,418 8,721 7,903 818 0.1 81 Subtotal / Weighted Average 47,951 48,119 43,670 4,449 39 Total / Weighted Average - Loans and CMBS $ 2,379,387 $ 2,370,350 $ 1,542,588 $ 827,762 955 (1) Amounts shown in the table include interest receivable of $0.1 million and are net of premium, discount, and unrealized gains of $0.1 million. (2) Amounts shown in the table include interest payable of $0.2 million and do not reflect unamortized deferred financing fees of $0.1 million. (3) Represents the net carrying value of available-for-sale securities 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. (4) Represents the sooner of the next maturity date of the CMBS repurchase agreement, or roll over date for the applicable underlying trade confirmation, subsequent to September 30, 2017. The following table summarizes certain characteristics of the Company’s repurchase agreements secured by commercial mortgage loans, all of which are considered long-term borrowings, and comprise counterparty concentration risks, at December 31, 2016 (in thousands): December 31, 2016 UPB of Collateral Carrying Value of Collateral (1) Amounts Payable under Repurchase Agreements (2) Net Counterparty Exposure (3) Percent of Stockholders Equity Days to Extended Maturity Wells Fargo Bank $ 461,618 $ 450,338 $ 320,175 $ 130,163 13 % 1,606 JP Morgan Chase Bank 414,269 414,461 289,206 125,255 13 1,328 Goldman Sachs Bank 363,146 361,964 251,366 110,598 11 961 Morgan Stanley Bank (4) 175,884 175,178 126,152 49,026 5 N/A Subtotal / Weighted Average 1,414,917 1,401,941 986,899 415,042 3,895 (1) Amounts shown in the table include interest receivable of $0.004 million and are net of premium, discount and origination fees of $0.02 million. (2) Amounts shown in the table include interest payable of $0.001 million and do not reflect unamortized deferred financing fees of $0.01 million. (3) Represents 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. (4) The Morgan Stanley Bank credit facility is excluded from the Days to Extended Maturity calculation because it does not have a contractual maturity date. The following table summarizes certain characteristics of the Company’s repurchase agreements secured by CMBS, all of which are considered short-term borrowings, and comprise counterparty concentration risks, at December 31, 2016 (in thousands): December 31, 2016 UPB of Collateral Carrying Value of Collateral(1) Amounts Payable under Repurchase Agreements(2) Net Counterparty Exposure(3) Percent of Stockholders Equity Days to Extended Maturity Goldman Sachs Bank $ 43,500 $ 41,403 $ 26,832 $ 14,571 2 % 1,502 Royal Bank of Canada 9,347 9,932 8,856 1,076 — 1,507 Subtotal / Weighted Average 52,847 51,335 35,688 15,647 3,009 Total / Weighted Average - Loans and CMBS $ 1,467,764 $ 1,453,276 $ 1,022,587 $ 430,689 1,331 (1) Amounts shown in the table include interest receivable of $0.03 million and are net of premium, discount, and unrealized gains of $2.7 million. (2) Amounts shown in the table include interest payable of $0.03 million and do not reflect unamortized deferred financing fees of $0.01 million. (3) Represents the net carrying value of available-for-sale securities 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. Senior Secured Credit Facility On September 29, 2017, the Company entered into a senior secured credit facility agreement with Bank of America that has a maximum facility amount $250 million, which may increase from time to time, up to $500 million, at the request of the Company and agreement by the lender. The current extended maturity of this facility is September 2022. Subscription Secured Facility On January 6, 2016, the Company entered into a subscription secured revolving credit facility with a commitment of $250 million. Borrowing ability is limited to the lesser of $250 million and 66.67% of unfunded commitments from included investors as defined in the agreement. The credit facility term is two years with a one year extension option at a rate of LIBOR plus 1.75%. In connection with the completion of the Company’s initial public offering in July 2017, the Company cancelled the unfunded commitments and terminated this facility. |
Schedule of Maturities
Schedule of Maturities | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Maturities | (7) Schedule of Maturities The future principal payments for the five years subsequent to September 30, 2017 and thereafter are as follows (in thousands): Senior Secured Credit Facility Repurchase Agreements Notes Payable 2017 $ — $ 101,485 $ — 2018 — 901,253 186,540 2019 — 537,360 45,752 2020 — — 32,500 2021 — — — Thereafter — — — Total $ — $ 1,540,098 $ 264,792 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2017 | |
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 accounts payable and accrued liabilities. At September 30, 2017, the Company had $58.9 million 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, a collateralized loan obligation, and secured financing arrangements 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. The Company did not have any nonrecurring fair value items as of September 30, 2017 and December 31, 2016. The following tables provide information about financial assets and liabilities not carried at fair value on a recurring basis in our consolidated balance sheet (dollars in thousands): September 30, 2017 Carrying Value Level I Level II Level III Financial Assets Loans Held for Investment $ 2,824,713 $ — $ — $ 2,848,390 Financial Liabilities Secured Financing Arrangements 1,793,220 — — 1,793,220 December 31, 2016 Carrying Value Level I Level II Level III Financial Assets Loans Held for Investment $ 2,449,990 $ — $ — $ 2,469,717 Financial Liabilities Collateralized Loan Obligation 540,780 — — 540,780 Secured Financing Arrangements 1,121,869 — — 1,121,869 Level III fair values were determined based on standardized valuation models and significant unobservable market inputs, including holding period, discount rates based on loan to value, property type and loan pricing expectations developed by the Manager that were corroborated with other institutional lenders to determine a market spread that was added to the one-month LIBOR forward curve. There were no transfers of financial assets or liabilities within the fair value hierarchy during the current period. At September 30, 2017 and December 31, 2016, the estimated fair value of loans held for investment was $2.8 billion and $2.5 billion, respectively. The average gross spread at September 30, 2017 and December 31, 2016 was 4.88% and 5.10%, respectively. The weighted average years to maturity was 3.5 years, assuming full extension of all loans, at September 30, 2017. At September 30, 2017 and December 31, 2016, the carrying value of the secured financing agreements approximates fair value as current borrowing spreads reflect market terms. At December 31, 2016, the carrying value of the collateralized loan obligation approximates fair value as current borrowing spreads reflect market terms. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | (9) Income Taxes As of September 30, 2017 and December 31, 2016, the Company indirectly owns 100% of the equity of TPG RE Finance Trust CLO TRS Corp. (“CLO TRS”), TPG RE Finance Trust CLO TRS 1 Corp. (“TRS 1”) and TPG RE Finance Trust CLO TRS 2 Corp. (“TRS 2”), each of which is a taxable REIT subsidiary (collectively, “TRS”). TRS is subject to applicable U.S. federal, state, local and foreign income tax on its 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 TRS 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 regulatory agencies until the related statute of limitations expires, with open tax years for all years since the Company’s initial capitalization in 2014. The years open to examination range from 2014 to present. The Company’s TRS had no operations as of September 30, 2017 and December 31, 2016, and accordingly no deferred tax assets or liabilities exist relating to the TRS’s operations. 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 September 30, 2017 and December 31, 2016, based on the Company’s evaluation, there is no reserve for any 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. For the periods ended September 30, 2017 and 2016, the Company did not have interest or penalties associated with the underpayment of any income taxes. For the three and nine months ended September 30, 2017 and September 30, 2016, the Company incurred $0.0 million and $0.1 million, respectively, and $0.1 million and $0.3 million, respectively, of federal, state and local tax expense relating to its TRS. At September 30, 2017 and 2016, the Company’s effective tax rate was 0.2% and 0.6%, respectively. At September 30, 2017 and December 31, 2016, the Company had no deferred tax assets or liabilities. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | (10) Related Party Transactions Management Agreements The Company is externally managed and advised by the Manager and, through July 24, 2017, paid the Manager a management fee in accordance with the management agreement which was executed on December 15, 2014 (the “pre-IPO Management Agreement”). For the three months ended September 30, 2017, the management fee and incentive management fee calculated under the pre-IPO Management Agreement was from July 1, 2017 through July 24, 2017, or 24 days. The management fee is equal to 1.25% of the Company’s stockholders’ equity per annum, which is calculated and payable quarterly in arrears. For purposes of calculating the management fee, stockholders’ equity means: (i) the sum of (A) the net proceeds received by the Company from all issuances of the Company’s common stock, plus (B) the Company’s cumulative Core Earnings from and after the date of the pre-IPO Management Agreement to the end of the most recently completed calendar quarter, (ii) less (A) any distributions to the Company’s stockholders from and after the date of the pre-IPO Management Agreement, (B) any amount that the Company or any of its subsidiaries has paid to repurchase the Company’s common stock since the date of the pre-IPO Management Agreement, and (C) any incentive management fee paid from and after the date of the pre-IPO Management Agreement. With respect to that portion of the period from and after the date of the pre-IPO Management Agreement that is used in any calculation of the incentive management fee or the management fee, all items in the foregoing sentence (other than clause (i) (B)) are calculated on a daily weighted average basis. In addition, the Manager is entitled to an incentive management fee each calendar quarter in arrears in an amount, not less than zero, equal to the product of (i) 16% and (ii) the positive sum, if any, remaining after (A) Core Earnings of the Company for such calendar quarter are reduced by (B) the product of (1) the Company’s stockholders’ equity as of the end of such calendar quarter, and (2) 7% per annum; provided, however, that no incentive management fee is payable with respect to any calendar quarter unless Core Earnings for the 12 most recently completed calendar quarters is greater than zero. The Manager also acts as Collateral Manager for the CLO. The collateral management fee is equal to 0.075% per annum of the aggregate par amount of the loans in the CLO, and is calculated and payable monthly in arrears in cash. Pursuant to an arrangement that the Company had with the Manager prior to the Company’s initial public offering, the Company was entitled to reduce the base management fee payable to the Manager under the pre-IPO Management Agreement by an amount equal to the collateral management fee the Manager was entitled to receive for acting as the collateral manager for the CLO. After the completion of the initial public offering and prior to the termination of the CLO, the Manager was entitled to earn a collateral management fee for acting as the collateral manager for the CLO without any reduction or offset right to the base management fee payable to the Manager under the Management Agreement (as defined below). As of September 30, 2017 and December 31, 2016, the aggregate par amount of the loans in the CLO was $0.0 million and $712.4 million, respectively. Post-IPO Management Agreement Upon the completion of the Company’s initial public offering on July 25, 2017, the pre-IPO Management Agreement terminated, without payment of any termination fee to the Manager, and the Company entered into a new management agreement with the Manager (the “Management Agreement”). For the three months ended September 30, 2017, the management fee and incentive management fee calculated under the Management Agreement was from July 25, 2017 through September 30, 2017, or 68 days. 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) and 1.50% per annum (0.375% per quarter) of the Company’s “Equity.” The base management fee is payable in cash, quarterly in arrears. “Equity” means: (1) the sum of (a) the net proceeds received by the Company from all issuances of the Company’s common stock and Class A common stock (for purposes of calculating this amount, the net proceeds received by the Company from all issuances of the Company’s outstanding common stock and Class A common stock prior to the completion of the Company’s initial public offering equals approximately $1.0 billion), plus (b) the Company’s cumulative Core Earnings for the period commencing on the completion of the Company’s initial public offering to the end of the most recently completed calendar quarter, and (2) less (a) any distributions to the Company’s stockholders following the completion of the Company’s initial public offering, (b) any amount that the Company or any of its subsidiaries have paid to repurchase for cash the Company’s common stock or Class A common stock following the completion of the Company’s initial public offering and (c) any incentive compensation earned by the Manager following the completion of the Company’s initial public offering. With respect to that portion of the period from and after the completion of the Company’s initial public offering that is used in the calculation of incentive compensation, which is described below, or the base management fee, all items in the foregoing sentence (other than the Company’s cumulative Core Earnings) will be calculated on a daily weighted average basis. The Manager is entitled to incentive compensation which is calculated and payable in cash with respect to each calendar quarter following the completion of the Company’s initial public offering (or part thereof that the Management Agreement is in effect) 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 (or such lesser number of completed calendar quarters, if applicable), 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 (or such lesser number of completed calendar quarters, if applicable), 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 (or such lesser number of completed calendar quarters preceding the applicable period, if applicable). 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 (or such lesser number of completed calendar quarters following the completion of the Company’s initial public offering) is greater than zero. The Company is required to reimburse the Manager or its affiliates for documented costs and expenses incurred by it and its affiliates on the Company’s behalf except those specifically required to be borne by the Manager or its affiliates under the Management Agreement. The Company’s reimbursement obligation is not be subject to any dollar limitation. The Manager or its affiliates is responsible for, and the Company will not reimburse the Manager or its affiliates for, the expenses related to the personnel of the Manager and its affiliates who provide services to the Company. However, the Company will reimburse the Manager for 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 September 30, 2017 and 2016, the Company paid an aggregate of $1.1 million and $3.2 million, respectively, to the Manager for management fees and incentive management fees under the pre-IPO Management Agreement and collateral management fees under the collateral management agreement for the CLO. For the nine months ended September 30, 2017 and 2016, the Company paid an aggregate of $10.0 million and $9.9 million, respectively, to the Manager for management fees and incentive management fees under the pre-IPO Management Agreement and collateral management fees under the collateral management agreement for the CLO. For the three and nine months ended September 30, 2017, the Company paid an aggregate of $3.4 million to the Manager for management fees and incentive management fees under the Management Agreement and collateral management fees under the collateral management agreement for the CLO. Management fees, incentive management fees, and collateral management fees included in payable to affiliates on the consolidated balance sheets at September 30, 2017 and December 31, 2016, is approximately $4.5 million and $2.9 million, respectively. The Company is responsible for reimbursing the Manager for certain expenses paid by the Manager on behalf of the Company or for certain services provided by the Manager to the Company. Expenses incurred by the Manager and reimbursed by the Company, are reflected in the respective consolidated statements of income expense category or the consolidated balance sheets based on the nature of the item. For the nine months ended September 30, 2017 and 2016, $1.0 million and $0.1 million were incurred by the Manager and reimbursable by the Company, respectively. Termination Fee A termination fee will be payable 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 or, if such termination occurs prior to July 25, 2019, and such termination fee is payable, the base management fees and the incentive compensation will be annualized for such two-year period based on such fees actually received by the Manager during such period. |
Earnings per Share
Earnings per Share | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Earnings per Share | (11) Earnings per Share At September 30, 2017, all share and per share data reflect the impact the common stock and Class A common stock dividend which was paid on July 25, 2017 to holders of record as of July 3, 2017 upon completion of the Company’s initial public offering. The following table sets forth the calculation of basic and diluted earnings per common share (common stock and Class A common stock) based on the weighted-average number of shares of common stock and Class A common stock outstanding (in thousands, except share and per share data): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Net Income Attributable to Common Stockholders $ 20,787 $ 17,439 $ 69,582 $ 50,796 Weighted-Average Common Shares Outstanding, Basic and Diluted 58,685,979 40,946,029 51,969,733 39,096,974 Per Common Share Amount, Basic and Diluted $ 0.35 $ 0.43 $ 1.34 $ 1.30 |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2017 | |
Stockholders Equity Note [Abstract] | |
Stockholders' Equity | (12) Stockholders’ Equity Initial Public Offering On July 25, 2017, the Company completed an initial public offering of 11 million shares of common stock at a price of $20.00 per share for net proceeds of $200.1 million, after deducting underwriting discounts of $13.2 million and estimated offering expenses payable by us of $6.7 million. On August 17, 2017, the underwriters of the Company’s initial public offering partially exercised their option to purchase up to an additional 1,650,000 shares of common stock. On August 22, 2017, the Company issued and sold, and the underwriters purchased, 650,000 shares of common stock for net proceeds of $12.2 million, after deducting underwriting discounts of $0.8 million. The Company used the net proceeds from the offering to originate commercial mortgage loans consistent with its investment strategy and investment guidelines. On July 28, 2017, the Company paid GACC $2.0 million related to its contractual deferred purchase price obligation due in the event the Company consummated an initial public offering on or before December 29, 2017. Stock Dividend On July 3, 2017, we declared a stock dividend that resulted in the issuance of 9,224,268 shares of our common stock and 230,815 shares of our Class A common stock upon the completion of our initial public offering. The stock dividend was paid on July 25, 2017 to holders of record of our common stock and Class A common stock as of July 3, 2017. All prior periods have been restated to give effect to the impact of these transactions on our common and Class A common stock issued, shares outstanding, per share calculations, and basic and diluted weighted average number of common shares outstanding. 10b5-1 Purchase Plan The Company entered into an agreement (the “10b5-1 Purchase Plan”) with Goldman Sachs & Co. LLC, pursuant to which Goldman Sachs & Co. LLC, as our agent, will buy in the open market up to $35.0 million in shares of our common stock in the aggregate during the period beginning on or about August 21, 2017 and ending 12 months thereafter or, if sooner, the date on which all the capital committed to the 10b5-1 Purchase Plan has been exhausted. The 10b5-1 Purchase Plan requires Goldman Sachs & Co. LLC to purchase for us shares of our common stock when the market price per share is below the threshold price specified in the 10b5-1 Purchase Plan which is based on our book value per common share. During the three months ended September 30, 2017, the Company repurchased 0.3 million shares of common stock, at an average price of $19.59 per share, for total consideration (including commissions and related fees) of $6.6 million. At September 30, 2017, the Company’s remaining commitment under the 10b5-1 Purchase Plan is $28.4 million. Subscriptions Prior to the completion of the Company’s initial public offering on July 25, 2017, certain of the Company’s pre-IPO investors entered into subscription agreements for specified capital commitments. Unfunded capital commitments as of December 31, 2016 were $181.0 million. In connection with the completion of the Company’s initial public offering, the stockholders agreement between the Company and certain of the Company’s pre-IPO stockholders and all of the obligations of certain of the Company’s pre-IPO stockholders to purchase additional shares of the Company’s common stock and Class A common stock using the undrawn portion of their capital commitments were terminated. Articles of Amendment and Restatement On July 19, 2017, the Company filed Articles of Amendment and Restatement with the State Department of Assessments and Taxation of Maryland. The Articles of Amendment and Restatement increased the Company’s authorized common stock to 300,000,000 shares of common stock and 2,500,000 shares of Class A common stock with $0.001 par value per share. Additionally, the Articles of Amendment and Restatement increased our authorized preferred stock to 100,000,000 shares of preferred stock with a $0.001 par value per share. Class A common stock has been issued to, and is owned by, certain individuals or entities affiliated with the Manager, and the sale or conversion to common stock by holders of such Class A common stock is subject to certain restrictions. As of September 30, 2017, the Company’s authorized common stock consisted of 300,000,000 shares of common stock and 2,500,000 shares of Class A common stock with $0.001 par value per share. As of September 30, 2017 and December 31, 2016, the Company had total common stock and Class A common stock shares of 61,004,768 and 48,446,028 issued and outstanding, respectively. Dividends Prior to the completion of the Company’s initial public offering, dividends were accrued at the time of approval by the Special Actions Committee (the ”Committee”), a standing committee comprised of directors who are employed by TPG Global, LLC or an affiliate thereof. Subsequent to the completion of the Company’s initial public offering, dividends are accrued at the time of approval by the Company’s Board of Directors. Upon the approval of the Committee, or the Company’s Board of Directors, as applicable, 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, and second to the holders of the Company’s common stock and Class A common stock. The Company intends to distribute each year substantially all of its taxable income to its stockholders to comply with the REIT provisions of the Internal Revenue Code of 1986, as amended. On September 26, 2017, the Company’s Board of Directors declared a dividend for the third quarter of 2017 in the amount of $0.33 per share of common stock and Class A common stock, or $20.1 million in the aggregate, which dividend was payable on October 25, 2017 to holders of record of our common stock and Class A common stock as of October 6, 2017. On September 29, 2016, we declared a dividend associated with the third quarter of 2016 in the amount of $0.41 per share of common stock and Class A common stock, or $17.0 million in the aggregate, which was paid on October 26, 2016. For the nine months ended September 30, 2017 and 2016, common and Class A common stock dividends in the amount of $61.9 million and $48.5 million, respectively, were approved. As of September 30, 2017 and December 31, 2016, $20.1 million and $18.3 million, respectively, remain unpaid and are reflected in dividends payable on the Company’s consolidated balance sheets. Liquidation Upon liquidation of the Company, subsequent to the redemption of preferred stock, the net assets attributable to all classes of common stock shall be distributed pro rata among the common shareholders in proportion to the number of shares of common stock, regardless of class, held by each such holder. Other Comprehensive (Loss) Income For the three and nine months ended September 30, 2017 and September 30, 2016, other comprehensive (loss) income was $(2.6) million and $(1.3) million, respectively, and $1.5 million and $2.6 million, respectively. Other comprehensive (loss) income is a result of unrealized (losses) gains on CMBS available-for-sale. 2017 Equity Incentive Plan The Company’s Board of Directors has adopted, and its 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 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, or 7.5% of the issued and outstanding shares of our common stock after completion of our common and Class A common stock dividend, initial public offering and the issuance of shares in connection with the partial exercise of the option to purchase additional shares related to the initial public offering. The Incentive Plan will automatically expire on the tenth anniversary of its effective date, unless terminated earlier by the Company’s Board of Directors. No equity grants were awarded in conjunction with the Company’s initial public offering or have otherwise been made under the Incentive Plan. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | (13) Commitments and Contingencies Unfunded Commitments As of September 30, 2017 and December 31, 2016, the Company had $581.6 million and $574.6 million, respectively, of unfunded commitments related to loans held for investment. These commitments are not reflected on the 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. As of September 30, 2017 and December 31, 2016, the Company was not involved in any material legal proceedings. |
Concentration of Credit Risk
Concentration of Credit Risk | 9 Months Ended |
Sep. 30, 2017 | |
Risks And Uncertainties [Abstract] | |
Concentration of Credit Risk | (14) Concentration of Credit Risk Property Type A summary of the loan portfolio by property type as of September 30, 2017 and December 31, 2016 based on current unpaid principal balance (“UPB”) and full loan commitment is as follows (amounts in thousands): As of September 30, 2017 Property Type Loan Commitment Unfunded Commitment % of Portfolio Loan UPB % of Portfolio Office $ 769,251 $ 148,756 22.4 % $ 620,494 21.8 % Condominium 703,662 205,107 20.6 % 498,556 17.5 % Multifamily 656,975 84,215 19.2 % 572,760 20.1 % Hotel 570,676 25,382 16.7 % 548,945 19.3 % Mixed Use 431,500 58,583 12.6 % 372,917 13.1 % Retail 195,044 48,460 5.7 % 146,584 5.2 % Industrial 86,270 11,087 2.5 % 75,183 2.6 % Other 10,249 — 0.3 % 10,249 0.4 % Total $ 3,423,627 $ 581,590 100.0 % $ 2,845,688 100.0 % As of December 31, 2016 Property Type Loan Commitment Unfunded Commitment % of Portfolio Loan UPB % of Portfolio Condominium $ 821,411 $ 338,222 27.0 % $ 486,646 19.7 % Hotel 644,459 31,282 21.2 % 615,238 24.9 % Office 538,736 99,953 17.7 % 438,783 17.8 % Mixed Use 527,548 74,100 17.4 % 453,448 18.4 % Multifamily 327,578 11,217 10.8 % 316,360 12.8 % Industrial 131,987 11,468 4.3 % 120,519 4.9 % Other 48,483 8,400 1.6 % 40,083 1.6 % Total $ 3,040,202 $ 574,642 100.0 % $ 2,471,078 100.0 % 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 full loan commitment and current UPB is as follows (dollars in thousands): September 30, 2017 Geographic Region Loan Commitment Unfunded Commitment % Loan Commitment Loan UPB % Loan UPB Carrying Amount East $ 1,327,238 $ 149,702 38.8 % $ 1,181,189 41.5 % $ 1,173,142 South 1,093,810 322,937 31.9 % 770,873 27.1 % 763,891 West 674,123 82,810 19.7 % 591,312 20.8 % 587,278 Midwest 259,686 15,054 7.6 % 244,631 8.6 % 242,900 Various 68,770 11,087 2.0 % 57,683 2.0 % 57,502 Total $ 3,423,627 $ 581,590 100.0 % $ 2,845,688 100.0 % $ 2,824,713 December 31, 2016 Geographic Region Loan Commitment Unfunded Commitment % Loan Commitment Loan UPB % Loan UPB Carrying Amount East $ 1,330,003 $ 132,951 43.7 % $ 1,197,052 48.4 % $ 1,192,153 West 867,494 116,057 28.5 % 751,437 30.4 % 741,513 South 578,340 311,166 19.0 % 272,692 11.0 % 268,443 Midwest 179,589 3,000 5.9 % 176,589 7.1 % 175,158 Various 84,776 11,468 2.8 % 73,308 3.0 % 72,723 Total $ 3,040,202 $ 574,642 100.0 % $ 2,471,078 100.0 % $ 2,449,990 Loan commitments represent principal commitments made by the Company, and do not include capitalized interest of $3.7 million and $5.5 million at September 30, 2017 and December 31, 2016, respectively. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | (15) Subsequent Events The following events occurred subsequent to September 30, 2017: Cash Dividend On October 25, 2017, the Company paid a cash dividend on its common stock, to stockholders of record as of October 6, 2017, of $0.33 per share, or $20.1 million. 10b5-1 Purchase Plan From September 30, 2017 through November 3, 2017, the Company repurchased 0.2 million shares of common stock under the 10b5-1 Purchase Plan, at an average price of $19.60 per share for total consideration (including commissions and related fees) of $3.4 million. Senior Mortgage Loan Originations From September 30, 2017 through November 6, 2017, the Company originated three first mortgage loans, representing loans closed and in the process of closing, with an aggregate commitment amount of $294 million. These loans were funded, or will be funded upon closing, with a combination of cash-on-hand and borrowings. The Company has evaluated subsequent events through November 6, 2017, the date which the consolidated financial statements were available to be issued. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
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, a consolidated variable interest entity for which the Company was the primary beneficiary through August 23, 2017, and its wholly-owned subsidiaries (see Note 5 for details). All intercompany transactions and balances have been eliminated. |
Use of Estimates | Use of Estimates The preparation of the interim 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 interim consolidated financial statements include, but are not limited to: impairment; adequacy of provisions for loan losses; and valuation of financial instruments. |
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 VIE (a variable interest entity 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 it 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 conclusion 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 accordingly. |
Revenue Recognition | Revenue Recognition Interest income on loans is accrued using the interest method based on the contractual terms of the loan, adjusted for credit impairment, 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. The Company considers a loan to be non-performing and places loans on non-accrual status at such time as: (1) management determines the borrower is incapable of, or has ceased efforts toward, curing the cause of a default; (2) the loan becomes 90 days delinquent; or (3) the loan has a maturity default. While on non-accrual status, based on the Company’s judgment as to collectability of principal, loans are either accounted for on a cash basis, where interest income is recognized only upon receipt of cash for principal and interest payments, or on a cost-recovery basis, where all cash receipts reduce a 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 payoff, are reported at their outstanding principal balances net of any premiums, discounts, loan origination fees and an allowance for loan losses. 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. The Company evaluates each loan classified as a loan receivable held for investment for impairment on a quarterly basis. Impairment occurs when it is deemed probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan. If the loan is considered to be impaired, an allowance is recorded to reduce the carrying value of the loan to the present value of the expected future cash flows discounted at the loan’s contractual effective rate, or the fair value of the collateral, less estimated costs to sell, if recovery of the Company’s investment is expected solely from the sale of the collateral. As part of the quarterly impairment review, we evaluate the risk of each loan and assign a risk rating based on a variety of factors, grouped as follows to include (without limitation): (i) loan and credit structure, including the as-is loan-to-value (“LTV”) and structural features; (ii) quality and stability of real estate value and operating cash flow, including debt yield, property type, dynamics of the geographic, property-type and local market, physical condition, stability of cash flow, leasing velocity and quality and diversity of tenancy; (iii) performance against underwritten business plan; and (iv) quality, experience and financial condition of sponsor, borrower and guarantor(s). Based on a 5-point scale, our 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, and material differences exist from business plan; technical milestones have been missed; defaults may exist, or may soon occur absent material improvement; and 5- Risk of Impairment/Default—Collateral performance is significantly worse than underwriting; major variance from business plan; loan covenants or technical milestones have been breached; timely exit from loan via sale or refinancing is questionable. Since Inception, the Company has not recorded asset-specific loan loss reserves, nor has it recognized any impairments on its loan portfolio. Our determination of asset-specific loan loss reserves, should any such reserves be necessary, relies on material estimates regarding the fair value of any loan collateral. Such losses could be caused by various factors, including, but not limited to, unanticipated adverse changes in the economy or events adversely affecting specific assets, borrowers, industries in which our borrowers operate or markets in which our borrowers or their properties are located. Significant judgment is required when evaluating loans for impairment. The Company’s loans are typically collateralized by real estate or a partnership, or similar, equity interest in an entity that owns real estate. As a result, the Company regularly evaluates on a loan-by-loan basis the extent and impact of any credit deterioration associated with the performance and/or value of the underlying collateral property as well as the financial and operating capability of the borrower/sponsor. The Company also evaluates the financial wherewithal of any loan guarantors 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 impairment analyses are completed and reviewed by asset management personnel and evaluated by senior management, who utilize various data sources, including (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. |
Commercial Mortgage-Backed Securities | Commercial Mortgage-Backed Securities The Company invests in CMBS for cash management and investment purposes. The Company designates as available-for-sale its CMBS investments on the date of acquisition of the investment. CMBS that are not classified as held-to-maturity and which the Company does not hold for the purpose of selling in the near-term, but may dispose of prior to maturity, are also designated as available-for-sale and are carried at fair value. The Company’s recognition of interest income from its CMBS, including its amortization of premium and discount, follows the Company’s revenue recognition policy. The Company uses a specific identification method when determining the cost of security sold and the amount reclassified out of accumulated other comprehensive income into earnings. Unrealized losses on securities that, in the judgment of management, are other than temporary are charged against earnings as a loss in the consolidated statements of income. Significant valuation inputs are Level II in the fair value hierarchy as described under “Fair Value Measurements”. |
Portfolio Financing Arrangements | Portfolio Financing Arrangements The Company finances certain of its loan and CMBS investments using secured revolving repurchase agreements, asset-specific financing arrangements (notes payable on the consolidated balance sheets), a senior secured credit facility, and, prior to August 23, 2017, its private collateralized loan obligation (“CLO”). 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 September 30, 2017, the Company has transferred 100% of the senior mortgage loan that the Company originated on a non-recourse basis to a third-party lender and has 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 loan 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 and not the non-consolidated senior loan interest sold or co-originated that the Company transferred. |
Fair Value Measurements | Fair Value Measurements The Company follows ASC 820-10, Fair Value Measurements and Disclosures “ASC 820-10” Level I Level II Level III For certain financial instruments, the various inputs that management uses 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. |
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, commencing with its 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. 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 (including any applicable alternative minimum tax) 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. 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 |
Earnings per Common Share | Earnings per Common Share The Company utilizes the two-class method when assessing participating securities to calculate earnings per common share. Basic and diluted earnings per common share is computed by dividing net income attributable to common stockholders (i.e., holders of common stock and Class A common stock), divided by the weighted-average number of common shares (both common stock and Class A common stock) outstanding during the period. The preferences, rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications and terms and conditions of redemption of the Class A common stock are identical to the common stock, except (1) the Class A common stock is not a “margin security” as defined in Regulation U of the Board of Governors of the U.S. Federal Reserve System (and rulings and interpretations thereunder) and may not be listed on a national securities exchange or a national market system and (2) each share of Class A common stock is convertible at any time or from time to time, at the option of the holder, for one fully paid and non-assessable share of common stock. The Class A common stock votes together with the common stock as a single class. Shares of Class A common stock have been issued to, and are owned by, certain individuals or entities affiliated with the Company’s external manager, TPG RE Finance Trust Management, L.P., a Delaware limited partnership (the “Manager”), and the sale or conversion to common stock by investors of such shares of Class A common stock is subject to certain restrictions. Diluted earnings per common share is calculated by including the effect of dilutive securities. The Company currently does not have any outstanding participating securities. |
Loan Origination Fees | Loan Origination Fees Loan origination fees are reflected in loans held for investment on the consolidated balance sheets and include fees charged to borrowers. These fees are amortized into interest income over the life of the related loans held. |
Deferred Financing Costs | Deferred Financing Costs Deferred financing costs are reflected net of the collateralized loan obligation and secured financing agreements on the Company’s consolidated balance sheets. These costs are amortized in interest expense using the interest method or on a straight line basis which approximates the interest method over the life of the related obligations. |
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 September 30, 2017 and December 31, 2016. The balances in these accounts may exceed the insured limits. |
Restricted Cash | Restricted Cash Restricted cash primarily represents deposit proceeds from potential borrowers which may be returned to borrowers, after deducting transaction costs paid by the Company for the benefit of the borrowers, upon the closing of a loan transaction. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In November 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force) In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In May 2014, FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) Deferral of the Effective Date Principal versus Agent Considerations (Reporting Revenue Gross versus Net) Identifying Performance Obligations and Licensing Narrow-Scope Improvements and Practical Expedients |
Loans Held for Investment (Tabl
Loans Held for Investment (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Receivables [Abstract] | |
Schedule of Loan Investment Portfolio | The following tables present an overview of the loan investment portfolio as of September 30, 2017 and December 31, 2016 (in thousands): September 30, 2017 Loans Receivable Outstanding Principal Unamortized Premium (Discount), Loan Origination Fees, net Carrying Amount Senior loans $ 2,778,553 $ (20,622 ) $ 2,757,931 Subordinated and mezzanine loans 67,135 (353 ) 66,782 Subtotal before allowance 2,845,688 (20,975 ) 2,824,713 Allowance for loan losses — — — Total $ 2,845,688 $ (20,975 ) $ 2,824,713 December 31, 2016 Loans Receivable Outstanding Principal Unamortized Premium (Discount), Loan Origination Fees, net Carrying Amount Senior loans $ 2,429,632 $ (20,931 ) $ 2,408,701 Subordinated and mezzanine loans 41,446 (157 ) 41,289 Subtotal before allowance 2,471,078 (21,088 ) 2,449,990 Allowance for loan losses — — — Total $ 2,471,078 $ (21,088 ) $ 2,449,990 |
Summary of Loan Portfolio Activity | For the nine months ended September 30, 2017, loan portfolio activity was as follows (in thousands): Balance at December 31, 2016 $ 2,449,990 Loans originated 1,149,911 Additional fundings 228,217 Amortization of discount and origination fees 15,607 Deductions during the period: Collection of principal (1,016,246 ) Amortization of premium (2,766 ) Balance at September 30, 2017 $ 2,824,713 |
Summary of Carrying Values and Results of Internal Risk Rating Review | The table below summarizes the carrying values and results of the Company’s internal risk rating review performed as of September 30, 2017 and December 31, 2016 (dollars in thousands): Carrying Value Rating September 30, 2017 December 31, 2016 1 $ — $ 261,261 2 1,073,455 745,340 3 1,695,009 1,205,994 4 56,249 237,395 5 — — Totals $ 2,824,713 $ 2,449,990 Weighted Average Risk Rating (1) 2.6 2.6 (1) Weighted Average Risk Rating calculated based on unpaid principal balance at period end. |
Commercial Mortgage-Backed Se24
Commercial Mortgage-Backed Securities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Investments Debt And Equity Securities [Abstract] | |
Available-for-Sale Commercial Mortgage-Backed Securities | Detailed information regarding the Company’s available-for-sale CMBS is as follows (dollars in thousands): September 30, 2017 Unamortized Gross Estimated Face Premium Unrealized Fair Amount (Discount) Loss Value Investments, at Fair Value Commercial mortgage-backed securities $ 85,866 $ 336 $ (20 ) $ 86,182 December 31, 2016 Face Amount Unamortized Premium (Discount) Gross Unrealized Gain Estimated Fair Value Investments, at Fair Value Commercial mortgage-backed securities $ 62,927 $ (2,673 ) $ 1,250 $ 61,504 |
Available-for-Sale Commercial Mortgage-Backed Securities by Contractual Maturity | The amortized cost and estimated fair value of the Company’s available-for-sale CMBS by contractual maturity are shown in the following table (dollars in thousands): September 30, 2017 Amortized Cost Estimated Fair Value Expected Maturity Date After one, within five years $ 36,700 $ 36,872 After five, within ten years 49,509 49,310 Total investment in commercial mortgage-backed securities, at fair value $ 86,209 $ 86,182 December 31, 2016 Amortized Cost Estimated Fair Value Expected Maturity Date After one, within five years $ 58,962 $ 60,242 After five, within ten years 1,292 1,262 Total investment in commercial mortgage-backed securities, at fair value $ 60,254 $ 61,504 |
Variable Interest Entities an25
Variable Interest Entities and Collateralized Loan Obligation (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Summary of Variable Interest Entities Assets and Liabilities | The Company’s total assets and total liabilities at December 31, 2016 included the following VIE assets and liabilities (dollars in thousands): December 31, 2016 ASSETS Cash and Cash Equivalents $ 2,133 Accounts Receivable 479 Accounts Receivable from Servicer/Trustee 23,009 Accrued Interest Receivable 5,714 Loans Held for Investment 712,158 Total Assets $ 743,493 LIABILITIES Accrued Interest Payable $ 885 Accrued Expenses 32 Collateralized Loan Obligation 540,780 Payable to Affiliates 933 Deferred Revenue 198 Total Liabilities $ 542,828 |
Collateralized Loan Obligation | |
Schedule of Borrowings and Corresponding Collateral | The following table outlines borrowings and the corresponding collateral under the Company’s consolidated CLO Issuer as of December 31, 2016 (dollars in thousands): As of December 31, 2016 Debt Collateral (loans) Face Value Carrying Value Outstanding Principal Carrying Value $ 543,320 $ 540,780 $ 712,420 $ 712,158 |
Notes Payable, Repurchase Agr26
Notes Payable, Repurchase Agreements, Senior Secured Credit Facility and Subscription Secured Facility (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Instrument [Line Items] | |
Schedule of Information Related to Notes Payable, Repurchase Agreement, Senior Secured Credit Facility and Subscription Secured Facility | The following table presents certain information regarding the Company’s notes payable, repurchase agreements, senior secured credit facility, and subscription secured facility as of September 30, 2017 and December 31, 2016, respectively. Except as otherwise noted, all other agreements are held on a non-recourse basis. Amounts included are shown in thousands: As of September 30, 2017 Notes Payable Maturity Date Index Rate Weighted Average Spread Interest Rate Commitment Amount Maximum Current Availability Balance Outstanding Principal Balance of Collateral Bank of the Ozarks 8/23/2019 1 Month Libor 4.5 % 5.7 % $ 92,400 $ 56,175 $ 36,225 $ 51,750 Bank of the Ozarks 8/31/2018 1 Month Libor 4.0 5.2 68,600 17,824 50,776 72,537 Deutsche Bank 9/25/2019 1 Month Libor 3.5 4.7 64,779 19,027 45,752 76,253 Deutsche Bank 6/29/2018 1 Month Libor 3.3 4.5 49,644 21,021 28,623 44,035 Bank of the Ozarks 5/22/2018 1 Month Libor 4.8 6.0 48,750 20,376 28,374 43,653 Deutsche Bank 12/9/2018 1 Month Libor 3.7 4.9 42,543 1 42,542 60,775 BMO Harris Bank (1) 4/9/2020 1 Month Libor 2.7 3.9 32,500 — 32,500 45,000 Subtotal 399,216 134,424 264,792 394,003 Repurchase Agreements Maturity Date Index Rate Weighted Average Spread Interest Rate Commitment Amount Maximum Current Availability Balance Outstanding Principal Balance of Collateral Goldman Sachs (1) 8/19/2018 1 Month Libor 2.2 % 3.4 % $ 750,000 $ 202,428 $ 547,572 $ 841,002 Wells Fargo (1) 5/25/2019 1 Month Libor 2.1 3.4 750,000 356,512 393,488 682,221 JP Morgan (1) 8/20/2018 1 Month Libor 2.5 3.7 417,250 155,382 261,868 380,621 Morgan Stanley (1) 5/3/2019 1 Month Libor 2.4 3.6 400,000 127,268 272,732 397,592 US Bank (1) 10/6/2019 1 Month Libor 2.3 3.5 150,000 129,000 21,000 30,000 Goldman Sachs (CMBS) (2) 10/30/2017 1 Month Libor 1.8 3.0 100,000 64,422 35,578 39,533 Royal Bank of Canada (CMBS) (2) 12/20/2017 1 Month Libor 1.0 2.2 100,000 92,140 7,860 8,418 Subtotal 2,667,250 1,127,152 1,540,098 2,379,387 Senior Secured Credit Facility Maturity Date Index Rate Weighted Average Spread Interest Rate Commitment Amount Maximum Current Availability Balance Outstanding Principal Balance of Collateral Bank of America (1) 9/29/2020 1 Month Libor N/A N/A $ 250,000 $ 250,000 — — Total $ 3,316,466 $ 1,511,576 $ 1,804,890 $ 2,773,390 (1) Borrowings under repurchase agreements, senior secured credit facility, and one note payable with a guarantee for 25% recourse. (2) Borrowings under repurchase agreements with a guarantee for 100% recourse. Maturity Date represents the sooner of the next maturity date of the CMBS repurchase agreement, or roll over date for the applicable underlying trade confirmation, subsequent to September 30, 2017. As of December 31, 2016 Notes Payable Maturity Date Index Rate Weighted Average Spread Interest Rate Commitment Amount Maximum Current Availability Balance Outstanding Principal Balance of Collateral Bank of the Ozarks 8/23/2019 1 Month Libor 4.5 % 5.1 % $ 92,400 $ 72,544 $ 19,856 $ 28,366 Deutsche Bank 9/25/2019 1 Month Libor 3.5 4.1 64,779 30,207 34,572 57,620 Deutsche Bank 12/9/2018 1 Month Libor 3.3 3.9 49,644 29,293 20,351 31,309 Deutsche Bank 9/29/2018 1 Month Libor 3.7 4.3 42,543 5,940 36,603 52,303 Subtotal 249,366 137,984 111,382 169,598 Repurchase Agreements Maturity Date Index Rate Weighted Average Spread Interest Rate Commitment Amount Maximum Current Availability Balance Outstanding Principal Balance of Collateral Goldman Sachs (1) 8/19/2017 1 Month Libor 2.2 % 2.9 % $ 500,000 $ 249,110 $ 250,890 $ 363,146 Wells Fargo (1) 5/25/2019 1 Month Libor 2.2 3.0 500,000 179,729 320,271 461,618 JP Morgan (1) 8/20/2018 1 Month Libor 2.7 3.4 313,750 25,001 288,749 414,269 Morgan Stanley (1) 5/3/2019 1 Month Libor 2.5 3.2 250,000 124,036 125,964 175,884 Goldman Sachs (CMBS) (2) 8/19/2017 1 Month Libor 2.0 2.6 100,000 73,195 26,805 43,500 Royal Bank of Canada (CMBS) (2) 2/9/2021 1 Month Libor 1.0 1.6 100,000 91,150 8,850 9,347 Subtotal 1,763,750 742,221 1,021,529 1,467,764 Subscription Secured Facility Maturity Date Index Rate Weighted Average Spread Interest Rate Commitment Amount Maximum Current Availability Balance Outstanding Principal Balance of Collateral Lloyds Bank 1/6/2018 1 Month Libor 1.8 % 2.5 % $ 250,000 $ 109,142 — — Total $ 2,263,116 $ 989,347 $ 1,132,911 $ 1,637,362 (1) Borrowings under repurchase agreements with a guarantee for 25% recourse. (2) Borrowings under repurchase agreements with a guarantee for 100% recourse. |
Summary of Repurchase Agreements Secured by CMBS, Short-term Borrowings, and Counterparty Concentration | The following table summarizes certain characteristics of the Company’s repurchase agreements secured by CMBS, all of which are considered short-term borrowings, and comprise counterparty concentration risks, at September 30, 2017 (in thousands): September 30, 2017 UPB of Collateral Carrying Value of Collateral (1) Amounts Payable under Repurchase Agreements (2) Net Counterparty Exposure (3) Percent of Stockholders Equity Days to Extended Maturity (4) Goldman Sachs Bank $ 39,533 $ 39,398 $ 35,767 $ 3,631 0.3 % 30 Royal Bank of Canada 8,418 8,721 7,903 818 0.1 81 Subtotal / Weighted Average 47,951 48,119 43,670 4,449 39 Total / Weighted Average - Loans and CMBS $ 2,379,387 $ 2,370,350 $ 1,542,588 $ 827,762 955 (1) Amounts shown in the table include interest receivable of $0.1 million and are net of premium, discount, and unrealized gains of $0.1 million. (2) Amounts shown in the table include interest payable of $0.2 million and do not reflect unamortized deferred financing fees of $0.1 million. (3) Represents the net carrying value of available-for-sale securities 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. (4) Represents the sooner of the next maturity date of the CMBS repurchase agreement, or roll over date for the applicable underlying trade confirmation, subsequent to September 30, 2017. The following table summarizes certain characteristics of the Company’s repurchase agreements secured by CMBS, all of which are considered short-term borrowings, and comprise counterparty concentration risks, at December 31, 2016 (in thousands): December 31, 2016 UPB of Collateral Carrying Value of Collateral(1) Amounts Payable under Repurchase Agreements(2) Net Counterparty Exposure(3) Percent of Stockholders Equity Days to Extended Maturity Goldman Sachs Bank $ 43,500 $ 41,403 $ 26,832 $ 14,571 2 % 1,502 Royal Bank of Canada 9,347 9,932 8,856 1,076 — 1,507 Subtotal / Weighted Average 52,847 51,335 35,688 15,647 3,009 Total / Weighted Average - Loans and CMBS $ 1,467,764 $ 1,453,276 $ 1,022,587 $ 430,689 1,331 (1) Amounts shown in the table include interest receivable of $0.03 million and are net of premium, discount, and unrealized gains of $2.7 million. (2) Amounts shown in the table include interest payable of $0.03 million and do not reflect unamortized deferred financing fees of $0.01 million. (3) Represents the net carrying value of available-for-sale securities 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. |
Commercial Mortgage Loans | |
Debt Instrument [Line Items] | |
Summary of Repurchase Agreements Secured by Commercial Mortgage Loans, Long - term Borrowings, and Counterparty Concentration | The following table summarizes certain characteristics of the Company’s repurchase agreements secured by commercial mortgage loans, all of which are considered long-term borrowings, and comprise counterparty concentration risks, at September 30, 2017 (in thousands): September 30, 2017 UPB of Collateral Carrying Value of Collateral (1) Amounts Payable under Repurchase Agreements (2) Net Counterparty Exposure (3) Percent of Stockholders Equity Days to Extended Maturity Goldman Sachs Bank $ 841,002 $ 836,913 $ 548,306 $ 288,607 23.9 % 688 Wells Fargo Bank 682,221 678,256 394,007 284,249 23.5 1,333 Morgan Stanley Bank (4) 397,592 396,370 273,144 123,226 10.2 N/A JP Morgan Chase Bank 380,621 381,178 262,403 118,775 9.8 1,055 US Bank 30,000 29,514 21,058 8,456 0.7 1,467 Subtotal / Weighted Average 2,331,436 2,322,231 1,498,918 823,313 987 (1) Amounts shown in the table include interest receivable of $9.2 million and are net of premium, discount and origination fees of $18.4 million. (2) Amounts shown in the table include interest payable of $2.3 million and do not reflect unamortized deferred financing fees of $8.7 million. (3) Represents 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. (4) The Morgan Stanley Bank credit facility is excluded from the Days to Extended Maturity calculation because it does not have a contractual maturity date. The following table summarizes certain characteristics of the Company’s repurchase agreements secured by commercial mortgage loans, all of which are considered long-term borrowings, and comprise counterparty concentration risks, at December 31, 2016 (in thousands): December 31, 2016 UPB of Collateral Carrying Value of Collateral (1) Amounts Payable under Repurchase Agreements (2) Net Counterparty Exposure (3) Percent of Stockholders Equity Days to Extended Maturity Wells Fargo Bank $ 461,618 $ 450,338 $ 320,175 $ 130,163 13 % 1,606 JP Morgan Chase Bank 414,269 414,461 289,206 125,255 13 1,328 Goldman Sachs Bank 363,146 361,964 251,366 110,598 11 961 Morgan Stanley Bank (4) 175,884 175,178 126,152 49,026 5 N/A Subtotal / Weighted Average 1,414,917 1,401,941 986,899 415,042 3,895 (1) Amounts shown in the table include interest receivable of $0.004 million and are net of premium, discount and origination fees of $0.02 million. (2) Amounts shown in the table include interest payable of $0.001 million and do not reflect unamortized deferred financing fees of $0.01 million. (3) Represents 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. (4) The Morgan Stanley Bank credit facility is excluded from the Days to Extended Maturity calculation because it does not have a contractual maturity date. |
Schedule of Maturities (Tables)
Schedule of Maturities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Future Principal Payments | The future principal payments for the five years subsequent to September 30, 2017 and thereafter are as follows (in thousands): Senior Secured Credit Facility Repurchase Agreements Notes Payable 2017 $ — $ 101,485 $ — 2018 — 901,253 186,540 2019 — 537,360 45,752 2020 — — 32,500 2021 — — — Thereafter — — — Total $ — $ 1,540,098 $ 264,792 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Assets and Liabilities Not Carried at Fair Value On Recurring Basis | The following tables provide information about financial assets and liabilities not carried at fair value on a recurring basis in our consolidated balance sheet (dollars in thousands): September 30, 2017 Carrying Value Level I Level II Level III Financial Assets Loans Held for Investment $ 2,824,713 $ — $ — $ 2,848,390 Financial Liabilities Secured Financing Arrangements 1,793,220 — — 1,793,220 December 31, 2016 Carrying Value Level I Level II Level III Financial Assets Loans Held for Investment $ 2,449,990 $ — $ — $ 2,469,717 Financial Liabilities Collateralized Loan Obligation 540,780 — — 540,780 Secured Financing Arrangements 1,121,869 — — 1,121,869 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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 (common stock and Class A common stock) based on the weighted-average number of shares of common stock and Class A common stock outstanding (in thousands, except share and per share data): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Net Income Attributable to Common Stockholders $ 20,787 $ 17,439 $ 69,582 $ 50,796 Weighted-Average Common Shares Outstanding, Basic and Diluted 58,685,979 40,946,029 51,969,733 39,096,974 Per Common Share Amount, Basic and Diluted $ 0.35 $ 0.43 $ 1.34 $ 1.30 |
Concentration of Credit Risk (T
Concentration of Credit Risk (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Risks And Uncertainties [Abstract] | |
Summary of Loan Portfolio by Property Type | Property Type A summary of the loan portfolio by property type as of September 30, 2017 and December 31, 2016 based on current unpaid principal balance (“UPB”) and full loan commitment is as follows (amounts in thousands): As of September 30, 2017 Property Type Loan Commitment Unfunded Commitment % of Portfolio Loan UPB % of Portfolio Office $ 769,251 $ 148,756 22.4 % $ 620,494 21.8 % Condominium 703,662 205,107 20.6 % 498,556 17.5 % Multifamily 656,975 84,215 19.2 % 572,760 20.1 % Hotel 570,676 25,382 16.7 % 548,945 19.3 % Mixed Use 431,500 58,583 12.6 % 372,917 13.1 % Retail 195,044 48,460 5.7 % 146,584 5.2 % Industrial 86,270 11,087 2.5 % 75,183 2.6 % Other 10,249 — 0.3 % 10,249 0.4 % Total $ 3,423,627 $ 581,590 100.0 % $ 2,845,688 100.0 % As of December 31, 2016 Property Type Loan Commitment Unfunded Commitment % of Portfolio Loan UPB % of Portfolio Condominium $ 821,411 $ 338,222 27.0 % $ 486,646 19.7 % Hotel 644,459 31,282 21.2 % 615,238 24.9 % Office 538,736 99,953 17.7 % 438,783 17.8 % Mixed Use 527,548 74,100 17.4 % 453,448 18.4 % Multifamily 327,578 11,217 10.8 % 316,360 12.8 % Industrial 131,987 11,468 4.3 % 120,519 4.9 % Other 48,483 8,400 1.6 % 40,083 1.6 % Total $ 3,040,202 $ 574,642 100.0 % $ 2,471,078 100.0 % |
Summary of Geographic Composition of Loans Held for Investment Based on Loan Commitment and Current UPB | 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 full loan commitment and current UPB is as follows (dollars in thousands): September 30, 2017 Geographic Region Loan Commitment Unfunded Commitment % Loan Commitment Loan UPB % Loan UPB Carrying Amount East $ 1,327,238 $ 149,702 38.8 % $ 1,181,189 41.5 % $ 1,173,142 South 1,093,810 322,937 31.9 % 770,873 27.1 % 763,891 West 674,123 82,810 19.7 % 591,312 20.8 % 587,278 Midwest 259,686 15,054 7.6 % 244,631 8.6 % 242,900 Various 68,770 11,087 2.0 % 57,683 2.0 % 57,502 Total $ 3,423,627 $ 581,590 100.0 % $ 2,845,688 100.0 % $ 2,824,713 December 31, 2016 Geographic Region Loan Commitment Unfunded Commitment % Loan Commitment Loan UPB % Loan UPB Carrying Amount East $ 1,330,003 $ 132,951 43.7 % $ 1,197,052 48.4 % $ 1,192,153 West 867,494 116,057 28.5 % 751,437 30.4 % 741,513 South 578,340 311,166 19.0 % 272,692 11.0 % 268,443 Midwest 179,589 3,000 5.9 % 176,589 7.1 % 175,158 Various 84,776 11,468 2.8 % 73,308 3.0 % 72,723 Total $ 3,040,202 $ 574,642 100.0 % $ 2,471,078 100.0 % $ 2,449,990 |
Summary of Significant Accoun31
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | ||
Threshold period of delinquency | 90 days | |
Percentage of senior mortgage loan transferred to third-party | 100.00% | |
Maximum insured amount of each cash account | $ 250,000 | $ 250,000 |
Loans Held for Investment - Add
Loans Held for Investment - Additional Information (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017USD ($)RatingLoan | Dec. 31, 2016USD ($)RatingLoan | |
Accounts Notes And Loans Receivable [Line Items] | ||
Total loan commitment amount | $ 3,423,627,000 | $ 3,040,202,000 |
Unfunded loan commitments | 581,590,000 | 574,642,000 |
Unamortized premium | 100,000 | 2,900,000 |
Unaccreted discount | $ 2,800,000 | $ 12,500,000 |
Weighted average risk rating | Rating | 2.6 | 2.6 |
Number of loans on non-accrual status | Loan | 0 | 0 |
Reserve | $ 0 | $ 0 |
Moved From Four Risk Rating Into Three Risk Rating | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Number of loans selected for risk rate changes | Loan | 2 | |
Moved From Three Risk Rating Into Four Risk Rating | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Number of loans selected for risk rate changes | Loan | 4 | |
Risk Rating One | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Payments received for loans classified with category one risk rating | Loan | 3 | |
Risk Rating Four | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Payments received for loans classified with category one risk rating | Loan | 2 | |
German American Capital Corporation | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Number of loans originated or acquired | Loan | 15 | |
Total loan commitment amount | $ 1,500,000,000 | |
Unpaid principal balance | 1,100,000,000 | |
Unfunded loan commitments | 229,700,000 | |
German American Capital Corporation | Non-recourse Senior Loan | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Total loan commitment amount | $ 91,500,000 |
Loans Held for Investment - Sch
Loans Held for Investment - Schedule of Loan Investment Portfolio (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Loans And Leases Receivable Disclosure [Line Items] | ||
Outstanding Principal, before allowance for loan losses | $ 2,845,688 | $ 2,471,078 |
Unamortized Premium (Discount), Loan Origination Fees net, before allowance for loan losses | (20,975) | (21,088) |
Carrying Amount, before allowance for loan losses | 2,824,713 | 2,449,990 |
Outstanding Principal, after allowance for loan losses | 2,845,688 | 2,471,078 |
Unamortized Premium (Discount), Loan Origination Fees net, after allowance for loan losses | (20,975) | (21,088) |
Carrying Amount, after allowance for loan losses | 2,824,713 | 2,449,990 |
Senior Loans | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Outstanding Principal, before allowance for loan losses | 2,778,553 | 2,429,632 |
Unamortized Premium (Discount), Loan Origination Fees net, before allowance for loan losses | (20,622) | (20,931) |
Carrying Amount, before allowance for loan losses | 2,757,931 | 2,408,701 |
Subordinated and Mezzanine Loans | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Outstanding Principal, before allowance for loan losses | 67,135 | 41,446 |
Unamortized Premium (Discount), Loan Origination Fees net, before allowance for loan losses | (353) | (157) |
Carrying Amount, before allowance for loan losses | $ 66,782 | $ 41,289 |
Loans Held for Investment - Sum
Loans Held for Investment - Summary of Loan Portfolio Activity (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Loans And Leases Receivable Disclosure [Abstract] | |
Balance at December 31, 2016 | $ 2,449,990 |
Loans originated | 1,149,911 |
Additional fundings | 228,217 |
Amortization of discount and origination fees | 15,607 |
Collection of principal | (1,016,246) |
Amortization of premium | (2,766) |
Balance at September 30, 2017 | $ 2,824,713 |
Loans Held for Investment - S35
Loans Held for Investment - Summary of Carrying Values and Results of Internal Risk Rating Review Performed (Details) $ in Thousands | Sep. 30, 2017USD ($)Rating | Dec. 31, 2016USD ($)Rating |
Accounts Notes And Loans Receivable [Line Items] | ||
Carrying Value | $ 2,824,713 | $ 2,449,990 |
Weighted Average Risk Rating | Rating | 2.6 | 2.6 |
Risk Rating One | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Carrying Value | $ 261,261 | |
Rating 2 | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Carrying Value | $ 1,073,455 | 745,340 |
Rating 3 | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Carrying Value | 1,695,009 | 1,205,994 |
Rating 4 | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Carrying Value | $ 56,249 | $ 237,395 |
Commercial Mortgage-Backed Se36
Commercial Mortgage-Backed Securities - Additional Information (Details) - Commercial Mortgage-Backed Securities | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017USD ($)Investment | Sep. 30, 2017USD ($)Investment | Dec. 31, 2016USD ($)Investment | |
Schedule Of Available For Sale Securities [Line Items] | |||
Number of Investments | Investment | 5 | 5 | 5 |
Net proceeds from sale of securities investment | $ 43,800,000 | ||
Net gain on sale of securities | $ 300,000 | ||
Other than temporary impairments on available-for-sale | $ 0 | $ 0 |
Commercial Mortgage-Backed Se37
Commercial Mortgage-Backed Securities - Available-for-Sale Commercial Mortgage-Backed Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | |
Schedule Of Available For Sale Securities [Line Items] | |||
Estimated Fair Value | [1] | $ 86,182 | $ 61,504 |
Commercial Mortgage-Backed Securities | |||
Schedule Of Available For Sale Securities [Line Items] | |||
Face Amount | 85,866 | 62,927 | |
Unamortized Premium (Discount) | 336 | (2,673) | |
Gross Unrealized Loss | (20) | ||
Gross Unrealized Gain | 1,250 | ||
Estimated Fair Value | $ 86,182 | $ 61,504 | |
[1] | At September 30, 2017 there were no VIE assets or liabilities recorded in the Company’s Total Assets and Total Liabilities. The Company’s consolidated Total Assets and Total Liabilities at December 31, 2016 include VIE assets and liabilities of $743.5 million and $542.8 million, respectively. These assets can be used only to satisfy obligations of the VIE, and creditors of the VIE have recourse only to these assets, and not to TPG RE Finance Trust, Inc. See Note 5 to the Consolidated Financial Statements for details |
Commercial Mortgage-Backed Se38
Commercial Mortgage-Backed Securities - Available-for-Sale Commercial Mortgage-Backed Securities by Contractual Maturity (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | |
Estimated Fair Value | |||
Total investment in commercial mortgage-backed securities, at fair value | [1] | $ 86,182 | $ 61,504 |
Commercial Mortgage-Backed Securities | |||
Amortized Cost | |||
After one, within five years | 36,700 | 58,962 | |
After five, within ten years | 49,509 | 1,292 | |
Total investment in commercial mortgage-backed securities, at fair value | 86,209 | 60,254 | |
Estimated Fair Value | |||
After one, within five years | 36,872 | 60,242 | |
After five, within ten years | 49,310 | 1,262 | |
Total investment in commercial mortgage-backed securities, at fair value | $ 86,182 | $ 61,504 | |
[1] | At September 30, 2017 there were no VIE assets or liabilities recorded in the Company’s Total Assets and Total Liabilities. The Company’s consolidated Total Assets and Total Liabilities at December 31, 2016 include VIE assets and liabilities of $743.5 million and $542.8 million, respectively. These assets can be used only to satisfy obligations of the VIE, and creditors of the VIE 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 an39
Variable Interest Entities and Collateralized Loan Obligation - Additional Information (Details) $ in Thousands | Aug. 23, 2017USD ($) | Aug. 16, 2017USD ($)Loan | Sep. 30, 2017USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Aug. 18, 2017USD ($)Loan | Dec. 31, 2016USD ($) | Dec. 29, 2014USD ($) | Dec. 18, 2014USD ($) |
Variable Interest Entities and Collateralized Loan Obligation [Line Items] | |||||||||
Additional issuance costs recognized | $ 9,160 | $ 6,843 | |||||||
Class A Senior Secured Note | CLO Issuer | |||||||||
Variable Interest Entities and Collateralized Loan Obligation [Line Items] | |||||||||
Outstanding principal balance | $ 118,000 | ||||||||
Number of first mortgage loan participation interests sold | Loan | 2 | 7 | |||||||
Unpaid principal balance of mortgage loan | $ 12,800 | $ 138,500 | |||||||
Loss on sale of first mortgage loan participation interests | $ 200 | ||||||||
Cash | $ 3,000 | ||||||||
Repayment of Class A Note | $ 118,000 | ||||||||
Collateralized Loan Obligation | |||||||||
Variable Interest Entities and Collateralized Loan Obligation [Line Items] | |||||||||
Variable interest entity ownership percentage | 100.00% | ||||||||
Unamortized issuance costs | $ 0 | $ 0 | $ 2,541 | ||||||
Collateralized Loan Obligation | Class A Senior Secured Note | |||||||||
Variable Interest Entities and Collateralized Loan Obligation [Line Items] | |||||||||
Debt issuance costs, gross | $ 13,200 | ||||||||
Additional issuance costs recognized | 900 | ||||||||
Unamortized issuance costs | $ 0 | 0 | $ 2,500 | ||||||
Interest expense excluding amortization of deferred financing costs | $ 9,300 | $ 21,800 | |||||||
German American Capital Corporation | |||||||||
Variable Interest Entities and Collateralized Loan Obligation [Line Items] | |||||||||
Percentage of interest in loans acquired | 75.00% | ||||||||
Loans secured, face value | $ 2,400,000 |
Variable Interest Entities an40
Variable Interest Entities and Collateralized Loan Obligation - Summary of Variable Interest Entities Assets and Liabilities (Details) - Variable Interest Entity, Primary Beneficiary $ in Thousands | Dec. 31, 2016USD ($) |
ASSETS | |
Total Assets | $ 743,493 |
LIABILITIES | |
Total Liabilities | 542,828 |
Cash and Cash Equivalents | |
ASSETS | |
Total Assets | 2,133 |
Accounts Receivable | |
ASSETS | |
Total Assets | 479 |
Accounts Receivable from Servicer/Trustee | |
ASSETS | |
Total Assets | 23,009 |
Accrued Interest Receivable | |
ASSETS | |
Total Assets | 5,714 |
Loans Held for Investment | |
ASSETS | |
Total Assets | 712,158 |
Accrued Interest Payable | |
LIABILITIES | |
Total Liabilities | 885 |
Accrued Expenses | |
LIABILITIES | |
Total Liabilities | 32 |
Collateralized Loan Obligation | |
LIABILITIES | |
Total Liabilities | 540,780 |
Payable to Affiliates | |
LIABILITIES | |
Total Liabilities | 933 |
Deferred Revenue | |
LIABILITIES | |
Total Liabilities | $ 198 |
Variable Interest Entities an41
Variable Interest Entities and Collateralized Loan Obligation - Schedule of Borrowings and Corresponding Collateral (Details) $ in Thousands | Dec. 31, 2016USD ($) | |
Debt Instrument [Line Items] | ||
Debt, Carrying Value | $ 540,780 | [1] |
Collateralized Loan Obligation | ||
Debt Instrument [Line Items] | ||
Debt, Face Value | 543,320 | |
Debt, Carrying Value | 540,780 | |
Collateral (loans), Outstanding Principal | 712,420 | |
Collateral (loans), Carrying Value | $ 712,158 | |
[1] | At September 30, 2017 there were no VIE assets or liabilities recorded in the Company’s Total Assets and Total Liabilities. The Company’s consolidated Total Assets and Total Liabilities at December 31, 2016 include VIE assets and liabilities of $743.5 million and $542.8 million, respectively. These assets can be used only to satisfy obligations of the VIE, and creditors of the VIE have recourse only to these assets, and not to TPG RE Finance Trust, Inc. See Note 5 to the Consolidated Financial Statements for details |
Notes Payable, Repurchase Agr42
Notes Payable, Repurchase Agreements, Senior Secured Credit Facility and Subscription Secured Facility - Additional Information (Details) | Sep. 30, 2017LoanAgreement | Sep. 29, 2017USD ($) | Aug. 18, 2017USD ($) | Jul. 21, 2017USD ($) | Jan. 06, 2016USD ($) | Sep. 30, 2017LoanAgreement | Dec. 31, 2016LoanAgreement | Jul. 20, 2017USD ($) |
Repurchase Agreements | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of additional repurchase agreements | Agreement | 1 | 2 | ||||||
Recourse guarantee percentage | 100.00% | 100.00% | ||||||
Repurchase Agreements | CMBS | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of repurchase agreements | Agreement | 2 | 2 | ||||||
Repurchase Agreements | Mortgage-backed Securities | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of repurchase agreements | Agreement | 3 | 3 | ||||||
Holdco | Repurchase Agreements | ||||||||
Debt Instrument [Line Items] | ||||||||
Percentage of recourse loans | 25.00% | 25.00% | ||||||
Holdco | Repurchase Agreements | CMBS | ||||||||
Debt Instrument [Line Items] | ||||||||
Recourse guarantee percentage | 100.00% | 100.00% | ||||||
Holdco | Repurchase Agreements | Mortgage-backed Securities | ||||||||
Debt Instrument [Line Items] | ||||||||
Recourse guarantee percentage | 100.00% | 100.00% | ||||||
Notes Payable | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of financing agreements | Agreement | 7 | 7 | 4 | |||||
Number of loans held for investment | Loan | 7 | 7 | 4 | |||||
Notes Payable | Holdco | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of recourse loans | Loan | 1 | 1 | ||||||
Percentage of recourse loans | 25.00% | |||||||
Notes Payable | Holdco | BMO Harris Bank | ||||||||
Debt Instrument [Line Items] | ||||||||
Guaranteed capped rate of outstanding obligations | 25.00% | |||||||
Subscription Secured Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Credit facility termination date | Jul. 31, 2017 | |||||||
Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit facility, maximum borrowing capacity | $ 250,000,000 | |||||||
Credit agreement initiation date | Jan. 6, 2016 | |||||||
Credit agreement, Description | Borrowing ability is limited to the lesser of $250 million and 66.67% of unfunded commitments from included investors as defined in the agreement. The credit facility term is two years with a one year extension option at a rate of LIBOR plus 1.75%. | |||||||
Credit agreement term | 2 years | |||||||
Debt instrument, basis spread on variable rate | 1.75% | |||||||
Revolving Credit Facility | Extension Term Option | ||||||||
Debt Instrument [Line Items] | ||||||||
Credit agreement term | 1 year | |||||||
Revolving Credit Facility | Morgan Stanley | Repurchase Agreements | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit facility, maximum borrowing capacity | $ 400,000,000 | $ 250,000,000 | ||||||
Line of credit facility, maximum borrowing capacity, subject to customary condition | $ 500,000,000 | |||||||
Line of credit facility, extended maturity | 2020-05 | |||||||
JP Morgan | Secured Revolving Repurchase Facility | Repurchase Agreements | Class A Senior Secured Note | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit facility, maximum borrowing capacity | $ 417,300,000 | |||||||
Line of credit facility, increase maximum borrowing capacity | $ 103,500,000 | |||||||
Senior Secured Credit Facility | Bank of America | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit facility, maximum borrowing capacity | $ 250,000,000 | |||||||
Line of credit facility, extended maturity | 2022-09 | |||||||
Credit agreement initiation date | Sep. 29, 2017 | |||||||
Line of credit facility, maximum borrowing capacity subject to condition | $ 500,000,000 |
Summary of Notes Payable, Repur
Summary of Notes Payable, Repurchase Agreements, Senior Secured Credit Facility, and Subscription Secured Facility (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | ||
Index Rate | one-month LIBOR | |
Repurchase Agreements | ||
Debt Instrument [Line Items] | ||
Commitment Amount | $ 2,667,250 | $ 1,763,750 |
Maximum Current Availability | 1,127,152 | 742,221 |
Balance Outstanding | 1,540,098 | 1,021,529 |
Collateral (loans), Outstanding Principal | 2,379,387 | 1,467,764 |
Senior Secured Credit Facility | ||
Debt Instrument [Line Items] | ||
Commitment Amount | 3,316,466 | |
Maximum Current Availability | 1,511,576 | |
Balance Outstanding | 1,804,890 | |
Collateral (loans), Outstanding Principal | 2,773,390 | |
Subscription Secured Facility | ||
Debt Instrument [Line Items] | ||
Commitment Amount | 2,263,116 | |
Maximum Current Availability | 989,347 | |
Balance Outstanding | 1,132,911 | |
Collateral (loans), Outstanding Principal | 1,637,362 | |
Notes Payable | ||
Debt Instrument [Line Items] | ||
Commitment Amount | 399,216 | 249,366 |
Maximum Current Availability | 134,424 | 137,984 |
Balance Outstanding | 264,792 | 111,382 |
Collateral (loans), Outstanding Principal | $ 394,003 | $ 169,598 |
Bank of the Ozarks | Debt Instrument, Interest Rate at 5.7% | Notes Payable | ||
Debt Instrument [Line Items] | ||
Maturity Date | Aug. 23, 2019 | |
Index Rate | 1 Month Libor | |
Weighted Average Spread | 4.50% | |
Interest Rate | 5.70% | |
Commitment Amount | $ 92,400 | |
Maximum Current Availability | 56,175 | |
Balance Outstanding | 36,225 | |
Collateral (loans), Outstanding Principal | $ 51,750 | |
Bank of the Ozarks | Debt Instrument, Interest Rate at 5.2% | Notes Payable | ||
Debt Instrument [Line Items] | ||
Maturity Date | Aug. 31, 2018 | |
Index Rate | 1 Month Libor | |
Weighted Average Spread | 4.00% | |
Interest Rate | 5.20% | |
Commitment Amount | $ 68,600 | |
Maximum Current Availability | 17,824 | |
Balance Outstanding | 50,776 | |
Collateral (loans), Outstanding Principal | $ 72,537 | |
Bank of the Ozarks | Debt Instrument, Interest Rate at 6.0% | Notes Payable | ||
Debt Instrument [Line Items] | ||
Maturity Date | May 22, 2018 | |
Index Rate | 1 Month Libor | |
Weighted Average Spread | 4.80% | |
Interest Rate | 6.00% | |
Commitment Amount | $ 48,750 | |
Maximum Current Availability | 20,376 | |
Balance Outstanding | 28,374 | |
Collateral (loans), Outstanding Principal | $ 43,653 | |
Bank of the Ozarks | Debt Instrument, Interest Rate at 5.1% | Notes Payable | ||
Debt Instrument [Line Items] | ||
Maturity Date | Aug. 23, 2019 | |
Index Rate | 1 Month Libor | |
Weighted Average Spread | 4.50% | |
Interest Rate | 5.10% | |
Commitment Amount | $ 92,400 | |
Maximum Current Availability | 72,544 | |
Balance Outstanding | 19,856 | |
Collateral (loans), Outstanding Principal | $ 28,366 | |
Deutsche Bank | Debt Instrument, Interest Rate at 4.7% | Notes Payable | ||
Debt Instrument [Line Items] | ||
Maturity Date | Sep. 25, 2019 | |
Index Rate | 1 Month Libor | |
Weighted Average Spread | 3.50% | |
Interest Rate | 4.70% | |
Commitment Amount | $ 64,779 | |
Maximum Current Availability | 19,027 | |
Balance Outstanding | 45,752 | |
Collateral (loans), Outstanding Principal | $ 76,253 | |
Deutsche Bank | Debt Instrument, Interest Rate at 4.5% | Notes Payable | ||
Debt Instrument [Line Items] | ||
Maturity Date | Jun. 29, 2018 | |
Index Rate | 1 Month Libor | |
Weighted Average Spread | 3.30% | |
Interest Rate | 4.50% | |
Commitment Amount | $ 49,644 | |
Maximum Current Availability | 21,021 | |
Balance Outstanding | 28,623 | |
Collateral (loans), Outstanding Principal | $ 44,035 | |
Deutsche Bank | Debt Instrument, Interest Rate at 4.9% | Notes Payable | ||
Debt Instrument [Line Items] | ||
Maturity Date | Dec. 9, 2018 | |
Index Rate | 1 Month Libor | |
Weighted Average Spread | 3.70% | |
Interest Rate | 4.90% | |
Commitment Amount | $ 42,543 | |
Maximum Current Availability | 1 | |
Balance Outstanding | 42,542 | |
Collateral (loans), Outstanding Principal | $ 60,775 | |
Deutsche Bank | Debt Instrument, Interest Rate at 4.1% | Notes Payable | ||
Debt Instrument [Line Items] | ||
Maturity Date | Sep. 25, 2019 | |
Index Rate | 1 Month Libor | |
Weighted Average Spread | 3.50% | |
Interest Rate | 4.10% | |
Commitment Amount | $ 64,779 | |
Maximum Current Availability | 30,207 | |
Balance Outstanding | 34,572 | |
Collateral (loans), Outstanding Principal | $ 57,620 | |
Deutsche Bank | Debt Instrument, Interest Rate at 3.9% | Notes Payable | ||
Debt Instrument [Line Items] | ||
Maturity Date | Dec. 9, 2018 | |
Index Rate | 1 Month Libor | |
Weighted Average Spread | 3.30% | |
Interest Rate | 3.90% | |
Commitment Amount | $ 49,644 | |
Maximum Current Availability | 29,293 | |
Balance Outstanding | 20,351 | |
Collateral (loans), Outstanding Principal | $ 31,309 | |
Deutsche Bank | Debt Instrument, Interest Rate at 4.3% | Notes Payable | ||
Debt Instrument [Line Items] | ||
Maturity Date | Sep. 29, 2018 | |
Index Rate | 1 Month Libor | |
Weighted Average Spread | 3.70% | |
Interest Rate | 4.30% | |
Commitment Amount | $ 42,543 | |
Maximum Current Availability | 5,940 | |
Balance Outstanding | 36,603 | |
Collateral (loans), Outstanding Principal | $ 52,303 | |
BMO Harris Bank | Debt Instrument, Interest Rate at 3.9% | Notes Payable | ||
Debt Instrument [Line Items] | ||
Maturity Date | Apr. 9, 2020 | |
Index Rate | 1 Month Libor | |
Weighted Average Spread | 2.70% | |
Interest Rate | 3.90% | |
Commitment Amount | $ 32,500 | |
Balance Outstanding | 32,500 | |
Collateral (loans), Outstanding Principal | $ 45,000 | |
Goldman Sachs | Debt Instrument, Interest Rate at 3.4% | Repurchase Agreements | ||
Debt Instrument [Line Items] | ||
Maturity Date | Aug. 19, 2018 | |
Index Rate | 1 Month Libor | |
Weighted Average Spread | 2.20% | |
Interest Rate | 3.40% | |
Commitment Amount | $ 750,000 | |
Maximum Current Availability | 202,428 | |
Balance Outstanding | 547,572 | |
Collateral (loans), Outstanding Principal | $ 841,002 | |
Goldman Sachs | Debt Instrument, Interest Rate at 3.0% | CMBS | Repurchase Agreements | ||
Debt Instrument [Line Items] | ||
Maturity Date | Oct. 30, 2017 | |
Index Rate | 1 Month Libor | |
Weighted Average Spread | 1.80% | |
Interest Rate | 3.00% | |
Commitment Amount | $ 100,000 | |
Maximum Current Availability | 64,422 | |
Balance Outstanding | 35,578 | |
Collateral (loans), Outstanding Principal | $ 39,533 | |
Goldman Sachs | Debt Instrument, Interest Rate at 2.9% | Repurchase Agreements | ||
Debt Instrument [Line Items] | ||
Maturity Date | Aug. 19, 2017 | |
Index Rate | 1 Month Libor | |
Weighted Average Spread | 2.20% | |
Interest Rate | 2.90% | |
Commitment Amount | $ 500,000 | |
Maximum Current Availability | 249,110 | |
Balance Outstanding | 250,890 | |
Collateral (loans), Outstanding Principal | $ 363,146 | |
Goldman Sachs | Debt Instrument, Interest Rate at 2.6% | CMBS | Repurchase Agreements | ||
Debt Instrument [Line Items] | ||
Maturity Date | Aug. 19, 2017 | |
Index Rate | 1 Month Libor | |
Weighted Average Spread | 2.00% | |
Interest Rate | 2.60% | |
Commitment Amount | $ 100,000 | |
Maximum Current Availability | 73,195 | |
Balance Outstanding | 26,805 | |
Collateral (loans), Outstanding Principal | $ 43,500 | |
Wells Fargo | Debt Instrument, Interest Rate at 3.4% | Repurchase Agreements | ||
Debt Instrument [Line Items] | ||
Maturity Date | May 25, 2019 | |
Index Rate | 1 Month Libor | |
Weighted Average Spread | 2.10% | |
Interest Rate | 3.40% | |
Commitment Amount | $ 750,000 | |
Maximum Current Availability | 356,512 | |
Balance Outstanding | 393,488 | |
Collateral (loans), Outstanding Principal | $ 682,221 | |
Wells Fargo | Debt Instrument, Interest Rate at 3.0% | Repurchase Agreements | ||
Debt Instrument [Line Items] | ||
Maturity Date | May 25, 2019 | |
Index Rate | 1 Month Libor | |
Weighted Average Spread | 2.20% | |
Interest Rate | 3.00% | |
Commitment Amount | $ 500,000 | |
Maximum Current Availability | 179,729 | |
Balance Outstanding | 320,271 | |
Collateral (loans), Outstanding Principal | $ 461,618 | |
JP Morgan | Debt Instrument, Interest Rate at 3.4% | Repurchase Agreements | ||
Debt Instrument [Line Items] | ||
Maturity Date | Aug. 20, 2018 | |
Index Rate | 1 Month Libor | |
Weighted Average Spread | 2.70% | |
Interest Rate | 3.40% | |
Commitment Amount | $ 313,750 | |
Maximum Current Availability | 25,001 | |
Balance Outstanding | 288,749 | |
Collateral (loans), Outstanding Principal | $ 414,269 | |
JP Morgan | Debt Instrument, Interest Rate at 3.7% | Repurchase Agreements | ||
Debt Instrument [Line Items] | ||
Maturity Date | Aug. 20, 2018 | |
Index Rate | 1 Month Libor | |
Weighted Average Spread | 2.50% | |
Interest Rate | 3.70% | |
Commitment Amount | $ 417,250 | |
Maximum Current Availability | 155,382 | |
Balance Outstanding | 261,868 | |
Collateral (loans), Outstanding Principal | $ 380,621 | |
Morgan Stanley | Debt Instrument, Interest Rate at 3.6% | Repurchase Agreements | ||
Debt Instrument [Line Items] | ||
Maturity Date | May 3, 2019 | |
Index Rate | 1 Month Libor | |
Weighted Average Spread | 2.40% | |
Interest Rate | 3.60% | |
Commitment Amount | $ 400,000 | |
Maximum Current Availability | 127,268 | |
Balance Outstanding | 272,732 | |
Collateral (loans), Outstanding Principal | $ 397,592 | |
Morgan Stanley | Debt Instrument, Interest Rate at 3.2% | Repurchase Agreements | ||
Debt Instrument [Line Items] | ||
Maturity Date | May 3, 2019 | |
Index Rate | 1 Month Libor | |
Weighted Average Spread | 2.50% | |
Interest Rate | 3.20% | |
Commitment Amount | $ 250,000 | |
Maximum Current Availability | 124,036 | |
Balance Outstanding | 125,964 | |
Collateral (loans), Outstanding Principal | $ 175,884 | |
US Bank | Debt Instrument, Interest Rate at 3.5% | Repurchase Agreements | ||
Debt Instrument [Line Items] | ||
Maturity Date | Oct. 6, 2019 | |
Index Rate | 1 Month Libor | |
Weighted Average Spread | 2.30% | |
Interest Rate | 3.50% | |
Commitment Amount | $ 150,000 | |
Maximum Current Availability | 129,000 | |
Balance Outstanding | 21,000 | |
Collateral (loans), Outstanding Principal | $ 30,000 | |
Royal Bank of Canada | Debt Instrument, Interest Rate at 2.2% | CMBS | Repurchase Agreements | ||
Debt Instrument [Line Items] | ||
Maturity Date | Dec. 20, 2017 | |
Index Rate | 1 Month Libor | |
Weighted Average Spread | 1.00% | |
Interest Rate | 2.20% | |
Commitment Amount | $ 100,000 | |
Maximum Current Availability | 92,140 | |
Balance Outstanding | 7,860 | |
Collateral (loans), Outstanding Principal | $ 8,418 | |
Royal Bank of Canada | Debt Instrument, Interest Rate at 1.6% | CMBS | Repurchase Agreements | ||
Debt Instrument [Line Items] | ||
Maturity Date | Feb. 9, 2021 | |
Index Rate | 1 Month Libor | |
Weighted Average Spread | 1.00% | |
Interest Rate | 1.60% | |
Commitment Amount | $ 100,000 | |
Maximum Current Availability | 91,150 | |
Balance Outstanding | 8,850 | |
Collateral (loans), Outstanding Principal | $ 9,347 | |
Bank of America | Senior Secured Credit Facility | ||
Debt Instrument [Line Items] | ||
Maturity Date | Sep. 29, 2020 | |
Index Rate | 1 Month Libor | |
Commitment Amount | $ 250,000 | |
Maximum Current Availability | $ 250,000 | |
Lloyds Bank | Subscription Secured Facility | ||
Debt Instrument [Line Items] | ||
Maturity Date | Jan. 6, 2018 | |
Index Rate | 1 Month Libor | |
Weighted Average Spread | 1.80% | |
Interest Rate | 2.50% | |
Commitment Amount | $ 250,000 | |
Maximum Current Availability | $ 109,142 |
Summary of Notes Payable, Rep44
Summary of Notes Payable, Repurchase Agreements, Senior Secured Credit Facility, and Subscription Secured Facility (Parenthetical) (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Repurchase Agreements, Senior Secured Credit Facility and Note Payable | ||
Debt Instrument [Line Items] | ||
Recourse guarantee percentage | 25.00% | |
Repurchase Agreements | ||
Debt Instrument [Line Items] | ||
Recourse guarantee percentage | 100.00% | 100.00% |
Repurchase Agreements | Goldman Sachs | ||
Debt Instrument [Line Items] | ||
Recourse guarantee percentage | 25.00% |
Summary of Repurchase Agreement
Summary of Repurchase Agreements Secured by Commercial Mortgage Loans, Long - term Borrowings, and Counterparty Concentration (Details) - Commercial Mortgage Loans - Long-term Borrowings - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Repurchase Agreement Counterparty [Line Items] | ||
UPB of Collateral | $ 2,331,436 | $ 1,414,917 |
Carrying Value of Collateral | 2,322,231 | 1,401,941 |
Amounts Payable under Repurchase Agreements | 1,498,918 | 986,899 |
Net Counterparty Exposure | $ 823,313 | $ 415,042 |
Days to Extended Maturity | 987 days | 3895 days |
Goldman Sachs Bank | ||
Repurchase Agreement Counterparty [Line Items] | ||
UPB of Collateral | $ 841,002 | $ 363,146 |
Carrying Value of Collateral | 836,913 | 361,964 |
Amounts Payable under Repurchase Agreements | 548,306 | 251,366 |
Net Counterparty Exposure | $ 288,607 | $ 110,598 |
Percent of Stockholders Equity | 23.90% | 11.00% |
Days to Extended Maturity | 688 days | 961 days |
Wells Fargo Bank | ||
Repurchase Agreement Counterparty [Line Items] | ||
UPB of Collateral | $ 682,221 | $ 461,618 |
Carrying Value of Collateral | 678,256 | 450,338 |
Amounts Payable under Repurchase Agreements | 394,007 | 320,175 |
Net Counterparty Exposure | $ 284,249 | $ 130,163 |
Percent of Stockholders Equity | 23.50% | 13.00% |
Days to Extended Maturity | 1333 days | 1606 days |
Morgan Stanley Bank | ||
Repurchase Agreement Counterparty [Line Items] | ||
UPB of Collateral | $ 397,592 | $ 175,884 |
Carrying Value of Collateral | 396,370 | 175,178 |
Amounts Payable under Repurchase Agreements | 273,144 | 126,152 |
Net Counterparty Exposure | $ 123,226 | $ 49,026 |
Percent of Stockholders Equity | 10.20% | 5.00% |
JP Morgan Chase Bank | ||
Repurchase Agreement Counterparty [Line Items] | ||
UPB of Collateral | $ 380,621 | $ 414,269 |
Carrying Value of Collateral | 381,178 | 414,461 |
Amounts Payable under Repurchase Agreements | 262,403 | 289,206 |
Net Counterparty Exposure | $ 118,775 | $ 125,255 |
Percent of Stockholders Equity | 9.80% | 13.00% |
Days to Extended Maturity | 1055 days | 1328 days |
US Bank | ||
Repurchase Agreement Counterparty [Line Items] | ||
UPB of Collateral | $ 30,000 | |
Carrying Value of Collateral | 29,514 | |
Amounts Payable under Repurchase Agreements | 21,058 | |
Net Counterparty Exposure | $ 8,456 | |
Percent of Stockholders Equity | 0.70% | |
Days to Extended Maturity | 1467 days |
Summary of Repurchase Agreeme46
Summary of Repurchase Agreements Secured by Commercial Mortgage Loans, Long - term Borrowings, and Counterparty Concentration (Parenthetical) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | ||
Repurchase Agreement Counterparty [Line Items] | |||
Interest receivable | [1] | $ 13,764 | $ 14,023 |
Accrued Interest Payable | [1] | 3,733 | 2,907 |
Commercial Mortgage Loans | Long-term Borrowings | |||
Repurchase Agreement Counterparty [Line Items] | |||
Interest receivable | 9,200 | 4 | |
Premium, discount and origination fees | 18,400 | 20 | |
Accrued Interest Payable | 2,300 | 1 | |
Unamortized deferred financing fees | $ 8,700 | $ 10 | |
[1] | At September 30, 2017 there were no VIE assets or liabilities recorded in the Company’s Total Assets and Total Liabilities. The Company’s consolidated Total Assets and Total Liabilities at December 31, 2016 include VIE assets and liabilities of $743.5 million and $542.8 million, respectively. These assets can be used only to satisfy obligations of the VIE, and creditors of the VIE have recourse only to these assets, and not to TPG RE Finance Trust, Inc. See Note 5 to the Consolidated Financial Statements for details |
Summary of Repurchase Agreeme47
Summary of Repurchase Agreements Secured by CMBS, Short-term Borrowings, and Counterparty Concentration (Details) - Short term Borrowings - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Repurchase Agreement Counterparty [Line Items] | ||
UPB of Collateral | $ 2,379,387 | $ 1,467,764 |
Carrying Value of Collateral | 2,370,350 | 1,453,276 |
Amounts Payable under Repurchase Agreements | 1,542,588 | 1,022,587 |
Net Counterparty Exposure | $ 827,762 | $ 430,689 |
Days to Extended Maturity | 955 days | 1331 days |
CMBS | ||
Repurchase Agreement Counterparty [Line Items] | ||
UPB of Collateral | $ 47,951 | $ 52,847 |
Carrying Value of Collateral | 48,119 | 51,335 |
Amounts Payable under Repurchase Agreements | 43,670 | 35,688 |
Net Counterparty Exposure | $ 4,449 | $ 15,647 |
Days to Extended Maturity | 39 days | 3009 days |
Goldman Sachs | CMBS | ||
Repurchase Agreement Counterparty [Line Items] | ||
UPB of Collateral | $ 39,533 | $ 43,500 |
Carrying Value of Collateral | 39,398 | 41,403 |
Amounts Payable under Repurchase Agreements | 35,767 | 26,832 |
Net Counterparty Exposure | $ 3,631 | $ 14,571 |
Percent of Stockholders Equity | 0.30% | 2.00% |
Days to Extended Maturity | 30 days | 1502 days |
Royal Bank of Canada | CMBS | ||
Repurchase Agreement Counterparty [Line Items] | ||
UPB of Collateral | $ 8,418 | $ 9,347 |
Carrying Value of Collateral | 8,721 | 9,932 |
Amounts Payable under Repurchase Agreements | 7,903 | 8,856 |
Net Counterparty Exposure | $ 818 | $ 1,076 |
Percent of Stockholders Equity | 0.10% | |
Days to Extended Maturity | 81 days | 1507 days |
Summary of Repurchase Agreeme48
Summary of Repurchase Agreements Secured by CMBS, Short-term Borrowings, and Counterparty Concentration (Parenthetical) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | ||
Repurchase Agreement Counterparty [Line Items] | |||
Accrued Interest Receivable | [1] | $ 13,764 | $ 14,023 |
Accrued Interest Payable | [1] | 3,733 | 2,907 |
Short term Borrowings | |||
Repurchase Agreement Counterparty [Line Items] | |||
Accrued Interest Receivable | 100 | 30 | |
Premium, discount and origination fees | 100 | 2,700 | |
Accrued Interest Payable | 200 | 30 | |
Unamortized deferred financing fees | $ 100 | $ 10 | |
[1] | At September 30, 2017 there were no VIE assets or liabilities recorded in the Company’s Total Assets and Total Liabilities. The Company’s consolidated Total Assets and Total Liabilities at December 31, 2016 include VIE assets and liabilities of $743.5 million and $542.8 million, respectively. These assets can be used only to satisfy obligations of the VIE, and creditors of the VIE 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 | Sep. 30, 2017USD ($) |
Repurchase Agreements | |
Debt Instrument [Line Items] | |
2,017 | $ 101,485 |
2,018 | 901,253 |
2,019 | 537,360 |
Total | 1,540,098 |
Notes Payable | |
Debt Instrument [Line Items] | |
2,018 | 186,540 |
2,019 | 45,752 |
2,020 | 32,500 |
Total | $ 264,792 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | ||
Money market funds | $ 58,900,000 | |
Threshold period of delinquency | 90 days | |
Market spread | one-month LIBOR | |
Transfers of financial assets or liabilities with in fair value hierarchy | $ 0 | |
Estimated fair value of loans held for investment | $ 2,800,000,000 | $ 2,500,000,000 |
Average gross spread percentage | 4.88% | 5.10% |
Weighted average maturity period | 3 years 6 months |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Financial Assets and Liabilities Not Carried at Fair Value On Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Carrying Value | Loans Held for Investment | ||
Financial Assets | ||
Financial Assets, Nonrecurring | $ 2,824,713 | $ 2,449,990 |
Carrying Value | Collateralized Loan Obligation | ||
Financial Liabilities | ||
Financial Liabilities, Nonrecurring | 540,780 | |
Carrying Value | Secured Financing Arrangements | ||
Financial Liabilities | ||
Financial Liabilities, Nonrecurring | 1,793,220 | 1,121,869 |
Estimate of Fair Value Measurement | Level III | Loans Held for Investment | ||
Financial Assets | ||
Financial Assets, Nonrecurring | 2,848,390 | 2,469,717 |
Estimate of Fair Value Measurement | Level III | Collateralized Loan Obligation | ||
Financial Liabilities | ||
Financial Liabilities, Nonrecurring | 540,780 | |
Estimate of Fair Value Measurement | Secured Financing Arrangements | Level III | ||
Financial Liabilities | ||
Financial Liabilities, Nonrecurring | $ 1,793,220 | $ 1,121,869 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Income Tax [Line Items] | |||||
Deferred tax asset | $ 0 | $ 0 | $ 0 | ||
Deferred tax liabilities | 0 | 0 | 0 | ||
Reserve for uncertain income tax positions | $ 0 | 0 | $ 0 | ||
Interest for underpayment of income taxes | 0 | $ 0 | |||
Penalties for underpayment of income taxes | $ 0 | $ 0 | |||
Effective income tax rate | 0.20% | 0.60% | |||
TRS | |||||
Income Tax [Line Items] | |||||
Equity interest percentage by parent | 100.00% | 100.00% | 100.00% | ||
Deferred tax asset | $ 0 | $ 0 | $ 0 | ||
Deferred tax liabilities | 0 | 0 | $ 0 | ||
Current portion of income tax expense | $ 0 | $ 100,000 | $ 100,000 | $ 300,000 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) | Jul. 25, 2017 | Dec. 15, 2014 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | ||||||||
Management fees, incentive management fees, and collateral management fees payable | [1] | $ 9,148,000 | $ 9,148,000 | $ 3,955,000 | ||||
Termination fee, description | A termination fee will be payable 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 or, if such termination occurs prior to July 25, 2019, and such termination fee is payable, the base management fees and the incentive compensation will be annualized for such two-year period based on such fees actually received by the Manager during such period | |||||||
Collateralized Loan Obligation | ||||||||
Related Party Transaction [Line Items] | ||||||||
Aggregate par amount of loans | 712,420,000 | |||||||
Pre-IPO Management Agreement | ||||||||
Related Party Transaction [Line Items] | ||||||||
Description of management and incentive management fee calculation | For the three months ended September 30, 2017, the management fee and incentive management fee calculated under the pre-IPO Management Agreement was from July 1, 2017 through July 24, 2017, or 24 days. | |||||||
Management and incentive management fee calculation period | 24 days | |||||||
Percentage of annual base management fee | 1.25% | |||||||
Incentive management fee, description | Manager is entitled to an incentive management fee each calendar quarter in arrears in an amount, not less than zero, equal to the product of (i) 16% and (ii) the positive sum, if any, remaining after (A) Core Earnings of the Company for such calendar quarter are reduced by (B) the product of (1) the Company’s stockholders’ equity as of the end of such calendar quarter, and (2) 7% per annum; provided, however, that no incentive management fee is payable with respect to any calendar quarter unless Core Earnings for the 12 most recently completed calendar quarters is greater than zero. | |||||||
Incentive management fee percentage of Core Earnings less seven percent of stockholders equity | 16.00% | |||||||
Percentage multiplied by stockholders equity included in incentive management fee | 7.00% | |||||||
Pre-IPO Management Agreement | Collateralized Loan Obligation | ||||||||
Related Party Transaction [Line Items] | ||||||||
Percentage of collateral management fee | 0.075% | |||||||
Aggregate par amount of loans | 0 | $ 0 | 712,400,000 | |||||
Management fees, incentive management fees and collateral management fees paid to Manager | 1,100,000 | $ 3,200,000 | $ 10,000,000 | $ 9,900,000 | ||||
Post-IPO Management Agreement | ||||||||
Related Party Transaction [Line Items] | ||||||||
Description of management and incentive management fee calculation | For the three months ended September 30, 2017, the management fee and incentive management fee calculated under the Management Agreement was from July 25, 2017 through September 30, 2017, or 68 days. | |||||||
Management and incentive management fee calculation period | 68 days | |||||||
Percentage of annual base management fee | 1.50% | |||||||
Incentive management fee, description | The Manager is entitled to incentive compensation which is calculated and payable in cash with respect to each calendar quarter following the completion of the Company’s initial public offering (or part thereof that the Management Agreement is in effect) 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 (or such lesser number of completed calendar quarters, if applicable), 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 (or such lesser number of completed calendar quarters, if applicable), 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 (or such lesser number of completed calendar quarters preceding the applicable period, if applicable). 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 (or such lesser number of completed calendar quarters following the completion of the Company’s initial public offering) is greater than zero | |||||||
Incentive management fee percentage of Core Earnings less seven percent of stockholders equity | 20.00% | |||||||
Percentage multiplied by stockholders equity included in incentive management fee | 7.00% | |||||||
Percentage of quarterly base management fee | 0.375% | |||||||
Proceeds from Issuance of Common Stock | $ 1,000,000,000 | |||||||
Management fees, incentive management fees, and collateral management fees payable | 4,500,000 | 4,500,000 | $ 2,900,000 | |||||
Amount incurred and reimbursable | 1,000,000 | $ 100,000 | ||||||
Post-IPO 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 | Collateralized Loan Obligation | ||||||||
Related Party Transaction [Line Items] | ||||||||
Management fees, incentive management fees and collateral management fees paid to Manager | $ 3,400,000 | $ 3,400,000 | ||||||
[1] | At September 30, 2017 there were no VIE assets or liabilities recorded in the Company’s Total Assets and Total Liabilities. The Company’s consolidated Total Assets and Total Liabilities at December 31, 2016 include VIE assets and liabilities of $743.5 million and $542.8 million, respectively. These assets can be used only to satisfy obligations of the VIE, and creditors of the VIE have recourse only to these assets, and not to TPG RE Finance Trust, Inc. See Note 5 to the Consolidated Financial Statements for details |
Earnings per Share - Additional
Earnings per Share - Additional Information (Details) | Jul. 03, 2017 | Sep. 30, 2017 |
Earnings Per Share [Abstract] | ||
Dividend payable declared date | Jul. 3, 2017 | Jul. 3, 2017 |
Dividend payable date | Jul. 25, 2017 | Jul. 25, 2017 |
Earnings per Share - Schedule o
Earnings per Share - Schedule of Calculation of Basic and Diluted Earnings per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Earnings Per Share [Abstract] | ||||
Net Income Attributable to Common Stockholders | $ 20,787 | $ 17,439 | $ 69,582 | $ 50,796 |
Weighted-Average Common Shares Outstanding, Basic and Diluted | 58,685,979 | 40,946,029 | 51,969,733 | 39,096,974 |
Per Common Share Amount, Basic and Diluted | $ 0.35 | $ 0.43 | $ 1.34 | $ 1.30 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 26, 2017 | Aug. 22, 2017 | Jul. 25, 2017 | Jul. 03, 2017 | Sep. 29, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Aug. 21, 2017 | Aug. 17, 2017 | Jul. 28, 2017 | Jul. 19, 2017 | Dec. 31, 2016 | |||
Class Of Stock [Line Items] | |||||||||||||||||
Proceeds from initial public offering | $ 200,100 | ||||||||||||||||
Payment of underwriting discounts | 13,200 | ||||||||||||||||
Estimated offering expenses payable | $ 6,700 | ||||||||||||||||
Unfunded commitments related to contractual deferred purchase price obligations | $ 2,000 | ||||||||||||||||
Dividend payable declared date | Jul. 3, 2017 | Jul. 3, 2017 | |||||||||||||||
Dividend payable date | Jul. 25, 2017 | Jul. 25, 2017 | |||||||||||||||
Unfunded capital commitments | $ 181,000 | ||||||||||||||||
Common stock, authorized shares | 300,000,000 | 300,000,000 | 300,000,000 | 95,500,000 | |||||||||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||
Preferred stock, authorized shares | 100,000,000 | 100,000,000 | 100,000,000 | 125 | |||||||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||
Common stock, shares issued | 59,791,742 | 59,791,742 | 47,251,165 | ||||||||||||||
Common stock, shares outstanding | 59,791,742 | 59,791,742 | 47,251,165 | ||||||||||||||
Unpaid dividends | $ 20,100 | $ 20,135 | [1] | $ 16,978 | $ 20,135 | [1] | $ 16,978 | $ 18,346 | [1] | ||||||||
Dividends | $ 17,000 | 61,900 | 48,500 | ||||||||||||||
Other comprehensive (loss) income | $ (2,558) | $ 1,542 | $ (1,270) | 2,579 | |||||||||||||
2017 Equity Incentive Plan | |||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||
Number of shares authorized under the plan | 4,600,463 | 4,600,463 | |||||||||||||||
Percentage of issued and outstanding ordinary shares authorized for issuance under plan | 7.50% | ||||||||||||||||
Number of shares awarded for grant | 0 | ||||||||||||||||
Goldman Sachs & Co. LLC | |||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||
Number of common shares issued | 35,000,000 | ||||||||||||||||
Description on purchase plan agreement | Pursuant to which Goldman Sachs & Co. LLC, as our agent, will buy in the open market up to $35.0 million in shares of our common stock in the aggregate during the period beginning on or about August 21, 2017 and ending 12 months thereafter or, if sooner, the date on which all the capital committed to the 10b5-1 Purchase Plan has been exhausted. | ||||||||||||||||
Stock repurchased during period, shares | 300,000 | ||||||||||||||||
Average price of repurchased shares | $ 19.59 | ||||||||||||||||
Stock repurchased during period, value | $ 6,600 | ||||||||||||||||
Stock repurchase program, remaining repurchase amount | $ 28,400 | $ 28,400 | |||||||||||||||
Class A Common Stock | |||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||
Number of common shares issued | 230,815 | ||||||||||||||||
Proceeds from Issuance of Common Stock | $ 365 | $ 1,832 | |||||||||||||||
Common stock, authorized shares | 2,500,000 | 2,500,000 | 2,500,000 | 2,500,000 | |||||||||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||
Common stock, shares issued | 1,213,026 | 1,213,026 | 1,194,863 | ||||||||||||||
Common stock, shares outstanding | 1,213,026 | 1,213,026 | 1,194,863 | ||||||||||||||
Dividend declared per share | $ 0.33 | $ 0.41 | |||||||||||||||
Common Stock and Class A Common Stock | |||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||
Dividend payable declared date | Sep. 29, 2016 | ||||||||||||||||
Dividend payable date | Oct. 25, 2017 | Oct. 26, 2016 | |||||||||||||||
Common stock, shares issued | 61,004,768 | 61,004,768 | 48,446,028 | ||||||||||||||
Common stock, shares outstanding | 61,004,768 | 61,004,768 | 48,446,028 | ||||||||||||||
Dividend record date | Oct. 6, 2017 | ||||||||||||||||
Series A Preferred Stock | |||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||
Dividend rate | 12.50% | ||||||||||||||||
Preferred stock, liquidation preference per annum | $ 1 | $ 1 | |||||||||||||||
Common Stock | |||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||
Number of common shares issued | 9,224,268 | 12,642,166,000 | 3,987,337 | ||||||||||||||
Dividend declared per share | $ 0.33 | $ 0.41 | |||||||||||||||
Initial Public Offering | |||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||
Payment of underwriting discounts | $ 800 | ||||||||||||||||
Exercise of stock option to purchase additional shares | 1,650,000 | ||||||||||||||||
Shares of common stock purchased by underwriters | 650,000 | ||||||||||||||||
Proceeds from Issuance of Common Stock | $ 12,200 | ||||||||||||||||
Initial Public Offering | Common Stock | |||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||
Number of common shares issued | 11,000,000 | ||||||||||||||||
Common stock price per share | $ 20 | ||||||||||||||||
[1] | At September 30, 2017 there were no VIE assets or liabilities recorded in the Company’s Total Assets and Total Liabilities. The Company’s consolidated Total Assets and Total Liabilities at December 31, 2016 include VIE assets and liabilities of $743.5 million and $542.8 million, respectively. These assets can be used only to satisfy obligations of the VIE, and creditors of the VIE have recourse only to these assets, and not to TPG RE Finance Trust, Inc. See Note 5 to the Consolidated Financial Statements for details |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Commitments And Contingencies Disclosure [Abstract] | ||
Unfunded commitments related to loans held for investment | $ 581.6 | $ 574.6 |
Concentration of Credit Risk -
Concentration of Credit Risk - Summary of Loan Portfolio by Property Type (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Loans And Leases Receivable Disclosure [Line Items] | ||
Loan Commitment | $ 3,423,627 | $ 3,040,202 |
Unfunded Commitment | $ 581,590 | $ 574,642 |
% of Portfolio | 100.00% | 100.00% |
Loan UPB | $ 2,845,688 | $ 2,471,078 |
% of Portfolio | 100.00% | 100.00% |
Condominium | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Loan Commitment | $ 703,662 | $ 821,411 |
Unfunded Commitment | $ 205,107 | $ 338,222 |
% of Portfolio | 20.60% | 27.00% |
Loan UPB | $ 498,556 | $ 486,646 |
% of Portfolio | 17.50% | 19.70% |
Hotel | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Loan Commitment | $ 570,676 | $ 644,459 |
Unfunded Commitment | $ 25,382 | $ 31,282 |
% of Portfolio | 16.70% | 21.20% |
Loan UPB | $ 548,945 | $ 615,238 |
% of Portfolio | 19.30% | 24.90% |
Office | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Loan Commitment | $ 769,251 | $ 538,736 |
Unfunded Commitment | $ 148,756 | $ 99,953 |
% of Portfolio | 22.40% | 17.70% |
Loan UPB | $ 620,494 | $ 438,783 |
% of Portfolio | 21.80% | 17.80% |
Mixed Use | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Loan Commitment | $ 431,500 | $ 527,548 |
Unfunded Commitment | $ 58,583 | $ 74,100 |
% of Portfolio | 12.60% | 17.40% |
Loan UPB | $ 372,917 | $ 453,448 |
% of Portfolio | 13.10% | 18.40% |
Multifamily | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Loan Commitment | $ 656,975 | $ 327,578 |
Unfunded Commitment | $ 84,215 | $ 11,217 |
% of Portfolio | 19.20% | 10.80% |
Loan UPB | $ 572,760 | $ 316,360 |
% of Portfolio | 20.10% | 12.80% |
Retail | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Loan Commitment | $ 195,044 | |
Unfunded Commitment | $ 48,460 | |
% of Portfolio | 5.70% | |
Loan UPB | $ 146,584 | |
% of Portfolio | 5.20% | |
Industrial | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Loan Commitment | $ 86,270 | $ 131,987 |
Unfunded Commitment | $ 11,087 | $ 11,468 |
% of Portfolio | 2.50% | 4.30% |
Loan UPB | $ 75,183 | $ 120,519 |
% of Portfolio | 2.60% | 4.90% |
Other | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Loan Commitment | $ 10,249 | $ 48,483 |
Unfunded Commitment | $ 8,400 | |
% of Portfolio | 0.30% | 1.60% |
Loan UPB | $ 10,249 | $ 40,083 |
% of Portfolio | 0.40% | 1.60% |
Concentration of Credit Risk 59
Concentration of Credit Risk - Summary of Geographic Composition of Loans Held for Investment Based on Loan Commitment and Current UPB (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Loans And Leases Receivable Disclosure [Line Items] | ||
Loan Commitment | $ 3,423,627 | $ 3,040,202 |
Unfunded Commitment | $ 581,590 | $ 574,642 |
% Loan Commitment | 100.00% | 100.00% |
Loan UPB | $ 2,845,688 | $ 2,471,078 |
% Loan UPB | 100.00% | 100.00% |
Carrying Amount | $ 2,824,713 | $ 2,449,990 |
East | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Loan Commitment | 1,327,238 | 1,330,003 |
Unfunded Commitment | $ 149,702 | $ 132,951 |
% Loan Commitment | 38.80% | 43.70% |
Loan UPB | $ 1,181,189 | $ 1,197,052 |
% Loan UPB | 41.50% | 48.40% |
Carrying Amount | $ 1,173,142 | $ 1,192,153 |
South | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Loan Commitment | 1,093,810 | 578,340 |
Unfunded Commitment | $ 322,937 | $ 311,166 |
% Loan Commitment | 31.90% | 19.00% |
Loan UPB | $ 770,873 | $ 272,692 |
% Loan UPB | 27.10% | 11.00% |
Carrying Amount | $ 763,891 | $ 268,443 |
West | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Loan Commitment | 674,123 | 867,494 |
Unfunded Commitment | $ 82,810 | $ 116,057 |
% Loan Commitment | 19.70% | 28.50% |
Loan UPB | $ 591,312 | $ 751,437 |
% Loan UPB | 20.80% | 30.40% |
Carrying Amount | $ 587,278 | $ 741,513 |
Midwest | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Loan Commitment | 259,686 | 179,589 |
Unfunded Commitment | $ 15,054 | $ 3,000 |
% Loan Commitment | 7.60% | 5.90% |
Loan UPB | $ 244,631 | $ 176,589 |
% Loan UPB | 8.60% | 7.10% |
Carrying Amount | $ 242,900 | $ 175,158 |
Various | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Loan Commitment | 68,770 | 84,776 |
Unfunded Commitment | $ 11,087 | $ 11,468 |
% Loan Commitment | 2.00% | 2.80% |
Loan UPB | $ 57,683 | $ 73,308 |
% Loan UPB | 2.00% | 3.00% |
Carrying Amount | $ 57,502 | $ 72,723 |
Concentration of Credit Risk 60
Concentration of Credit Risk - Additional Information (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Risks And Uncertainties [Abstract] | ||
Capitalized interest | $ 3.7 | $ 5.5 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) $ / shares in Units, shares in Millions | Oct. 25, 2017USD ($)$ / shares | Jul. 03, 2017 | Nov. 06, 2017USD ($)Loan | Nov. 03, 2017USD ($)$ / sharesshares | Sep. 30, 2017USD ($) | Sep. 26, 2017USD ($)$ / shares | Dec. 31, 2016USD ($) | [1] | Sep. 30, 2016USD ($) | Sep. 29, 2016$ / shares | |
Subsequent Event [Line Items] | |||||||||||
Dividend payable date | Jul. 25, 2017 | Jul. 25, 2017 | |||||||||
Dividends Payable | $ 20,135,000 | [1] | $ 20,100,000 | $ 18,346,000 | $ 16,978,000 | ||||||
Common Stock | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Dividend amount per share | $ / shares | $ 0.33 | $ 0.41 | |||||||||
Subsequent Events | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Common stock, shares repurchased | shares | 0.2 | ||||||||||
Stock repurchased during period, value | $ 3,400,000 | ||||||||||
Average price of repurchased shares | $ / shares | $ 19.60 | ||||||||||
Number of first mortgage loans originated | Loan | 3 | ||||||||||
Aggregate commitment amount | $ 294,000,000 | ||||||||||
Subsequent event date | Nov. 6, 2017 | ||||||||||
Subsequent Events | Common Stock | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Dividend payable date | Oct. 25, 2017 | ||||||||||
Dividend record date | Oct. 6, 2017 | ||||||||||
Dividend amount per share | $ / shares | $ 0.33 | ||||||||||
Dividends Payable | $ 20,100,000 | ||||||||||
[1] | At September 30, 2017 there were no VIE assets or liabilities recorded in the Company’s Total Assets and Total Liabilities. The Company’s consolidated Total Assets and Total Liabilities at December 31, 2016 include VIE assets and liabilities of $743.5 million and $542.8 million, respectively. These assets can be used only to satisfy obligations of the VIE, and creditors of the VIE have recourse only to these assets, and not to TPG RE Finance Trust, Inc. See Note 5 to the Consolidated Financial Statements for details |