Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 14, 2022 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Title of 12(g) Security | None | |
Entity Registrant Name | Rodin Income Trust, Inc. | |
Entity Central Index Key | 0001664780 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity File Number | 333-221814 | |
Entity Tax Identification Number | 81-1144197 | |
Entity Address, Address Line One | 110 E. 59th Street | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10022 | |
City Area Code | 212 | |
Local Phone Number | 938-5000 | |
Entity Incorporation, State or Country Code | MD | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Class A Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 408,487 | |
Class I Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 175,771 | |
Class T Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 200,441 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Assets | ||
Cash and cash equivalents | $ 2,515,341 | $ 2,061,470 |
Commercial mortgage loans, held for investment | 8,100,000 | 16,889,417 |
Investment in real estate-related assets | 8,100,000 | 8,100,000 |
Accrued interest receivable | 42,997 | 132,613 |
Accrued preferred return receivable | 45,000 | 47,250 |
Due from related party | 39,963 | 39,963 |
Prepaid expenses and other assets | 9,708 | 25,000 |
Total assets | 18,853,009 | 27,295,713 |
Liabilities | ||
Loan participations sold | 8,019,000 | |
Due to related party | 208,121 | 282,896 |
Accounts payable and accrued expenses | 200,545 | 186,480 |
Distributions payable | 108,295 | 109,960 |
Accrued interest payable | 71,757 | |
Total liabilities | 516,961 | 8,670,093 |
Commitments and contingencies (Note 9) | ||
Stockholders' equity | ||
Preferred stock, $0.01 par value per share, 50,000,000 shares authorized, and 0 issued and outstanding at each September 30, 2022 and December 31, 2021 | ||
Additional paid-in capital | 17,901,414 | 18,193,305 |
Retained earnings and cumulative distributions | 340,913 | 327,216 |
Total controlling interest | 18,250,173 | 18,528,495 |
Non-controlling interests in subsidiaries | 85,875 | 97,125 |
Total stockholders' equity | 18,336,048 | 18,625,620 |
Total liabilities and stockholders' equity | 18,853,009 | 27,295,713 |
Class A Common Stock | ||
Stockholders' equity | ||
Common stock | 4,085 | 4,120 |
Class T Common Stock | ||
Stockholders' equity | ||
Common stock | 2,004 | 2,097 |
Class I Common Stock | ||
Stockholders' equity | ||
Common stock | $ 1,757 | $ 1,757 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, shares authorized | 410,000,000 | |
Class A Common Stock | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 160,000,000 | 160,000,000 |
Common stock, shares issued | 408,487 | 411,979 |
Common stock, shares outstanding | 408,487 | 411,979 |
Class T Common Stock | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 200,441 | 209,708 |
Common stock, shares outstanding | 200,441 | 209,708 |
Class I Common Stock | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 175,771 | 175,771 |
Common stock, shares outstanding | 175,771 | 175,771 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues: | ||||
Interest income | $ 191,783 | $ 448,029 | $ 921,925 | $ 1,318,422 |
Less: Interest income related to loan participations sold | 0 | (186,486) | (295,134) | (550,907) |
Total interest income, net | 191,783 | 261,543 | 626,791 | 767,515 |
Preferred return income | 207,000 | 207,000 | 614,250 | 614,250 |
Total revenues | 398,783 | 468,543 | 1,241,041 | 1,381,765 |
Operating expenses: | ||||
General and administrative expenses | 23,358 | 25,476 | 101,849 | 76,203 |
Management fees | 55,023 | 56,049 | 166,806 | 161,279 |
Total operating expenses | 78,381 | 81,525 | 268,655 | 237,482 |
Net income (loss) | $ 320,402 | $ 387,018 | $ 972,386 | $ 1,144,283 |
Weighted average shares outstanding - basic | 784,973 | 805,720 | 791,165 | 806,458 |
Weighted average shares outstanding - diluted | 784,973 | 805,720 | 791,165 | 806,458 |
Net income (loss) per common share - basic | $ 0.41 | $ 0.48 | $ 1.23 | $ 1.42 |
Net income (loss) per common share - diluted | $ 0.41 | $ 0.48 | $ 1.23 | $ 1.42 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited) - USD ($) | Total | Class A Common Stock | Class T Common Stock | Class I Common Stock | Common Stock Class A Common Stock | Common Stock Class T Common Stock | Common Stock Class I Common Stock | Additional Paid-In Capital | Retained Earnings and Cumulative Distributions | Non-controlling Interest |
Beginning balance at Dec. 31, 2020 | $ 18,516,579 | $ 4,166 | $ 2,100 | $ 1,752 | $ 18,296,613 | $ 99,823 | $ 112,125 | |||
Beginning balance, shares at Dec. 31, 2020 | 416,559 | 210,033 | 175,241 | |||||||
Common stock | 85,000 | $ 29 | $ 7 | 84,964 | ||||||
Common stock, shares | 2,908 | 636 | ||||||||
Common stock repurchased | (61,773) | $ (28) | (61,745) | |||||||
Common stock repurchased, shares | (2,758) | |||||||||
Distribution reinvestment | 54,169 | $ 14 | $ 5 | $ 4 | 54,146 | |||||
Distribution reinvestment, shares | 1,437 | 533 | 392 | |||||||
Offering costs, commissions and fees | (14,175) | (14,175) | ||||||||
Net income (loss) | 375,809 | 375,809 | ||||||||
Distributions declared | (325,080) | (321,330) | (3,750) | |||||||
Ending balance at Mar. 31, 2021 | 18,630,529 | $ 4,181 | $ 2,112 | $ 1,756 | 18,359,803 | 154,302 | 108,375 | |||
Ending balance, shares at Mar. 31, 2021 | 418,146 | 211,202 | 175,633 | |||||||
Beginning balance at Dec. 31, 2020 | 18,516,579 | $ 4,166 | $ 2,100 | $ 1,752 | 18,296,613 | 99,823 | 112,125 | |||
Beginning balance, shares at Dec. 31, 2020 | 416,559 | 210,033 | 175,241 | |||||||
Common stock repurchased | (191,665) | |||||||||
Ending balance at Sep. 30, 2021 | 18,699,550 | $ 4,161 | $ 2,114 | $ 1,758 | 18,323,165 | 267,477 | 100,875 | |||
Ending balance, shares at Sep. 30, 2021 | 416,113 | 211,394 | 175,771 | |||||||
Beginning balance at Mar. 31, 2021 | 18,630,529 | $ 4,181 | $ 2,112 | $ 1,756 | 18,359,803 | 154,302 | 108,375 | |||
Beginning balance, shares at Mar. 31, 2021 | 418,146 | 211,202 | 175,633 | |||||||
Common stock | 79,000 | $ 33 | 78,967 | |||||||
Common stock, shares | 3,252 | |||||||||
Common stock repurchased | (51,112) | $ (23) | (51,089) | |||||||
Common stock repurchased, shares | (2,300) | |||||||||
Distribution reinvestment | 17,856 | $ 4 | $ 2 | $ 2 | 17,848 | |||||
Distribution reinvestment, shares | 444 | 192 | 138 | |||||||
Offering costs, commissions and fees | (4,407) | (4,407) | ||||||||
Net income (loss) | 381,456 | 381,456 | ||||||||
Distributions declared | (330,172) | (326,422) | (3,750) | |||||||
Ending balance at Jun. 30, 2021 | 18,723,150 | $ 4,195 | $ 2,114 | $ 1,758 | 18,401,122 | 209,336 | 104,625 | |||
Ending balance, shares at Jun. 30, 2021 | 419,542 | 211,394 | 175,771 | |||||||
Common stock repurchased | (78,780) | $ (34) | (78,746) | |||||||
Common stock repurchased, shares | (3,429) | |||||||||
Offering costs, commissions and fees | 789 | 789 | ||||||||
Net income (loss) | 387,018 | 387,018 | ||||||||
Distributions declared | (332,627) | (328,877) | (3,750) | |||||||
Ending balance at Sep. 30, 2021 | 18,699,550 | $ 4,161 | $ 2,114 | $ 1,758 | 18,323,165 | 267,477 | 100,875 | |||
Ending balance, shares at Sep. 30, 2021 | 416,113 | 211,394 | 175,771 | |||||||
Beginning balance at Dec. 31, 2021 | 18,625,620 | $ 4,120 | $ 2,097 | $ 1,757 | 18,193,305 | 327,216 | 97,125 | |||
Beginning balance, shares at Dec. 31, 2021 | 411,979 | 209,708 | 175,771 | 411,979 | 209,708 | 175,771 | ||||
Common stock repurchased | (70,962) | $ (31) | (70,931) | |||||||
Common stock repurchased, shares | (3,065) | |||||||||
Offering costs, commissions and fees | (8,291) | (8,291) | ||||||||
Net income (loss) | 376,855 | 376,855 | ||||||||
Distributions declared | (322,377) | (318,627) | (3,750) | |||||||
Ending balance at Mar. 31, 2022 | 18,600,845 | $ 4,089 | $ 2,097 | $ 1,757 | 18,114,083 | 385,444 | 93,375 | |||
Ending balance, shares at Mar. 31, 2022 | 408,914 | 209,708 | 175,771 | |||||||
Beginning balance at Dec. 31, 2021 | 18,625,620 | $ 4,120 | $ 2,097 | $ 1,757 | 18,193,305 | 327,216 | 97,125 | |||
Beginning balance, shares at Dec. 31, 2021 | 411,979 | 209,708 | 175,771 | 411,979 | 209,708 | 175,771 | ||||
Common stock repurchased | (292,189) | |||||||||
Ending balance at Sep. 30, 2022 | 18,336,048 | $ 4,085 | $ 2,004 | $ 1,757 | 17,901,414 | 340,913 | 85,875 | |||
Ending balance, shares at Sep. 30, 2022 | 408,487 | 200,441 | 175,771 | 408,487 | 200,441 | 175,771 | ||||
Beginning balance at Mar. 31, 2022 | 18,600,845 | $ 4,089 | $ 2,097 | $ 1,757 | 18,114,083 | 385,444 | 93,375 | |||
Beginning balance, shares at Mar. 31, 2022 | 408,914 | 209,708 | 175,771 | |||||||
Common stock repurchased | (211,520) | $ (93) | (211,427) | |||||||
Common stock repurchased, shares | (9,267) | |||||||||
Offering costs, commissions and fees | 8,461 | 8,461 | ||||||||
Net income (loss) | 275,129 | 275,129 | ||||||||
Distributions declared | (323,145) | (319,395) | (3,750) | |||||||
Ending balance at Jun. 30, 2022 | 18,349,770 | $ 4,089 | $ 2,004 | $ 1,757 | 17,911,117 | 341,178 | 89,625 | |||
Ending balance, shares at Jun. 30, 2022 | 408,914 | 200,441 | 175,771 | |||||||
Common stock repurchased | (9,707) | $ (4) | (9,703) | |||||||
Common stock repurchased, shares | (427) | |||||||||
Net income (loss) | 320,402 | 320,402 | ||||||||
Distributions declared | (324,417) | (320,667) | (3,750) | |||||||
Ending balance at Sep. 30, 2022 | $ 18,336,048 | $ 4,085 | $ 2,004 | $ 1,757 | $ 17,901,414 | $ 340,913 | $ 85,875 | |||
Ending balance, shares at Sep. 30, 2022 | 408,487 | 200,441 | 175,771 | 408,487 | 200,441 | 175,771 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 972,386 | $ 1,144,283 |
Changes in assets and liabilities: | ||
Decrease/(increase) in prepaid expenses and other assets | 15,292 | (25,000) |
Decrease in accrued interest receivable | 89,616 | 57,192 |
Decrease/(increase) in accrued preferred return receivable | 2,250 | (45,000) |
Decrease in accounts receivable | 1,800,000 | |
(Decrease)/increase in accrued interest payable | (71,757) | 2,969 |
Increase in accounts payable and accrued expenses | 14,065 | 39,998 |
(Decrease) in due to related party | (517) | (4,347,112) |
Net cash provided by /(used in) operating activities | 1,021,335 | (1,372,670) |
Cash flows from investing activities: | ||
Repurchases of loan participation interest | (8,019,000) | |
Proceeds from sale/(fundings) of commercial mortgage loans, held for investment | 8,789,417 | (264,737) |
Cash provided by/(used in) investing activities | 770,417 | (264,737) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 51,424 | |
Payments related to organization and offering costs | (74,088) | |
Distributions | (964,104) | (907,734) |
Payments from redemptions of common stock | (292,189) | (181,568) |
Preferred stock dividends from RIT REIT Sub I | (7,500) | (7,500) |
Net cash used in financing activities | (1,337,881) | (1,045,378) |
Net increase/(decrease) in cash and cash equivalents | 453,871 | (2,682,785) |
Cash and cash equivalents, at beginning of period | 2,061,470 | 4,804,926 |
Cash and cash equivalents, at end of period | 2,515,341 | 2,122,141 |
Non-cash financing activities: | ||
Distribution reinvestment | 72,025 | |
Distributions payable | $ 1,665 | $ 620 |
Organization and Business Purpo
Organization and Business Purpose | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Organization and Business Purpose | Note 1 – Organization and Business Purpose Rodin Income Trust, Inc. (the “Company”) was formed on January 19, 2016 as a Maryland corporation that has elected to qualify as a real estate investment trust (“REIT”) for United States (“U.S.”) federal income tax purposes, commencing with its 2019 tax year. The Company’s consolidated financial statements include Rodin Income Trust Operating Partnership, L.P. (the “Operating Partnership”), RIT REIT Sub I, Inc. (“RIT REIT Sub I”), and RIT Lending, Inc. (“RIT Lending”). Both RIT REIT Sub I and RIT Lending are indirect wholly owned subsidiaries of the Company. Substantially all of the Company’s business is expected to be conducted through the Operating Partnership, a Delaware partnership formed on January 19, 2016. The Company is the sole general and limited partner of the Operating Partnership. Unless the context otherwise requires, the “Company” refers to the Company and the Operating Partnership. The Company currently operates its business in one reportable segment, which has focused on originating mortgage or mezzanine loans, secured mainly by commercial real estate, investing in participations of such loans, and other real estate related assets. On January 22, 2016, the Company was capitalized with a $ 200,001 investment by its sponsor, Cantor Fitzgerald Investors, LLC (“CFI”), through the purchase of 8,180 Class A shares of common stock. In addition, an indirect wholly owned subsidiary of CFI, Rodin Income Trust OP Holdings, LLC (the “Special Unit Holder”), has invested $ 1,000 in the Operating Partnership and has been issued a special class of limited partnership units, which is recorded as a non-controlling interest on the consolidated balance sheets as of September 30, 2022 and December 31, 2021 , respectively. The Company has registered with the Securities and Exchange Commission (“SEC”) an offering of up to $ 1.25 billion in shares of common stock, consisting of up to $ 1.0 billion in shares in the Company’s primary offering (the “Primary Offering”) and up to $ 250 million in shares pursuant to its distribution reinvestment plan (the “DRP”, and together with the Primary Offering, the “Offering”). On June 28, 2018, the Company satisfied the minimum offering requirement for the Offering (the “Minimum Offering Requirement”) as a result of CFI’s purchase of $ 2.0 million in Class I shares at $ 25.00 per share. On April 20, 2020, the Company’s board of directors authorized the extension of the term of the Offering until May 2, 2021, upon which date the Offering expired, pursuant to its terms. The Company ceased accepting subscription agreements dated after April 28, 2021, to allow for the orderly close of the Offering prior to its expiration on May 2, 2021. The Company’s board of directors determined to terminate the DRP effective on the distribution date of May 5, 2021. Accordingly, all distributions payable on or after May 5, 2021, have been paid in cash. Following the expiration of the Offering, the Company has continued to actively manage its portfolio. On September 16, 2022, the board of directors of the Company approved the assignment of substantially all of the Company’s assets ("Asset Assignment"), consisting of a mezzanine loan and a preferred equity interest, to an affiliate of CFI. In connection with the approval of the Asset Assignment, the Company’s board of directors also unanimously approved the Company’s plan of liquidation and dissolution, which together with the Asset Assignment are subject to stockholder approval. The Company is working to complete the Asset Assignment as soon as practicable and currently expects that the Asset Assignment will be completed promptly if the Company receives stockholder approval. In connection with the approval of the Asset Assignment and plan of liquidation, on September 16, 2022, the board of directors unanimously approved suspension of the Company’s share repurchase program until further notice. Pursuant to the terms of the share repurchase program, the suspension for the share repurchase program went into effect on September 30, 2022. The Company currently has two investments: (i) a $ 8.1 million fixed rate mezzanine loan (“Delshah Loan”) originated to Brooklyn Portfolio Mezz LLC (“Mezzanine Borrower) for the acquisition of a 28 -property multifamily portfolio by Delshah Capital Limited and (ii) a $ 8.1 million preferred equity interest in DS Brooklyn Portfolio Owner LLC, a single purpose limited liability company of which the Mezzanine Borrower owns 100 % of the membership interests (“Delshah Preferred Equity Interest”). The Company is externally managed by Rodin Income Advisors, LLC (the “Advisor”), a Delaware limited liability company and a wholly owned subsidiary of CFI. CFI is a wholly owned subsidiary of CFIM Holdings, LLC, which is a wholly owned subsidiary of Cantor Fitzgerald, L.P. (“CFLP”). |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 – Summary of Significant Accounting Policies Basis of Presentation The consolidated financial statements are presented in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, the accompanying consolidated financial statements contain all adjustments and eliminations, consisting only of normal recurring adjustments necessary for a fair presentation in conformity with U.S. GAAP. Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the balance sheet. Management believes that the estimates utilized in preparing the consolidated financial statements are reasonable. As such, actual results could differ from those estimates. Principles of Consolidation The consolidated financial statements include the accounts of the Company, the Operating Partnership and any single member limited liability companies or other entities which are consolidated in accordance with U.S. GAAP. The Company consolidates variable interest entities (“VIEs”) where it is the primary beneficiary and voting interest entities which are generally majority owned or otherwise controlled by the Company. All intercompany balances are eliminated in consolidation. Variable Interest Entities The Company determines if an entity is a VIE in accordance with guidance in Accounting Standards Codification (“ASC”) Topic 810, Consolidation . For an entity in which the Company has acquired an interest, the entity will be considered a VIE if the following characteristics are not met: 1) the equity investors in the entity have the characteristics of a controlling financial interest 2) the equity investors’ total investment at risk is sufficient to finance the entity’s activities without additional subordinated financial support and 3) the entity is structured with non-substantive voting rights (i.e., an anti-abuse clause). The Company makes judgments regarding the sufficiency of the equity at risk based first on a qualitative analysis, then a quantitative analysis, if necessary. A qualitative analysis is generally based on a review of the design of the entity, including its control structure and decision-making abilities, and also its financial structure. In a quantitative analysis, the Company would incorporate various estimates, including estimated future cash flows, assumed hold periods and capitalization or discount rates. If an entity is determined to be a VIE, the Company then determines whether to consolidate the entity as the primary beneficiary. The primary beneficiary has both (i) the power to direct the activities that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the entity. The Company evaluates all of its investments to determine if they are VIEs utilizing judgments and estimates that are inherently subjective. If different judgments or estimates were used for these evaluations, it could result in differing conclusions as to whether or not an entity is a VIE and whether or not to consolidate such entity. As of September 30, 2022 and December 31, 2021 , the Company concluded that it did no t have any investments in VIEs. Voting Interest Entities A voting interest entity is an entity in which the total equity investment at risk is sufficient to enable it to finance its activities independently and the equity holders have the power to direct the activities of the entity that most significantly impact its economic performance, the obligation to absorb the losses of the entity and the right to receive the residual returns of the entity. The usual condition for a controlling financial interest in a voting interest entity is ownership of a majority voting interest. If the Company has a majority voting interest in a voting interest entity, the entity will generally be consolidated. The Company will not consolidate a voting interest entity if there are substantive participating rights by other parties and/or kick-out rights by a single party. The Company performs ongoing reassessments of whether entities previously evaluated under the voting interest framework have become VIEs, based on certain events, and therefore subject to the VIE consolidation framework, and vice versa. Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand and highly liquid investments with original maturities of three months or less. Prepaid Expenses and other Assets Prepaid expenses and other assets consist primarily of reimbursements due from third party. Commercial Mortgage Loans, Held for Investment Commercial mortgage loans are generally intended to be held for investment and, accordingly, are carried at cost, net of unamortized loan fees, premiums, discounts and unfunded commitments. Commercial mortgage loans, held for investment that are deemed to be impaired are carried at amortized cost less a loan loss reserve, if deemed appropriate. Commercial mortgage loans where the Company does not have the intent to hold the loan for the foreseeable future or until its expected payoff are classified as held for sale and recorded at the lower of cost or estimated value. As of December 31, 2021 , the Company originated and held two mezzanine loans and classified them as held for investment. As of September 30, 2022 , the Company held one mezzanine loan classified as held for investment Mezzanine Loans The Company has originated mezzanine loans to entities that are members of commercial real estate property owners. The mezzanine loan the Company currently holds, is secured by a pledge against the borrower’s equity in the property owner and is subordinate to senior debt. The mezzanine loan is senior to any preferred equity or common equity in the property (see Note 3 – Commercial Mortgage Loans, Held for Investment for further information). Loan Participations Sold The Company has partially financed its Commercial mortgage loans, held for investment, through the sale of participating mezzanine loan interests to CFI. To the extent that U.S. GAAP does not recognize a sale resulting from the loan participation interests sold, the Company does not derecognize the participation in the loan that it sold. Instead, the Company recognizes a loan participation sold liability in an amount equal to the principal of the loan participation sold. The Company continues to recognize interest income on the entire loan, including the interest attributable to the Loan participations sold. During May and June 2022, the Company has repurchased all the mezzanine loan interests from CFI (see Note 4 – Loan Participations Sold for further information). Investment in Real Estate - Related Assets Preferred Equity Investment The Company has made a preferred equity investment in the Delshah Preferred Equity Interest. Preferred equity investments are generally intended to be held to maturity and, accordingly, are carried at cost, net of unamortized fees, premium, discount and unfunded commitments. Preferred equity investments that are deemed to be impaired are carried at amortized cost less a loss reserve, if deemed appropriate. Preferred equity investments where the Company does not have the intent to hold the investment for the foreseeable future or until its expected payoff are classified as held for sale and recorded at the lower of cost or estimated value. Preferred equity investments are considered impaired when, based on current information and events, it is probable that the Company will not be able to collect principal and preferred return income amounts due according to the contractual terms. The Company assesses the credit quality of the portfolio and adequacy of loss reserves on a periodic basis. Significant judgment of management is required in this analysis. The Company considers the estimated net recoverable value of the preferred equity investment as well as other factors, including but not limited to the fair value of any collateral, the amount and the status of any senior debt, the quality and financial condition of the borrower and the competitive situation of the area where the underlying collateral is located. Because this determination is based on projections of future economic events, which are inherently subjective, the amount ultimately realized may differ materially from the carrying value as of the balance sheet date. If upon completion of the assessment, the estimated fair value of the underlying collateral is less than the net carrying value of the preferred equity investment, a loss reserve is recorded with a corresponding charge to provision for losses. The loss reserve for each preferred equity investment is maintained at a level that is determined to be adequate by management to absorb probable losses. Income recognition is suspended for a preferred equity investment at the earlier of the date at which payments become 90-days past due or when, in the opinion of management, a full recovery of income and principal becomes doubtful. When the ultimate collectability of the principal of an impaired preferred equity investment is in doubt, all payments are applied to principal under the cost recovery method. When the ultimate collectability of the principal of an impaired preferred equity investment is not in doubt, contractual preferred return income is recorded as preferred return income when received, under the cash basis method until an accrual is resumed when the preferred return investment becomes contractually current and performance is demonstrated to be resumed. A preferred return investment is written off when it is no longer realizable and/or legally discharged. No impairment losses were recorded during the nine months ended September 30, 2022 after the Company assessed the recoverability of its assets. As of September 30, 2022 , no impairment losses have been identified. Revenue Recognition Interest income from the Company’s Commercial mortgage loans, held for investment is recognized when earned and accrued based on the outstanding accrual balance and any related premium, discount, origination costs and fees are amortized over the term of the loan on a straight-line basis. The amortization is reflected as an adjustment to Interest income in earnings. The amortization of a premium or accretion of a discount is discontinued if such loan is reclassified to held for sale. Preferred return income from the Company’s preferred equity investment is recognized when earned and accrued based on the outstanding investment balance. Credit Losses and Impairment on Commercial Mortgage Loans, Held for Investment Loans are considered impaired when, based on current information and events, it is probable that the Company will not be able to collect principal and interest amounts due according to the contractual terms. The Company assesses the credit quality of the portfolio and adequacy of loan loss reserves on a periodic basis. Significant judgment of management is required in this analysis. The Company considers the estimated net recoverable value of the loan as well as other factors, including but not limited to the fair value of any collateral, the amount and the status of any senior debt, the credit quality and financial condition of the borrower, and the competitive situation of the area where the underlying collateral is located. Because this determination is based on projections of future economic events, which are inherently subjective, the amount ultimately realized may differ materially from the carrying value as of the balance sheet date. If upon completion of the assessment, the estimated fair value of the underlying collateral is less than the net carrying value of the loan, a loan loss reserve is recorded with a corresponding charge to provision for loan losses. The loan loss reserve for each loan is maintained at a level that is determined to be adequate by management to absorb probable losses. Income recognition is suspended for a loan at the earlier of the date at which payments become 90-days past due or when, in the opinion of management, a full recovery of income and principal becomes doubtful. When the ultimate collectability of the principal of an impaired loan is in doubt, all payments are applied to principal under the cost recovery method. When the ultimate collectability of the principal of an impaired loan is not in doubt, contractual interest is recorded as interest income when received, under the cash basis method until an accrual is resumed when the loan becomes contractually current and performance is demonstrated to be resumed. A loan is written off when it is no longer realizable and/or legally discharged. As of September 30, 2022, and December 31, 2021 , no impairment has been identified for loans that are held for investment. There are no loans that have been classified as past due or in non-accrual status as of September 30, 2022 and December 31, 2021 . Risks and Uncertainties Financial instruments that potentially subject the Company to concentrations of credit risk include Cash and cash equivalents. At times, balances with any one financial institution may exceed the Federal Deposit Insurance Corporation insurance limits. The Company believes it mitigates this risk by investing its cash with high-credit quality financial institutions. Concentration of Credit Risk The following table presents the geography and property type of collateral underlying the Company’s Commercial mortgage loans, held for investment as a percentage of the loan’s carrying value as of September 30, 2022 and December 31, 2021: Geography Collateral Property Type Percentage New York Multifamily 100 % Due from Related Party Due from related party includes amounts due from the Advisor for prior payments made by the Company relating to blue sky registration fees. As of both September 30, 2022 and December 31, 2021, the balance of Due from related party was $ 39,963 . Due to Related Party Due to related party is comprised of amounts contractually owed by the Company for various services provided to the Company from a related party, which at September 30, 2022 and December 31, 2021 was $ 208,121 and $ 282,896 , respectively. Accounts Payable and Accrued Expenses Accounts payable and accrued expenses is comprised of amounts owed by the Company for compensation to the Company’s independent board of directors relating to pro-rated annual compensation as well as attendance at meetings of the board of directors. As of September 30, 2022 and December 31, 2021, accounts payable and accrued expenses was $ 200,545 and $ 186,480 , respectively. Organization and Offering Costs The Advisor has agreed to pay, on behalf of the Company, all organizational and offering costs (including legal, accounting, and other costs attributable to the Company’s organization and offering, but excluding upfront selling commissions, dealer manager fees and distribution fees) (“O&O Costs”) through the first anniversary of the date on which the Company satisfied the Minimum Offering Requirement, which was June 28, 2019 (the “Escrow Break Anniversary”). After the Escrow Break Anniversary, the Advisor, in its sole discretion, may pay some or all of the additional O&O Costs incurred, but it is not required to do so. Following the Escrow Break Anniversary, the Company began reimbursing the Advisor for payment of the O&O Costs ratably over a 36 -month period; provided, however, that the Company will not be obligated to pay any amounts that as a result of such payment would cause the aggregate payments for O&O Costs (less selling commissions, dealer manager fees and distribution fees) paid to the Advisor to exceed 1 % of gross proceeds of the Offering (the “1% Cap”), as of such payment date. To the extent the Advisor pays any additional O&O Costs, the Company will be obligated to reimburse the Advisor subject to the 1% Cap. Any amounts not reimbursed in any period shall be included in determining any reimbursement liability for a subsequent period. The Advisor has continued to pay all O&O Costs on behalf of the Company through the expiration of the Offering. As of April 30, 2022, the Company completed its obligation to reimburse the Advisor for payments of the O&O Cost up to the 1 % Cap. As of September 30, 2022 and December 31, 2021 , the Advisor has incurred $ 6,031,627 and $ 6,040,637 respectively, of O&O Costs on behalf of the Company. The Company’s obligation is $ 0 , pursuant to the 1% Cap, less any reimbursement payments made by the Company to the Advisor for O&O costs incurred, which at September 30, 2022 and December 31, 2021 was $ 0 and $ 32,696 , respectively, and is included within Due to related party in the accompanying consolidated balance sheets. As of September 30, 2022, organizational costs of $ 449 since inception had been recorded in General and administrative expenses in prior periods. As of September 30, 2022 and December 31, 2021, offering costs of $ 187,117 and $ 187,826 , respectively, were charged to stockholders’ equity. As of September 30, 2022 and December 31, 2021, the Company has made reimbursement payments of $ 187,565 and $ 155,579 , respectively, to the Advisor for O&O Costs incurred. Income Taxes The Company has elected and qualified to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, commencing with its 2019 tax year. Accordingly, the Company generally will not be subject to U.S. federal income tax to the extent of its distributions to stockholders and as long as certain asset, income, share ownership, minimum distribution and other requirements are met. To qualify as a REIT, the Company must annually distribute at least 90 % of its REIT taxable income to its stockholders and meet certain other requirements. Under certain circumstances, federal income and excise taxes may be due on its undistributed taxable income. The Company may also be subject to certain state, local and franchise taxes. If the Company fails to meet these requirements, it will be subject to U.S. federal income tax, which could have a material adverse impact on its results of operations and amounts available for distributions to its stockholders. The Company provides for uncertain tax positions based upon management’s assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. Management is required to determine whether a tax position is more likely than not to be sustained upon examination by tax authorities, including resolution of any related appeals or litigation processes, based on the technical merits of the position. Because assumptions are used in determining whether a tax benefit is more likely than not to be sustained upon examination by tax authorities, actual results may differ from the Company’s estimates under different assumptions or conditions. Earnings Per Share Basic net income (loss) per share of common stock is determined by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is determined by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during the period, including common stock equivalents. As of September 30, 2022 and December 31, 2021, there were no material common stock equivalents that would have a dilutive effect on net income (loss) per share for common stockholders. All classes of common stock are allocated net income (loss) at the same rate per share. For the three months and nine months ended September 30, 2022, basic and diluted net income per common share was $ 0.41 and $ 1.23 , respectively. For the three months and nine months ended September 30, 2021, basic and diluted net income per common share was $ 0.48 and $ 1.42 , respectively. Recently Adopted Accounting Pronouncements In January 2020, the FASB issued ASU No. 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the FASB Emerging Issues Task Force) . These amendments improve current guidance by reducing diversity in practice and increasing comparability of the accounting for the interactions between these codification topics as they pertain to certain equity securities, investments under the equity method of accounting and forward contracts or purchased options to purchase securities that, upon settlement of the forward contract or exercise of the purchased option, would be accounted for under the equity method of accounting or the fair value option. The new standard became effective for the Company beginning January 1, 2022 on a prospective basis. The adoption of this guidance did not have a material impact on the Company’s unaudited consolidated financial statements. In October 2020, the FASB issued ASU No. 2020-10, Codification Improvements . The standard amends the Codification by moving existing disclosure requirements to (or adding appropriate references in) the relevant disclosure sections. The ASU also clarifies various provisions of the Codification by amending and adding new headings, cross-referencing, and refining or correcting terminology. The Company adopted the standard on its effective date beginning January 1, 2022 and it was applied using a modified retrospective method of transition. The adoption of this guidance did not have a material impact on the Company’s unaudited consolidated financial statements. New Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which requires financial assets that are measured at amortized cost to be presented, net of an allowance for credit losses, at the amount expected to be collected over their estimated life. Expected credit losses for newly recognized financial assets, as well as changes to credit losses during the period, are recognized in earnings. For certain purchased financial assets with deterioration in credit quality since origination (“PCD assets”), the initial allowance for expected credit losses will be recorded as an increase to the purchase price. Expected credit losses, including losses on off-balance-sheet exposures such as lending commitments, will be measured based on historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses , to clarify that operating lease receivables accounted for under ASC 842, Leases , are not in the scope of the new credit losses guidance, and, instead, impairment of receivables arising from operating leases should be accounted for in accordance with ASC 842, Leases . In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments . The ASU makes changes to the guidance introduced or amended by ASU No. 2016-13 to clarify the scope of the credit losses standard and address guidance related to accrued interest receivable balances, recoveries, variable interest rates and prepayments, among other issues. In addition, in May 2019, the FASB issued ASU No. 2019-05, Financial Instruments—Credit Losses (Topic 326 ) : Targeted Transition Relief . The amendments in this ASU allow entities, upon adoption of ASU No. 2016-13, to irrevocably elect the fair value option for financial instruments that were previously carried at amortized cost and are eligible for the fair value option under ASC 825-10, Financial Instruments: Overall . In November 2019, the FASB issued ASU No. 2019-10, Financial instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842) Effective Dates . Pursuant to this ASU, the effective date of the new credit losses standard was deferred, and the new credit impairment guidance will become effective for the Company on January 1, 2023 under a modified retrospective approach, and early adoption is permitted. In addition, in November 2019, the FASB issued ASU No. 2019-11 , Codification Improvements to Topic 326, Financial Instruments—Credit Losses . The amendments in this ASU require entities to include certain expected recoveries of the amortized cost basis previously written off, or expected to be written off, in the allowance for credit losses for PCD assets; provide transition relief related to troubled debt restructurings; allow entities to exclude accrued interest amounts from certain required disclosures; and clarify the requirements for applying the collateral maintenance practical expedient. The amendments in ASUs No. 2018-19, 2019-04, 2019-05, 2019-10 and 2019-11 are required to be adopted concurrently with the guidance in ASU No. 2016-13. The Company plans to adopt the standards on January 1, 2023. Management is continuing to implement the new credit losses guidance, including development of the credit loss estimation methodology and the assessment of the impact of the new guidance on the Company’s unaudited consolidated financial statements. Given the objective of the new standard, it is generally expected allowances for credit losses for the financial instruments within its scope would increase, however, the amount of any change will be dependent on the composition and quality of the Company’s portfolios at the adoption date as well as economic conditions and forecasts at that time. In March 2020, the FASB issued ASU No. 2020-03, Codification Improvements to Financial Instruments . This ASU makes narrow-scope amendments related to various aspects pertaining to financial instruments and related disclosures by clarifying or improving the Codification. Certain guidance became effective for the Company for annual periods beginning January 1, 2020, and the adoption of this guidance did not have a material impact on the Company’s consolidated unaudited financial statements. The guidance related to credit losses will be effective for the Company on January 1, 2023. Early adoption is permitted. Management is currently evaluating the impact of the new credit losses guidance on the Company’s unaudited consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . The guidance is designed to provide relief from the accounting analysis and impacts that may otherwise be required for modifications to agreements (e.g., loans, debt securities, derivatives, and borrowings) necessitated by reference rate reform as entities transition away from LIBOR and other interbank offered rates to alternative reference rates. This ASU also provides optional expedients to enable companies to continue to apply hedge accounting to certain hedging relationships impacted by reference rate reform. Application of the guidance is optional and only available in certain situations. The ASU is effective upon issuance and generally can be applied through December 31, 2022. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope . The amendments in this standard are elective and principally apply to entities that have derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform (referred to as the “discounting transition”). The standard expands the scope of ASC 848, Reference Rate Reform, and allows entities to elect optional expedients to derivative contracts impacted by the discounting transition. Similar to ASU No. 2020-04, provisions of this ASU are effective upon issuance and generally can be applied through December 31, 2022. Management is evaluating and planning for the adoption of the new guidance to determine the Company’s transition plan and facilitate an orderly transition to alternative reference rates, and continuing its assessment on the Company’s unaudited consolidated financial statements. In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers . The standard improves the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to the recognition of an acquired contract liability, as well as payment terms and their effect on subsequent revenue recognized by the acquirer. The ASU requires companies to apply guidance in ASC 606, Revenue from Contracts with Customers , to recognize and measure contract assets and contract liabilities from contracts with customers acquired in a business combination, and, thus, creates an exception to the general recognition and measurement principle in ASC 805, Business Combinations . The new standard will become effective for the Company beginning January 1, 2024, can be applied prospectively for business combinations occurring on or after the effective date, and early adoption is permitted. Management is currently evaluating the impact of the new standard on the Company’s consolidated financial statements. In March 2022, the FASB issued ASU No. 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures . The guidance is intended to improve the decision usefulness of information provided to investors about certain loan refinancings, restructurings, and write-offs. The standard eliminates the recognition and measurement guidance on TDRs for creditors after they have adopted ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and requires them to make enhanced disclosures about loan modifications for borrowers experiencing financial difficulty. The new standard will become effective for the Company beginning January 1, 2023. The guidance for recognition and measurement of TDRs can be applied using either a prospective or modified retrospective transition method, and the amendments related to disclosures can be applied prospectively. Early adoption is permitted, and an entity may elect to early adopt the amendments related to TDRs separately from the amendments related to vintage disclosures. Management is currently evaluating the impact of the new standard on the Company’s unaudited consolidated financial statements. |
Commercial Mortgage Loans, Held
Commercial Mortgage Loans, Held for Investment | 9 Months Ended |
Sep. 30, 2022 | |
Receivables [Abstract] | |
Commercial Mortgage Loans, Held for Investment | Note 3 – Commercial Mortgage Loans, Held for Investment NYC Multi-family Portfolio Mezzanine Loan On September 21, 2018, the Company originated, through RIT Lending, the Delshah Loan to the Mezzanine Borrower, an affiliate of Delshah, for the acquisition of the Portfolio. The fee simple interest in the Portfolio is held by DS Brooklyn Portfolio Owner LLC, a single purpose limited liability company (the “Senior Borrower”) of which the Mezzanine Borrower owns 100 % of the membership interests. The Portfolio is comprised of 207 residential units and 19 commercial units that encompass 167,499 square feet. The interest rate for the Delshah Loan for years one through five is 9.10 %. Beginning on September 22, 2023, the interest rate for the Delshah Loan will change to the greater of (i) 9.10 % or (ii) 275 basis points over the then existing five year U.S. Treasury Note Yield (the “Mortgage Loan Interest Rate ”). However, in the event certain conditions described in the Delshah Loan mezzanine loan agreement are not satisfied at the end of year five, the interest rate for the Delshah Loan will increase to the greater of (i) 10.10 % or (ii) 565 basis points over the Mortgage Loan Interest Rate in effect at the end of year five. The Delshah Loan is secured by a pledge of 100 % of the equity interests in the Senior Borrower. The Delshah Loan may be prepaid in its entirety, but not in part, subject to RIT Lending’s receipt of eighteen months of minimum interest. The term of the Delshah Loan is ten years , with no option to extend. The Portfolio is managed by an affiliate of the Borrower. In connection with the origination of the Delshah Loan, RIT Lending entered into a participation agreement (the “Delshah Loan Participation Agreement”) with CFI. RIT Lending originated the Delshah Loan with (i) cash from the Offering equivalent to a 5 % participation interest in the amount of $ 900,000 in the Delshah Loan and (ii) proceeds from the sale to CFI of a 95 % participation interest in the amount of $ 17,100,000 in the Delshah Loan. Prior to the modification on December 31, 2020, an amount of $ 9,081,000 participation interests in the Delshah loan was repurchased from CFI. During the three months ended September 30, 2022 and September 30, 2021, the Company earned Interest income, net of $ 191,783 and $ 1,884 , respectively, on the Delshah Loan, consisting of $ 191,783 and $ 188,370 , respectively, of total Interest less $ 0 and $ 186,486 , respectively, of Interest income related to Loan participations sold. During the nine months ended September 30, 2022 and September 30, 2021, the Company earned Interest income, net of $ 267,246 and $ 5,565 , respectively, on the Delshah Loan, consisting of $ 562,380 and $ 556,472 , respectively, of total Interest less $ 295,134 and $ 550,907 , respectively, of Interest income related to Loan participations sold. Summary of the modification At Delshah’s request, the Company agreed to the following modification of the Delshah Loan, effective December 31, 2020. On December 31, 2020, an affiliate of Delshah paid down the original balance of the Delshah Loan by $ 1.8 million, resulting in a principal loan balance of $ 16.2 million. Concurrently with the pay down, $ 8.1 million ( 50 % of the Delshah Loan) converted from the mezzanine loan to the Delshah Preferred Equity Interest in DS Brooklyn Portfolio Holdings LLC, the sole owner of the Mezzanine Borrower, on the terms described below, to be held by RIT Lending. The other member of DS Brooklyn Portfolio Holdings LLC is DS Property Acquisitions LLC, an affiliate of Delshah. The remaining $ 8.1 million balance of the Delshah Loan remained outstanding as a mezzanine loan on the same terms as those in effect prior to the conversion. Following the conversion, CFI had 99 % interest in the Delshah Loan and the Company had 1 % interest in the Delshah Loan and 100 % of the Delshah Preferred Equity Interest. During the nine months ended September 30, 2022 , the Company repurchased 99 % Interest of the Delshah Loan from CFI in the amount of $ 8.0 million, increasing the Company’s total interest in the Delshah Loan to 100 % . The following table provides certain information about the Delshah Loan: Loan Type Loan Amount Loan Coupon Amortization Loan-to-Value (1) Mezzanine Loan $ 8,100,000 10 years 9.10% subject to a potential increase in year six Interest only 83.14 % Note: (1) Loan-to-Value is calculated as of the date the Delshah Loan was originated. 533 East 12th Street, New York, NY On November 1, 2018, the Company, through RIT Lending, originated the East 12th Street Loan to the East 12th Street Mezzanine Borrower, an affiliate of Delshah, for the acquisition of the East 12th Street Property. The fee simple interest in the East 12th Street Property is held by DS 531 E. 12th Owner LLC, a single purpose limited liability company (the “East 12th Street Senior Borrower”) of which the East 12th Street Mezzanine Borrower owns 100 % of the membership interests. The East 12 th Street Loan was secured by a pledge of 100 % of the equity interests in the East 12th Street Senior Borrower. The East 12th Street Loan could be prepaid in its entirety or in part in connection with sales of condominium units, subject in each case to RIT Lending’s receipt of eighteen months of minimum interest. The term of the East 12th Street Loan was three years , with two 1-year options to extend. On November 1, 2021, the Company and the East 12th Street Borrower agreed to modify the first of such options to a six-month extension in exchange for the waiver of certain borrower requirements. The East 12th Street Borrower simultaneously exercised the six-month extension. $ 6,830,000 of the East 12 th Street Loan was funded at closing. $ 1,660,000 of the East 12 th Street Loan was withheld to be advanced to the extent the East 12 th Street Property generated insufficient cash flow to fully cover payment of interest on the East 12 th Street Loan. The remaining portion of the East 12 th Street Loan, $ 500,000 , was also withheld to be advanced to pay for capital expenditure, broker commissions and tenant improvements associated with the East 12 th Street Property as approved by RIT Lending. No interest accrued on the unfunded amounts. On April 21, 2022, the Company, through RIT Lending, and the East 12th Street Mezzanine Borrower entered into a modification of the East 12th Street Loan. Under the modification, the East 12th Street Mezzanine Borrower paid down the principal amount of the East 12th Street Loan in the amount of $ 5,670,904 , after which $ 3,118,513 was the remaining unpaid principal balance of the East 12th Street Loan. During May and June, 2022, the East 12th Street Mezzanine Borrower repaid the remining unpaid balance of the East 12th Street Loan reducing the loan balance to $ 0 . As of December 31, 2021, the Company and CFI had advanced $1,459,417 to cover interest shortfalls, reducing the amount withheld to fully cover payment of interest on the East 12 th Street Loan to $200,583. As of December 31, 2021, the Company had advanced $500,000 for capital expenditure, reducing the amount withheld for capital expenditure, broker commissions and tenant improvements to $0. As of December 31, 2021, the total funded amount for the East 12 th Street Loan was $8,789,417. During the three months ended September 30, 2022 and September 30, 2021 , the Company earned Interest income, of $ 0 and $ 259,659 respectively, on the East 12 th Street Loan. During the nine months ended September 30, 2022 and September 30, 2021, the Company earned Interest income of $ 359,545 and $ 761,950 , respectively, on the East 12th Street Loan. The following table summarizes the activity on the loans at September 30, 2022: Activity Delshah Loan RIT Total Delshah East 12th Street RIT Total East 12th Total Loans Total Loan $ 18,000,000 $ 18,000,000 $ 8,990,000 $ 8,990,000 $ 26,990,000 Initial Funding 18,000,000 100.00 % 18,000,000 6,830,000 100.00 % 6,830,000 24,830,000 Interest ( 17,100,000 ) - 95.00 % — ( 5,435,000 ) - 79.58 % — — Ownership 900,000 5.00 % 18,000,000 1,395,000 20.42 % 6,830,000 24,830,000 Advance for — — — 1,459,417 — 1,459,417 1,459,417 Interest — — — ( 174,044 ) — — — Advance for — — — 500,000 — 500,000 500,000 RIT Interest 17,100,000 95.00 % — 5,609,044 79.58 % — — Principal ( 1,800,000 ) ( 1,800,000 ) ( 8,789,417 ) - 100.00 % ( 8,789,417 ) ( 10,589,417 ) Conversion to Preferred Equity ( 8,100,000 ) ( 8,100,000 ) — — ( 8,100,000 ) Ownership $ 8,100,000 100.00 % $ 8,100,000 $ — 0.00 % $ — $ 8,100,000 During the three months ended September 30, 2022 and September 30, 2021, the Company earned Total interest income, net of $ 191,783 and $ 261,543 , respectively, which was comprised of total Interest income of $ 191,783 and $ 448,029 , respectively, less Interest income related to loan participations sold of $ 0 and $ 186,486 , respectively. During the nine months ended September 30, 2022 and September 30, 2021, the Company earned Total interest income, net of $ 626,791 and $ 767,515 , respectively, which was comprised of Interest income of $ 921,925 and $ 1,318,422 , respectively, less Interest income related to loan participations sold of $ 295,134 and $ 550,907 , respectively. |
Loan Participations Sold
Loan Participations Sold | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Loan Participations Sold | Note 4 – Loan Participations Sold Delshah Loan Participation Agreement In connection with the origination of the Delshah Loan, RIT Lending entered into the Delshah Loan Participation Agreement with CFI. The Company originated, through RIT Lending, the Delshah Loan with (i) cash from the Offering equivalent to a 5 % participation interest in the amount of $ 900,000 in the Delshah Loan and (ii) proceeds from the sale to CFI of a 95 % participation interest in the amount of $ 17,100,000 in the Delshah Loan. The Company intended, but was not obligated, to repurchase the remaining 95% of the participation interest in the Delshah Loan from CFI at a purchase price equivalent to the amount paid for the participation interest by CFI. The Delshah Loan Participation Agreement provided that participation certificates sold to CFI represent an undivided beneficial ownership interest in the Delshah Loan. The Delshah Loan Participation Agreement also specified the parties’ respective rights with respect to the Delshah Loan. The transactions with CFI were approved by the Company’s board of directors, including by the majority of its independent directors. As of December 31, 2020, the Company had repurchased participation interests in the Delshah Loan from CFI totaling $ 9,081,000 . On December 31, 2020, an affiliate of Delshah paid down the original balance of the Delshah Loan by $ 1.8 million, resulting in a principal loan balance of $ 16.2 million. Concurrently with the pay down, $ 8.1 million ( 50 % of the Delshah Loan) converted from the mezzanine loan to the Delshah Preferred Equity Interest in DS Brooklyn Portfolio Holdings LLC, the sole owner of the Delshah Borrower, to be held by RIT Lending. As a result, as of December 31, 2021, the Company’s total interest was $ 81,000 , which represented 1 % ownership interest in the Delshah Loan. During the nine months ended September 30, 2022 , the Company repurchased an amount of $ 8,019,000 representing the 99 % of the participation interests in the Delshah Loan held by CFI. As a result, as of September 30, 2022 , the Company’s interest in the Delshah Loan was $ 8,100,000 , which represented 100 % ownership interest. In accordance with ASC Topic 860, Transfers and Servicing, the sales of participation interests in the Investments do not qualify as sales. Therefore, the Company presents the gross amount of the Investments as an asset and the Loan participations sold as a liability on the consolidated balance sheet. The gross presentation of Loan participations sold does not impact stockholders’ equity or net income. |
Investment in Real Estate-Relat
Investment in Real Estate-Related Assets | 9 Months Ended |
Sep. 30, 2022 | |
Real Estate [Abstract] | |
Investment in Real Estate-Related Assets | Note 5 – Investment in real estate-related assets As described above in Note 3, pursuant to Delshah’s request to modify the Delshah Loan, on December 31, 2020, an affiliate of Delshah paid down the original balance of the Delshah Loan by $ 1.8 million, resulting in a principal loan balance of $ 16.2 million. Concurrently with the pay down, $ 8.1 million ( 50 % of the Delshah Loan) converted from the mezzanine loan to the Delshah Preferred Equity Interest in DS Brooklyn Portfolio Holdings LLC. The $8.1 million Delshah Preferred Equity Interest has the mandatory redemption date of the earlier of September 21, 2028 or the maturity date of either Delshah senior loan or Delshah Loan. In addition, the DS Property Acquisitions LLC (the “Operating Member”), an affiliate of Delshah, may redeem the Delshah Preferred Equity Interest in whole or in part on any business day upon at least 5 business days prior written notice. The preferred return for the Delshah Preferred Equity Interest until September 21, 2023 is 10.00 %. At such date, the preferred return for the Delshah Preferred Equity Interest will change to the greater of (i) 10.25 % or (ii) 740 basis points over the then existing five-year U.S. Treasury Note Yield, such interest rate then in effect for Delshah Preferred Equity Interest is referred to as the Mortgage Loan Interest Rate. However, in the event certain conditions described in the next sentence are not satisfied by September 21, 2023, the interest rate for the Delshah Loan will increase to the greater of (i) 11.25 % or (ii) 840 basis points over the Mortgage Loan Interest Rate in effect. The interest rate modification conditions to be satisfied by September 21, 2023 are: (a) a minimum financing yield on the combined Delshah Loan, Delshah senior loan and Delshah Preferred Equity Interest amount of 7.0 %; (b) a financing service coverage ratio of at least 1.10x , on the combined Delshah Loan, Delshah senior loan and Delshah Preferred Equity Interest amount; and (c) the then outstanding balance of the combined Delshah Loan, Delshah senior loan and Delshah Preferred Equity Interest is not greater than 75.0 % of the value of the Delshah portfolio. The Operating Member has the right to cause any portion of the preferred return in excess of 9.1 % to be paid as a payment-in-kind (including as an increase in the capital balance of the Delshah Preferred Equity Interest). On the 10 th day of each month, available cash flow will be distributed as follows: (i) to any reserves required under the operating agreement of DS Brooklyn Portfolio Holdings LLC for taxes or insurance premiums, (ii) to the accrued and unpaid return on any special contributions made by RIT Lending, (iii) to repayment of any special contributions made by RIT Lending until paid in full, (iv) to the accrued and unpaid return on the Delshah Preferred Equity Interest, (v) provided no trigger event is continuing, to the payment of a cumulative return on the capital contribution made by RIT Lending at a rate equal to 15 % (the “Operating Member Return”), (vi) to repayment of the capital balance of the Delshah Preferred Equity Interest, (vii) during the continuance of a trigger event, to the payment of the Operating Member Return, and (viii) any remaining amounts to be distributed on a pari passu basis 20 % to RIT Lending and 80 % to Operating Member. In addition, any excess proceeds will be used to pay down Delshah Preferred Equity Interest. In connection with the Delshah Preferred Equity Interest, Delshah paid the Advisor a fee totaling $ 60,750 ( 75 basis points on the $ 8.1 million amount of the Delshah Preferred Equity Interest). The following table provides certain information about the Delshah Preferred Equity Interest: Portfolio Original Investment Amount Preferred Return Preferred Equity Investment $ 8,100,000 10.00 % through 9/21/2023, then the greater of 10.25 % or 740 bps over 5-year Treasury Yield During the three months ended September 30, 2022 and September 30, 2021, the Company earned Preferred return income of $ 207,000 on the Delshah Preferred Equity Interest. During the nine months ended September 30, 2022 and September 30, 2021 , the Company earned Preferred return income of $ 614,250 . |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Stockholders' Equity | Note 6 – Stockholders’ Equity Initial Public Offering On November 30, 2017, the Company filed a registration statement with the SEC on Form S-11 in connection with the Offering. The registration statement was subsequently declared effective by the SEC on May 2, 2018. In addition, on June 28, 2018, the Company satisfied the Minimum Offering Requirement for the Offering as a result of CFI’s purchase of $ 2.0 million in Class I shares at $ 25.00 per share. The Company’s shares of common stock consist of Class A shares, Class T shares and Class I shares, all of which are collectively referred to herein as shares of common stock. As of September 30, 2022, the Company’s total number of authorized shares of common stock was 410,000,000 consisting of 160,000,000 of Class A authorized common shares, 200,000,000 of Class T authorized common shares and 50,000,000 of Class I authorized common shares. The Class A shares, Class T shares and Class I shares have identical rights and privileges, including identical voting rights, but had different upfront selling commissions and dealer manager fees and the Class T shares had an ongoing distribution fee. CFI paid a portion of selling commissions and all of the dealer manager fees (“Sponsor Support”), up to a total of 4.0 % of gross offering proceeds from the sale of Class A shares and Class T shares, and up to a total of 1.5 % of gross offering proceeds from the sale of Class I shares, incurred in connection with the Offering. Selling commissions and dealer manager fees are presented net of Sponsor Support on the Company’s consolidated statements of stockholders’ equity. The Company will reimburse Sponsor Support (i) immediately prior to or upon the occurrence of a liquidity event, including (A) the listing of the Company’s common stock on a national securities exchange or (B) a merger, consolidation or a sale of substantially all of the Company’s assets or any similar transaction or any transaction pursuant to which a majority of the Company’s board of directors then in office are replaced or removed, or (ii) upon the termination of the Advisory Agreement (as defined below) by the Company or by the Advisor. In each such case, the Company will only reimburse CFI after the Company has fully invested the proceeds from the Offering and the Company’s stockholders have received, or are deemed to have received, in the aggregate, cumulative distributions equal to their invested capital plus a 6.5 % cumulative, non-compounded annual pre-tax return on such invested capital. Pursuant to the terms of the dealer manager agreement between the Company and Cantor Fitzgerald & Co. (the “Dealer Manager”), a related party, the Dealer Manager provided dealer manager services in connection with the Offering. The Offering was a best efforts continuous offering that ended May 2, 2021 pursuant to its terms. The Company’s board of directors determined to terminate the DRP effective on the distribution date of May 5, 2021. Accordingly, all distributions payable on or after May 5, 2021, have been paid in cash. The Company also has 50 million shares of preferred stock, $ 0.01 par value, authorized. No shares of preferred stock are issued or outstanding. As of the termination of the Offering on May 2, 2021, the Company had sold 800,825 shares of its common stock (consisting of 413,661 Class A shares and 175,771 Class I shares and 211,394 Class T shares) in the Offering for a total of gross proceeds of $ 19,090,154 . Distributions The Company’s board of directors authorized, and the Company declared, for a period covering January 1, 2022 through September 30, 2022 , distributions of $ 0.004602739 per day (or approximately $ 1.68 on an annual basis) per share of Class A common stock, Class I common stock and Class T common stock, less, for holders of the shares of Class T common stock, the distribution fees that are payable with respect to shares of Class T common stock. The distributions are payable by the 5th business day following each month end to stockholders of record at the close of business each day during the prior month. As of September 30, 2022 and December 31, 2021, the Company has declared common share distributions of $ 3,946,481 and $ 2,987,794 , respectively, of which $ 104,545 and $ 109,960 , respectively, was unpaid as of the respective reporting dates and has been recorded as a component of Distributions payable on the accompanying consolidated balance sheets. All of the unpaid distributions as of September 30, 2022 were paid during October 2022. In connection with the board’s approval of the Asset Assignment and the plan of liquidation, the Company will cease paying regular monthly distributions after the payment of the previously announced distributions and the Company also will cease paying on-going distribution fees payable with respect to shares of Class T common stock. On August 10, 2022, the board of directors authorized, and the Company declared, distributions for the period from August 15, 2022 to November 14, 2022, in an amount equal to $ 0.004602739 per day per share (or approximately $ 1.68 on an annual basis). Redemptions Stockholders may be eligible to have their shares repurchased by the Company pursuant to the Amended and Restated Share Repurchase Program. The Company may repurchase shares at a price equal to, or at a discount from, Net Asset Value (“NAV”) per share of the share class being repurchased subject to certain holding period requirements which effect the repurchase price as a percentage of NAV. The Amended and Restated Share Repurchase Program includes numerous restrictions that limit stockholders’ ability to have their shares repurchased. The Company limits the number of shares repurchased pursuant to the Amended and Restated Share Repurchase Program as follows: (i) during any calendar month, the Company may repurchase no more than 2 % of the combined NAV of all classes of shares as of the last calendar day of the previous month (based on the most recently determined NAV per share) and (ii) during any calendar year, the Company may repurchase no more than 10 % of the combined NAV of all classes of shares as of the last calendar day of the previous calendar year. Further, the Company also has no obligation to repurchase shares if the redemption would violate the restrictions on distributions under Maryland law, which prohibits distributions that would cause a corporation to fail to meet statutory tests of solvency. The Company may amend, suspend or terminate the program for any reason upon 10 business days’ notice. During the three months and nine months ended September 30, 2022, the Company repurchased 427 and 12,759 shares, respectively, in the amount of $ 9,707 and $ 292,189 , respectively. During the three months and nine months ended September 30, 2021, the Company repurchased 3,429 and 8,487 shares, respectively, in the amount of $ 78,780 and $ 191,665 , respectively. In connection with the approval of the Asset Assignment and plan of liquidation, on September 16, 2022, the Company’s board of directors unanimously approved suspension of the Company’s share repurchase program until further notice. Pursuant to the terms of the share repurchase program, the suspension for the share repurchase program went into effect on September 30, 2022 Non-controlling Interest The Special Unit Holder has invested $ 1,000 in the Operating Partnership and has been issued a special class of limited partnership units as part of the overall consideration for the services to be provided by the Advisor. In January 2020, in order to comply with certain REIT qualification requirements, RIT REIT Sub I issued in a private placement 125 shares of preferred stock to accredited investors for gross offering proceeds of $ 125,000 . Pursuant to the private placement offering, RIT REIT Sub I incurred $ 20,900 of offering costs, which have been included within Additional paid-in capital on the accompanying consolidated balance sheet. The shares of preferred stock entitle the holders to an annual 12 % preferred return, which, as of September 30, 2022, was $ 40,125 , $ 3,750 of which was payable as of September 30, 2022. The above-mentioned Special Unit Holder interest and RIT REIT Sub I private placement offering have been recorded as components of non-controlling interest on the consolidated balance sheets as of September 30, 2022 and December 31, 2021 , respectively. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 7 – Related Party Transactions Repurchases of Participation Interest in the Delshah Loan During the nine months ended September 30, 2022, the Company repurchased participation interests in the Delshah Loan from CFI in the amount of $ 8,019,000 , increasing the Company’s total interest to $ 8,100,000 , which represents a 100 % ownership interest in the Delshah Loan. Assignment of Company's Assets On September 16, 2022, the board of directors, unanimously approved, subject to receipt of requisite stockholder approval, the assignment of substantially all of the Company’s assets, consisting of a mezzanine loan and a preferred equity interest, to Cantor Realty Fund III, L.P. (“Cantor Realty”), an affiliate of CFI. The cash amount to be received is based on the most recently determined net asset value of the Delshah Loan and the Delshah Preferred Equity Interest as of June 30, 2022 as determined by Robert A. Stanger & Co., Inc., the Company’s independent valuation firm, in accordance with the procedures described in the “Net Asset Value Calculation and Valuation Procedures” section of the Company’s prospectus for the initial public offering. In connection with the approval of the Asset Assignment, the Company’s board of directors also unanimously approved the Company’s plan of liquidation and dissolution, which is also subject to stockholder approval. Fees and Expenses The Company and the Advisor entered into an amended and restated advisory agreement, dated as of September 28, 2018, as amended by amendment no. 1 to the amended and restated advisory agreement (the “Advisory Agreement”), dated and effective as of September 28, 2019. The amendment to the Advisory Agreement (i) amends the monthly asset management fee from one-twelfth of 1.25 % of the cost of the Company’s investments at the end of each month, to one-twelfth of 1.20 % of the Company’s most recently disclosed NAV and (ii) renews the term of the Advisory Agreement for an additional one-year term commencing on September 28, 2019. On each of September 28, 2020, 2021 and 2022, the Advisory Agreement was renewed for an additional one-year term . Pursuant to the Advisory Agreement, and subject to certain restrictions and limitations, the Advisor is responsible for managing the Company’s affairs on a day-to-day basis and for identifying, originating, acquiring, and managing investments on behalf of the Company. For providing such services, the Advisor receives fees and reimbursements from the Company. The following summarizes these fees and reimbursements. Organization and Offering Expenses. The Company will reimburse the Advisor and its affiliates for O&O Costs it incurs on the Company’s behalf but only to the extent that the reimbursement will not cause the selling commissions, the dealer manager fee and the other organization and offering expenses to be borne by the Company to exceed 15 % of gross offering proceeds of the Offering as of the date of the reimbursement. These O&O Costs include all costs (other than upfront selling commissions, dealer manager fees and distribution fees) to be paid by the Company in connection with the initial set up of the organization of the Company as well as the Offering, including legal, accounting, printing, mailing and filing fees, charges of the transfer agent, charges of the Advisor for administrative services related to the issuance of shares in the Offering, reimbursement of bona fide due diligence expenses of broker-dealers, and reimbursement of the Advisor for costs in connection with preparing supplemental sales materials. The Advisor has agreed to pay for all O&O Costs on the Company’s behalf through the Escrow Break Anniversary. After the Escrow Break Anniversary, the Advisor, in its sole discretion, may pay some or all of the additional O&O Costs incurred, but is not required to do so. To the extent the Advisor pays such additional O&O Costs, the Company will be obligated to reimburse the Advisor subject to the 1 % Cap. The Company began reimbursing the Advisor for such costs ratably over the 36 months following the Escrow Break Anniversary; provided that the Company will not be obligated to reimburse any amounts that as a result of such payment would cause the aggregate payments for O&O Costs to be paid to the Advisor to exceed the 1 % Cap as of such reimbursement date. As of September 30, 2022 and December 31, 2021 , the Advisor had incurred $ 6,031,627 and $ 6,040,637 , respectively, of O&O Costs on behalf of the Company. The Company’s obligation is $ 0 , pursuant to the 1 % Cap, less any reimbursement payments made by the Company to the Advisor for O&O Costs incurred, which at September 30, 2022 and December 31, 2021 was $ 0 and $ 32,696 , respectively, and is included within Due to related party in the accompanying consolidated balance sheets. At September 30, 2022, organizational costs of $ 449 since inception had been recorded in General and administrative expenses in prior periods. As of September 30, 2022and December 31, 2021, offering costs of $ 187,117 and $ 187,826 , respectively, were charged to stockholders’ equity. As of September 30, 2022 and December 31, 2021, the Company has made reimbursement payments of $ 187,565 and $ 155,579 , respectively, to the Advisor for O&O Costs incurred. As of September 30, 2022 , the Advisor has continued to pay all O&O Costs on behalf of the Company through the expiration of the Offering. As of April 30, 2022, the Company completed its obligation to reimburse the Advisor for payments of the O&O Cost up to the 1 % Cap. Acquisition Expenses. The Company does not intend to pay the Advisor any acquisition fees in connection with making investments. The Company will, however, provide reimbursement of customary acquisition expenses (including expenses relating to potential investments that the Company does not close), such as legal fees and expenses (including fees of in-house counsel of affiliates and other affiliated service providers that provide resources to the Company), costs of due diligence (including, as necessary, updated appraisals, surveys and environmental site assessments), travel and communication expenses, accounting fees and expenses and other closing costs and miscellaneous expenses relating to the acquisition or origination of the Company’s investments. While most of the acquisition expenses are expected to be paid to third parties, a portion of the out-of-pocket acquisition expenses may be paid or reimbursed to the Advisor or its affiliates. The Advisor has not incurred any reimbursable acquisition expenses on behalf of the Company as of September 30, 2022 or December 31, 2021. Origination Fees. The Company will pay the Advisor up to 1.0 % of the amount funded by the Company to originate commercial real estate-related loans, but only if and to the extent there is a corresponding fee paid by the borrower to the Company. During the three months ended September 30, 2022 and September 30, 2021 , no origination fees were paid or incurred. Asset Management Fees. Asset management fees are due to the Advisor. Asset management fees payable to the Advisor consist of monthly fees equal to one-twelfth of 1.20 % of the Company’s most recently disclosed NAV. For the three and nine months ended September 30, 2022, the Company incurred asset management fees of $ 55,023 and $ 166,806 , respectively. The asset management fee related to the month of September 30, 2022 of $ 18,199 is unpaid as of September 30, 2022, and has been included within Due to related party on the consolidated balance sheet. For the three and nine months ended September 30, 2021, the Company incurred asset management fees of $ 56,049 and $ 161,279 , respectively. The amount of asset management fees incurred by the Company during the applicable period is included in the calculation of the limitation of operating expenses pursuant to the 2%/25% Guidelines (as defined and described below). Other Operating Expenses. Effective beginning in the third quarter of 2018, the Advisory Agreement (i) includes limitations with regards to the incurrence of and additional limitations on reimbursements of operating expenses and (ii) clarifies the reimbursement and expense timing and procedures, including potential reimbursement of operating expenses incurred by the Advisor on the Company’s behalf which have not been invoiced to the Company and amounts invoiced to the Company by the Advisor but not yet reimbursed (“Unreimbursed Operating Expenses”). Pursuant to the terms of the Advisory Agreement between the Company and the Advisor, the Company is obligated to reimburse the Advisor for certain operating expenses. Beginning on October 1, 2019, the Company was subject to the limitation that it generally may not reimburse the Advisor for any amounts by which the total operating expenses at the end of the four preceding fiscal quarters exceeds the greater of (i) 2.0 % of average invested assets (as defined in the Advisory Agreement) and (ii) 25.0 % of net income other than any additions to reserves for depreciation, bad debts or other similar non-cash reserves and excluding any gain from the sale of investments for that period (the “2%/25% Guidelines”). If the Company’s independent directors determine that all or a portion of such amounts in excess of the limitation are justified based on certain factors, the Company may reimburse amounts in excess of the limitation to the Advisor. In addition, beginning on October 1, 2019, the Company may request any operating expenses that were previously reimbursed to the Advisor in prior periods in excess of the limitation to be remitted back to the Company. As of September 30, 2022 and December 31, 2021, the Company has accrued but not reimbursed any of the $ 108,485 in operating expenses pursuant to the Advisory Agreement, which represents the current operating expense reimbursement obligation to the Advisor. The Advisory Agreement provides that, subject to other limitations on the incurrence and reimbursement of operating expenses contained in the Advisory Agreement, operating expenses which have been incurred and paid by the Advisor will not become an obligation of the Company unless the Advisor has invoiced the Company for reimbursement, which will occur in a quarterly statement and accrued for in the respective period. The Advisor will not invoice the Company for any reimbursement if the impact of such would result in the Company’s incurrence of an obligation in an amount that would result in the Company’s net asset value per share for any class of shares to be less than $ 25.00 . The Company may, however, incur and record an obligation to reimburse the Advisor, even if it would result in the Company’s net asset value per share for any class of shares for such quarter to be less than $ 25.00 , if the Company’s board of directors determines that the reasons for the decrease of the Company’s net asset value per share below $ 25.00 were unrelated to the Company’s obligation to reimburse the Advisor for operating expenses. In addition, the Advisory Agreement provides that all or a portion of the operating expenses, which have not been previously paid by the Company or invoiced by the Advisor may be in the sole discretion of the Advisor: (i) waived by the Advisor, (ii) reimbursed to the Advisor in any subsequent quarter or (iii) reimbursed to the Advisor in connection with a liquidity event or termination of the Advisory Agreement, provided that the Company has fully invested the proceeds from its initial public offering and the stockholders have received, or are deemed to have received, in the aggregate, cumulative distributions equal to their invested capital plus a 6.5 % cumulative, non-compounded annual pre-tax return on their invested capital. Any reimbursement of operating expenses remains subject to the limitations described above and the limitations and the approval requirements relating to the 2%/25% Guidelines. During the three and nine months ended September 30, 2022 and September 30, 2021 , the Company did no t incur any operating expenses reimbursable to the Advisor, in accordance with the terms of the Advisory Agreement. Reimbursable operating expenses include personnel and related employment costs incurred by the Advisor or its affiliates in performing the services described in the Advisory Agreement, including but not limited to reasonable salaries and wages, benefits and overhead of all employees directly involved in the performance of such services. The Company is not obligated to reimburse the Advisor for costs of such employees of the Advisor or its affiliates to the extent that such employees (A) perform services for which the Advisor receives acquisition fees or disposition fees or (B) serve as executive officers of the Company. At September 30, 2022, any unpaid reimbursable operating expenses are included within Due to related party on the accompanying consolidated balance sheet. As of September 30, 2022 , the total amount of Unreimbursed Operating Expenses was $ 6,227,613 . The amount of operating expenses incurred by the Advisor during the nine months ended September 30, 2022 which were not invoiced to the Company amounted to $ 822,207 . Disposition Fees. For substantial assistance in connection with the sale of investments and based on the services provided, as determined by the independent directors, the Company will pay a disposition fee in an amount equal to 1.0 % of the contract sales price of each commercial real estate loan or other investment sold, including mortgage-backed securities or collateralized debt obligations issued by a Company’s subsidiary as part of a securitization transaction; provided, however, in no event may the disposition fee paid to the Advisor or its affiliates, when added to the real estate commissions paid to unaffiliated third parties, exceed the lesser of a competitive real estate commission or an amount equal to 6.0 % of the contract sales price. If the Company takes ownership of a property as a result of a workout or foreclosure of a debt investment, the Company will pay a disposition fee upon the sale of such property. The Company will not pay a disposition fee upon the maturity, prepayment, workout, modification or extension of a debt investment unless there is a corresponding fee paid by the borrower, in which case the disposition fee will be the lesser of: (i) 1.0 % of the principal amount of the debt prior to such transaction; or (ii) the amount of the fee paid by the borrower in connection with such transaction. As of September 30, 2022 and December 31, 2021, no disposition fees have been incurred by the Company. Selling Commissions, Dealer Manager Fees and Distribution Fees The Dealer Manager is a registered broker-dealer affiliated with CFI. The Company entered into the dealer manager agreement with the Dealer Manager and is obligated to pay various commissions and fees with respect to the Class A, Class T and Class I shares distributed in the Offering. In addition, CFI was required to pay a portion of selling commissions and all of the dealer manager fees, up to a total of 4.0 % of gross offering proceeds from the sale of Class A shares, Class T shares, and Class I shares, incurred in connection with the Offering. The Company will reimburse CFI for these costs (i) immediately prior to or upon the occurrence of a liquidity event, including (A) the listing of the Company’s common stock on a national securities exchange or (B) a merger, consolidation or a sale of substantially all of the Company’s assets or any similar transaction or any transaction pursuant to which a majority of the Company’s board of directors then in office are replaced or removed, or (ii) upon the termination of the Advisory Agreement by the Company or by the Advisor. In each such case, the Company only will reimburse CFI after the Company has fully invested the proceeds from the Offering and the Company’s stockholders have received, or are deemed to have received, in the aggregate, cumulative distributions equal to their invested capital plus a 6.5 % cumulative, non-compounded annual pre-tax return on such invested capital. As of September 30, 2022, the likelihood, probability and timing of each of the possible occurrences or events listed in the preceding sentences (i) and (ii) in this paragraph are individually and collectively uncertain. Additionally, whether or not the Company will have fully invested the proceeds from the Offering and also whether the Company’s stockholders will have received, or are deemed to have received, in the aggregate, cumulative distributions equal to their invested capital plus a 6.5% cumulative, non-compounded annual pre-tax return on such invested capital at the time of any such occurrence or event is also uncertain. As of both September 30, 2022 and December 31, 2021, CFI has paid Sponsor Support totaling $ 594,941 , which will be subject to reimbursement by the Company to CFI in the event of these highly conditional circumstances. The following summarizes fees payable to the Dealer Manager: Selling Commissions . Selling commissions payable to the Dealer Manager consist of (i) up to 1.0 % of gross offering proceeds paid by CFI for Class A shares and Class T shares and (ii) up to 5.0 % and 2.0 % of gross offering proceeds from the sale of Class A shares and Class T shares, respectively, in the Primary Offering. All or a portion of such selling commissions may be re-allowed to participating broker-dealers. No selling commissions are payable with respect to Class I shares. As of both September 30, 2022 and December 31, 2021, the Company has incurred $ 417,402 of selling commissions to date, which is included within Additional paid-in capital on the consolidated balance sheets. As of both September 30, 2022 and December 31, 2021, $ 118,492 of Sponsor Support to selling commission has been recorded and $ 118,492 has been reimbursed by CFI. No Sponsor Support payment was due at September 30, 2022, as Sponsor Support ended with the termination of the Primary Offering. Dealer Manager Fees. Dealer manager fees payable to the Dealer Manager consist of up to 3.0 % of gross offering proceeds from the sale of Class A shares and Class T shares sold in the Primary Offering and up to 1.5 % of gross offering proceeds from the sale of Class I shares sold in the Primary Offering, all of which were paid by CFI. A portion of such dealer manager fees may be re-allowed to participating broker-dealers as a marketing fee. As of both September 30, 2022 and December 31, 2021, the Company has recorded $ 476,450 of dealer manager fees, which is included within Additional paid-in capital on the consolidated balance sheets. As of both September 30, 2022 and December 31, 2021, all of the Sponsor Support related to dealer manager fees has been recorded and $ 476,450 has been reimbursed by CFI. No Sponsor Support payment was due at September 30, 2022, as Sponsor Support ended with the termination of the Primary Offering. Distribution Fees. Distribution fees are payable to the Dealer Manager, subject to the terms set forth in the dealer manager agreement between the Company and the Dealer Manager. Distribution fees are paid with respect to the Company’s Class T shares only, all or a portion of which may be re-allowed by the Dealer Manager to participating broker-dealers. The distribution fees accrue daily and are calculated on outstanding Class T shares issued in the Primary Offering in an amount equal to 1.0 % per annum of (i) the gross offering price per Class T share in the Primary Offering, or (ii) if the Company is no longer offering shares in a public offering, the most recently published per share NAV of Class T shares. The distribution fee is payable monthly in arrears and is paid on a continuous basis from year to year. During the three months ended September 30, 2022 and September 30, 2021, the Company paid distribution fees of $ 10,299 and $ 11,965 , respectively. During the nine months ended September 30, 2022 and September 30, 2021, the Company paid distribution fees of $ 33,102 and $ 35,767 , respectively. As of September 30, 2022 and December 31, 2021, the Company has incurred a liability of $ 81,437 and $ 122,999 , respectively, which is included within Due to related party on the consolidated balance sheets, $ 3,358 and $ 4,015 , respectively, of which was payable as of September 30, 2022 and December 31, 2021 and paid during October 2022 and January 2022, respectively. The Company did not pay any distribution fees on shares sold pursuant to the Company’s DRP. In connection with the Board’s approval of the Asset Assignment and the plan of liquidation, the Company ceased paying regular monthly distributions after the payment of the previously announced distributions and has also ceased paying on-going distribution fees payable with respect to shares of Class T common stock The following table summarizes the above mentioned fees and expenses incurred by the Company as of September 30, 2022: Due to related For the nine months Due to related Type of Fee or Reimbursement Financial Statement Location December 31, 2021 Incurred Paid September 30, 2022 Management Fees Asset management fees Management fees $ 18,716 $ 166,806 $ 167,323 $ 18,199 Organization, Offering and Operating Operating expenses (1) General and administrative expenses 108,485 — — 108,485 Organization expenses (2) General and administrative expenses 55 — 55 — Offering costs (2)(3) Additional paid-in capital 32,641 ( 710 ) 31,931 — Commissions and Fees Selling commissions and dealer manager fees, net Additional paid-in capital — — — — Distribution fees (3) Additional paid-in capital 122,999 ( 8,460 ) 33,102 81,437 Total $ 282,896 $ 157,636 $ 232,411 $ 208,121 Note: (1) As of September 30, 2022 , the Advisor has incurred, on behalf of the Company, a total of $ 6,227,613 in Unreimbursed Operating Expenses, including a total of $ 822,207 during the nine months ended September 30, 2022 for which the Advisor has not invoiced the Company for reimbursement. (2) As of September 30, 2022 , the Advisor has incurred, on behalf of the Company, a total of $ 6,031,627 of O&O Costs, of which the Company’s obligation is $ 0 , pursuant to the 1 % Cap. (3) The amount incurred reflects the change in accrual. The following table summarizes the above mentioned fees, and expenses incurred by the Company and Preferred Equity Interest payment due as a result of Delshah Loan modification as of December 31, 2021: Due to related Year ended Due to related Type of Fee or Reimbursement Financial Statement Location December 31, Incurred Paid December 31, Management Fees Asset management fees Management fees $ 14,834 $ 217,434 $ 213,552 $ 18,716 Organization, Offering and Operating Operating expenses (1) General and administrative expenses 108,485 — — 108,485 Organization expenses (2) General and administrative expenses 187 — 132 55 Offering costs (2) Additional paid-in capital 115,090 ( 883 ) 81,566 32,641 Commissions and Fees Selling commissions and dealer manager fees, net Additional paid-in capital — 7,750 7,750 — Distribution fees (3) Additional paid-in capital 171,493 ( 939 ) 47,555 122,999 Repurchase of loan participations sold Delshah Preferred Equity Interest Investment in real estate-related assets 4,351,000 — 4,351,000 — Total $ 4,761,089 $ 223,362 $ 4,701,555 $ 282,896 Note: (1) As of December 31, 2021, the Advisor has incurred, on behalf of the Company, a total of $ 5,405,407 in Unreimbursed Operating Expenses, including a total of $ 1,355,237 during the year ended December 31, 2021 for which the Advisor has not invoiced the Company for reimbursement. The total amount of Unreimbursed Operating Expenses may, in future periods, be subject to reimbursement by the Company pursuant to the terms of the Advisory Agreement. (2) As of December 31, 2021, the Advisor has incurred, on behalf of the Company, a total of $ 6,040,637 of O&O Costs, of which the Company’s obligation is limited to $ 32,696 , pursuant to the 1 % Cap. (3) The amount incurred reflects the change in accrual. Investment by CFI CFI initially invested $ 200,001 in the Company through the purchase of 8,180 Class A shares at $ 24.45 per share. CFI may not sell any of these shares during the period it serves as our sponsor. Neither the Advisor nor CFI currently has any options or warrants to acquire additional shares of the Company. As of September 30, 2022, CFI has invested $ 2,200,001 in the Company through the purchase of 88,180 shares ( 8,180 Class A shares for an aggregate purchase price of $ 200,001 and 80,000 Class I shares for an aggregate purchase price of $ 2,000,000 ). Sponsor Support The Company’s sponsor, CFI, is a Delaware limited liability company and an affiliate of CFLP. CFI has paid a portion of selling commissions and all of the dealer manager fees, up to a total of 4.0 % of gross offering proceeds from the sale of Class A shares and Class T shares, as well as 1.5 % of gross offering proceeds from the sale of Class I shares, incurred in connection with the Offering. The Company will reimburse such expenses (i) immediately prior to or upon the occurrence of a liquidity event, including (A) the listing of the Company’s common stock on a national securities exchange or (B) a merger, consolidation or a sale of substantially all of the Company’s assets or any similar transaction or any transaction pursuant to which a majority of the Company’s board of directors then in office are replaced or removed, or (ii) upon the termination of the Advisory Agreement by the Company or by the Advisor. In each such case, the Company will only reimburse CFI after the Company has fully invested the proceeds from the Offering and the Company’s stockholders have received, or are deemed to have received, in the aggregate, cumulative distributions equal to their invested capital plus a 6.5 % cumulative, non-compounded annual pre-tax return on such invested capital. As of September 30, 2022, CFI has paid Sponsor Support totaling $ 594,941 . |
Economic Dependency
Economic Dependency | 9 Months Ended |
Sep. 30, 2022 | |
Economic Dependency [Abstract] | |
Economic Dependency | Note 8 – Economic Dependency The Company is dependent on the Advisor and its affiliates for certain services that are essential to the Company, including the sale of the Company’s shares of capital stock, acquisition and disposition decisions and certain other responsibilities. In the event that the Advisor is unable or unwilling to provide such services, the Company would be required to find alternative service providers. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 9 – Commitments and Contingencies As of September 30, 2022 and December 31, 2021, the Company was not subject to litigation nor was the Company aware of any material litigation pending against it. Risks and Uncertainties The rapid development and fluidity of the situation surrounding the COVID-19 pandemic precludes any prediction as to the ultimate impact on the Company. The full extent of the impact and effects of COVID-19 on the future financial performance of the Company, as a whole, and, specifically, on its loan investments and underlying borrowers and their real estate property holdings are uncertain at this time. The impact will depend on future developments, including, among other factors, the duration and spread of the outbreak, along with related travel advisories and restrictions, the recovery time of the disrupted supply chains, the consequential staff shortages, and production delays, and the uncertainty with respect to the accessibility of additional liquidity or to the capital markets. COVID-19 and the current financial, economic and capital markets environment, and future developments in these and other areas present uncertainty and risk with respect to the Company’s performance, financial condition, results of operations and cash flows. U.S. and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions and the start of the military conflict between Russia and Ukraine. On February 24, 2022, a full-scale military invasion of Ukraine by Russian troops was reported. Although the length and impact of the ongoing military conflict is highly unpredictable, the conflict in Ukraine has led and could continue to lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions. The Company is continuing to monitor the situation in Ukraine and globally and assessing its potential impact on the Company’s business. Russian military actions and the resulting sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets, potentially making it more difficult for the Company to obtain additional funds. Any of the abovementioned factors could affect the Company’s business, prospects, financial condition, and operating results. The extent and duration of the military action, sanctions and resulting market disruptions are impossible to predict, but could be substantial. LIBOR and other indices which are deemed “benchmarks” are the subject of recent national, international, and other regulatory guidance and proposals for reform. Some of these reforms are already effective while others are still to be implemented. These reforms may cause such benchmarks to perform differently than in the past, or have other consequences which cannot be predicted. It currently appears that, over time, U.S. Dollar LIBOR may be replaced by the Secured Overnight Financing Rate (“SOFR”) published by the Federal Reserve Bank of New York. However, the manner and timing of this shift is currently unknown. Market participants are still considering how various types of financial instruments and securitization vehicles should react to a discontinuation of LIBOR. The ICE Benchmark Association, or IBA, announced that one-week and two-week month USD LIBOR maturities and non-USA LIBOR maturities will cease publication. While all remaining USD LIBOR maturities will cease immediately after June 30, 2023, at this time, it is not possible to predict the effect of any such changes, any establishment of alternative reference rates or any other reforms to LIBOR that may be implemented. Uncertainty as to the nature of such potential changes, alternative reference rates or other reforms may adversely affect the market for or value of any securities on which the interest or dividend is determined by reference to LIBOR, loans, derivatives and other financial obligations or on the Company’s overall financial condition or results of operations. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 10 – Fair Value Measurements Under normal market conditions, the fair value of an investment is the amount that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price). Additionally, there is a hierarchal framework that prioritizes and ranks the level of market price observability used in measuring investments at fair value. Market price observability is impacted by a number of factors, including the type of investment and the characteristics specific to the investment and the state of the market place, including the existence and transparency of transactions between market participants. Investments with readily available active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. Investments measured and reported at fair value are classified and disclosed in one of the following levels within the fair value hierarchy: Level 1 measurement — quoted prices are available in active markets for identical investments as of the measurement date. The Company does not adjust the quoted price for these investments. Level 2 measurement — quoted prices are available in markets that are not active or model inputs are based on inputs that are either directly or indirectly observable as of the measurement date. Level 3 measurement — pricing inputs are unobservable and include instances where there is minimal, if any, market activity for the investment. These inputs require significant judgment or estimation by management or third parties when determining fair value and generally represent anything that does not meet the criteria of Levels 1 and 2. Due to the inherent uncertainty of these estimates, these values may differ materially from the values that would have been used had a ready market for these investments existed. The following describes the methods the Company uses to estimate the fair value of the Company’s financial assets and liabilities: Commercial mortgage loans, held for investment and Loan participations sold — The fair value is estimated by discounting the expected cash flows based on the market interest rates for similar loans to the Company’s Commercial mortgage loans, held for investment and Loan participations sold. The Company determined that the market interest rates as of September 30, 2022 for the Delshah Loan was greater than its contractual interest rates. As of September 30, 2022 and December 31, 2021, the estimated fair value of the Company’s Commercial mortgage loans, held for investment was $ 8,100,000 and $ 16,889,417 respectively. As of September 30, 2022 , the Company had repurchased all of Loan participations sold. As of December 31, 2021, the estimated fair value of the Company’s Loan participations sold was $ 8,019,000 . T he Company has not elected the fair value option to account for its Commercial mortgage loans, held for investment or Loan participations sold. Investment in real estate-related assets - The fair value is estimated by discounting the expected cash flows outflows based on the market preferred return rates for similar preferred equity investments to the Company’s investment in the Delshah Preferred Equity Interest. As of September 30, 2022 and December 31, 2021, the estimated fair value of the Company’s Investment in real estate-related assets was $ 8,012,387 and $ 8,100,000 , respectively. The Company has not elected the fair value option to account for its Investment in real estate-related assets. Other financial instruments — The Company considers the carrying value of its Cash and cash equivalents to approximate its fair value because of the short period of time between its origination and its expected realization as well as its highly-liquid nature. Due to the short-term maturity of this instrument, Level 1 inputs are utilized to estimate the fair value of Cash and cash equivalents. The following table details the principal balance, carrying value, and fair value of the Company’s financial assets and liabilities as of September 30, 2022: Fair Value Principal Balance Carrying Value Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents $ 2,515,341 $ 2,515,341 $ 2,515,341 $ — $ — $ 2,515,341 Commercial mortgage loans, held for investment $ 8,100,000 $ 8,100,000 $ — $ — $ 8,100,000 $ 8,100,000 Investment in real estate-related assets $ 8,100,000 $ 8,100,000 $ — $ — $ 8,012,387 $ 8,012,387 Liabilities Loan participations sold $ — $ — $ — $ — $ — $ — The following table details the principal balance, carrying value, and fair value of the Company’s financial assets and liabilities as of December 31, 2021: Fair Value Principal Balance Carrying Value Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents $ 2,061,470 $ 2,061,470 $ 2,061,470 $ — $ — $ 2,061,470 Commercial mortgage loans, held for investment $ 16,889,417 $ 16,889,417 $ — $ — $ 16,889,417 $ 16,889,417 Investment in real estate-related assets $ 8,100,000 $ 8,100,000 $ — $ — $ 8,100,000 $ 8,100,000 Liabilities Loan participations sold $ 8,019,000 $ 8,019,000 $ — $ — $ 8,019,000 $ 8,019,000 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 11 – Subsequent Events Delshah Preferred Equity Interest Paydown On October 24, 2022, Delshah paid down $ 825,000 of the Delshah Preferred Equity Interest, resulting in a remaining principal balance of $ 7,275,000 . |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements are presented in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, the accompanying consolidated financial statements contain all adjustments and eliminations, consisting only of normal recurring adjustments necessary for a fair presentation in conformity with U.S. GAAP. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the balance sheet. Management believes that the estimates utilized in preparing the consolidated financial statements are reasonable. As such, actual results could differ from those estimates. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company, the Operating Partnership and any single member limited liability companies or other entities which are consolidated in accordance with U.S. GAAP. The Company consolidates variable interest entities (“VIEs”) where it is the primary beneficiary and voting interest entities which are generally majority owned or otherwise controlled by the Company. All intercompany balances are eliminated in consolidation. |
Variable Interest Entities | Variable Interest Entities The Company determines if an entity is a VIE in accordance with guidance in Accounting Standards Codification (“ASC”) Topic 810, Consolidation . For an entity in which the Company has acquired an interest, the entity will be considered a VIE if the following characteristics are not met: 1) the equity investors in the entity have the characteristics of a controlling financial interest 2) the equity investors’ total investment at risk is sufficient to finance the entity’s activities without additional subordinated financial support and 3) the entity is structured with non-substantive voting rights (i.e., an anti-abuse clause). The Company makes judgments regarding the sufficiency of the equity at risk based first on a qualitative analysis, then a quantitative analysis, if necessary. A qualitative analysis is generally based on a review of the design of the entity, including its control structure and decision-making abilities, and also its financial structure. In a quantitative analysis, the Company would incorporate various estimates, including estimated future cash flows, assumed hold periods and capitalization or discount rates. If an entity is determined to be a VIE, the Company then determines whether to consolidate the entity as the primary beneficiary. The primary beneficiary has both (i) the power to direct the activities that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the entity. The Company evaluates all of its investments to determine if they are VIEs utilizing judgments and estimates that are inherently subjective. If different judgments or estimates were used for these evaluations, it could result in differing conclusions as to whether or not an entity is a VIE and whether or not to consolidate such entity. As of September 30, 2022 and December 31, 2021 , the Company concluded that it did no t have any investments in VIEs. |
Voting Interest Entities | Voting Interest Entities A voting interest entity is an entity in which the total equity investment at risk is sufficient to enable it to finance its activities independently and the equity holders have the power to direct the activities of the entity that most significantly impact its economic performance, the obligation to absorb the losses of the entity and the right to receive the residual returns of the entity. The usual condition for a controlling financial interest in a voting interest entity is ownership of a majority voting interest. If the Company has a majority voting interest in a voting interest entity, the entity will generally be consolidated. The Company will not consolidate a voting interest entity if there are substantive participating rights by other parties and/or kick-out rights by a single party. The Company performs ongoing reassessments of whether entities previously evaluated under the voting interest framework have become VIEs, based on certain events, and therefore subject to the VIE consolidation framework, and vice versa. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand and highly liquid investments with original maturities of three months or less. |
Prepaid Expenses and other Assets | Prepaid Expenses and other Assets Prepaid expenses and other assets consist primarily of reimbursements due from third party. |
Commercial Mortgage Loans, Held for Investment | Commercial Mortgage Loans, Held for Investment Commercial mortgage loans are generally intended to be held for investment and, accordingly, are carried at cost, net of unamortized loan fees, premiums, discounts and unfunded commitments. Commercial mortgage loans, held for investment that are deemed to be impaired are carried at amortized cost less a loan loss reserve, if deemed appropriate. Commercial mortgage loans where the Company does not have the intent to hold the loan for the foreseeable future or until its expected payoff are classified as held for sale and recorded at the lower of cost or estimated value. As of December 31, 2021 , the Company originated and held two mezzanine loans and classified them as held for investment. As of September 30, 2022 , the Company held one mezzanine loan classified as held for investment Mezzanine Loans The Company has originated mezzanine loans to entities that are members of commercial real estate property owners. The mezzanine loan the Company currently holds, is secured by a pledge against the borrower’s equity in the property owner and is subordinate to senior debt. The mezzanine loan is senior to any preferred equity or common equity in the property (see Note 3 – Commercial Mortgage Loans, Held for Investment for further information). |
Loan Participations Sold | Loan Participations Sold The Company has partially financed its Commercial mortgage loans, held for investment, through the sale of participating mezzanine loan interests to CFI. To the extent that U.S. GAAP does not recognize a sale resulting from the loan participation interests sold, the Company does not derecognize the participation in the loan that it sold. Instead, the Company recognizes a loan participation sold liability in an amount equal to the principal of the loan participation sold. The Company continues to recognize interest income on the entire loan, including the interest attributable to the Loan participations sold. During May and June 2022, the Company has repurchased all the mezzanine loan interests from CFI (see Note 4 – Loan Participations Sold for further information). |
Investment in Real Estate-Related Assets | Investment in Real Estate - Related Assets Preferred Equity Investment The Company has made a preferred equity investment in the Delshah Preferred Equity Interest. Preferred equity investments are generally intended to be held to maturity and, accordingly, are carried at cost, net of unamortized fees, premium, discount and unfunded commitments. Preferred equity investments that are deemed to be impaired are carried at amortized cost less a loss reserve, if deemed appropriate. Preferred equity investments where the Company does not have the intent to hold the investment for the foreseeable future or until its expected payoff are classified as held for sale and recorded at the lower of cost or estimated value. Preferred equity investments are considered impaired when, based on current information and events, it is probable that the Company will not be able to collect principal and preferred return income amounts due according to the contractual terms. The Company assesses the credit quality of the portfolio and adequacy of loss reserves on a periodic basis. Significant judgment of management is required in this analysis. The Company considers the estimated net recoverable value of the preferred equity investment as well as other factors, including but not limited to the fair value of any collateral, the amount and the status of any senior debt, the quality and financial condition of the borrower and the competitive situation of the area where the underlying collateral is located. Because this determination is based on projections of future economic events, which are inherently subjective, the amount ultimately realized may differ materially from the carrying value as of the balance sheet date. If upon completion of the assessment, the estimated fair value of the underlying collateral is less than the net carrying value of the preferred equity investment, a loss reserve is recorded with a corresponding charge to provision for losses. The loss reserve for each preferred equity investment is maintained at a level that is determined to be adequate by management to absorb probable losses. Income recognition is suspended for a preferred equity investment at the earlier of the date at which payments become 90-days past due or when, in the opinion of management, a full recovery of income and principal becomes doubtful. When the ultimate collectability of the principal of an impaired preferred equity investment is in doubt, all payments are applied to principal under the cost recovery method. When the ultimate collectability of the principal of an impaired preferred equity investment is not in doubt, contractual preferred return income is recorded as preferred return income when received, under the cash basis method until an accrual is resumed when the preferred return investment becomes contractually current and performance is demonstrated to be resumed. A preferred return investment is written off when it is no longer realizable and/or legally discharged. No impairment losses were recorded during the nine months ended September 30, 2022 after the Company assessed the recoverability of its assets. As of September 30, 2022 , no impairment losses have been identified. |
Revenue Recognition | Revenue Recognition Interest income from the Company’s Commercial mortgage loans, held for investment is recognized when earned and accrued based on the outstanding accrual balance and any related premium, discount, origination costs and fees are amortized over the term of the loan on a straight-line basis. The amortization is reflected as an adjustment to Interest income in earnings. The amortization of a premium or accretion of a discount is discontinued if such loan is reclassified to held for sale. Preferred return income from the Company’s preferred equity investment is recognized when earned and accrued based on the outstanding investment balance. |
Credit Losses and Impairment on Commercial Mortgage Loans, Held for Investment | Credit Losses and Impairment on Commercial Mortgage Loans, Held for Investment Loans are considered impaired when, based on current information and events, it is probable that the Company will not be able to collect principal and interest amounts due according to the contractual terms. The Company assesses the credit quality of the portfolio and adequacy of loan loss reserves on a periodic basis. Significant judgment of management is required in this analysis. The Company considers the estimated net recoverable value of the loan as well as other factors, including but not limited to the fair value of any collateral, the amount and the status of any senior debt, the credit quality and financial condition of the borrower, and the competitive situation of the area where the underlying collateral is located. Because this determination is based on projections of future economic events, which are inherently subjective, the amount ultimately realized may differ materially from the carrying value as of the balance sheet date. If upon completion of the assessment, the estimated fair value of the underlying collateral is less than the net carrying value of the loan, a loan loss reserve is recorded with a corresponding charge to provision for loan losses. The loan loss reserve for each loan is maintained at a level that is determined to be adequate by management to absorb probable losses. Income recognition is suspended for a loan at the earlier of the date at which payments become 90-days past due or when, in the opinion of management, a full recovery of income and principal becomes doubtful. When the ultimate collectability of the principal of an impaired loan is in doubt, all payments are applied to principal under the cost recovery method. When the ultimate collectability of the principal of an impaired loan is not in doubt, contractual interest is recorded as interest income when received, under the cash basis method until an accrual is resumed when the loan becomes contractually current and performance is demonstrated to be resumed. A loan is written off when it is no longer realizable and/or legally discharged. As of September 30, 2022, and December 31, 2021 , no impairment has been identified for loans that are held for investment. There are no loans that have been classified as past due or in non-accrual status as of September 30, 2022 and December 31, 2021 . |
Risks and Uncertainties | Risks and Uncertainties Financial instruments that potentially subject the Company to concentrations of credit risk include Cash and cash equivalents. At times, balances with any one financial institution may exceed the Federal Deposit Insurance Corporation insurance limits. The Company believes it mitigates this risk by investing its cash with high-credit quality financial institutions. Concentration of Credit Risk The following table presents the geography and property type of collateral underlying the Company’s Commercial mortgage loans, held for investment as a percentage of the loan’s carrying value as of September 30, 2022 and December 31, 2021: Geography Collateral Property Type Percentage New York Multifamily 100 % |
Due from Related Party | Due from Related Party Due from related party includes amounts due from the Advisor for prior payments made by the Company relating to blue sky registration fees. As of both September 30, 2022 and December 31, 2021, the balance of Due from related party was $ 39,963 . |
Due To Related Party | Due to Related Party Due to related party is comprised of amounts contractually owed by the Company for various services provided to the Company from a related party, which at September 30, 2022 and December 31, 2021 was $ 208,121 and $ 282,896 , respectively. |
Accounts Payable and Accrued Expenses | Accounts Payable and Accrued Expenses Accounts payable and accrued expenses is comprised of amounts owed by the Company for compensation to the Company’s independent board of directors relating to pro-rated annual compensation as well as attendance at meetings of the board of directors. As of September 30, 2022 and December 31, 2021, accounts payable and accrued expenses was $ 200,545 and $ 186,480 , respectively. |
Organization and Offering Costs | Organization and Offering Costs The Advisor has agreed to pay, on behalf of the Company, all organizational and offering costs (including legal, accounting, and other costs attributable to the Company’s organization and offering, but excluding upfront selling commissions, dealer manager fees and distribution fees) (“O&O Costs”) through the first anniversary of the date on which the Company satisfied the Minimum Offering Requirement, which was June 28, 2019 (the “Escrow Break Anniversary”). After the Escrow Break Anniversary, the Advisor, in its sole discretion, may pay some or all of the additional O&O Costs incurred, but it is not required to do so. Following the Escrow Break Anniversary, the Company began reimbursing the Advisor for payment of the O&O Costs ratably over a 36 -month period; provided, however, that the Company will not be obligated to pay any amounts that as a result of such payment would cause the aggregate payments for O&O Costs (less selling commissions, dealer manager fees and distribution fees) paid to the Advisor to exceed 1 % of gross proceeds of the Offering (the “1% Cap”), as of such payment date. To the extent the Advisor pays any additional O&O Costs, the Company will be obligated to reimburse the Advisor subject to the 1% Cap. Any amounts not reimbursed in any period shall be included in determining any reimbursement liability for a subsequent period. The Advisor has continued to pay all O&O Costs on behalf of the Company through the expiration of the Offering. As of April 30, 2022, the Company completed its obligation to reimburse the Advisor for payments of the O&O Cost up to the 1 % Cap. As of September 30, 2022 and December 31, 2021 , the Advisor has incurred $ 6,031,627 and $ 6,040,637 respectively, of O&O Costs on behalf of the Company. The Company’s obligation is $ 0 , pursuant to the 1% Cap, less any reimbursement payments made by the Company to the Advisor for O&O costs incurred, which at September 30, 2022 and December 31, 2021 was $ 0 and $ 32,696 , respectively, and is included within Due to related party in the accompanying consolidated balance sheets. As of September 30, 2022, organizational costs of $ 449 since inception had been recorded in General and administrative expenses in prior periods. As of September 30, 2022 and December 31, 2021, offering costs of $ 187,117 and $ 187,826 , respectively, were charged to stockholders’ equity. As of September 30, 2022 and December 31, 2021, the Company has made reimbursement payments of $ 187,565 and $ 155,579 , respectively, to the Advisor for O&O Costs incurred. |
Income Taxes | Income Taxes The Company has elected and qualified to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, commencing with its 2019 tax year. Accordingly, the Company generally will not be subject to U.S. federal income tax to the extent of its distributions to stockholders and as long as certain asset, income, share ownership, minimum distribution and other requirements are met. To qualify as a REIT, the Company must annually distribute at least 90 % of its REIT taxable income to its stockholders and meet certain other requirements. Under certain circumstances, federal income and excise taxes may be due on its undistributed taxable income. The Company may also be subject to certain state, local and franchise taxes. If the Company fails to meet these requirements, it will be subject to U.S. federal income tax, which could have a material adverse impact on its results of operations and amounts available for distributions to its stockholders. The Company provides for uncertain tax positions based upon management’s assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. Management is required to determine whether a tax position is more likely than not to be sustained upon examination by tax authorities, including resolution of any related appeals or litigation processes, based on the technical merits of the position. Because assumptions are used in determining whether a tax benefit is more likely than not to be sustained upon examination by tax authorities, actual results may differ from the Company’s estimates under different assumptions or conditions. |
Earnings Per Share | Earnings Per Share Basic net income (loss) per share of common stock is determined by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is determined by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during the period, including common stock equivalents. As of September 30, 2022 and December 31, 2021, there were no material common stock equivalents that would have a dilutive effect on net income (loss) per share for common stockholders. All classes of common stock are allocated net income (loss) at the same rate per share. For the three months and nine months ended September 30, 2022, basic and diluted net income per common share was $ 0.41 and $ 1.23 , respectively. For the three months and nine months ended September 30, 2021, basic and diluted net income per common share was $ 0.48 and $ 1.42 , respectively. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In January 2020, the FASB issued ASU No. 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the FASB Emerging Issues Task Force) . These amendments improve current guidance by reducing diversity in practice and increasing comparability of the accounting for the interactions between these codification topics as they pertain to certain equity securities, investments under the equity method of accounting and forward contracts or purchased options to purchase securities that, upon settlement of the forward contract or exercise of the purchased option, would be accounted for under the equity method of accounting or the fair value option. The new standard became effective for the Company beginning January 1, 2022 on a prospective basis. The adoption of this guidance did not have a material impact on the Company’s unaudited consolidated financial statements. In October 2020, the FASB issued ASU No. 2020-10, Codification Improvements . The standard amends the Codification by moving existing disclosure requirements to (or adding appropriate references in) the relevant disclosure sections. The ASU also clarifies various provisions of the Codification by amending and adding new headings, cross-referencing, and refining or correcting terminology. The Company adopted the standard on its effective date beginning January 1, 2022 and it was applied using a modified retrospective method of transition. The adoption of this guidance did not have a material impact on the Company’s unaudited consolidated financial statements. New Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which requires financial assets that are measured at amortized cost to be presented, net of an allowance for credit losses, at the amount expected to be collected over their estimated life. Expected credit losses for newly recognized financial assets, as well as changes to credit losses during the period, are recognized in earnings. For certain purchased financial assets with deterioration in credit quality since origination (“PCD assets”), the initial allowance for expected credit losses will be recorded as an increase to the purchase price. Expected credit losses, including losses on off-balance-sheet exposures such as lending commitments, will be measured based on historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses , to clarify that operating lease receivables accounted for under ASC 842, Leases , are not in the scope of the new credit losses guidance, and, instead, impairment of receivables arising from operating leases should be accounted for in accordance with ASC 842, Leases . In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments . The ASU makes changes to the guidance introduced or amended by ASU No. 2016-13 to clarify the scope of the credit losses standard and address guidance related to accrued interest receivable balances, recoveries, variable interest rates and prepayments, among other issues. In addition, in May 2019, the FASB issued ASU No. 2019-05, Financial Instruments—Credit Losses (Topic 326 ) : Targeted Transition Relief . The amendments in this ASU allow entities, upon adoption of ASU No. 2016-13, to irrevocably elect the fair value option for financial instruments that were previously carried at amortized cost and are eligible for the fair value option under ASC 825-10, Financial Instruments: Overall . In November 2019, the FASB issued ASU No. 2019-10, Financial instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842) Effective Dates . Pursuant to this ASU, the effective date of the new credit losses standard was deferred, and the new credit impairment guidance will become effective for the Company on January 1, 2023 under a modified retrospective approach, and early adoption is permitted. In addition, in November 2019, the FASB issued ASU No. 2019-11 , Codification Improvements to Topic 326, Financial Instruments—Credit Losses . The amendments in this ASU require entities to include certain expected recoveries of the amortized cost basis previously written off, or expected to be written off, in the allowance for credit losses for PCD assets; provide transition relief related to troubled debt restructurings; allow entities to exclude accrued interest amounts from certain required disclosures; and clarify the requirements for applying the collateral maintenance practical expedient. The amendments in ASUs No. 2018-19, 2019-04, 2019-05, 2019-10 and 2019-11 are required to be adopted concurrently with the guidance in ASU No. 2016-13. The Company plans to adopt the standards on January 1, 2023. Management is continuing to implement the new credit losses guidance, including development of the credit loss estimation methodology and the assessment of the impact of the new guidance on the Company’s unaudited consolidated financial statements. Given the objective of the new standard, it is generally expected allowances for credit losses for the financial instruments within its scope would increase, however, the amount of any change will be dependent on the composition and quality of the Company’s portfolios at the adoption date as well as economic conditions and forecasts at that time. In March 2020, the FASB issued ASU No. 2020-03, Codification Improvements to Financial Instruments . This ASU makes narrow-scope amendments related to various aspects pertaining to financial instruments and related disclosures by clarifying or improving the Codification. Certain guidance became effective for the Company for annual periods beginning January 1, 2020, and the adoption of this guidance did not have a material impact on the Company’s consolidated unaudited financial statements. The guidance related to credit losses will be effective for the Company on January 1, 2023. Early adoption is permitted. Management is currently evaluating the impact of the new credit losses guidance on the Company’s unaudited consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . The guidance is designed to provide relief from the accounting analysis and impacts that may otherwise be required for modifications to agreements (e.g., loans, debt securities, derivatives, and borrowings) necessitated by reference rate reform as entities transition away from LIBOR and other interbank offered rates to alternative reference rates. This ASU also provides optional expedients to enable companies to continue to apply hedge accounting to certain hedging relationships impacted by reference rate reform. Application of the guidance is optional and only available in certain situations. The ASU is effective upon issuance and generally can be applied through December 31, 2022. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope . The amendments in this standard are elective and principally apply to entities that have derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform (referred to as the “discounting transition”). The standard expands the scope of ASC 848, Reference Rate Reform, and allows entities to elect optional expedients to derivative contracts impacted by the discounting transition. Similar to ASU No. 2020-04, provisions of this ASU are effective upon issuance and generally can be applied through December 31, 2022. Management is evaluating and planning for the adoption of the new guidance to determine the Company’s transition plan and facilitate an orderly transition to alternative reference rates, and continuing its assessment on the Company’s unaudited consolidated financial statements. In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers . The standard improves the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to the recognition of an acquired contract liability, as well as payment terms and their effect on subsequent revenue recognized by the acquirer. The ASU requires companies to apply guidance in ASC 606, Revenue from Contracts with Customers , to recognize and measure contract assets and contract liabilities from contracts with customers acquired in a business combination, and, thus, creates an exception to the general recognition and measurement principle in ASC 805, Business Combinations . The new standard will become effective for the Company beginning January 1, 2024, can be applied prospectively for business combinations occurring on or after the effective date, and early adoption is permitted. Management is currently evaluating the impact of the new standard on the Company’s consolidated financial statements. In March 2022, the FASB issued ASU No. 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures . The guidance is intended to improve the decision usefulness of information provided to investors about certain loan refinancings, restructurings, and write-offs. The standard eliminates the recognition and measurement guidance on TDRs for creditors after they have adopted ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and requires them to make enhanced disclosures about loan modifications for borrowers experiencing financial difficulty. The new standard will become effective for the Company beginning January 1, 2023. The guidance for recognition and measurement of TDRs can be applied using either a prospective or modified retrospective transition method, and the amendments related to disclosures can be applied prospectively. Early adoption is permitted, and an entity may elect to early adopt the amendments related to TDRs separately from the amendments related to vintage disclosures. Management is currently evaluating the impact of the new standard on the Company’s unaudited consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Concentration of Credit Risk | The following table presents the geography and property type of collateral underlying the Company’s Commercial mortgage loans, held for investment as a percentage of the loan’s carrying value as of September 30, 2022 and December 31, 2021: Geography Collateral Property Type Percentage New York Multifamily 100 % |
Commercial Mortgage Loans, He_2
Commercial Mortgage Loans, Held for Investment (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Receivables [Abstract] | |
Schedule of Information of Loan | The following table provides certain information about the Delshah Loan: Loan Type Loan Amount Loan Coupon Amortization Loan-to-Value (1) Mezzanine Loan $ 8,100,000 10 years 9.10% subject to a potential increase in year six Interest only 83.14 % Note: (1) Loan-to-Value is calculated as of the date the Delshah Loan was originated. |
Schedule of Activity on Loan | The following table summarizes the activity on the loans at September 30, 2022: Activity Delshah Loan RIT Total Delshah East 12th Street RIT Total East 12th Total Loans Total Loan $ 18,000,000 $ 18,000,000 $ 8,990,000 $ 8,990,000 $ 26,990,000 Initial Funding 18,000,000 100.00 % 18,000,000 6,830,000 100.00 % 6,830,000 24,830,000 Interest ( 17,100,000 ) - 95.00 % — ( 5,435,000 ) - 79.58 % — — Ownership 900,000 5.00 % 18,000,000 1,395,000 20.42 % 6,830,000 24,830,000 Advance for — — — 1,459,417 — 1,459,417 1,459,417 Interest — — — ( 174,044 ) — — — Advance for — — — 500,000 — 500,000 500,000 RIT Interest 17,100,000 95.00 % — 5,609,044 79.58 % — — Principal ( 1,800,000 ) ( 1,800,000 ) ( 8,789,417 ) - 100.00 % ( 8,789,417 ) ( 10,589,417 ) Conversion to Preferred Equity ( 8,100,000 ) ( 8,100,000 ) — — ( 8,100,000 ) Ownership $ 8,100,000 100.00 % $ 8,100,000 $ — 0.00 % $ — $ 8,100,000 |
Investment in Real Estate-Rel_2
Investment in Real Estate-Related Assets (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Real Estate [Abstract] | |
Schedule of Delshah Preferred Equity Interest | The following table provides certain information about the Delshah Preferred Equity Interest: Portfolio Original Investment Amount Preferred Return Preferred Equity Investment $ 8,100,000 10.00 % through 9/21/2023, then the greater of 10.25 % or 740 bps over 5-year Treasury Yield |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Summary of Fees and Expenses Incurred and Preferred Equity Interest Payment Due | The following table summarizes the above mentioned fees and expenses incurred by the Company as of September 30, 2022: Due to related For the nine months Due to related Type of Fee or Reimbursement Financial Statement Location December 31, 2021 Incurred Paid September 30, 2022 Management Fees Asset management fees Management fees $ 18,716 $ 166,806 $ 167,323 $ 18,199 Organization, Offering and Operating Operating expenses (1) General and administrative expenses 108,485 — — 108,485 Organization expenses (2) General and administrative expenses 55 — 55 — Offering costs (2)(3) Additional paid-in capital 32,641 ( 710 ) 31,931 — Commissions and Fees Selling commissions and dealer manager fees, net Additional paid-in capital — — — — Distribution fees (3) Additional paid-in capital 122,999 ( 8,460 ) 33,102 81,437 Total $ 282,896 $ 157,636 $ 232,411 $ 208,121 Note: (1) As of September 30, 2022 , the Advisor has incurred, on behalf of the Company, a total of $ 6,227,613 in Unreimbursed Operating Expenses, including a total of $ 822,207 during the nine months ended September 30, 2022 for which the Advisor has not invoiced the Company for reimbursement. (2) As of September 30, 2022 , the Advisor has incurred, on behalf of the Company, a total of $ 6,031,627 of O&O Costs, of which the Company’s obligation is $ 0 , pursuant to the 1 % Cap. (3) The amount incurred reflects the change in accrual. The following table summarizes the above mentioned fees, and expenses incurred by the Company and Preferred Equity Interest payment due as a result of Delshah Loan modification as of December 31, 2021: Due to related Year ended Due to related Type of Fee or Reimbursement Financial Statement Location December 31, Incurred Paid December 31, Management Fees Asset management fees Management fees $ 14,834 $ 217,434 $ 213,552 $ 18,716 Organization, Offering and Operating Operating expenses (1) General and administrative expenses 108,485 — — 108,485 Organization expenses (2) General and administrative expenses 187 — 132 55 Offering costs (2) Additional paid-in capital 115,090 ( 883 ) 81,566 32,641 Commissions and Fees Selling commissions and dealer manager fees, net Additional paid-in capital — 7,750 7,750 — Distribution fees (3) Additional paid-in capital 171,493 ( 939 ) 47,555 122,999 Repurchase of loan participations sold Delshah Preferred Equity Interest Investment in real estate-related assets 4,351,000 — 4,351,000 — Total $ 4,761,089 $ 223,362 $ 4,701,555 $ 282,896 Note: (1) As of December 31, 2021, the Advisor has incurred, on behalf of the Company, a total of $ 5,405,407 in Unreimbursed Operating Expenses, including a total of $ 1,355,237 during the year ended December 31, 2021 for which the Advisor has not invoiced the Company for reimbursement. The total amount of Unreimbursed Operating Expenses may, in future periods, be subject to reimbursement by the Company pursuant to the terms of the Advisory Agreement. (2) As of December 31, 2021, the Advisor has incurred, on behalf of the Company, a total of $ 6,040,637 of O&O Costs, of which the Company’s obligation is limited to $ 32,696 , pursuant to the 1 % Cap. (3) The amount incurred reflects the change in accrual. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Principal Balance, Carrying Value, and Fair Value of Company's Financial Assets and Liabilities | The following table details the principal balance, carrying value, and fair value of the Company’s financial assets and liabilities as of September 30, 2022: Fair Value Principal Balance Carrying Value Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents $ 2,515,341 $ 2,515,341 $ 2,515,341 $ — $ — $ 2,515,341 Commercial mortgage loans, held for investment $ 8,100,000 $ 8,100,000 $ — $ — $ 8,100,000 $ 8,100,000 Investment in real estate-related assets $ 8,100,000 $ 8,100,000 $ — $ — $ 8,012,387 $ 8,012,387 Liabilities Loan participations sold $ — $ — $ — $ — $ — $ — The following table details the principal balance, carrying value, and fair value of the Company’s financial assets and liabilities as of December 31, 2021: Fair Value Principal Balance Carrying Value Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents $ 2,061,470 $ 2,061,470 $ 2,061,470 $ — $ — $ 2,061,470 Commercial mortgage loans, held for investment $ 16,889,417 $ 16,889,417 $ — $ — $ 16,889,417 $ 16,889,417 Investment in real estate-related assets $ 8,100,000 $ 8,100,000 $ — $ — $ 8,100,000 $ 8,100,000 Liabilities Loan participations sold $ 8,019,000 $ 8,019,000 $ — $ — $ 8,019,000 $ 8,019,000 |
Organization and Business Pur_2
Organization and Business Purpose - Additional Information (Details) | 3 Months Ended | 9 Months Ended | |||||
Jun. 28, 2018 USD ($) $ / shares | Jan. 22, 2016 USD ($) shares | Jun. 30, 2021 USD ($) | Mar. 31, 2021 USD ($) | Sep. 30, 2022 USD ($) ResidentialUnit Segment | Dec. 31, 2021 USD ($) | Nov. 30, 2017 USD ($) | |
Schedule Of Organization And Basis Of Presentation [Line Items] | |||||||
Date of incorporation | Jan. 19, 2016 | ||||||
State of incorporation | MD | ||||||
Number of reportable segments | Segment | 1 | ||||||
Stock issued during period, new issues, value | $ 79,000 | $ 85,000 | |||||
Investment in operating partnership by company | $ 1,000 | $ 1,000 | |||||
Fixed rate mezzanine loan investment | 8,100,000 | 16,889,417 | |||||
Investment in preferred equity interest | 8,100,000 | $ 8,100,000 | |||||
Delshah Loan | Mezzanine Borrower | |||||||
Schedule Of Organization And Basis Of Presentation [Line Items] | |||||||
Fixed rate mezzanine loan investment | $ 8,100,000 | ||||||
Number of real estate properties acquired | ResidentialUnit | 28 | ||||||
Mezzanine loan | $ 8,100,000 | ||||||
Delshah Preferred Equity Interest | |||||||
Schedule Of Organization And Basis Of Presentation [Line Items] | |||||||
Percentage of membership interest | 100% | ||||||
Investment in preferred equity interest | $ 8,100,000 | ||||||
Maximum | DRP | |||||||
Schedule Of Organization And Basis Of Presentation [Line Items] | |||||||
Common stock amount, authorized | $ 250,000,000 | ||||||
Maximum | Offering | |||||||
Schedule Of Organization And Basis Of Presentation [Line Items] | |||||||
Common stock amount, authorized | 1,250,000,000 | ||||||
Maximum | Primary Offering | |||||||
Schedule Of Organization And Basis Of Presentation [Line Items] | |||||||
Common stock amount, authorized | $ 1,000,000,000 | ||||||
Class A Common Stock | |||||||
Schedule Of Organization And Basis Of Presentation [Line Items] | |||||||
Stock issued during period, new issues, value | $ 200,001 | ||||||
Stock issued during period, new issues, shares | shares | 8,180 | ||||||
Class I | Minimum Offering Requirement | |||||||
Schedule Of Organization And Basis Of Presentation [Line Items] | |||||||
Stock issued during period, new issues, value | $ 2,000,000 | ||||||
Common stock, Per share | $ / shares | $ 25 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Apr. 30, 2022 | Sep. 30, 2022 USD ($) $ / shares | Sep. 30, 2021 $ / shares | Sep. 30, 2022 USD ($) $ / shares | Sep. 30, 2021 $ / shares | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Summary of Significant Accounting Policies [Line Items] | |||||||
Investments in VIEs | $ 0 | $ 0 | $ 0 | ||||
Impairment losses on preferred equity investment | 0 | ||||||
Loans impairment | 0 | 0 | 0 | ||||
Loans classified as past due | 0 | 0 | 0 | ||||
Loans classified as non-accrual status | 0 | 0 | 0 | ||||
Due to related party | 208,121 | 208,121 | 282,896 | $ 4,761,089 | |||
Accounts payable and accrued expenses | $ 200,545 | $ 200,545 | 186,480 | ||||
Minimum percentage of taxable income annually distributed to shareholders to qualify as REIT | 90% | ||||||
Net income (loss) per common share - basic | $ / shares | $ 0.41 | $ 0.48 | $ 1.23 | $ 1.42 | |||
Net income (loss) per common share - diluted | $ / shares | $ 0.41 | $ 0.48 | $ 1.23 | $ 1.42 | |||
Advisor | |||||||
Summary of Significant Accounting Policies [Line Items] | |||||||
Due from related party | $ 39,963 | $ 39,963 | 39,963 | ||||
Period of reimbursement for payment of organization and offering costs | 36 months | ||||||
Percentage of reimbursement for payment of organization and offering costs | 1% | ||||||
Advisor | Organization and Offering Costs Payable | |||||||
Summary of Significant Accounting Policies [Line Items] | |||||||
Due to related party | 0 | $ 0 | |||||
Initial O&O Costs incurred by advisor on behalf of Company | 6,031,627 | 6,040,637 | |||||
Advisor | Initial Public Offering | Organization and Offering Costs Payable | |||||||
Summary of Significant Accounting Policies [Line Items] | |||||||
Due to related party | 0 | 0 | 32,696 | ||||
Reimbursement payments for costs incurred | 187,565 | 155,579 | |||||
Advisor | Initial Public Offering | Organizational Costs | |||||||
Summary of Significant Accounting Policies [Line Items] | |||||||
Due to related party | 449 | 449 | |||||
Advisor | Initial Public Offering | Offering Costs | |||||||
Summary of Significant Accounting Policies [Line Items] | |||||||
Due to related party | $ 187,117 | $ 187,117 | $ 187,826 | ||||
Advisor | Initial Public Offering | Maximum | |||||||
Summary of Significant Accounting Policies [Line Items] | |||||||
Percentage of organization and offering costs to gross offering proceeds | 1% | 1% | |||||
Mezzanine Loans | |||||||
Summary of Significant Accounting Policies [Line Items] | |||||||
Number of Mezzanine loans originated | 1 | 2 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Concentration of Credit Risk (Details) - New York | 9 Months Ended |
Sep. 30, 2022 | |
Accounts Notes And Loans Receivable [Line Items] | |
Collateral Property Type | Multifamily |
Percentage | 100% |
Commercial Mortgage Loans, He_3
Commercial Mortgage Loans, Held for Investment - Additional Information (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Apr. 21, 2022 USD ($) | Sep. 30, 2022 USD ($) ft² | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) ft² CommercialUnit ResidentialUnit | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Jun. 30, 2022 USD ($) | May 31, 2022 USD ($) | Nov. 01, 2018 | Sep. 21, 2018 | |
Accounts Notes And Loans Receivable [Line Items] | |||||||||||
Interest income, net | $ 191,783 | $ 261,543 | $ 626,791 | $ 767,515 | |||||||
Interest income | 191,783 | 448,029 | 921,925 | 1,318,422 | |||||||
Interest income related to loan participation sold | 0 | 186,486 | $ 295,134 | 550,907 | |||||||
East 12th Street Loan | |||||||||||
Accounts Notes And Loans Receivable [Line Items] | |||||||||||
Percentage of equity interests pledged | 100% | ||||||||||
Term Loan Duration | 3 years | ||||||||||
Interest income, net | 0 | 259,659 | $ 359,545 | 761,950 | |||||||
Term loan duration description | The term of the East 12th Street Loan was three years, with two 1-year options to extend. | ||||||||||
Proceeds from loans | $ 5,670,904 | ||||||||||
Remaining unpaid principal balance of loan | $ 3,118,513 | ||||||||||
Loan outstanding | $ 0 | $ 0 | |||||||||
East 12th Street Loan | Mezzanine Borrower | |||||||||||
Accounts Notes And Loans Receivable [Line Items] | |||||||||||
Percentage of equity interests pledged | 100% | ||||||||||
Loan funded at closing | $ 6,830,000 | $ 6,830,000 | |||||||||
Amount of Loan held back | 1,660,000 | ||||||||||
Remaining loan held back | 500,000 | ||||||||||
Accrued Interest | $ 0 | ||||||||||
Delshah Loan | |||||||||||
Accounts Notes And Loans Receivable [Line Items] | |||||||||||
Percentage of equity interests pledged | 100% | ||||||||||
Number of residential units | ResidentialUnit | 207 | ||||||||||
Number of commercial units | CommercialUnit | 19 | ||||||||||
Area of real estate property acquired | ft² | 167,499 | 167,499 | |||||||||
Debt instrument, interest rate, increase (decrease) | 2.75% | ||||||||||
Percentage of equity interests pledged | 100% | ||||||||||
Term Loan Duration | 10 years | ||||||||||
Loans participation agreement percentage | 5% | ||||||||||
Proceeds from contributions from affiliates | $ 900,000 | ||||||||||
Beneficial interests acquired, purchase price | $ 8,019,000 | 8,019,000 | |||||||||
Interest income, net | 191,783 | 1,884 | 267,246 | 5,565 | |||||||
Interest income | 191,783 | 188,370 | 562,380 | 556,472 | |||||||
Interest income related to loan participation sold | $ 0 | $ 186,486 | $ 295,134 | $ 550,907 | |||||||
Repayments of loan | $ 1,800,000 | ||||||||||
Principal loan balance | 16,200,000 | ||||||||||
Conversion of loan | $ 8,100,000 | 8,100,000 | |||||||||
Ownership percentage | 100% | 100% | 1% | ||||||||
Delshah Loan | CFI | |||||||||||
Accounts Notes And Loans Receivable [Line Items] | |||||||||||
Loans participation agreement percentage | 95% | ||||||||||
Proceeds from contributions from affiliates | $ 17,100,000 | ||||||||||
Beneficial interests acquired, purchase price | $ 8,019,000 | $ 8,019,000 | 9,081,000 | ||||||||
Ownership percentage | 99% | 99% | 99% | ||||||||
Delshah Loan | Year One to Five | |||||||||||
Accounts Notes And Loans Receivable [Line Items] | |||||||||||
Debt instrument, interest rate during period | 9.10% | ||||||||||
Debt instrument, payment terms | greater of (i) 9.10% or (ii) 275 basis points over the then existing five year U.S. Treasury Note Yield (the “Mortgage Loan Interest Rate | ||||||||||
Delshah Loan | End Of Year Five | |||||||||||
Accounts Notes And Loans Receivable [Line Items] | |||||||||||
Debt instrument, interest rate during period | 10.10% | ||||||||||
Debt instrument, payment terms | greater of (i) 10.10% or (ii) 565 basis points over the Mortgage Loan Interest Rate | ||||||||||
Debt instrument, interest rate, increase (decrease) | 5.65% | ||||||||||
Delshah Preferred Equity Interest | |||||||||||
Accounts Notes And Loans Receivable [Line Items] | |||||||||||
Conversion of loan | $ 8,100,000 | ||||||||||
Percentage of affiliate principal loan converted into preferred equity interest | 50% | ||||||||||
Ownership percentage | 100% |
Commercial Mortgage Loans, He_4
Commercial Mortgage Loans, Held for Investment - Schedule of Information of Loan (Details) - Delshah Loan - Mezzanine Borrower | 9 Months Ended | |
Sep. 30, 2022 USD ($) | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Loan Amount | $ 8,100,000 | |
Loan Term | 10 years | |
Fixed Rate Coupon Description | 9.10% subject to a potential increase in year six | |
Loan-to-Value | 83.14% | [1] |
[1] Loan-to-Value is calculated as of the date the Delshah Loan was originated. |
Commercial Mortgage Loans, He_5
Commercial Mortgage Loans, Held for Investment - Schedule of Activity on Loan (Details) | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Loan | |
Accounts Notes And Loans Receivable [Line Items] | |
Total Loans, Amount | $ 26,990,000 |
Loan | Delshah Loan | |
Accounts Notes And Loans Receivable [Line Items] | |
Loan Amount | 18,000,000 |
Total Loans, Amount | 18,000,000 |
Loan | East 12th Street Loan | |
Accounts Notes And Loans Receivable [Line Items] | |
Loan Amount | 8,990,000 |
Total Loans, Amount | 8,990,000 |
Initial Funding | |
Accounts Notes And Loans Receivable [Line Items] | |
Total Loans, Amount | 24,830,000 |
Initial Funding | Delshah Loan | |
Accounts Notes And Loans Receivable [Line Items] | |
Loan Amount | $ 18,000,000 |
RIT Participation Interest % | 100% |
Total Loans, Amount | $ 18,000,000 |
Initial Funding | East 12th Street Loan | |
Accounts Notes And Loans Receivable [Line Items] | |
Loan Amount | $ 6,830,000 |
RIT Participation Interest % | 100% |
Total Loans, Amount | $ 6,830,000 |
Interest Participation Sale | Delshah Loan | |
Accounts Notes And Loans Receivable [Line Items] | |
Loan Amount | $ (17,100,000) |
RIT Participation Interest % | (95.00%) |
Interest Participation Sale | East 12th Street Loan | |
Accounts Notes And Loans Receivable [Line Items] | |
Loan Amount | $ (5,435,000) |
RIT Participation Interest % | (79.58%) |
Ownership | |
Accounts Notes And Loans Receivable [Line Items] | |
Total Loans, Amount | $ 24,830,000 |
Ownership | Delshah Loan | |
Accounts Notes And Loans Receivable [Line Items] | |
Loan Amount | $ 900,000 |
RIT Participation Interest % | 5% |
Total Loans, Amount | $ 18,000,000 |
Ownership | East 12th Street Loan | |
Accounts Notes And Loans Receivable [Line Items] | |
Loan Amount | $ 1,395,000 |
RIT Participation Interest % | 20.42% |
Total Loans, Amount | $ 6,830,000 |
Interest Shortfall | |
Accounts Notes And Loans Receivable [Line Items] | |
Total Loans, Amount | 1,459,417 |
Interest Shortfall | East 12th Street Loan | |
Accounts Notes And Loans Receivable [Line Items] | |
Loan Amount | 1,459,417 |
Total Loans, Amount | 1,459,417 |
Interest Participation Sale Interest Shortfall | East 12th Street Loan | |
Accounts Notes And Loans Receivable [Line Items] | |
Loan Amount | (174,044) |
Advance For Capital Expenditures | |
Accounts Notes And Loans Receivable [Line Items] | |
Total Loans, Amount | 500,000 |
Advance For Capital Expenditures | East 12th Street Loan | |
Accounts Notes And Loans Receivable [Line Items] | |
Loan Amount | 500,000 |
Total Loans, Amount | 500,000 |
RIT Interest Participation Purchase | Delshah Loan | |
Accounts Notes And Loans Receivable [Line Items] | |
Loan Amount | $ 17,100,000 |
RIT Participation Interest % | 95% |
RIT Interest Participation Purchase | East 12th Street Loan | |
Accounts Notes And Loans Receivable [Line Items] | |
Loan Amount | $ 5,609,044 |
RIT Participation Interest % | 79.58% |
Principal Paydown | |
Accounts Notes And Loans Receivable [Line Items] | |
Total Loans, Amount | $ (10,589,417) |
Principal Paydown | Delshah Loan | |
Accounts Notes And Loans Receivable [Line Items] | |
Loan Amount | (1,800,000) |
Total Loans, Amount | (1,800,000) |
Principal Paydown | East 12th Street Loan | |
Accounts Notes And Loans Receivable [Line Items] | |
Loan Amount | $ (8,789,417) |
RIT Participation Interest % | (100.00%) |
Total Loans, Amount | $ (8,789,417) |
Conversion To Preferred Equity | |
Accounts Notes And Loans Receivable [Line Items] | |
Total Loans, Amount | (8,100,000) |
Conversion To Preferred Equity | Delshah Loan | |
Accounts Notes And Loans Receivable [Line Items] | |
Loan Amount | (8,100,000) |
Total Loans, Amount | (8,100,000) |
Ownership | |
Accounts Notes And Loans Receivable [Line Items] | |
Total Loans, Amount | 8,100,000 |
Ownership | Delshah Loan | |
Accounts Notes And Loans Receivable [Line Items] | |
Loan Amount | $ 8,100,000 |
RIT Participation Interest % | 100% |
Total Loans, Amount | $ 8,100,000 |
Ownership | East 12th Street Loan | |
Accounts Notes And Loans Receivable [Line Items] | |
RIT Participation Interest % | 0% |
Loan Participations Sold - Addi
Loan Participations Sold - Additional Information (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Delshah Loan | |||
Loan Participations Sold [Line Items] | |||
Loans participation agreement percentage | 5% | ||
Proceeds from contributions from affiliates | $ 900,000 | ||
Repayments of loan | $ 1,800,000 | ||
Principal loan balance | 16,200,000 | ||
Conversion of loan | $ 8,100,000 | 8,100,000 | |
Increase (decrease) in participation liabilities | $ 8,100,000 | $ 81,000 | |
Ownership percentage | 100% | 1% | |
Beneficial interests acquired, purchase price | $ 8,019,000 | ||
Delshah Loan | CFI | |||
Loan Participations Sold [Line Items] | |||
Loans participation agreement percentage | 95% | ||
Proceeds from contributions from affiliates | $ 17,100,000 | ||
Ownership percentage | 99% | 99% | |
Beneficial interests acquired, purchase price | $ 8,019,000 | 9,081,000 | |
Percentage of participation interest | 99% | ||
Delshah Preferred Equity Interest | |||
Loan Participations Sold [Line Items] | |||
Conversion of loan | $ 8,100,000 | ||
Percentage of affiliate principal loan converted into preferred equity interest | 50% | ||
Ownership percentage | 100% |
Investments in Real Estate-Rela
Investments in Real Estate-Related Assets - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Investments In Real Estate Related Assets [Line Items] | ||||||
Investments in VIEs | $ 0 | $ 0 | $ 0 | |||
Due to related party | 208,121 | 208,121 | $ 282,896 | $ 4,761,089 | ||
Preferred return income earned | 207,000 | $ 207,000 | $ 614,250 | $ 614,250 | ||
Minimum [Member] | ||||||
Investments In Real Estate Related Assets [Line Items] | ||||||
Preferred return for preferred equity interest | 10% | |||||
Maximum | ||||||
Investments In Real Estate Related Assets [Line Items] | ||||||
Preferred return for preferred equity interest | 10.25% | |||||
Delshah Loan | ||||||
Investments In Real Estate Related Assets [Line Items] | ||||||
Delshah loan principal paydown | $ 1,800,000 | |||||
Investments in VIEs | 16,200,000 | 16,200,000 | ||||
Mezzanine loan converted to preferred equity interests | $ 8,100,000 | |||||
Mezzanine loan converted to preferred equity interests, percentage | 50% | |||||
Delshah Preferred Equity Interest | ||||||
Investments In Real Estate Related Assets [Line Items] | ||||||
Mezzanine loan converted to preferred equity interests | $ 8,100,000 | |||||
Preferred return for preferred equity interest | 10% | |||||
Change in rate of return on preferred equity interest | 10.25% | |||||
Change in rate of return on preferred equity interest, basis points | 7.40% | |||||
Change in rate of return on preferred equity interest, increase | 11.25% | |||||
Change in rate of return on preferred equity interest, basis points, increase | 8.40% | |||||
Minimum financing yield on combined loans and preferred equity interest | 7% | |||||
Description of financing service coverage ratio | financing service coverage ratio of at least 1.10x | |||||
Rate of return on capital distribution | 15% | |||||
Amounts to be distributed on pari passu basis | 20% | |||||
Due to related party | $ 60,750 | $ 60,750 | ||||
Basis points on amount of preferred equity interest | 75% | |||||
Delshah Preferred Equity Interest | Operating Member | ||||||
Investments In Real Estate Related Assets [Line Items] | ||||||
Amounts to be distributed on pari passu basis | 80% | |||||
Delshah Preferred Equity Interest | Minimum [Member] | ||||||
Investments In Real Estate Related Assets [Line Items] | ||||||
Percentage of outstanding balance of combined loans and preferred equity interest | 75% | |||||
Percentage of payment in kind | 9.10% |
Investments in Real Estate-Re_2
Investments in Real Estate-Related Assets - Schedule of Delshah Preferred Equity Interest (Details) | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Investments In Real Estate Related Assets [Line Items] | |
Original Investment Amount | $ 8,100,000 |
Minimum [Member] | |
Investments In Real Estate Related Assets [Line Items] | |
Preferred Return | 10% |
Maximum | |
Investments In Real Estate Related Assets [Line Items] | |
Preferred Return | 10.25% |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Aug. 10, 2022 | Jun. 28, 2018 | Jan. 22, 2016 | Jan. 31, 2020 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Stockholders Equity [Line Items] | |||||||||||||
Stock issued during period, new issues, value | $ 79,000 | $ 85,000 | |||||||||||
Common stock, shares authorized | 410,000,000 | 410,000,000 | |||||||||||
Closing date of offering | May 02, 2021 | ||||||||||||
Description of offering | The Offering was a best efforts continuous offering that ended May 2, 2021 pursuant to its terms. The Company’s board of directors determined to terminate the DRP effective on the distribution date of May 5, 2021. Accordingly, all distributions payable on or after May 5, 2021, have been paid in cash. | ||||||||||||
Preferred stock, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 | ||||||||||
Preferred stock, par value | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||||
Preferred stock, shares issued | 0 | 0 | 0 | ||||||||||
Preferred stock, shares outstanding | 0 | 0 | 0 | ||||||||||
Stock issued during period, new issues | 800,825 | ||||||||||||
Net proceeds from sale of common stock | $ 19,090,154 | ||||||||||||
Common share Distributions declared | 3,946,481 | $ 2,987,794 | |||||||||||
Distributions payable | $ 108,295 | $ 108,295 | $ 109,960 | ||||||||||
Notice period to amend, suspend or terminate share repurchase program | 10 days | ||||||||||||
Common stock repurchased | 9,707 | $ 211,520 | $ 70,962 | $ 78,780 | $ 51,112 | $ 61,773 | $ 292,189 | $ 191,665 | |||||
Acquired non-controlling interests | $ 1,000 | ||||||||||||
RIT REIT Sub I, Inc. | |||||||||||||
Stockholders Equity [Line Items] | |||||||||||||
Noncontrolling interest preferred stock dividends rate | 12% | ||||||||||||
Noncontrolling interest preferred stock dividends | $ 40,125 | ||||||||||||
Noncontrolling interest preferred stock dividends payable | $ 3,750 | $ 3,750 | |||||||||||
CFI and Company Reimbursement Agreement | |||||||||||||
Stockholders Equity [Line Items] | |||||||||||||
Cumulative, non-compounded annual pre-tax return | 6.50% | 6.50% | |||||||||||
Maximum | |||||||||||||
Stockholders Equity [Line Items] | |||||||||||||
Repurchase of shares to combined net asset value of classes of shares aggregate value percentage during any calendar month | 2% | ||||||||||||
Repurchase of shares to combined net asset value of classes of shares aggregate value percentage during any calendar year | 10% | ||||||||||||
Maximum | CFI and Company Reimbursement Agreement | |||||||||||||
Stockholders Equity [Line Items] | |||||||||||||
Percentage of selling commissions and all of dealer manager fees on gross offering proceeds to be paid by CFI | 4% | ||||||||||||
Class A Common Stock | |||||||||||||
Stockholders Equity [Line Items] | |||||||||||||
Stock issued during period, new issues, value | $ 200,001 | ||||||||||||
Common stock, shares authorized | 160,000,000 | 160,000,000 | 160,000,000 | ||||||||||
Stock issued during period, new issues | 413,661 | ||||||||||||
Dividends payable, amount per share per day | $ 0.004602739 | $ 0.004602739 | |||||||||||
Distributions declared on an annual basis | $ 1.68 | ||||||||||||
Class T Common Stock | |||||||||||||
Stockholders Equity [Line Items] | |||||||||||||
Common stock, shares authorized | 200,000,000 | 200,000,000 | 200,000,000 | ||||||||||
Stock issued during period, new issues | 211,394 | ||||||||||||
Dividends payable, amount per share per day | $ 0.004602739 | $ 0.004602739 | $ 0.004602739 | ||||||||||
Distributions declared on an annual basis | $ 1.68 | $ 1.68 | |||||||||||
Class I Common Stock | |||||||||||||
Stockholders Equity [Line Items] | |||||||||||||
Common stock, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 | ||||||||||
Stock issued during period, new issues | 175,771 | ||||||||||||
Dividends payable, amount per share per day | $ 0.004602739 | $ 0.004602739 | |||||||||||
Distributions declared on an annual basis | $ 1.68 | ||||||||||||
Class I Common Stock | Maximum | CFI and Company Reimbursement Agreement | |||||||||||||
Stockholders Equity [Line Items] | |||||||||||||
Percentage of selling commissions and all of dealer manager fees on gross offering proceeds to be paid by CFI | 1.50% | ||||||||||||
Class A and T | Maximum | CFI and Company Reimbursement Agreement | |||||||||||||
Stockholders Equity [Line Items] | |||||||||||||
Percentage of selling commissions and all of dealer manager fees on gross offering proceeds to be paid by CFI | 4% | ||||||||||||
Common Stock | |||||||||||||
Stockholders Equity [Line Items] | |||||||||||||
Distributions payable | $ 104,545 | $ 104,545 | $ 109,960 | ||||||||||
Common Class A And Class I | |||||||||||||
Stockholders Equity [Line Items] | |||||||||||||
Common stock repurchased, shares | 427 | 3,429 | 12,759 | 8,487 | |||||||||
Minimum Offering Requirement | Class I Common Stock | |||||||||||||
Stockholders Equity [Line Items] | |||||||||||||
Stock issued during period, new issues, value | $ 2,000,000 | ||||||||||||
Per share purchase price for shares of common stock | $ 25 | ||||||||||||
Private Placement | RIT REIT Sub I, Inc. | |||||||||||||
Stockholders Equity [Line Items] | |||||||||||||
Noncontrolling Interest, preferred stock purchased during period, shares | 125 | ||||||||||||
Purchase of noncontrolling interest | $ 125,000 | ||||||||||||
Noncontrolling interest preferred stock issuance costs | $ 20,900 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||||
Apr. 30, 2022 | Sep. 28, 2019 | Sep. 27, 2019 | Jan. 22, 2016 | Jan. 19, 2016 | Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |||||
Related Party Transaction [Line Items] | |||||||||||||||||
Due to related party | $ 208,121 | $ 208,121 | $ 282,896 | $ 4,761,089 | |||||||||||||
Disposition fee as percentage of contract sales price | 1% | 1% | |||||||||||||||
Disposition fee threshold as percentage of contract sales price | 6% | ||||||||||||||||
Selling commissions payable | $ 417,402 | 417,402 | |||||||||||||||
Sponsor Support fees | 118,492 | 118,492 | |||||||||||||||
Sponsor support payment due | $ 0 | 0 | |||||||||||||||
Management fees | 55,023 | $ 56,049 | 166,806 | $ 161,279 | |||||||||||||
Sponsor support payment received related to dealer manager fees | 476,450 | 476,450 | |||||||||||||||
Common stock | $ 79,000 | $ 85,000 | |||||||||||||||
Class A Common Stock | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Common stock | $ 200,001 | ||||||||||||||||
Common stock, shares | 8,180 | ||||||||||||||||
Operating Expense | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Due to related party | 108,485 | [1] | $ 108,485 | [1] | 108,485 | [1],[2] | $ 108,485 | [2] | |||||||||
Asset Management Agreement | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Asset management fee, amount paid monthly one-twelfth | 1.20% | ||||||||||||||||
Due to related party | 18,199 | $ 18,199 | |||||||||||||||
Related party transaction expenses from transactions with related party | $ 55,023 | 56,049 | $ 166,806 | 161,279 | |||||||||||||
CFI and Company Reimbursement Agreement | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Cumulative, non-compounded annual pre-tax return | 6.50% | 6.50% | |||||||||||||||
Advisor and Dealer Manager Agreement Transaction Agreement | Class I Common Stock | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Selling commissions payable | $ 0 | ||||||||||||||||
Unreimbursed Operating Expense | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Due to related party | $ 6,227,613 | 6,227,613 | 5,405,407 | ||||||||||||||
Related party transaction expenses from transactions with related party | 822,207 | 1,355,237 | |||||||||||||||
Operating expenses incurred by the advisor | $ 822,207 | $ 822,207 | |||||||||||||||
Maximum | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Disposition fee as percentage of principal amount of debt | 1% | ||||||||||||||||
Maximum | CFI and Company Reimbursement Agreement | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Percentage of selling commissions and all of dealer manager fees on gross offering proceeds to be paid by CFI | 4% | ||||||||||||||||
Maximum | CFI and Company Reimbursement Agreement | Common Class A and Class T | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Percentage of selling commissions and all of dealer manager fees on gross offering proceeds to be paid by CFI | 4% | ||||||||||||||||
Maximum | CFI and Company Reimbursement Agreement | Class I Common Stock | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Percentage of selling commissions and all of dealer manager fees on gross offering proceeds to be paid by CFI | 1.50% | ||||||||||||||||
Initial Public Offering | Maximum | Advisor and Dealer Manager Agreement Transaction Agreement | Common Class A and Class T | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Percentage of selling commissions on gross offering proceeds | 1% | ||||||||||||||||
Percentage of dealer manager fee on gross offering proceeds | 3% | ||||||||||||||||
Initial Public Offering | Maximum | Advisor and Dealer Manager Agreement Transaction Agreement | Class A Common Stock | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Percentage of selling commissions on gross offering proceeds | 5% | ||||||||||||||||
Initial Public Offering | Maximum | Advisor and Dealer Manager Agreement Transaction Agreement | Class T Common Stock | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Percentage of selling commissions on gross offering proceeds | 2% | ||||||||||||||||
Initial Public Offering | Maximum | Advisor and Dealer Manager Agreement Transaction Agreement | Class I Common Stock | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Percentage of dealer manager fee on gross offering proceeds | 1.50% | ||||||||||||||||
Advisor | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Asset management fee, amount paid monthly one-twelfth | 1.20% | 1.25% | |||||||||||||||
Commercial real estate related loans, origination fee percentage | 1% | ||||||||||||||||
Related party transaction expenses from transactions with related party | $ 108,485 | 108,485 | |||||||||||||||
Cumulative, non-compounded annual pre-tax return | 6.50% | 6.50% | |||||||||||||||
Reimbursable operating expenses | $ 0 | 0 | $ 0 | 0 | |||||||||||||
Advisor | Mezzanine Borrower | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Origination fees paid by Mezzanine borrower | 0 | 0 | |||||||||||||||
Advisor | Organization and Offering Costs Payable | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Organization and offering costs incurred by advisor on behalf of Company | 6,031,627 | 6,040,637 | |||||||||||||||
Due to related party | $ 0 | $ 0 | |||||||||||||||
Advisor | Maximum | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Percentage of average invested assets | 2% | ||||||||||||||||
Percentage of net income | 25% | ||||||||||||||||
Advisor | Maximum | Operating Expense | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Net asset value per share, reimbursement limitation | $ 25 | $ 25 | |||||||||||||||
Advisor | Initial Public Offering | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Percentage of additional cost obligation reimbursement | 100% | 100% | |||||||||||||||
Cost reimbursement period | 36 months | ||||||||||||||||
Advisor | Initial Public Offering | Organization and Offering Costs Payable | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Due to related party | $ 0 | $ 0 | 32,696 | ||||||||||||||
Reimbursement payments for costs incurred | 187,565 | 155,579 | |||||||||||||||
Advisor | Initial Public Offering | Organizational Costs | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Due to related party | 449 | 449 | |||||||||||||||
Advisor | Initial Public Offering | Offering Costs | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Due to related party | $ 187,117 | $ 187,117 | $ 187,826 | ||||||||||||||
Advisor | Initial Public Offering | Maximum | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Percentage of organization and offering costs to gross offering proceeds | 1% | 1% | |||||||||||||||
Advisor And Dealer Manager | Initial Public Offering | Maximum | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Percentage of organization and offering costs to gross offering proceeds of offering | 15% | ||||||||||||||||
CFI | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Cumulative, non-compounded annual pre-tax return | 6.50% | 6.50% | |||||||||||||||
Proceeds from sponsor support from CFI | $ 594,941 | $ 594,941 | |||||||||||||||
Sponsor support reimbursed by CFI | 118,492 | 118,492 | |||||||||||||||
Common stock | $ 2,200,001 | ||||||||||||||||
Common stock, shares | 88,180 | ||||||||||||||||
CFI | Class A Common Stock | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Common stock | $ 200,001 | $ 200,001 | |||||||||||||||
Common stock, shares | 8,180 | 8,180 | |||||||||||||||
Per share purchase price for shares of common stock in IPO | $ 24.45 | ||||||||||||||||
CFI | Class I Common Stock | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Common stock | $ 2,000,000 | ||||||||||||||||
Common stock, shares | 80,000 | ||||||||||||||||
CFI | Maximum | Common Class A and Class T | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Percentage of selling commissions and all of dealer manager fees on gross offering proceeds to be paid by CFI | 4% | ||||||||||||||||
CFI | Maximum | Class I Common Stock | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Percentage of selling commissions and all of dealer manager fees on gross offering proceeds to be paid by CFI | 1.50% | ||||||||||||||||
Dealer manager | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Management fees | $ 476,450 | 476,450 | |||||||||||||||
Dealer manager | Class T Common Stock | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Annual distribution fee percentage | 1% | ||||||||||||||||
Payment of distribution fees | $ 10,299 | $ 11,965 | $ 33,102 | $ 35,767 | |||||||||||||
Distribution fees due | 81,437 | 81,437 | 122,999 | ||||||||||||||
Dealer manager | Distribution Fee Payable | Class T Common Stock | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Due to related party | 3,358 | 3,358 | 4,015 | ||||||||||||||
Delshah Loan | |||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||
Beneficial interests acquired, purchase price | $ 8,019,000 | 8,019,000 | |||||||||||||||
Increase (decrease) in participation liabilities | $ 8,100,000 | $ 81,000 | |||||||||||||||
Ownership percentage | 100% | 100% | 1% | ||||||||||||||
[1] As of September 30, 2022 , the Advisor has incurred, on behalf of the Company, a total of $ 6,227,613 in Unreimbursed Operating Expenses, including a total of $ 822,207 during the nine months ended September 30, 2022 for which the Advisor has not invoiced the Company for reimbursement. As of December 31, 2021, the Advisor has incurred, on behalf of the Company, a total of $ 5,405,407 in Unreimbursed Operating Expenses, including a total of $ 1,355,237 during the year ended December 31, 2021 for which the Advisor has not invoiced the Company for reimbursement. The total amount of Unreimbursed Operating Expenses may, in future periods, be subject to reimbursement by the Company pursuant to the terms of the Advisory Agreement. |
Related Party Transactions - Su
Related Party Transactions - Summary of Fees and Expenses Incurred and Preferred Equity Interest Payment Due (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2022 | Dec. 31, 2021 | ||||
Related Party Transaction [Line Items] | |||||
Fees and expenses, Due to related party | $ 282,896 | $ 4,761,089 | |||
Fees, expenses and recoveries, Incurred | 157,636 | 223,362 | |||
Fees and expenses, Paid | 232,411 | 4,701,555 | |||
Fees and expenses, Due to related party | 208,121 | 282,896 | |||
Asset Management Fees | |||||
Related Party Transaction [Line Items] | |||||
Fees and expenses, Due to related party | 18,716 | 14,834 | |||
Fees, expenses and recoveries, Incurred | 166,806 | 217,434 | |||
Fees and expenses, Paid | 167,323 | 213,552 | |||
Fees and expenses, Due to related party | 18,199 | 18,716 | |||
Operating Expense | |||||
Related Party Transaction [Line Items] | |||||
Fees and expenses, Due to related party | [2] | 108,485 | [1] | 108,485 | |
Fees and expenses, Due to related party | [1] | 108,485 | 108,485 | [2] | |
Organization Expenses | |||||
Related Party Transaction [Line Items] | |||||
Fees and expenses, Due to related party | [4] | 55 | [3] | 187 | |
Fees and expenses, Paid | 55 | [3] | 132 | [4] | |
Fees and expenses, Due to related party | [3],[4] | 55 | |||
Offering Costs | |||||
Related Party Transaction [Line Items] | |||||
Fees and expenses, Due to related party | [4] | 32,641 | [3],[5] | 115,090 | |
Fees, expenses and recoveries, Incurred | (710) | [3],[5] | (883) | [4] | |
Fees and expenses, Paid | 31,931 | [3],[5] | 81,566 | [4] | |
Fees and expenses, Due to related party | [3],[4],[5] | 32,641 | |||
Selling Commissions And Dealer Manager Fees Net | |||||
Related Party Transaction [Line Items] | |||||
Fees, expenses and recoveries, Incurred | 7,750 | ||||
Fees and expenses, Paid | 7,750 | ||||
Distribution Fees | |||||
Related Party Transaction [Line Items] | |||||
Fees and expenses, Due to related party | 122,999 | [5] | 171,493 | [6] | |
Fees, expenses and recoveries, Incurred | (8,460) | [5] | (939) | [6] | |
Fees and expenses, Paid | 33,102 | [5] | 47,555 | [6] | |
Fees and expenses, Due to related party | [5] | $ 81,437 | 122,999 | ||
Delshah Preferred Equity Interest | |||||
Related Party Transaction [Line Items] | |||||
Fees and expenses, Due to related party | 4,351,000 | ||||
Fees and expenses, Paid | $ 4,351,000 | ||||
[1] As of September 30, 2022 , the Advisor has incurred, on behalf of the Company, a total of $ 6,227,613 in Unreimbursed Operating Expenses, including a total of $ 822,207 during the nine months ended September 30, 2022 for which the Advisor has not invoiced the Company for reimbursement. As of December 31, 2021, the Advisor has incurred, on behalf of the Company, a total of $ 5,405,407 in Unreimbursed Operating Expenses, including a total of $ 1,355,237 during the year ended December 31, 2021 for which the Advisor has not invoiced the Company for reimbursement. The total amount of Unreimbursed Operating Expenses may, in future periods, be subject to reimbursement by the Company pursuant to the terms of the Advisory Agreement. As of September 30, 2022 , the Advisor has incurred, on behalf of the Company, a total of $ 6,031,627 of O&O Costs, of which the Company’s obligation is $ 0 , pursuant to the 1 % Cap. As of December 31, 2021, the Advisor has incurred, on behalf of the Company, a total of $ 6,040,637 of O&O Costs, of which the Company’s obligation is limited to $ 32,696 , pursuant to the 1 % Cap. The amount incurred reflects the change in accrual. The amount incurred reflects the change in accrual. |
Related Party Transactions - _2
Related Party Transactions - Summary of Fees and Expenses Incurred and Preferred Equity Interest Payment Due (Parenthetical) (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | |||
Due to related party | $ 208,121 | $ 282,896 | $ 4,761,089 |
Advisor | |||
Related Party Transaction [Line Items] | |||
Related party transaction expenses from transactions with related party | 108,485 | 108,485 | |
Advisor | O&O Costs | |||
Related Party Transaction [Line Items] | |||
Due to related party | 0 | 32,696 | |
Organization and offering costs incurred by advisor on behalf of Company | $ 6,031,627 | $ 6,040,637 | |
Advisor | O&O Costs | Maximum | |||
Related Party Transaction [Line Items] | |||
Percentage of cap on organization and offering cost | 1% | 1% | |
Unreimbursed Operating Expense | |||
Related Party Transaction [Line Items] | |||
Due to related party | $ 6,227,613 | $ 5,405,407 | |
Related party transaction expenses from transactions with related party | $ 822,207 | $ 1,355,237 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value Disclosures [Abstract] | ||
Estimated fair value of commercial mortgage loan, held for investment | $ 8,100,000 | $ 16,889,417 |
Estimated fair value of loan participations sold | 8,019,000 | |
Estimated fair value of investment in real estate-related assets | $ 8,012,387 | $ 8,100,000 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Principal Balance, Carrying Value, and Fair Value of the Company's Financial Assets and Liabilities (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Assets | ||
Commercial mortgage loans, held for investment | $ 8,100,000 | $ 16,889,417 |
Investment in real estate-related assets | 8,012,387 | 8,100,000 |
Liabilities | ||
Loan participations sold | 8,019,000 | |
Assets | ||
Cash and cash equivalents | 2,515,341 | 2,061,470 |
Commercial mortgage loans, held for investment | 8,100,000 | 16,889,417 |
Investment in real estate-related assets | 8,100,000 | 8,100,000 |
Liabilities | ||
Loan participations sold | 8,019,000 | |
Carrying Value | ||
Assets | ||
Cash and cash equivalents | 2,515,341 | 2,061,470 |
Commercial mortgage loans, held for investment | 8,100,000 | 16,889,417 |
Investment in real estate-related assets | 8,100,000 | 8,100,000 |
Liabilities | ||
Loan participations sold | 8,019,000 | |
Fair Value | ||
Assets | ||
Cash and cash equivalents | 2,515,341 | 2,061,470 |
Commercial mortgage loans, held for investment | 8,100,000 | 16,889,417 |
Investment in real estate-related assets | 8,012,387 | 8,100,000 |
Liabilities | ||
Loan participations sold | 8,019,000 | |
Fair Value | Level 1 | ||
Assets | ||
Cash and cash equivalents | 2,515,341 | 2,061,470 |
Fair Value | Level 3 | ||
Assets | ||
Commercial mortgage loans, held for investment | 8,100,000 | 16,889,417 |
Investment in real estate-related assets | $ 8,012,387 | 8,100,000 |
Liabilities | ||
Loan participations sold | $ 8,019,000 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - USD ($) | Oct. 24, 2022 | Sep. 30, 2022 | Dec. 31, 2021 |
Subsequent Event [Line Items] | |||
Remaining principal balance | $ 8,100,000 | $ 8,100,000 | |
Delshah Preferred Equity Interest Paydown | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Proceeds from preferred equity interest | $ 825,000 | ||
Remaining principal balance | $ 7,275,000 |