Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2024 | May 09, 2024 | |
Document And Entity Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2024 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | INPOINT COMMERCIAL REAL ESTATE INCOME, INC. | |
Entity Central Index Key | 0001690012 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
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 Shell Company | false | |
Entity File Number | 001-40833 | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 32-0506267 | |
Entity Address, Address Line One | 2901 Butterfield Road | |
Entity Address, City or Town | Oak Brook | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60523 | |
City Area Code | 800 | |
Local Phone Number | 826-8228 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Title of 12(b) Security | 6.75% Series A Cumulative Redeemable Preferred Stock, par value $0.001 | |
Trading Symbol | ICR PR A | |
Security Exchange Name | NYSE | |
Class P Common Stock | ||
Document And Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 8,562,777 | |
Class T Common Stock | ||
Document And Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 290,345 | |
Class I Common Stock | ||
Document And Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 469,168 | |
Class A Common Stock | ||
Document And Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 745,887 | |
Class D Common Stock | ||
Document And Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 48,015 | |
Class S Common Stock | ||
Document And Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 0 |
CONSOLIDATED BALANCE SHEETS (un
CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | |
ASSETS | |||
Cash and cash equivalents | $ 60,396 | $ 54,143 | |
Commercial mortgage loans: | |||
Commercial mortgage loans at cost | 714,891 | 743,852 | |
Allowance for credit losses | (22,253) | (21,849) | |
Commercial mortgage loans at cost, net | [1] | 692,638 | 722,003 |
Deferred debt finance costs | 201 | 604 | |
Accrued interest receivable | 3,012 | 3,283 | |
Prepaid expenses and other assets | 345 | 312 | |
Total assets | 756,592 | 780,345 | |
Liabilities: | |||
Repurchase agreements | 435,439 | 457,438 | |
Credit facility payable | 9,498 | 9,498 | |
Loan participations sold, net | 57,226 | 57,226 | |
Due to related parties | $ 1,662 | $ 2,028 | |
Other Liability, Related Party, Type [Extensible Enumeration] | us-gaap:RelatedPartyMember | us-gaap:RelatedPartyMember | |
Accrued interest payable | $ 1,720 | $ 1,792 | |
Distributions payable | 1,051 | 1,050 | |
Accrued expenses and other liabilities | 719 | 762 | |
Total liabilities | 507,315 | 529,794 | |
Commitments and contingencies (Note 8) | |||
Stockholders’ Equity: | |||
6.75% Series A Cumulative Redeemable Preferred Stock, $0.001 par value, 4,025,000 shares authorized and 3,544,553 shares issued and outstanding as of March 31, 2024 and December 31, 2023. | 4 | 4 | |
Additional paid in capital | 339,554 | 339,581 | |
Accumulated deficit | (90,291) | (89,044) | |
Total stockholders’ equity | 249,277 | 250,551 | |
Total liabilities and stockholders’ equity | 756,592 | 780,345 | |
Class P Common Stock | |||
Stockholders’ Equity: | |||
Common stock | 9 | 9 | |
Class A Common Stock | |||
Stockholders’ Equity: | |||
Common stock | 1 | 1 | |
Class T Common Stock | |||
Stockholders’ Equity: | |||
Common stock | 0 | 0 | |
Class S Common Stock | |||
Stockholders’ Equity: | |||
Common stock | 0 | 0 | |
Class D Common Stock | |||
Stockholders’ Equity: | |||
Common stock | 0 | 0 | |
Class I Common Stock | |||
Stockholders’ Equity: | |||
Common stock | $ 0 | $ 0 | |
[1] First mortgage loans are first position mortgage loans and credit loans are mezzanine and subordinated loans. |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Class P Common Stock | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares, issued | 8,562,777 | 8,562,777 |
Common stock, shares, outstanding | 8,562,777 | 8,562,777 |
Class A Common Stock | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares, issued | 745,887 | 745,887 |
Common stock, shares, outstanding | 745,887 | 745,887 |
Class T Common Stock | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares, issued | 290,345 | 290,345 |
Common stock, shares, outstanding | 290,345 | 290,345 |
Class S Common Stock | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares, issued | 0 | 0 |
Common stock, shares, outstanding | 0 | 0 |
Class D Common Stock | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares, issued | 48,015 | 48,015 |
Common stock, shares, outstanding | 48,015 | 48,015 |
Class I Common Stock | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares, issued | 469,168 | 469,168 |
Common stock, shares, outstanding | 469,168 | 469,168 |
6.75% Series A Cumulative Redeemable Preferred Stock | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 4,025,000 | 4,025,000 |
Percentage of cumulative redeemable preferred stock | 6.75% | 6.75% |
Preferred stock, shares issued | 3,544,553 | 3,544,553 |
Preferred stock, shares outstanding | 3,544,553 | 3,544,553 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income: | ||
Interest income | $ 15,112 | $ 16,854 |
Less: Interest expense | (9,476) | (10,229) |
Net interest income | 5,636 | 6,625 |
Revenue from real estate | 0 | 2,921 |
Total income | 5,636 | 9,546 |
Operating expenses: | ||
Advisory fee | 805 | 881 |
Amortization of debt finance costs | 403 | 371 |
Directors compensation | 20 | 19 |
Professional service fees | 281 | 191 |
Real estate operating expenses | 0 | 3,188 |
Depreciation and amortization | 0 | 321 |
Other expenses | 391 | 353 |
Total operating expenses | 1,900 | 5,324 |
Other (loss) income: | ||
(Provision for) reversal of credit losses | (337) | 399 |
Total other (loss) income | (337) | 399 |
Net income | 3,399 | 4,621 |
Gain on repurchase and retirement of preferred stock | 0 | 21 |
Net income attributable to common stockholders | $ 1,904 | $ 3,147 |
Net income attributable to common stockholders per share basic | $ 0.19 | $ 0.31 |
Net income attributable to common stockholders per share diluted | $ 0.19 | $ 0.31 |
Weighted average number of shares of common stock | ||
Basic | 10,116,192 | 10,113,221 |
Diluted | 10,116,531 | 10,113,587 |
Series A Preferred Stock | ||
Other (loss) income: | ||
Series A Preferred Stock dividends | $ (1,495) | $ (1,495) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (unaudited) - USD ($) $ in Thousands | Total | Preferred Stock Series A Preferred Stock | Common Stock Class P Common Stock | Common Stock Class A Common Stock | Additional Paid in Capital | Accumulated Deficit | Accumulated Deficit Cumulative Effect, Period of Adoption, Adjustment | Accumulated Deficit Cumulative Effect, Period of Adoption, Adjustment Accumulated Deficit | Cumulative Effect, Period of Adoption, Adjusted Balance | Cumulative Effect, Period of Adoption, Adjusted Balance Additional Paid in Capital | Cumulative Effect, Period of Adoption, Adjusted Balance Accumulated Deficit |
Balance at Dec. 31, 2022 | $ 278,557 | $ 4 | $ 9 | $ 1 | $ 339,470 | $ (60,927) | $ (5,122) | $ (5,122) | $ 273,435 | $ 339,470 | $ (66,049) |
Accounting Standards Update [Extensible Enumeration] | Accounting Standards Update 2016-13 [Member] | ||||||||||
Proceeds from issuance of common stock | 342 | 342 | |||||||||
Repurchase and retirement of preferred stock | (82) | (104) | 22 | ||||||||
Offering costs | (82) | (82) | |||||||||
Net income | 4,621 | 4,621 | |||||||||
Common stock distributions declared | (3,148) | (3,148) | |||||||||
Preferred stock distributions declared | (1,495) | (1,495) | |||||||||
Distribution reinvestment | 85 | 85 | |||||||||
Equity-based compensation | 7 | 7 | |||||||||
Balance at Mar. 31, 2023 | 273,683 | 4 | 9 | 1 | 339,718 | (66,049) | |||||
Balance at Dec. 31, 2023 | 250,551 | 4 | 9 | 1 | 339,581 | (89,044) | |||||
Offering costs | (35) | (35) | |||||||||
Net income | 3,399 | 3,399 | |||||||||
Common stock distributions declared | (3,151) | (3,151) | |||||||||
Preferred stock distributions declared | (1,495) | (1,495) | |||||||||
Equity-based compensation | 8 | 8 | |||||||||
Balance at Mar. 31, 2024 | $ 249,277 | $ 4 | $ 9 | $ 1 | $ 339,554 | $ (90,291) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Cash flows from operating activities | ||
Net income | $ 3,399 | $ 4,621 |
Adjustments to reconcile net income to cash provided by operations: | ||
Provision for (reversal of) credit losses | 337 | (399) |
Depreciation and amortization expense | 321 | |
Reduction in the carrying amount of the right-of-use asset | 18 | |
Amortization of equity-based compensation | 8 | 7 |
Amortization of debt finance costs to operating expense | 403 | 371 |
Amortization of debt finance costs to interest expense | 2 | |
Amortization of origination fees | (7) | |
Amortization of loan extension fees | (99) | (207) |
Changes in assets and liabilities: | ||
Accrued interest receivable | 271 | (150) |
Accrued expenses and other liabilities | 24 | (3,372) |
Accrued interest payable | (72) | 60 |
Due to related parties | (74) | (9) |
Prepaid expenses and other assets | (33) | (58) |
Net cash provided by operating activities | 4,164 | 1,198 |
Cash flows from investing activities: | ||
Origination of commercial loans | (3,482) | (5,289) |
Loan extension fees received on commercial loans | 63 | 80 |
Principal repayments of commercial loans | 32,197 | 26,777 |
Real estate capital expenditures | (380) | |
Net cash provided by investing activities | 28,778 | 21,188 |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 342 | |
Repurchase of preferred stock | (82) | |
Payment of offering costs | (45) | (90) |
Principal repayments of repurchase agreements | (21,999) | (6,478) |
Proceeds from sale of loan participations | 309 | |
Principal repayments of loan participations | (21,400) | |
Debt finance costs | (118) | |
Distributions paid to common stockholders | (3,150) | (3,061) |
Distributions paid to preferred stockholders | (1,495) | (1,494) |
Net cash used in financing activities | (26,689) | (32,072) |
Net change in cash, cash equivalents and restricted cash | 6,253 | (9,686) |
Cash, cash equivalents and restricted cash at beginning of period | 54,143 | 29,408 |
Cash, cash equivalents and restricted cash at end of period | 60,396 | 19,722 |
Supplemental disclosure of cash flow information: | ||
Amortization of deferred exit fees due to related party | (282) | (87) |
Interest paid | 9,547 | 10,261 |
Accrued stockholder servicing fee due to related party | $ (10) | (8) |
Distribution reinvestment | $ 85 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ 3,399 | $ 4,621 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Organization and Business Opera
Organization and Business Operations | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business Operations | Note 1 – Orga nization and Business Operations InPoint Commercial Real Estate Income, Inc. (the “Company”) was incorporated in Maryland on September 13, 2016 to originate, acquire and manage a diversified portfolio of commercial real estate (“CRE”) investments primarily comprised of (i) CRE debt, including (a) primarily floating-rate first mortgage loans, and (b) subordinate mortgage and mezzanine loans, and participations in such loans and (ii) floating-rate CRE securities, such as commercial mortgage-backed securities (“CMBS”), and senior unsecured debt of publicly traded real estate investment trusts (“REITs”). Substantially all of the Company’s business is conducted through InPoint REIT Operating Partnership, LP (the “Operating Partnership”), a Delaware limited partnership. The Company is the sole general partner and directly or indirectly holds all of the limited partner interests in the Operating Partnership. The Company has elected to be taxed as a REIT for U.S. federal income tax purposes. The Company is externally managed by Inland InPoint Advisor, LLC (the “Advisor”), a Delaware limited liability company formed in August 2016 that is a wholly owned indirect subsidiary of Inland Real Estate Investment Corporation (“IREIC”), a member of The Inland Real Estate Group of Companies, Inc. The Advisor is responsible for coordinating the management of the day-to-day operations and originating, acquiring and managing the Company’s CRE investment portfolio, subject to the supervision of the Company’s board of directors (the “Board”). The Advisor performs its duties and responsibilities as the Company’s fiduciary pursuant to an amended and restated advisory agreement dated July 1, 2021 among the Company, the Advisor and the Operating Partnership (the “Advisory Agreement”). The Advisor has delegated certain of its duties to SPCRE InPoint Advisors, LLC (the “Sub-Advisor”), a Delaware limited liability company formed in September 2016 that is a wholly owned subsidiary of Sound Point CRE Management, LP, pursuant to a second amended and restated sub-advisory agreement between the Advisor and the Sub-Advisor dated July 1, 2021. Among other duties, the Sub-Advisor has the authority to identify, negotiate, acquire and originate the Company’s investments and provide portfolio management, disposition, property management and leasing services to the Company. Notwithstanding such delegation to the Sub-Advisor, the Advisor retains ultimate responsibility for the performance of all the matters entrusted to it under the Advisory Agreement, including those duties which the Advisor has not delegated to the Sub-Advisor, such as (i) valuation of the Company’s assets and calculation of the Company’s net asset value (“NAV”); (ii) management of the Company’s day-to-day operations; (iii) preparation of stockholder reports and communications and arrangement of the Company’s annual stockholder meetings; and (iv) monitoring the Company’s ongoing compliance with the REIT qualification requirements for U.S. federal income tax purposes. On October 25, 2016, the Company commenced a private offering (the “Private Offering”) of up to $ 500,000 in shares of Class P common stock (“Class P Shares”). The Company issued 10,258,094 Class P Shares in the Private Offering, resulting in gross proceeds of $ 276,681 and terminated the Private Offering on June 28, 2019. On March 22, 2019, the Company filed a registration statement on Form S-11 (File No. 333-230465) (the “2019 Registration Statement”) with the Securities and Exchange Commission (the “SEC”) to register up to $ 2,350,000 in shares of common stock (the “IPO”). On May 3, 2019, the SEC declared effective the 2019 Registration Statement and the Company commenced the IPO. The purchase price per share for each class of common stock in the IPO (Class A, Class I, Class D, Class S and Class T) varied and generally equaled the prior month’s NAV per share, as determined monthly, plus applicable upfront selling commissions and dealer manager fees. Inland Securities Corporation (the “Dealer Manager”), an affiliate of the Advisor, served as the Company’s exclusive dealer manager for the IPO on a best efforts basis. On September 22, 2021, the Company completed an underwritten public offering of 3,500,000 shares of its 6.75 % Series A Cumulative Redeemable Preferred Stock, par value $ 0.001 per share (the “Series A Preferred Stock”), with a liquidation preference of $ 25.00 per share (the “Preferred Stock Offering”). In addition, on October 15, 2021, Raymond James & Associates, Inc., as a representative of the underwriters, partially exercised their over-allotment option to purchase an additional 100,000 shares of Series A Preferred Stock. The Series A Preferred Stock were issued and sold pursuant to an effective registration statement on Form S-11 (File No. 333-258802) filed with the SEC. The Company received net proceeds in the Preferred Stock Offering of $ 86,310 , after underwriter’s discount and issuance costs, and contributed the net proceeds to the Operating Partnership in exchange for an equivalent number of Series A units in the Operating Partnership (with economic terms that mirror those of the Series A Preferred Stock). For more information on the Preferred Stock Offering, see “Note 6 – Stockholders’ Equity.” On April 28, 2022, the Company filed a registration statement on Form S-11 (File No. 333-264540) (the “2022 Registration Statement”) with the SEC to register up to $ 2,200,000 in shares of common stock, which was declared effective by the SEC on November 2, 2022 (the “Second Public Offering” and collectively with the IPO, the “Public Offerings”). In light of the pace of fundraising in the Second Public Offering and the amount of monthly redemption requests pursuant to the share repurchase plan (the “SRP”), which were in excess of such fundraising, on January 30, 2023, the Board approved, effective immediately, the suspension of the operation of the SRP. In connection with such suspension, the Board also approved the suspension of the sale of shares in the primary portion of the Second Public Offering (the “Primary Offering”), effective immediately, and the suspension of the sale of shares pursuant to the distribution reinvestment plan (the “DRP”), effective as of February 10, 2023. The Primary Offering, the SRP, and the DRP shall each remain suspended unless and until such time as the Board approves their resumption. Please refer to “Note 14 – Subsequent Events” for updates to the Company’s business after March 31, 2024 . |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 – Summary of Significant Accounting Policies Disclosures discussing all significant accounting policies are set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on March 15, 2024 (the “Annual Report”), under the heading “Note 2 – Summary of Significant Accounting Policies.” See below for discussion of changes to the Company’s significant accounting policies for the three months ended March 31, 2024. Basis of Accounting The accompanying consolidated financial statements and related footnotes have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) and require management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of income and expenses during the reported periods. Actual results could differ from such estimates. In the opinion of management, the accompanying unaudited consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents include funds on deposit with financial institutions, including demand deposits with financial institutions with original maturities of three months or less. The account balance may exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance coverage limits and, as a result, there could be a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage limits. The Company believes that the risk will not be significant, as the Company does not anticipate the financial institutions’ non-performance. Restricted cash represents cash the Company is required to hold in a segregated account as additional collateral on real estate securities repurchase agreements. As of March 31, 2024 and December 31, 2023 , no restricted cash was held by the Company. Allowance for Credit Losses On January 1, 2023 , the Company adopted Accounting Standards Update 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”), which requires companies to estimate a current expected credit loss (“CECL”) for the recognition of credit losses on financial instruments, including commercial mortgage loans, in their consolidated financial statements. The allowance for credit losses is adjusted each period for changes in expected credit losses. This replaces prior GAAP which required losses to be recognized as incurred. The Company adopted ASU 2016-13 using the modified retrospective method, therefore, the results for reporting periods prior to January 1, 2023 remain unadjusted and reported in accordance with previously applicable GAAP. In connection with the adoption of ASU 2016-13, the Company recorded a $ 5,122 increase to accumulated deficit with offsets on the consolidated balance sheet as noted below. The following table illustrates the impact of adoption ASU 2016-13: January 1, 2023 As Reported Under ASU 2016-13 As Reported Pre-Adoption Impact of Adoption Assets: Allowance for credit losses $ 8,375 $ 3,588 $ 4,787 Liabilities: Accrued expenses and other liabilities $ 8,187 $ 7,852 $ 335 The allowance for credit losses is recorded in accordance with ASU 2016-13, and is a valuation account that is deducted from the amortized cost basis of loans held-for-investment on the Company’s consolidated balance sheets. Changes to the allowance for credit losses are recognized through net income (loss) on the Company’s consolidated statements of operations. The allowance is based on relevant information about past events, including historical loss experience, current portfolio, market conditions and reasonable and supportable forecasts for the duration of each respective loan. All loans held-for-investment within the Company’s portfolio have some amount of expected loss to reflect the GAAP principal underlying the CECL model that all loans have some inherent risk of loss, regardless of credit quality, subordinate capital or other mitigating factors. The Company’s loans typically include commitments to fund incremental proceeds to its borrowers over the life of the loan. Those future funding commitments are also subject to an allowance for credit losses. The allowance for credit losses related to future loan fundings is recorded as a component of “Accrued expenses and other liabilities” on the Company’s consolidated balance sheets, and not as an offset to the related loan balance. This allowance for credit losses is estimated using the same process outlined below for the Company’s outstanding loan balances, and changes in this component of the allowance for credit losses similarly flow through the Company’s consolidated statements of operations. The allowance for credit losses is estimated on a quarterly basis and represents management’s estimates of current expected credit losses in the Company’s investment portfolio. Pools of loans with similar risk characteristics are collectively evaluated while loans that no longer share risk characteristics with loan pools are evaluated individually. Estimating an allowance for credit losses is inherently subjective, as it requires management to exercise significant judgment in establishing appropriate factors used to determine the allowance and a variety of subjective assumptions, including (i) determination of relevant historical loan loss data sets, (ii) the expected timing and amount of future loan fundings and repayments, (iii) the current credit quality of loans and operating performance of loan collateral and the Company’s expectations of performance, and (iv) selecting the forecast for macroeconomic conditions. The Company estimates the analytical portion of its allowance for credit losses by using a probability-weighted quantitative analytical model that considers the likelihood of default and loss-given-default for each individual loan. The analytical model incorporates a third-party licensed database for over 100,000 commercial real estate loans. The Company licenses certain macroeconomic financial forecasts from a third-party to inform its view of the potential future impact that broader macroeconomic conditions may have on the performance of the loans held-for-investment. These macroeconomic factors include unemployment rates, interest rates, price indices for commercial property and other factors. The Company may use one or more of these forecasts in the process of estimating its allowance for credit losses. Selection of these economic forecasts requires significant judgment about future events that, while based on the information available to the Company as of the balance sheet date, are ultimately unknowable with certainty, and the actual economic conditions impacting the Company’s portfolio could vary significantly from the estimates the Company made for the periods presented. Significant inputs to the Company’s estimate of the allowance for credit losses include the reasonable and supportable forecast period and loan specific factors such as debt service coverage ratio, or DSCR, loan-to-value ratio, or LTV, remaining contractual loan term, property type and others. In addition, the Company also considers relevant loan-specific qualitative factors to estimate its allowance for credit losses. |
Commercial Mortgage Loans Held
Commercial Mortgage Loans Held for Investment | 3 Months Ended |
Mar. 31, 2024 | |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Abstract] | |
Commercial Mortgage Loans Held for Investment | Note 3 – Commercial Mortgage Loans Held for Investment The following tables show a summary of the Company’s commercial mortgage loans held for investment as of March 31, 2024 and December 31, 2023: March 31, 2024 Loan Type (1) Number Principal Unamortized (fees)/costs, net Allowance for credit losses Carrying Weighted Average (2) Weighted Average (3) First mortgage loans 32 $ 700,664 $ 727 $ ( 22,205 ) $ 679,186 7.9 % 0.8 Credit loans 2 13,500 — ( 48 ) 13,452 9.6 % 2.2 Total and average 34 $ 714,164 $ 727 $ ( 22,253 ) $ 692,638 8.0 % 0.8 December 31, 2023 Loan Type (1) Number Principal Unamortized (fees)/costs, net Allowance for credit losses Carrying Weighted Average (2) Weighted Average (3) First mortgage loans 34 $ 729,380 $ 972 $ ( 21,809 ) $ 708,543 8.8 % 0.9 Credit loans 2 13,500 — ( 40 ) 13,460 9.6 % 2.4 Total and average 36 $ 742,880 $ 972 $ ( 21,849 ) $ 722,003 8.8 % 0.9 (1) First mortgage loans are first position mortgage loans and credit loans are mezzanine and subordinated loans. (2) Weighted average interest rate is based on the loan spreads plus the applicable indices as of the last interest reset date, which is typically the 15th of each month. On March 15, 2024, the one-month term USD Secured Overnight Financing Rate (“SOFR”) rate reset to 5.33 % . On December 15, 2023, the SOFR rate reset to 5.36 %. Weighted average interest rate excludes maturity default interest and interest on loans placed on nonaccrual status. (3) Weighted average years to maturity excludes allowable extensions on the loans. For the three months ended March 31, 2024, the activity in the Company’s commercial mortgage loans, held-for-investment portfolio was as follows: Commercial mortgage loans at cost Allowance for credit losses Carrying Value Balance at Beginning of Year $ 743,852 $ ( 21,849 ) $ 722,003 Loan originations/advances 3,482 — 3,482 Principal repayments ( 32,197 ) — ( 32,197 ) Amortization of loan origination and deferred exit fees 146 — 146 Origination fees and extension fees received on commercial loans ( 392 ) — ( 392 ) Provision for credit losses — ( 404 ) ( 404 ) Balance at End of Period $ 714,891 $ ( 22,253 ) $ 692,638 Allowance for Credit Losses The following table presents the activity in the Company’s allowance for credit losses for the three months ended March 31, 2024: Commercial Mortgage Loans Unfunded Loan Commitments (1) Total Balance at beginning of period $ ( 21,849 ) $ ( 289 ) $ ( 22,138 ) Provision for credit losses ( 404 ) 67 ( 337 ) Ending allowance for credit losses $ ( 22,253 ) $ ( 222 ) $ ( 22,475 ) (1) The reserve for expected credit losses related to unfunded loan commitments is recorded in “accrued expenses and other liabilities” on the consolidated balance sheets following the adoption of ASU 2016-13 on January 1, 2023. The following table presents the activity in the Company’s allowance for credit losses for the three months ended March 31, 2023: Commercial Mortgage Loans Unfunded Loan Commitments (1) Total Beginning of period $ ( 3,588 ) $ — $ ( 3,588 ) Adoption of ASU 2016-13 ( 4,787 ) ( 335 ) ( 5,122 ) Reversal of (provision for) credit losses 355 44 399 Charge-offs — — — Ending allowance for credit losses $ ( 8,020 ) $ ( 291 ) $ ( 8,311 ) (1) The reserve for expected credit losses related to unfunded loan commitments is recorded in “accrued expenses and other liabilities” on the consolidated balance sheets following the adoption of ASU 2016-13 on January 1, 2023. As of March 31, 2024, the Company had a total CECL reserve of $ 22,475 which included an asset-specific component of $ 17,427 related to five loans. During the three months ended March 31, 2024 , the Company increased the CECL reserve by $ 337 . This CECL reserve reflects certain loans assessed for impairment in the Company’s portfolio as well as reserves determined based on an analysis of macroeconomic conditions. During the three months ended March 31, 2024 , the Company recorded a net increase of $ 1,161 in the asset-specific component of the CECL reserve. The asset-specific component relates to three loans secured by office properties and two loans secured by multifamily properties. Since December 31, 2023, the Company observed a decline in the estimated fair value of the collateral for three of these loans due to macroeconomic conditions and an increase in the estimated fair value of the collateral for one of the loans due to improved performance of the collateral. The estimated fair value of the collateral for one of the loans remained unchanged from December 31, 2023. The estimated fair value of the collateral is less than the outstanding balances on all these loans as of March 31, 2024. Three of these loans have been placed on nonaccrual status as described below. During the three months ended March 31, 2023 , the Company reduced the CECL reserve by $ 399 . This CECL reserve reflects reserves determined based on an analysis of macroeconomic conditions. Credit Characteristics As part of the Company’s process for monitoring the credit quality of its investments, it performs a quarterly asset review of the investment portfolio and assigns risk ratings to each of its loans and certain securities it may own, such as CMBS. Risk factors include payment status, lien position, borrower financial resources and investment in collateral, collateral type, project economics and geographic location, as well as national and regional economic factors. To determine the likelihood of loss, the loans are rated on a 5-point scale as follows: Investment Grade Investment Grade Definition 1 Investment exceeding fundamental performance expectations and/or capital gain expected. Trends and risk factors since time of investment are favorable. 2 Performing consistent with expectations and a full return of principal and interest expected. Trends and risk factors are neutral to favorable. 3 Performing investment requiring closer monitoring. Trends and risk factors show some deterioration. Collection of principal and interest is still expected. 4 Underperforming investment with the potential of some interest loss but still expecting a positive return on investment. Trends and risk factors are negative. 5 Underperforming investment with expected loss of interest and some principal. All investments are assigned an initial risk rating of 2 at origination or acquisition. As of March 31, 2024 , 20 loans had a risk rating of 2 , eight had a risk rating of 3, four had a risk rating of 4 and two had a risk rating of 5. As of December 31, 2023 , 24 loans had a risk rating of 2 , seven had a risk rating of 3, three had a risk rating of 4 and two had a risk rating of 5. As of March 31, 2024, the Company has established an asset-specific CECL reserve of $ 17,427 related to five loans. Below is a summary of the status of each of the loans: • A senior loan secured by a multifamily property located in Portland, OR with an outstanding balance of $ 29,986 and an unfunded commitment of $ 450 was extended in December 2023 to May 9, 2024 to provide the sponsor time to stabilize the rent roll and eventually sell the property. The Company established an interest reserve through maturity that was added to the principal balance in the amount of $ 1,750 . The Company is negotiating an additional loan extension with the sponsor. If the loan is not extended, the Company will begin the foreclosure process with respect to this property. The loan is on nonaccrual status and the Company has recorded an asset-specific CECL reserve of $ 7,073 on this loan as of March 31, 2024. The loan had a risk rating of 5 as of March 31, 2024. • A senior loan secured by an office property in Reston, VA with an outstanding loan balance of $ 13,477 , an unfunded commitment of $ 4,353 and a maturity date of March 9, 2024 . The Company has been negotiating a loan extension with the sponsor. The loan was placed on nonaccrual status as of February 1, 2024 and the Company has recorded an asset-specific CECL reserve of $ 3,187 on this loan as of March 31, 2024. The loan had a risk rating of 5 as of March 31, 2024. • A senior loan secured by an office property located in Addison, TX with an outstanding balance of $ 24,411 and no unfunded commitment has been in maturity default since September 9, 2023. The Company has been negotiating a loan extension with the sponsor. The loan is on nonaccrual status and the Company has recorded an asset-specific CECL reserve of $ 4,760 on this loan as of March 31, 2024. The loan had a risk rating of 4 as of March 31, 2024. • A senior loan secured by an office property located in Charlotte, NC with an outstanding balance of $ 22,616 , no unfunded commitment and a maturity date of October 9, 2023 was in maturity default. The Company has been negotiating a two-year extension with the borrower with an option to extend an additional year. The Company has recorded an asset-specific CECL reserve of $ 983 on this loan as of March 31, 2024. The loan had a risk rating of 4 as of March 31, 2024. • A senior loan secured by a multifamily property located in Arlington, TX with an outstanding balance of $ 24,581 , an unfunded commitment of $ 469 and a maturity date of December 9, 2024 for which the Company has recorded an asset-specific CECL reserve of $ 1,424 as the estimated value of the property securing the loan was below the loan balance. The loan had a risk rating of 3 as of March 31, 2024. During the three months ended March 31, 2024 , the Company recognized $ 123 in interest income related to the nonaccrual status loans. During the three months ended March 31, 2024, there was no reversal of interest income as a result of placing the loans on nonaccrual status. For the three months ended March 31, 2024 , the total interest income forgone on the loans on nonaccrual status was $ 1,480 . Loan Modifications The Company may amend or modify a loan based on its specific facts and circumstances. These modifications are often in the form of a term extension to provide the borrower additional time to refinance or sell the collateral property in order to repay the principal balance of the loan. Such extensions are generally made at the loan’s contractual interest rate and may require an extension fee be paid to the Company. During the three months ended March 31, 2024 and 2023, the Company made no such modifications which are disclosable under ASU 2022-02, Troubled Debt Restructurings and Vintage Disclosures. |
Repurchase Agreements and Credi
Repurchase Agreements and Credit Facilities | 3 Months Ended |
Mar. 31, 2024 | |
Disclosure of Repurchase Agreements [Abstract] | |
Repurchase Agreements and Credit Facilities | Note 4 – Repurchase Agreements and Credit Facilities Commercial Mortgage Loans On February 15, 2018, the Company, through a wholly owned subsidiary, entered into a master repurchase agreement (the “Atlas Repo Facility”) with Column Financial, Inc. as administrative agent for certain of its affiliates. As the Company’s business has grown, it has increased the borrowing limit and extended the maturity. The most recent extension was in November 2023 for a twelve-month term and the maximum advance amount was reduced to $ 100,000 . On February 8, 2023, Column Financial, Inc. and affiliated parties sold and assigned their interest in the Atlas Repo Facility to Atlas Securitized Products Investments 2, L.P. (“Atlas”) with no changes to the terms of the Atlas Repo Facility. Advances under the Atlas Repo Facility accrue interest at a per annum annual rate equal to SOFR plus 2.50 % to 3.00 % with a 0.15 % to 0.25 % floor. The Company paid off the outstanding balance on the Atlas Repo Facility in May 2023 and had no outstanding balance as of March 31, 2024. As there were no borrowings outstanding, the Company was not subject to any financial covenants. On May 6, 2019, the Company, through a wholly owned subsidiary, entered into an uncommitted master repurchase agreement (the “JPM Repo Facility”) with JPMorgan Chase Bank, National Association (“JPM”). The JPM Repo Facility provides up to $ 150,000 in advances that the Company expects to use to finance the acquisition or origination of eligible loans and participation interests therein. Advances made prior to December 2021 under the JPM Repo Facility accrue interest at per annum rates equal to the sum of (i) the applicable one-month USD London Interbank Offered Rate (“LIBOR”) index rate plus (ii) a margin of between 1.75 % to 2.50 % with no floor, depending on the attributes of the purchased assets. Advances made subsequent to December 2021 under the JPM Repo Facility accrue interest at per annum rates equal to the sum of SOFR plus an agreed upon margin. As of March 31, 2024 , all of the advances made under the JPM Repo Facility were indexed to SOFR and have margins between 1.85 % and 2.85 % with a floor between 0.00 % to 2.00 %. In May 2022, the maturity date of the JPM Repo Facility was extended to May 6, 2023 . On May 5, 2023, the Company entered into an amendment that extended the maturity date to May 6, 2026 , with the option to extend the maturity date further to May 6, 2028 subject to two optional one-year extensions . The amendment also increased the maximum facility amount to $ 526,076 . The Company used the increased capacity to pay off the balance on the Atlas Repo Facility. The JPM Repo Facility is subject to certain financial covenants. The Company was in compliance with all financial covenant requirements as of March 31, 2024 and December 31, 2023. On March 10, 2021, the Company, through a wholly owned subsidiary, entered into a loan and security agreement and a promissory note (collectively, the “WA Credit Facility”) with Western Alliance Bank (“Western Alliance”). The WA Credit Facility provides for loan advances up to the lesser of $ 75,000 or the borrowing base. The borrowing base consists of eligible assets pledged to and accepted by Western Alliance in its discretion up to the lower of (i) 60 % to 70 % of loan-to-unpaid balance or (ii) 45 % to 50 % of the loan-to-appraised value (depending on the property type underlying the asset, for both (i) and (ii)). Assets that would otherwise be eligible become ineligible after being pledged as part of the borrowing base for 36 months. Advances under the WA Credit Facility accrue interest at an annual rate equal to one-month LIBOR plus 3.25 % with a floor of 0.75 %. The initial maturity date of the WA Credit Facility was March 10, 2023 . On March 9, 2023, the Company extended the maturity date of the WA Credit Facility to March 10, 2025 , modified that loan advances are up to the lesser of $ 40,000 or the borrowing base, and changed the index rate from LIBOR to SOFR. In addition, the spread increased to 3.50 % and the floor to 2.50 %. The Company has an option to convert the loan made pursuant to the WA Credit Facility upon its initial maturity to a term loan with the same interest rate and floor and a maturity of two years in exchange for, among other things, a conversion fee of 0.25 % of the outstanding amount at the time of conversion. The WA Credit Facility requires maintenance of an average unrestricted aggregate deposit account balance with Western Alliance of not less than $ 3,750 , until the calendar quarter ending on June 30, 2023 and not less than $ 5,000 commencing with the calendar quarter ending on September 30, 2023. Failure to meet the minimum deposit balance will result in, among other things, the interest rate of the WA Credit Facility increasing by 0.50 % per annum for each quarter in which the compensating balances are not maintained. The WA Credit Facility is subject to certain financial covenants. One of the covenants requires that the Company has a debt service coverage ratio of at least 1.50 measured on a quarterly basis. On March 4, 2024, the Company executed a second loan modification and waiver agreement that temporarily decreased the debt service coverage ratio to 1.40 for the three-month period ended March 31, 2024. For the three-month period ended March 31, 2024 and December 31, 2023 , the Company had a debt service coverage ratio of 1.44 and 1.47 , respectively. Western Alliance agreed to waive this covenant as of December 31, 2023. As a result, the Company was in compliance with all financial covenant requirements as of March 31, 2024 and December 31, 2023. The JPM Repo Facility, Atlas Repo Facility and WA Credit Facility (collectively, the “Facilities”) are used to finance eligible loans and each act in the manner of a revolving credit facility that can be repaid as the Company’s assets are paid off and re-drawn as advances against new assets. The details of the Facilities as of March 31, 2024 and December 31, 2023 are as follows: March 31, 2024 Weighted Average Committed Financing Amount (1) Accrued Collateral Interest Days to Atlas Repo Facility $ 100,000 $ — $ — $ — — — JPM Repo Facility 526,076 435,439 1,312 615,655 7.74 % 1,497 Total Repurchase Facilities — commercial mortgage loans 626,076 435,439 1,312 615,655 7.74 % 1,497 WA Credit Facility 40,000 9,498 40 13,477 8.83 % 344 $ 666,076 $ 444,937 $ 1,352 $ 629,132 7.77 % 1,472 December 31, 2023 Weighted Average Committed Financing Amount (1) Accrued Collateral Interest Days to Atlas Repo Facility $ 100,000 $ — $ — $ — — — JPM Repo Facility 526,076 457,438 1,385 644,201 7.78 % 1,588 Total Repurchase Facilities — commercial mortgage loans 626,076 457,438 1,385 644,201 7.78 % 1,588 WA Credit Facility 40,000 9,498 42 13,647 9.34 % (2) 435 $ 666,076 $ 466,936 $ 1,427 $ 657,848 7.81 % 1,565 (1) Excluding $ 0 of unamortized debt issuance costs at March 31, 2024 and December 31, 2023 . (2) Includes 0.50 % additional interest rate during the third and fourth quarters of 2023 as the minimum deposit balance was not met by the Company as of June 30, 2023. |
Loan Participations Sold, Net
Loan Participations Sold, Net | 3 Months Ended |
Mar. 31, 2024 | |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Abstract] | |
Loan Participations Sold, Net | Note 5 – Loan Participations Sold, Net On November 15, 2021, the Company sold a non-recourse senior participation interest in nine first mortgage loans to a third party. Under the loan participation agreement, in the event of default by the underlying mortgagor, any amounts paid are first allocated to the third party before any amounts are allocated to the Company’s subordinate interest. The Company, as the directing participant in the loan participation agreement, is entitled to exercise, without the consent of the third party, each of the consent approval and control rights under the applicable underlying mortgage loan documents with a few exceptions. The Company requires the third party’s approval for any modification or amendment to the loan, a bankruptcy plan for an underlying mortgagor where the third party would incur an out-of-pocket loss, or any transfer of the underlying mortgaged property if the Company’s approval is required by the underlying mortgage documents. The Company remains the directing participant unless certain conditions are met related to losses on the property or if the mortgagor is an affiliate of the Company. In the former case, the Company may post cash or short-term U.S. government securities as collateral to retain the rights of the directing participant. The third party, as the senior participation interest holder, receives interest and principal payments from the borrower until they receive the amounts to which they are entitled. All expenses or losses on the underlying mortgages are allocated first to the Company and then to the third party. If the underlying mortgage is in default, the Company will have the option to purchase the third party’s participation interest and remove it from the loan participation agreement. The financing or transfer of a portion of a loan by the non-recourse sale of a senior interest in the loan through a participation agreement generally does not qualify as a sale under GAAP. Therefore, in this instance, the Company presents the whole loan as an asset and the loan participation sold as a liability on the consolidated balance sheet until the loan is repaid. The obligation to pay principal and interest on these liabilities is generally based on the performance of the related loan obligation. The gross presentation of loan participations sold does not impact stockholders’ equity or net income. The following tables detail the Company’s loan participations sold as of March 31, 2024 and December 31, 2023: March 31, 2024 Loan Participations Sold Count Principal Balance Book Value Yield/Cost (1) Guarantee (2) Weighted Average Maximum Maturity (4) Total Loans 4 $ 71,532 $ 65,837 S+ 3.2 % n/a 0.19 Senior participations (3) 4 $ 57,226 $ 57,226 S+ 2.0 % n/a 0.19 December 31, 2023 Loan Participations Sold Count Principal Balance Book Value Yield/Cost (1) Guarantee (2) Weighted Average Maximum Maturity (4) Total Loans 4 $ 71,532 $ 65,435 SOFR+ 3.5 % n/a 0.11 Senior participations (3) 4 $ 57,226 $ 57,226 SOFR+ 2.0 % n/a 0.11 ____________ (1) The yield/cost is the present value of all future principal and interest payments on the loan or participation interest and does not include any origination fees or deferred commitment fees. The yield/cost excludes maturity default interest and interest on loans placed on nonaccrual status. (2) As of March 31, 2024 and December 31, 2023, the loan participations sold were non-recourse to the Company. (3) During the three months ended March 31, 2024 and 2023, the Company recorded $ 626 and $ 1,441 of interest expense related to loan participations sold, respectively. (4) Based on the furthest maximum maturity date of all the loans subject to the participation agreement. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
Stockholders' Equity | Note 6 – Stockholders’ Equity Preferred Stock Offering On September 22, 2021, the Company issued and sold 3,500,000 shares of the Series A Preferred Stock at a public offering price of $ 25.00 per share. In addition, on October 15, 2021, Raymond James & Associates, Inc., as representative of the underwriters, partially exercised their over-allotment option to purchase an additional 100,000 shares of Series A Preferred Stock. The Series A Preferred Stock were issued and sold pursuant to an effective registration statement on Form S-11 (File No. 333-258802) filed with the SEC. The Company received net proceeds of approximately $ 86,310 , after underwriter’s discount and issuance costs, and contributed the net proceeds to the Operating Partnership in exchange for an equivalent number of Series A units in the Operating Partnership. Dividends on the Series A Preferred Stock are cumulative and payable quarterly in arrears at a rate per annum equal to 6.75 % per annum of the $ 25.00 liquidation preference (the “Initial Rate”). Subject to certain exceptions, upon a Downgrade Event (as such terms are defined in the Articles Supplementary designating the Series A Preferred Stock (the “Articles Supplementary”)) or where any shares of the Series A Preferred Stock remain outstanding after September 22, 2026, the Series A Preferred Stock will thereafter accrue cumulative cash dividends at a rate higher than the Initial Rate. Subject to certain exceptions, upon the occurrence of a Change of Control, each holder of shares of Series A Preferred Stock will have the right to convert some or all of the Series A Preferred Stock held by such holder into a number of the Company’s shares of Class I common stock as provided for in the Articles Supplementary. The Company may not redeem the Series A Preferred Stock prior to September 22, 2026 , except in limited circumstances relating to maintaining the Company’s qualification as a REIT and in connection with a Change of Control. On and after September 22, 2026, the Company may, at its option, redeem the Series A Preferred Stock, in whole or from time-to-time in part, at a price of $ 25.00 per share of Series A Preferred Stock plus an amount equal to accrued and unpaid dividends (whether or not declared), if any. The Series A Preferred Stock has no maturity date and will remain outstanding indefinitely unless redeemed by the Company or converted by the holder pursuant to its terms (as set forth in the Articles Supplementary). On August 11, 2022, the Board authorized and approved a share repurchase program (the “Series A Preferred Repurchase Program”) pursuant to which the Company was permitted to repurchase up to the lesser of 1,000,000 shares or $ 15,000 of the outstanding shares of the Company’s Series A Preferred Stock through December 31, 2022. On November 10, 2022, the Board approved to extend the Series A Preferred Repurchase Program through December 31, 2023. Under the Series A Preferred Repurchase Program, repurchases of shares of the Company’s Series A Preferred Stock were to be made at management’s discretion from time to time through open market purchases, privately-negotiated transactions, block purchases or otherwise in accordance with applicable federal securities laws. During the three months ended March 31, 2024 and 2023, the Company repurchased and retired zero and 4,143 shares, respectively, of Series A Preferred Stock resulting in a gain of zero and $ 21 , respectively, from these repurchases. On January 30, 2023, the Board approved the termination of the Series A Preferred Repurchase Program. The Series A Preferred Stock is listed on the New York Stock Exchange under the symbol ICR PR A. Share Activity for Common Stock and Preferred Stock The following tables detail the change in the Company’s outstanding shares of all classes of common and preferred stock, including restricted common stock: Preferred Stock Common Stock Three months ended March 31, 2024 Series A Class P Class A Class T Class S Class D Class I Beginning balance 3,544,553 8,562,777 745,887 290,345 — 48,015 469,168 Ending balance 3,544,553 8,562,777 745,887 290,345 — 48,015 469,168 Preferred Stock Common Stock Three months ended March 31, 2023 Series A Class P Class A Class T Class S Class D Class I Beginning balance 3,548,696 8,562,777 743,183 286,341 — 47,888 452,667 Issuance of shares — — 1,445 3,453 — — 12,386 Distribution reinvestment — — 1,259 551 — 127 2,393 Repurchase and retirement of preferred stock ( 4,143 ) — — — — — — Ending balance 3,544,553 8,562,777 745,887 290,345 — 48,015 467,446 Distributions – Common Stock and Series A Preferred Stock The table below presents the aggregate annualized and monthly distributions declared on common stock by record date for all classes of shares. Record date Aggregate annualized gross distribution declared per share Aggregate monthly gross distribution declared per share January 31, 2023 $ 1.2500 $ 0.1042 February 28, 2023 $ 1.2500 $ 0.1042 March 31, 2023 $ 1.2500 $ 0.1042 April 30, 2023 $ 1.2500 $ 0.1042 May 31, 2023 $ 1.2500 $ 0.1042 June 30, 2023 $ 1.2500 $ 0.1042 July 31, 2023 $ 1.2500 $ 0.1042 August 31, 2023 $ 1.2500 $ 0.1042 September 30, 2023 $ 1.2500 $ 0.1042 October 31, 2023 $ 1.2500 $ 0.1042 November 30, 2023 $ 1.2500 $ 0.1042 December 31, 2023 $ 1.2500 $ 0.1042 January 30, 2024 $ 1.2500 $ 0.1042 February 29, 2024 $ 1.2500 $ 0.1042 March 31, 2024 $ 1.2500 $ 0.1042 The gross distribution was reduced each month for Class D and Class T of the Company’s common stock for applicable class-specific stockholder servicing fees to arrive at a lower net distribution amount paid to those classes. For a description of the stockholder servicing fees applicable to Class D, Class S and Class T shares of the Company’s common stock, please see “Note 10 – Transactions with Related Parties” below. Since the IPO and through March 31, 2024, the Company has not issued any shares of Class S common stock. The following table shows the monthly net distribution per share for shares of Class D and Class T common stock. Record date Monthly net distribution declared per share of Class D common stock Monthly net distribution declared per share of Class T common stock January 31, 2023 $ 0.1000 $ 0.0900 February 28, 2023 $ 0.1004 $ 0.0914 March 31,2023 $ 0.1001 $ 0.0903 April 30,2023 $ 0.1002 $ 0.0907 May 31, 2023 $ 0.1001 $ 0.0903 June 30, 2023 $ 0.1004 $ 0.0912 July 31, 2023 $ 0.1005 $ 0.0916 August 31, 2023 $ 0.1005 $ 0.0915 September 30, 2023 $ 0.1006 $ 0.0920 October 31, 2023 $ 0.1005 $ 0.0916 November 30, 2023 $ 0.1006 $ 0.0920 December 31, 2023 $ 0.1005 $ 0.0916 January 30, 2024 $ 0.1006 $ 0.0919 February 29, 2024 $ 0.1008 $ 0.0927 March 31, 2024 $ 0.1006 $ 0.0920 Series A Preferred Stock dividends are paid quarterly in arrears based on an annualized distribution rate of 6.75 % of the $ 25.00 per share liquidation preference, or $ 1.6875 per share per annum. The tables below present the aggregate distributions declared per share for each applicable class of common stock and preferred stock during the three months ended March 31, 2024 and 2023. The tables exclude distributions declared for any month for a class of shares of stock when there were no shares of that class outstanding on the applicable record date. Preferred Stock Common Stock Three months ended March 31, 2024 Series A Class P Class A Class T Class S Class D Class I Aggregate gross distributions declared per share $ 0.4219 $ 0.3126 $ 0.3126 $ 0.3126 $ — $ 0.3126 $ 0.3126 Stockholder servicing fee per share N/A N/A N/A 0.0360 — 0.0106 N/A Net distributions declared per share $ 0.4219 $ 0.3126 $ 0.3126 $ 0.2766 $ — $ 0.3020 $ 0.3126 Preferred Stock Common Stock Three months ended March 31, 2023 Series A Class P Class A Class T Class S Class D Class I Aggregate gross distributions declared per share $ 0.4219 $ 0.3126 $ 0.3126 $ 0.3126 $ — $ 0.3126 $ 0.3126 Stockholder servicing fee per share N/A N/A N/A 0.0409 — 0.0121 N/A Net distributions declared per share $ 0.4219 $ 0.3126 $ 0.3126 $ 0.2717 $ — $ 0.3005 $ 0.3126 As of March 31, 2024 and December 31, 2023, distributions declared but not yet paid amounted to $ 1,051 and $ 1,050 , respectively. |
Net Income Per Share Attributab
Net Income Per Share Attributable to Common Stockholders | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Net Income Per Share Attributable to Common Stockholders | Note 7 – Net Income Per Share Attributable to Common Stockholders Basic earnings per share attributable to common stockholders (“EPS”) is computed by dividing net income attributable to common stockholders by the weighted average number of common shares outstanding for the period. Diluted EPS is computed by dividing net income attributable to common stockholders by the common shares plus common share equivalents. The Company’s common share equivalents are unvested restricted shares. The Company excludes antidilutive restricted shares from the calculation of weighted-average shares for diluted earnings per share. There were zero antidilutive restricted shares for both the three months ended March 31, 2024 and 2023. For further information about the Company’s restricted shares, see “Note 11 – Equity-Based Compensation.” The following table is a summary of the basic and diluted net income per share attributable to common stockholders computation for the three months ended March 31, 2024 and 2023: Three months ended 2024 2023 Net income attributable to common stockholders $ 1,904 $ 3,147 Weighted average shares outstanding, basic 10,116,192 10,113,221 Dilutive effect of restricted stock 339 366 Weighted average shares outstanding, diluted 10,116,531 10,113,587 Net income attributable to common stockholders per share, basic and diluted $ 0.19 $ 0.31 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 8 – Commitments and Contingencies In the ordinary course of business, the Company may become subject to litigation, claims and regulatory matters. The Company has no knowledge of material legal or regulatory proceedings pending or known to be contemplated against the Company at this time. The Company has made a commitment to advance additional funds under certain of its CRE loans if the borrower meets certain conditions. As of March 31, 2024 , the Company had 23 such loans with a total remaining future funding commitment of $ 24,700 . As of December 31, 2023 , the Company had 27 such loans with a total remaining future funding commitment of $ 31,021 . The Company could advance future funds at its discretion if requested by the borrower and the borrower meets certain requirements as specified in individual loan agreements. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
Segment Reporting | Note 9 – Segment Reporting The Company has one reportable segment as defined by GAAP for the three months ended March 31, 2024 and 2023 . |
Transactions with Related Parti
Transactions with Related Parties | 3 Months Ended |
Mar. 31, 2024 | |
Related Party Transactions [Abstract] | |
Transactions with Related Parties | Note 10 – Transactions with Related Parties As of March 31, 2024, the Advisor had invested $ 1,000 in the Company through the purchase of 40,040 Class P shares. The purchase price per Class P share for the Advisor’s investment was equal to $ 25.00 . The Advisor has agreed that, for so long as it or its affiliate is serving as the Company’s advisor, (i) it will not sell or transfer at least 8,000 of the Class P shares that it has purchased, accounting for $ 200 of its investment, to an unaffiliated third party and (ii) repurchase requests made for these Class P shares will only be accepted (a) on the last business day of a calendar quarter, (b) after all repurchase requests from all other stockholders for such quarter have been accepted and (c) to the extent that such repurchases do not cause total repurchases in the quarter in which they are being repurchased to exceed that quarter’s repurchase cap. As of March 31, 2024, Sound Point Capital Management, LP (“Sound Point”), an affiliate of the Sub-Advisor, had invested $ 3,000 in the Company through the purchase of 120,000 Class P shares. The purchase price per Class P share for the Sub-Advisor’s investment was $ 25.00 . Sound Point has agreed that, for so long as the Sub-Advisor or its affiliate is serving as the Company’s sub-advisor, repurchase requests made for these Class P shares will only be accepted (a) on the last business day of a calendar quarter, (b) after all repurchase requests from all other stockholders for such quarter have been accepted and (c) to the extent that such repurchases do not cause total repurchases in the quarter in which they are being repurchased to exceed that quarter’s repurchase cap. The following table summarizes the Company’s related party transactions for the three months ended March 31, 2024 and 2023 and the amount due to related parties at March 31, 2024 and December 31, 2023: Three months ended Payable as of March 31, Payable as of December 31, 2024 2023 2024 2023 Organization and offering expense reimbursement (1) $ — $ 1 $ — $ 2 Selling commissions and dealer manager fee (2) — 4 — — Advisory fee (3) 805 881 268 271 Loan fees (4) 58 91 961 1,313 Accrued stockholder servicing fee (5) — 4 433 442 Total $ 863 $ 981 $ 1,662 $ 2,028 (1) The Company reimburses the Advisor, the Sub-Advisor and their respective affiliates for costs and other expenses related to the Public Offerings, provided the Advisor has agreed to reimburse the Company to the extent that the organization and offering expenses that the Company incurs exceeds 15 % of its gross proceeds from the Public Offerings. (2) For the Public Offerings, the Dealer Manager was entitled to receive (a) upfront selling commissions of up to 6.0 %, and upfront dealer manager fees of up to 1.25 %, of the transaction price of each Class A share sold in the primary offering, however such amounts may vary at certain participating broker-dealers provided that the sum will not exceed 7.25 % of the transaction price; (b) upfront selling commissions of up to 3.0 %, and upfront dealer manager fees of 0.5 %, of the transaction price of each Class T share sold in the primary offering, however such amounts may vary at certain participating broker-dealers provided that the sum will not exceed 3.5 % of the transaction price; and (c) upfront selling commissions of up to 3.5 % of the transaction price of each Class S share sold in the primary offering. No upfront selling commissions or dealer manager fees are paid with respect to purchases of Class D shares, Class I shares or shares of any class sold pursuant to the Company’s DRP. All upfront selling commissions and dealer manager fees were reallowed (paid) by the Dealer Manager to participating broker-dealers. (3) The Advisor is entitled to receive an advisory fee comprised of two separate components: (1) a fixed component payable monthly and (2) a performance component payable annually. The fixed component of the advisory fee is paid in an amount equal to 1/12 th of 1.25 % of the Company’s average NAV for each month, paid monthly in arrears. The performance component of the advisory fee is calculated and paid annually, such that for any year in which the Company’s total return per share exceeds 7 % per annum, the Advisor will receive 20 % of the excess total return allocable to shares of the Company’s common stock; provided that in no event will the performance fee exceed 15 % of the aggregate total return allocable to shares of the Company’s common stock for such year. In addition, if the NAV per share decreases below $ 25 for any class of shares during the measurement period, any subsequent increase in NAV per share to $ 25 (or such other adjusted number) will not be included in the calculation of the performance component with respect to that class. The Advisor pays fees to the Sub-Advisor for the services it delegates to the Sub-Advisor or may direct the Company to pay a portion of the fees otherwise payable to the Advisor directly to the Sub-Advisor. (4) The Company pays the Advisor all new loan origination and administrative fees related to CRE loans held for investment, to the extent that such fees are paid by the borrower. Pursuant to the Sub-Advisory Agreement, the Advisor generally will reallow a portion of loan fees and all administrative fees to the Sub-Advisor. (5) Subject to the Financial Industry Regulatory Authority, Inc. limitations on underwriting compensation, the Company pays the Dealer Manager selling commissions over time as stockholder servicing fees for ongoing services rendered to stockholders by participating broker-dealers or broker-dealers servicing stockholders’ accounts as follows: (a) for Class T shares only, 0.85 % per annum of the NAV of the Class T shares; (b) for Class S shares only, 0.85 % per annum of the aggregate NAV for the Class S shares; and (c) for Class D shares only, 0.25 % per annum of the aggregate NAV for the Class D shares. The Company will cease paying the stockholder servicing fee with respect to any Class T share, Class S share or Class D share held in a stockholder’s account upon the occurrence of certain events. The Company accrues the full cost of the stockholder servicing fee as an offering cost at the time the Company sells Class T, Class S, and Class D shares. The Dealer Manager does not retain any of these fees, all of which are retained by, or reallowed (paid) to, participating broker-dealers and servicing broker-dealers for ongoing stockholder services performed by such broker-dealers. Expense Limitation Agreement Pursuant to an expense limitation agreement (the “Expense Limitation Agreement”) dated July 1, 2021, the Advisor and Sub-Advisor agree to waive reimbursement of or pay, on a quarterly basis, certain of the Company’s ordinary operating expenses for each class of shares to the extent necessary to ensure that the ordinary operating expenses do not exceed 1.5 % of the average monthly net assets on an annualized basis (the “ 1.5 % Expense Limit”). Amounts waived or paid by the Advisor or Sub-Advisor pursuant to the Expense Limitation Agreement are subject to conditional repayment on a quarterly basis by the Company during the three years following the quarter in which the expenses were incurred, but only to the extent such repayment does not cause the Company to exceed its then-current expenses limitation, if any, for such quarter. Any waiver or reimbursement by the Advisor or Sub-Advisor not repaid by the Company within the three-year period will be deemed permanently waived and not subject to repayment under the Expense Limitation Agreement. During the three months ended March 31, 2024 , the amount of ordinary operating expenses either submitted for reimbursement by the Advisor and Sub-Advisor or incurred by the Company directly that was subject to the Expense Limitation Agreement did not exceed the 1.5 % Expense Limit. Separately from the limitation on ordinary operating expenses under the Expense Limitation Agreement, the Advisor and Sub-Advisor voluntarily chose not to seek reimbursement for certain expenses that they incurred or paid on behalf of the Company during the three months ended March 31, 2024, and for which they may have been entitled to be reimbursed. The Advisory Agreement and Sub-Advisory Agreement provide that expenses will be submitted monthly to the Company for reimbursement, and the amount of expenses submitted for reimbursement in any particular month is not necessarily indicative of the total amount of expenses actually incurred by the Advisor and Sub-Advisor in providing services to the Company and for which reimbursement could have been received by the Advisor and Sub-Advisor. Revolving Credit Liquidity Letter Agreements IREIC, the Company’s sponsor, and Sound Point have agreed under separate letter agreements dated July 20, 2021, and July 15, 2021, respectively, to make revolving credit loans to the Company in an aggregate principal amount outstanding at any one time not to exceed $ 5,000 and $ 15,000 , respectively (the “IREIC-Sound Point Commitments”) from time to time until the Termination Date (defined below) of the letter agreements. These letter agreements are identical to each other in all material respects other than the commitment amounts. Use of the IREIC-Sound Point Commitments is limited to satisfying requirements to maintain cash or cash equivalents under the Company’s repurchase and other borrowing arrangements. The “Termination Date” is the earliest of (i) the Maturity Date (defined below) (ii) the first date on which the Company’s balance sheet equity is equal to or greater than $ 500,000 , (iii) the date IREIC or one of its affiliates is no longer the Company’s advisor or Sound Point or one of its affiliates is no longer the Company’s sub-advisor and (iv) such earlier date on which the commitment will terminate as provided in the letter agreements, for example, because of an event of default. The “Maturity Date” is one year from the date of the agreement, and the Maturity Date will be automatically extended every year for an additional year, unless (a) the lender delivers notice of termination 60 days prior to an anniversary of the letter agreements or (b) an Event of Default (defined below) has occurred and is continuing. Each revolving loan will bear interest at 6.00 % per annum. Interest is payable in arrears when principal is paid or repaid and on the Termination Date. Each of the following constitutes an “Event of Default” under the letter agreements: (y) the Company fails to perform or observe any covenant or condition to be performed or observed under the letter agreement (including the obligation to repay a loan in full on the Termination Date) and such failure is not remedied within three business days of its receipt of notice thereof; or (z) the Company becomes insolvent or the subject of any bankruptcy proceeding. |
Equity-Based Compensation
Equity-Based Compensation | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Equity-Based Compensation | Note 11 – Equity-Based Compensation With each stock grant, the Company awards each of its three independent directors an equal number of restricted shares. The table below summarizes total stock grants as of March 31, 2024 with a vesting date after January 1, 2023. Grant Date Class of common stock granted Total number of shares granted Grant Date Fair Value Per Share Total Fair Value of Grant Proportion of total shares that vest annually Vesting Date Year 1 Vesting Date Year 2 Vesting Date Year 3 December 1, 2020 Class I 1,393 $ 21.54 $ 30 1/3 12/1/2021 12/1/2022 12/1/2023 October 14, 2021 Class I 1,477 $ 20.31 $ 30 1/3 10/14/2022 10/14/2023 10/14/2024 October 3, 2022 Class I 1,534 $ 19.55 $ 30 1/3 10/3/2023 10/3/2024 10/3/2025 September 29, 2023 Class I 1,722 $ 17.42 $ 30 1/3 9/29/2024 9/29/2025 9/29/2026 Under the Company’s Independent Director Restricted Share Plan (the “RSP”), restricted shares generally vest over a three-year vesting period from the date of the grant, subject to the specific terms of the grant. Restricted shares are included in common stock outstanding on the grant date. The grant-date value of the restricted shares is amortized over the vesting period representing the requisite service period. Compensation expense associated with the restricted shares issued to the independent directors was $ 8 and $ 7 , in the aggregate, for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, the Company had $ 45 of unrecognized compensation expense related to the unvested restricted shares, in the aggregate. The weighted average remaining period that compensation expense related to unvested restricted shares will be recognized is 1.20 years. There were no restricted shares that vested during the three months ended March 31, 2024 and 2023. A summary table of the status of the restricted shares granted under the RSP is presented below: Restricted Shares Weighted Average Grant Date Fair Value Per Share Outstanding at December 31, 2023 3,237 $ 18.53 Granted — — Vested — — Converted — — Forfeited — — Outstanding at March 31, 2024 3,237 $ 18.53 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Note 12 – Fair Value of Financial Instruments GAAP requires the disclosure of fair value information about financial instruments, whether or not they are recognized at fair value in the consolidated balance sheets, for which it is practicable to estimate that value. The following table details the carrying amount and estimated fair value of the Company’s financial instruments at the dates below: March 31, 2024 December 31, 2023 Carrying Estimated Fair Carrying Estimated Fair Financial assets Cash and cash equivalents $ 60,396 $ 60,396 $ 54,143 $ 54,143 Commercial mortgage loans, net 692,638 692,638 722,003 722,003 Total $ 753,034 $ 753,034 $ 776,146 $ 776,146 Financial liabilities Repurchase agreements — commercial mortgage $ 435,439 $ 435,439 $ 457,438 $ 457,438 Credit facility payable 9,498 9,498 9,498 9,498 Loan participations — sold 57,226 57,226 57,226 57,226 Total $ 502,163 $ 502,163 $ 524,162 $ 524,162 The following describes the Company’s methods for estimating the fair value for financial instruments: • The estimated fair values of restricted cash, cash and cash equivalents were based on the bank balance and was a Level 1 fair value measurement. • The estimated fair value of commercial mortgage loans, net is a Level 3 fair value measurement. The majority of the loans are floating rate and as such the interest rates on such loans reflect the current interest rate spreads. Additionally, since the loans have a short duration to maturity ( 0.8 years), are not delinquent or impaired (except for three loans impaired as of March 31, 2024 and two loans impaired as of December 31, 2023, for which an asset-specific CECL reserve has been recorded) and are expected to return to par, the Advisor determined the amortized cost, less allowance for credit losses, is the best estimate of fair value for all loans. The allowance for credit losses includes the analytical portion as well as the asset-specific component of the CECL reserve. For the impaired loans, the CECL reserve was recorded based on the Company’s estimation of the fair value of the loans’ aggregate underlying collateral as of March 31, 2024 and December 31, 2023, as applicable. These loans are therefore measured at fair value on a nonrecurring basis using significant unobservable inputs and are classified as Level 3 assets in the fair value hierarchy. The Company estimated the fair value of these loans by considering a variety of inputs including property performance, market data, and comparable sales, as applicable. The significant unobservable input used is the exit capitalization rate assumption used to forecast the future sale price of the underlying real estate collateral, which ranged from 5.75 % to 9.10 % and had weighted average of 7.44 %. • The estimated fair values of repurchase agreements – commercial mortgage loans, credit facility payable and loan participations sold are Level 3 fair value measurements based on expected present value techniques. This method discounts future estimated cash flows using rates the Company determined best reflect current market interest rates that would be offered for repurchase agreements, credit facilities and loan participations sold with similar characteristics and credit quality. The carrying value of these instruments approximates fair value as the fair value of these instruments is not materially sensitive to shifts in market interest rates because of the floating interest rates on these instruments. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
Leases | Note 13– Leases Prior to September 28, 2023, the Company was the lessee under one ground lease. The ground lease, which commenced on April 1, 1999 , was assumed as part of the Renaissance O’Hare property acquired through a deed-in-lieu of foreclosure transaction on August 20, 2020. The lease was classified as a finance lease. Upon the sale of the property on September 28, 2023, the Company was no longer obligated under the ground lease. Upon assumption of the lease on August 20, 2020, the Company recorded a lease liability of $ 16,827 and a right-of-use asset of $ 5,549 on its consolidated balance sheet. The lease liability was based on the present value of the ground lease’s future payments using an interest rate of 11.37 %, which the Company considered reasonable and an estimate of the Company’s incremental borrowing rate. For the three months ended March 31, 2023, total finance lease cost recorded to real estate operating expenses on the Company’s consolidated statements of operations was comprised as follows: Three months ended Amortization of right-of-use assets $ 18 Interest on lease liabilities 497 Total finance lease cost $ 515 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 14– Subsequent Events The Company has evaluated subsequent events through May 10, 2024, the date the consolidated financial statements were issued, and determined that there have not been any events that have occurred that would require adjustments to disclosures in the consolidated financial statements except for the following transactions: Common Stock Distributions On April 29, 2024 , the Company announced that the Board authorized distributions to stockholders of record as of April 30, 2024 , payable on or about May 17, 2024 for each class of its common stock in the amount per share set forth below: Common Stock Class P Class A Class T Class S Class D Class I Aggregate gross distributions declared per share $ 0.1042 $ 0.1042 $ 0.1042 $ — $ 0.1042 $ 0.1042 Stockholder servicing fee per share N/A N/A 0.0117 — 0.0035 N/A Net distributions declared per share $ 0.1042 $ 0.1042 $ 0.0925 $ — $ 0.1007 $ 0.1042 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Basis of Accounting | Basis of Accounting The accompanying consolidated financial statements and related footnotes have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) and require management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of income and expenses during the reported periods. Actual results could differ from such estimates. In the opinion of management, the accompanying unaudited consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents include funds on deposit with financial institutions, including demand deposits with financial institutions with original maturities of three months or less. The account balance may exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance coverage limits and, as a result, there could be a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage limits. The Company believes that the risk will not be significant, as the Company does not anticipate the financial institutions’ non-performance. Restricted cash represents cash the Company is required to hold in a segregated account as additional collateral on real estate securities repurchase agreements. As of March 31, 2024 and December 31, 2023 , no restricted cash was held by the Company. |
Allowance for Credit Losses | Allowance for Credit Losses On January 1, 2023 , the Company adopted Accounting Standards Update 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”), which requires companies to estimate a current expected credit loss (“CECL”) for the recognition of credit losses on financial instruments, including commercial mortgage loans, in their consolidated financial statements. The allowance for credit losses is adjusted each period for changes in expected credit losses. This replaces prior GAAP which required losses to be recognized as incurred. The Company adopted ASU 2016-13 using the modified retrospective method, therefore, the results for reporting periods prior to January 1, 2023 remain unadjusted and reported in accordance with previously applicable GAAP. In connection with the adoption of ASU 2016-13, the Company recorded a $ 5,122 increase to accumulated deficit with offsets on the consolidated balance sheet as noted below. The following table illustrates the impact of adoption ASU 2016-13: January 1, 2023 As Reported Under ASU 2016-13 As Reported Pre-Adoption Impact of Adoption Assets: Allowance for credit losses $ 8,375 $ 3,588 $ 4,787 Liabilities: Accrued expenses and other liabilities $ 8,187 $ 7,852 $ 335 The allowance for credit losses is recorded in accordance with ASU 2016-13, and is a valuation account that is deducted from the amortized cost basis of loans held-for-investment on the Company’s consolidated balance sheets. Changes to the allowance for credit losses are recognized through net income (loss) on the Company’s consolidated statements of operations. The allowance is based on relevant information about past events, including historical loss experience, current portfolio, market conditions and reasonable and supportable forecasts for the duration of each respective loan. All loans held-for-investment within the Company’s portfolio have some amount of expected loss to reflect the GAAP principal underlying the CECL model that all loans have some inherent risk of loss, regardless of credit quality, subordinate capital or other mitigating factors. The Company’s loans typically include commitments to fund incremental proceeds to its borrowers over the life of the loan. Those future funding commitments are also subject to an allowance for credit losses. The allowance for credit losses related to future loan fundings is recorded as a component of “Accrued expenses and other liabilities” on the Company’s consolidated balance sheets, and not as an offset to the related loan balance. This allowance for credit losses is estimated using the same process outlined below for the Company’s outstanding loan balances, and changes in this component of the allowance for credit losses similarly flow through the Company’s consolidated statements of operations. The allowance for credit losses is estimated on a quarterly basis and represents management’s estimates of current expected credit losses in the Company’s investment portfolio. Pools of loans with similar risk characteristics are collectively evaluated while loans that no longer share risk characteristics with loan pools are evaluated individually. Estimating an allowance for credit losses is inherently subjective, as it requires management to exercise significant judgment in establishing appropriate factors used to determine the allowance and a variety of subjective assumptions, including (i) determination of relevant historical loan loss data sets, (ii) the expected timing and amount of future loan fundings and repayments, (iii) the current credit quality of loans and operating performance of loan collateral and the Company’s expectations of performance, and (iv) selecting the forecast for macroeconomic conditions. The Company estimates the analytical portion of its allowance for credit losses by using a probability-weighted quantitative analytical model that considers the likelihood of default and loss-given-default for each individual loan. The analytical model incorporates a third-party licensed database for over 100,000 commercial real estate loans. The Company licenses certain macroeconomic financial forecasts from a third-party to inform its view of the potential future impact that broader macroeconomic conditions may have on the performance of the loans held-for-investment. These macroeconomic factors include unemployment rates, interest rates, price indices for commercial property and other factors. The Company may use one or more of these forecasts in the process of estimating its allowance for credit losses. Selection of these economic forecasts requires significant judgment about future events that, while based on the information available to the Company as of the balance sheet date, are ultimately unknowable with certainty, and the actual economic conditions impacting the Company’s portfolio could vary significantly from the estimates the Company made for the periods presented. Significant inputs to the Company’s estimate of the allowance for credit losses include the reasonable and supportable forecast period and loan specific factors such as debt service coverage ratio, or DSCR, loan-to-value ratio, or LTV, remaining contractual loan term, property type and others. In addition, the Company also considers relevant loan-specific qualitative factors to estimate its allowance for credit losses. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Schedule of the Impact of Adoption | The following table illustrates the impact of adoption ASU 2016-13: January 1, 2023 As Reported Under ASU 2016-13 As Reported Pre-Adoption Impact of Adoption Assets: Allowance for credit losses $ 8,375 $ 3,588 $ 4,787 Liabilities: Accrued expenses and other liabilities $ 8,187 $ 7,852 $ 335 |
Commercial Mortgage Loans Hel_2
Commercial Mortgage Loans Held for Investment (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Abstract] | |
Schedule of Commercial Mortgage Loans Held for Investment | The following tables show a summary of the Company’s commercial mortgage loans held for investment as of March 31, 2024 and December 31, 2023: March 31, 2024 Loan Type (1) Number Principal Unamortized (fees)/costs, net Allowance for credit losses Carrying Weighted Average (2) Weighted Average (3) First mortgage loans 32 $ 700,664 $ 727 $ ( 22,205 ) $ 679,186 7.9 % 0.8 Credit loans 2 13,500 — ( 48 ) 13,452 9.6 % 2.2 Total and average 34 $ 714,164 $ 727 $ ( 22,253 ) $ 692,638 8.0 % 0.8 December 31, 2023 Loan Type (1) Number Principal Unamortized (fees)/costs, net Allowance for credit losses Carrying Weighted Average (2) Weighted Average (3) First mortgage loans 34 $ 729,380 $ 972 $ ( 21,809 ) $ 708,543 8.8 % 0.9 Credit loans 2 13,500 — ( 40 ) 13,460 9.6 % 2.4 Total and average 36 $ 742,880 $ 972 $ ( 21,849 ) $ 722,003 8.8 % 0.9 (1) First mortgage loans are first position mortgage loans and credit loans are mezzanine and subordinated loans. (2) Weighted average interest rate is based on the loan spreads plus the applicable indices as of the last interest reset date, which is typically the 15th of each month. On March 15, 2024, the one-month term USD Secured Overnight Financing Rate (“SOFR”) rate reset to 5.33 % . On December 15, 2023, the SOFR rate reset to 5.36 %. Weighted average interest rate excludes maturity default interest and interest on loans placed on nonaccrual status. (3) Weighted average years to maturity excludes allowable extensions on the loans. |
Schedule of Commercial Mortgage Loans held for Investment Portfolio | For the three months ended March 31, 2024, the activity in the Company’s commercial mortgage loans, held-for-investment portfolio was as follows: Commercial mortgage loans at cost Allowance for credit losses Carrying Value Balance at Beginning of Year $ 743,852 $ ( 21,849 ) $ 722,003 Loan originations/advances 3,482 — 3,482 Principal repayments ( 32,197 ) — ( 32,197 ) Amortization of loan origination and deferred exit fees 146 — 146 Origination fees and extension fees received on commercial loans ( 392 ) — ( 392 ) Provision for credit losses — ( 404 ) ( 404 ) Balance at End of Period $ 714,891 $ ( 22,253 ) $ 692,638 |
Schedule of Allowance for Credit Losses | The following table presents the activity in the Company’s allowance for credit losses for the three months ended March 31, 2024: Commercial Mortgage Loans Unfunded Loan Commitments (1) Total Balance at beginning of period $ ( 21,849 ) $ ( 289 ) $ ( 22,138 ) Provision for credit losses ( 404 ) 67 ( 337 ) Ending allowance for credit losses $ ( 22,253 ) $ ( 222 ) $ ( 22,475 ) (1) The reserve for expected credit losses related to unfunded loan commitments is recorded in “accrued expenses and other liabilities” on the consolidated balance sheets following the adoption of ASU 2016-13 on January 1, 2023. The following table presents the activity in the Company’s allowance for credit losses for the three months ended March 31, 2023: Commercial Mortgage Loans Unfunded Loan Commitments (1) Total Beginning of period $ ( 3,588 ) $ — $ ( 3,588 ) Adoption of ASU 2016-13 ( 4,787 ) ( 335 ) ( 5,122 ) Reversal of (provision for) credit losses 355 44 399 Charge-offs — — — Ending allowance for credit losses $ ( 8,020 ) $ ( 291 ) $ ( 8,311 ) (1) The reserve for expected credit losses related to unfunded loan commitments is recorded in “accrued expenses and other liabilities” on the consolidated balance sheets following the adoption of ASU 2016-13 on January 1, 2023. |
Summary of Investment Grade of Loans Loss | As part of the Company’s process for monitoring the credit quality of its investments, it performs a quarterly asset review of the investment portfolio and assigns risk ratings to each of its loans and certain securities it may own, such as CMBS. Risk factors include payment status, lien position, borrower financial resources and investment in collateral, collateral type, project economics and geographic location, as well as national and regional economic factors. To determine the likelihood of loss, the loans are rated on a 5-point scale as follows: Investment Grade Investment Grade Definition 1 Investment exceeding fundamental performance expectations and/or capital gain expected. Trends and risk factors since time of investment are favorable. 2 Performing consistent with expectations and a full return of principal and interest expected. Trends and risk factors are neutral to favorable. 3 Performing investment requiring closer monitoring. Trends and risk factors show some deterioration. Collection of principal and interest is still expected. 4 Underperforming investment with the potential of some interest loss but still expecting a positive return on investment. Trends and risk factors are negative. 5 Underperforming investment with expected loss of interest and some principal. |
Repurchase Agreements and Cre_2
Repurchase Agreements and Credit Facilities (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Repurchase Agreement [Line Items] | |
Schedule of Outstanding Repurchase Agreements | The details of the Facilities as of March 31, 2024 and December 31, 2023 are as follows: March 31, 2024 Weighted Average Committed Financing Amount (1) Accrued Collateral Interest Days to Atlas Repo Facility $ 100,000 $ — $ — $ — — — JPM Repo Facility 526,076 435,439 1,312 615,655 7.74 % 1,497 Total Repurchase Facilities — commercial mortgage loans 626,076 435,439 1,312 615,655 7.74 % 1,497 WA Credit Facility 40,000 9,498 40 13,477 8.83 % 344 $ 666,076 $ 444,937 $ 1,352 $ 629,132 7.77 % 1,472 December 31, 2023 Weighted Average Committed Financing Amount (1) Accrued Collateral Interest Days to Atlas Repo Facility $ 100,000 $ — $ — $ — — — JPM Repo Facility 526,076 457,438 1,385 644,201 7.78 % 1,588 Total Repurchase Facilities — commercial mortgage loans 626,076 457,438 1,385 644,201 7.78 % 1,588 WA Credit Facility 40,000 9,498 42 13,647 9.34 % (2) 435 $ 666,076 $ 466,936 $ 1,427 $ 657,848 7.81 % 1,565 (1) Excluding $ 0 of unamortized debt issuance costs at March 31, 2024 and December 31, 2023 . (2) Includes 0.50 % additional interest rate during the third and fourth quarters of 2023 as the minimum deposit balance was not met by the Company as of June 30, 2023. |
Loan Participations Sold, Net (
Loan Participations Sold, Net (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Abstract] | |
Summary of Loan Participations Sold | The following tables detail the Company’s loan participations sold as of March 31, 2024 and December 31, 2023: March 31, 2024 Loan Participations Sold Count Principal Balance Book Value Yield/Cost (1) Guarantee (2) Weighted Average Maximum Maturity (4) Total Loans 4 $ 71,532 $ 65,837 S+ 3.2 % n/a 0.19 Senior participations (3) 4 $ 57,226 $ 57,226 S+ 2.0 % n/a 0.19 December 31, 2023 Loan Participations Sold Count Principal Balance Book Value Yield/Cost (1) Guarantee (2) Weighted Average Maximum Maturity (4) Total Loans 4 $ 71,532 $ 65,435 SOFR+ 3.5 % n/a 0.11 Senior participations (3) 4 $ 57,226 $ 57,226 SOFR+ 2.0 % n/a 0.11 ____________ (1) The yield/cost is the present value of all future principal and interest payments on the loan or participation interest and does not include any origination fees or deferred commitment fees. The yield/cost excludes maturity default interest and interest on loans placed on nonaccrual status. (2) As of March 31, 2024 and December 31, 2023, the loan participations sold were non-recourse to the Company. (3) During the three months ended March 31, 2024 and 2023, the Company recorded $ 626 and $ 1,441 of interest expense related to loan participations sold, respectively. (4) Based on the furthest maximum maturity date of all the loans subject to the participation agreement. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
Schedule of Change in Outstanding Shares Including Restricted Common Stock | The following tables detail the change in the Company’s outstanding shares of all classes of common and preferred stock, including restricted common stock: Preferred Stock Common Stock Three months ended March 31, 2024 Series A Class P Class A Class T Class S Class D Class I Beginning balance 3,544,553 8,562,777 745,887 290,345 — 48,015 469,168 Ending balance 3,544,553 8,562,777 745,887 290,345 — 48,015 469,168 Preferred Stock Common Stock Three months ended March 31, 2023 Series A Class P Class A Class T Class S Class D Class I Beginning balance 3,548,696 8,562,777 743,183 286,341 — 47,888 452,667 Issuance of shares — — 1,445 3,453 — — 12,386 Distribution reinvestment — — 1,259 551 — 127 2,393 Repurchase and retirement of preferred stock ( 4,143 ) — — — — — — Ending balance 3,544,553 8,562,777 745,887 290,345 — 48,015 467,446 |
Schedule of Distributions Declared | The table below presents the aggregate annualized and monthly distributions declared on common stock by record date for all classes of shares. Record date Aggregate annualized gross distribution declared per share Aggregate monthly gross distribution declared per share January 31, 2023 $ 1.2500 $ 0.1042 February 28, 2023 $ 1.2500 $ 0.1042 March 31, 2023 $ 1.2500 $ 0.1042 April 30, 2023 $ 1.2500 $ 0.1042 May 31, 2023 $ 1.2500 $ 0.1042 June 30, 2023 $ 1.2500 $ 0.1042 July 31, 2023 $ 1.2500 $ 0.1042 August 31, 2023 $ 1.2500 $ 0.1042 September 30, 2023 $ 1.2500 $ 0.1042 October 31, 2023 $ 1.2500 $ 0.1042 November 30, 2023 $ 1.2500 $ 0.1042 December 31, 2023 $ 1.2500 $ 0.1042 January 30, 2024 $ 1.2500 $ 0.1042 February 29, 2024 $ 1.2500 $ 0.1042 March 31, 2024 $ 1.2500 $ 0.1042 The following table shows the monthly net distribution per share for shares of Class D and Class T common stock. Record date Monthly net distribution declared per share of Class D common stock Monthly net distribution declared per share of Class T common stock January 31, 2023 $ 0.1000 $ 0.0900 February 28, 2023 $ 0.1004 $ 0.0914 March 31,2023 $ 0.1001 $ 0.0903 April 30,2023 $ 0.1002 $ 0.0907 May 31, 2023 $ 0.1001 $ 0.0903 June 30, 2023 $ 0.1004 $ 0.0912 July 31, 2023 $ 0.1005 $ 0.0916 August 31, 2023 $ 0.1005 $ 0.0915 September 30, 2023 $ 0.1006 $ 0.0920 October 31, 2023 $ 0.1005 $ 0.0916 November 30, 2023 $ 0.1006 $ 0.0920 December 31, 2023 $ 0.1005 $ 0.0916 January 30, 2024 $ 0.1006 $ 0.0919 February 29, 2024 $ 0.1008 $ 0.0927 March 31, 2024 $ 0.1006 $ 0.0920 The tables below present the aggregate distributions declared per share for each applicable class of common stock and preferred stock during the three months ended March 31, 2024 and 2023. The tables exclude distributions declared for any month for a class of shares of stock when there were no shares of that class outstanding on the applicable record date. Preferred Stock Common Stock Three months ended March 31, 2024 Series A Class P Class A Class T Class S Class D Class I Aggregate gross distributions declared per share $ 0.4219 $ 0.3126 $ 0.3126 $ 0.3126 $ — $ 0.3126 $ 0.3126 Stockholder servicing fee per share N/A N/A N/A 0.0360 — 0.0106 N/A Net distributions declared per share $ 0.4219 $ 0.3126 $ 0.3126 $ 0.2766 $ — $ 0.3020 $ 0.3126 Preferred Stock Common Stock Three months ended March 31, 2023 Series A Class P Class A Class T Class S Class D Class I Aggregate gross distributions declared per share $ 0.4219 $ 0.3126 $ 0.3126 $ 0.3126 $ — $ 0.3126 $ 0.3126 Stockholder servicing fee per share N/A N/A N/A 0.0409 — 0.0121 N/A Net distributions declared per share $ 0.4219 $ 0.3126 $ 0.3126 $ 0.2717 $ — $ 0.3005 $ 0.3126 |
Net Income Per Share Attribut_2
Net Income Per Share Attributable to Common Stockholders (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Summary of Basic and Diluted Net Income Per Share Attributable to Common Stockholders | The following table is a summary of the basic and diluted net income per share attributable to common stockholders computation for the three months ended March 31, 2024 and 2023: Three months ended 2024 2023 Net income attributable to common stockholders $ 1,904 $ 3,147 Weighted average shares outstanding, basic 10,116,192 10,113,221 Dilutive effect of restricted stock 339 366 Weighted average shares outstanding, diluted 10,116,531 10,113,587 Net income attributable to common stockholders per share, basic and diluted $ 0.19 $ 0.31 |
Transactions with Related Par_2
Transactions with Related Parties (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Related Party Transactions [Abstract] | |
Summary of Related Party Transactions | The following table summarizes the Company’s related party transactions for the three months ended March 31, 2024 and 2023 and the amount due to related parties at March 31, 2024 and December 31, 2023: Three months ended Payable as of March 31, Payable as of December 31, 2024 2023 2024 2023 Organization and offering expense reimbursement (1) $ — $ 1 $ — $ 2 Selling commissions and dealer manager fee (2) — 4 — — Advisory fee (3) 805 881 268 271 Loan fees (4) 58 91 961 1,313 Accrued stockholder servicing fee (5) — 4 433 442 Total $ 863 $ 981 $ 1,662 $ 2,028 (1) The Company reimburses the Advisor, the Sub-Advisor and their respective affiliates for costs and other expenses related to the Public Offerings, provided the Advisor has agreed to reimburse the Company to the extent that the organization and offering expenses that the Company incurs exceeds 15 % of its gross proceeds from the Public Offerings. (2) For the Public Offerings, the Dealer Manager was entitled to receive (a) upfront selling commissions of up to 6.0 %, and upfront dealer manager fees of up to 1.25 %, of the transaction price of each Class A share sold in the primary offering, however such amounts may vary at certain participating broker-dealers provided that the sum will not exceed 7.25 % of the transaction price; (b) upfront selling commissions of up to 3.0 %, and upfront dealer manager fees of 0.5 %, of the transaction price of each Class T share sold in the primary offering, however such amounts may vary at certain participating broker-dealers provided that the sum will not exceed 3.5 % of the transaction price; and (c) upfront selling commissions of up to 3.5 % of the transaction price of each Class S share sold in the primary offering. No upfront selling commissions or dealer manager fees are paid with respect to purchases of Class D shares, Class I shares or shares of any class sold pursuant to the Company’s DRP. All upfront selling commissions and dealer manager fees were reallowed (paid) by the Dealer Manager to participating broker-dealers. (3) The Advisor is entitled to receive an advisory fee comprised of two separate components: (1) a fixed component payable monthly and (2) a performance component payable annually. The fixed component of the advisory fee is paid in an amount equal to 1/12 th of 1.25 % of the Company’s average NAV for each month, paid monthly in arrears. The performance component of the advisory fee is calculated and paid annually, such that for any year in which the Company’s total return per share exceeds 7 % per annum, the Advisor will receive 20 % of the excess total return allocable to shares of the Company’s common stock; provided that in no event will the performance fee exceed 15 % of the aggregate total return allocable to shares of the Company’s common stock for such year. In addition, if the NAV per share decreases below $ 25 for any class of shares during the measurement period, any subsequent increase in NAV per share to $ 25 (or such other adjusted number) will not be included in the calculation of the performance component with respect to that class. The Advisor pays fees to the Sub-Advisor for the services it delegates to the Sub-Advisor or may direct the Company to pay a portion of the fees otherwise payable to the Advisor directly to the Sub-Advisor. (4) The Company pays the Advisor all new loan origination and administrative fees related to CRE loans held for investment, to the extent that such fees are paid by the borrower. Pursuant to the Sub-Advisory Agreement, the Advisor generally will reallow a portion of loan fees and all administrative fees to the Sub-Advisor. (5) Subject to the Financial Industry Regulatory Authority, Inc. limitations on underwriting compensation, the Company pays the Dealer Manager selling commissions over time as stockholder servicing fees for ongoing services rendered to stockholders by participating broker-dealers or broker-dealers servicing stockholders’ accounts as follows: (a) for Class T shares only, 0.85 % per annum of the NAV of the Class T shares; (b) for Class S shares only, 0.85 % per annum of the aggregate NAV for the Class S shares; and (c) for Class D shares only, 0.25 % per annum of the aggregate NAV for the Class D shares. The Company will cease paying the stockholder servicing fee with respect to any Class T share, Class S share or Class D share held in a stockholder’s account upon the occurrence of certain events. The Company accrues the full cost of the stockholder servicing fee as an offering cost at the time the Company sells Class T, Class S, and Class D shares. The Dealer Manager does not retain any of these fees, all of which are retained by, or reallowed (paid) to, participating broker-dealers and servicing broker-dealers for ongoing stockholder services performed by such broker-dealers. |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Total Stock Grants | The table below summarizes total stock grants as of March 31, 2024 with a vesting date after January 1, 2023. Grant Date Class of common stock granted Total number of shares granted Grant Date Fair Value Per Share Total Fair Value of Grant Proportion of total shares that vest annually Vesting Date Year 1 Vesting Date Year 2 Vesting Date Year 3 December 1, 2020 Class I 1,393 $ 21.54 $ 30 1/3 12/1/2021 12/1/2022 12/1/2023 October 14, 2021 Class I 1,477 $ 20.31 $ 30 1/3 10/14/2022 10/14/2023 10/14/2024 October 3, 2022 Class I 1,534 $ 19.55 $ 30 1/3 10/3/2023 10/3/2024 10/3/2025 September 29, 2023 Class I 1,722 $ 17.42 $ 30 1/3 9/29/2024 9/29/2025 9/29/2026 |
Summary of Restricted Shares Granted under RSP | A summary table of the status of the restricted shares granted under the RSP is presented below: Restricted Shares Weighted Average Grant Date Fair Value Per Share Outstanding at December 31, 2023 3,237 $ 18.53 Granted — — Vested — — Converted — — Forfeited — — Outstanding at March 31, 2024 3,237 $ 18.53 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Schedule of Carrying Amount and Estimated Fair Value of Financial Instruments | The following table details the carrying amount and estimated fair value of the Company’s financial instruments at the dates below: March 31, 2024 December 31, 2023 Carrying Estimated Fair Carrying Estimated Fair Financial assets Cash and cash equivalents $ 60,396 $ 60,396 $ 54,143 $ 54,143 Commercial mortgage loans, net 692,638 692,638 722,003 722,003 Total $ 753,034 $ 753,034 $ 776,146 $ 776,146 Financial liabilities Repurchase agreements — commercial mortgage $ 435,439 $ 435,439 $ 457,438 $ 457,438 Credit facility payable 9,498 9,498 9,498 9,498 Loan participations — sold 57,226 57,226 57,226 57,226 Total $ 502,163 $ 502,163 $ 524,162 $ 524,162 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
Summary of Finance Lease Cost | For the three months ended March 31, 2023, total finance lease cost recorded to real estate operating expenses on the Company’s consolidated statements of operations was comprised as follows: Three months ended Amortization of right-of-use assets $ 18 Interest on lease liabilities 497 Total finance lease cost $ 515 |
Subsequent Events (Tables)
Subsequent Events (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
Schedule of Declared Distributions for Class of Common Stock | On April 29, 2024 , the Company announced that the Board authorized distributions to stockholders of record as of April 30, 2024 , payable on or about May 17, 2024 for each class of its common stock in the amount per share set forth below: Common Stock Class P Class A Class T Class S Class D Class I Aggregate gross distributions declared per share $ 0.1042 $ 0.1042 $ 0.1042 $ — $ 0.1042 $ 0.1042 Stockholder servicing fee per share N/A N/A 0.0117 — 0.0035 N/A Net distributions declared per share $ 0.1042 $ 0.1042 $ 0.0925 $ — $ 0.1007 $ 0.1042 |
Organization and Business Ope_2
Organization and Business Operations - Additional Information (Details) - USD ($) | 3 Months Ended | 32 Months Ended | |||||||
Apr. 28, 2022 | Oct. 15, 2021 | Sep. 22, 2021 | Mar. 22, 2019 | Oct. 25, 2016 | Mar. 31, 2023 | Jun. 28, 2019 | Mar. 31, 2024 | Dec. 31, 2023 | |
Organization And Business Operations [Line Items] | |||||||||
Issuance of common stock, value | $ 342,000 | ||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | |||||||
Maximum | Initial Public Offering | |||||||||
Organization And Business Operations [Line Items] | |||||||||
Issuance of common stock, value | $ 2,200,000,000 | $ 2,350,000,000 | |||||||
Class P Common Stock | |||||||||
Organization And Business Operations [Line Items] | |||||||||
Shares issued, private offering | 10,258,094 | ||||||||
Gross proceeds from issuance of private offering | $ 276,681,000 | ||||||||
Class P Common Stock | Maximum | |||||||||
Organization And Business Operations [Line Items] | |||||||||
Shares authorized value, private offering | $ 500,000,000 | ||||||||
Series A Preferred Stock | |||||||||
Organization And Business Operations [Line Items] | |||||||||
Liquidation preference per share | $ 25 | ||||||||
Series A Preferred Stock | Preferred Stock Offering | |||||||||
Organization And Business Operations [Line Items] | |||||||||
Preferred stock, shares issued | 3,500,000 | ||||||||
Percentage of cumulative redeemable preferred stock | 6.75% | ||||||||
Preferred stock, par value | $ 0.001 | ||||||||
Liquidation preference per share | $ 25 | ||||||||
Net proceeds after underwriter's discount and issuance costs | $ 86,310,000 | ||||||||
Series A Preferred Stock | Over-Allotment | Raymond James & Associates, Inc. | |||||||||
Organization And Business Operations [Line Items] | |||||||||
Additional shares issued to cover over-allotments | 100,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2024 | Dec. 31, 2023 | Jan. 01, 2023 | |
Summary Of Significant Accounting Policies Disclosures [Line Items] | |||
Cash and cash equivalents, description | Cash and cash equivalents include funds on deposit with financial institutions, including demand deposits with financial institutions with original maturities of three months or less. | ||
Restricted cash current | $ 0 | $ 0 | |
Adoption of ASU 2016-13, increase to accumulated deficit | 5,122,000 | ||
Allowance for credit losses | $ 22,253,000 | $ 21,849,000 | $ 3,588,000 |
ASU 2016-13 | |||
Summary Of Significant Accounting Policies Disclosures [Line Items] | |||
Allowance for credit losses | $ 8,375,000 | ||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true | ||
Change in Accounting Principle, Accounting Standards Update, Adoption Date | Jan. 01, 2023 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of the Impact of Adoption (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | Jan. 01, 2023 |
Assets: | |||
Allowance for credit losses | $ 22,253 | $ 21,849 | $ 3,588 |
Liabilities: | |||
Accrued expenses and other liabilities | 7,852 | ||
ASU 2016-13 | |||
Assets: | |||
Allowance for credit losses | 8,375 | ||
Liabilities: | |||
Accrued expenses and other liabilities | 8,187 | ||
Impact of Adoption | ASU 2016-13 | |||
Assets: | |||
Allowance for credit losses | 4,787 | ||
Liabilities: | |||
Accrued expenses and other liabilities | $ 335 |
Commercial Mortgage Loans Hel_3
Commercial Mortgage Loans Held for Investment - Schedule of Commercial Mortgage Loans held for Investment (Details) $ in Thousands | Mar. 31, 2024 USD ($) Loan | Dec. 31, 2023 USD ($) Loan | |
Mortgage Loans On Real Estate [Line Items] | |||
Number of Loans | Loan | [1] | 34 | 36 |
Principal Balance | [1] | $ 714,164 | $ 742,880 |
Unamortized (fees)/costs, net | [1] | 727 | 972 |
Allowance for credit losses | [1] | (22,253) | (21,849) |
Commercial mortgage loans at cost, net | [1] | $ 692,638 | $ 722,003 |
Weighted Average Interest Rate | [2] | 8% | 8.80% |
Weighted Average Years to Maturity | [3] | 9 months 18 days | 10 months 24 days |
First Mortgage Loans [Member] | |||
Mortgage Loans On Real Estate [Line Items] | |||
Number of Loans | Loan | [1] | 32 | 34 |
Principal Balance | [1] | $ 700,664 | $ 729,380 |
Unamortized (fees)/costs, net | [1] | 727 | 972 |
Allowance for credit losses | [1] | (22,205) | (21,809) |
Carrying Value | [1] | $ 679,186 | $ 708,543 |
Weighted Average Interest Rate | [2] | 7.90% | 8.80% |
Weighted Average Years to Maturity | [3] | 9 months 18 days | 10 months 24 days |
Credit Loans [Member] | |||
Mortgage Loans On Real Estate [Line Items] | |||
Number of Loans | Loan | [1] | 2 | 2 |
Principal Balance | [1] | $ 13,500 | $ 13,500 |
Allowance for credit losses | [1] | (48) | (40) |
Carrying Value | [1] | $ 13,452 | $ 13,460 |
Weighted Average Interest Rate | [2] | 9.60% | 9.60% |
Weighted Average Years to Maturity | [3] | 2 years 2 months 12 days | 2 years 4 months 24 days |
[1] First mortgage loans are first position mortgage loans and credit loans are mezzanine and subordinated loans. Weighted average interest rate is based on the loan spreads plus the applicable indices as of the last interest reset date, which is typically the 15th of each month. On March 15, 2024, the one-month term USD Secured Overnight Financing Rate (“SOFR”) rate reset to 5.33 % . On December 15, 2023, the SOFR rate reset to 5.36 %. Weighted average interest rate excludes maturity default interest and interest on loans placed on nonaccrual status. Weighted average years to maturity excludes allowable extensions on the loans. |
Commercial Mortgage Loans Hel_4
Commercial Mortgage Loans Held for Investment - Schedule of Commercial Mortgage Loans held for Investment (Parenthetical) (Details) | Mar. 15, 2024 | Dec. 15, 2023 |
SOFR [Member] | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Mortgage loans applicable reference rate percentage | 5.33% | 5.36% |
Commercial Mortgage Loans Hel_5
Commercial Mortgage Loans Held for Investment - Schedule of Commercial Mortgage Loans held for Investment Portfolio (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 USD ($) | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Balance at Beginning of Year | $ 743,852 | |
Balance at Beginning of Year, Allowance for credit losses | (21,849) | |
Balance at Beginning of Year, Carrying value | 722,003 | [1] |
Loan originations | 3,482 | |
Principal repayments | (32,197) | |
Amortization of loan origination and deferred exit fees | 146 | |
Origination fees and extension fees received on commercial loans | (392) | |
Provision for credit losses, Allowance for credit losses | (404) | |
Provision for credit losses | (404) | |
Balance at End of Period | 714,891 | |
Balance at End of Period, Allowance for credit losses | (22,253) | |
Balance at End of Period, Carrying value | 692,638 | [1] |
Commercial Mortgage Loans at Cost | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Balance at Beginning of Year | 743,852 | |
Loan originations | 3,482 | |
Principal repayments | (32,197) | |
Amortization of loan origination and deferred exit fees | 146 | |
Origination fees and extension fees received on commercial loans | (392) | |
Balance at End of Period | $ 714,891 | |
[1] First mortgage loans are first position mortgage loans and credit loans are mezzanine and subordinated loans. |
Commercial Mortgage Loans Hel_6
Commercial Mortgage Loans Held for Investment - Schedule of Allowance for Credit Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Balance at Beginning of Year, Allowance for credit losses | $ (22,138) | $ (3,588) | |
Balance at Beginning of Year, Allowance for credit losses | (21,849) | ||
Impact of adoption of ASU 2016-13 | (5,122) | ||
Reversal of (provision for) loan losses | (337) | 399 | |
Balance at End of Period, Allowance for credit losses | (22,475) | (8,311) | |
Commercial Mortgage Loans | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Balance at Beginning of Year, Allowance for credit losses | (21,849) | (3,588) | |
Reversal of (provision for) loan losses | (404) | 355 | |
Balance at End of Period, Allowance for credit losses | (22,253) | (8,020) | |
Commercial Mortgage Loans | ASU 2016-13 | Impact of Adoption | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Balance at Beginning of Year, Allowance for credit losses | (4,787) | ||
Unfunded Loan Commitments | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Balance at Beginning of Year, Allowance for credit losses | [1] | (289) | |
Reversal of (provision for) loan losses | [1] | 67 | 44 |
Balance at End of Period, Allowance for credit losses | [1] | $ (222) | (291) |
Unfunded Loan Commitments | ASU 2016-13 | Impact of Adoption | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Adoption of ASU 2016-13 | [1] | $ (335) | |
[1] The reserve for expected credit losses related to unfunded loan commitments is recorded in “accrued expenses and other liabilities” on the consolidated balance sheets following the adoption of ASU 2016-13 on January 1, 2023. |
Commercial Mortgage Loans Hel_7
Commercial Mortgage Loans Held for Investment - Additional Information (Details) | 3 Months Ended | ||||
Mar. 31, 2024 USD ($) Rating Loan | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) Loan Rating | Dec. 31, 2022 USD ($) | ||
Mortgage Loans On Real Estate [Line Items] | |||||
Allowance for credit losses | $ 22,253,000 | $ 21,849,000 | |||
Risk rating for commercial mortgage loans held for investment and real estate securities | Rating | 2 | 2 | |||
Number of loans risk rated two | Loan | 20 | 24 | |||
Number of loans risk rated three | Loan | 8 | 7 | |||
Number of loans risk rated four | Loan | 4 | 3 | |||
Number of loans risk rated five | Loan | 2 | 2 | |||
Asset specific CECL reserve | $ 17,427,000 | ||||
Increase (decrease) in CECL reserve | 337,000 | $ (399,000) | |||
Provision for (reversal of) credit losses | 337,000 | (399,000) | |||
Impact of adoption of ASU 2016-13 | $ (5,122,000) | ||||
Total CECL reserve | 22,475,000 | 8,311,000 | $ 22,138,000 | $ 3,588,000 | |
Net increase (decrease) in asset specific CECL reserve | 1,161,000 | ||||
Unfunded Loan Commitments | |||||
Mortgage Loans On Real Estate [Line Items] | |||||
Provision for (reversal of) credit losses | [1] | (67,000) | (44,000) | ||
Total CECL reserve | [1] | $ 222,000 | $ 291,000 | $ 289,000 | |
Portland, OR Loan [Member] | |||||
Mortgage Loans On Real Estate [Line Items] | |||||
Risk rating for commercial mortgage loans held for investment and real estate securities | Rating | 5 | ||||
Interest reserve through maturity added to the principal amount | $ 1,750,000 | ||||
Asset specific CECL reserve | 7,073,000 | ||||
Mortgage loans on real estate, outstanding | 29,986,000 | ||||
Portland, OR Loan [Member] | Unfunded Loan Commitments | |||||
Mortgage Loans On Real Estate [Line Items] | |||||
Mortgage loans on real estate, outstanding | $ 450,000 | ||||
Reston, VA Loan [Member] | |||||
Mortgage Loans On Real Estate [Line Items] | |||||
Risk rating for commercial mortgage loans held for investment and real estate securities | Rating | 5 | ||||
Mortgage loans on real estate, maturity date | Mar. 09, 2024 | ||||
Asset specific CECL reserve | $ 3,187,000 | ||||
Mortgage loans on real estate, outstanding | 13,477,000 | ||||
Reston, VA Loan [Member] | Unfunded Loan Commitments | |||||
Mortgage Loans On Real Estate [Line Items] | |||||
Mortgage loans on real estate, outstanding | $ 4,353,000 | ||||
Addison TX Loan [Member] | |||||
Mortgage Loans On Real Estate [Line Items] | |||||
Risk rating for commercial mortgage loans held for investment and real estate securities | Rating | 4 | ||||
Asset specific CECL reserve | $ 4,760,000 | ||||
Mortgage loans on real estate, outstanding | 24,411,000 | ||||
Addison TX Loan [Member] | Unfunded Loan Commitments | |||||
Mortgage Loans On Real Estate [Line Items] | |||||
Mortgage loans on real estate, outstanding | $ 0 | ||||
Charlotte, NC Loan [Member] | |||||
Mortgage Loans On Real Estate [Line Items] | |||||
Risk rating for commercial mortgage loans held for investment and real estate securities | Rating | 4 | ||||
Asset specific CECL reserve | $ 983,000 | ||||
Mortgage loans on real estate, outstanding | 22,616,000 | ||||
Charlotte, NC Loan [Member] | Unfunded Loan Commitments | |||||
Mortgage Loans On Real Estate [Line Items] | |||||
Mortgage loans on real estate, outstanding | $ 0 | ||||
Arlington, TX Loan [Member] | |||||
Mortgage Loans On Real Estate [Line Items] | |||||
Risk rating for commercial mortgage loans held for investment and real estate securities | Rating | 3 | ||||
Asset specific CECL reserve | $ 1,424,000 | ||||
Mortgage loans on real estate, outstanding | 24,581,000 | ||||
Arlington, TX Loan [Member] | Unfunded Loan Commitments | |||||
Mortgage Loans On Real Estate [Line Items] | |||||
Mortgage loans on real estate, outstanding | 469,000 | ||||
Three Senior Loans [Member] | Nonaccrual Basis Loans | |||||
Mortgage Loans On Real Estate [Line Items] | |||||
Interest income for impaired related to nonaccrual status loans | 123,000 | ||||
Reversal of interest income on loans | 0 | ||||
Interest income forgone of loans on nonaccrual status | $ 1,480,000 | ||||
[1] The reserve for expected credit losses related to unfunded loan commitments is recorded in “accrued expenses and other liabilities” on the consolidated balance sheets following the adoption of ASU 2016-13 on January 1, 2023. |
Commercial Mortgage Loans Hel_8
Commercial Mortgage Loans Held for Investment - Summary of Investment Grade of Loans Loss (Details) - Commercial Mortgage Loans | 3 Months Ended |
Mar. 31, 2024 | |
Investment Grade One | |
Financing Receivable Recorded Investment [Line Items] | |
Description of Investment Grade | Investment exceeding fundamental performance expectations and/or capital gain expected. Trends and risk factors since time of investment are favorable. |
Investment Grade Two | |
Financing Receivable Recorded Investment [Line Items] | |
Description of Investment Grade | Performing consistent with expectations and a full return of principal and interest expected. Trends and risk factors are neutral to favorable. |
Investment Grade Three | |
Financing Receivable Recorded Investment [Line Items] | |
Description of Investment Grade | Performing investment requiring closer monitoring. Trends and risk factors show some deterioration. Collection of principal and interest is still expected. |
Investment Grade Four | |
Financing Receivable Recorded Investment [Line Items] | |
Description of Investment Grade | Underperforming investment with the potential of some interest loss but still expecting a positive return on investment. Trends and risk factors are negative. |
Investment Grade Five | |
Financing Receivable Recorded Investment [Line Items] | |
Description of Investment Grade | Underperforming investment with expected loss of interest and some principal. |
Repurchase Agreements and Cre_3
Repurchase Agreements and Credit Facilities - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | 32 Months Ended | ||||||||
May 05, 2023 | Mar. 09, 2023 | Mar. 10, 2021 | May 31, 2022 | Mar. 31, 2024 | Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2021 | Nov. 30, 2023 | May 06, 2019 | |
Atlas Repo Facility | ||||||||||||
Repurchase Agreement [Line Items] | ||||||||||||
Repurchase agreement, maximum advance amount | $ 100,000,000 | |||||||||||
Amount Outstanding | $ 0 | |||||||||||
Atlas Repo Facility | Secured Overnight Financing Rate (SOFR) | Minimum | ||||||||||||
Repurchase Agreement [Line Items] | ||||||||||||
Interest rate spread | 2.50% | |||||||||||
Floor rate | 0.15% | |||||||||||
Atlas Repo Facility | Secured Overnight Financing Rate (SOFR) | Maximum | ||||||||||||
Repurchase Agreement [Line Items] | ||||||||||||
Interest rate spread | 3% | |||||||||||
Floor rate | 0.25% | |||||||||||
JP Morgan Repo Facility | ||||||||||||
Repurchase Agreement [Line Items] | ||||||||||||
Repurchase agreement, maximum advance amount | $ 526,076,000 | $ 150,000,000 | ||||||||||
Maturity date | May 06, 2026 | May 06, 2023 | ||||||||||
Option to extend maturity date | May 06, 2028 | |||||||||||
Option to extend maturity, description | two optional one-year extensions | |||||||||||
JP Morgan Repo Facility | Minimum | ||||||||||||
Repurchase Agreement [Line Items] | ||||||||||||
Interest rate spread | 1.85% | |||||||||||
Floor rate | 0% | |||||||||||
JP Morgan Repo Facility | Maximum | ||||||||||||
Repurchase Agreement [Line Items] | ||||||||||||
Interest rate spread | 2.85% | |||||||||||
Floor rate | 2% | |||||||||||
JP Morgan Repo Facility | London Interbank Offered Rate | Minimum | ||||||||||||
Repurchase Agreement [Line Items] | ||||||||||||
Interest rate spread | 1.75% | |||||||||||
JP Morgan Repo Facility | London Interbank Offered Rate | Maximum | ||||||||||||
Repurchase Agreement [Line Items] | ||||||||||||
Interest rate spread | 2.50% | |||||||||||
Western Alliance Credit Facility | ||||||||||||
Repurchase Agreement [Line Items] | ||||||||||||
Repurchase agreement, maximum advance amount | $ 40,000,000 | $ 75,000,000 | ||||||||||
Interest rate spread | 3.50% | |||||||||||
Floor rate | 2.50% | |||||||||||
Maturity date | Mar. 10, 2025 | Mar. 10, 2023 | ||||||||||
Borrowing base period for eligible pledged assets become ineligible | 36 months | |||||||||||
Convertible by option term loan initial maturity period | 2 years | |||||||||||
Percentage of conversion fee of convertible by option term loan. | 0.25% | |||||||||||
Minimum required average unrestricted aggregate deposit account balance amount to be maintained | $ 5,000,000 | $ 3,750,000 | ||||||||||
Increased interest rate due to failure to meet the minimum deposit balance | 0.50% | |||||||||||
Minimum debt service coverage ratio | 1.40% | 1.50% | ||||||||||
Debt service coverage ratio | 1.44% | 1.47% | ||||||||||
Western Alliance Credit Facility | Minimum | ||||||||||||
Repurchase Agreement [Line Items] | ||||||||||||
Loan-to-unpaid balance percentage | 60% | |||||||||||
Loan-to-appraised value percentage | 45% | |||||||||||
Western Alliance Credit Facility | Maximum | ||||||||||||
Repurchase Agreement [Line Items] | ||||||||||||
Loan-to-unpaid balance percentage | 70% | |||||||||||
Loan-to-appraised value percentage | 50% | |||||||||||
Western Alliance Credit Facility | London Interbank Offered Rate | ||||||||||||
Repurchase Agreement [Line Items] | ||||||||||||
Interest rate spread | 3.25% | |||||||||||
Floor rate | 0.75% |
Repurchase Agreements and Cre_4
Repurchase Agreements and Credit Facilities - Schedule of Outstanding Repurchase Agreements (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 | ||
Repurchase Agreements And Credit Facility [Line Items] | ||||
Accrued Interest Payable | $ 1,720,000 | $ 1,792,000 | ||
Atlas Repo Facility | ||||
Repurchase Agreements And Credit Facility [Line Items] | ||||
Amount Outstanding | 0 | |||
Atlas Repo Facility | Commercial Mortgage Loans | ||||
Repurchase Agreements And Credit Facility [Line Items] | ||||
Committed Financing | 100,000,000 | 100,000,000 | ||
JPM Repo Facility | Commercial Mortgage Loans | ||||
Repurchase Agreements And Credit Facility [Line Items] | ||||
Committed Financing | 526,076,000 | 526,076,000 | ||
Amount Outstanding | [1] | 435,439,000 | 457,438,000 | |
Accrued Interest Payable | $ 1,312,000 | $ 1,385,000 | ||
Weighted Average Interest Rate | 7.74% | 7.78% | ||
Weighted Average Days to Maturity | 1497 days | 1588 days | ||
JPM Repo Facility | Commercial Mortgage Loans | Collateral Pledged | ||||
Repurchase Agreements And Credit Facility [Line Items] | ||||
Collateral Pledged | $ 615,655,000 | $ 644,201,000 | ||
Repo Facility | Commercial Mortgage Loans | ||||
Repurchase Agreements And Credit Facility [Line Items] | ||||
Committed Financing | 626,076,000 | 626,076,000 | ||
Amount Outstanding | [1] | 435,439,000 | 457,438,000 | |
Accrued Interest Payable | $ 1,312,000 | $ 1,385,000 | ||
Weighted Average Interest Rate | 7.74% | 7.78% | ||
Weighted Average Days to Maturity | 1497 days | 1588 days | ||
Repo Facility | Commercial Mortgage Loans | Collateral Pledged | ||||
Repurchase Agreements And Credit Facility [Line Items] | ||||
Collateral Pledged | $ 615,655,000 | $ 644,201,000 | ||
Western Alliance Credit Facility | Commercial Mortgage Loans | ||||
Repurchase Agreements And Credit Facility [Line Items] | ||||
Committed Financing | 40,000,000 | 40,000,000 | ||
Amount Outstanding | [1] | 9,498,000 | 9,498,000 | |
Accrued Interest Payable | $ 40,000 | $ 42,000 | ||
Weighted Average Interest Rate | 8.83% | 9.34% | [2] | |
Weighted Average Days to Maturity | 344 days | 435 days | ||
Western Alliance Credit Facility | Commercial Mortgage Loans | Collateral Pledged | ||||
Repurchase Agreements And Credit Facility [Line Items] | ||||
Collateral Pledged | $ 13,477,000 | $ 13,647,000 | ||
Facilities | Commercial Mortgage Loans | ||||
Repurchase Agreements And Credit Facility [Line Items] | ||||
Committed Financing | 666,076,000 | 666,076,000 | ||
Amount Outstanding | [1] | 444,937,000 | 466,936,000 | |
Accrued Interest Payable | $ 1,352,000 | $ 1,427,000 | ||
Weighted Average Interest Rate | 7.77% | 7.81% | ||
Weighted Average Days to Maturity | 1472 days | 1565 days | ||
Facilities | Commercial Mortgage Loans | Collateral Pledged | ||||
Repurchase Agreements And Credit Facility [Line Items] | ||||
Collateral Pledged | $ 629,132,000 | $ 657,848,000 | ||
[1] Excluding $ 0 of unamortized debt issuance costs at March 31, 2024 and December 31, 2023 . Includes 0.50 % additional interest rate during the third and fourth quarters of 2023 as the minimum deposit balance was not met by the Company as of June 30, 2023. |
Repurchase Agreements and Cre_5
Repurchase Agreements and Credit Facilities - Schedule of Outstanding Repurchase Agreements (Parenthetical) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Dec. 31, 2023 | Sep. 30, 2023 | Mar. 31, 2024 | |
Repo Facility | |||
Repurchase Agreements And Credit Facility [Line Items] | |||
Unamortized Debt Issuance Expense | $ 0 | $ 0 | |
Western Alliance Credit Facility | |||
Repurchase Agreements And Credit Facility [Line Items] | |||
Additional interest rate | 0.50% | 0.50% |
Loan Participations Sold, Net -
Loan Participations Sold, Net - Additional Information (Details) | Nov. 15, 2021 Loan |
First Mortgage Loans [Member] | |
Mortgage Loans On Real Estate [Line Items] | |
Number of loans sold to third party | 9 |
Loan Participations Sold, Net_2
Loan Participations Sold, Net - Summary of Loan Participations Sold (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 USD ($) Loan | Dec. 31, 2023 USD ($) Loan | ||
Loan Participations | |||
Mortgage Loans On Real Estate [Line Items] | |||
Number of loans sold to third party | Loan | 4 | 4 | |
Principal Balance | $ 71,532 | $ 71,532 | |
Book Value | $ 65,837 | $ 65,435 | |
Weighted Average Interest Rate | [1] | 3.20% | 3.50% |
Weighted Average Maximum Maturity | [2] | 2 months 8 days | 1 month 9 days |
Senior Loan Participations | |||
Mortgage Loans On Real Estate [Line Items] | |||
Number of loans sold to third party | Loan | [3] | 4 | 4 |
Principal Balance | [3] | $ 57,226 | $ 57,226 |
Book Value | [3] | $ 57,226 | $ 57,226 |
Weighted Average Interest Rate | [1],[3] | 2% | 2% |
Weighted Average Maximum Maturity | [2],[3] | 2 months 8 days | 1 month 9 days |
[1] The yield/cost is the present value of all future principal and interest payments on the loan or participation interest and does not include any origination fees or deferred commitment fees. The yield/cost excludes maturity default interest and interest on loans placed on nonaccrual status. Based on the furthest maximum maturity date of all the loans subject to the participation agreement. During the three months ended March 31, 2024 and 2023, the Company recorded $ 626 and $ 1,441 of interest expense related to loan participations sold, respectively. |
Loan Participations Sold, Net_3
Loan Participations Sold, Net - Summary of Loan Participations Sold (Parenthetical) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Mortgage Loans On Real Estate [Line Items] | ||
Investment, Type [Extensible Enumeration] | Loan Participations [Member] | Loan Participations [Member] |
Interest expense on loan sold | $ 626 | $ 1,441 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - USD ($) | 3 Months Ended | |||||
Oct. 15, 2021 | Sep. 22, 2021 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Aug. 11, 2022 | |
Class Of Stock [Line Items] | ||||||
Preferred stock, change of control, terms of conversion | Subject to certain exceptions, upon the occurrence of a Change of Control, each holder of shares of Series A Preferred Stock will have the right to convert some or all of the Series A Preferred Stock held by such holder into a number of the Company’s shares of Class I common stock as provided for in the Articles Supplementary. | |||||
Distributions payable | $ 1,051,000 | $ 1,050,000 | ||||
Gain on repurchase and retirement of preferred stock | $ 0 | $ 21,000 | ||||
Series A Preferred Stock | ||||||
Class Of Stock [Line Items] | ||||||
Liquidation preference per share | $ 25 | |||||
Preferred stock, redemption date | Sep. 22, 2026 | |||||
Preferred stock, redemption price per share | $ 25 | |||||
Percentage of dividend rate | 6.75% | |||||
Annual dividend per share | $ 1.6875 | |||||
Shares repurchased and retired | 4,143 | |||||
Class S Common Stock | ||||||
Class Of Stock [Line Items] | ||||||
Common stock, shares, issued | 0 | 0 | ||||
Preferred Stock Offering | Series A Preferred Stock | ||||||
Class Of Stock [Line Items] | ||||||
Preferred stock, shares issued | 3,500,000 | |||||
Offered price | $ 25 | |||||
Net proceeds after underwriter's discount and issuance costs | $ 86,310,000 | |||||
Liquidation preference per share | $ 25 | |||||
Percentage of dividend rate | 6.75% | |||||
Over-Allotment | Series A Preferred Stock | Raymond James & Associates, Inc. | ||||||
Class Of Stock [Line Items] | ||||||
Additional shares issued to cover over-allotments | 100,000 | |||||
Series A Preferred Repurchase Program | ||||||
Class Of Stock [Line Items] | ||||||
Share repurchase program, shares authorized to be repurchased | 1,000,000 | |||||
Share repurchase program, authorized amount | $ 15,000,000 | |||||
Shares repurchased and retired | 0 | 4,143 | ||||
Gain on repurchase and retirement of preferred stock | $ 0 | $ 21,000 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Change in Outstanding Shares Including Restricted Common Stock (Details) - shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Series A Preferred Stock | ||
Class Of Stock [Line Items] | ||
Beginning balance | 3,544,553 | 3,548,696 |
Repurchase and retirement of preferred stock | (4,143) | |
Ending balance | 3,544,553 | 3,544,553 |
Class P Common Stock | ||
Class Of Stock [Line Items] | ||
Beginning balance | 8,562,777 | 8,562,777 |
Ending balance | 8,562,777 | 8,562,777 |
Class A Common Stock | ||
Class Of Stock [Line Items] | ||
Beginning balance | 745,887 | 743,183 |
Issuance of shares | 1,445 | |
Distribution reinvestment | 1,259 | |
Ending balance | 745,887 | 745,887 |
Class T Common Stock | ||
Class Of Stock [Line Items] | ||
Beginning balance | 290,345 | 286,341 |
Issuance of shares | 3,453 | |
Distribution reinvestment | 551 | |
Ending balance | 290,345 | 290,345 |
Class S Common Stock | ||
Class Of Stock [Line Items] | ||
Beginning balance | 0 | |
Ending balance | 0 | |
Class D Common Stock | ||
Class Of Stock [Line Items] | ||
Beginning balance | 48,015 | 47,888 |
Distribution reinvestment | 127 | |
Ending balance | 48,015 | 48,015 |
Class I Common Stock | ||
Class Of Stock [Line Items] | ||
Beginning balance | 469,168 | 452,667 |
Issuance of shares | 12,386 | |
Distribution reinvestment | 2,393 | |
Ending balance | 469,168 | 467,446 |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Aggregate Annualized and Monthly Distributions Declared by Record Date for all Classes of Shares (Details) - $ / shares | 1 Months Ended | ||||||||||||||
Mar. 31, 2024 | Feb. 29, 2024 | Jan. 30, 2024 | Dec. 31, 2023 | Nov. 30, 2023 | Oct. 31, 2023 | Sep. 30, 2023 | Aug. 31, 2023 | Jul. 31, 2023 | Jun. 30, 2023 | May 31, 2023 | Apr. 30, 2023 | Mar. 31, 2023 | Feb. 28, 2023 | Jan. 31, 2023 | |
Class Of Stock [Line Items] | |||||||||||||||
Record date | Mar. 31, 2024 | Feb. 29, 2024 | Jan. 30, 2024 | Dec. 31, 2023 | Nov. 30, 2023 | Oct. 31, 2023 | Sep. 30, 2023 | Aug. 31, 2023 | Jul. 31, 2023 | Jun. 30, 2023 | May 31, 2023 | Apr. 30, 2023 | Mar. 31, 2023 | Feb. 28, 2023 | Jan. 31, 2023 |
Aggregate Annualized Gross Dividend Declared | |||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||
Aggregate annualized gross distribution declared per share | $ 1.25 | $ 1.25 | $ 1.25 | $ 1.25 | $ 1.25 | $ 1.25 | $ 1.25 | $ 1.25 | $ 1.25 | $ 1.25 | $ 1.25 | $ 1.25 | $ 1.2500 | $ 1.2500 | $ 1.2500 |
Aggregate Monthly Gross Dividend Declared | |||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||
Aggregate annualized gross distribution declared per share | $ 0.1042 | $ 0.1042 | $ 0.1042 | $ 0.1042 | $ 0.1042 | $ 0.1042 | $ 0.1042 | $ 0.1042 | $ 0.1042 | $ 0.1042 | $ 0.1042 | $ 0.1042 | $ 0.1042 | $ 0.1042 | $ 0.1042 |
Stockholders' Equity - Schedu_3
Stockholders' Equity - Schedule of Monthly Net Distributions Per Share (Details) - $ / shares | 1 Months Ended | ||||||||||||||
Mar. 31, 2024 | Feb. 29, 2024 | Jan. 30, 2024 | Dec. 31, 2023 | Nov. 30, 2023 | Oct. 31, 2023 | Sep. 30, 2023 | Aug. 31, 2023 | Jul. 31, 2023 | Jun. 30, 2023 | May 31, 2023 | Apr. 30, 2023 | Mar. 31, 2023 | Feb. 28, 2023 | Jan. 31, 2023 | |
Class Of Stock [Line Items] | |||||||||||||||
Record date | Mar. 31, 2024 | Feb. 29, 2024 | Jan. 30, 2024 | Dec. 31, 2023 | Nov. 30, 2023 | Oct. 31, 2023 | Sep. 30, 2023 | Aug. 31, 2023 | Jul. 31, 2023 | Jun. 30, 2023 | May 31, 2023 | Apr. 30, 2023 | Mar. 31, 2023 | Feb. 28, 2023 | Jan. 31, 2023 |
Monthly Net Distribution Declared of Class D Common Stock | |||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||
Net distributions declared per share | $ 0.1006 | $ 0.1008 | $ 0.1006 | $ 0.1005 | $ 0.1006 | $ 0.1005 | $ 0.1006 | $ 0.1005 | $ 0.1005 | $ 0.1004 | $ 0.1001 | $ 0.1002 | $ 0.1001 | $ 0.1004 | $ 0.1000 |
Monthly Net Distribution Declared of Class T Common Stock | |||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||
Net distributions declared per share | $ 0.092 | $ 0.0927 | $ 0.0919 | $ 0.0916 | $ 0.092 | $ 0.0916 | $ 0.092 | $ 0.0915 | $ 0.0916 | $ 0.0912 | $ 0.0903 | $ 0.0907 | $ 0.0903 | $ 0.0914 | $ 0.0900 |
Stockholders' Equity - Schedu_4
Stockholders' Equity - Schedule of Aggregate Distributions Declared for Applicable Class of Common Stock and Preferred Stock (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Series A Preferred Stock | ||
Distributions Declared [Line Items] | ||
Aggregate gross distributions declared per share | $ 0.4219 | $ 0.4219 |
Net distributions declared per share | 0.4219 | 0.4219 |
Class P Common Stock | ||
Distributions Declared [Line Items] | ||
Aggregate gross distributions declared per share | 0.3126 | 0.3126 |
Net distributions declared per share | 0.3126 | 0.3126 |
Class A Common Stock | ||
Distributions Declared [Line Items] | ||
Aggregate gross distributions declared per share | 0.3126 | 0.3126 |
Net distributions declared per share | 0.3126 | 0.3126 |
Class T Common Stock | ||
Distributions Declared [Line Items] | ||
Aggregate gross distributions declared per share | 0.3126 | 0.3126 |
Stockholder servicing fee per share | 0.036 | 0.0409 |
Net distributions declared per share | 0.2766 | 0.2717 |
Class D Common Stock | ||
Distributions Declared [Line Items] | ||
Aggregate gross distributions declared per share | 0.3126 | 0.3126 |
Stockholder servicing fee per share | 0.0106 | 0.0121 |
Net distributions declared per share | 0.302 | 0.3005 |
Class I Common Stock | ||
Distributions Declared [Line Items] | ||
Aggregate gross distributions declared per share | 0.3126 | 0.3126 |
Net distributions declared per share | $ 0.3126 | $ 0.3126 |
Net Income Per Share Attribut_3
Net Income Per Share Attributable to Common Stockholders - Additional information (Details) - shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Earnings Per Share [Abstract] | ||
Antidilutive restricted shares | 0 | 0 |
Net Income Per Share Attribut_4
Net Income Per Share Attributable to Common Stockholders - Summary of Basic and Diluted Net Income Per Share Attributable to Common Stockholders (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Earnings Per Share [Abstract] | ||
Net income attributable to common stockholders | $ 1,904 | $ 3,147 |
Weighted average shares outstanding, basic | 10,116,192 | 10,113,221 |
Dilutive effect of restricted stock | 339 | 366 |
Weighted average shares outstanding, diluted | 10,116,531 | 10,113,587 |
Net income attributable to common stockholders per share basic | $ 0.19 | $ 0.31 |
Net income attributable to common stockholders per share diluted | $ 0.19 | $ 0.31 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Thousands | Mar. 31, 2024 USD ($) Loan | Dec. 31, 2023 USD ($) Loan |
Commitments and Contingencies Disclosure [Abstract] | ||
Number of commercial real estate loans with remaining future funding commitment | Loan | 23 | 27 |
Commercial real estate, remaining future funding commitment | $ | $ 24,700 | $ 31,021 |
Segment Reporting - Additional
Segment Reporting - Additional Information (Details) - Segment | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Segment Reporting [Abstract] | ||
Number of reportable segment | 1 | 1 |
Transactions with Related Par_3
Transactions with Related Parties - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||||
Jul. 20, 2021 | Jul. 15, 2021 | Nov. 30, 2016 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Related Party Transaction [Line Items] | ||||||
Proceeds from issuance of common stock | $ 342,000 | |||||
Expense Limitation Agreement | ||||||
Related Party Transaction [Line Items] | ||||||
Annualized ordinary operating expenses of quarter to extent expenses do not exceed average monthly net assets percentage | 1.50% | |||||
Annualized basis expense limit percentage | 1.50% | |||||
Reimbursement of expenses payable term | 3 years | |||||
Waive reimbursement on quarterly basis terms | waive reimbursement of or pay, on a quarterly basis, certain of the Company’s ordinary operating expenses for each class of shares to the extent necessary to ensure that the ordinary operating expenses do not exceed 1.5% of the average monthly net assets on an annualized basis (the “1.5% Expense Limit”). Amounts waived or paid by the Advisor or Sub-Advisor pursuant to the Expense Limitation Agreement are subject to conditional repayment on a quarterly basis by the Company during the three years following the quarter in which the expenses were incurred, but only to the extent such repayment does not cause the Company to exceed its then-current expenses limitation, if any, for such quarter. Any waiver or reimbursement by the Advisor or Sub-Advisor not repaid by the Company within the three-year period will be deemed permanently waived and not subject to repayment under the Expense Limitation Agreement. During the three months ended March 31, 2024, the amount of ordinary operating expenses either submitted for reimbursement by the Advisor and Sub-Advisor or incurred by the Company directly that was subject to the Expense Limitation Agreement did not exceed the 1.5% Expense Limit. | |||||
Expense Limitation Agreement | Maximum | ||||||
Related Party Transaction [Line Items] | ||||||
Reimbursement of expenses payable term | 3 years | |||||
Class P Common Stock | ||||||
Related Party Transaction [Line Items] | ||||||
Common stock, shares, issued | 8,562,777 | 8,562,777 | ||||
Advisor | Class P Common Stock | ||||||
Related Party Transaction [Line Items] | ||||||
Proceeds from issuance of common stock | $ 1,000,000 | |||||
Common stock, shares, issued | 40,040 | |||||
Common stock, purchase price per share | $ 25 | |||||
Subscription agreement, minimum number of shares to be held | 8,000 | |||||
Subscription agreement, value of minimum number of shares to be held | $ 200,000 | |||||
Description of subscription agreement | The Advisor has agreed that, for so long as it or its affiliate is serving as the Company’s advisor, (i) it will not sell or transfer at least 8,000 of the Class P shares that it has purchased, accounting for $200 of its investment, to an unaffiliated third party and (ii) repurchase requests made for these Class P shares will only be accepted (a) on the last business day of a calendar quarter, (b) after all repurchase requests from all other stockholders for such quarter have been accepted and (c) to the extent that such repurchases do not cause total repurchases in the quarter in which they are being repurchased to exceed that quarter’s repurchase cap. | |||||
Sub-Advisor | Class P Common Stock | ||||||
Related Party Transaction [Line Items] | ||||||
Proceeds from issuance of common stock | $ 3,000,000 | |||||
Common stock, shares, issued | 120,000 | |||||
Common stock, purchase price per share | $ 25 | |||||
Description of subscription agreement | Sound Point has agreed that, for so long as the Sub-Advisor or its affiliate is serving as the Company’s sub-advisor, repurchase requests made for these Class P shares will only be accepted (a) on the last business day of a calendar quarter, (b) after all repurchase requests from all other stockholders for such quarter have been accepted and (c) to the extent that such repurchases do not cause total repurchases in the quarter in which they are being repurchased to exceed that quarter’s repurchase cap. | |||||
Inland Real Estate Investment Corporation | Revolving Credit Liquidity Letter Agreements | ||||||
Related Party Transaction [Line Items] | ||||||
Number of days notice of termination prior to maturity date of agreement | 60 days | |||||
Fixed interest rate | 6% | |||||
Inland Real Estate Investment Corporation | Revolving Credit Liquidity Letter Agreements | Maximum | ||||||
Related Party Transaction [Line Items] | ||||||
Aggregate principal amount outstanding | $ 5,000,000 | |||||
Inland Real Estate Investment Corporation | Revolving Credit Liquidity Letter Agreements | Minimum | ||||||
Related Party Transaction [Line Items] | ||||||
Stockholders equity balance to trigger termination of liquidity letter agreements | $ 500,000,000 | |||||
Sound Point | Revolving Credit Liquidity Letter Agreements | ||||||
Related Party Transaction [Line Items] | ||||||
Number of days notice of termination prior to maturity date of agreement | 60 days | |||||
Fixed interest rate | 6% | |||||
Sound Point | Revolving Credit Liquidity Letter Agreements | Maximum | ||||||
Related Party Transaction [Line Items] | ||||||
Aggregate principal amount outstanding | $ 15,000,000 | |||||
Sound Point | Revolving Credit Liquidity Letter Agreements | Minimum | ||||||
Related Party Transaction [Line Items] | ||||||
Stockholders equity balance to trigger termination of liquidity letter agreements | $ 500,000,000 |
Transactions with Related Par_4
Transactions with Related Parties - Summary of Related Party Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | ||
Related Party Transaction [Line Items] | ||||
Advisory fee | $ 805 | $ 881 | ||
Accrued stockholder servicing fee | (10) | (8) | ||
Total | 1,662 | $ 2,028 | ||
Advisor, Sub-Advisor and Dealer Manager | ||||
Related Party Transaction [Line Items] | ||||
Organization and offering expense reimbursement | [1] | 1 | ||
Selling commissions and dealer manager fee | [2] | 4 | ||
Advisory fee | [3] | 805 | 881 | |
Loan fees | [4] | 58 | 91 | |
Accrued stockholder servicing fee | [5] | 4 | ||
Total | 863 | $ 981 | ||
Organization and offering expense reimbursement, payable | [1] | 2 | ||
Advisory fee, payable | [3] | 268 | 271 | |
Loan fees, payable | [4] | 961 | 1,313 | |
Accrued stockholder servicing fee, payable | [5] | 433 | 442 | |
Total | $ 1,662 | $ 2,028 | ||
[1] The Company reimburses the Advisor, the Sub-Advisor and their respective affiliates for costs and other expenses related to the Public Offerings, provided the Advisor has agreed to reimburse the Company to the extent that the organization and offering expenses that the Company incurs exceeds 15 % of its gross proceeds from the Public Offerings. For the Public Offerings, the Dealer Manager was entitled to receive (a) upfront selling commissions of up to 6.0 %, and upfront dealer manager fees of up to 1.25 %, of the transaction price of each Class A share sold in the primary offering, however such amounts may vary at certain participating broker-dealers provided that the sum will not exceed 7.25 % of the transaction price; (b) upfront selling commissions of up to 3.0 %, and upfront dealer manager fees of 0.5 %, of the transaction price of each Class T share sold in the primary offering, however such amounts may vary at certain participating broker-dealers provided that the sum will not exceed 3.5 % of the transaction price; and (c) upfront selling commissions of up to 3.5 % of the transaction price of each Class S share sold in the primary offering. No upfront selling commissions or dealer manager fees are paid with respect to purchases of Class D shares, Class I shares or shares of any class sold pursuant to the Company’s DRP. All upfront selling commissions and dealer manager fees were reallowed (paid) by the Dealer Manager to participating broker-dealers. The Advisor is entitled to receive an advisory fee comprised of two separate components: (1) a fixed component payable monthly and (2) a performance component payable annually. The fixed component of the advisory fee is paid in an amount equal to 1/12 th of 1.25 % of the Company’s average NAV for each month, paid monthly in arrears. The performance component of the advisory fee is calculated and paid annually, such that for any year in which the Company’s total return per share exceeds 7 % per annum, the Advisor will receive 20 % of the excess total return allocable to shares of the Company’s common stock; provided that in no event will the performance fee exceed 15 % of the aggregate total return allocable to shares of the Company’s common stock for such year. In addition, if the NAV per share decreases below $ 25 for any class of shares during the measurement period, any subsequent increase in NAV per share to $ 25 (or such other adjusted number) will not be included in the calculation of the performance component with respect to that class. The Advisor pays fees to the Sub-Advisor for the services it delegates to the Sub-Advisor or may direct the Company to pay a portion of the fees otherwise payable to the Advisor directly to the Sub-Advisor. The Company pays the Advisor all new loan origination and administrative fees related to CRE loans held for investment, to the extent that such fees are paid by the borrower. Pursuant to the Sub-Advisory Agreement, the Advisor generally will reallow a portion of loan fees and all administrative fees to the Sub-Advisor. Subject to the Financial Industry Regulatory Authority, Inc. limitations on underwriting compensation, the Company pays the Dealer Manager selling commissions over time as stockholder servicing fees for ongoing services rendered to stockholders by participating broker-dealers or broker-dealers servicing stockholders’ accounts as follows: (a) for Class T shares only, 0.85 % per annum of the NAV of the Class T shares; (b) for Class S shares only, 0.85 % per annum of the aggregate NAV for the Class S shares; and (c) for Class D shares only, 0.25 % per annum of the aggregate NAV for the Class D shares. The Company will cease paying the stockholder servicing fee with respect to any Class T share, Class S share or Class D share held in a stockholder’s account upon the occurrence of certain events. The Company accrues the full cost of the stockholder servicing fee as an offering cost at the time the Company sells Class T, Class S, and Class D shares. The Dealer Manager does not retain any of these fees, all of which are retained by, or reallowed (paid) to, participating broker-dealers and servicing broker-dealers for ongoing stockholder services performed by such broker-dealers. |
Transactions with Related Par_5
Transactions with Related Parties - Summary of Related Party Transactions (Parenthetical) (Details) - Advisor - $ / shares | 3 Months Ended | 57 Months Ended | |
Jul. 01, 2021 | Mar. 31, 2024 | Mar. 31, 2024 | |
Related Party Transaction [Line Items] | |||
Maximum percentage of gross proceeds from issuance of initial public offering | 15% | ||
Percentage of net asset value of assets, paid monthly | 0.104% | ||
Percentage of excess total return | 20% | ||
Net asset value | $ 25 | $ 25 | |
Net asset value description | if the NAV per share decreases below $25 for any class of shares during the measurement period, any subsequent increase in NAV per share to $25 (or such other adjusted number) will not be included in the calculation of the performance component with respect to that class. | ||
Class T Common Stock | |||
Related Party Transaction [Line Items] | |||
Percentage of stockholder servicing fees on net asset value | 0.85% | ||
Class S Common Stock | |||
Related Party Transaction [Line Items] | |||
Aggregate percentage of stockholder servicing fees on net asset value | 0.85% | ||
Class D and Class I Common Stock | |||
Related Party Transaction [Line Items] | |||
Percentage of upfront selling commission | 0% | ||
Percentage of upfront dealer manager fee | 0% | ||
Class D Common Stock | |||
Related Party Transaction [Line Items] | |||
Aggregate percentage of stockholder servicing fees on net asset value | 0.25% | ||
Public Offerings | Class T Common Stock | |||
Related Party Transaction [Line Items] | |||
Percentage of upfront dealer manager fee | 0.50% | ||
Minimum | |||
Related Party Transaction [Line Items] | |||
Minimum percentage to earn performance component of advisory fee | 7% | ||
Maximum | |||
Related Party Transaction [Line Items] | |||
Percentage of aggregate total return | 15% | ||
Maximum | Public Offerings | Class A Common Stock | |||
Related Party Transaction [Line Items] | |||
Percentage of upfront selling commission | 6% | ||
Percentage of upfront dealer manager fee | 1.25% | ||
Percentage of participation dealers fee | 7.25% | ||
Maximum | Public Offerings | Class T Common Stock | |||
Related Party Transaction [Line Items] | |||
Percentage of upfront selling commission | 3% | ||
Percentage of participation dealers fee | 3.50% | ||
Maximum | Public Offerings | Class S Common Stock | |||
Related Party Transaction [Line Items] | |||
Percentage of upfront selling commission | 3.50% |
Equity-Based Compensation - Sum
Equity-Based Compensation - Summary of Total Stock Grants (Details) - Restricted Shares - RSP - Class I Common Stock - USD ($) $ / shares in Units, $ in Thousands | Sep. 29, 2023 | Oct. 03, 2022 | Oct. 14, 2021 | Dec. 01, 2020 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total number of shares granted | 1,722 | 1,534 | 1,477 | 1,393 |
Grant Date Fair Value Per Share | $ 17.42 | $ 19.55 | $ 20.31 | $ 21.54 |
Total Fair Value of Grant | $ 30 | $ 30 | $ 30 | $ 30 |
Proportion of total shares that vest annually | 33.33% | 33.33% | 33.33% | 33.33% |
Year 1 | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Vesting Date | Sep. 29, 2024 | Oct. 03, 2023 | Oct. 14, 2022 | Dec. 01, 2021 |
Year 2 | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Vesting Date | Sep. 29, 2025 | Oct. 03, 2024 | Oct. 14, 2023 | Dec. 01, 2022 |
Year 3 | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Vesting Date | Sep. 29, 2026 | Oct. 03, 2025 | Oct. 14, 2024 | Dec. 01, 2023 |
Equity-Based Compensation - Add
Equity-Based Compensation - Additional Information (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 USD ($) Director shares | Mar. 31, 2023 USD ($) shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of independent directors | Director | 3 | |
RSP | Restricted Shares | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Restricted shares vested | shares | 0 | 0 |
RSP | Restricted Shares | Independent Directors | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Vesting period | 3 years | |
Compensation expense | $ 8 | $ 7 |
Unrecognized compensation cost | $ 45 | |
Weighted average remaining period that compensation expense recognizable | 1 year 2 months 12 days |
Equity-Based Compensation - S_2
Equity-Based Compensation - Summary of Restricted Shares Granted under RSP (Details) - Restricted Shares - RSP - $ / shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Outstanding beginning balance, Shares | 3,237 | |
Vested, Shares | 0 | 0 |
Outstanding ending balance, Shares | 3,237 | |
Outstanding beginning balance, Weighted average grant date fair value per share | $ 18.53 | |
Outstanding ending balance, Weighted average grant date fair value per share | $ 18.53 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Schedule of Carrying Amount and Estimated Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Carrying Amount | ||
Financial assets | ||
Cash and cash equivalents | $ 60,396 | $ 54,143 |
Commercial mortgage loans, net | 692,638 | 722,003 |
Total | 753,034 | 776,146 |
Financial liabilities | ||
Credit facility payable | 9,498 | 9,498 |
Loan participations - sold | 57,226 | 57,226 |
Total | 502,163 | 524,162 |
Carrying Amount | Commercial Mortgage Loans | ||
Financial liabilities | ||
Repurchase agreements | 435,439 | 457,438 |
Estimated Fair Value | ||
Financial assets | ||
Cash and cash equivalents | 60,396 | 54,143 |
Commercial mortgage loans, net | 692,638 | 722,003 |
Total | 753,034 | 776,146 |
Financial liabilities | ||
Credit facility payable | 9,498 | 9,498 |
Loan participations - sold | 57,226 | 57,226 |
Total | 502,163 | 524,162 |
Estimated Fair Value | Commercial Mortgage Loans | ||
Financial liabilities | ||
Repurchase agreements | $ 435,439 | $ 457,438 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Additional Information (Details) - Loan | Mar. 31, 2024 | Dec. 31, 2023 | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Loan term | [1] | 9 months 18 days | 10 months 24 days |
Weighted average | 7.44% | ||
Maximum | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Percentage of exit capitalization rate on impaired loans | 9.10% | ||
Minimum | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Percentage of exit capitalization rate on impaired loans | 5.75% | ||
Commercial Mortgage Loans | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Number of loans impaired | 3 | 2 | |
[1] Weighted average years to maturity excludes allowable extensions on the loans. |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Aug. 20, 2020 | |
Leases [Abstract] | ||
Lessee finance lease description | Prior to September 28, 2023, the Company was the lessee under one ground lease. The ground lease, which commenced on April 1, 1999, was assumed as part of the Renaissance O’Hare property acquired through a deed-in-lieu of foreclosure transaction on August 20, 2020. The lease was classified as a finance lease. Upon the sale of the property on September 28, 2023, the Company was no longer obligated under the ground lease. | |
Finance lease, commencement date | Apr. 01, 1999 | |
Finance lease liability | $ 16,827 | |
Finance lease, right-of-use asset | $ 5,549 | |
Finance lease liability, interest rate | 11.37% |
Leases - Summary of Finance Lea
Leases - Summary of Finance Lease Cost (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Leases [Abstract] | |
Amortization of right-of-use assets | $ 18 |
Interest on lease liabilities | 497 |
Total finance lease cost | $ 515 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) | 1 Months Ended | |||||||||||||||
Apr. 29, 2024 | Mar. 31, 2024 | Feb. 29, 2024 | Jan. 30, 2024 | Dec. 31, 2023 | Nov. 30, 2023 | Oct. 31, 2023 | Sep. 30, 2023 | Aug. 31, 2023 | Jul. 31, 2023 | Jun. 30, 2023 | May 31, 2023 | Apr. 30, 2023 | Mar. 31, 2023 | Feb. 28, 2023 | Jan. 31, 2023 | |
Subsequent Event [Line Items] | ||||||||||||||||
Distributions record date | Mar. 31, 2024 | Feb. 29, 2024 | Jan. 30, 2024 | Dec. 31, 2023 | Nov. 30, 2023 | Oct. 31, 2023 | Sep. 30, 2023 | Aug. 31, 2023 | Jul. 31, 2023 | Jun. 30, 2023 | May 31, 2023 | Apr. 30, 2023 | Mar. 31, 2023 | Feb. 28, 2023 | Jan. 31, 2023 | |
Subsequent Event | Common Stock | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Distributions declared date | Apr. 29, 2024 | |||||||||||||||
Distributions record date | Apr. 30, 2024 | |||||||||||||||
Distributions paid date | May 17, 2024 |
Subsequent Events -Schedule of
Subsequent Events -Schedule of Declared Distributions for Class of Common Stock (Details) - $ / shares | 3 Months Ended | ||
Apr. 29, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | |
Class P Common Stock | |||
Subsequent Event [Line Items] | |||
Aggregate gross distributions declared per share | $ 0.3126 | $ 0.3126 | |
Class A Common Stock | |||
Subsequent Event [Line Items] | |||
Aggregate gross distributions declared per share | 0.3126 | 0.3126 | |
Class T Common Stock | |||
Subsequent Event [Line Items] | |||
Aggregate gross distributions declared per share | 0.3126 | 0.3126 | |
Stockholder servicing fee per share | 0.036 | 0.0409 | |
Class D Common Stock | |||
Subsequent Event [Line Items] | |||
Aggregate gross distributions declared per share | 0.3126 | 0.3126 | |
Stockholder servicing fee per share | 0.0106 | 0.0121 | |
Class I Common Stock | |||
Subsequent Event [Line Items] | |||
Aggregate gross distributions declared per share | $ 0.3126 | $ 0.3126 | |
Subsequent Event | Class P Common Stock | |||
Subsequent Event [Line Items] | |||
Aggregate gross distributions declared per share | $ 0.1042 | ||
Net distributions declared per share | 0.1042 | ||
Subsequent Event | Class A Common Stock | |||
Subsequent Event [Line Items] | |||
Aggregate gross distributions declared per share | 0.1042 | ||
Net distributions declared per share | 0.1042 | ||
Subsequent Event | Class T Common Stock | |||
Subsequent Event [Line Items] | |||
Aggregate gross distributions declared per share | 0.1042 | ||
Stockholder servicing fee per share | 0.0117 | ||
Net distributions declared per share | 0.0925 | ||
Subsequent Event | Class D Common Stock | |||
Subsequent Event [Line Items] | |||
Aggregate gross distributions declared per share | 0.1042 | ||
Stockholder servicing fee per share | 0.0035 | ||
Net distributions declared per share | 0.1007 | ||
Subsequent Event | Class I Common Stock | |||
Subsequent Event [Line Items] | |||
Aggregate gross distributions declared per share | 0.1042 | ||
Net distributions declared per share | $ 0.1042 |