Tremont Mortgage Trust (TRMT) 10-Q 3 Nov 20 2020 Q3 Quarterly report Financial data

Cover Page

Cover Page - shares	9 Months Ended
	Sep. 30, 2020	Nov. 02, 2020
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2020
Document Transition Report	false
Entity File Number	001-38199
Entity Registrant Name	Tremont Mortgage Trust
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	82-1719041
Entity Address, Address Line One	Two Newton Place
Entity Address, Address Line Two	255 Washington Street
Entity Address, Address Line Three	Suite 300
Entity Address, City or Town	Newton
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02458-1634
City Area Code	617
Local Phone Number	796-8317
Title of 12(b) Security	Common Shares of Beneficial Interest
Trading Symbol	TRMT
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Smaller Business Entity	true
Emerging Growth Company	true
Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		8,303,254
Entity Central Index Key	0001708405
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
ASSETS
Cash and cash equivalents	$ 11,036	$ 8,732
Restricted cash	0	143
Loans held for investment, net	280,219	242,078
Accrued interest receivable	946	755
Prepaid expenses and other assets	40	221
Total assets	292,241	251,929
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable, accrued liabilities and deposits	658	1,011
Master repurchase facility, net	200,501	164,694
Due to related persons	19	3
Total liabilities	201,178	165,708
Commitments and contingencies
Shareholders' equity:
Common shares of beneficial interest, $0.01 par value per share; 25,000,000 shares authorized; 8,303,254 and 8,239,610 shares issued and outstanding, respectively	83	82
Additional paid in capital	89,035	88,869
Cumulative net income	8,590	1,937
Cumulative distributions	(6,645)	(4,667)
Total shareholders’ equity	91,063	86,221
Total liabilities and shareholders' equity	$ 292,241	$ 251,929

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock shares authorized (in shares)	25,000,000	25,000,000
Common stock shares issued (in shares)	8,303,254	8,239,610
Common stock shares outstanding (in shares)	8,303,254	8,239,610

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
INCOME FROM INVESTMENTS:
Interest income from investments	$ 4,632	$ 4,959	$ 13,412	$ 11,872
Less: interest and related expenses	(1,242)	(1,992)	(4,367)	(5,572)
Income from investments, net	3,390	2,967	9,045	6,300
OTHER EXPENSES:
General and administrative expenses	576	541	1,640	1,662
Reimbursement of shared services expenses	189	370	752	1,110
Total expenses	765	911	2,392	2,772
Net income	$ 2,625	$ 2,056	$ 6,653	$ 3,528
Weighted average common shares outstanding - basic and diluted (in shares)	8,190	8,156	8,179	5,583
Net income per common share - basic and diluted (in dollars per share)	$ 0.32	$ 0.25	$ 0.81	$ 0.63

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY - USD ($) $ in Thousands	Total	Common Shares	Additional Paid In Capital	Cumulative Net Income (Loss)	Cumulative Distributions
Beginning balance (in shares) at Dec. 31, 2018		3,179,000
Beginning balance at Dec. 31, 2018	$ 59,668	$ 32	$ 62,540	$ (2,904)	$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share grants	35		35
Net income	578			578
Distributions	(350)				(350)
Ending balance (in shares) at Mar. 31, 2019		3,179,000
Ending balance at Mar. 31, 2019	59,931	$ 32	62,575	(2,326)	(350)
Beginning balance (in shares) at Dec. 31, 2018		3,179,000
Beginning balance at Dec. 31, 2018	59,668	$ 32	62,540	(2,904)	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	3,528
Ending balance (in shares) at Sep. 30, 2019		8,240,000
Ending balance at Sep. 30, 2019	86,679	$ 82	88,827	624	(2,854)
Beginning balance (in shares) at Mar. 31, 2019		3,179,000
Beginning balance at Mar. 31, 2019	59,931	$ 32	62,575	(2,326)	(350)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share grants (in shares)		15,000
Share grants	185		185
Share repurchases (in shares)		(1,000)
Share repurchases	(6)		(6)
Net income	894			894
Distributions	(702)				(702)
Issuance of shares, net (in shares)		5,000,000
Issuance of shares, net	26,074	$ 50	26,024
Ending balance (in shares) at Jun. 30, 2019		8,193,000
Ending balance at Jun. 30, 2019	86,376	$ 82	88,778	(1,432)	(1,052)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share grants (in shares)		53,000
Share grants	80		80
Share repurchases (in shares)		(6,000)
Share repurchases	(31)		(31)
Net income	2,056			2,056
Distributions	(1,802)				(1,802)
Ending balance (in shares) at Sep. 30, 2019		8,240,000
Ending balance at Sep. 30, 2019	$ 86,679	$ 82	88,827	624	(2,854)
Beginning balance (in shares) at Dec. 31, 2019	8,239,610	8,240,000
Beginning balance at Dec. 31, 2019	$ 86,221	$ 82	88,869	1,937	(4,667)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share grants	42		42
Share repurchases (in shares)		(1,000)
Share repurchases	(2)		(2)
Net income	1,666			1,666
Distributions	(1,895)				(1,895)
Ending balance (in shares) at Mar. 31, 2020		8,239,000
Ending balance at Mar. 31, 2020	$ 86,032	$ 82	88,909	3,603	(6,562)
Beginning balance (in shares) at Dec. 31, 2019	8,239,610	8,240,000
Beginning balance at Dec. 31, 2019	$ 86,221	$ 82	88,869	1,937	(4,667)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	6,653
Distributions	$ (1,978)
Ending balance (in shares) at Sep. 30, 2020	8,303,254	8,303,000
Ending balance at Sep. 30, 2020	$ 91,063	$ 83	89,035	8,590	(6,645)
Beginning balance (in shares) at Mar. 31, 2020		8,239,000
Beginning balance at Mar. 31, 2020	86,032	$ 82	88,909	3,603	(6,562)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share grants (in shares)		15,000
Share grants	72	$ 1	71
Share repurchases	(1)		(1)
Net income	2,362			2,362
Ending balance (in shares) at Jun. 30, 2020		8,254,000
Ending balance at Jun. 30, 2020	88,465	$ 83	88,979	5,965	(6,562)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share grants (in shares)		56,000
Share grants	76		76
Share repurchases (in shares)		(7,000)
Share repurchases	(20)		(20)
Net income	2,625			2,625
Distributions	$ (83)				(83)
Ending balance (in shares) at Sep. 30, 2020	8,303,254	8,303,000
Ending balance at Sep. 30, 2020	$ 91,063	$ 83	$ 89,035	$ 8,590	$ (6,645)

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 6,653	$ 3,528
Adjustments to reconcile net income to net cash provided by operating activities:
Share based compensation	190	300
Amortization of deferred financing costs	364	502
Amortization of loan origination and exit fees	(1,441)	(1,333)
Changes in operating assets and liabilities:
Accrued interest receivable and interest advances	(933)	(367)
Prepaid expenses and other assets	181	136
Accounts payable, accrued liabilities and deposits	(353)	(176)
Due to related persons	16	(101)
Net cash provided by operating activities	4,677	2,489
CASH FLOWS FROM INVESTING ACTIVITIES:
Origination of loans held for investment	(25,738)	(119,062)
Additional funding of loans held for investment	(12,309)	(4,835)
Repayment of loans held for investment	2,089	53,610
Net cash used in investing activities	(35,958)	(70,287)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from master repurchase facility	36,873	92,983
Repayments under master repurchase facility	(1,358)	(34,312)
Proceeds from RMR credit agreement	0	14,220
Repayment of RMR credit agreement	0	(14,220)
Repayment of note payable	0	(31,690)
Payments of deferred financing costs	(72)	(347)
Proceeds from issuance of common shares, net	0	26,074
Repurchase of common shares	(23)	(37)
Distributions	(1,978)	(2,854)
Net cash provided by financing activities	33,442	49,817
Increase (decrease) in cash, cash equivalents and restricted cash	2,161	(17,981)
Cash, cash equivalents and restricted cash at beginning of period	8,875	27,335
Cash, cash equivalents and restricted cash at end of period	11,036	9,354
SUPPLEMENTAL DISCLOSURES:
Interest paid	4,059	4,974
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows	$ 11,036	$ 9,354

Basis of Presentation

Basis of Presentation	9 Months Ended
	Sep. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	Basis of Presentation The accompanying condensed consolidated financial statements of Tremont Mortgage Trust and its consolidated subsidiaries are unaudited. Certain information and disclosures required by U.S. generally accepted accounting principles, or GAAP, for complete financial statements have been condensed or omitted. We believe the disclosures made are adequate to make the information presented not misleading. However, the accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes contained in our Annual Report on Form 10-K for the year ended December 31, 2019, or our Annual Report. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement of results for the interim period have been included. All intercompany transactions and balances with or among our consolidated subsidiaries have been eliminated. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect reported amounts. Actual results could differ from those estimates. Significant estimates in the accompanying condensed consolidated financial statements include the fair value of financial instruments.

Summary of Significant Accounti

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2020
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Summary of Significant Accounting Policies Consolidation. For each investment we make, we evaluate whether consolidation of the borrower's financial statements is required under GAAP. GAAP addresses the application of consolidation principles to an investor with a controlling financial interest. Variable interest entities, or VIEs, are subject to consolidation under GAAP if their equity investors do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties, are not able to direct the entity’s most significant activities or are not exposed to the entity’s losses or entitled to its residual returns. VIEs are required to be consolidated by their primary beneficiaries, which are the entities with the power to direct the activities which are most significant to the economic performance of the VIE. These determinations often involve complex and subjective analyses. As of September 30, 2020, we concluded that our investments were not VIEs. Cash, Cash Equivalents and Restricted Cash. We consider highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. Restricted cash primarily consists of deposit proceeds from potential borrowers when originating loans, which may be returned to the applicable borrower upon the closing of the loan, after deducting any transaction costs paid by us for the benefit of such borrower. Repurchase Agreements. Loans financed through repurchase agreements are treated as collateralized financing transactions, unless they meet sales treatment under GAAP. Pursuant to GAAP treatment of collateralized financing transactions, loans financed through repurchase agreements remain on our consolidated balance sheet as assets, and cash received from the purchasers is recorded on our consolidated balance sheet as liabilities. Interest paid in accordance with repurchase agreements is recorded as interest expense. Loans Held for Investment. Generally, our loans are classified as held for investment based upon our intent and ability to hold them until maturity. Loans that are held for investment are carried at cost, net of unamortized loan origination and accreted exit fees that are required to be recognized in the carrying value of the loans in accordance with GAAP, unless the loans are deemed to be impaired. Loans that we have a plan to sell or liquidate are held at the lower of cost or fair value less cost to sell. We evaluate each of our loans for impairment at least quarterly by assessing a variety of risk factors in relation to each loan and assigning a risk rating to each loan based on those factors. Factors considered in these evaluations include, but are not limited to, property type, geographic and local market dynamics, physical condition, leasing and tenant profile, projected cash flow, risk of loss, current loan to value ratio, or LTV, debt yield, collateral performance, structure, exit plan and sponsorship. Loans are rated “1” (lower risk) through “5” (impaired/loss likely) as defined below: "1" lower risk—Criteria reflects a sponsor having a strong financial condition and low credit risk and our evaluation of management's experience; collateral performance exceeding performance metrics included in the business plan or credit underwriting; and the property demonstrating stabilized occupancy and/or market rates, resulting in strong current cash flow and net operating income and/or having a very low LTV. "2" average risk—Criteria reflects a sponsor having a stable financial condition and our evaluation of management's experience; collateral performance meeting or exceeding substantially all performance metrics included in the business plan or credit underwriting; and the property demonstrating improved occupancy at market rents, resulting in sufficient current cash flow and/or having a low LTV. "3" acceptable risk—Criteria reflects a sponsor having a history of repaying loans at maturity and meeting its credit obligations and our evaluation of management's experience; collateral performance expected to meet performance metrics included in the business plan or credit underwriting; and the property having a moderate LTV. New loans and loans with a limited history will typically be assigned this rating and will be adjusted to other levels from time to time as appropriate. "4" higher risk—Criteria reflects a sponsor having a history of unresolved missed or late payments, maturity extensions and difficulty timely fulfilling its credit obligations and our evaluation of management's experience; collateral performance failing to meet the business plan or credit underwriting; the existence of a risk of default possibly leading to a loss and/or potential weaknesses that deserve management’s attention; and/or the property having a high LTV. "5" impaired/loss likely—Criteria reflects a very high risk of realizing a principal loss or having incurred a principal loss; a sponsor having a history of default payments, trouble fulfilling its credit obligations, deeds in lieu of foreclosures, and/or bankruptcies; collateral performance is significantly worse than performance metrics included in the business plan; loan covenants or performance milestones having been breached or not attained; timely exit via sale or refinancing being uncertain; and/or the property having a very high LTV. See Note 4 for further information regarding our current loan portfolio’s assessment under our internal risk rating policy. Impairment occurs when it is deemed probable that we will not be able to collect all amounts due under a loan according to its contractual terms. Impairment will then be measured based on the estimated fair value of the underlying collateral, net of any costs we expect to incur to realize that value. The determination of this estimated fair value involves judgments and assumptions based on objective and subjective factors. Consideration will be given to various factors, such as business plans, property occupancies, tenant profiles, rental rates, operating expenses and borrowers’ repayment plans, among others, and will require significant judgments regarding certain circumstances, such as guarantees, if any. Upon measurement of an impairment, we will record an allowance to reduce the carrying value of the loan accordingly, and record a corresponding charge to net income in our condensed consolidated statements of operations. Fair Value of Financial Instruments. Financial Accounting Standards Board, or FASB, Accounting Standards Codification , or ASC, Topic 820-10, Fair Value Measurements and Disclosures , defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands the required disclosure regarding fair value measurements. ASC Topic 820-10 defines fair value as the price that would be received for a financial instrument in a current sale, which assumes an orderly transaction between market participants on the measurement date. We determine the estimated fair value of financial assets and liabilities using the three-tier fair value hierarchy established by GAAP, which prioritizes the inputs used in measuring fair value. GAAP establishes market based or observable inputs as the preferred source of values followed by valuation models using management assumptions in the absence of market inputs. The three levels of inputs that may be used to measure fair value are as follows: Level I—Inputs include quoted prices in active markets for identical assets or liabilities that we have the ability to access. Level II—Inputs include quoted prices in markets that are less active or inactive or for which all significant inputs are observable, either directly or indirectly. Level III—Inputs include unobservable prices and are supported by little or no market activity and are significant to the overall fair value measurement. Loan Deferred Fees. Loan origination and exit fees are reflected in loans held for investment, net, in our condensed consolidated balance sheets and include fees charged to borrowers. These fees are amortized and accreted, respectively, into interest income over the life of the related loans held for investment. Deferred Financing Costs. Costs incurred in connection with financings are capitalized and recorded as an offset to the related liability and amortized over the respective financing terms and are recorded in our consolidated statements of operations as a component of interest and related expenses. At September 30, 2020, we had approximately $550 of capitalized financing costs, net of amortization. Net Earnings Per Common Share. We calculate basic earnings per common share, or EPS, by dividing net income by the weighted average number of common shares outstanding during the period. We calculate diluted net EPS using the more dilutive of the two-class method or the treasury stock method. Revenue Recognition. Interest income related to our first mortgage whole loans secured by commercial real estate, or CRE, will generally be accrued based on the coupon rates applied to the outstanding principal balance of such loans. Fees, premiums and discounts, if any, will be amortized or accreted into interest income over the remaining lives of the loans using the effective interest method, as adjusted for any prepayments. If a loan's interest or principal payments are not paid when due and there is uncertainty that such payments will be collected, the loan may be categorized as non-accrual and no interest will be recorded unless it is collected. When all overdue payments are collected and, in our judgment, a loan is likely to remain current, it may be re-categorized as accrual.

Recent Accounting Pronouncement

Recent Accounting Pronouncements	9 Months Ended
	Sep. 30, 2020
Accounting Policies [Abstract]
Recent Accounting Pronouncements	Recent Accounting Pronouncements In June 2016, FASB issued Accounting Standards Update, or ASU, No. 2016-13, Financial Instruments - Credit Losses (Topic 326) : Measurement of Credit Losses on Financial Instruments , which requires that entities use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowance for credit losses. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. ASU No. 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. As an emerging growth company that has opted to take advantage of the extended transition period, we expect to adopt ASU No. 2016-13 on January 1, 2023. We are currently assessing the potential impact the adoption of ASU No. 2016-13 will have on our condensed consolidated financial statements.

Loans Held for Investment

Loans Held for Investment	9 Months Ended
	Sep. 30, 2020
Receivables [Abstract]
Loans Held for Investment	Loans Held for Investment We originate first mortgage whole loans secured by middle market and transitional CRE, which are generally to be held as long term investments. We funded our existing loan portfolio using cash on hand and advancements under our master repurchase facility with Citibank, N.A., or Citibank, or our Master Repurchase Facility, and other debt financing. See Note 5 for further information regarding our Master Repurchase Facility. The table below details overall statistics for our loan portfolio as of September 30, 2020 and December 31, 2019: Balance at September 30, 2020 Balance at December 31, 2019 Number of loans 14 12 Total loan commitments $ 293,961 $ 260,167 Unfunded loan commitments (1) $ 13,974 $ 17,268 Principal balance $ 279,987 $ 242,899 Unamortized net deferred origination and exit fees $ 232 $ (821) Carrying value $ 280,219 $ 242,078 Weighted average coupon rate 5.70 % 5.76 % Weighted average all in yield (2) 6.38 % 6.41 % Weighted average maximum maturity (years) (3) 2.9 3.6 Weighted average LTV (4) 67 % 70 % (1) Unfunded loan commitments are primarily used to finance property and building improvements and leasing capital and are generally funded over the term of the loan. (2) All in yield represents the yield on a loan, excluding any repurchase debt funding applicable to the loan and including amortization of deferred fees over the initial term of the loan. (3) Maximum maturity assumes all borrower loan extension options have been exercised, which options are subject to the borrower meeting certain conditions. (4) LTV represents the initial loan amount divided by the underwritten in-place value at closing. The table below details our loan activities during the three months ended September 30, 2020: Principal Balance Deferred Fees Carrying Value Balance at June 30, 2020 $ 278,484 $ (259) $ 278,225 Additional funding 3,592 — 3,592 Repayments (2,089) — (2,089) Net amortization of deferred fees — 491 491 Balance at September 30, 2020 $ 279,987 $ 232 $ 280,219 The table below details our loan activities during the nine months ended September 30, 2020: Principal Balance Deferred Fees Carrying Value Balance at December 31, 2019 $ 242,899 $ (821) $ 242,078 Additional funding 13,051 — 13,051 Originations 26,126 (388) 25,738 Repayments (2,089) — (2,089) Net amortization of deferred fees — 1,441 1,441 Balance at September 30, 2020 $ 279,987 $ 232 $ 280,219 In July 2020, the borrower under our loan related to a retail property located in Coppell, TX sold a parcel of land that was a part of the property securing the loan. The borrower used $2,089 of the sale proceeds to repay part of the outstanding principal balance under the loan which also reduced the committed principal by the same amount and we allowed the borrower to use the remaining $100 of sale proceeds to increase the reserve for its future debt service obligation payments owed to us under the loan. We used $1,358 of these repayment proceeds to repay a part of the outstanding balance under our Master Repurchase Facility. In October 2020, the borrower under our loan related to a retail property located in Paradise Valley, AZ exercised its right and satisfied the applicable conditions to extend the maturity date of the loan by one year to November 30, 2021 pursuant to the terms of the loan agreement. The tables below detail the property type and geographic location of the properties securing the loans in our portfolio as of September 30, 2020 and December 31, 2019: September 30, 2020 December 31, 2019 Property Type Number of Loans Carrying Value Percentage of Value Number of Loans Carrying Value Percentage of Value Office 5 $ 93,480 33 % 4 $ 71,446 30 % Multifamily 3 70,107 25 % 3 68,911 28 % Industrial 2 48,951 17 % 1 34,838 14 % Retail 3 43,802 16 % 3 43,782 18 % Hotel 1 23,879 9 % 1 23,101 10 % 14 $ 280,219 100 % 12 $ 242,078 100 % September 30, 2020 December 31, 2019 Geographic Location Number of Loans Carrying Value Percentage of Value Number of Loans Carrying Value Percentage of Value East 5 $ 105,099 37 % 4 $ 90,047 37 % South 5 103,958 37 % 5 103,295 43 % Midwest 3 60,496 22 % 2 39,722 16 % West 1 10,666 4 % 1 9,014 4 % 14 $ 280,219 100 % 12 $ 242,078 100 % Loan Risk Ratings We evaluate each of our loans for impairment at least quarterly by assessing a variety of risk factors in relation to each loan and assigning a risk rating to each loan based on those factors. The following table allocates the carrying value of our loan portfolio at September 30, 2020 and December 31, 2019 based on our internal risk rating policy: September 30, 2020 December 31, 2019 Risk Rating Number of Loans Carrying Value Number of Loans Carrying Value 1 — $ — — $ — 2 1 24,589 1 24,462 3 6 128,037 11 217,616 4 7 127,593 — — 5 — — — — 14 $ 280,219 12 $ 242,078 The weighted average risk rating of our loans by carrying value was 3.4 and 2.9 as of September 30, 2020 and December 31, 2019, respectively. The COVID-19 pandemic has negatively impacted some of our borrowers’ business operations or tenants, particularly in the cases of our retail and hospitality collateral, which are the types of properties that have been most negatively impacted by the pandemic. We expect that those negative impacts may continue and may apply to other borrowers and/or their tenants. Therefore, certain of our borrowers’ business plans will likely take longer to execute than initially expected and certain of our borrowers may be unable to pay their debt service obligations owed and due to us as currently scheduled or at all. As of September 30, 2020, we had seven loans representing 46% of the carrying value of our loan portfolio with a loan risk rating of “4” or “higher risk." Six of these loans were downgraded from a risk rating of "3" or "acceptable risk" during the three months ended March 31, 2020, and the seventh loan was downgraded from a risk rating of "3" or "acceptable risk" during the three months ended September 30, 2020. We did not have any impaired loans or nonaccrual loans as of September 30, 2020 or December 31, 2019. See Note 2 for further information regarding our loan risk ratings.

Debt Agreements

Debt Agreements	9 Months Ended
	Sep. 30, 2020
Debt Disclosure [Abstract]
Debt Agreements	Debt Agreements The table below is an overview of our debt agreements that provided financing for our loans held for investment: Debt Obligation Weighted Average Collateral Maximum Facility Size Principal Balance Carrying Value Coupon Rate Remaining Maturity (1)(2) (years) Principal Balance Fair Value (3) September 30, 2020: Master repurchase facility $ 213,482 $ 201,051 $ 200,501 L + 2.00% 0.9 $ 279,987 $ 277,457 December 31, 2019: Master repurchase facility $ 213,482 $ 165,536 $ 164,694 L + 1.99% 1.6 $ 242,899 $ 242,763 (1) The weighted average remaining maturity is determined using the current maturity date of the corresponding loans, assuming no borrower loan extension options have been exercised. (2) On October 30, 2020, we amended the agreements that govern our Master Repurchase Facility, or collectively, as amended, our Master Repurchase Agreement to, among other things, extend the expiration date by one year to November 6, 2022, subject to early termination as provided for in our Master Repurchase Agreement. (3) See Note 6 for further discussion of our financial assets and liabilities not carried at fair value. Under our Master Repurchase Agreement, the initial purchase price paid by Citibank for each purchased asset is up to 75% of the lesser of the market value of the purchased asset or the unpaid principal balance of such purchased asset, subject to Citibank’s approval. Upon the repurchase of a purchased asset, we are required to pay Citibank the outstanding purchase price of the purchased asset, accrued interest and all accrued and unpaid expenses of Citibank relating to such purchased asset. The price differential (or interest rate) relating to a purchased asset is equal to LIBOR plus a premium of 200 to 250 basis points, determined by the yield of the purchased asset and the property type of the purchased asset’s real estate collateral. Citibank has the discretion under our Master Repurchase Agreement to make advancements at margins higher than 75% and at premiums of less than 200 basis points. The weighted average interest rate for advancements under our Master Repurchase Facility was 2.17% and 4.18% for the three months ended September 30, 2020 and 2019, respectively, and 2.70% and 4.38% for the nine months ended September 30, 2020 and 2019, respectively. For the three months ended September 30, 2020 and 2019, we recorded interest expense of $1,120 and $1,563, respectively, and $4,003 and $4,126 for the nine months ended September 30, 2020 and 2019, respectively, in connection with our Master Repurchase Facility. In connection with our Master Repurchase Agreement, we entered into a guaranty, or, as amended, the Guaranty, which requires us to guarantee 25% of our subsidiary's prompt and complete payment of the purchase price, purchase price differential and any costs and expenses of Citibank related to our Master Repurchase Agreement. The Guaranty also requires us to comply with customary financial covenants, which include the maintenance of a minimum tangible net worth, minimum cash liquidity, a total indebtedness to tangible net worth ratio and a minimum interest coverage ratio. These maintenance provisions provide Citibank with the right, in certain circumstances related to a credit event, as defined in our Master Repurchase Agreement, to re-determine the value of purchased assets. Where a decline in the value of purchased assets has resulted in a margin deficit, Citibank may require us to eliminate such margin deficit through a combination of purchased asset repurchases and cash transfers to Citibank, subject to Citibank's approval. As of September 30, 2020, we have not received a margin call under our Master Repurchase Agreement. Our Master Repurchase Agreement also provides for acceleration of the date of repurchase of the purchased assets and Citibank’s liquidation of the purchased assets upon the occurrence and continuation of certain events of default, including a change of control of us, which includes our Tremont Realty Advisors LLC, or our Manager, ceasing to act as our sole manager or to be a wholly owned subsidiary of The RMR Group LLC, or RMR LLC. As of September 30, 2020, we were in compliance with all of the covenants and other terms under our Master Repurchase Agreement and the Guaranty. From July 2018 until August 2019, we were a party to a term loan facility, in the form of a note payable, with Texas Capital Bank, National Association, or the TCB note payable. Following our repayment of the $31,790 then outstanding principal and accrued interest under the TCB note payable, the TCB note payable terminated in accordance with its terms. We recorded $155 and $891 of interest expense for the three and nine months ended September 30, 2019, respectively, in connection with the TCB note payable. From February 2019 until May 2019, we were a party to a credit agreement with our Manager as lender, or the RMR Credit Agreement. Following our repayment of the $14,220 balance then outstanding under the RMR Credit Agreement, the RMR Credit Agreement was terminated. We recorded $39 of interest expense for the nine months ended September 30, 2019, in connection with the RMR Credit Agreement. At September 30, 2020, our outstanding advancements under our Master Repurchase Facility had the following remaining maturities: Year Principal Payments (1) 2020 $ 29,680 2021 171,371 2022 — 2023 — 2024 — $ 201,051 (1) The allocation of our outstanding advancements under our Master Repurchase Facility is based on the current maturity date of each loan investment with respect to which the individual borrowing relates assuming no borrower loan extension options have been exercised.

Fair Value of Financial Instrum

Fair Value of Financial Instruments	9 Months Ended
	Sep. 30, 2020
Fair Value Disclosures [Abstract]
Fair Value of Financial Instruments	Fair Value of Financial Instruments ASC 820, Fair Value Measurements , establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities (Level I), and the lowest priority to unobservable inputs (Level III). A financial asset’s or financial liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. As of September 30, 2020 and December 31, 2019, the carrying values of cash and cash equivalents, restricted cash and accounts payable approximated their fair values due to the short term nature of these financial instruments. As of December 31, 2019, the outstanding principal balances under our Master Repurchase Facility approximated their fair values, as interest was based on floating rates based on LIBOR plus a spread, and the spread was consistent with those demanded by the market. We estimate the fair values of our loans held for investment and outstanding principal balances under our Master Repurchase Facility by using Level III inputs, including discounted cash flow analyses and currently prevailing market terms as of the measurement date, determined by significant unobservable market inputs, which include holding periods, discount rates based on LTV, property types and loan pricing expectations which are corroborated by a comparison with other market participants to determine the appropriate market spread to add to the one month LIBOR (Level III inputs as defined in the fair value hierarchy under GAAP). The table below provides information regarding financial assets and liabilities not carried at fair value on a recurring basis in our condensed consolidated balance sheets: September 30, 2020 December 31, 2019 Carrying Value Fair Value Carrying Value Fair Value Financial assets Loans held for investment $ 280,219 $ 277,457 $ 242,078 $ 242,763 Financial liabilities Master Repurchase Facility $ 200,501 $ 200,184 $ 164,694 $ 165,536

Shareholders' Equity

Shareholders' Equity	9 Months Ended
	Sep. 30, 2020
Equity [Abstract]
Shareholders' Equity	Shareholders' Equity Common Share Awards: On May 13, 2020, in accordance with our Trustee compensation arrangements, we awarded to each of our five Trustees 3,000 of our common shares, valued at $1.92 per common share, the closing price of our common shares on Nasdaq that day. On September 17, 2020, we awarded under our equity compensation plan an aggregate of 56,600 of our common shares, valued at $2.92 per share, the closing price of our common shares on Nasdaq on that day, to our officers and certain other employees of our Manager and of RMR LLC. Common Share Purchases: During the nine months ended September 30, 2020, we purchased our common shares from certain of our officers and certain former and current officers and employees of our Manager and of RMR LLC in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares, valued at the closing price of our common shares on Nasdaq on the purchase dates, as follows: Date Purchased Number of Shares Price per Share January 9, 2020 384 $ 5.33 June 30, 2020 390 $ 3.08 September 21, 2020 7,182 $ 2.77 Distributions: During the nine months ended September 30, 2020, we declared and paid a quarterly distribution to common shareholders as follows: Record Date Payment Date Distribution Per Share Total Distribution January 27, 2020 February 20, 2020 $ 0.22 $ 1,813 April 10, 2020 May 21, 2020 0.01 82 July 27, 2020 August 20, 2020 0.01 83 $ 0.24 $ 1,978 On October 15, 2020, we declared a quarterly distribution of $0.01 per common share for the third quarter of 2020, or approximately $83, to shareholders of record on October 26, 2020. We expect to pay this distribution on or about November 19, 2020.

Management Agreement with our M

Management Agreement with our Manager	9 Months Ended
	Sep. 30, 2020
Related Party Transactions [Abstract]
Management Agreement with our Manager	Management Agreement with our Manager We have no employees. The personnel and various services we require to operate our business are provided to us by our Manager pursuant to a management agreement, which provides for the day to day management of our operations by our Manager, subject to the oversight and direction of our Board of Trustees. We did not recognize any base management or incentive fees for the three or nine months ended September 30, 2020 or 2019. Our Manager has waived any base management or incentive fees otherwise due and payable by us under our management agreement for and through the periods ending December 31, 2020. If our Manager had not waived these base management and incentive fees, we would have recognized $332 and $322 of base management fees for the three months ended September 30, 2020 and 2019, respectively, $975 and $812 of base management fees for the nine months ended September 30, 2020 and 2019, respectively, and $129 and $164 of incentive fees for the three and nine months ended September 30, 2020. No incentive fees would have been paid or payable for either of the three or nine months ended September 30, 2019. Our Manager, and not us, is responsible for the costs of its employees who provide services to us, including the cost of our Manager’s personnel who originate our loans, unless any such payment or reimbursement is specifically approved by a majority of our Independent Trustees, is a shared services cost or relates to awards made under any equity compensation plan adopted by us. We are required to pay or to reimburse our Manager and its affiliates for all other costs and expenses of our

Related Person Transactions

Related Person Transactions	9 Months Ended
	Sep. 30, 2020
Related Party Transactions [Abstract]
Related Person Transactions	Related Person Transactions We have relationships and historical and continuing transactions with our Manager, RMR LLC, The RMR Group Inc., or RMR Inc., and others related to them, including other companies to which RMR LLC or its subsidiaries provide management services and some of which have trustees, directors or officers who are also our Trustees or officers. Our Manager is a subsidiary of RMR LLC, which is a majority owned subsidiary of RMR Inc., and RMR Inc. is the managing member of RMR LLC. RMR LLC provides certain shared services to our Manager that are applicable to us, and we reimburse our Manager for the amounts it pays for those services. One of our Managing Trustees, Adam Portnoy, is the sole trustee, an officer and the controlling shareholder of ABP Trust, which is the controlling shareholder of RMR Inc., and he is also a director of our Manager, a managing director and the president and chief executive officer of RMR Inc., and an officer and employee of RMR LLC. David M. Blackman, our other Managing Trustee and our President and Chief Executive Officer, also serves as a director and the president, and chief executive officer of our Manager and is an officer and employee of RMR LLC. Mr. Blackman has announced his decision to retire and, therefore, resign as our Managing Trustee, President and Chief Executive Officer and as a director, the president and chief executive officer of our Manager, effective December 31, 2020. In replacement of Mr. Blackman, Matthew P. Jordan has been elected as our Managing Trustee and Thomas L. Lorenzini has been appointed our President, each effective January 1, 2021. Also effective January 1, 2021, Mr. Jordan has been elected as a director and the president and chief executive officer of our Manager in replacement of Mr. Blackman. Mr. Jordan is an officer of RMR Inc. and he and Mr. Lorenzini are both officers of RMR LLC and our Manager. In addition, each of our other officers is also an officer and/or employee of our Manager or RMR LLC. Our Independent Trustees also serve as independent directors or independent trustees of other public companies to which RMR LLC or its subsidiaries provide management services. Adam Portnoy serves as the chair of the boards of trustees and boards of directors of several of these public companies and as a managing director or managing trustee of all of these companies and other officers of RMR LLC, including Mr. Blackman and certain of our other officers, serve as managing trustees, managing directors or officers of certain of these companies. In addition, officers of our Manager, RMR LLC and RMR Inc. serve as our officers and officers of other companies to which RMR LLC or its subsidiaries provide management services. See Note 7 for information relating to the annual share awards we made in September 2020 to our officers and certain other employees of our Manager and RMR LLC and common shares we purchased from certain of our officers and employees of our Manager and RMR LLC in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares to them. We include amounts recognized as expense for share awards to employees of our Manager or RMR LLC, as applicable, in general and administrative expenses in our condensed consolidated statements of operations. Our Manager, Tremont Realty Advisors LLC . We have a management agreement with our Manager to provide management services to us. See Note 8 for further information regarding our management agreement with our Manager. Our Manager is our largest shareholder and, as of September 30, 2020, owned 1,600,100 of our common shares or approximately 19.3% of our outstanding common shares. Until May 23, 2019, we were a party to the RMR Credit Agreement. For further information about these and other such relationships and certain other related person transactions, refer to our Annual Report.

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2020
Income Tax Disclosure [Abstract]
Income Taxes	Income TaxesWe have elected to be taxed as a real estate investment trust, or REIT, under the Internal Revenue Code of 1986, as amended, or the IRC. Accordingly, we generally are not, and will not be, subject to U.S. federal income tax, provided that we meet certain distribution and other requirements. We are subject to certain state and local taxes, certain of which amounts are or will be reported as income taxes in our condensed consolidated statements of operations.

Weighted Average Common Shares

Weighted Average Common Shares	9 Months Ended
	Sep. 30, 2020
Earnings Per Share [Abstract]
Weighted Average Common Shares	Weighted Average Common Shares    We calculate basic EPS by dividing net income by the weighted average number of common shares outstanding during the relevant period. We calculate diluted EPS using the more dilutive of the two class method or the treasury stock method. Unvested share awards and other potentially dilutive common share issuances, and the related impact on earnings, are considered when calculating diluted earnings per share. For the three months ended September 30, 2020 and 2019, 63,429 and 39,024 unvested common shares, respectively, and for the nine months ended September 30, 2020 and 2019, 63,630 and 15,037 unvested common shares, respectively, were excluded from the calculation of diluted earnings per share because to do so would have been antidilutive.

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2020
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Unfunded Loan Commitments As of September 30, 2020, we had unfunded commitments of $13,974 related to our loans held for investment that are not reflected in our condensed consolidated balance sheets. These unfunded commitments had a weighted average initial maturity of 1.2 years as of September 30, 2020. See Note 4 for further information related to our loans held for investment. Secured Borrowings

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2020
Accounting Policies [Abstract]
Consolidation	Consolidation. For each investment we make, we evaluate whether consolidation of the borrower's financial statements is required under GAAP. GAAP addresses the application of consolidation principles to an investor with a controlling financial interest. Variable interest entities, or VIEs, are subject to consolidation under GAAP if their equity investors do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties, are not able to direct the entity’s most significant activities or are not exposed to the entity’s losses or entitled to its residual returns. VIEs are required to be consolidated by their primary beneficiaries, which are the entities with the power to direct the activities which are most significant to the economic performance of the VIE. These determinations often involve complex and subjective analyses. As of September 30, 2020, we concluded that our investments were not VIEs.
Cash, Cash Equivalents and Restricted Cash	Cash, Cash Equivalents and Restricted Cash. We consider highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents.    Restricted cash primarily consists of deposit proceeds from potential borrowers when originating loans, which may be returned to the applicable borrower upon the closing of the loan, after deducting any transaction costs paid by us for the benefit of such borrower.
Repurchase Agreements	Repurchase Agreements. Loans financed through repurchase agreements are treated as collateralized financing transactions, unless they meet sales treatment under GAAP. Pursuant to GAAP treatment of collateralized financing transactions, loans financed through repurchase agreements remain on our consolidated balance sheet as assets, and cash received from the purchasers is recorded on our consolidated balance sheet as liabilities. Interest paid in accordance with repurchase agreements is recorded as interest expense.
Loans Held for Investment	Loans Held for Investment. Generally, our loans are classified as held for investment based upon our intent and ability to hold them until maturity. Loans that are held for investment are carried at cost, net of unamortized loan origination and accreted exit fees that are required to be recognized in the carrying value of the loans in accordance with GAAP, unless the loans are deemed to be impaired. Loans that we have a plan to sell or liquidate are held at the lower of cost or fair value less cost to sell. We evaluate each of our loans for impairment at least quarterly by assessing a variety of risk factors in relation to each loan and assigning a risk rating to each loan based on those factors. Factors considered in these evaluations include, but are not limited to, property type, geographic and local market dynamics, physical condition, leasing and tenant profile, projected cash flow, risk of loss, current loan to value ratio, or LTV, debt yield, collateral performance, structure, exit plan and sponsorship. Loans are rated “1” (lower risk) through “5” (impaired/loss likely) as defined below: "1" lower risk—Criteria reflects a sponsor having a strong financial condition and low credit risk and our evaluation of management's experience; collateral performance exceeding performance metrics included in the business plan or credit underwriting; and the property demonstrating stabilized occupancy and/or market rates, resulting in strong current cash flow and net operating income and/or having a very low LTV. "2" average risk—Criteria reflects a sponsor having a stable financial condition and our evaluation of management's experience; collateral performance meeting or exceeding substantially all performance metrics included in the business plan or credit underwriting; and the property demonstrating improved occupancy at market rents, resulting in sufficient current cash flow and/or having a low LTV. "3" acceptable risk—Criteria reflects a sponsor having a history of repaying loans at maturity and meeting its credit obligations and our evaluation of management's experience; collateral performance expected to meet performance metrics included in the business plan or credit underwriting; and the property having a moderate LTV. New loans and loans with a limited history will typically be assigned this rating and will be adjusted to other levels from time to time as appropriate. "4" higher risk—Criteria reflects a sponsor having a history of unresolved missed or late payments, maturity extensions and difficulty timely fulfilling its credit obligations and our evaluation of management's experience; collateral performance failing to meet the business plan or credit underwriting; the existence of a risk of default possibly leading to a loss and/or potential weaknesses that deserve management’s attention; and/or the property having a high LTV. "5" impaired/loss likely—Criteria reflects a very high risk of realizing a principal loss or having incurred a principal loss; a sponsor having a history of default payments, trouble fulfilling its credit obligations, deeds in lieu of foreclosures, and/or bankruptcies; collateral performance is significantly worse than performance metrics included in the business plan; loan covenants or performance milestones having been breached or not attained; timely exit via sale or refinancing being uncertain; and/or the property having a very high LTV. See Note 4 for further information regarding our current loan portfolio’s assessment under our internal risk rating policy. Impairment occurs when it is deemed probable that we will not be able to collect all amounts due under a loan according to its contractual terms. Impairment will then be measured based on the estimated fair value of the underlying collateral, net of any costs we expect to incur to realize that value. The determination of this estimated fair value involves judgments and assumptions based on objective and subjective factors. Consideration will be given to various factors, such as business plans, property occupancies, tenant profiles, rental rates, operating expenses and borrowers’ repayment plans, among others, and will require significant judgments regarding certain circumstances, such as guarantees, if any. Upon measurement of an impairment, we will record an allowance to reduce the carrying value of the loan accordingly, and record a corresponding charge to net income in our condensed consolidated statements of operations.
Fair Value of Financial Instruments	Fair Value of Financial Instruments. Financial Accounting Standards Board, or FASB, Accounting Standards Codification , or ASC, Topic 820-10, Fair Value Measurements and Disclosures , defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands the required disclosure regarding fair value measurements. ASC Topic 820-10 defines fair value as the price that would be received for a financial instrument in a current sale, which assumes an orderly transaction between market participants on the measurement date. We determine the estimated fair value of financial assets and liabilities using the three-tier fair value hierarchy established by GAAP, which prioritizes the inputs used in measuring fair value. GAAP establishes market based or observable inputs as the preferred source of values followed by valuation models using management assumptions in the absence of market inputs. The three levels of inputs that may be used to measure fair value are as follows: Level I—Inputs include quoted prices in active markets for identical assets or liabilities that we have the ability to access. Level II—Inputs include quoted prices in markets that are less active or inactive or for which all significant inputs are observable, either directly or indirectly.
Loan Deferred Fees	Loan Deferred Fees. Loan origination and exit fees are reflected in loans held for investment, net, in our condensed consolidated balance sheets and include fees charged to borrowers. These fees are amortized and accreted, respectively, into interest income over the life of the related loans held for investment.
Deferred Financing Costs	Deferred Financing Costs. Costs incurred in connection with financings are capitalized and recorded as an offset to the related liability and amortized over the respective financing terms and are recorded in our consolidated statements of operations as a component of interest and related expenses.
Net Earnings Per Common Share	Net Earnings Per Common Share. We calculate basic earnings per common share, or EPS, by dividing net income by the weighted average number of common shares outstanding during the period. We calculate diluted net EPS using the more dilutive of the two-class method or the treasury stock method.
Revenue Recognition	Revenue Recognition. Interest income related to our first mortgage whole loans secured by commercial real estate, or CRE, will generally be accrued based on the coupon rates applied to the outstanding principal balance of such loans. Fees, premiums and discounts, if any, will be amortized or accreted into interest income over the remaining lives of the loans using the effective interest method, as adjusted for any prepayments.     If a loan's interest or principal payments are not paid when due and there is uncertainty that such payments will be collected, the loan may be categorized as non-accrual and no interest will be recorded unless it is collected. When all overdue payments are collected and, in our judgment, a loan is likely to remain current, it may be re-categorized as accrual.     For loans purchased at a discount, GAAP limits the yield that may be accreted (accretable yield) to the excess of the investor’s estimate of undiscounted expected principal, interest and other cash flows (cash flows expected at acquisition to be collected) over the investor’s initial investment in the loan. GAAP also requires that the excess of contractual cash flows over cash flows expected to be collected (non-accretable difference) not be recognized as an adjustment of yield, loss accrual or valuation allowance. Subsequent increases in cash flows expected to be collected from such loans generally will be recognized prospectively through adjustment of the loan’s yield over its remaining life. Decreases in cash flows expected to be collected will be recorded as an impairment.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In June 2016, FASB issued Accounting Standards Update, or ASU, No. 2016-13, Financial Instruments - Credit Losses (Topic 326) : Measurement of Credit Losses on Financial Instruments , which requires that entities use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowance for credit losses. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. ASU No. 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. As an emerging growth company that has opted to take advantage of the extended transition period, we expect to adopt ASU No. 2016-13 on January 1, 2023. We are currently assessing the potential impact the adoption of ASU No. 2016-13 will have on our condensed consolidated financial statements.

Loans Held for Investment (Tabl

Loans Held for Investment (Tables)	9 Months Ended
	Sep. 30, 2020
Receivables [Abstract]
Schedule of Loans	The table below details overall statistics for our loan portfolio as of September 30, 2020 and December 31, 2019: Balance at September 30, 2020 Balance at December 31, 2019 Number of loans 14 12 Total loan commitments $ 293,961 $ 260,167 Unfunded loan commitments (1) $ 13,974 $ 17,268 Principal balance $ 279,987 $ 242,899 Unamortized net deferred origination and exit fees $ 232 $ (821) Carrying value $ 280,219 $ 242,078 Weighted average coupon rate 5.70 % 5.76 % Weighted average all in yield (2) 6.38 % 6.41 % Weighted average maximum maturity (years) (3) 2.9 3.6 Weighted average LTV (4) 67 % 70 % (1) Unfunded loan commitments are primarily used to finance property and building improvements and leasing capital and are generally funded over the term of the loan. (2) All in yield represents the yield on a loan, excluding any repurchase debt funding applicable to the loan and including amortization of deferred fees over the initial term of the loan. (3) Maximum maturity assumes all borrower loan extension options have been exercised, which options are subject to the borrower meeting certain conditions. (4) LTV represents the initial loan amount divided by the underwritten in-place value at closing. The table below details our loan activities during the three months ended September 30, 2020: Principal Balance Deferred Fees Carrying Value Balance at June 30, 2020 $ 278,484 $ (259) $ 278,225 Additional funding 3,592 — 3,592 Repayments (2,089) — (2,089) Net amortization of deferred fees — 491 491 Balance at September 30, 2020 $ 279,987 $ 232 $ 280,219 The table below details our loan activities during the nine months ended September 30, 2020: Principal Balance Deferred Fees Carrying Value Balance at December 31, 2019 $ 242,899 $ (821) $ 242,078 Additional funding 13,051 — 13,051 Originations 26,126 (388) 25,738 Repayments (2,089) — (2,089) Net amortization of deferred fees — 1,441 1,441 Balance at September 30, 2020 $ 279,987 $ 232 $ 280,219 September 30, 2020 December 31, 2019 Property Type Number of Loans Carrying Value Percentage of Value Number of Loans Carrying Value Percentage of Value Office 5 $ 93,480 33 % 4 $ 71,446 30 % Multifamily 3 70,107 25 % 3 68,911 28 % Industrial 2 48,951 17 % 1 34,838 14 % Retail 3 43,802 16 % 3 43,782 18 % Hotel 1 23,879 9 % 1 23,101 10 % 14 $ 280,219 100 % 12 $ 242,078 100 % September 30, 2020 December 31, 2019 Geographic Location Number of Loans Carrying Value Percentage of Value Number of Loans Carrying Value Percentage of Value East 5 $ 105,099 37 % 4 $ 90,047 37 % South 5 103,958 37 % 5 103,295 43 % Midwest 3 60,496 22 % 2 39,722 16 % West 1 10,666 4 % 1 9,014 4 % 14 $ 280,219 100 % 12 $ 242,078 100 % September 30, 2020 December 31, 2019 Risk Rating Number of Loans Carrying Value Number of Loans Carrying Value 1 — $ — — $ — 2 1 24,589 1 24,462 3 6 128,037 11 217,616 4 7 127,593 — — 5 — — — — 14 $ 280,219 12 $ 242,078

Debt Agreements (Tables)

Debt Agreements (Tables)	9 Months Ended
	Sep. 30, 2020
Debt Disclosure [Abstract]
Schedule of Long-term Debt Instruments	The table below is an overview of our debt agreements that provided financing for our loans held for investment: Debt Obligation Weighted Average Collateral Maximum Facility Size Principal Balance Carrying Value Coupon Rate Remaining Maturity (1)(2) (years) Principal Balance Fair Value (3) September 30, 2020: Master repurchase facility $ 213,482 $ 201,051 $ 200,501 L + 2.00% 0.9 $ 279,987 $ 277,457 December 31, 2019: Master repurchase facility $ 213,482 $ 165,536 $ 164,694 L + 1.99% 1.6 $ 242,899 $ 242,763 (1) The weighted average remaining maturity is determined using the current maturity date of the corresponding loans, assuming no borrower loan extension options have been exercised. (2) On October 30, 2020, we amended the agreements that govern our Master Repurchase Facility, or collectively, as amended, our Master Repurchase Agreement to, among other things, extend the expiration date by one year to November 6, 2022, subject to early termination as provided for in our Master Repurchase Agreement. (3) See Note 6 for further discussion of our financial assets and liabilities not carried at fair value.
Schedule of Maturities of Long-term Debt	At September 30, 2020, our outstanding advancements under our Master Repurchase Facility had the following remaining maturities: Year Principal Payments (1) 2020 $ 29,680 2021 171,371 2022 — 2023 — 2024 — $ 201,051 (1) The allocation of our outstanding advancements under our Master Repurchase Facility is based on the current maturity date of each loan investment with respect to which the individual borrowing relates assuming no borrower loan extension options have been exercised.

Fair Value of Financial Instr_2

Fair Value of Financial Instruments (Tables)	9 Months Ended
	Sep. 30, 2020
Fair Value Disclosures [Abstract]
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis	The table below provides information regarding financial assets and liabilities not carried at fair value on a recurring basis in our condensed consolidated balance sheets: September 30, 2020 December 31, 2019 Carrying Value Fair Value Carrying Value Fair Value Financial assets Loans held for investment $ 280,219 $ 277,457 $ 242,078 $ 242,763 Financial liabilities Master Repurchase Facility $ 200,501 $ 200,184 $ 164,694 $ 165,536

Shareholders' Equity (Tables)

Shareholders' Equity (Tables)	9 Months Ended
	Sep. 30, 2020
Equity [Abstract]
Schedule of Shares Repurchased	During the nine months ended September 30, 2020, we purchased our common shares from certain of our officers and certain former and current officers and employees of our Manager and of RMR LLC in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares, valued at the closing price of our common shares on Nasdaq on the purchase dates, as follows: Date Purchased Number of Shares Price per Share January 9, 2020 384 $ 5.33 June 30, 2020 390 $ 3.08 September 21, 2020 7,182 $ 2.77
Dividends Declared	During the nine months ended September 30, 2020, we declared and paid a quarterly distribution to common shareholders as follows: Record Date Payment Date Distribution Per Share Total Distribution January 27, 2020 February 20, 2020 $ 0.22 $ 1,813 April 10, 2020 May 21, 2020 0.01 82 July 27, 2020 August 20, 2020 0.01 83 $ 0.24 $ 1,978

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Details) $ in Thousands	Sep. 30, 2020USD ($)
Accounting Policies [Abstract]
Debt financing costs	$ 550

Loans Held for Investment - Loa

Loans Held for Investment - Loan Portfolio Statistics (Details) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2020USD ($)loan	Dec. 31, 2019USD ($)loan	Jun. 30, 2020USD ($)
Receivables [Abstract]
Number of Loans | loan	14	12
Total loan commitments	$ 293,961	$ 260,167
Unfunded loan commitments	13,974	17,268
Principal balance	279,987	242,899	$ 278,484
Unamortized net deferred origination and exit fees	232	(821)	(259)
Carrying value	$ 280,219	$ 242,078	$ 278,225
Weighted average coupon rate	5.70%	5.76%
Weighted average all in yield	6.38%	6.41%
Weighted average maximum maturity	2 years 10 months 24 days	3 years 7 months 6 days
Weighted average LTV	0.67	0.70

Loans Held for Investment - L_2

Loans Held for Investment - Loan Activity (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2020
SEC Schedule, 12-29, Real Estate Companies, Investment in Movement in Mortgage Loans on Real Estate [Roll Forward]
Principal, beginning balance	$ 278,484	$ 242,899
Deferred fees, beginning balance	(259)	(821)
Carrying value, beginning balance	278,225	242,078
Additional funding	3,592	13,051
Principal, originations		26,126
Deferred fees, originations		(388)
Carrying value, originations		25,738
Repayments	(2,089)
Repayments, net	(2,089)
Net amortization of deferred fees	491	1,441
Principal, ending balance	279,987	279,987
Deferred fees, ending balance	232	232
Carrying value, ending balance	$ 280,219	$ 280,219

Loans Held for Investment - Nar

Loans Held for Investment - Narrative (Details) - USD ($) $ in Thousands	1 Months Ended
	Oct. 31, 2020	Jul. 31, 2020
Coppell, TX
Accounts, Notes, Loans and Financing Receivable [Line Items]
Proceeds from repayment		$ 2,089
Increase to reserve for future debt service obligation payments		100
Portion of repayment used to repay outstanding balance and accrued interest for master repurchase facility		$ 1,358
Paradise Valley, AZ | Subsequent Event
Accounts, Notes, Loans and Financing Receivable [Line Items]
Period of extension	1 year

Loans Held for Investment - L_3

Loans Held for Investment - Loan Portfolio (Details) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2020USD ($)loan	Dec. 31, 2019USD ($)loan	Jun. 30, 2020USD ($)
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number of Loans | loan	14	12
Carrying value | $	$ 280,219	$ 242,078	$ 278,225
Percentage of Value	100.00%	100.00%
East
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number of Loans | loan	5	4
Carrying value | $	$ 105,099	$ 90,047
Percentage of Value	37.00%	37.00%
South
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number of Loans | loan	5	5
Carrying value | $	$ 103,958	$ 103,295
Percentage of Value	37.00%	43.00%
Midwest
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number of Loans | loan	3	2
Carrying value | $	$ 60,496	$ 39,722
Percentage of Value	22.00%	16.00%
West
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number of Loans | loan	1	1
Carrying value | $	$ 10,666	$ 9,014
Percentage of Value	4.00%	4.00%
Office
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number of Loans | loan	5	4
Carrying value | $	$ 93,480	$ 71,446
Percentage of Value	33.00%	30.00%
Multifamily
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number of Loans | loan	3	3
Carrying value | $	$ 70,107	$ 68,911
Percentage of Value	25.00%	28.00%
Industrial
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number of Loans | loan	2	1
Carrying value | $	$ 48,951	$ 34,838
Percentage of Value	17.00%	14.00%
Retail
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number of Loans | loan	3	3
Carrying value | $	$ 43,802	$ 43,782
Percentage of Value	16.00%	18.00%
Hotel
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number of Loans | loan	1	1
Carrying value | $	$ 23,879	$ 23,101
Percentage of Value	9.00%	10.00%

Loans Held for Investment - L_4

Loans Held for Investment - Loan Risk Ratings (Details) $ in Thousands	3 Months Ended	9 Months Ended	12 Months Ended
	Mar. 31, 2020loan	Sep. 30, 2020USD ($)loan	Dec. 31, 2019USD ($)loan	Jun. 30, 2020USD ($)
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number of Loans | loan		14	12
Carrying value | $		$ 280,219	$ 242,078	$ 278,225
Weighted average risk rating		3.4	2.9
Percentage of Value		100.00%	100.00%
Risk Rating, 1
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number of Loans | loan		0	0
Carrying value | $		$ 0	$ 0
Risk Rating, 2
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number of Loans | loan		1	1
Carrying value | $		$ 24,589	$ 24,462
Risk Rating, 3
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number of Loans | loan		6	11
Carrying value | $		$ 128,037	$ 217,616
Risk Rating, 4
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number of Loans | loan	6	7	0
Carrying value | $		$ 127,593	$ 0
Percentage of Value		46.00%
Risk Rating, 5
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items]
Number of Loans | loan		0	0
Carrying value | $		$ 0	$ 0

Debt Agreements - Schedule of D

Debt Agreements - Schedule of Debt (Details) - Master repurchase facility - USD ($) $ in Thousands	Oct. 30, 2020	Sep. 30, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
Maximum Facility Size		$ 213,482	$ 213,482
Principal Balance		201,051	165,536
Carrying Value		$ 200,501	$ 164,694
Weighted Average, Remaining Maturity (years)		10 months 24 days	1 year 7 months 6 days
Collateral, Principal Balance		$ 279,987	$ 242,899
Collateral, Fair Value		$ 277,457	$ 242,763
Subsequent Event
Debt Instrument [Line Items]
Extension term	1 year
LIBOR
Debt Instrument [Line Items]
Weighted Average, Coupon Rate		20.00%	19.90%

Debt Agreements - Master Repurc

Debt Agreements - Master Repurchase Facility (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		4 Months Ended	9 Months Ended
	Aug. 31, 2019	Sep. 30, 2020	Sep. 30, 2019	May 31, 2019	Sep. 30, 2020	Sep. 30, 2019
Assets Sold under Agreements to Repurchase [Line Items]
Repayment of note payable					$ 0	$ 31,690
RMR Credit Agreement
Assets Sold under Agreements to Repurchase [Line Items]
Interest expense						39
Proceeds from issuance of long-term debt and capital securities, net				$ 14,220
Notes Payable | TCB Loan
Assets Sold under Agreements to Repurchase [Line Items]
Repayment of note payable	$ 31,790
Interest expense			$ 155			$ 891
Mortgages and Related Assets
Assets Sold under Agreements to Repurchase [Line Items]
Debt, weighted average interest rate		2.17%	4.18%		2.70%	4.38%
Interest expense for repurchase agreement		$ 1,120	$ 1,563		$ 4,003	$ 4,126
Percentage of loan guaranteed		25.00%			25.00%
Citibank, N.A. | Mortgages and Related Assets
Assets Sold under Agreements to Repurchase [Line Items]
Percentage of purchased asset, initial purchase price		75.00%			75.00%
Minimum percentage of margin to advance		75.00%			75.00%
Citibank, N.A. | Mortgages and Related Assets | LIBOR
Assets Sold under Agreements to Repurchase [Line Items]
Variable basis spread					2.00%
Citibank, N.A. | Mortgages and Related Assets | LIBOR | Minimum
Assets Sold under Agreements to Repurchase [Line Items]
Variable basis spread					2.00%
Citibank, N.A. | Mortgages and Related Assets | LIBOR | Maximum
Assets Sold under Agreements to Repurchase [Line Items]
Variable basis spread					2.50%

Debt Agreements - Debt Maturiti

Debt Agreements - Debt Maturities (Details) - Mortgages and Related Assets $ in Thousands	Sep. 30, 2020USD ($)
Debt Instrument [Line Items]
2020	$ 29,680
2021	171,371
2022	0
2023	0
2024	0
Total	$ 201,051

Fair Value of Financial Instr_3

Fair Value of Financial Instruments (Details) - Level III - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Carrying Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans held for investment	$ 280,219	$ 242,078
Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans held for investment	277,457	242,763
Master Repurchase Facility | Carrying Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Master Repurchase Facility	200,501	164,694
Master Repurchase Facility | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Master Repurchase Facility	$ 200,184	$ 165,536

Shareholders' Equity - Narrativ

Shareholders' Equity - Narrative (Details) $ / shares in Units, $ in Thousands

Oct. 15, 2020USD ($)$ / shares

Sep. 17, 2020$ / sharesshares

Aug. 20, 2020USD ($)

May 21, 2020USD ($)

May 13, 2020trustee$ / sharesshares

Feb. 20, 2020USD ($)

Sep. 30, 2020USD ($)

Mar. 31, 2020USD ($)

Sep. 30, 2019USD ($)

Jun. 30, 2019USD ($)

Mar. 31, 2019USD ($)

Sep. 30, 2020USD ($)

Subsequent Event [Line Items]

Number of trustees | trustee

5

Grants awarded (in shares) | shares

3,000

Grants awarded (in dollars per share)

$ 1.92

Distributions | $

$ 83

$ 82

$ 1,813

$ 83

$ 1,895

$ 1,802

$ 702

$ 350

$ 1,978

Subsequent Event

Subsequent Event [Line Items]

Distributions declared (in dollars per share)

$ 0.01

Distributions | $

$ 83

Fully Vested Common Shares

Subsequent Event [Line Items]

Grants awarded (in shares) | shares

56,600

Grants awarded (in dollars per share)

$ 2.92

Shareholders' Equity - Schedule

Shareholders' Equity - Schedule of Share Repurchases and Distributions (Details) - USD ($) $ / shares in Units, $ in Thousands	Sep. 21, 2020	Aug. 20, 2020	Jun. 30, 2020	May 21, 2020	Feb. 20, 2020	Jan. 09, 2020	Sep. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2020
Equity [Abstract]
Shares repurchased (in shares)	7,182		390			384
Shares repurchased (in dollars per share)	$ 2.77		$ 3.08			$ 5.33
Distributions paid (in dollars per share)		$ 0.01		$ 0.01	$ 0.22							$ 0.24
Distributions		$ 83		$ 82	$ 1,813		$ 83	$ 1,895	$ 1,802	$ 702	$ 350	$ 1,978

Management Agreement with our_2

Management Agreement with our Manager (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020USD ($)employee	Sep. 30, 2019USD ($)	Sep. 30, 2020USD ($)employee	Sep. 30, 2019USD ($)
Related Party Transaction [Line Items]
Number of employees | employee	0		0
Management fees, including waived fees	$ 332	$ 322	$ 975	$ 812
Incentive fees, including waived fees	129	0	164	0
Reimbursement of shared services expenses	189	370	752	1,110
Principal Owner | Shared Service Costs
Related Party Transaction [Line Items]
Reimbursement of shared services expenses	$ 218	$ 406	$ 856	$ 1,217

Related Person Transactions (De

Related Person Transactions (Details) - Tremont Mortgage Trust - Tremont Realty Advisors LLC	Sep. 30, 2020shares
Related Party Transaction [Line Items]
Shares owned (in shares)	1,600,100
Noncontrolling ownership interest	19.30%

Weighted Average Common Shares

Weighted Average Common Shares (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Earnings Per Share [Abstract]
Antidilutive securities excluded from computation of earnings per share (in shares)	63,429	39,024	63,630	15,037

Commitments and Contingencies (

Commitments and Contingencies (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2020	Dec. 31, 2019
Other Commitments [Line Items]
Unfunded loan commitments	$ 13,974	$ 17,268
Weighted average maximum maturity	2 years 10 months 24 days	3 years 7 months 6 days
Mortgages and Related Assets
Other Commitments [Line Items]
Borrowings outstanding	$ 201,051
Weighted average maturity	10 months 24 days	1 year 7 months 6 days
Unfunded Commitments
Other Commitments [Line Items]
Weighted average maximum maturity	1 year 2 months 12 days