Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 01, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | Tremont Mortgage Trust | |
Entity Central Index Key | 1,708,405 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Entity Common Stock, Shares Outstanding | 3,179,118 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Assets | ||
Cash and cash equivalents | $ 30,101 | $ 61,666 |
Restricted cash | 100 | 0 |
Loans held-for-investment, net (includes $68,637 and $0 pledged as collateral under master repurchase agreement and note payable) | 81,664 | 0 |
Accrued interest receivable | 293 | 0 |
Prepaid expenses and other assets | 254 | 259 |
Total assets | 112,412 | 61,925 |
Liabilities and Shareholders' Equity | ||
Accounts payable, accrued liabilities and deposits | 607 | 301 |
Master repurchase agreement (net of deferred financing costs of $649 and $0, respectively) | 20,935 | 0 |
Note payable (net of deferred financing costs of $229 and $0, respectively) | 31,461 | 0 |
Due to related persons | 23 | 754 |
Total liabilities | 53,026 | 1,055 |
Commitments and contingencies | ||
Shareholders' equity: | ||
Common shares of beneficial interest, $0.01 par value per share; 25,000,000 shares authorized; 3,179,118 and 3,126,439 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively | 32 | 31 |
Additional paid in capital | 62,443 | 62,135 |
Cumulative net loss | (3,089) | (1,296) |
Total shareholders’ equity | 59,386 | 60,870 |
Total liabilities and shareholders' equity | $ 112,412 | $ 61,925 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Assets pledged as collateral | $ 68,637 | $ 0 |
Deferred financing costs | $ 878 | |
Common shares of beneficial interest, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common shares of beneficial interest, shares authorized | 25,000,000 | 25,000,000 |
Common shares of beneficial interest, shares issued | 3,179,118 | 3,126,439 |
Common shares of beneficial interest, shares outstanding | 3,179,118 | 3,126,439 |
Mortgages and Related Assets | ||
Deferred financing costs | $ 649 | $ 0 |
Note payable | ||
Deferred financing costs | $ 229 | $ 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 4 Months Ended | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2018 | |
Income: | ||||
Interest income from investments | $ 1,385 | $ 23 | $ 23 | $ 2,113 |
Less: Interest and related expenses | (563) | 0 | 0 | (666) |
Total income from investments, net | 822 | 23 | 23 | 1,447 |
Expenses: | ||||
Management fees | 0 | 32 | 32 | 447 |
General and administrative expenses | 510 | 176 | 176 | 1,668 |
Shared services agreement reimbursement | 375 | 53 | 53 | 1,125 |
Total expenses | 885 | 261 | 261 | 3,240 |
Loss before income tax expense | (63) | (238) | (238) | (1,793) |
Income tax expense | 0 | 0 | 0 | 0 |
Net loss | $ (63) | $ (238) | $ (238) | $ (1,793) |
Weighted average common shares outstanding - basic and diluted (in shares) | 3,129 | 438 | 330 | 3,121 |
Net loss per common share - basic and diluted (in dollars per share) | $ (0.02) | $ (0.54) | $ (0.72) | $ (0.57) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Thousands | 4 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Sep. 30, 2018 | |
Cash Flows from Operating Activities | ||
Net loss | $ (238) | $ (1,793) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Share based compensation | 0 | 325 |
Amortization of deferred financing costs | 0 | 184 |
Amortization of loan origination and exit fees | 0 | (145) |
Changes in operating assets and liabilities: | ||
Accrued interest receivable | 0 | (293) |
Prepaid expenses and other assets | 0 | 5 |
Accounts payable, accrued liabilities and deposits | 75 | 274 |
Due to related persons | 115 | (731) |
Net cash used in operating activities | (48) | (2,174) |
Cash Flows from Investing Activities | ||
Origination of loans held-for-investment, net | 0 | (81,519) |
Net cash used in investing activities | 0 | (81,519) |
Cash Flows from Financing Activities | ||
Proceeds from master repurchase agreement | 0 | 21,583 |
Proceeds from note payable | 0 | 31,690 |
Payments for deferred financing costs | 0 | (1,045) |
Proceeds from issuance of common shares | 62,002 | 0 |
Net cash used in financing activities | 62,002 | 52,228 |
Decrease in cash, cash equivalents and restricted cash | 61,954 | (31,465) |
Cash, cash equivalents and restricted cash at beginning of period | 0 | 61,666 |
Cash, cash equivalents and restricted cash at end of period | $ 61,954 | $ 30,201 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS - Supplemental Information - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | May 31, 2017 |
Statement of Cash Flows [Abstract] | ||||
Cash and cash equivalents | $ 30,101 | $ 61,666 | $ 61,954 | |
Restricted cash | 100 | 0 | 0 | |
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statement of cash flows | $ 30,201 | $ 61,666 | $ 61,954 | $ 0 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2018 | |
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 subsidiaries, or we, us or our, 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, 2017, 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 condensed consolidated financial statements include the fair value of financial instruments. |
Organization
Organization | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization We were organized as a real estate investment trust, or REIT, under Maryland law on June 1, 2017. On September 18, 2017, we sold 2,500,000 of our common shares of beneficial interest, par value $0.01 per share, or our common shares, at a price of $20.00 per share in our initial public offering, or our IPO. Concurrently with our IPO, we sold an additional 600,000 of our common shares at a price of $20.00 per share to Tremont Realty Advisors LLC, or our Manager, in a private placement. The aggregate proceeds from these sales were $62,000 . |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies 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 will generally be treated as collateralized financing transactions and will remain recorded in our consolidated balance sheets as assets, and cash received from the purchasers will be recorded in our consolidated balance sheets as a liability. Interest paid in accordance with repurchase agreements will be recorded as interest expense in our consolidated statements of operations. Loans Held-for-Investment. Generally, our loans will be classified as held-for-investment based upon our intent and ability to hold them until maturity. We expect that loans that are held-for-investment will be carried at cost, net of unamortized loan origination and 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 will be held at the lower of cost or fair value. 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 will be rated “1” (less risk) through “5” (greater risk) 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 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 the property having a very high LTV. 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 present value of expected future cash flows discounted at the loan’s contractual effective rate and the fair value of any available collateral, net of any costs we expect to incur to realize that value. The determination of whether loans are impaired will involve 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, including assumptions regarding the values of loans, the values of underlying collateral and other 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 consolidated statements of operations. As of September 30, 2018, we have not recorded any allowance for losses as we believe it is probable that we will be able to collect all amounts due pursuant to the contractual terms of our loans. Fair Value of Financial Instruments. Financial Accounting Standards Board, or FASB, Accounting Standards Codification TM , 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 consolidated balance sheets and include fees charged to borrowers. These fees are amortized 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 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, 2018, we had approximately $878 of capitalized financing costs, net of amortization. Net Loss Per Common Share. We calculate basic earnings per common share by dividing net loss by the weighted average number of common shares outstanding during the period. We calculate diluted net loss per share using the more dilutive of the two class method or the treasury stock method. Revenue Recognition. Interest income related to our first mortgage 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 impairment. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements On January 1, 2018, we adopted FASB Accounting Standards Update, or ASU, No. 2014-09 (and related clarifying guidance issued by the FASB), Revenue From Contracts With Customers , which outlines a comprehensive model for entities to use in accounting for revenue arising from contracts with customers. ASU No. 2014-09 states that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” We have evaluated ASU No. 2014-09 and related clarifying guidance issued by the FASB and determined that interest income and gains and losses on financial instruments are outside of its scope; therefore, the adoption of ASU No. 2014-09 did not have a material impact in our consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) : Measurement of Credit Losses on Financial Instruments , which requires 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. We are currently assessing the potential impact the adoption of ASU No. 2016-13 will have in our consolidated financial statements. On January 1, 2018, we adopted FASB ASU No. 2016-18, Restricted Cash , which requires companies to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statements of cash flows. This update also requires a reconciliation of the totals in the statements of cash flows to the related captions in the balance sheet. As a result, amounts included in restricted cash in our condensed consolidated balance sheets are included with cash and cash equivalents in the consolidated statements of cash flows. Restricted cash, which primarily consists of deposit proceeds from potential borrowers 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, totaled $ 100 as of September 30, 2018. The adoption of this update did not change our consolidated balance sheet presentation. In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting , which aligns the measurement and classification guidance for share based payments to nonemployees with the guidance for share based payments to employees, with certain exceptions. ASU No. 2018-07 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are currently assessing the potential impact the adoption of ASU No. 2018-07 will have in our condensed consolidated financial statements. |
Loans Held-for-Investment
Loans Held-for-Investment | 9 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
Loans Held-for-Investment | Loans Held-for-Investment We originate first mortgage loans secured by middle market and transitional CRE and related instruments which are generally to be held as long term investments. As of September 30, 2018 , we had established a portfolio of investments with a total commitment of approximately $88,512 , of which $6,104 remained unfunded. At September 30, 2018 , these loans had a total principal balance in loans held-for-investment of $82,408 , and a net book value of $81,664 , net of deferred fees totaling $744 ; a weighted average all-in yield, which includes the amortization of deferred fees, of 6.71% ; a weighted average coupon rate of 6.09% ; a weighted average maximum maturity of 4.8 years , assuming full term extension of all loans; and a weighted average LTV of 73% . To fund these loan originations, we used cash on hand, advancements under our master repurchase agreement and borrowings under a note payable. 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. 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 LTV, debt yield, collateral performance, structure, exit plan and sponsorship. During the nine months ended September 30, 2018 , we originated four first mortgage bridge loans with an aggregate net book value of $81,664 . Based on our internal risk rating policy, each of these loans was assigned a "3" acceptable risk rating. We did not have any impaired loans, nonaccrual loans, or loans in default as of September 30, 2018 ; thus, we did not record a reserve for loan loss. See Note 3 for a discussion regarding the risk rating system that we use in evaluating our portfolio. |
Secured Debt Agreements
Secured Debt Agreements | 9 Months Ended |
Sep. 30, 2018 | |
Repurchase Agreement [Abstract] | |
Secured Debt Agreements | Secured Debt Agreements At September 30, 2018, we had a master repurchase facility and a note payable that we have used to finance certain loans. Master Repurchase Facility On February 9, 2018, one of our wholly owned subsidiaries entered into a master repurchase agreement, or our master repurchase agreement, with Citibank, N.A., or Citibank, for a $100,000 master repurchase facility, or our master repurchase facility, pursuant to which we may sell to Citibank, and later repurchase, floating rate mortgage loans and other related assets, or purchased assets. Our master repurchase agreement expires February 9, 2021, unless terminated earlier according to its terms. Under our master repurchase facility, 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 one month 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. In connection with our master repurchase facility, we entered into a guaranty which requires us to pay the purchase price, purchase price differential and any costs and expenses of Citibank related to the facility. This guaranty also requires us to comply with customary financial covenants, which include a minimum tangible net worth, minimum cash liquidity, a total indebtedness to tangible net worth ratio and a minimum interest coverage ratio. As of September 30, 2018, we believe we were in compliance with the terms and conditions of the covenants of our master repurchase facility. Our master repurchase agreement also contains margin maintenance provisions that 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. Our master repurchase agreement 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 Manager ceasing to act as our sole manager or be a wholly owned subsidiary of The RMR Group LLC, or RMR LLC. In July 2018, we sold to, and committed to later repurchase from, Citibank, two first mortgage bridge loans, with an aggregate principal balance of $28,778 , and, as a result, Citibank advanced to us $21,583 . As of September 30, 2018, our master repurchase agreement had a weighted average interest rate of LIBOR plus 226 basis points per annum, excluding associated fees and expenses, and a weighted average remaining maturity of 2.4 years . During the nine months ended September 30, 2018 , we recorded interest expense of $234 in connection with our master repurchase facility. Note Payable In July 2018, we closed a $40,363 first mortgage bridge loan, of which $39,613 was funded by us at closing, to finance the acquisition of the Hampton Inn JFK, a 216 -key, 13 -story hotel located adjacent to the John F. Kennedy International Airport in Queens, NY, or the JFK Loan, and in connection therewith, one of our wholly owned subsidiaries entered into a term loan facility, in the form of a note payable, with Texas Capital Bank, National Association, or Texas Capital Bank, or the TCB loan. The TCB loan advances up to 80% of the JFK Loan amount from time to time. The TCB loan matures in July 2021. Subject to our payment of extension fees and meeting other conditions, we have the option to extend the stated maturity date of the TCB loan for two , 12 month periods. Interest on amounts advanced to our subsidiary under the TCB loan is calculated at a floating rate based on one month LIBOR plus a premium of 215 basis points. We may be required to repay a portion of the amount outstanding under the TCB loan to maintain a 10.5% debt yield on the net operating income of the underlying hotel. The TCB loan is prepayable in whole at any time without premium or penalty, and provides for acceleration of payment of all amounts due thereunder upon the occurrence and continuation of customary events of default. In connection with the TCB loan, we entered into a guaranty with Texas Capital Bank pursuant to which we have guaranteed 25% of the TCB loan amount plus all related interest and costs. This guaranty also requires us to comply with customary financial covenants, which include a minimum tangible net worth, minimum asset liquidity, a total indebtedness to tangible net worth leverage ratio and a required debt yield. As of September 30, 2018, we believe we were in compliance with the terms and conditions of the covenants of the TCB loan. As of September 30, 2018, Texas Capital Bank had advanced to our subsidiary $31,690 under the TCB loan with an interest rate of LIBOR plus 215 basis points per annum, excluding associated fees and expenses. During the nine months ended September 30, 2018 , we recorded interest expense of $246 in connection with the TCB loan. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments As of each of September 30, 2018 and December 31, 2017, the carrying values of certain of our financial instruments, which include cash and cash equivalents, restricted cash, prepaid expenses, due to related parties, accounts payable, accrued expenses and deposits, approximated their fair values due to the short term nature of these financial instruments. At September 30, 2018 , the estimated fair value of our loans held-for-investment was $83,006 , which we estimated using Level III inputs. We estimated the fair values of our loans held-for-investment by using discounted cash flow analysis and currently prevailing market terms as of the measurement date, determined by significant unobservable market inputs, which include holding periods, discount rates based on loan to value, 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). There were no transfers of financial assets or liabilities within the fair value hierarchy during either the three or nine months ended September 30, 2018 or the year ended December 31, 2017. The following table provides information regarding financial assets and liabilities not carried at fair value on a recurring basis in our condensed consolidated balance sheets: Book Face Fair Value At September 30, 2018 Value Value Level I Level II Level III Financial assets Loans held-for-investment $ 81,664 $ 82,408 $ — $ — $ 83,006 Financial liabilities Master repurchase agreement 20,935 21,583 — — 21,583 Note payable 31,461 31,690 — — 31,690 |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders' Equity Share Awards We have common shares available for issuance under the terms of our 2017 Equity Compensation Plan. On March 9, 2018, in accordance with our Trustee compensation arrangements, and in connection with the election of one of our Managing Trustees, we granted 1,500 of our common shares, valued at $13.31 per share, the closing price of our common shares on The Nasdaq Stock Market LLC, or Nasdaq, on that day, to the Managing Trustee who was elected as a Managing Trustee that day. On April 25, 2018, in accordance with our Trustee compensation arrangements, we granted 3,000 of our common shares, valued at $12.61 per share, the closing price of our common shares on Nasdaq on that day, to each of our five Trustees as part of their annual compensation. On September 13, 2018, we granted an aggregate of 46,300 of our common shares, valued at $11.80 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 under our equity compensation plan. Share Forfeitures and Repurchases On August 20, 2018, 8,000 of our common shares were forfeited in connection with the resignation of certain of our executive officers. The shares were valued at $12.50 per share, the closing price of our common shares on Nasdaq on that day. On September 24, 2018, we purchased an aggregate of 2,121 of our common shares, valued at $11.89 per common share, the closing price of our common shares on Nasdaq on that day, from certain of our officers and other 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. |
Management Agreement With Our M
Management Agreement With Our Manager | 9 Months Ended |
Sep. 30, 2018 | |
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 pay our Manager an annual base management fee that is equal to 1.5% of our “equity,” as defined. We pay this business management fee in cash quarterly in arrears. Pursuant to our management agreement, we recognized management fees of $0 and $447 for the three and nine months ended September 30, 2018 , respectively. In June 2018, our Manager agreed to waive any base management fees otherwise due and payable pursuant to our management agreement for the period beginning July 1, 2018 until June 30, 2020. As a result, we did not recognize any base management fees for the three months ended September 30, 2018. If our Manager had not agreed to waive these base management fees, we would have recognized $222 of base management fees for the three months ended September 30, 2018. For the period beginning on September 18, 2017, the date on which we entered into our management agreement, through September 30, 2017, we recognized base management fees of $32 . In addition, beginning in the fourth quarter of 2018, we may be obligated to pay our Manager an incentive fee if it is earned under our management agreement; however, our Manager has agreed that no incentive fee will be paid or payable by us for the 2018 or 2019 calendar years. 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 generally required to pay or to reimburse our Manager and its affiliates for all other costs and expenses of our operations. Some of these overhead, professional and other services are provided by RMR LLC pursuant to a shared services agreement between our Manager and RMR LLC. We reimburse our Manager for shared services costs our Manager pays to RMR LLC and its affiliates, and these reimbursements may include an allocation of the cost of personnel employed by RMR LLC, with such shared services costs subject to approval by a majority of our Independent Trustees at least annually. We incurred shared services costs of $375 and $1,125 for the three and nine months ended September 30, 2018 , respectively, and $53 for the period beginning on September 18, 2017 through September 30, 2017, payable to our Manager as reimbursement for shared services costs it paid to RMR LLC. These amounts are included in shared services agreement reimbursement in our condensed consolidated statements of operations. In addition, we pay our pro rata portion of internal audit costs incurred by RMR LLC on behalf of us and other public companies to which RMR LLC or its subsidiaries provide management services. We incurred internal audit costs of $25 and $87 for the three and nine months ended September 30, 2018 , respectively, and $0 for the period beginning on September 18, 2017 through September 30, 2017, payable to RMR LLC. These amounts are included in general and administrative expenses in our condensed consolidated statements of operations. |
Related Person Transactions
Related Person Transactions | 9 Months Ended |
Sep. 30, 2018 | |
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 which have trustees, directors and officers who are also our Trustees or officers. Our Manager, Tremont Realty Advisors LLC. We have a management agreement with our Manager to provide management services to us. See Note 9 for further information regarding our management agreement with our Manager. We were formerly a 100% owned subsidiary of our Manager. Our Manager is our largest shareholder and, as of September 30, 2018 , owned 600,100 of our common shares, or approximately 18.9% of our outstanding common shares. Our Manager paid the initial organizational costs related to our formation and the other costs of our IPO and concurrent private placement, including underwriting discounts and commissions, totaling $6,823 . Each of our Managing Trustees and executive officers is also a director or officer of our Manager and of RMR LLC. RMR Inc. and RMR LLC . 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. Adam D. Portnoy, one of our Managing Trustees, is the sole trustee, an officer and the controlling shareholder of ABP Trust, which is the controlling shareholder of RMR Inc., and a managing director, president and chief executive officer of RMR Inc. and a director of our Manager and the president and chief executive officer of RMR LLC. David M. Blackman, our other Managing Trustee and our President and Chief Executive Officer, also serves as the president and chief executive officer of our Manager and an executive officer of RMR LLC. Other officers of our Manager and of RMR LLC also serve as our officers. RMR LLC provides certain shared services to our Manager which are applicable to us, and we reimburse our Manager for the amounts it pays for those services. See Note 9 for further information regarding these shared services arrangements. In September 2018, we granted annual awards of 46,300 of our common shares to our officers and to other officers and employees of our Manager and of RMR LLC. In September 2018, we purchased 2,121 of our common shares, valued at the closing price of our common shares on Nasdaq on the date of purchase, in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares to certain of our officers and other officers and employees or our Manager and of RMR LLC. We include the amounts recognized as expense for share awards to our officers and to other officers and employees of our Manager and of RMR LLC in general and administrative expenses in our condensed consolidated statements of operations. 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, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We have elected to be taxed as a 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 taxes provided that we distribute our taxable income and meet certain other requirements to qualify for taxation as a REIT. We are subject to certain state and local taxes, certain of which amounts are reported as income taxes in our condensed consolidated statements of income. We do not currently expect recent amendments to the IRC to have a significant impact on us; however, we will monitor future interpretations of such amendments as they develop, and accordingly, our estimates and disclosures may change. |
Weighted Average Common Shares
Weighted Average Common Shares | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Weighted Average Common Shares | Weighted Average Common Shares We calculated earnings per share, or EPS, for the period ended September 30, 2018 using the weighted average number of common shares outstanding during the period. When applicable, diluted EPS reflects the more dilutive earnings per common share amount calculated using the two class method or the treasury stock method. For the three and nine months ended September 30, 2018 , 2,204 and 1,071 , respectively, restricted unvested common shares were not included in the calculation of diluted EPS because to do so would have been antidilutive. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Unfunded Commitments As of September 30, 2018 , we had unfunded commitments of $6,104 related to our loans held-for-investment. These commitments are not reflected in our condensed consolidated balance sheets. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
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 will generally be treated as collateralized financing transactions and will remain recorded in our consolidated balance sheets as assets, and cash received from the purchasers will be recorded in our consolidated balance sheets as a liability. Interest paid in accordance with repurchase agreements will be recorded as interest expense in our consolidated statements of operations. |
Loans Held-for-Investment | Loans Held-for-Investment. Generally, our loans will be classified as held-for-investment based upon our intent and ability to hold them until maturity. We expect that loans that are held-for-investment will be carried at cost, net of unamortized loan origination and 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 will be held at the lower of cost or fair value. 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 will be rated “1” (less risk) through “5” (greater risk) 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 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 the property having a very high LTV. 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 present value of expected future cash flows discounted at the loan’s contractual effective rate and the fair value of any available collateral, net of any costs we expect to incur to realize that value. The determination of whether loans are impaired will involve 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, including assumptions regarding the values of loans, the values of underlying collateral and other 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 consolidated statements of operations. As of September 30, 2018, we have not recorded any allowance for losses as we believe it is probable that we will be able to collect all amounts due pursuant to the contractual terms of our loans. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments. Financial Accounting Standards Board, or FASB, Accounting Standards Codification TM , 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 Origination Fees | Loan Deferred Fees. Loan origination and exit fees are reflected in loans held-for-investment, net, in our consolidated balance sheets and include fees charged to borrowers. These fees are amortized 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 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, 2018, we had approximately $878 of capitalized financing costs, net of amortization. |
Net Loss Per Common Share | Net Loss Per Common Share. We calculate basic earnings per common share by dividing net loss by the weighted average number of common shares outstanding during the period. We calculate diluted net loss per share 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 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 impairment. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements On January 1, 2018, we adopted FASB Accounting Standards Update, or ASU, No. 2014-09 (and related clarifying guidance issued by the FASB), Revenue From Contracts With Customers , which outlines a comprehensive model for entities to use in accounting for revenue arising from contracts with customers. ASU No. 2014-09 states that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” We have evaluated ASU No. 2014-09 and related clarifying guidance issued by the FASB and determined that interest income and gains and losses on financial instruments are outside of its scope; therefore, the adoption of ASU No. 2014-09 did not have a material impact in our consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) : Measurement of Credit Losses on Financial Instruments , which requires 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. We are currently assessing the potential impact the adoption of ASU No. 2016-13 will have in our consolidated financial statements. On January 1, 2018, we adopted FASB ASU No. 2016-18, Restricted Cash , which requires companies to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statements of cash flows. This update also requires a reconciliation of the totals in the statements of cash flows to the related captions in the balance sheet. As a result, amounts included in restricted cash in our condensed consolidated balance sheets are included with cash and cash equivalents in the consolidated statements of cash flows. Restricted cash, which primarily consists of deposit proceeds from potential borrowers 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, totaled $ 100 as of September 30, 2018. The adoption of this update did not change our consolidated balance sheet presentation. In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting , which aligns the measurement and classification guidance for share based payments to nonemployees with the guidance for share based payments to employees, with certain exceptions. ASU No. 2018-07 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are currently assessing the potential impact the adoption of ASU No. 2018-07 will have in our condensed consolidated financial statements. |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table provides information regarding financial assets and liabilities not carried at fair value on a recurring basis in our condensed consolidated balance sheets: Book Face Fair Value At September 30, 2018 Value Value Level I Level II Level III Financial assets Loans held-for-investment $ 81,664 $ 82,408 $ — $ — $ 83,006 Financial liabilities Master repurchase agreement 20,935 21,583 — — 21,583 Note payable 31,461 31,690 — — 31,690 |
Organization (Details)
Organization (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 18, 2017 | Sep. 30, 2018 | Dec. 31, 2017 |
Subsidiary, Sale of Stock [Line Items] | |||
Common shares of beneficial interest, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Proceeds from sale of common shares | $ 62,000 | ||
IPO | |||
Subsidiary, Sale of Stock [Line Items] | |||
Number of shares issued (in shares) | 2,500,000 | ||
Price of shares issued (in dollars per share) | $ 20 | ||
Private Placement | |||
Subsidiary, Sale of Stock [Line Items] | |||
Number of shares issued (in shares) | 600,000 | ||
Price of shares issued (in dollars per share) | $ 20 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Details) $ in Thousands | Sep. 30, 2018USD ($) |
Accounting Policies [Abstract] | |
Capitalized financing costs, net of amortization | $ 878 |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements - Additional Information (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
Accounting Policies [Abstract] | |||
Restricted cash | $ 100 | $ 0 | $ 0 |
Loans Held-for-Investment (Deta
Loans Held-for-Investment (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018USD ($)loan | Dec. 31, 2017USD ($) | |
Receivables [Abstract] | ||
Total commitments | $ 88,512 | |
Unfunded commitments | 6,104 | |
Principal balance of loans held-for-investment | 82,408 | |
Loans held-for-investment, net | 81,664 | $ 0 |
Deferred origination fees and accrued exit fee | $ 744 | |
Average all-in yield | 6.71% | |
Weighted average coupon rate | 6.09% | |
Weighted average maximum maturity | 4 years 9 months 18 days | |
Weighted average LTV | 0.73 | |
Number of first mortgage bridge loans | loan | 4 |
Secured Debt Agreements - Maste
Secured Debt Agreements - Master Repurchase Facility (Details) | Feb. 09, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Jul. 31, 2018USD ($)loan | Dec. 31, 2017USD ($) |
Assets Sold under Agreements to Repurchase [Line Items] | |||||
Carrying amount | $ 20,935,000 | $ 0 | |||
Proceeds from master repurchase agreement | $ 0 | (21,583,000) | |||
Citibank, N.A. | Mortgages and Related Assets | |||||
Assets Sold under Agreements to Repurchase [Line Items] | |||||
Authorized amount | $ 100,000,000 | ||||
Percentage of purchased asset, initial purchase price | 75.00% | ||||
Number of assets sold | loan | 2 | ||||
Carrying amount | $ 28,778,000 | ||||
Proceeds from master repurchase agreement | $ (21,583,000) | ||||
Weighted average remaining maturity | 2 years 4 months 24 days | ||||
Interest rate | 2.26% | ||||
Interest expense | $ 234,000 | ||||
LIBOR | Citibank, N.A. | Minimum | Mortgages and Related Assets | |||||
Assets Sold under Agreements to Repurchase [Line Items] | |||||
Variable basis spread | 2.00% | ||||
LIBOR | Citibank, N.A. | Maximum | Mortgages and Related Assets | |||||
Assets Sold under Agreements to Repurchase [Line Items] | |||||
Variable basis spread | 2.50% |
Secured Debt Agreements - Notes
Secured Debt Agreements - Notes Payable (Details) $ in Thousands | Jul. 27, 2018USD ($)extension_option | Sep. 30, 2018USD ($) | Jul. 31, 2018USD ($)keystory |
Hampton Inn JFK | |||
Debt Instrument [Line Items] | |||
Face amount | $ 40,363 | ||
Face amount funded upon closing | $ 39,613 | ||
Number of keys in building | key | 216 | ||
Number of stories in building | story | 13 | ||
TCB Loan | Note payable | |||
Debt Instrument [Line Items] | |||
Percentage of collateral eligible to be advanced | 80.00% | ||
Number of extension options | extension_option | 2 | ||
Term of extension option | 12 months | ||
Debt yield | 10.50% | ||
Percentage of loan guaranteed | 25.00% | ||
Proceeds from debt | $ (31,690) | ||
Interest expense | $ 246 | ||
TCB Loan | Note payable | LIBOR | |||
Debt Instrument [Line Items] | |||
Variable rate | 2.15% |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - $ / shares | Sep. 24, 2018 | Sep. 13, 2018 | Aug. 20, 2018 | Apr. 25, 2018 | Mar. 09, 2018 | Sep. 30, 2018 |
Subsidiary, Sale of Stock [Line Items] | ||||||
Shares forfeited (in shares) | 8,000 | |||||
Shares forfeited (in dollars per share) | $ 12.50 | |||||
Shares paid for tax withholding (in shares) | 2,121 | 2,121 | ||||
Shares paid for tax withholding (in dollars per share) | $ 11.89 | |||||
Fully Vested Common Shares | 2017 Plan | Trustee | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Shares granted (in shares) | 3,000 | 1,500 | ||||
Shares granted (in dollars per share) | $ 12.61 | $ 13.31 | ||||
Fully Vested Common Shares | 2017 Plan | Officers and employees | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Shares granted (in shares) | 46,300 | |||||
Shares granted (in dollars per share) | $ 11.80 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Additional Information (Details) $ in Thousands | Sep. 30, 2018USD ($) |
Fair Value Disclosures [Abstract] | |
Loans held-for-investment | $ 83,006 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Recurring Fair Value (Details) $ in Thousands | Sep. 30, 2018USD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Loans held-for-investment | $ 83,006 |
Recurring | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Loans held-for-investment | 82,408 |
Recurring | Level I | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Loans held-for-investment | 0 |
Recurring | Level II | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Loans held-for-investment | 0 |
Recurring | Level III | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Loans held-for-investment | 83,006 |
Book Value | Recurring | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Loans held-for-investment | 81,664 |
Master repurchase agreement | Recurring | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Financial liabilities | 21,583 |
Master repurchase agreement | Recurring | Level I | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Financial liabilities | 0 |
Master repurchase agreement | Recurring | Level II | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Financial liabilities | 0 |
Master repurchase agreement | Recurring | Level III | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Financial liabilities | 21,583 |
Master repurchase agreement | Book Value | Recurring | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Financial liabilities | 20,935 |
Note payable | Recurring | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Financial liabilities | 31,690 |
Note payable | Recurring | Level I | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Financial liabilities | 0 |
Note payable | Recurring | Level II | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Financial liabilities | 0 |
Note payable | Recurring | Level III | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Financial liabilities | 31,690 |
Note payable | Book Value | Recurring | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Financial liabilities | $ 31,461 |
Management Agreement With Our_2
Management Agreement With Our Manager (Details) $ in Thousands | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)employee | Sep. 30, 2017USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)employee |
Related Party Transaction [Line Items] | |||||
Number of employees | employee | 0 | 0 | |||
Annualized base management fee | 1.50% | 1.50% | |||
Management fees | $ 32 | $ 0 | $ 32 | $ 32 | $ 447 |
Management fees, including waived fees | 222 | ||||
Shared services agreement reimbursement | 375 | $ 53 | $ 53 | 1,125 | |
Shared Service Costs | Principal Owner | |||||
Related Party Transaction [Line Items] | |||||
Shared services agreement reimbursement | 53 | 375 | 1,125 | ||
Internal audit costs | Principal Owner | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction | $ 0 | $ 25 | $ 87 |
Related Person Transactions (De
Related Person Transactions (Details) - USD ($) $ in Thousands | Sep. 24, 2018 | Sep. 29, 2017 | Sep. 30, 2018 | Sep. 30, 2018 |
Related Party Transaction [Line Items] | ||||
Shares paid for tax withholding (in shares) | 2,121 | 2,121 | ||
Officers and employees | ||||
Related Party Transaction [Line Items] | ||||
Shares granted (in shares) | 46,300 | |||
Initial organizational and IPO costs | RMR, LLC | ||||
Related Party Transaction [Line Items] | ||||
Related party transaction | $ 6,823 | |||
Tremont Mortgage Trust | Tremont Realty Advisors LLC | ||||
Related Party Transaction [Line Items] | ||||
Ownership percentage | 100.00% | |||
Shares owned (in shares) | 600,100 | 600,100 | ||
Noncontrolling ownership interest | 18.90% | 18.90% |
Weighted Average Common Shares
Weighted Average Common Shares (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | |
Restricted unvested common shares | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 2,204 | 1,071 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Unfunded commitments | $ 6,104 |