Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2021 | Feb. 21, 2022 | Jun. 30, 2021 | |
Document Information [Line Items] | |||
Entity Registrant Name | Broadmark Realty Capital Inc. | ||
Entity Central Index Key | 0001784797 | ||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2021 | ||
Entity File Number | 001-39134 | ||
Entity Incorporation, State or Country Code | MD | ||
Entity Tax Identification Number | 84-2620891 | ||
Entity Address, Address Line One | 1420 Fifth Avenue, Suite 2000 | ||
Entity Address, City or Town | Seattle | ||
Entity Address, State or Province | WA | ||
Entity Address, Postal Zip Code | 98101 | ||
City Area Code | 206 | ||
Local Phone Number | 971-0800 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1.4 | ||
Entity Common Stock, Shares Outstanding | 132,785,082 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Documents Incorporated by Reference [Text Block] | DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s definitive proxy statement relating to its 2022 annual meeting of shareholders (the “2022 Proxy Statement”) are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. The 2022 Proxy Statement will be filed with the U.S. Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K. | ||
Auditor Name | Moss Adams LLP | ||
Auditor Location | Everett, Washington | ||
Auditor Firm ID | 659 | ||
Common Stock [Member] | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Common Stock | ||
Trading Symbol | BRMK | ||
Security Exchange Name | NYSE | ||
Warrant | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Warrants | ||
Trading Symbol | BRMK WS | ||
Security Exchange Name | NYSEAMER |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Assets | ||
Cash and cash equivalents | $ 132,889 | $ 223,375 |
Mortgage notes receivable, net | 901,350 | 798,486 |
Interest and fees receivable, net | 17,526 | 14,357 |
Investment in real property, net | 68,067 | 8,473 |
Right-of-use assets | 6,016 | 0 |
Goodwill | 136,965 | 136,965 |
Other assets | 8,342 | 5,663 |
Total assets | 1,271,155 | 1,187,319 |
Liabilities and Equity | ||
Senior Unsecured Notes, Net | 97,223 | 0 |
Dividends payable | 9,291 | 7,952 |
Accounts payable and accrued liabilities | 8,180 | 4,946 |
Lease liabilities | 7,993 | 0 |
Total liabilities | 122,687 | 12,898 |
Commitments and contingencies (Note 8) | ||
Preferred stock, $0.001 par value, 100,000,000 shares authorized, no shares issued and outstanding at December 31, 2021 and December 31, 2020 | 0 | 0 |
Common stock, $0.001 par value, 500,000,000 shares authorized, 132,716,338 and 132,532,383 shares issued and outstanding at December 31, 2021 and December 31, 2020, respectively | 132 | 132 |
Additional paid in capital | 1,216,957 | 1,213,987 |
Accumulated deficit | (68,621) | (39,698) |
Total equity | 1,148,468 | 1,174,421 |
Total liabilities and equity | $ 1,271,155 | $ 1,187,319 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock shares issued (in shares) | 0 | 0 |
Preferred stock shares outstanding (in shares) | 0 | 0 |
Common stock par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock shares issued (in shares) | 132,716,338 | 132,532,383 |
Common stock shares outstanding (in shares) | 132,716,338 | 132,532,383 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 2 Months Ended | 10 Months Ended | 12 Months Ended | |||
Dec. 31, 2019 | Nov. 14, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | |||
Income Statement [Abstract] | ||||||
Financial Designation | Successor | Predecessor | Successor | Successor | ||
Revenues | ||||||
Revenues | $ 15,974 | $ 115,010 | [1] | $ 120,544 | $ 122,358 | |
Operating expenses: | ||||||
Compensation and employee benefits | 2,527 | 5,554 | [1] | 15,093 | 15,646 | |
General and administrative | 2,843 | 10,402 | [1] | 11,626 | 15,251 | |
Interest Expense | 0 | 0 | [1] | 3,320 | 0 | |
Transaction costs | 367 | 25,789 | [1] | 0 | 0 | |
Total expenses | 5,737 | 41,745 | [1] | 30,039 | 30,897 | |
Impairment: | ||||||
Provision for (reversal of) credit losses, net | 0 | 3,342 | [1] | 6,179 | 6,722 | |
Other (expense) income: | ||||||
Change in fair value of warrant liabilities | (4,924) | 0 | [1] | (1,838) | 5,492 | |
Income before income taxes | 5,313 | 69,923 | [1] | 82,488 | 90,231 | |
Income tax provision | 0 | 0 | [1] | 0 | 0 | |
Net income | $ 5,313 | 69,923 | [1] | $ 82,488 | $ 90,231 | |
Earnings per common share: | ||||||
Basic | [2] | $ 0.04 | $ 0.62 | $ 0.68 | ||
Diluted | [2] | $ 0.04 | $ 0.62 | $ 0.68 | ||
Weighted-average shares of common stock outstanding, basic and diluted | ||||||
Basic | 132,111,329 | 132,579,289 | 132,209,495 | |||
Diluted | 132,499,386 | 132,666,502 | 132,261,113 | |||
Interest Income | ||||||
Revenues | ||||||
Revenues | $ 13,207 | 82,225 | [1] | $ 89,957 | $ 93,869 | |
Fee Income | ||||||
Revenues | ||||||
Revenues | $ 2,767 | $ 32,785 | [1] | $ 30,587 | $ 28,489 | |
[1] | Predecessor period is combined as disclosed in Note 1 | |||||
[2] | The Company determined that earnings per unit in the Predecessor periods would not be meaningful to the users of this filing, given the different unit holders and members' equity structures of each individual entity in the Predecessor Company Group |
Consolidated Statements of Memb
Consolidated Statements of Members' Equity and Shareholders' Equity - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment [Member] | Class A Units [Member] | Class P Units [Member] | Preferred Stock [Member] | Common Stock [Member] | Common Stock [Member]Class A Units [Member] | Common Stock [Member]Class P Units [Member] | Additional Paid-in Capital [Member] | Retained Earnings (Accumulated Deficit) [Member] | Retained Earnings (Accumulated Deficit) [Member]Cumulative Effect, Period of Adoption, Adjustment [Member] | ||
Balance as of December 31, 2018 (Predecessor) at Dec. 31, 2018 | $ 685,110 | $ 684,979 | $ 1 | $ 767 | $ (637) | ||||||||
Balance as of (in units) at Dec. 31, 2018 | 6,817,701 | 20,950 | 50 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Contributions | $ 356,386 | $ 356,386 | |||||||||||
Contributions, Shares | 850 | 3,563,859 | |||||||||||
Reinvestments | $ 33,637 | $ 33,637 | |||||||||||
Reinvestments, Shares | 336,366 | ||||||||||||
Net income | 69,923 | [1] | 69,923 | ||||||||||
Distributions | (102,204) | (102,204) | |||||||||||
Redemptions | (155,744) | $ (155,744) | |||||||||||
Redemptions, Shares | (1,555,623) | ||||||||||||
Compensation Expense Related to Grant of Profits Interest | 734 | 734 | |||||||||||
Compensation Expense Related to Grant of Profits Interest, Shares | (100) | 100 | |||||||||||
Grants of Restricted Units | 474 | 474 | |||||||||||
Grants of Restricted Units, Shares | 150 | ||||||||||||
Balance at Nov. 14, 2019 | 454,976 | $ 467,235 | (12,259) | ||||||||||
Balance as of November 14, 2019 (Predecessor) at Nov. 14, 2019 | [2] | 888,316 | $ 919,258 | $ 1 | 1,975 | (32,918) | |||||||
Balance as of (in units) at Nov. 14, 2019 | [2] | 9,162,303 | 21,850 | 150 | |||||||||
Balance, Shares at Nov. 14, 2019 | 4,655,758 | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Recapitalization of BRELF II, LLC and Broadmark - Shares | (4,655,758) | 86,118,101 | |||||||||||
Recapitalization of BRELF II, LLC and Broadmark | 325,657 | $ (467,235) | $ 86 | 794,798 | (1,992) | ||||||||
Consent fee paid to warrant holders | (66,679) | (66,679) | |||||||||||
Issuance of shares in connection with Business Combination - Shares | 45,896,534 | ||||||||||||
Issuance of shares in connection with Business Combination | 479,619 | $ 46 | 479,573 | ||||||||||
Net income | 5,313 | 5,313 | |||||||||||
Dividends | (15,842) | 15,842 | |||||||||||
Issuance of shares for exercised Warrants - Shares | 1,000 | ||||||||||||
Issuance of Shares for Exercised Warrants | 11 | 11 | |||||||||||
Stock-based compensation expense for restricted stock units | 1,417 | 1,417 | |||||||||||
Balance at Dec. 31, 2019 | 1,184,472 | $ 132 | 1,209,120 | (24,780) | |||||||||
Balance, Shares at Dec. 31, 2019 | 132,015,635 | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Net income | 90,231 | 90,231 | |||||||||||
Dividends | (103,174) | 103,174 | |||||||||||
Issuance of shares for vested restricted stock units (in shares) | 516,723 | ||||||||||||
Issuance of shares for exercised Warrants - Shares | 25 | ||||||||||||
Stock-based compensation expense for restricted stock units | 4,867 | 4,867 | |||||||||||
Balance at Dec. 31, 2020 | 1,174,421 | $ (1,975) | $ 132 | 1,213,987 | (39,698) | $ (1,975) | |||||||
Balance, Shares at Dec. 31, 2020 | 132,532,383 | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Net income | 82,488 | 82,488 | |||||||||||
Dividends | (111,411) | 111,411 | |||||||||||
Issuance of shares for vested restricted stock units (in shares) | 231,053 | ||||||||||||
Shares withheld for tax liability | (485) | (485) | |||||||||||
Shares withheld for tax liability (in shares) | (47,098) | ||||||||||||
Stock-based compensation expense for restricted stock units | 3,455 | 3,455 | |||||||||||
Balance at Dec. 31, 2021 | $ 1,148,468 | $ 132 | $ 1,216,957 | $ (68,621) | |||||||||
Balance, Shares at Dec. 31, 2021 | 132,716,338 | ||||||||||||
[1] | Predecessor period is combined as disclosed in Note 1 | ||||||||||||
[2] | Predecessor period is combined as disclosed in Note 1. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 2 Months Ended | 10 Months Ended | 12 Months Ended | |||
Dec. 31, 2019 | Nov. 14, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | |||
Statement of Cash Flows [Abstract] | ||||||
Financial Designation | Successor | Predecessor | Successor | Successor | ||
Cash flows from operating activities | ||||||
Net income | $ 5,313 | $ 69,923 | [1] | $ 82,488 | $ 90,231 | |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Accretion of deferred origination and amendment fees | 0 | 0 | [1] | (27,741) | (23,114) | |
Depreciation and amortization | 1,038 | 112 | [1] | 741 | (558) | |
Amortization of right of use assets | 0 | 0 | [1] | 382 | 446 | |
Amortization of debt issuance costs | 0 | 0 | [1] | 78 | 0 | |
Amortization of credit facility costs | 0 | 0 | [1] | 1,255 | 0 | |
Stock-based compensation expense for restricted stock units | 1,417 | 0 | [1] | 3,455 | 4,867 | |
Compensation expense related to grant of profits interest | 0 | 734 | [1] | 0 | 0 | |
Compensation expense related to grant of Class A units | 0 | 474 | [1] | 0 | 0 | |
Provision for credit losses, net | 0 | 3,342 | [1] | 6,179 | 6,722 | |
Write down of investment in real property | 0 | 179 | [1] | 0 | 0 | |
Change in fair value of warrant liabilities | 4,924 | 0 | [1] | 1,838 | (5,492) | |
Changes in operating assets and liabilities: | ||||||
Interest and fees receivable, net | 1,908 | (5,134) | [1] | (3,169) | (10,249) | |
Other assets | (1,291) | (290) | [1] | 385 | (1,073) | |
Accounts payable and accrued liabilities | (7,669) | 22,158 | [1] | (1,397) | 2,469 | |
Lease liabilities | 0 | 0 | [1] | (364) | (446) | |
Net cash provided by operating activities | 5,640 | 91,498 | [1] | 64,130 | 63,803 | |
Cash flows from investing activities: | ||||||
Purchases of property and equipment | (13,740) | (268) | [1] | (476) | 0 | |
Proceeds from sale of real property | 2,577 | 6,363 | [1] | 4,319 | 6,356 | |
Improvements to investments in real property | 0 | (308) | [1] | (4,435) | (119) | |
Repurchase of participations in mortgage notes receivable | 0 | 0 | [1] | (43,498) | 0 | |
Change in mortgage notes receivable, net | (14,729) | (222,178) | [1] | (91,989) | 26,185 | |
Net cash used in investing activities | (25,892) | (216,391) | [1] | (136,079) | 32,422 | |
Cash flows from financing activities: | ||||||
Proceeds from recapitalization with Trinity Merger Sub | 327,056 | 0 | [1] | 0 | 0 | |
Contributions from members | 0 | 356,386 | [1] | 0 | 0 | |
Contributions received in advance | 0 | (24,507) | [1] | 0 | 0 | |
Dividends paid | 0 | 0 | [1] | (110,072) | (111,064) | |
Distributions | (1,992) | (74,900) | [1] | 0 | 0 | |
Redemptions of members | 0 | (155,744) | [1] | 0 | 0 | |
Proceeds from exercise of warrants | 11 | 0 | [1] | 0 | 0 | |
Consent fee paid to holders of Public Warrants | (66,679) | 0 | [1] | 0 | 0 | |
Proceeds from issuance of senior unsecured notes | 0 | 0 | [1] | 100,000 | 0 | |
Payment of debt issue costs | (2,855) | |||||
Payment of costs to obtain financing | 0 | 0 | [1] | (5,125) | 0 | |
Proceeds from borrowings on credit facilities | 0 | 0 | [1] | 50,000 | 0 | |
Repayment of borrowings on credit facilities | 0 | 0 | [1] | (50,000) | 0 | |
Payment of taxes on shares withheld for tax liability | 0 | 0 | [1] | (485) | 0 | |
Net Cash Provided by (Used in) Financing Activities, Total | 258,396 | 101,235 | [1] | (18,537) | (111,064) | |
Net increase (decrease) in cash and cash equivalents | 238,144 | (23,658) | [1] | (90,486) | (14,839) | |
Cash and cash equivalents, beginning of period | 88,576 | [1] | 112,234 | [1] | 223,375 | 238,214 |
Cash and cash equivalents, beginning of period | 70 | |||||
Cash and cash equivalents, end of period | 238,214 | 88,576 | [1] | 132,889 | 223,375 | |
Supplemental disclosure of non-cash investing and financing activities | ||||||
Common stock issued in connection with the Business Combination | 479,619 | 0 | [1] | 0 | 0 | |
Common stock issued in connection with the Recapitalization of BRELF II | 495,496 | 0 | [1] | 0 | 0 | |
Common stock issued for transaction expenses in connection with Business Combination and Recapitalization | 1,391 | 0 | [1] | 0 | 0 | |
Assumption of consent fee liability in connection with the recapitalization with Trinity Merger Sub I, Inc. | 66,679 | 0 | [1] | 0 | 0 | |
Dividends payable | 15,842 | 0 | [1] | 9,291 | 7,952 | |
Reinvested distributions | 0 | 33,637 | [1] | 0 | 0 | |
Measurement period adjustment to goodwill and intangible assets | 0 | 0 | [1] | 0 | 5,000 | |
Mortgage notes receivable converted to real property owned | 0 | 2,046 | [1] | 54,349 | 8,873 | |
Interest and fee receivables converted to investment in real property | 0 | 0 | [1] | 4,129 | 0 | |
Operating lease right-of-use assets | 0 | 0 | [1] | 6,360 | 0 | |
Lease liabilities arising from obtaining right-of-use assets | 0 | 0 | [1] | 8,319 | 0 | |
Property and equipment purchased through tenant improvement allowance | $ 0 | $ 0 | [1] | $ 1,959 | $ 0 | |
[1] | Predecessor period is combined as disclosed in Note 1. |
Organization and Business
Organization and Business | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business | Note 1 - Organization and Business Broadmark Realty Capital Inc. (“Broadmark Realty,” “the Company,” “Successor,” “we,” “us” and “our”) is an internally managed commercial real estate finance company that provides secured financing to real estate investors and developers. Broadmark Realty’s objective is to preserve and protect stockholder capital while producing attractive risk-adjusted returns primarily through dividends generated from current income from its loan portfolio. Broadmark Realty generally operates in states that it believes to have favorable demographic trends and provide Broadmark Realty the ability to efficiently access the underlying collateral in the event of borrower default. On November 14, 2019 (the “Closing Date”), Broadmark Realty Capital Inc., a Maryland corporation (formerly named Trinity Sub Inc.) (“Broadmark Realty”), consummated a business combination (the “Business Combination”) pursuant to an Agreement and Plan of Merger, dated August 9, 2019 (the “Merger Agreement”), by and among the Company, Trinity Merger Corp. (“Trinity”), Trinity Merger Sub I, Inc. (“Merger Sub I”), Trinity Merger Sub II, LLC (“Merger Sub II” and together with Trinity and Merger Sub I, the “Trinity Parties”), PBRELF I, LLC (“PBRELF”), BRELF II, LLC (“BRELF II”), BRELF III, LLC (“BRELF III”), BRELF IV, LLC (“BRELF IV” and, together with PBRELF, BRELF II and BRELF III, the “Predecessor Companies” and each a “Predecessor Company”), Pyatt Broadmark Management, LLC (“MgCo I”), Broadmark Real Estate Management II, LLC (“MgCo II”), Broadmark Real Estate Management III, LLC (“MgCo III”), and Broadmark Real Estate Management IV, LLC (“MgCo IV” and, together with MgCo I, MgCo II and MgCo III, the “Predecessor Management Companies” and each a “Predecessor Management Company,” and the Predecessor Management Companies, together with the Predecessor Companies and their subsidiaries, the “Predecessor Company Group”). Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, (i) Merger Sub I merged with and into Trinity, with Trinity being the surviving entity of such merger (the “Trinity Merger”), (ii) immediately following the Trinity Merger, each of the Predecessor Companies merged with and into Merger Sub II, with Merger Sub II being the surviving entity of such merger (the “Company Merger”), and (iii) immediately following the Company Merger, each of the Predecessor Management Companies merged with and into Trinity, with Trinity being the surviving entity of such merger (the “Management Company Merger” and, together with the Trinity Merger and the Company Merger, the “Mergers”). As a result of the Mergers, Merger Sub II and Trinity became wholly owned subsidiaries of Broadmark Realty. The consolidated subsidiaries of Broadmark Realty include BRMK Lending, LLC, BRMK Management, Corp., and Broadmark Private REIT Management, LLC. BRMK Lending, LLC originates short-term loans secured by first deed of trust liens on residential and commercial real estate. BRMK Management, Corp. (the “Manager”) manages the underwriting, closing, servicing and disposition of mortgage notes, and performs all general and administrative duties for Broadmark Realty. Broadmark Private REIT Management, LLC (the “Private REIT Manager”) previously managed Broadmark Private REIT, LLC (the “Private REIT”), which was an unconsolidated affiliate of the Company that primarily participated in loans originated, underwritten and serviced by a subsidiary of Broadmark Realty. The Private REIT was liquidated during the quarter ended September 30, 2021. Refer to “Broadmark Private REIT, LLC” in Note 13 for details about the liquidation of the Private REIT. Broadmark Realty has elected to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes. Broadmark Realty generally will not be subject to U.S. federal corporate income tax on that portion of its net income that is distributed to stockholders if it distributes at least 90% of its REIT taxable income to its stockholders by prescribed dates and complies with various other requirements. The Company also operates its business in a manner that permits it to maintain an exclusion from registration under the Investment Company Act of 1940. As a REIT, Broadmark Realty may own up to 100% of the stock of one or more taxable REIT subsidiaries (“TRSs”), which may earn income that would not be qualifying income if earned directly by a REIT. The Manager is a TRS and this election applies to the wholly-owned subsidiaries of the Manager, including the Private REIT Manager. Unless the context otherwise requires, references to “Broadmark Realty,” the “Company,” “we,” “us” and “our” in the remainder of this report refer to Broadmark Realty Capital Inc. and its consolidated subsidiaries after the Business Combination, and refer to the Predecessor Company Group for periods prior to the Business Combination. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 - Summary of Significant Accounting Policies Basis of Presentation For the period from January 1, 2019 through November 15, 2019, the accompanying consolidated financial statements do not represent the financial position and results of operations of one controlling legal entity, but rather a combination of the historical results of the Predecessor Company Group, which was under common management. Therefore, any reference herein to the Predecessor financial statements are made on a combined basis. For periods from November 15, 2019 on, the principles of consolidation accompanying consolidated financial statements represent the consolidated financial statements of the Company, beginning with BRELF II as the accounting acquirer and successor entity. In addition, as a result of the Business Combination, the consolidated financial statements for periods from November 15, 2019 on, are presented on a new basis of accounting pursuant to Accounting Standards Codification ("ASC") 805, Business Combinations (refer to Note 3) to reflect BRELF II acquiring the other entities within the Predecessor Company Group and Trinity in the successor period. The accompanying consolidated financial statements include Broadmark Realty Capital Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. These consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Principles of Consolidation For the Predecessor period, all significant intra-entity accounts, balances, and transactions have been eliminated in the preparation of the consolidated financial statements. All significant intercompany accounts, balances, and transactions have been eliminated in consolidation. Broadmark Realty consolidates those entities in which it has control over significant operating, financial and investing decisions of the entity, as well as those entities deemed to be variable interest entities (“VIEs”), if any, in which Broadmark Realty is determined to be the primary beneficiary. Broadmark Realty is not the primary beneficiary of, and therefore does not consolidate, any VIEs in the accompanying consolidated financial statements. The Private REIT was determined to be a voting interest entity for which we, through our wholly-owned subsidiary who previously acted as manager with no significant equity investment, did not hold a controlling interest in and, therefore, did not consolidate. Furthermore, the Private REIT's participation in loans originated by us met the characteristics of a participating interest and the criterion for sale accounting in accordance with GAAP and therefore, was derecognized from our consolidated financial statements. The Private REIT was liquidated in August 2021 and all participations in mortgage notes receivable held by the Private REIT were purchased for cash by the Company at the settlement value which approximated fair value. Reclassifications Certain amounts in our consolidated financial statements as of and for the year ended December 31, 2020 have been reclassified to conform to the presentation of our current period consolidated financial statements. These reclassifications had no effect on our previously reported net income or stockholders’ equity. The reclassifications include reclassifying certain board member expenses from compensation expense into general and administrative expense on the consolidated statements of income. The reclassification for the change in receivables due from the Private REIT from other assets to mortgage notes receivables resulted in an immaterial adjustment of the totals for net cash provided by operating activities and net cash provided by investing activities, both as previously reported. The reclassifications also included the separate presentation of amortization of right of use assets and change in lease liabilities and the combined presentation of depreciation and amortization on the consolidated statements of cash flows. Correction of Immaterial Error In the course of preparing our second quarter 2021 consolidated financial statements, we revisited our previous accounting classification for warrants and identified an error related to the presentation of the Private Placement Warrants, resulting in an understatement of liabilities and change in fair value from November 14, 2019 to March 31, 2021. Refer to Note 9 for additional details about the Private Placement Warrants and Public Warrants. The Private Placement Warrants generally have the same terms as the Public Warrant s, except that so long as the Private Placement Warrants are held by the original holder or its permitted transferees, (i) the original holder or its permitted transferees may exercise the warrant on a cashless basis and (ii) the Company does not have the right to redeem the Private Placement Warrants. In the case of a change of control in which less than 70 percent of the consideration received is stock listed on an exchange, the Public Warrants and Private Placement Warrants would be subject to an exercise price adjustment calculated on the basis of a capped American call option and uncapped American call option, respectively. If, however, the Private Placement Warrants are transferred to a third party, the basis for the exercise price adjustment changes and is calculated on the basis of a capped American call option, which results in the valuation change being based, in part, on the holder of the Private Placement Warrants. As a result, the Private Placement Warrants do not meet the criteria to be indexed to valuation inputs based on the Company’s own stock and must be classified as a liability measured at fair value. Based on consideration of both the quantitative and qualitative factors within the provisions of SEC Staff Accounting Bulletin No. 99, Materiality, and Staff Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, we determined that the error was not material to our previously issued annual and interim consolidated financial statements. Furthermore, we determined that correcting the error in the second quarter of 2021 would not materially misstate our consolidated financial statements and therefore, no restatement of our prior period consolidated financial statements was required. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts and disclosures at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. The most significant estimates relate to the expected credit losses on our loans and the fair value of financial instruments. Accordingly, actual results could differ from those estimates. For certain real properties, where a recent appraisal is either unavailable or not most representative of fair value, the fair value is based on a broker opinion of value including a capitalized income analysis and replacement cost analysis considering historical operating results, market rents, vacancy rates, capitalization rates, land cost comparisons, market trends and economic conditions. The assessment of fair value of real property is subject to uncertainty and, in certain cases, sensitive to the selection of comparable properties. Certain Significant Risks and Uncertainties In the normal course of business, we encounter two primary types of economic risk in the form of credit and market risks. Credit risk is the risk of default on our investment in mortgage notes receivable resulting from a borrower's inability or unwillingness to make contractually required payments. Market risk is the risk of declining real estate values for the collateral underlying our loans which may make it more difficult for existing borrowers to remain current on their payment obligations, reduce the speed or ability for our loans to be repaid through the sale or refinance of the collateral and increase the likelihood that we will incur losses on our loans in the event of default as the value of collateral may be insufficient to cover our investment in the loan. We believe that the carrying values of our loans reasonably consider these risks. In addition, we are subject to significant tax risks. If we were to fail to qualify as a REIT in any taxable year, we would be subject to U.S. federal corporate income tax, which could be material. We operate in a dynamic industry and, accordingly, can be affected by a variety of factors. For example, we believe that changes in any of the following areas could have a significant negative effect on us in terms of our future financial position, results of operations or cash flows: public health crises, like the COVID-19 pandemic; the economy in the areas we operate; competition in our market; the stability of the real estate market and the impact of interest rate changes; changes in government regulation affecting our business; natural disasters and catastrophic events; and our ability to attract and retain qualified employees and key personnel, among other things. Reportable Segments We operate the business as one reportable segment, which originates, underwrites and services construction loans. BALANCE SHEET MEASUREMENT Cash and Cash Equivalents We consider all highly liquid investments with an original maturity of 90 days or less at the date of purchase to be cash equivalents. We have a cash management sweep account repurchase agreement, whereby our bank nightly sweeps cash in excess of $ 750,000 , sells us specific U.S. government agency securities and then repurchases these securities the next day. We maintain our cash and cash equivalents with financial institutions, which are insured up to a maximum of $ 250,000 per account as of December 31, 2021 and 2020 . The balances in these accounts may exceed the insured limits. There were no restrictions on cash as of December 31, 2021 or 2020 . Mortgage Notes Receivable Mortgage notes receivable (referred to herein as “mortgage notes receivable”, “construction loans”, “loans”, or “notes”) are classified as held for investment, as we have the intent and ability to hold until maturity or payoff and are carried in the consolidated balance sheets at amortized cost, net of construction holdbacks, interest reserves, allowance for credit losses and deferred origination and amendment fees. Participations in mortgage notes receivables are accounted for as sales and derecognized from the balance sheet when control over the transferred assets has been surrendered. Control over transferred assets is deemed to be surrendered when: (1) a group of financial assets or a participating interest in an entire financial asset has been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right, beyond a more than trivial benefit) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets. If the sales do not meet these criteria, the sale of the participation is treated as a secured borrowing. As of December 31, 2021 , there were no outstanding participations in our mortgage notes receivables. Current Expected Credit Losses Allowance We adopted the current expected credit loss (“CECL Standard”) during the year ended December 31, 2020. The initial CECL allowance adjustment of $ 2.0 million was recorded effective January 1, 2020 as a cumulative-effect of change in accounting principle through a direct charge to accumulated deficit on our consolidated statements of stockholders’ equity; however, subsequent changes to the CECL allowance are recognized in our consolidated statements of income. The CECL Standard replaced the incurred loss model under existing guidance with an expected loss model for instruments measured at amortized cost. We record an allowance for credit losses in accordance with the CECL Standard on our loan portfolio, including unfunded construction holdbacks, on a collective basis by assets with similar risk characteristics. In addition, for assets that are classified as collateral dependent based on foreclosure being probable, we continue to record loan specific allowances based on the fair value of the collateral for expected credit losses under the CECL Standard. Given the short-term nature of our loans, we evaluate the most recent external appraisal and, depending on the age of the appraisal, may order a new appraisal or, where available, will evaluate against existing comparable sales or other pertinent information to estimate the fair value of the collateral for such loans. The CECL Standard requires an entity to consider historical loss experience, current conditions, and a reasonable and supportable forecast of the economic environment. The Company utilizes a probability of default/loss given default (“PD/LGD”) method for estimating current expected credit losses. In accordance with the PD/LGD method, an annual historical loss rate is applied to the amortized cost of an asset or pool of assets over the remaining expected life. The PD/LGD method requires consideration of the timing of expected future funding of existing commitments and repayments over each asset’s remaining life. An annual loss factor, adjusted for macroeconomic estimates, is applied over each subsequent period and aggregated to arrive at the CECL allowance. In determining the CECL allowance, we considered various factors including (i) historical loss experience in our portfolio, (ii) historical loss experience in the commercial real estate lending market, (iii) timing of expected pay offs including prepayments and extensions where reasonably expected, and (iv) our current and future view of the macroeconomic environment. We utilize a reasonable and supportable forecast period equal to the contractual term of the loan plus short-term extensions of one to three months that are reasonably expected for construction loans. Management estimates the allowance for credit losses using relevant information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. The allowance for credit losses is maintained at a level sufficient to provide for expected credit losses over the life of the loan based on evaluating historical credit loss experience and making adjustments to historical loss information for differences in the specific risk characteristics in the current loan portfolio. The CECL Allowance related to the principal outstanding is presented within mortgage notes receivable, net and for unfunded commitments is within accounts payable and accrued liabilities on our consolidated balance sheets. We have made an accounting policy election to exclude accrued interest receivable, included in interest and fees receivable, net on our consolidated balance sheets, from the amortized cost basis of the related mortgage notes receivable in determining the CECL allowance, as any uncollectable accrued interest receivable is written off either when the collateral underlying the loan is sold or upon transfer to real estate owned. No interest income is recognized on mortgage notes receivable that are in contractual default unless the collectability of all principal is not in doubt and collection of accrued amounts is reasonably assured or paid in cash. In addition, in certain instances, where the interest reserve on a current loan has been fully depleted and the interest payment is not expected to be collected from the borrower, we may place a current loan on non-accrual status and recognize interest income on a cash-basis where principal collection is not in doubt. Impairment of Loans – Incurred Loss Model For the periods ended December 31, 2019 and November 14, 2019, we evaluated loans designated as non-performing for impairment as we had some expectation that the repayment of loan, including both contractual interest and principal payments, may not be realized in full. We designated loans as non-performing at such time as (1) the borrower failed to make the required monthly interest-only loan payments; (2) the loan had a maturity default; or (3) in the opinion of management, it was probable we would be unable to collect all amounts due according to the contractual terms of the loan. For the 2019 periods, the allowance for credit losses reflected our estimate of incurred loan losses in the loan portfolio as of the balance sheet date. The allowance increased or decreased by recording the loan loss provision or recovery in our consolidated statements of income and decreased by charge-offs when losses were confirmed through the receipt of assets, such as in a pre-foreclosure sale or upon ownership control of the underlying collateral in full satisfaction of the loan upon foreclosure or when significant collection efforts had ceased. The allowance for credit losses was determined on an asset-specific basis. The asset-specific allowance related to estimated losses on individual impaired loans. This assessment was based on factors such as payment status, lien position, borrower financial resources and investment collateral, collateral type, project economics and geographic location as well as national and regional economic factors. For impaired loans, impairment was measured using the estimated fair value of collateral less the estimated cost to sell in comparison to the carrying value. Valuations were performed or obtained at the time a loan was determined to be impaired and designated as non-performing, and they are updated if circumstances indicate that a significant change in value has occurred. Given the short-term nature of our loans, we evaluated the most recent external appraisal and depending on the age of the appraisal, may have ordered a new appraisal or, where available, evaluated against existing comparable sales or other pertinent information to estimate the fair value of the collateral for such loans. Deferred Income Deferred income represents the amount of our origination and amendment fees that have been deferred and will be recognized in income over the contractual maturity of the underlying loan. Origination fees are included in the total commitment to the borrower and financed at the time of loan origination. Amendment fees are either included in the total commitment to the borrower and financed at the time of the loan amendment or are billed to the borrower when the loan is amended and not capitalized into the principal outstanding. Deferred origination and amendment fees capitalized into the principal outstanding are included within mortgage notes receivable, net on the consolidated balance sheets. Deferred amendment fees that are not included in the principal outstanding are presented within interest and fees receivable, net on the consolidated balance sheets. Interest and Fees Receivable Interest on performing loans is accrued and recognized as interest income at the contractual rate of interest, or at the contractual rate of monthly minimum interest. Extension fees are charged when we agree to extend the maturity dates of loans. In addition, late fees are charged when borrower payments are contractually past due. We monitor each note’s outstanding interest and fee receivables and, based on historical performance, generally reserve against the balance after a receivable is greater than 60 days past due unless collectability of all amounts due is reasonably assured. Real Property To maximize recovery against a defaulted loan, we may assume legal title or physical possession of the underlying collateral through foreclosure or the execution of a deed in lieu of foreclosure. Foreclosed properties are recorded at the lower of cost and fair value at the time of acquisition. The fair value generally approximates the carrying value of the loan secured by such property, and if the collateral value exceeds the carrying value of the loan, we then record some or all the unpaid, accrued interest and fees to the carrying value of the property. Real property is classified as held for sale in the period when we commit to a plan and have the authority to sell the asset in its current condition, have initiated an active marketing plan to sell the asset at a price that is reflective of its current fair value and the sale of the asset is both probable and expected to qualify for full sales recognition within a period of 12 months. Real property, held for sale is held at the lower of cost or fair value, which evaluated on a quarterly basis. Real property that does not qualify as held for sale is classified as held for use. Once construction is complete, real property, held for use is depreciated using the straight-line method over the estimated useful life of the property and depreciation expense is no longer recorded once the real property is classified as held for sale. Costs related to acquisition, development, construction and improvements are capitalized to the extent the investment in the real property does not exceed the fair value less estimated costs to sell. Expenditures for repairs and maintenance are charged to expense when incurred. Leases Our office space in Seattle, Washington is subject to an operating lease. The right of use assets and lease liabilities in our consolidated balance sheets relate to this lease. The lease agreement includes both lease components (e.g., fixed rent) and non-lease components (e.g., common-area maintenance). We account for the lease and non-lease components as a single component. Right of use assets represent our right to use an underlying asset during the lease term and lease liabilities represent our obligation to make lease payments. Right of use assets and lease liabilities are recognized at the lease commencement date based on the present value of the total lease payments not yet paid, including lease incentives not yet received, with the right of use assets further adjusted for any prepaid or accrued lease payments, lease incentives received and/or initial direct costs incurred. Our lease arrangement also includes variable payments for costs such as common-area maintenance, utilities, taxes or other operating costs, which are based on a percentage of actual expenses incurred. These variable lease payments are excluded from the measurement of the right of use assets and lease liabilities. When our lease includes an option to extend the lease term, we consider several factors in determining if a renewal option is reasonably certain of being exercised at lease commencement, including, but not limited to, contract-based, asset-based and entity-based factors. We reassess the term of the existing lease if there is a significant event or change in circumstances within our control that affects whether we are reasonably certain to exercise the option to extend the lease. Examples of such events or changes include construction of significant leasehold improvements or other modifications or customizations to the underlying asset, relevant business decisions or subleases. As our lease did not provide an implicit rate, we used our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments. We recognize lease expense for our operating lease on a straight-line basis over the lease term. Variable lease payments are generally recognized when incurred. These expenses are included in general and administrative expenses in the consolidated statements of income. Goodwill Goodwill was recognized as of the close of the Business Combination on November 14, 2019 and represents the excess of the cost of an acquired business over the fair value of the assets acquired at the date of acquisition and is not amortized. We assess the impairment of goodwill on an annual basis, in our fourth quarter, or whenever events or changes in circumstances indicate that goodwill may be impaired. In our evaluation of goodwill, we typically first perform a qualitative assessment to determine whether the carrying value of each reporting unit is greater than its fair value. If it is more likely than not that the carrying value of a reporting unit is greater than its fair value, we perform a quantitative assessment and an impairment charge is recorded in our statements of operations for the excess of carrying value of the reporting unit over its fair value. Our annual assessment occurs in the fourth quarter. We continue to monitor the impact of COVID-19 and determined there were no new triggering events to warrant a quantitative assessment of our goodwill during 2021. In the first quarter of 2020, we recorded a measurement period adjustment to reduce the preliminary fair value of intangible assets in the form of customer relationships by $ 5.0 million and increased our preliminary value of goodwill by $ 5.0 million. As a result of this adjustment to preliminary values, $ 0.9 million of amortization of intangible assets recorded in 2019 was reversed in the first quarter of 2020. Other Assets Other assets primarily consist of deferred financing costs related to our revolving credit facility, fixed assets, prepaid insurance, intangible assets, and other operating receivables. Fixed Assets Fixed assets, which are included in other assets in the accompanying consolidated balance sheets are stated at cost, less accumulated depreciation. Repairs and maintenance to these assets are charged to expense as incurred; major improvements enhancing the function and/or useful life are capitalized. When items are sold or retired, the related cost and accumulated depreciation are removed from the accounts and any gains or losses arising from such transactions are recognized. Depreciation is recorded on the straight-line basis over the estimated useful life of the assets. For computer equipment, office equipment, furniture and fixtures the useful lives range from three to seven years . For leasehold improvements, we depreciate over the shorter of expected useful life or lease term. Deferred Financing Costs Deferred financing costs that are included in other assets represent direct costs associated with the execution of the revolving credit facility. Such costs are included in other assets because the revolving credit facility has no principal outstanding as of December 31, 2021 and there is no recognized debt liability. These costs are amortized on the straight-line basis over the initial term of our revolving credit facility. Intangible Assets As a result of the Business Combination in November 2019, we identified intangible assets in the form of customer relationships. We record the intangible assets at fair value at the acquisition date and amortize the value of these finite-lived intangibles into expense over the expected useful life. All of our intangible assets relate to the value of customer relationships. As of December 31, 2021 and 2020, intangible assets net of accumulated amortization totaled $ 0.3 and $ 0.6 million, respectively. Senior Unsecured Notes Senior unsecured notes are recorded at the face amount of the notes net of issuance costs. Debt Issuance Costs Debt issuance costs represent direct costs associated with the issuance of a debt instrument that are deferred and amortized over the initial term of our debt instruments. Debt issuance costs are reported in the consolidated balance sheets as a direct deduction from the face amount of the debt issued. Costs that do not qualify as debt issuance costs are expensed as incurred. INCOME RECOGNITION Interest Income Interest income on mortgage notes receivable is accrued based on contractual rates applied to the principal balance, unless there is a minimum interest provision in the mortgage note. Certain construction loans provide for minimum interest provisions, to which the contractual rate applies, which are typically between 50 % and 70 % of the face amount of the note until the actual outstanding principal exceeds the minimum threshold. Mortgage notes receivable can be placed in contractual default status for any of the following reasons: (1) an interest payment is more than 30 days past due; (2) a note matures and the borrower fails to make payment of all amounts owed or extend the loan; or (3) the collateral becomes impaired in such a way that the ultimate collection of the note is doubtful. The accrual of interest income is suspended when a loan is in contractual default unless the interest is paid in cash or collectability of all amounts due is reasonably assured. In addition, in certain instances, where the interest reserve on a current loan has been fully depleted and the interest payment is not expected to be collected from the borrower, we may place a current loan on non-accrual status and recognize interest income on a cash-basis where principal collection is not in doubt. Interest previously accrued may be reversed at that time, and such reversal is offset against interest income. The accrual of interest income resumes only when the suspended loan becomes contractually current or a credit analysis supports the ability to collect all principal outstanding and accrued amounts at loan payoff. Fee Income We charge loan origination fees in conjunction with origination. Amendment fees are charged when loan terms are modified, such as increases in interest reserves and construction holdbacks in line with our underwriting criteria or upon modification of a loan for the transition from horizontal development to vertical construction. We defer and amortize loan origination and amendment fees over the contractual terms of the loans. Extension fees are charged when we agree to extend the maturity dates of loans and we charge fees on past due receivables. Extension and late fees are recognized when billed to the borrower. We charge inspection fees, which we use to hire independent inspectors to report on the status of construction projects. These fees are earned and recognized upon each construction draw request. EXPENSE RECOGNITION Interest Expense Interest expense on debt obligations is accrued based on the note rate applied to the face amount of the debt outstanding. Amortization of debt issuance costs and deferred financing costs over the initial term of the debt instruments is reported as interest expense in the consolidated statements of income. Stock‑Based Compensation We measure compensation expense for all share-based awards at fair value on the date of grant and recognize compensation expense over the service period on a straight-line basis for awards expected to vest, which is generally three years for employees and one year for directors. Share-based awards are issued under the Broadmark Realty Capital Inc. 2019 Stock Incentive Plan. Awards made to our employees and directors, typically consist of restricted stock units (“RSUs”). Employee stock-based compensation expense is included in compensation and employee benefits and director stock-based compensation expense is included in general and administrative in the consolidated statement of operations. For awards with only a service vesting condition, the fair value of the award is based on the grant date closing price of our common stock less the present value of expected dividends over the requisite service period, as the awards are not entitled to dividends. For these awards, we recognize stock-based compensation expense on a straight-line basis over the requisite service period for the entire award, subject to periodic adjustments to ensure that the cumulative amount of expense recognized through the end of any reporting period is at least equal to the portion of the grant date fair value of the award that has vested through that date, and we account for forfeitures prospectively as they occur. For awards that contain both service vesting and market conditions, referred to as performance restricted stock units (“pRSUs”), we use a Monte Carlo simulation model to calculate the grant date fair value. For these market-condition awards, regardless of the outcome of the market condition, we recognize stock-based compensation expense on a straight-line basis over the longest of explicit and derived service periods, and we account for forfeitures prospectively as they occur. If there are any modifications or cancellations of the underlying unvested share-based awards, we may be required to accelerate or increase any remain |
Business Combination
Business Combination | 12 Months Ended |
Dec. 31, 2021 | |
Business Combinations [Abstract] | |
Business Combination | Note 3 – Business Combination As discussed in Note 1, the Company entered into a Merger Agreement with Trinity, the Trinity Parties, the Predecessor Companies and the Predecessor Management Companies. The Business Combination was accounted for in accordance with ASC 805, Business Combinations . The Company determined that BRELF II was the accounting acquirer. As such, the Business Combination culminated in two steps: the merger of the Trinity Parties with and into BRELF II as a recapitalization and simultaneous capital issuance, and the acquisition of 100 % of the remaining entities within the Predecessor Company Group by BRELF II. In accordance with ASC 805, the merger of the Trinity Parties into BRELF II was accounted for as a recapitalization and is reflected as the issuance of shares for cash. The acquisition of the remaining entities within the Predecessor Company Group by BRELF II was accounted for as a business combination in accordance with ASC 805 using the acquisition method of accounting. Cash proceeds from the recapitalization with Trinity Merger Sub I, Inc. were $ 327.1 million, partially offset by the consent fee paid to holders of public warrants in the amount of $ 66.7 million, for net proceeds of $ 260.4 million. The cash proceeds from the recapitalization with Trinity Merger Sub I, Inc. were used, in part, to pay cash consideration for the acquisition of the Predecessor Company Group and transaction costs (as further described below), leaving approximately $ 146.9 million remaining. Separately, the cash and equity consideration transferred per the Merger Agreement was allocated between the legal amounts issued for the recapitalization of BRELF II and the cash and equity issued for the acquisition of the Predecessor Company Group. Given that the Merger Agreement was negotiated at arm’s length and based on the fair value of the entities, the legal consideration best depicted the relative fair value of separating the acquisitions from the recapitalization. The amount of common stock issued in the transaction that was attributable to the recapitalization of BRELF II was $ 495.5 million, along with $ 12.7 million of transaction costs, which were recorded as operating expenses and were settled in cash of $ 11.3 million and common stock of $ 1.4 million. Total consideration allocated to the Business Combination under ASC 805 is $ 581.9 million, which was measured at its acquisition date fair value, consisting of $ 102.2 million in cash and $ 479.6 million of the Company common stock. Such amounts are inclusive of seller-transaction costs of $ 13.5 million, settled by the acquirer at closing in cash of $ 11.9 million and common stock of $ 1.6 million. The purchase price allocation of assets acquired, and liabilities assumed have been recorded at their preliminary fair values as of the closing of November 14, 2019 , the date of acquisition. The difference between the fair value of net assets acquired, including the value of intangible assets acquired, and the consideration was recorded as goodwill. The fair values of assets acquired and liabilities assumed by BRELF II on November 14, 2019 are as follows: Consideration paid: $ (in thousands) Cash $ 102,245 Common stock 479,619 Total consideration paid $ 581,864 Assets acquired: Cash and cash equivalents 88,505 Investment in real property 8,413 Mortgage notes receivable 344,837 Interest and fees receivable 2,743 Intangible assets 1,000 Other assets 174 Total Assets 445,672 Liabilities assumed: Accounts payable and accrued liability 205 Other liabilities 568 Total Liabilities 773 Net assets acquired 444,899 Goodwill $ 136,965 In the first quarter of 2020, based on additional information obtained about facts and circumstances that existed as of November 14, 2019, we recorded a measurement period adjustment to reduce the fair value of intangible assets in the form of customer relationships from $ 6.0 to $ 1.0 million. This adjustment increased the preliminary amount of goodwill previously recorded by $ 5.0 million. The purchase price for the acquisition was determined based on our expectations of future earnings and cash flows, resulting in the recognition of goodwill. Goodwill predominantly relates to the value of the assembled workforce and intangible assets that do not qualify for separate recognition at the time of the acquisition. Purchased goodwill is deductible for income tax purposes over 15 years . The fair value of the customer relationships was determined using the replacement cost approach. The cost provides a systematic framework for estimating the value of the intangible asset based on the economic principle of substitution. Under this approach, value is estimated by developing the cost to either replace or reproduce (replicate) the asset as if new. The preliminary useful lives for customer relationships were determined based upon the remaining useful economic lives of the assets that are expected to contribute to future cash flows and approximates between two to five years . Amortization expense is recorded on a straight-line method, refer to Note 7 for further information on the estimated useful lives and amortization related to the acquired intangible assets. As described above, the Company incurred a total of $ 26.2 million of transaction-related costs for both the Business Combination and the recapitalization of BRELF II, of which $ 25.8 million was incurred and expensed in the Predecessor period and $ 0.4 million was incurred and expensed in the Successor period. Transaction-related expenses are comprised primarily of transaction fees, including legal, finance, consulting, professional fees and other third-party costs. These amounts were recorded as operating expenses in the consolidated statements of income in the periods incurred. At the closing of the transaction in the Successor period, the acquirer directly paid (or repaid to the sellers) the amounts owed for such expenses, settling them in a combination of cash and equity. From the perspective of the Successor entity, the settlement of these amounts by the acquirer at closing were allocated between purchase price for the business combination and recapitalization of BRELF II, using a methodology consistent with the allocation of the overall consideration transferred. Included within the transaction-related expenses referred to above, is a termination fee of $ 10.0 million related to the termination of certain referral agreements the Predecessor Management Companies had in place with a related entity, which settled in $ 7.0 million of cash and $ 3.0 million of the Company common stock at closing. Supplemental pro forma financial information When giving effect to the Business Combination as if it closed on January 1, 2019, there are no material differences between historical revenue and earnings of the Company and results on a pro forma basis, except for the timing of transaction costs and amortization expense related to intangible assets, which would have been incurred as of an earlier date. |
Mortgage Notes Receivable
Mortgage Notes Receivable | 12 Months Ended |
Dec. 31, 2021 | |
Receivables [Abstract] | |
Mortgage Notes Receivable | Note 4 - Mortgage Notes Receivable The stated principal amount of mortgage notes receivable in our portfolio represents our interest in loans secured by first deeds of trust, security agreements or legal title to real estate located in the United States. Our lending standards require that all mortgage notes receivable be secured by a first deed of trust lien on real estate and that the maximum loan to value ratio (“LTV”) be no greater than 65 %. The LTV is calculated on an “as-complete” appraised value of the underlying collateral as determined by an independent appraiser at the time of the loan origination. The lending standards also limit the initial outstanding principal balance of the loan to a maximum LTV of up to 65 % of the “as-is” appraised value of the underlying collateral, as determined by an independent appraiser at the time of the loan origination. Unless otherwise indicated, LTV is measured by the total commitment amount of the loan divided by the “as-complete” appraisal. LTVs do not reflect interim loan activity such as construction draws or interest payments capitalized to loans, or partial repayments of the loan. The maximum amount of a single loan may not exceed 10 % of our total assets and the maximum amount to a single borrower may not exceed 15 % of our total assets. We consider the maximum LTV as an indicator for the credit quality of a mortgage note receivable. Mortgage notes receivable are considered to be short-term financings. As of December 31, 2021, the weighted average term of our active loans was 13 months at origination, which we often elect to extend for several months, based on our evaluation of the expected timeline for completion of construction. All loans require monthly interest only payments with our weighted average interest rate being 10.7 % as of December 31, 2021. Most loans are structured with an interest reserve holdback that covers the interest payments for most of the initial term of the loan. Once the interest reserve is depleted, borrowers are expected to pay their monthly interest payment within 10 days of month end. Mortgage notes receivable are presented net of construction holdbacks, interest reserves, allowance for credit losses and deferred origination and amendment fee income in the consolidated balance sheets. The construction holdback represents amounts withheld from the funding of construction loans until we deem construction to be sufficiently completed. The interest reserve represents amounts withheld from the funding of certain mortgage notes receivable for the purpose of satisfying monthly interest payments over all or part of the term of the related note. Accrued interest is paid out of the interest reserve and recognized as interest income at the end of each month. The deferred origination and amendment fee income represents amounts that will be recognized over the contractual life of the underlying mortgage notes receivable. The following table reconciles outstanding mortgage loan commitments to outstanding balance of mortgage notes receivable as of December 31, 2021 and 2020: (dollars in thousands) December 31, 2021 December 31, 2020 Total loan commitments $ 1,489,055 $ 1,245,963 Less: Construction holdbacks (1) 524,462 356,026 Interest reserves (1) 39,880 29,817 Private REIT participation (2) — 37,729 Total principal outstanding for our mortgage notes receivable 924,713 822,391 Less: Allowance for credit losses (3) 10,394 10,590 Deferred origination and amendment fees 12,969 13,315 Mortgage notes receivable, net $ 901,350 $ 798,486 (1) Includes construction holdbacks of $ 40.4 million and interest reserves of $ 4.3 million on participating interests sold to the Private REIT as of December 31, 2020. As of December 31, 2021 , there were no outstanding participations as a result of the liquidation of the Private REIT and purchase of all outstanding participations by the Company. Refer to Note 13 for details. (2) The Private REIT’s participations in loans originated by us met the characteristics of participating interests and the criterion for sale accounting and therefore, were derecognized from our consolidated financial statements. As of December 31, 2021 , there were no outstanding participations as a result of the liquidation of the Private REIT and purchase of all outstanding participations by the Company. Refer to Note 13 for details. (3) As of December 31, 2021, $ 0.9 million of the CECL allowance is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable and accrued liabilities in our consolidated balance sheet. Non-accrual Status In certain instances, where the interest reserve on a current loan has been fully depleted and the interest payment is not expected to be collect ed from the borrower, we may place a current loan on non-accrual status and recognize interest income on a cash-basis where principal collection is not in doubt. As of December 31, 2021 and 2020, the principal outstanding on loans in contractual default status placed on non-accrual status was $ 101.9 a nd $ 126.8 million, respectively, and all non-accrual loans had an allowance for credit losses. As of December 31, 2021, loans in contractual default, totaled $ 191.4 million in total commitment. Current Expected Credit Losses In assessing the CECL allowance, we consider historical loss experience, current conditions, and a reasonable and supportable forecast of the macroeconomic environment. We derived an annual historical loss rate based on the Company’s historical loss experience in our portfolio and historical loss experience in the commercial real estate industry provided by a third party adjusted to fully incorporate the risks of construction lending and to reflect our expectations of the macroeconomic environment based on forecast data per the Federal Reserve. The following tables summarize the activity in the CECL allowance during the years ended December 31, 2021 and 2020: CECL Allowance (dollars in thousands) Funded Unfunded (2) Total CECL allowance as of December 31, 2020 $ 10,590 $ — $ 10,590 Provision for credit losses, net 5,275 904 6,179 Charge-offs (1) ( 5,471 ) — ( 5,471 ) CECL allowance as of December 31, 2021 $ 10,394 $ 904 $ 11,298 (dollars in thousands) CECL Allowance Loan loss reserve as of December 31, 2019 $ 4,096 Adoption of ASU 2016-13 (3) 1,975 Provision for credit losses, net 6,722 Charge-offs (1) ( 2,203 ) CECL allowance as of December 31, 2020 $ 10,590 (1) Resulting from either loan repayments where the proceeds are less than the principal outstanding or transfers to investment in real property owned upon foreclosure where the fair values of the underlying collateral are less than the principal outstanding. (2) CECL allowance related to unfunded commitments is presented as a liability under accounts payable and accrued liabilities in our consolidated balance sheet. (3) Recorded as a direct charge to stockholders’ equity, effective January 1, 2020, as a cumulative-effect of change in accounting principle. In determining our CECL allowance, we segment loans with similar characteristics. All of our loans are construction loans secured by residential or commercial real estate and, in assessing estimated credit losses, we evaluate various metrics, including, but not limited to, construction type, collateral type, LTV, market conditions of property location and borrower experience and financial strength. The following tables allocate the carrying value of our loan portfolio based on our internal credit quality indicators in assessing estimated credit losses and vintage of origination at the dates indicated: At December 31, 2021 Year Originated (1) (dollars in thousands) Carrying Value % of Portfolio 2021 2020 2019 2018 2017 Prior Construction Type Vertical Construction $ 471,863 51.8 % $ 236,961 $ 184,143 $ 1,177 $ 1,382 $ 47,939 $ 261 Investment 256,936 28.1 204,865 28,094 1,925 4,717 17,335 — Horizontal Development 182,945 20.1 155,443 27,502 — — — — Total $ 911,744 100.0 % $ 597,269 $ 239,739 $ 3,102 $ 6,099 $ 65,274 $ 261 CECL allowance (2) ( 10,394 ) Carrying value, net $ 901,350 (1) Represents the year of amendment where the loan incurred a full re-underwriting in connection with the amendment. (2) Includes $ 0.7 million in loan specific allowances for loans deemed collateral dependent based on the fair value of the underlying collateral. In addition, $ 0.9 million of the CECL allowance is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable and accrued liabilities in our consolidated balance sheet. At December 31, 2021 Year Originated (1) (dollars in thousands) Carrying Value % of Portfolio 2021 2020 2019 2018 2017 Prior Collateral Type Residential Lots $ 111,644 12.2 % 85,219 26,425 — — — — Apartments 107,765 11.8 $ 38,232 $ 68,356 $ 1,177 $ — $ — $ — Townhomes 93,300 10.2 51,240 28,979 — 1,017 11,803 261 Mixed Use 85,929 9.4 53,530 30,474 1,925 — — — Single Family Housing 87,902 9.5 84,703 3,049 — — 150 — Condos 64,492 7.1 8,805 18,227 — 1,474 35,986 — Commercial 61,592 6.8 61,592 — — — — — Senior Housing 61,236 6.7 35,899 25,337 — — — — Storage 56,481 6.2 56,481 — — — — — Unentitled Land 46,019 5.0 42,411 — — 3,608 — — Entitled Land 45,098 4.9 27,763 — — — 17,335 — Hotel 31,665 3.5 4,886 26,779 — — — — Offices 15,348 1.7 8,280 7,068 — — — — Commercial Lots 10,227 1.1 6,670 3,557 — — — — Quadplex 9,769 1.1 9,769 — — — — — Commercial Other 9,080 1.0 9,080 — — — — — Retail 7,873 0.9 6,385 1,488 — — — — Duplex 6,324 0.7 6,324 — — — — — Total $ 911,744 100.0 % $ 597,269 $ 239,739 $ 3,102 $ 6,099 $ 65,274 $ 261 CECL allowance (2) ( 10,394 ) Carrying value, net $ 901,350 (1) Represents the year of amendment where the loan incurred a full re-underwriting in connection with the amendment. (2) Includes $ 0.7 million in loan specific allowances for loans deemed collateral dependent based on the fair value of the underlying collateral. In addition, $ 0.9 million of the CECL allowance is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable and accrued liabilities in our consolidated balance sheet. At December 31, 2021 Year Originated (1) (dollars in thousands) Carrying Value % of Portfolio 2021 2020 2019 2018 2017 Prior LTV (2) 0 - 40% $ 53,907 5.9 % $ 32,634 $ — $ — $ 3,608 $ 17,665 $ — 41 - 45% 48,431 5.3 44,380 4,051 — — — — 46 - 50% 63,690 7.0 41,356 21,317 — 1,017 — — 51 - 55% 92,238 10.1 74,978 17,260 — — — — 56 - 60% 79,039 8.7 27,115 40,190 — — 11,473 261 61 - 65% 559,997 61.4 372,645 146,640 3,102 1,474 36,136 — 66 - 70% 645 0.1 645 — — — — — 71 - 75% — 0.0 — — — — — — 76 - 80% — 0.0 — — — — — — Above 80% 13,797 1.5 3,516 10,281 — — — — Total $ 911,744 100.0 % $ 597,269 $ 239,739 $ 3,102 $ 6,099 $ 65,274 $ 261 CECL allowance (3) ( 10,394 ) Carrying value, net $ 901,350 (1) Represents the year of amendment where the loan incurred a full re-underwriting in connection with the amendment. (2) Represents LTV as of origination or latest amendment. LTVs above 65 % generally represent loans in contractual default status where we have agreed to extend funds to the borrower above 65 % in order to facilitate successful completion of the construction and return of capital. (3) Includes $ 0.7 million in loan specific allowances for loans deemed collateral dependent based on the fair value of the underlying collateral. In addition, $ 0.9 million of the CECL allowance is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable and accrued liabilities in our consolidated balance sheet. At December 31, 2020 Year Originated (1) (dollars in thousands) Carrying Value % of Portfolio 2020 2019 2018 2017 2016 Prior Construction Type Vertical Construction $ 514,136 63.5 % $ 354,012 $ 57,090 $ 6,853 $ 88,655 $ 7,526 $ — Horizontal Development 153,345 19.0 129,607 15,028 283 — 8,427 — Investment 141,595 17.5 98,146 18,657 7,259 16,444 — 1,089 Total $ 809,076 100.0 % $ 581,765 $ 90,775 $ 14,395 $ 105,099 $ 15,953 $ 1,089 CECL allowance (2) ( 10,590 ) Carrying value, net $ 798,486 (1) Represents the year of amendment where the loan incurred a full re-underwriting in connection with the amendment. (2) Includes $ 1.5 million in loan specific allowances for loans deemed collateral dependent based on the fair value of the underlying collateral. At December 31, 2020 Year Originated (1) (dollars in thousands) Carrying Value % of Portfolio 2020 2019 2018 2017 2016 Prior Collateral Type Apartments $ 129,588 16.0 % $ 79,931 $ 18,953 $ — $ 24,232 $ 6,472 $ — Residential Lots 124,548 15.4 105,830 10,291 — — 8,427 — Condos 92,245 11.4 52,714 3,106 4,405 32,020 — — Single Family Housing 90,131 11.1 69,438 8,839 1,028 10,103 — 723 Townhomes 72,773 9.0 47,391 1,061 1,703 21,564 1,054 — Unentitled Land 71,796 8.9 47,727 — 7,259 16,444 — 366 Mixed Use 66,092 8.2 60,232 5,860 — — — — Hotel 51,115 6.3 42,874 8,241 — — — — Senior Housing 34,283 4.2 34,283 — — — — — Offices 29,540 3.7 8,495 21,045 — — — — Commercial Lots 15,683 1.9 15,683 — — — — — Retail 11,397 1.4 9,500 1,897 — — — — Industrial 11,309 1.4 704 10,605 — — — — Quadplex 5,592 0.7 5,592 — — — — — Entitled Land 1,116 0.1 1,116 — — — — — Commercial 877 0.1 — 877 — — — — Duplex 736 0.1 — — — 736 — — Commercial Other 254 0.1 254 — — — — — Total $ 809,076 100.0 % $ 581,765 $ 90,775 $ 14,395 $ 105,099 $ 15,953 $ 1,089 CECL allowance (2) ( 10,590 ) Carrying value, net $ 798,486 (1) Represents the year of amendment where the loan incurred a full re-underwriting in connection with the amendment. (2) Includes $ 1.5 million in loan specific allowances for loans deemed collateral dependent based on the fair value of the underlying collateral. At December 31, 2020 Year Originated (1) (dollars in thousands) Carrying Value % of Portfolio 2020 2019 2018 2017 2016 Prior LTV (2) 0 - 40% $ 22,601 2.8 % $ 18,112 $ — $ 3,862 $ 261 $ — $ 366 41 - 45% 68,263 8.4 44,683 20,183 3,397 — — — 46 - 50% 23,864 2.9 15,917 7,224 — — — 723 51 - 55% 76,539 9.5 57,583 2,774 — 16,182 — — 56 - 60% 135,170 16.7 117,309 3,106 — 9,639 5,116 — 61 - 65% 450,253 55.7 301,964 57,488 7,136 76,139 7,526 — 66 - 70% 9,416 1.2 9,416 — — — — — 71 - 75% 1,983 0.2 1,983 — — — — — 76 - 80% 14,544 1.8 14,544 — — — — — Above 80% 6,443 0.8 254 — — 2,878 3,311 — Total $ 809,076 100.0 % $ 581,765 $ 90,775 $ 14,395 $ 105,099 $ 15,953 $ 1,089 CECL allowance (3) ( 10,590 ) Carrying value, net $ 798,486 (1) Represents the year of amendment where the loan incurred a full re-underwriting in connection with the amendment. (2) Represents LTV as of origination or latest amendment. LTVs above 65 % generally represent loans in contractual default status where we have agreed to extend funds to the borrower above 65 % in order to ensure successful completion of the construction and return of capital. (3) Includes $ 1.5 million in loan specific allowances for loans deemed collateral dependent based on the fair value of the underlying collateral. The following tables allocate the carrying value of collateral dependent loans in our loan portfolio to the collateral type at the dates indicated: At December 31, 2021 (dollars in thousands) Carrying Value CECL Allowance (1) Carrying Value, net Collateral Type Senior Housing $ 25,337 $ ( 1,103 ) $ 24,234 Entitled Land 17,335 ( 42 ) 17,293 Single Family Housing 1,730 ( 15 ) 1,715 Condos 1,109 ( 673 ) 436 Townhomes 261 ( 1 ) 260 Total $ 45,772 $ ( 1,834 ) $ 43,938 (1) Includes $ 0.7 million in specific allowances based on the excess amortized cost over the fair value of the underlying collateral and $ 1.1 million where the fair value was greater than the amortized cost and the allowance is based on the standard CECL methodology. At December 31, 2020 (dollars in thousands) Carrying Value CECL Allowance (1) Carrying Value, net Collateral Type Hotel $ 16,215 $ ( 202 ) $ 16,013 Single Family Housing 9,953 ( 1,542 ) 8,411 Offices 5,541 ( 305 ) 5,236 Residential Lots 713 - 713 Total $ 32,422 $ ( 2,049 ) $ 30,373 (1) Includes $ 1.5 million in specific allowances based on the excess amortized cost over the fair value of the underlying collateral an d $ 0.5 m illion where the fair value was greater than the amortized cost and the allowance is based on the standard CECL methodology. Impaired mortgage notes receivable Prior to the adoption of the CECL Standard, for the periods ended December 31, 2019 and November 14, 2019, we evaluated each loan for impairment based on the incurred loss model. Loans in contractual default were designated as non-performing and were considered impaired as we had some expectation that the repayment of the loan, including both contractual interest and principal payments, may not be realized in full. Placing a loan in contractual default did not in and of itself result in an impairment if we deemed it probable that we would ultimately collect all amounts due. If a loan was determined to have impairment, we recorded an allowance through the provision for loan losses to reduce the carrying value of the loan to the fair value of the collateral less estimated costs to sell, as all of our loans were classified as collateral dependent as repayment was expected solely from the collateral. All of the allowance for loan losses relates to loans deemed to be impaired. The following table summarizes the activity in the allowance for loan losses for the year ended December 31, 2019: (dollars in thousands) Successor Period from (1) Predecessor Period from Beginning $ 4,096 $ 1,704 Provision for loan losses — 3,342 Charge offs — ( 452 ) Recoveries — — Ending $ 4,096 $ 4,594 (1) The beginning balance on November 15, 2019 (Successor) represents the allowance of the acquirer, BRELF II . |
Investment in Real Property
Investment in Real Property | 12 Months Ended |
Dec. 31, 2021 | |
Real Estate [Abstract] | |
Investment in Real Property | Note 5 – Investment in Real Property As of December 31, 2021 and 2020, we owned nine and three properties or projects totaling $ 68.1 and $ 8.5 million, respectively. The following tables provides information about the carrying value of our owned real property: (dollars in thousands) At December 31, 2021 At December 31, 2020 Collateral Type Condos $ 28,441 $ — Offices 19,388 2,970 Townhomes 9,281 — Single Family Housing 4,134 1,761 Retail 3,811 3,742 Residential Lots 3,012 — Total $ 68,067 $ 8,473 (dollars in thousands) At December 31, 2021 At December 31, 2020 Held-for-sale $ 52,531 $ 8,473 Held-for-use 15,536 — Total $ 68,067 $ 8,473 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 6 – Fair Value Measurements We follow the accounting guidance in ASC 820, Fair Value Measurements and Disclosures, which requires the categorization of fair value measurement into three broad levels of the fair value hierarchy as follows: Level 1 – Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 – Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The following tables present estimated fair values of our financial instruments as of the date indicated, whether or not recognized or recorded in the consolidated balance sheets at the period indicated: December 31, 2021 Fair Value Measurements Using (dollars in thousands) Carrying Value Estimated Fair Value Level 1 Level 2 Level 3 Financial Assets Cash and cash equivalents $ 132,889 $ 132,889 $ 132,889 $ — $ — Mortgage notes receivable, net 901,350 901,350 — — 901,350 Financial Liabilities Senior unsecured notes 97,223 100,000 100,000 — — Private placement warrant liability 1,838 1,838 — 1,838 — December 31, 2020 Fair Value Measurements Using (dollars in thousands) Carrying Value Estimated Fair Value Level 1 Level 2 Level 3 Financial Assets Cash and cash equivalents $ 223,375 $ 223,375 $ 223,375 $ — $ — Mortgage notes receivable, net 798,486 798,486 — — 798,486 The following table sets forth assets and liabilities measured and reported at fair value on a recurring and nonrecurring basis, as well as for which fair value is only disclosed, as of December 31, 2021 and 2020. All of these fair values are categorized as Level 3. The table also contains information about valuation methodologies and inputs. Fair Value (dollars in thousands) December 31, 2021 December 31, 2020 Valuation technique Unobservable inputs Range of inputs Real property — held for sale (1) $ 52,531 $ 8,473 Collateral valuations Appraised value, broker opinion of value, discounted cash flows or capitalization rate applied to estimate net operating income 0 - 10 % Collateral dependent loans, net of allowance for credit losses (2) 43,938 30,373 Collateral valuations Discount to appraised value based on comparable market prices 0 - 10 % Total $ 96,469 $ 38,846 (1) Real property held-for-sale is measured at lower of cost or fair value, a non-recurring measurement of fair value. (2) Loans meeting the definition of collateral dependent are measured at the fair value. The carrying value of the collateral dependent loans, net of the allowance for credit losses, approximates fair value. Fair Value on a Recurring Basis As discussed in Note 2, the Company recorded the value of the Private Placement Warrants as of June 30, 2021. Initially, the fair value of the Private Placement Warrants was classified as Level 3 within the fair value hierarchy as it was valued using a lattice model, which primarily incorporates observable inputs such as our common stock price, exercise price, term of the warrant, dividend yield and the risk-free rate; however, it also incorporates an assumption for equity volatility. For the unobservable volatility input, we solved for the volatility of the Public Warrants using the lattice model that captures the redemption right and analyzed the calculated equity volatility based on the volatility of the common stock of comparable public companies. The valuation methodology as of June 30, 2021 resulted in the same value per share for both the Public Warrants and Private Placement Warrants, indicating the redemption right, a feature excluded from Private Placement Warrants, did not change the valuation; and therefore, the quoted price per share of the Public Warrants was used to value the Private Placement Warrants on a recurring basis at September 30, 2021. As we utilized observable inputs in the valuation, specifically a quoted price for a similar item in an active market, we re-classified the Private Placement Warrant liability from a Level 3 to a Level 2 within the fair value hierarchy as of September 30, 2021. The fair value of the 5.2 million Private Placement Warrants, estimated using the quoted share price of the Public Warrants (BRMK.WS), was approximately $ 0.09 per warrant or $0.35 per share to arrive at $ 1.8 million as of December 31, 2021. Refer to Note 9 for additional details on the Private Placement Warrants. Fair Value on a Nonrecurring Basis Investments in real properties are initially recorded at the acquisition cost less estimated costs to sell, which approximates fair value. Upon transfer from mortgage notes receivable to investment in real estate property, the fair value less costs to sell becomes the new cost for the property. Costs related to acquisition, development, construction and improvements are capitalized. At each reporting date, the fair value of real properties is based upon the most recent independent third-party appraisals of value discounted based upon our experience with actual liquidation values. These discounts to the appraisals generally range from 0 % to 10 %. As the result of using unobservable inputs in the valuation, we classify investments in real properties as Level 3 within the fair value hierarchy. For collateral dependent loans, the fair values are based on the value of the underlying collateral less the costs to sell. At each reporting date, these loans are evaluated based upon the most recent independent third-party appraisals of value discounted based upon our experience with actual liquidation values. These discounts to the appraisals generally range from 0 % to 10 %. As the result of using unobservable inputs in the valuation, we classify collateral dependent as Level 3 within the fair value hierarchy. Fair Value Disclosure Only For our financial instruments, including cash equivalents, which are classified under Level 1 within the fair value hierarchy, the carrying amounts approximate fair value due to their short-term maturities. Our mortgage notes receivable are evaluated for expected credit losses and mortgage notes receivable are presented net of an allowance for credit losses. Due to the short-term maturity of the mortgage notes receivable, a premium or discount is not material and the carrying value approximates fair value. We believe that our mortgage notes receivable net of the CECL allowance approximates fair value of the portfolio. As we utilize unobservable inputs, including third-party appraisals for estimating as-complete appraised values, we classify mortgage notes receivable as Level 3 within the fair value hierarchy. Our senior unsecured notes were purchased at par by investors in a private placement, but trade in the secondary market. Fair value is estimated using current market quotes received from active markets and we classify as Level 1 within the fair value hierarchy. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Note 7 – Goodwill and Intangible Assets Goodwill All of our goodwill relates to the Business Combination. As discussed in Note 3, in the first quarter of 2020, we recorded a measurement period adjustment to reduce the preliminary fair value of intangible assets in the form of customer relationships by $ 5.0 million and increased our preliminary value of goodwill by $ 5.0 million resulting in $ 137.0 million of goodwill as of September 30, 2020. As a result of this adjustment to preliminary values, $ 0.7 million of amortization of intangible assets recorded in 2019 was reversed in the first quarter of 2020. We continuously evaluate the presence of triggering events that require an impairment test. An impairment loss is recognized to the extent that the carrying amount, including goodwill, exceeds the reporting unit’s fair value. Our annual assessment occurred in the fourth quarter of 2021 and the fair value of the reporting unit exceeded the carrying value and there was no goodwill impairment. In the first quarter of 2020, we determined that COVID-19 was a triggering event based on the adverse impact on our business and results of operations. Specifically, we noted that COVID-19 and containment measures have contributed to, among other things, adverse impacts on the progress of construction on our borrowers’ projects, the demand for and value of commercial and residential real estate that our borrowers have developed, the creditworthiness of our borrowers and other counterparties, the capital and credit market conditions and potential delays in foreclosure proceedings. We performed a quantitative assessment of our goodwill based on both the market and income approach and determined that, as of March 31, 2020, the fair value of the reporting unit exceeded the carrying value and there was no goodwill impairment. During the second and third quarters of 2020, we continued to monitor the impact of COVID-19 and determined there were no new triggering events to warrant updating our quantitative assessment of goodwill performed as of March 31, 2020. Intangible Assets All of our intangible assets relate to the Business Combination, specifically the value of customer relationships. The following table summarizes the balances of intangible assets as of December 31, 2021 and 2020: (dollars in thousands) 2021 2020 Asset Type Customer relationships $ 1,000 $ 1,000 Less: Accumulated amortization 718 379 Intangible assets, net $ 282 $ 621 The remaining balance of intangible assets, net is expected to be fully amortized during the year ended December 31, 2022. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt | Note 8 - Debt On February 19, 2021, we entered into a credit agreement with a syndicate of lenders and JPMorgan Chase Bank, N.A., as administrative agent for the lenders, providing for a $ 135.0 million revolving credit facility due on the maturity date of February 19, 2024 . We incurred fees of approximately $ 4.5 million in relation to the revolving credit facility that were capitalized as deferred financing costs on the consolidated balance sheets and are being amortized over the three year term. As of December 31, 2021, the revolving credit facility has no principal outstanding. Our obligations under the revolving credit facility are secured by substantially all of our Company’s assets. The revolving credit facility contains covenants customary for financings of this type, including limitations on the incurrence of indebtedness, liens, asset dispositions, acquisitions, mergers and consolidations, certain dividends, distributions and other payments, advances and investments, payments to affiliates, optional prepayments and other modifications of certain other indebtedness, and amendments, terminations and waivers of certain material agreements, as well as a minimum tangible net worth and a total debt to equity ratio requirement. Among other things, the credit agreement provides that we may not pay cash dividends that would result in non-compliance with the financial covenants under the credit agreement or during an event of default under the credit agreement, except in the case of defaults other than payment defaults, for dividends in amounts necessary to maintain our REIT status. The revolving credit facility contains events of default customary for financings of this type, including failure to pay principal, interest and other amounts, materially incorrect representations or warranties, failure to observe covenants and other terms of the revolving credit facility, cross-defaults to other indebtedness, bankruptcy, insolvency, material judgments, certain ERISA violations, changes in control and failure to maintain REIT status, in some cases subject to customary grace periods. On November 12, 2021, we completed a private offering of $ 100.0 million of senior unsecured notes. Interest on this debt accrues at the fixed rate of 5.0 % per annum. The notes may be prepaid prior to their maturity date, subject to the payment of applicable premiums. The note purchase agreement governing the senior unsecured notes contains financial covenants that require compliance with leverage and coverage ratios and maintenance of minimum tangible net worth, as well as other affirmative and negative covenants that may limit, among other things, our ability to incur liens and enter into mergers or transfer all or substantially all of our assets. The note purchase agreement also includes customary representations and warranties and customary events of default. The amounts outstanding will be due on the maturity date of November 15, 2026 . We incurred fees of approximately $ 2.9 million in relation to the issuance of these notes. The following table presents the carrying values of the senior unsecured notes as of December 31, 2021: (dollars in thousands) Principal $ 100,000 Debt issuance costs ( 2,855 ) Amortization of debt issuance costs 78 Total notes, net $ 97,223 The following table summarizes the terms of our senior unsecured notes as of December 31, 2021 (in thousands, except interest rates: Maturity Date Aggregate Principal Amount Stated Interest Rate First Interest Payment Date Semi-Annual Interest Payment Dates Unamortized Debt Issuance Costs November 15, 2026 $ 100,000 5.00 % May 15, 2022 May 15; November 15 $ ( 2,777 ) Total $ 100,000 $ ( 2,777 ) The following table summarizes the interest expense related to our senior unsecured notes and revolving credit facility for the year ended December 31, 2021: (in thousands) Amortization of Deferred Debt Costs Interest Paid and Accrued Undrawn Fees 5.00% senior notes $ 78 $ 694 $ — Revolving credit facility 1,255 107 1,186 Total $ 1,333 $ 801 $ 1,186 |
Stockholders' Equity and Earnin
Stockholders' Equity and Earnings per Common Share | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Stockholders' Equity and Earnings per Common Share | Note 9 - Stockholders’ Equity and Earnings per Common Share Stockholders’ Equity The Company is authorized to issue 500,000,000 shares of common stock with a par value of $ 0.001 per share and 100,000,000 shares of preferred stock with a par value of $ 0.001 per share. Holders of our common stock are entitled to one vote for each share. As of December 31, 2021 and 2020, there were 132,716,338 and 132,532,383 shares of common stock issued and outstanding, respectively, and no shares of preferred stock issued and outstanding. On March 2, 2021, we entered into a distribution agreement with J.P. Morgan Securities LLC, Barclays Capital Inc., B. Riley Securities, Inc., JMP Securities LLC and Raymond James & Associates, Inc. as sales agents, to sell shares of our common stock having an aggregate gross sales price of up to $ 200,000,000 , from time to time, through an “at-the-market” equity offering program (the “ATM Program”). We have no obligation to sell any shares under the ATM Program, and sold no shares under the ATM Program during the year ended December 31, 2021. As of December 31, 2021 and 2020 there were 41.7 million public warrants outstanding to acquire one -fourth of a share of common stock at a price of $ 2.875 (the “Public Warrants”), and 5.2 million warrants outstanding to acquire one share of our common stock at a price of $ 11.50 per share (the “Private Placement Warrants”). In the aggregate, we have outstanding warrants to purchase approximately 15.6 million shares of common stock at a price of $ 11.50 per whole share. Settlement of outstanding warrants will be in shares of our common stock, unless we elect solely in our discretion to settle warrants we have called for redemption in cash, and subject to customary adjustment in the event of business combinations and certain tender offers. The liability for the Private Placement Warrants was $ 1.8 million as of December 31, 2021 and is included in accounts payable and accrued liabilities in the consolidated balance sheet. Refer to "Correction of Immaterial Error" in Note 2 for additional details on the accounting classification of the Private Placement Warrants. As part of the PIPE Investment (for further details, refer to Note 13), the Farallon Entities had an option (the “Optional Subscription”) to purchase up to $ 25 million of additional shares of common stock, which were exercisable during the 365-day period following the consummation of the Business Combination at $ 10.45352229 (the “Reference Price”). The Optional Subscription expired unexercised on November 14, 2020, accordingly, the liability was $ 0 as of December 31, 2020 and 2021. The Farallon Entities were entitled to cash settle, in whole or in part, the exercise of the Optional Subscription, and therefore, the Optional Subscription did not meet the requirements for equity classification and was assumed to be settled in cash and classified as a liability in our consolidated balance sheet and changes in the fair value of the Optional Subscription were included in change in fair value of warrant liabilities in our consolidated statements of income. Earnings per Common Share The table below presents the computation of basic and diluted net income per share of common stock for the periods presented: Year Ended (dollars in thousands, except share and per share data): December 31, 2021 December 31, 2020 Net income $ 82,488 $ 90,231 Basic weighted-average shares of common stock outstanding 132,579,289 132,209,495 Dilutive effect of share-based compensation – unvested restricted stock units 87,213 51,618 Diluted weighted-average shares of common stock outstanding 132,666,502 132,261,113 Basic earnings per share $ 0.62 $ 0.68 Diluted earnings per share $ 0.62 $ 0.68 For the periods presented, the following stock equivalents were excluded from the calculations of diluted earnings per share because their effect would have been antidilutive: Year Ended December 31, 2021 December 31, 2020 Weighted-average restricted stock units outstanding 199,709 315,260 Unexercised public warrants and private placement warrants 15,604,304 15,604,304 Expired and unexercised shares related to the Optional Subscription liability — 2,391,539 Total stock equivalents excluded 15,804,013 18,311,103 Members’ Equity (Predecessor) Members’ Equity is presented on a combined basis for the Predecessor Company Group, which includes the preferred units for the Predecessor Companies and the Class A and Class P units for the Predecessor Management Companies. The applicable Predecessor Management Company was the sole common unit holder of the Predecessor Company it managed, and, therefore all common units have been eliminated in the preparation of the consolidated Predecessor Company Group financial statements, as they represent intra-entity balances between entities within the combined Predecessor Company Group. Earnings Per Unit (Predecessor) We determined that earnings per unit would not be meaningful to the users of these financial statements for the Predecessor period. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 10 - Income Taxes For the Successor period, the Manager has elected to be treated as a TRS and this election applies to the wholly-owned subsidiaries of the Manager, including the Private REIT Manager. Having TRSs permit us to participate in certain activities from which REITs are generally precluded, as long as these activities meet specific criteria, are conducted within the parameters of certain limitations established by the Code and are conducted in entities which elect to be treated as taxable subsidiaries under the Code. To the extent these criteria are met, we will continue to maintain the qualification as a REIT. We generally must distribute annually at least 90% of our net taxable income, subject to certain adjustments and excluding any net capital gain, in order for U.S. federal income tax not to apply to earnings that we distribute. To the extent that we satisfy this distribution requirement but distribute less than 100% of our net taxable income, we will be subject to U.S. federal income tax on our undistributed taxable income. In addition, we will be subject to a 4 % nondeductible excise tax if the actual amount that we pay out to our stockholders in a calendar year is less than a minimum amount specified under U.S. federal tax laws. Our qualification as a REIT also depends on our ability to meet various other requirements imposed by the Code, which relate to organizational structure, diversity of stock ownership, and certain restrictions with regard to the nature of assets and the sources of income. Even if we qualify as a REIT, we may be subject to certain U.S. federal income and excise taxes and state and local taxes on our income and assets. If we fail to maintain our qualification as a REIT for any taxable year, we may be subject to material penalties as well as federal, state, and local income tax on our taxable income at regular corporate rates and we would not be able to qualify as a REIT for the subsequent four full taxable years. As of December 31, 2021 and 2020, we were in compliance with all REIT requirements. Based on our evaluation, we concluded that there are no significant uncertain tax positions requiring recognition in our consolidated financial statements of a contingent tax liability for uncertain tax positions. Additionally, there were no amounts accrued for penalties or interest as of or during the periods presented in the accompanying consolidated financial statements. The state and local tax jurisdictions for which we are subject to tax-filing obligations recognize our status as a REIT, and therefore, we generally do not pay income tax in such jurisdictions. We may, however, be subject to certain minimum state and local tax filing fees as well as certain excise or business taxes. Our TRSs are subject to U.S. federal, state and local income taxes. |
Equity Incentive Plan
Equity Incentive Plan | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Equity Incentive Plan | Note 11 - Equity Incentive Plan Stock Incentive Plan (Successor) The Broadmark Realty 2019 Stock Incentive Plan (the “Plan”) allows for the issuance of up to 5,000,000 stock options, stock appreciation rights, restricted stock awards, restricted stock units or other equity-based awards or any combination thereof to the directors, employees, consultants or any other party providing services to us. The Plan is administered by the compensation committee of our board of directors. As of December 31, 2021, there were 3,644,068 shares available to be awarded under the Plan. The restricted stock units granted under the Plan generally vest from one to three years depending on the terms of the specific award. In 2021, pRSUs were granted to our executive officers that will be earned at the end of the three fiscal year period ending December 31, 2023 based on the Company’s level of achievement of total stockholder return relative to the total stockholder return (“Relative TSR”) of a selected group of industry peer companies for the three-year performance period. A variable level of shares of our common stock, ranging from 0 % to 150 % of target level, will be earned based on the level of achievement of the Relative TSR goals. The earned pRSUs will be paid in the form of common stock promptly following the end of the three-year performance period. The pRSUs are each measured at fair value based on Monte Carlo simulation models. All RSUs awarded will be settled upon vesting in shares of our common stock. If (1) the recipient becomes disabled and the recipient’s employment or service is terminated as a result, (2) the recipient dies during the vesting period, or (3) the recipient’s employment is terminated without cause (as defined in the Plan) in connection with, or in certain cases within a specified period following a change in control (as defined in the Plan), then the vesting of the RSUs will fully accelerate as of the date of termination of employment. Dividend equivalents are not accrued or paid on RSUs granted to employees, executive officers and directors and accordingly those RSUs are not considered participating securities. If an award granted under the Plan expires or terminates, the shares subject to any portion of the award that expires or terminates without having been exercised or paid will again become available for the issuance of additional awards. The following table summarizes the activity related to RSUs during 2021: Shares Weighted Average Grant Date Fair Market Value Unvested RSUs outstanding as of December 31, 2020 434,143 Granted 466,001 $ 10.08 Vested ( 231,053 ) $ 10.61 Forfeited ( 13,837 ) $ 10.58 Unvested RSUs outstanding as of December 31, 2021 655,254 As of December 31, 2021, there was $ 4.7 million of net unrecognized compensation cost related to unvested stock-based compensation arrangements. This compensation will be recognized on a straight-line basis over a weighted-average recognition period of 1.7 years. Profits Interests and Equity Compensation (Predecessor) The Predecessor Company Group expensed the fair value of share-based compensation awards granted to employees and directors over the period each award vested. Compensation cost was measured using the Black-Scholes model. There were 150 units granted during the period from January 1, 2019 through November 14, 2019 at $11,717 per unit, which were to vest ratably over 48 months . The fair value of restricted unit awards was equal to the fair value of the Predecessor Company’s units at the date of grant. The units were valued using an internal model with market inputs available on the date of grant. The restricted units were settled as part of the Business Combination. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Note 12 - Commitments and Contingencies The following table illustrates our contractual obligations and commercial commitments by due date as of December 31, 2021: (dollars in thousands) Total Less than 1 year 1-3 years 3-5 years More than 5 years Construction holdbacks (1) $ 524,462 $ 298,692 $ 225,770 $ — $ — Operating lease obligations (2) 10,870 861 1,959 2,079 5,971 Total $ 535,332 $ 299,553 $ 227,729 $ 2,079 $ 5,971 (1) The funding timing and amounts of construction holdbacks are uncertain as these commitments relate to loans for construction costs and depend on the progress and performance of the underlying projects. (2) The total operating lease obligation includes $ 2.9 million of imputed interest. Construction Loans Our commitments and contingencies include usual obligations incurred by real estate lending companies in the normal course of business, including construction holdbacks as disclosed in Note 4. Lease Commitments On March 18, 2020, we entered into a non-cancelable operating lease agreement for our office space in Seattle with an original lease period expiring in January 2032, which includes an option to extend the lease term for an additional five years. We have concluded that the renewal option is not reasonably certain of being exercised, therefore, the renewal is not included in the right of use asset and lease liability. The lease commencement date was in the first quarter of 2021. The total future cash payments included in the measurement of our operating lease liabilities, net of lease incentives, was $ 11.7 million at inception of the lease. The right-of-use assets obtained in exchange for the new operating lease obligation and the tenant improvements were $ 6.4 and $ 2.0 million, respectively. The discount rate for the operating lease was 6 % , resulting in an imputed interest amount of $ 3.3 million. Legal Proceedings From time to time, we are named as a defendant in legal actions relating to transactions conducted in the ordinary course of business. Although there can be no assurance of the outcome of such legal actions, in the opinion of management, we do not have a potential liability related to any current legal proceeding or claim that would individually or in the aggregate materially affect our results of operations, financial condition or cash flows. Concentration Risk Our loan portfolio is primarily secured by first deed of trust liens on residential and commercial real estate located in 19 states and the District of Columbia. Our loan portfolio is also concentrated within ten counties, the largest being Utah County in Utah. As of December 31, 2021 and 2020, the top ten counties make up 46.6 % and 43.2 % of the total committed amount of loans in our total portfolio. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 13 - Related Party Transactions Private Placement with Farallon On November 14, 2019, Broadmark Realty consummated a business combination (the “Business Combination”) pursuant to an Agreement and Plan of Merger, dated August 9, 2019 (the “Merger Agreement”). In connection with the Business Combination and the execution of the Merger Agreement, we entered into certain subscription agreements with affiliates of Farallon Capital Management, L.L.C. (the “Farallon Entities”) for a private placement (the “PIPE Investment”) of our shares of common stock, pursuant to which, immediately prior to the consummation of the Business Combination, we issued and sold to the Farallon Entities an aggregate of 7,174,163 shares of common stock for an aggregate purchase price of approximately $ 75.0 million at a price per share equal to $ 10.45352229 (the “Reference Price”). In connection with the PIPE Investment, we issued to the Farallon Entities an aggregate of 7,174,163 Public Warrants. The Farallon Entities received a fee for each warrant equal to the cash payable per each warrant held by unaffiliated Public Warrant holders in connection with the warrant amendment proposal approved as part of the Business Combination, in an amount equal to $ 1.60 per warrant. The Farallon Entities own less than 5% of our outstanding common stock; however, their beneficial ownership exceeds 5 % of our common stock when including the shares issuable upon exercise of the Public Warrants held by them. We also provided the Farallon Entities with certain registration rights in connection with the PIPE Investment, pursuant to which we registered in December 2019 the shares of our common stock, Public Warrants and shares issuable upon exercise of the Public Warrants under the Securities Act. As part of the PIPE Investment, the Farallon Entities had an option (the “Optional Subscription”) to purchase up to $ 25 million of additional shares of common stock, which were exercisable during the 365 -day period following the consummation of the Business Combination at $ 10.45352229 (the “Reference Price”). The Farallon Entities were entitled to cash settle, in whole or in part, the exercise of the Optional Subscription, and therefore, the Optional Subscription did not meet the requirements for equity classification and was assumed to be settled in cash and classified as a liability in our consolidated balance sheet. The Optional Subscription expired unexercised on November 14, 2020, and therefore the liability was $ 0 as of December 31, 2020 and 2021. The change in fair value of the Optional Subscription Liability was included in the consolidated statements of income and was estimated using a lattice model, and the expected volatility was based on the historical volatility of comparable public companies. Broadmark Private REIT, LLC The Private REIT was a private real estate finance company that primarily participated in short-term, first deed of trust loans secured by real estate that were originated, underwritten and serviced by Broadmark Realty Capital Inc. The Private REIT was managed by our subsidiary in accordance with a market-based arrangement and was determined to be a voting interest entity. We did not directly or indirectly control the Private REIT and owned only a nominal interest in the Private REIT’s common units and, therefore, we did not consolidate the Private REIT. In August 2021, in connection with the liquidation of the Private REIT, all participations in mortgage notes receivable held by the Private REIT were offered to and purchased for cash by the Company at the settlement value which approximates fair value of $ 43.5 million. As of September 30, 2021, the Private REIT had distributed the net assets in excess of cash required to discharge liabilities (including accrued liabilities for liquidation costs) to its investors based on their relative percentage interests. The Private REIT Manager, acting as liquidator, is responsible for discharging the Private REIT’s remaining liabilities and winding up its affairs, which was completed in the fourth quarter of 2021. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 14 - Subsequent Events Dividend Declaration On January 14, 2022, our board of directors declared a monthly cash dividend of $ 0.07 per common share payable on February 15, 2022 to stockholders of record as of January 31, 2022, a nd on February 14, 2022, our board of directors declared a cash dividend of $ 0.07 per common share payable on March 15, 2022 to stockholders of record as of February 28, 2022 . |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation For the period from January 1, 2019 through November 15, 2019, the accompanying consolidated financial statements do not represent the financial position and results of operations of one controlling legal entity, but rather a combination of the historical results of the Predecessor Company Group, which was under common management. Therefore, any reference herein to the Predecessor financial statements are made on a combined basis. For periods from November 15, 2019 on, the principles of consolidation accompanying consolidated financial statements represent the consolidated financial statements of the Company, beginning with BRELF II as the accounting acquirer and successor entity. In addition, as a result of the Business Combination, the consolidated financial statements for periods from November 15, 2019 on, are presented on a new basis of accounting pursuant to Accounting Standards Codification ("ASC") 805, Business Combinations (refer to Note 3) to reflect BRELF II acquiring the other entities within the Predecessor Company Group and Trinity in the successor period. The accompanying consolidated financial statements include Broadmark Realty Capital Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. These consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”). |
Principles of Consolidation | Principles of Consolidation For the Predecessor period, all significant intra-entity accounts, balances, and transactions have been eliminated in the preparation of the consolidated financial statements. All significant intercompany accounts, balances, and transactions have been eliminated in consolidation. Broadmark Realty consolidates those entities in which it has control over significant operating, financial and investing decisions of the entity, as well as those entities deemed to be variable interest entities (“VIEs”), if any, in which Broadmark Realty is determined to be the primary beneficiary. Broadmark Realty is not the primary beneficiary of, and therefore does not consolidate, any VIEs in the accompanying consolidated financial statements. The Private REIT was determined to be a voting interest entity for which we, through our wholly-owned subsidiary who previously acted as manager with no significant equity investment, did not hold a controlling interest in and, therefore, did not consolidate. Furthermore, the Private REIT's participation in loans originated by us met the characteristics of a participating interest and the criterion for sale accounting in accordance with GAAP and therefore, was derecognized from our consolidated financial statements. The Private REIT was liquidated in August 2021 and all participations in mortgage notes receivable held by the Private REIT were purchased for cash by the Company at the settlement value which approximated fair value. |
Reclassifications | Reclassifications Certain amounts in our consolidated financial statements as of and for the year ended December 31, 2020 have been reclassified to conform to the presentation of our current period consolidated financial statements. These reclassifications had no effect on our previously reported net income or stockholders’ equity. The reclassifications include reclassifying certain board member expenses from compensation expense into general and administrative expense on the consolidated statements of income. The reclassification for the change in receivables due from the Private REIT from other assets to mortgage notes receivables resulted in an immaterial adjustment of the totals for net cash provided by operating activities and net cash provided by investing activities, both as previously reported. The reclassifications also included the separate presentation of amortization of right of use assets and change in lease liabilities and the combined presentation of depreciation and amortization on the consolidated statements of cash flows. |
Correction of Immaterial Error | Correction of Immaterial Error In the course of preparing our second quarter 2021 consolidated financial statements, we revisited our previous accounting classification for warrants and identified an error related to the presentation of the Private Placement Warrants, resulting in an understatement of liabilities and change in fair value from November 14, 2019 to March 31, 2021. Refer to Note 9 for additional details about the Private Placement Warrants and Public Warrants. The Private Placement Warrants generally have the same terms as the Public Warrant s, except that so long as the Private Placement Warrants are held by the original holder or its permitted transferees, (i) the original holder or its permitted transferees may exercise the warrant on a cashless basis and (ii) the Company does not have the right to redeem the Private Placement Warrants. In the case of a change of control in which less than 70 percent of the consideration received is stock listed on an exchange, the Public Warrants and Private Placement Warrants would be subject to an exercise price adjustment calculated on the basis of a capped American call option and uncapped American call option, respectively. If, however, the Private Placement Warrants are transferred to a third party, the basis for the exercise price adjustment changes and is calculated on the basis of a capped American call option, which results in the valuation change being based, in part, on the holder of the Private Placement Warrants. As a result, the Private Placement Warrants do not meet the criteria to be indexed to valuation inputs based on the Company’s own stock and must be classified as a liability measured at fair value. Based on consideration of both the quantitative and qualitative factors within the provisions of SEC Staff Accounting Bulletin No. 99, Materiality, and Staff Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, we determined that the error was not material to our previously issued annual and interim consolidated financial statements. Furthermore, we determined that correcting the error in the second quarter of 2021 would not materially misstate our consolidated financial statements and therefore, no restatement of our prior period consolidated financial statements was required. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts and disclosures at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. The most significant estimates relate to the expected credit losses on our loans and the fair value of financial instruments. Accordingly, actual results could differ from those estimates. For certain real properties, where a recent appraisal is either unavailable or not most representative of fair value, the fair value is based on a broker opinion of value including a capitalized income analysis and replacement cost analysis considering historical operating results, market rents, vacancy rates, capitalization rates, land cost comparisons, market trends and economic conditions. The assessment of fair value of real property is subject to uncertainty and, in certain cases, sensitive to the selection of comparable properties. |
Certain Significant Risks and Uncertainties | Certain Significant Risks and Uncertainties In the normal course of business, we encounter two primary types of economic risk in the form of credit and market risks. Credit risk is the risk of default on our investment in mortgage notes receivable resulting from a borrower's inability or unwillingness to make contractually required payments. Market risk is the risk of declining real estate values for the collateral underlying our loans which may make it more difficult for existing borrowers to remain current on their payment obligations, reduce the speed or ability for our loans to be repaid through the sale or refinance of the collateral and increase the likelihood that we will incur losses on our loans in the event of default as the value of collateral may be insufficient to cover our investment in the loan. We believe that the carrying values of our loans reasonably consider these risks. In addition, we are subject to significant tax risks. If we were to fail to qualify as a REIT in any taxable year, we would be subject to U.S. federal corporate income tax, which could be material. We operate in a dynamic industry and, accordingly, can be affected by a variety of factors. For example, we believe that changes in any of the following areas could have a significant negative effect on us in terms of our future financial position, results of operations or cash flows: public health crises, like the COVID-19 pandemic; the economy in the areas we operate; competition in our market; the stability of the real estate market and the impact of interest rate changes; changes in government regulation affecting our business; natural disasters and catastrophic events; and our ability to attract and retain qualified employees and key personnel, among other things. |
Reportable Segments | Reportable Segments We operate the business as one reportable segment, which originates, underwrites and services construction loans. |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider all highly liquid investments with an original maturity of 90 days or less at the date of purchase to be cash equivalents. We have a cash management sweep account repurchase agreement, whereby our bank nightly sweeps cash in excess of $ 750,000 , sells us specific U.S. government agency securities and then repurchases these securities the next day. We maintain our cash and cash equivalents with financial institutions, which are insured up to a maximum of $ 250,000 per account as of December 31, 2021 and 2020 . The balances in these accounts may exceed the insured limits. There were no restrictions on cash as of December 31, 2021 or 2020 . |
Mortgage Notes Receivable | Mortgage Notes Receivable Mortgage notes receivable (referred to herein as “mortgage notes receivable”, “construction loans”, “loans”, or “notes”) are classified as held for investment, as we have the intent and ability to hold until maturity or payoff and are carried in the consolidated balance sheets at amortized cost, net of construction holdbacks, interest reserves, allowance for credit losses and deferred origination and amendment fees. Participations in mortgage notes receivables are accounted for as sales and derecognized from the balance sheet when control over the transferred assets has been surrendered. Control over transferred assets is deemed to be surrendered when: (1) a group of financial assets or a participating interest in an entire financial asset has been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right, beyond a more than trivial benefit) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets. If the sales do not meet these criteria, the sale of the participation is treated as a secured borrowing. As of December 31, 2021 , there were no outstanding participations in our mortgage notes receivables. |
Current Expected Credit Losses Allowance | Current Expected Credit Losses Allowance We adopted the current expected credit loss (“CECL Standard”) during the year ended December 31, 2020. The initial CECL allowance adjustment of $ 2.0 million was recorded effective January 1, 2020 as a cumulative-effect of change in accounting principle through a direct charge to accumulated deficit on our consolidated statements of stockholders’ equity; however, subsequent changes to the CECL allowance are recognized in our consolidated statements of income. The CECL Standard replaced the incurred loss model under existing guidance with an expected loss model for instruments measured at amortized cost. We record an allowance for credit losses in accordance with the CECL Standard on our loan portfolio, including unfunded construction holdbacks, on a collective basis by assets with similar risk characteristics. In addition, for assets that are classified as collateral dependent based on foreclosure being probable, we continue to record loan specific allowances based on the fair value of the collateral for expected credit losses under the CECL Standard. Given the short-term nature of our loans, we evaluate the most recent external appraisal and, depending on the age of the appraisal, may order a new appraisal or, where available, will evaluate against existing comparable sales or other pertinent information to estimate the fair value of the collateral for such loans. The CECL Standard requires an entity to consider historical loss experience, current conditions, and a reasonable and supportable forecast of the economic environment. The Company utilizes a probability of default/loss given default (“PD/LGD”) method for estimating current expected credit losses. In accordance with the PD/LGD method, an annual historical loss rate is applied to the amortized cost of an asset or pool of assets over the remaining expected life. The PD/LGD method requires consideration of the timing of expected future funding of existing commitments and repayments over each asset’s remaining life. An annual loss factor, adjusted for macroeconomic estimates, is applied over each subsequent period and aggregated to arrive at the CECL allowance. In determining the CECL allowance, we considered various factors including (i) historical loss experience in our portfolio, (ii) historical loss experience in the commercial real estate lending market, (iii) timing of expected pay offs including prepayments and extensions where reasonably expected, and (iv) our current and future view of the macroeconomic environment. We utilize a reasonable and supportable forecast period equal to the contractual term of the loan plus short-term extensions of one to three months that are reasonably expected for construction loans. Management estimates the allowance for credit losses using relevant information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. The allowance for credit losses is maintained at a level sufficient to provide for expected credit losses over the life of the loan based on evaluating historical credit loss experience and making adjustments to historical loss information for differences in the specific risk characteristics in the current loan portfolio. The CECL Allowance related to the principal outstanding is presented within mortgage notes receivable, net and for unfunded commitments is within accounts payable and accrued liabilities on our consolidated balance sheets. We have made an accounting policy election to exclude accrued interest receivable, included in interest and fees receivable, net on our consolidated balance sheets, from the amortized cost basis of the related mortgage notes receivable in determining the CECL allowance, as any uncollectable accrued interest receivable is written off either when the collateral underlying the loan is sold or upon transfer to real estate owned. No interest income is recognized on mortgage notes receivable that are in contractual default unless the collectability of all principal is not in doubt and collection of accrued amounts is reasonably assured or paid in cash. In addition, in certain instances, where the interest reserve on a current loan has been fully depleted and the interest payment is not expected to be collected from the borrower, we may place a current loan on non-accrual status and recognize interest income on a cash-basis where principal collection is not in doubt. |
Impairment of Loans-Incurred Loss Model | Impairment of Loans – Incurred Loss Model For the periods ended December 31, 2019 and November 14, 2019, we evaluated loans designated as non-performing for impairment as we had some expectation that the repayment of loan, including both contractual interest and principal payments, may not be realized in full. We designated loans as non-performing at such time as (1) the borrower failed to make the required monthly interest-only loan payments; (2) the loan had a maturity default; or (3) in the opinion of management, it was probable we would be unable to collect all amounts due according to the contractual terms of the loan. For the 2019 periods, the allowance for credit losses reflected our estimate of incurred loan losses in the loan portfolio as of the balance sheet date. The allowance increased or decreased by recording the loan loss provision or recovery in our consolidated statements of income and decreased by charge-offs when losses were confirmed through the receipt of assets, such as in a pre-foreclosure sale or upon ownership control of the underlying collateral in full satisfaction of the loan upon foreclosure or when significant collection efforts had ceased. The allowance for credit losses was determined on an asset-specific basis. The asset-specific allowance related to estimated losses on individual impaired loans. This assessment was based on factors such as payment status, lien position, borrower financial resources and investment collateral, collateral type, project economics and geographic location as well as national and regional economic factors. For impaired loans, impairment was measured using the estimated fair value of collateral less the estimated cost to sell in comparison to the carrying value. Valuations were performed or obtained at the time a loan was determined to be impaired and designated as non-performing, and they are updated if circumstances indicate that a significant change in value has occurred. Given the short-term nature of our loans, we evaluated the most recent external appraisal and depending on the age of the appraisal, may have ordered a new appraisal or, where available, evaluated against existing comparable sales or other pertinent information to estimate the fair value of the collateral for such loans. |
Deferred Income | Deferred Income Deferred income represents the amount of our origination and amendment fees that have been deferred and will be recognized in income over the contractual maturity of the underlying loan. Origination fees are included in the total commitment to the borrower and financed at the time of loan origination. Amendment fees are either included in the total commitment to the borrower and financed at the time of the loan amendment or are billed to the borrower when the loan is amended and not capitalized into the principal outstanding. Deferred origination and amendment fees capitalized into the principal outstanding are included within mortgage notes receivable, net on the consolidated balance sheets. Deferred amendment fees that are not included in the principal outstanding are presented within interest and fees receivable, net on the consolidated balance sheets. |
Interest and Fees Receivable | Interest and Fees Receivable Interest on performing loans is accrued and recognized as interest income at the contractual rate of interest, or at the contractual rate of monthly minimum interest. Extension fees are charged when we agree to extend the maturity dates of loans. In addition, late fees are charged when borrower payments are contractually past due. We monitor each note’s outstanding interest and fee receivables and, based on historical performance, generally reserve against the balance after a receivable is greater than 60 days past due unless collectability of all amounts due is reasonably assured. |
Real property | Real Property To maximize recovery against a defaulted loan, we may assume legal title or physical possession of the underlying collateral through foreclosure or the execution of a deed in lieu of foreclosure. Foreclosed properties are recorded at the lower of cost and fair value at the time of acquisition. The fair value generally approximates the carrying value of the loan secured by such property, and if the collateral value exceeds the carrying value of the loan, we then record some or all the unpaid, accrued interest and fees to the carrying value of the property. Real property is classified as held for sale in the period when we commit to a plan and have the authority to sell the asset in its current condition, have initiated an active marketing plan to sell the asset at a price that is reflective of its current fair value and the sale of the asset is both probable and expected to qualify for full sales recognition within a period of 12 months. Real property, held for sale is held at the lower of cost or fair value, which evaluated on a quarterly basis. Real property that does not qualify as held for sale is classified as held for use. Once construction is complete, real property, held for use is depreciated using the straight-line method over the estimated useful life of the property and depreciation expense is no longer recorded once the real property is classified as held for sale. Costs related to acquisition, development, construction and improvements are capitalized to the extent the investment in the real property does not exceed the fair value less estimated costs to sell. Expenditures for repairs and maintenance are charged to expense when incurred. |
Leases | Leases Our office space in Seattle, Washington is subject to an operating lease. The right of use assets and lease liabilities in our consolidated balance sheets relate to this lease. The lease agreement includes both lease components (e.g., fixed rent) and non-lease components (e.g., common-area maintenance). We account for the lease and non-lease components as a single component. Right of use assets represent our right to use an underlying asset during the lease term and lease liabilities represent our obligation to make lease payments. Right of use assets and lease liabilities are recognized at the lease commencement date based on the present value of the total lease payments not yet paid, including lease incentives not yet received, with the right of use assets further adjusted for any prepaid or accrued lease payments, lease incentives received and/or initial direct costs incurred. Our lease arrangement also includes variable payments for costs such as common-area maintenance, utilities, taxes or other operating costs, which are based on a percentage of actual expenses incurred. These variable lease payments are excluded from the measurement of the right of use assets and lease liabilities. When our lease includes an option to extend the lease term, we consider several factors in determining if a renewal option is reasonably certain of being exercised at lease commencement, including, but not limited to, contract-based, asset-based and entity-based factors. We reassess the term of the existing lease if there is a significant event or change in circumstances within our control that affects whether we are reasonably certain to exercise the option to extend the lease. Examples of such events or changes include construction of significant leasehold improvements or other modifications or customizations to the underlying asset, relevant business decisions or subleases. As our lease did not provide an implicit rate, we used our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments. We recognize lease expense for our operating lease on a straight-line basis over the lease term. Variable lease payments are generally recognized when incurred. These expenses are included in general and administrative expenses in the consolidated statements of income. |
Goodwill | Goodwill Goodwill was recognized as of the close of the Business Combination on November 14, 2019 and represents the excess of the cost of an acquired business over the fair value of the assets acquired at the date of acquisition and is not amortized. We assess the impairment of goodwill on an annual basis, in our fourth quarter, or whenever events or changes in circumstances indicate that goodwill may be impaired. In our evaluation of goodwill, we typically first perform a qualitative assessment to determine whether the carrying value of each reporting unit is greater than its fair value. If it is more likely than not that the carrying value of a reporting unit is greater than its fair value, we perform a quantitative assessment and an impairment charge is recorded in our statements of operations for the excess of carrying value of the reporting unit over its fair value. Our annual assessment occurs in the fourth quarter. We continue to monitor the impact of COVID-19 and determined there were no new triggering events to warrant a quantitative assessment of our goodwill during 2021. In the first quarter of 2020, we recorded a measurement period adjustment to reduce the preliminary fair value of intangible assets in the form of customer relationships by $ 5.0 million and increased our preliminary value of goodwill by $ 5.0 million. As a result of this adjustment to preliminary values, $ 0.9 million of amortization of intangible assets recorded in 2019 was reversed in the first quarter of 2020. |
Other Assets | Other Assets Other assets primarily consist of deferred financing costs related to our revolving credit facility, fixed assets, prepaid insurance, intangible assets, and other operating receivables. |
Fixed Assets | Fixed Assets Fixed assets, which are included in other assets in the accompanying consolidated balance sheets are stated at cost, less accumulated depreciation. Repairs and maintenance to these assets are charged to expense as incurred; major improvements enhancing the function and/or useful life are capitalized. When items are sold or retired, the related cost and accumulated depreciation are removed from the accounts and any gains or losses arising from such transactions are recognized. Depreciation is recorded on the straight-line basis over the estimated useful life of the assets. For computer equipment, office equipment, furniture and fixtures the useful lives range from three to seven years . For leasehold improvements, we depreciate over the shorter of expected useful life or lease term. |
Deferred Financing Costs | Deferred Financing Costs Deferred financing costs that are included in other assets represent direct costs associated with the execution of the revolving credit facility. Such costs are included in other assets because the revolving credit facility has no principal outstanding as of December 31, 2021 and there is no recognized debt liability. These costs are amortized on the straight-line basis over the initial term of our revolving credit facility. |
Intangible Assets | Intangible Assets As a result of the Business Combination in November 2019, we identified intangible assets in the form of customer relationships. We record the intangible assets at fair value at the acquisition date and amortize the value of these finite-lived intangibles into expense over the expected useful life. All of our intangible assets relate to the value of customer relationships. As of December 31, 2021 and 2020, intangible assets net of accumulated amortization totaled $ 0.3 and $ 0.6 million, respectively. |
Debt, Policy | Senior Unsecured Notes Senior unsecured notes are recorded at the face amount of the notes net of issuance costs. Debt Issuance Costs Debt issuance costs represent direct costs associated with the issuance of a debt instrument that are deferred and amortized over the initial term of our debt instruments. Debt issuance costs are reported in the consolidated balance sheets as a direct deduction from the face amount of the debt issued. Costs that do not qualify as debt issuance costs are expensed as incurred. |
Interest Income | Interest Income Interest income on mortgage notes receivable is accrued based on contractual rates applied to the principal balance, unless there is a minimum interest provision in the mortgage note. Certain construction loans provide for minimum interest provisions, to which the contractual rate applies, which are typically between 50 % and 70 % of the face amount of the note until the actual outstanding principal exceeds the minimum threshold. Mortgage notes receivable can be placed in contractual default status for any of the following reasons: (1) an interest payment is more than 30 days past due; (2) a note matures and the borrower fails to make payment of all amounts owed or extend the loan; or (3) the collateral becomes impaired in such a way that the ultimate collection of the note is doubtful. The accrual of interest income is suspended when a loan is in contractual default unless the interest is paid in cash or collectability of all amounts due is reasonably assured. In addition, in certain instances, where the interest reserve on a current loan has been fully depleted and the interest payment is not expected to be collected from the borrower, we may place a current loan on non-accrual status and recognize interest income on a cash-basis where principal collection is not in doubt. Interest previously accrued may be reversed at that time, and such reversal is offset against interest income. The accrual of interest income resumes only when the suspended loan becomes contractually current or a credit analysis supports the ability to collect all principal outstanding and accrued amounts at loan payoff. |
Fee Income | Fee Income We charge loan origination fees in conjunction with origination. Amendment fees are charged when loan terms are modified, such as increases in interest reserves and construction holdbacks in line with our underwriting criteria or upon modification of a loan for the transition from horizontal development to vertical construction. We defer and amortize loan origination and amendment fees over the contractual terms of the loans. Extension fees are charged when we agree to extend the maturity dates of loans and we charge fees on past due receivables. Extension and late fees are recognized when billed to the borrower. We charge inspection fees, which we use to hire independent inspectors to report on the status of construction projects. These fees are earned and recognized upon each construction draw request. |
Interest Expense | Interest Expense Interest expense on debt obligations is accrued based on the note rate applied to the face amount of the debt outstanding. Amortization of debt issuance costs and deferred financing costs over the initial term of the debt instruments is reported as interest expense in the consolidated statements of income. |
Share-Based Payments | Stock‑Based Compensation We measure compensation expense for all share-based awards at fair value on the date of grant and recognize compensation expense over the service period on a straight-line basis for awards expected to vest, which is generally three years for employees and one year for directors. Share-based awards are issued under the Broadmark Realty Capital Inc. 2019 Stock Incentive Plan. Awards made to our employees and directors, typically consist of restricted stock units (“RSUs”). Employee stock-based compensation expense is included in compensation and employee benefits and director stock-based compensation expense is included in general and administrative in the consolidated statement of operations. For awards with only a service vesting condition, the fair value of the award is based on the grant date closing price of our common stock less the present value of expected dividends over the requisite service period, as the awards are not entitled to dividends. For these awards, we recognize stock-based compensation expense on a straight-line basis over the requisite service period for the entire award, subject to periodic adjustments to ensure that the cumulative amount of expense recognized through the end of any reporting period is at least equal to the portion of the grant date fair value of the award that has vested through that date, and we account for forfeitures prospectively as they occur. For awards that contain both service vesting and market conditions, referred to as performance restricted stock units (“pRSUs”), we use a Monte Carlo simulation model to calculate the grant date fair value. For these market-condition awards, regardless of the outcome of the market condition, we recognize stock-based compensation expense on a straight-line basis over the longest of explicit and derived service periods, and we account for forfeitures prospectively as they occur. If there are any modifications or cancellations of the underlying unvested share-based awards, we may be required to accelerate or increase any remaining unrecognized or previously recorded stock-based compensation expense. |
Profit Interests | Profit Interests (Predecessor) The Predecessor Management Companies' profits interests were accounted for as share-based compensation. The Predecessor Management Companies expensed the fair value of profits interests granted to its employees and directors over the period each award vested. Compensation cost was measured using the Black-Scholes model. All unvested profits interests vested at the time of the Business Combination. |
Income Taxes | Income Taxes (Successor) We have elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, for U.S. federal income tax purposes (the “Code”). As a REIT, we generally are not subject to U.S. federal income taxes on net income we distribute to our stockholders. We intend to make timely distributions sufficient to satisfy the annual distribution requirements. If we fail to qualify as a REIT in any taxable year, we will be subject to U.S. federal income tax on our taxable income at regular corporate tax rates. Even if we qualify for taxation as a REIT, we may be subject to certain state and local taxes on our income and property and U.S. federal income and excise taxes on our undistributed income. Our TRSs are subject to U.S. federal income taxes. Income Taxes (Predecessor) The Predecessor Companies were taxed as partnerships and REITs under provisions of the Code. As such, the tax attributes of the partnerships are included in the individual tax returns of its members for partnerships and not for the Predecessor Company Group as the REIT entities met the qualifications to be taxed as REITs. Accordingly, the accompanying consolidated statement of income for the period ending November 14, 2019 includes no provision for income taxes for the Predecessor Company Group. |
Earnings per Share | Earnings per Share We present both basic and diluted earnings per common share (“EPS”) amounts in our consolidated financial statements. Basic EPS excludes dilution and is computed by dividing income available to common stockholders by the weighted-average number of shares of common stock outstanding for the period. Diluted EPS reflects the maximum potential dilution that could occur from our outstanding warrants and restricted stock units. We consider the two-class method to measure dilution to earnings per share. Under the two-class method, net income is first reduced for dividends declared on all classes of securities to arrive at undistributed earnings. During periods of net losses, the net loss is reduced for dividends declared on participating securities only if the security has the right to participate in the earnings of the company and an objectively determinable contractual obligation to share in net losses of the company. The remaining earnings are allocated to common stockholders and participating securities to the extent that each security shares in earnings as if all of the earnings for the period had been distributed. Each total is then divided by the applicable weighted average number of common shares outstanding during the period to arrive at basic earnings per share. We utilize the treasury stock method to measure dilution to earnings per share in calculating the net number of shares that would be issued, assuming any related proceeds are used to buy back outstanding shares. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements There are no recent accounting pronouncements that we have yet to adopt with an expected impact on our financial position, results of operations or cash flows. |
Business Combination (Tables)
Business Combination (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Business Combinations [Abstract] | |
Summary of preliminary fair values of assets acquired and liabilities assumed by BRELF II | The fair values of assets acquired and liabilities assumed by BRELF II on November 14, 2019 are as follows: Consideration paid: $ (in thousands) Cash $ 102,245 Common stock 479,619 Total consideration paid $ 581,864 Assets acquired: Cash and cash equivalents 88,505 Investment in real property 8,413 Mortgage notes receivable 344,837 Interest and fees receivable 2,743 Intangible assets 1,000 Other assets 174 Total Assets 445,672 Liabilities assumed: Accounts payable and accrued liability 205 Other liabilities 568 Total Liabilities 773 Net assets acquired 444,899 Goodwill $ 136,965 |
Mortgage Notes Receivable (Tabl
Mortgage Notes Receivable (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Receivables [Abstract] | |
Schedule of mortgage notes receivable | The following table reconciles outstanding mortgage loan commitments to outstanding balance of mortgage notes receivable as of December 31, 2021 and 2020: (dollars in thousands) December 31, 2021 December 31, 2020 Total loan commitments $ 1,489,055 $ 1,245,963 Less: Construction holdbacks (1) 524,462 356,026 Interest reserves (1) 39,880 29,817 Private REIT participation (2) — 37,729 Total principal outstanding for our mortgage notes receivable 924,713 822,391 Less: Allowance for credit losses (3) 10,394 10,590 Deferred origination and amendment fees 12,969 13,315 Mortgage notes receivable, net $ 901,350 $ 798,486 (1) Includes construction holdbacks of $ 40.4 million and interest reserves of $ 4.3 million on participating interests sold to the Private REIT as of December 31, 2020. As of December 31, 2021 , there were no outstanding participations as a result of the liquidation of the Private REIT and purchase of all outstanding participations by the Company. Refer to Note 13 for details. (2) The Private REIT’s participations in loans originated by us met the characteristics of participating interests and the criterion for sale accounting and therefore, were derecognized from our consolidated financial statements. As of December 31, 2021 , there were no outstanding participations as a result of the liquidation of the Private REIT and purchase of all outstanding participations by the Company. Refer to Note 13 for details. (3) As of December 31, 2021, $ 0.9 million of the CECL allowance is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable and accrued liabilities in our consolidated balance sheet. |
Schedule of activity in the CECL Allowance | The following tables summarize the activity in the CECL allowance during the years ended December 31, 2021 and 2020: CECL Allowance (dollars in thousands) Funded Unfunded (2) Total CECL allowance as of December 31, 2020 $ 10,590 $ — $ 10,590 Provision for credit losses, net 5,275 904 6,179 Charge-offs (1) ( 5,471 ) — ( 5,471 ) CECL allowance as of December 31, 2021 $ 10,394 $ 904 $ 11,298 (dollars in thousands) CECL Allowance Loan loss reserve as of December 31, 2019 $ 4,096 Adoption of ASU 2016-13 (3) 1,975 Provision for credit losses, net 6,722 Charge-offs (1) ( 2,203 ) CECL allowance as of December 31, 2020 $ 10,590 (1) Resulting from either loan repayments where the proceeds are less than the principal outstanding or transfers to investment in real property owned upon foreclosure where the fair values of the underlying collateral are less than the principal outstanding. (2) CECL allowance related to unfunded commitments is presented as a liability under accounts payable and accrued liabilities in our consolidated balance sheet. (3) Recorded as a direct charge to stockholders’ equity, effective January 1, 2020, as a cumulative-effect of change in accounting principle. |
Schedule of composition of loan portfolio | The following tables allocate the carrying value of our loan portfolio based on our internal credit quality indicators in assessing estimated credit losses and vintage of origination at the dates indicated: At December 31, 2021 Year Originated (1) (dollars in thousands) Carrying Value % of Portfolio 2021 2020 2019 2018 2017 Prior Construction Type Vertical Construction $ 471,863 51.8 % $ 236,961 $ 184,143 $ 1,177 $ 1,382 $ 47,939 $ 261 Investment 256,936 28.1 204,865 28,094 1,925 4,717 17,335 — Horizontal Development 182,945 20.1 155,443 27,502 — — — — Total $ 911,744 100.0 % $ 597,269 $ 239,739 $ 3,102 $ 6,099 $ 65,274 $ 261 CECL allowance (2) ( 10,394 ) Carrying value, net $ 901,350 (1) Represents the year of amendment where the loan incurred a full re-underwriting in connection with the amendment. (2) Includes $ 0.7 million in loan specific allowances for loans deemed collateral dependent based on the fair value of the underlying collateral. In addition, $ 0.9 million of the CECL allowance is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable and accrued liabilities in our consolidated balance sheet. At December 31, 2021 Year Originated (1) (dollars in thousands) Carrying Value % of Portfolio 2021 2020 2019 2018 2017 Prior Collateral Type Residential Lots $ 111,644 12.2 % 85,219 26,425 — — — — Apartments 107,765 11.8 $ 38,232 $ 68,356 $ 1,177 $ — $ — $ — Townhomes 93,300 10.2 51,240 28,979 — 1,017 11,803 261 Mixed Use 85,929 9.4 53,530 30,474 1,925 — — — Single Family Housing 87,902 9.5 84,703 3,049 — — 150 — Condos 64,492 7.1 8,805 18,227 — 1,474 35,986 — Commercial 61,592 6.8 61,592 — — — — — Senior Housing 61,236 6.7 35,899 25,337 — — — — Storage 56,481 6.2 56,481 — — — — — Unentitled Land 46,019 5.0 42,411 — — 3,608 — — Entitled Land 45,098 4.9 27,763 — — — 17,335 — Hotel 31,665 3.5 4,886 26,779 — — — — Offices 15,348 1.7 8,280 7,068 — — — — Commercial Lots 10,227 1.1 6,670 3,557 — — — — Quadplex 9,769 1.1 9,769 — — — — — Commercial Other 9,080 1.0 9,080 — — — — — Retail 7,873 0.9 6,385 1,488 — — — — Duplex 6,324 0.7 6,324 — — — — — Total $ 911,744 100.0 % $ 597,269 $ 239,739 $ 3,102 $ 6,099 $ 65,274 $ 261 CECL allowance (2) ( 10,394 ) Carrying value, net $ 901,350 (1) Represents the year of amendment where the loan incurred a full re-underwriting in connection with the amendment. (2) Includes $ 0.7 million in loan specific allowances for loans deemed collateral dependent based on the fair value of the underlying collateral. In addition, $ 0.9 million of the CECL allowance is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable and accrued liabilities in our consolidated balance sheet. At December 31, 2021 Year Originated (1) (dollars in thousands) Carrying Value % of Portfolio 2021 2020 2019 2018 2017 Prior LTV (2) 0 - 40% $ 53,907 5.9 % $ 32,634 $ — $ — $ 3,608 $ 17,665 $ — 41 - 45% 48,431 5.3 44,380 4,051 — — — — 46 - 50% 63,690 7.0 41,356 21,317 — 1,017 — — 51 - 55% 92,238 10.1 74,978 17,260 — — — — 56 - 60% 79,039 8.7 27,115 40,190 — — 11,473 261 61 - 65% 559,997 61.4 372,645 146,640 3,102 1,474 36,136 — 66 - 70% 645 0.1 645 — — — — — 71 - 75% — 0.0 — — — — — — 76 - 80% — 0.0 — — — — — — Above 80% 13,797 1.5 3,516 10,281 — — — — Total $ 911,744 100.0 % $ 597,269 $ 239,739 $ 3,102 $ 6,099 $ 65,274 $ 261 CECL allowance (3) ( 10,394 ) Carrying value, net $ 901,350 (1) Represents the year of amendment where the loan incurred a full re-underwriting in connection with the amendment. (2) Represents LTV as of origination or latest amendment. LTVs above 65 % generally represent loans in contractual default status where we have agreed to extend funds to the borrower above 65 % in order to facilitate successful completion of the construction and return of capital. (3) Includes $ 0.7 million in loan specific allowances for loans deemed collateral dependent based on the fair value of the underlying collateral. In addition, $ 0.9 million of the CECL allowance is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable and accrued liabilities in our consolidated balance sheet. At December 31, 2020 Year Originated (1) (dollars in thousands) Carrying Value % of Portfolio 2020 2019 2018 2017 2016 Prior Construction Type Vertical Construction $ 514,136 63.5 % $ 354,012 $ 57,090 $ 6,853 $ 88,655 $ 7,526 $ — Horizontal Development 153,345 19.0 129,607 15,028 283 — 8,427 — Investment 141,595 17.5 98,146 18,657 7,259 16,444 — 1,089 Total $ 809,076 100.0 % $ 581,765 $ 90,775 $ 14,395 $ 105,099 $ 15,953 $ 1,089 CECL allowance (2) ( 10,590 ) Carrying value, net $ 798,486 (1) Represents the year of amendment where the loan incurred a full re-underwriting in connection with the amendment. (2) Includes $ 1.5 million in loan specific allowances for loans deemed collateral dependent based on the fair value of the underlying collateral. At December 31, 2020 Year Originated (1) (dollars in thousands) Carrying Value % of Portfolio 2020 2019 2018 2017 2016 Prior Collateral Type Apartments $ 129,588 16.0 % $ 79,931 $ 18,953 $ — $ 24,232 $ 6,472 $ — Residential Lots 124,548 15.4 105,830 10,291 — — 8,427 — Condos 92,245 11.4 52,714 3,106 4,405 32,020 — — Single Family Housing 90,131 11.1 69,438 8,839 1,028 10,103 — 723 Townhomes 72,773 9.0 47,391 1,061 1,703 21,564 1,054 — Unentitled Land 71,796 8.9 47,727 — 7,259 16,444 — 366 Mixed Use 66,092 8.2 60,232 5,860 — — — — Hotel 51,115 6.3 42,874 8,241 — — — — Senior Housing 34,283 4.2 34,283 — — — — — Offices 29,540 3.7 8,495 21,045 — — — — Commercial Lots 15,683 1.9 15,683 — — — — — Retail 11,397 1.4 9,500 1,897 — — — — Industrial 11,309 1.4 704 10,605 — — — — Quadplex 5,592 0.7 5,592 — — — — — Entitled Land 1,116 0.1 1,116 — — — — — Commercial 877 0.1 — 877 — — — — Duplex 736 0.1 — — — 736 — — Commercial Other 254 0.1 254 — — — — — Total $ 809,076 100.0 % $ 581,765 $ 90,775 $ 14,395 $ 105,099 $ 15,953 $ 1,089 CECL allowance (2) ( 10,590 ) Carrying value, net $ 798,486 (1) Represents the year of amendment where the loan incurred a full re-underwriting in connection with the amendment. (2) Includes $ 1.5 million in loan specific allowances for loans deemed collateral dependent based on the fair value of the underlying collateral. At December 31, 2020 Year Originated (1) (dollars in thousands) Carrying Value % of Portfolio 2020 2019 2018 2017 2016 Prior LTV (2) 0 - 40% $ 22,601 2.8 % $ 18,112 $ — $ 3,862 $ 261 $ — $ 366 41 - 45% 68,263 8.4 44,683 20,183 3,397 — — — 46 - 50% 23,864 2.9 15,917 7,224 — — — 723 51 - 55% 76,539 9.5 57,583 2,774 — 16,182 — — 56 - 60% 135,170 16.7 117,309 3,106 — 9,639 5,116 — 61 - 65% 450,253 55.7 301,964 57,488 7,136 76,139 7,526 — 66 - 70% 9,416 1.2 9,416 — — — — — 71 - 75% 1,983 0.2 1,983 — — — — — 76 - 80% 14,544 1.8 14,544 — — — — — Above 80% 6,443 0.8 254 — — 2,878 3,311 — Total $ 809,076 100.0 % $ 581,765 $ 90,775 $ 14,395 $ 105,099 $ 15,953 $ 1,089 CECL allowance (3) ( 10,590 ) Carrying value, net $ 798,486 (1) Represents the year of amendment where the loan incurred a full re-underwriting in connection with the amendment. (2) Represents LTV as of origination or latest amendment. LTVs above 65 % generally represent loans in contractual default status where we have agreed to extend funds to the borrower above 65 % in order to ensure successful completion of the construction and return of capital. (3) Includes $ 1.5 million in loan specific allowances for loans deemed collateral dependent based on the fair value of the underlying collateral. |
Schedule of carrying value of collateral dependent loans | The following tables allocate the carrying value of collateral dependent loans in our loan portfolio to the collateral type at the dates indicated: At December 31, 2021 (dollars in thousands) Carrying Value CECL Allowance (1) Carrying Value, net Collateral Type Senior Housing $ 25,337 $ ( 1,103 ) $ 24,234 Entitled Land 17,335 ( 42 ) 17,293 Single Family Housing 1,730 ( 15 ) 1,715 Condos 1,109 ( 673 ) 436 Townhomes 261 ( 1 ) 260 Total $ 45,772 $ ( 1,834 ) $ 43,938 (1) Includes $ 0.7 million in specific allowances based on the excess amortized cost over the fair value of the underlying collateral and $ 1.1 million where the fair value was greater than the amortized cost and the allowance is based on the standard CECL methodology. At December 31, 2020 (dollars in thousands) Carrying Value CECL Allowance (1) Carrying Value, net Collateral Type Hotel $ 16,215 $ ( 202 ) $ 16,013 Single Family Housing 9,953 ( 1,542 ) 8,411 Offices 5,541 ( 305 ) 5,236 Residential Lots 713 - 713 Total $ 32,422 $ ( 2,049 ) $ 30,373 (1) Includes $ 1.5 million in specific allowances based on the excess amortized cost over the fair value of the underlying collateral an d $ 0.5 m illion where the fair value was greater than the amortized cost and the allowance is based on the standard CECL methodology. |
Summary of activity in the allowance for loan losses | The following table summarizes the activity in the allowance for loan losses for the year ended December 31, 2019: (dollars in thousands) Successor Period from (1) Predecessor Period from Beginning $ 4,096 $ 1,704 Provision for loan losses — 3,342 Charge offs — ( 452 ) Recoveries — — Ending $ 4,096 $ 4,594 (1) The beginning balance on November 15, 2019 (Successor) represents the allowance of the acquirer, BRELF II . |
Investment in Real Property (Ta
Investment in Real Property (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Real Estate [Abstract] | |
Schedule of carrying value of owned real estate | The following tables provides information about the carrying value of our owned real property: (dollars in thousands) At December 31, 2021 At December 31, 2020 Collateral Type Condos $ 28,441 $ — Offices 19,388 2,970 Townhomes 9,281 — Single Family Housing 4,134 1,761 Retail 3,811 3,742 Residential Lots 3,012 — Total $ 68,067 $ 8,473 (dollars in thousands) At December 31, 2021 At December 31, 2020 Held-for-sale $ 52,531 $ 8,473 Held-for-use 15,536 — Total $ 68,067 $ 8,473 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value of assets and liabilities | The following tables present estimated fair values of our financial instruments as of the date indicated, whether or not recognized or recorded in the consolidated balance sheets at the period indicated: December 31, 2021 Fair Value Measurements Using (dollars in thousands) Carrying Value Estimated Fair Value Level 1 Level 2 Level 3 Financial Assets Cash and cash equivalents $ 132,889 $ 132,889 $ 132,889 $ — $ — Mortgage notes receivable, net 901,350 901,350 — — 901,350 Financial Liabilities Senior unsecured notes 97,223 100,000 100,000 — — Private placement warrant liability 1,838 1,838 — 1,838 — December 31, 2020 Fair Value Measurements Using (dollars in thousands) Carrying Value Estimated Fair Value Level 1 Level 2 Level 3 Financial Assets Cash and cash equivalents $ 223,375 $ 223,375 $ 223,375 $ — $ — Mortgage notes receivable, net 798,486 798,486 — — 798,486 |
Schedule of valuation methodologies and inputs used for assets that are measured at fair value | Fair Value (dollars in thousands) December 31, 2021 December 31, 2020 Valuation technique Unobservable inputs Range of inputs Real property — held for sale (1) $ 52,531 $ 8,473 Collateral valuations Appraised value, broker opinion of value, discounted cash flows or capitalization rate applied to estimate net operating income 0 - 10 % Collateral dependent loans, net of allowance for credit losses (2) 43,938 30,373 Collateral valuations Discount to appraised value based on comparable market prices 0 - 10 % Total $ 96,469 $ 38,846 (1) Real property held-for-sale is measured at lower of cost or fair value, a non-recurring measurement of fair value. (2) Loans meeting the definition of collateral dependent are measured at the fair value. The carrying value of the collateral dependent loans, net of the allowance for credit losses, approximates fair value. |
Schedule of activity in the CECL Allowance | The following tables summarize the activity in the CECL allowance during the years ended December 31, 2021 and 2020: CECL Allowance (dollars in thousands) Funded Unfunded (2) Total CECL allowance as of December 31, 2020 $ 10,590 $ — $ 10,590 Provision for credit losses, net 5,275 904 6,179 Charge-offs (1) ( 5,471 ) — ( 5,471 ) CECL allowance as of December 31, 2021 $ 10,394 $ 904 $ 11,298 (dollars in thousands) CECL Allowance Loan loss reserve as of December 31, 2019 $ 4,096 Adoption of ASU 2016-13 (3) 1,975 Provision for credit losses, net 6,722 Charge-offs (1) ( 2,203 ) CECL allowance as of December 31, 2020 $ 10,590 (1) Resulting from either loan repayments where the proceeds are less than the principal outstanding or transfers to investment in real property owned upon foreclosure where the fair values of the underlying collateral are less than the principal outstanding. (2) CECL allowance related to unfunded commitments is presented as a liability under accounts payable and accrued liabilities in our consolidated balance sheet. (3) Recorded as a direct charge to stockholders’ equity, effective January 1, 2020, as a cumulative-effect of change in accounting principle. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of change in net book value of intangible assets | The following table summarizes the balances of intangible assets as of December 31, 2021 and 2020: (dollars in thousands) 2021 2020 Asset Type Customer relationships $ 1,000 $ 1,000 Less: Accumulated amortization 718 379 Intangible assets, net $ 282 $ 621 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Carrying Values of The Company's Debt | The following table presents the carrying values of the senior unsecured notes as of December 31, 2021: (dollars in thousands) Principal $ 100,000 Debt issuance costs ( 2,855 ) Amortization of debt issuance costs 78 Total notes, net $ 97,223 |
Schedule of Senior Unsecured Notes | The following table summarizes the terms of our senior unsecured notes as of December 31, 2021 (in thousands, except interest rates: Maturity Date Aggregate Principal Amount Stated Interest Rate First Interest Payment Date Semi-Annual Interest Payment Dates Unamortized Debt Issuance Costs November 15, 2026 $ 100,000 5.00 % May 15, 2022 May 15; November 15 $ ( 2,777 ) Total $ 100,000 $ ( 2,777 ) |
Schedule of Interest Expense Related to Senior Unsecured Notes and Revolving Credit Facility | The following table summarizes the interest expense related to our senior unsecured notes and revolving credit facility for the year ended December 31, 2021: (in thousands) Amortization of Deferred Debt Costs Interest Paid and Accrued Undrawn Fees 5.00% senior notes $ 78 $ 694 $ — Revolving credit facility 1,255 107 1,186 Total $ 1,333 $ 801 $ 1,186 |
Stockholders' Equity and Earn_2
Stockholders' Equity and Earnings per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Schedule of basic and diluted earnings per common share | The table below presents the computation of basic and diluted net income per share of common stock for the periods presented: Year Ended (dollars in thousands, except share and per share data): December 31, 2021 December 31, 2020 Net income $ 82,488 $ 90,231 Basic weighted-average shares of common stock outstanding 132,579,289 132,209,495 Dilutive effect of share-based compensation – unvested restricted stock units 87,213 51,618 Diluted weighted-average shares of common stock outstanding 132,666,502 132,261,113 Basic earnings per share $ 0.62 $ 0.68 Diluted earnings per share $ 0.62 $ 0.68 |
Schedule of stock equivalents excluded from diluted net income per share | For the periods presented, the following stock equivalents were excluded from the calculations of diluted earnings per share because their effect would have been antidilutive: Year Ended December 31, 2021 December 31, 2020 Weighted-average restricted stock units outstanding 199,709 315,260 Unexercised public warrants and private placement warrants 15,604,304 15,604,304 Expired and unexercised shares related to the Optional Subscription liability — 2,391,539 Total stock equivalents excluded 15,804,013 18,311,103 |
Equity Incentive Plan (Tables)
Equity Incentive Plan (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Summary of the activity related to restricted stock | The following table summarizes the activity related to RSUs during 2021: Shares Weighted Average Grant Date Fair Market Value Unvested RSUs outstanding as of December 31, 2020 434,143 Granted 466,001 $ 10.08 Vested ( 231,053 ) $ 10.61 Forfeited ( 13,837 ) $ 10.58 Unvested RSUs outstanding as of December 31, 2021 655,254 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of contractual obligations and commercial commitments | The following table illustrates our contractual obligations and commercial commitments by due date as of December 31, 2021: (dollars in thousands) Total Less than 1 year 1-3 years 3-5 years More than 5 years Construction holdbacks (1) $ 524,462 $ 298,692 $ 225,770 $ — $ — Operating lease obligations (2) 10,870 861 1,959 2,079 5,971 Total $ 535,332 $ 299,553 $ 227,729 $ 2,079 $ 5,971 (1) The funding timing and amounts of construction holdbacks are uncertain as these commitments relate to loans for construction costs and depend on the progress and performance of the underlying projects. (2) The total operating lease obligation includes $ 2.9 million of imputed interest. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional information (Details) | 1 Months Ended | 2 Months Ended | 3 Months Ended | 10 Months Ended | 12 Months Ended | |||
Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Mar. 31, 2020USD ($) | Nov. 14, 2019USD ($) | [1] | Dec. 31, 2021USD ($)Segment | Dec. 31, 2020USD ($)Property | Jan. 01, 2020USD ($) | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Additional paid in capital | $ 1,216,957,000 | $ 1,213,987,000 | ||||||
Placement warrants description | the Company does not have the right to redeem the Private Placement Warrants. In the case of a change of control in which less than 70 percent of the consideration received is stock listed on an exchange, the Public Warrants and Private Placement Warrants would be subject to an exercise price adjustment calculated on the basis of a capped American call option and uncapped American call option, respectively. | |||||||
Number of Reportable Segments | Segment | 1 | |||||||
Threshold Sweep Account Balance | $ 750,000 | |||||||
Cash and cash equivalents insured maximum per account | 250,000 | 250,000 | ||||||
Restricted cash | 0 | 0 | ||||||
Accumulated deficit | (68,621,000) | (39,698,000) | ||||||
Provision for credit losses | $ 0 | $ 3,342,000 | 6,179,000 | 6,722,000 | ||||
Net income (Loss) | 5,313,000 | 69,923,000 | 82,488,000 | $ 90,231,000 | ||||
Number of properties | Property | 3 | |||||||
Real Estate Project Value | 68,100,000 | $ 8,500,000 | ||||||
Impairment of goodwill | $ 0 | |||||||
Adjustment to goodwill | $ 5,000,000 | |||||||
Amortization reversed | 900,000 | |||||||
Intangible assets, net | 300,000 | 600,000 | ||||||
Provision for income taxes | $ 0 | $ 0 | $ 0 | $ 0 | ||||
Cumulative Effect, Period of Adoption, Adjustment [Member] | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Accumulated deficit | $ 2,000,000 | |||||||
Employees | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Vesting period | 3 years | |||||||
Directors | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Vesting period | 1 year | |||||||
Customer relationships | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Adjustment to intangible assets | $ 5,000,000 | |||||||
Maximum | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Estimated Useful Lives of fixed assets | 7 years | |||||||
Contractual Rate | 70.00% | |||||||
Minimum | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Estimated Useful Lives of fixed assets | 3 years | |||||||
Contractual Rate | 50.00% | |||||||
[1] | Predecessor period is combined as disclosed in Note 1 |
Business Combination - Fair Val
Business Combination - Fair Values of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Nov. 14, 2019 | Dec. 31, 2019 | Nov. 14, 2019 | Nov. 14, 2019 | Dec. 31, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | ||||||
Financial Designation | Successor | Successor | Predecessor | Predecessor | Successor | Successor |
Goodwill | $ 136,965 | $ 136,965 | ||||
Trinity | ||||||
Business Acquisition [Line Items] | ||||||
Cash | $ 102,245 | |||||
Common stock | 479,619 | |||||
Total consideration paid | 581,864 | |||||
Cash and cash equivalents | 88,505 | $ 88,505 | $ 88,505 | |||
Investment in real property | 8,413 | 8,413 | 8,413 | |||
Mortgage notes receivable | 344,837 | 344,837 | 344,837 | |||
Interest and fees receivable | 2,743 | 2,743 | 2,743 | |||
Intangible assets | 1,000 | 1,000 | 1,000 | |||
Other assets | 174 | 174 | 174 | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets, Total | 445,672 | 445,672 | 445,672 | |||
Accounts payable and accrued liability | 205 | 205 | 205 | |||
Other liabilities | 568 | 568 | 568 | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities, Total | 773 | 773 | 773 | |||
Net assets acquired | 444,899 | 444,899 | 444,899 | |||
Goodwill | $ 136,965 | $ 136,965 | $ 136,965 |
Business Combination - Addition
Business Combination - Additional information (Details) - USD ($) $ in Thousands | Nov. 14, 2019 | Dec. 31, 2019 | Dec. 31, 2019 | Mar. 31, 2020 | Nov. 14, 2019 | Nov. 14, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Business Acquisition [Line Items] | ||||||||||
Proceeds From Recapitalization | $ 327,056 | $ 0 | [1] | $ 0 | $ 0 | |||||
Consent fee paid to holders of Public Warrants | (66,679) | 0 | [1] | 0 | 0 | |||||
Transaction costs | 367 | 25,789 | [2] | 0 | 0 | |||||
Common Stock Issued For Transaction Expenses In Connection With Business Combination And Recapitalization | $ 1,391 | $ 0 | [1] | $ 0 | $ 0 | |||||
Financial Designation | Successor | Successor | Predecessor | Predecessor | Successor | Successor | ||||
Purchased Goodwill, Income Tax Amortization Period | 15 years | |||||||||
Customer Relationships [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Allocation of the preliminary fair value | $ 6,000 | $ 1,000 | $ 6,000 | $ 6,000 | ||||||
Goodwill, Period Increase (Decrease) | $ 5,000 | |||||||||
Trinity | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Proceeds From Recapitalization | 327,100 | |||||||||
Consent fee paid to holders of Public Warrants | 66,700 | |||||||||
Net proceeds | 260,400 | |||||||||
Remaining Proceeds From Recapitalization | 146,900 | |||||||||
Total consideration paid | 581,864 | |||||||||
Settlement in cash | 102,245 | |||||||||
Settlement in common stock | 479,619 | |||||||||
Seller transaction costs | 13,500 | |||||||||
Seller transaction costs (settled in cash) | 11,900 | |||||||||
Seller transaction costs (settled in stock) | 1,600 | |||||||||
Allocation of the preliminary fair value | 1,000 | $ 1,000 | $ 1,000 | |||||||
Transaction costs | $ 400 | $ 26,200 | ||||||||
Settlement made for termination of referral agreements | 10,000 | |||||||||
Settlement made in the form of cash | 7,000 | |||||||||
Settlement made in the form of common stock | $ 3,000 | |||||||||
Maximum [Member] | Customer Relationships [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Useful economic lives | 5 years | |||||||||
Minimum [Member] | Customer Relationships [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Useful economic lives | 2 years | |||||||||
Brelf Ii Member | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Stock Issued In Connection With Recapitalization | 495,500 | |||||||||
Transaction cost settled in cash | 11,300 | |||||||||
Common Stock Issued For Transaction Expenses In Connection With Business Combination And Recapitalization | $ 1,400 | |||||||||
Transaction costs | $ 25,800 | |||||||||
Brelf Ii Member | Trinity | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Percentage of acquisition | 100.00% | 100.00% | 100.00% | |||||||
Brelf Ii Member | Operating Expense [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Transaction costs | $ 12,700 | |||||||||
[1] | Predecessor period is combined as disclosed in Note 1. | |||||||||
[2] | Predecessor period is combined as disclosed in Note 1 |
Mortgage Notes Receivable - Add
Mortgage Notes Receivable - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Loans and Leases Receivable Disclosure [Line Items] | ||
Percentage of maximum loan to value ratio | 65.00% | |
Percentage of maximum of amount of a single loan | 10.00% | |
Percentage of maximum amount of loans to single borrower | 15.00% | |
Term of mortgage notes receivable | 13 months | |
Interest rate (as a percent) | 10.70% | |
Monthly interest rate payment term | 10 days | |
Principal outstanding on non accrual status | $ 101.9 | $ 126.8 |
Contractual loans | $ 191.4 |
Mortgage Notes Receivable - Inf
Mortgage Notes Receivable - Information pertaining to mortgage notes receivable (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | [1] | Nov. 14, 2019 | Dec. 31, 2018 | ||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||
Total principal outstanding for our mortgage notes receivable | $ 911,744 | $ 809,076 | |||||||
Adoption of ASU 2016-13 | 10,394 | 10,590 | $ 4,096 | $ 4,594 | $ 1,704 | ||||
Mortgage notes receivable, net | 901,350 | 798,486 | |||||||
Mortgage notes receivables | |||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||
Total loan commitments | 1,489,055 | 1,245,963 | |||||||
Construction holdbacks | 524,462 | [2] | 356,026 | ||||||
Interest reserves | 39,880 | [2] | 29,817 | ||||||
Private REIT participation | [3] | 37,729 | |||||||
Total principal outstanding for our mortgage notes receivable | 924,713 | 822,391 | |||||||
Adoption of ASU 2016-13 | 10,394 | [4] | 10,590 | ||||||
Deferred origination and amendment fees | 12,969 | 13,315 | |||||||
Mortgage notes receivable, net | 901,350 | 798,486 | |||||||
Broadmark Private REIT, LLC | |||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||
Construction holdbacks | 40,400 | ||||||||
Interest reserves | 4,300 | ||||||||
Unfunded Loan Commitment [Member] | |||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||
Adoption of ASU 2016-13 | [5] | 904 | 0 | ||||||
Unfunded Loan Commitment [Member] | Accounts payable and accrued liabilities | |||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||
Adoption of ASU 2016-13 | 900 | $ 900 | |||||||
Funded And Unfunded Loan Commitment [Member] | |||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||
Adoption of ASU 2016-13 | $ 11,298 | $ 10,590 | |||||||
[1] | The beginning balance on November 15, 2019 (Successor) represents the allowance of the acquirer, BRELF II | ||||||||
[2] | Includes construction holdbacks of $ 40.4 million and interest reserves of $ 4.3 million on participating interests sold to the Private REIT as of December 31, 2020. As of December 31, 2021 , there were no outstanding participations as a result of the liquidation of the Private REIT and purchase of all outstanding participations by the Company. Refer to Note 13 for details. | ||||||||
[3] | The Private REIT’s participations in loans originated by us met the characteristics of participating interests and the criterion for sale accounting and therefore, were derecognized from our consolidated financial statements. As of December 31, 2021 , there were no outstanding participations as a result of the liquidation of the Private REIT and purchase of all outstanding participations by the Company. Refer to Note 13 for details. | ||||||||
[4] | As of December 31, 2021, $ 0.9 million of the CECL allowance is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable and accrued liabilities in our consolidated balance sheet. | ||||||||
[5] | CECL allowance related to unfunded commitments is presented as a liability under accounts payable and accrued liabilities in our consolidated balance sheet. |
Mortgage Notes Receivable - All
Mortgage Notes Receivable - Allowance for loan loss (Details) - USD ($) $ in Thousands | 2 Months Ended | 10 Months Ended | 12 Months Ended | ||||
Dec. 31, 2019 | Nov. 14, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||||||
Allowance for Credit Loss, Beginning Balance | $ 4,594 | $ 1,704 | $ 10,590 | $ 4,096 | [1] | ||
Allowance for Credit Loss, Beginning Balance | [1] | 4,096 | |||||
Adoption of ASU 2016-13 | 4,096 | [1] | 4,594 | 10,394 | 10,590 | ||
Provision for loan losses (benefits) | 0 | 3,342 | 5,275 | 6,722 | |||
Charge offs | 0 | (452) | (5,471) | (2,203) | [2] | ||
Allowance for Credit Loss, Ending Balance | $ 4,096 | [1] | $ 4,594 | 10,394 | 10,590 | ||
Cumulative Effect, Period of Adoption, Adjustment [Member] | |||||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||||||
Allowance for Credit Loss, Beginning Balance | [3] | 1,975 | |||||
Adoption of ASU 2016-13 | [3] | 1,975 | |||||
Allowance for Credit Loss, Ending Balance | [3] | 1,975 | |||||
Unfunded Loan Commitment [Member] | |||||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||||||
Allowance for Credit Loss, Beginning Balance | [4] | 0 | |||||
Adoption of ASU 2016-13 | [4] | 904 | 0 | ||||
Provision for loan losses (benefits) | [4] | 904 | |||||
Charge offs | [4] | 0 | |||||
Allowance for Credit Loss, Ending Balance | [4] | 904 | 0 | ||||
Funded And Unfunded Loan Commitment [Member] | |||||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||||||
Allowance for Credit Loss, Beginning Balance | 10,590 | ||||||
Adoption of ASU 2016-13 | 11,298 | 10,590 | |||||
Provision for loan losses (benefits) | 6,179 | ||||||
Charge offs | (5,471) | ||||||
Allowance for Credit Loss, Ending Balance | $ 11,298 | $ 10,590 | |||||
[1] | The beginning balance on November 15, 2019 (Successor) represents the allowance of the acquirer, BRELF II | ||||||
[2] | Resulting from either loan repayments where the proceeds are less than the principal outstanding or transfers to investment in real property owned upon foreclosure where the fair values of the underlying collateral are less than the principal outstanding. | ||||||
[3] | Recorded as a direct charge to stockholders’ equity, effective January 1, 2020, as a cumulative-effect of change in accounting principle. | ||||||
[4] | CECL allowance related to unfunded commitments is presented as a liability under accounts payable and accrued liabilities in our consolidated balance sheet. |
Mortgage Notes Receivable - Com
Mortgage Notes Receivable - Composition of loan portfolio (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | [1] | Nov. 14, 2019 | Dec. 31, 2018 | |
Loans and Leases Receivable Disclosure [Line Items] | ||||||||
Carrying Value | $ 911,744 | $ 809,076 | ||||||
CECL Allowance | (10,394) | (10,590) | $ (4,096) | $ (4,594) | $ (1,704) | |||
Carrying value, net | $ 901,350 | $ 798,486 | ||||||
Percentage of portfolio | 100.00% | 100.00% | ||||||
2021 | $ 597,269 | $ 581,765 | ||||||
2020 | 239,739 | 90,775 | ||||||
2019 | 3,102 | 14,395 | ||||||
2018 | 6,099 | 105,099 | ||||||
2017 | 65,274 | 15,953 | ||||||
Prior | $ 261 | $ 1,089 | ||||||
LTV general percent indicating default status | 65 | 65 | ||||||
Allowances on excess amortized cost over fair value | $ 1,500 | $ 1,500 | ||||||
0 - 40% | ||||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||||
Carrying Value | $ 53,907 | $ 22,601 | ||||||
Percentage of portfolio | 5.90% | 2.80% | ||||||
2021 | $ 32,634 | $ 18,112 | ||||||
2019 | 3,862 | |||||||
2018 | 3,608 | 261 | ||||||
2017 | 17,665 | |||||||
Prior | 366 | |||||||
41 - 45% | ||||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||||
Carrying Value | $ 48,431 | $ 68,263 | ||||||
Percentage of portfolio | 5.30% | 8.40% | ||||||
2021 | $ 44,380 | $ 44,683 | ||||||
2020 | 4,051 | 20,183 | ||||||
2019 | 3,397 | |||||||
46 - 50% | ||||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||||
Carrying Value | $ 63,690 | $ 23,864 | ||||||
Percentage of portfolio | 7.00% | 2.90% | ||||||
2021 | $ 41,356 | $ 15,917 | ||||||
2020 | 21,317 | 7,224 | ||||||
2018 | 1,017 | |||||||
Prior | 723 | |||||||
51 - 55% | ||||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||||
Carrying Value | $ 92,238 | $ 76,539 | ||||||
Percentage of portfolio | 10.10% | 9.50% | ||||||
2021 | $ 74,978 | $ 57,583 | ||||||
2020 | 17,260 | 2,774 | ||||||
2019 | ||||||||
2018 | 16,182 | |||||||
56 - 60% | ||||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||||
Carrying Value | $ 79,039 | $ 135,170 | ||||||
Percentage of portfolio | 8.70% | 16.70% | ||||||
2021 | $ 27,115 | $ 117,309 | ||||||
2020 | 40,190 | 3,106 | ||||||
2018 | 9,639 | |||||||
2017 | 11,473 | 5,116 | ||||||
Prior | 261 | |||||||
61 - 65% | ||||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||||
Carrying Value | $ 559,997 | $ 450,253 | ||||||
Percentage of portfolio | 61.40% | 55.70% | ||||||
2021 | $ 372,645 | $ 301,964 | ||||||
2020 | 146,640 | 57,488 | ||||||
2019 | 3,102 | 7,136 | ||||||
2018 | 1,474 | 76,139 | ||||||
2017 | 36,136 | 7,526 | ||||||
66 - 70% | ||||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||||
Carrying Value | $ 645 | $ 9,416 | ||||||
Percentage of portfolio | 0.10% | 1.20% | ||||||
2021 | $ 645 | $ 9,416 | ||||||
71 - 75% | ||||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||||
Carrying Value | $ 1,983 | |||||||
Percentage of portfolio | 0.00% | 0.20% | ||||||
2021 | $ 1,983 | |||||||
76 - 80% | ||||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||||
Carrying Value | $ 14,544 | |||||||
Percentage of portfolio | 0.00% | 1.80% | ||||||
2021 | $ 14,544 | |||||||
Above 80% | ||||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||||
Carrying Value | $ 13,797 | $ 6,443 | ||||||
Percentage of portfolio | 1.50% | 0.80% | ||||||
2021 | $ 3,516 | $ 254 | ||||||
2020 | 10,281 | |||||||
2018 | 2,878 | |||||||
2017 | 3,311 | |||||||
Apartments | ||||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||||
Carrying Value | $ 107,765 | $ 129,588 | ||||||
Percentage of portfolio | 11.80% | 16.00% | ||||||
2021 | $ 38,232 | $ 79,931 | ||||||
2020 | 68,356 | 18,953 | ||||||
2019 | 1,177 | |||||||
2018 | 24,232 | |||||||
2017 | 6,472 | |||||||
Prior | ||||||||
Residential Lots | ||||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||||
Carrying Value | $ 111,644 | $ 124,548 | ||||||
Percentage of portfolio | 12.20% | 15.40% | ||||||
2021 | $ 85,219 | $ 105,830 | ||||||
2020 | 26,425 | 10,291 | ||||||
2017 | 8,427 | |||||||
Prior | ||||||||
Condos | ||||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||||
Carrying Value | $ 64,492 | $ 92,245 | ||||||
Percentage of portfolio | 7.10% | 11.40% | ||||||
2021 | $ 8,805 | $ 52,714 | ||||||
2020 | 18,227 | 3,106 | ||||||
2019 | 4,405 | |||||||
2018 | 1,474 | 32,020 | ||||||
2017 | 35,986 | |||||||
Single family housing | ||||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||||
Carrying Value | $ 87,902 | $ 90,131 | ||||||
Percentage of portfolio | 9.50% | 11.10% | ||||||
2021 | $ 84,703 | $ 69,438 | ||||||
2020 | 3,049 | 8,839 | ||||||
2019 | 1,028 | |||||||
2018 | 10,103 | |||||||
2017 | 150 | |||||||
Prior | 723 | |||||||
Unentitled Land | ||||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||||
Carrying Value | $ 46,019 | $ 71,796 | ||||||
Percentage of portfolio | 5.00% | 8.90% | ||||||
2021 | $ 42,411 | $ 47,727 | ||||||
2020 | ||||||||
2019 | 7,259 | |||||||
2018 | 3,608 | 16,444 | ||||||
Prior | 366 | |||||||
Townhomes | ||||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||||
Carrying Value | $ 93,300 | $ 72,773 | ||||||
Percentage of portfolio | 10.20% | 9.00% | ||||||
2021 | $ 51,240 | $ 47,391 | ||||||
2020 | 28,979 | 1,061 | ||||||
2019 | 1,703 | |||||||
2018 | 1,017 | 21,564 | ||||||
2017 | 11,803 | 1,054 | ||||||
Prior | 261 | |||||||
Mixed Use | ||||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||||
Carrying Value | $ 85,929 | $ 66,092 | ||||||
Percentage of portfolio | 9.40% | 8.20% | ||||||
2021 | $ 53,530 | $ 60,232 | ||||||
2020 | 30,474 | 5,860 | ||||||
2019 | 1,925 | |||||||
Hotel | ||||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||||
Carrying Value | $ 31,665 | $ 51,115 | ||||||
Percentage of portfolio | 3.50% | 6.30% | ||||||
2021 | $ 4,886 | $ 42,874 | ||||||
2020 | 26,779 | 8,241 | ||||||
Senior Housing | ||||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||||
Carrying Value | $ 61,236 | $ 34,283 | ||||||
Percentage of portfolio | 6.70% | 4.20% | ||||||
2021 | $ 35,899 | $ 34,283 | ||||||
2020 | 25,337 | |||||||
Offices | ||||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||||
Carrying Value | $ 15,348 | $ 29,540 | ||||||
Percentage of portfolio | 1.70% | 3.70% | ||||||
2021 | $ 8,280 | $ 8,495 | ||||||
2020 | 7,068 | 21,045 | ||||||
2019 | ||||||||
Entitled Land | ||||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||||
Carrying Value | $ 45,098 | $ 1,116 | ||||||
Percentage of portfolio | 4.90% | 0.10% | ||||||
2021 | $ 27,763 | $ 1,116 | ||||||
2018 | ||||||||
2017 | 17,335 | |||||||
Commercial Lots | ||||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||||
Carrying Value | $ 10,227 | $ 15,683 | ||||||
Percentage of portfolio | 1.10% | 1.90% | ||||||
2021 | $ 6,670 | $ 15,683 | ||||||
2020 | 3,557 | |||||||
Retail | ||||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||||
Carrying Value | $ 7,873 | $ 11,397 | ||||||
Percentage of portfolio | 0.90% | 1.40% | ||||||
2021 | $ 6,385 | $ 9,500 | ||||||
2020 | 1,488 | 1,897 | ||||||
2019 | ||||||||
Storage | ||||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||||
Carrying Value | $ 56,481 | $ 11,309 | ||||||
Percentage of portfolio | 6.20% | 1.40% | ||||||
2021 | $ 56,481 | $ 704 | ||||||
2020 | 10,605 | |||||||
Quadplex | ||||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||||
Carrying Value | $ 9,769 | $ 5,592 | ||||||
Percentage of portfolio | 1.10% | 0.70% | ||||||
2021 | $ 9,769 | $ 5,592 | ||||||
2020 | ||||||||
Commercial | ||||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||||
Carrying Value | $ 61,592 | $ 877 | ||||||
Percentage of portfolio | 6.80% | 0.10% | ||||||
2021 | $ 61,592 | |||||||
2020 | $ 877 | |||||||
Duplex | ||||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||||
Carrying Value | $ 6,324 | $ 736 | ||||||
Percentage of portfolio | 0.70% | 0.10% | ||||||
2021 | $ 6,324 | |||||||
2018 | $ 736 | |||||||
Commercial other | ||||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||||
Carrying Value | $ 9,080 | $ 254 | ||||||
Percentage of portfolio | 1.00% | 0.10% | ||||||
2021 | $ 9,080 | $ 254 | ||||||
Vertical Construction | ||||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||||
Carrying Value | $ 471,863 | $ 514,136 | ||||||
Percentage of portfolio | 51.80% | 63.50% | ||||||
2021 | $ 236,961 | $ 354,012 | ||||||
2020 | 184,143 | 57,090 | ||||||
2019 | 1,177 | 6,853 | ||||||
2018 | 1,382 | 88,655 | ||||||
2017 | 47,939 | 7,526 | ||||||
Prior | 261 | |||||||
Horizontal Development | ||||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||||
Carrying Value | $ 182,945 | $ 153,345 | ||||||
Percentage of portfolio | 20.10% | 19.00% | ||||||
2021 | $ 155,443 | $ 129,607 | ||||||
2020 | 27,502 | 15,028 | ||||||
2019 | 283 | |||||||
2018 | ||||||||
2017 | 8,427 | |||||||
Prior | ||||||||
Investment | ||||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||||
Carrying Value | $ 256,936 | $ 141,595 | ||||||
Percentage of portfolio | 28.10% | 17.50% | ||||||
2021 | $ 204,865 | $ 98,146 | ||||||
2020 | 28,094 | 18,657 | ||||||
2019 | 1,925 | 7,259 | ||||||
2018 | 4,717 | 16,444 | ||||||
2017 | 17,335 | |||||||
Prior | 1,089 | |||||||
Unfunded Loan Commitment [Member] | ||||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||||
CECL Allowance | [2] | (904) | $ 0 | |||||
Unfunded Loan Commitment [Member] | Accounts payable and accrued liabilities | ||||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||||
CECL Allowance | (900) | $ (900) | ||||||
Allowances on excess amortized cost over fair value | $ 700 | $ 700 | ||||||
[1] | The beginning balance on November 15, 2019 (Successor) represents the allowance of the acquirer, BRELF II | |||||||
[2] | CECL allowance related to unfunded commitments is presented as a liability under accounts payable and accrued liabilities in our consolidated balance sheet. |
Mortgage Notes Receivable - Sch
Mortgage Notes Receivable - Schedule of carrying value of collateral dependent loans (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | [1] | Nov. 14, 2019 | Dec. 31, 2018 | |||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||
Carrying Value | $ 911,744 | $ 809,076 | |||||||
CECL Allowance | (10,394) | (10,590) | $ (4,096) | $ (4,594) | $ (1,704) | ||||
Financing Receivable, after Allowance for Credit Loss, Total | 901,350 | 798,486 | |||||||
Allowances on excess amortized cost over fair value | 1,500 | 1,500 | |||||||
Loan portfolio [Member] | |||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||
Carrying Value | 45,772 | 32,422 | |||||||
CECL Allowance | (1,834) | [2] | (2,049) | [3] | |||||
Financing Receivable, after Allowance for Credit Loss, Total | 43,938 | 30,373 | |||||||
Allowances on excess amortized cost over fair value | 700 | 1,500 | |||||||
Fair value allowances | 1,100 | 500 | |||||||
Senior Housing [Member] | |||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||
Carrying Value | 61,236 | 34,283 | |||||||
Senior Housing [Member] | Loan portfolio [Member] | |||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||
Carrying Value | 25,337 | ||||||||
CECL Allowance | [2] | (1,103) | |||||||
Financing Receivable, after Allowance for Credit Loss, Total | 24,234 | ||||||||
Entitled Land [Member] | |||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||
Carrying Value | 45,098 | 1,116 | |||||||
Entitled Land [Member] | Loan portfolio [Member] | |||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||
Carrying Value | 17,335 | ||||||||
CECL Allowance | [2] | (42) | |||||||
Financing Receivable, after Allowance for Credit Loss, Total | 17,293 | ||||||||
Single Family Housing [Member] | Loan portfolio [Member] | |||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||
Carrying Value | 1,730 | 9,953 | |||||||
CECL Allowance | (15) | [2] | (1,542) | [3] | |||||
Financing Receivable, after Allowance for Credit Loss, Total | 1,715 | 8,411 | |||||||
Condos [Member] | |||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||
Carrying Value | 64,492 | 92,245 | |||||||
Condos [Member] | Loan portfolio [Member] | |||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||
Carrying Value | 1,109 | ||||||||
CECL Allowance | [2] | (673) | |||||||
Financing Receivable, after Allowance for Credit Loss, Total | 436 | ||||||||
Townhomes [Member] | |||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||
Carrying Value | 93,300 | 72,773 | |||||||
Townhomes [Member] | Loan portfolio [Member] | |||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||
Carrying Value | 261 | ||||||||
CECL Allowance | [2] | (1) | |||||||
Financing Receivable, after Allowance for Credit Loss, Total | 260 | ||||||||
Hotel [Member] | Loan portfolio [Member] | |||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||
Carrying Value | 16,215 | ||||||||
CECL Allowance | [3] | (202) | |||||||
Financing Receivable, after Allowance for Credit Loss, Total | 16,013 | ||||||||
Offices [Member] | Loan portfolio [Member] | |||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||
Carrying Value | 5,541 | ||||||||
CECL Allowance | [3] | (305) | |||||||
Financing Receivable, after Allowance for Credit Loss, Total | 5,236 | ||||||||
Residential Lots [Member] | |||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||
Carrying Value | $ 111,644 | 124,548 | |||||||
Residential Lots [Member] | Loan portfolio [Member] | |||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||
Carrying Value | 713 | ||||||||
CECL Allowance | [3] | 0 | |||||||
Financing Receivable, after Allowance for Credit Loss, Total | $ 713 | ||||||||
[1] | The beginning balance on November 15, 2019 (Successor) represents the allowance of the acquirer, BRELF II | ||||||||
[2] | Includes $ 0.7 million in specific allowances based on the excess amortized cost over the fair value of the underlying collateral and $ 1.1 million where the fair value was greater than the amortized cost and the allowance is based on the standard CECL methodology. | ||||||||
[3] | Includes $ 1.5 million in specific allowances based on the excess amortized cost over the fair value of the underlying collateral an d $ 0.5 m illion where the fair value was greater than the amortized cost and the allowance is based on the standard CECL methodology. |
Investment in Real Property - S
Investment in Real Property - Schedule of carrying value of owned real estate (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Real Estate [Line Items] | ||
Investment in real property, net | $ 68,067 | $ 8,473 |
Real Estate Held-for-sale | 68,067 | 8,473 |
Condos [Member] | ||
Real Estate [Line Items] | ||
Investment in real property, net | 28,441 | 0 |
Offices [Member] | ||
Real Estate [Line Items] | ||
Investment in real property, net | 19,388 | 2,970 |
Townhomes [Member] | ||
Real Estate [Line Items] | ||
Investment in real property, net | 9,281 | 0 |
Single Family Housing [Member] | ||
Real Estate [Line Items] | ||
Investment in real property, net | 4,134 | 1,761 |
Retail [Member] | ||
Real Estate [Line Items] | ||
Investment in real property, net | 3,811 | 3,742 |
Residential Lots [Member] | ||
Real Estate [Line Items] | ||
Investment in real property, net | 3,012 | 0 |
Real Estate Held-for-sale One [Member] | ||
Real Estate [Line Items] | ||
Real Estate Held-for-sale | 52,531 | 8,473 |
Real Estate Held-for-sale Two [Member] | ||
Real Estate [Line Items] | ||
Real Estate Held-for-sale | $ 15,536 | $ 0 |
Investment in Real Property - A
Investment in Real Property - Additional Information (Details) $ in Millions | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($)Property |
Real Estate [Abstract] | ||
Number of properties | Property | 3 | |
Real Estate Project Value | $ | $ 68.1 | $ 8.5 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair value of assets and liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Carrying Value | ||
Financial Assets | ||
Cash and cash equivalents | $ 132,889 | $ 223,375 |
Mortgage notes receivable, net | 901,350 | 798,486 |
Financial Liabilities | ||
Senior unsecured notes | 97,223 | |
Private placement warrant liability | 1,838 | |
Estimated Fair Value | ||
Financial Assets | ||
Cash and cash equivalents | 132,889 | 223,375 |
Mortgage notes receivable, net | 901,350 | 798,486 |
Financial Liabilities | ||
Senior unsecured notes | 100,000 | |
Private placement warrant liability | 1,838 | |
Level 1 | Estimated Fair Value | ||
Financial Assets | ||
Cash and cash equivalents | 132,889 | 223,375 |
Financial Liabilities | ||
Senior unsecured notes | 100,000 | |
Level 2 | Estimated Fair Value | ||
Financial Liabilities | ||
Private placement warrant liability | 1,838 | |
Level 3 | Estimated Fair Value | ||
Financial Assets | ||
Mortgage notes receivable, net | $ 901,350 | $ 798,486 |
Fair Value Measurements - Valua
Fair Value Measurements - Valuation Methodologies and Inputs Used for Assets Measured at Fair Value (Details) $ in Thousands | Dec. 31, 2021USD ($) | Jun. 30, 2021 | Dec. 31, 2020USD ($) | ||
Level 3 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Assets measured at fair value | $ 96,469 | $ 38,846 | |||
Non recurring | Private Placement Warrants [Member] | Minimum | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Range of inputs | [1] | 0 | |||
Non recurring | Private Placement Warrants [Member] | Maximum | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Range of inputs | [1] | 10 | |||
Non recurring | Real Property | Minimum | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Range of inputs | 0 | [2] | 0 | ||
Non recurring | Real Property | Maximum | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Range of inputs | 10 | [2] | 10 | ||
Non recurring | Collateral Dependent Loans [Member] | Minimum | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Range of inputs | 0 | ||||
Non recurring | Collateral Dependent Loans [Member] | Maximum | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Range of inputs | 10 | ||||
Non recurring | Level 3 | Real Property | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Assets measured at fair value | [1] | $ 52,531 | 8,473 | ||
Non recurring | Level 3 | Collateral Dependent Loans [Member] | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Assets measured at fair value | [2] | $ 43,938 | $ 30,373 | ||
[1] | Real property held-for-sale is measured at lower of cost or fair value, a non-recurring measurement of fair value. | ||||
[2] | Loans meeting the definition of collateral dependent are measured at the fair value. The carrying value of the collateral dependent loans, net of the allowance for credit losses, approximates fair value. |
Fair Value Measurement - Additi
Fair Value Measurement - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | 2 Months Ended | 10 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Nov. 14, 2019 | [1] | Dec. 31, 2021 | Dec. 31, 2020 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Change in fair value of warrant liabilities | $ 4,924 | $ 0 | $ 1,838 | $ (5,492) | |
Private Placement Warrants | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Warrants outstanding (in shares) | 5.2 | 5.2 | |||
Warrants outstanding | $ 1,800 | ||||
Share price | $ 0.09 | ||||
Fair Value Measurement Transfer from Level 3 To Level 2 Description | The fair value of the 5.2 million Private Placement Warrants, estimated using the quoted share price of the Public Warrants (BRMK.WS), was approximately $0.09 per warrant or $0.35 per share to arrive at $1.8 million as of December 31, 2021. Refer to Note 9 for additional details on the Private Placement Warrants. | ||||
[1] | Predecessor period is combined as disclosed in Note 1. |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of change in net book value of intangible assets (Details) - Customer Relationships [Member] - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Intangibles, Gross | $ 1,000 | $ 1,000 |
Less Accumulated amortization | 718 | 379 |
Intangible assets, net | $ 282 | $ 621 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Additional Information) (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill | $ 136,965 | $ 136,965 | |||
Impairment of goodwill | $ 0 | ||||
Customer Relationships [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Adjustment to fair value of intangible assets | $ 5,000 | ||||
Goodwill, Period Increase (Decrease) | 5,000 | ||||
Goodwill | $ 137,000 | ||||
Amortization of intangible assets | $ 700 |
Debt (Additional Information) (
Debt (Additional Information) (Details) - USD ($) | Nov. 12, 2021 | Feb. 19, 2021 | Dec. 31, 2021 |
Line of Credit Facility [Line Items] | |||
Aggregate principal amount | $ 100,000,000 | ||
Debt issuance cost | 97,223,000 | ||
5.0% senior unsecured notes due 2026 | Private offering [Member] | |||
Line of Credit Facility [Line Items] | |||
Aggregate principal amount | $ 100,000,000 | ||
Fixed interest rate | 5.00% | ||
Debt issuance cost | $ 2,900,000 | ||
5.0% senior unsecured notes due 2026 | Private offering [Member] | Future [Member] | |||
Line of Credit Facility [Line Items] | |||
Maturity Date | Nov. 15, 2026 | ||
Revolving Credit Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Amount of revolving credit facility | $ 135,000,000 | ||
Maturity Date | Feb. 19, 2024 | ||
Amortization period | 3 years | ||
Revolving credit facility outstanding, amount | $ 0 | ||
Deferred financing costs | $ 4,500,000 |
Debt - Schedule of Carrying Val
Debt - Schedule of Carrying Values of The Company's Debt (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Unsecured Senior Notes: | |
Aggregate principal amount | $ 100,000 |
Debt issuance costs | (2,855) |
Amortization of debt issuance costs | 78 |
Total notes, net | $ 97,223 |
Debt - Schedule of Senior Unsec
Debt - Schedule of Senior Unsecured Notes (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Line of Credit Facility [Line Items] | |
Aggregate principal amount | $ 100,000 |
Unamortized Debt Issuance Costs | $ (2,777) |
Senior Unsecured Notes [Member] | |
Line of Credit Facility [Line Items] | |
Maturity Date | Nov. 15, 2026 |
Aggregate principal amount | $ 100,000 |
Stated Interest Rate | 5.00% |
First Interest Payment Date | May 15, 2022 |
Semi-Annual Interest Payment Dates | May 15; November 15 |
Unamortized Debt Issuance Costs | $ (2,777) |
Debt - Summary of Interest Expe
Debt - Summary of Interest Expense Related to Our Senior Unsecured Notes and Revolving Credit Facility (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Line of Credit Facility [Line Items] | |
Amortization of Deferred Debt Costs | $ 1,333 |
Interest Paid and Accrued | 801 |
Undrawn Fee | 1,186 |
5.00% senior notes | |
Line of Credit Facility [Line Items] | |
Amortization of Deferred Debt Costs | 78 |
Interest Paid and Accrued | 694 |
Revolving Credit Facility [Member] | |
Line of Credit Facility [Line Items] | |
Amortization of Deferred Debt Costs | 1,255 |
Interest Paid and Accrued | 107 |
Undrawn Fee | $ 1,186 |
Stockholders' Equity and Earn_3
Stockholders' Equity and Earnings per Common Share - Stock (Details) | 12 Months Ended | ||
Dec. 31, 2021Vote$ / sharesshares | Dec. 31, 2020Vote$ / sharesshares | Mar. 02, 2021USD ($) | |
Equity [Abstract] | |||
Common stock shares authorized (in shares) | 500,000,000 | 500,000,000 | |
Common stock par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | |
Preferred stock shares authorized (in shares) | 100,000,000 | 100,000,000 | |
Preferred stock par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | |
Common stock number of voting rights | Vote | 1 | 1 | |
Common stock shares issued (in shares) | 132,716,338 | 132,532,383 | |
Common stock shares outstanding (in shares) | 132,716,338 | 132,532,383 | |
Preferred stock shares issued (in shares) | 0 | 0 | |
Preferred stock shares outstanding (in shares) | 0 | 0 | |
Common Stock Aggregate Gross Sales Price | $ | $ 200,000,000 |
Stockholders' Equity and Earn_4
Stockholders' Equity and Earnings per Common Share - Warrant (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Class of Warrant or Right [Line Items] | ||
Exercise price per share (in dollars per share) | $ 11.50 | $ 11.50 |
Warrants issued | 15,600,000 | 15,600,000 |
Private placement warrant liabilities | $ 1,800 | |
Public Warrants | ||
Class of Warrant or Right [Line Items] | ||
Warrants outstanding (in shares) | 41,700,000 | 41,700,000 |
Exercise price per share (in dollars per share) | $ 2.875 | $ 2.875 |
Number of share per warrant | 0.25 | |
Private Placement Warrants | ||
Class of Warrant or Right [Line Items] | ||
Warrants outstanding (in shares) | 5,200,000 | 5,200,000 |
Exercise price per share (in dollars per share) | $ 11.50 | $ 11.50 |
Number of share per warrant | 1 | 1 |
Warrants outstanding | $ 1,800 | |
Share Price | $ 0.09 | |
Optional Subscription [Member] | ||
Class of Warrant or Right [Line Items] | ||
Warrants outstanding | $ 0 | $ 0 |
Farallon Entities | ||
Class of Warrant or Right [Line Items] | ||
Warrants outstanding (in shares) | 7,174,163 | |
Farallon Entities | Optional Subscription [Member] | ||
Class of Warrant or Right [Line Items] | ||
Common stock exercisable term | 365 days | |
Share Price | $ 10.45352229 | |
Maximum | Farallon Entities | Optional Subscription [Member] | ||
Class of Warrant or Right [Line Items] | ||
Additional shares of common stock | 25,000,000 | |
Accounts payable and accrued liabilities | Farallon Entities | Optional Subscription [Member] | ||
Class of Warrant or Right [Line Items] | ||
Warrants outstanding | $ 0 | $ 0 |
Stockholders' Equity and Earn_5
Stockholders' Equity and Earnings per Common Share - Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 2 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Net income | $ 82,488 | $ 90,231 | ||
Basic weighted-average shares of common stock outstanding | 132,111,329 | 132,579,289 | 132,209,495 | |
Dilutive effect of share-based compensation - unvested restricted stock units | 87,213 | 51,618 | ||
Diluted weighted-average shares of common stock outstanding | 132,499,386 | 132,666,502 | 132,261,113 | |
Basic earnings per share | [1] | $ 0.04 | $ 0.62 | $ 0.68 |
Diluted earnings per share | [1] | $ 0.04 | $ 0.62 | $ 0.68 |
[1] | The Company determined that earnings per unit in the Predecessor periods would not be meaningful to the users of this filing, given the different unit holders and members' equity structures of each individual entity in the Predecessor Company Group |
Stockholders' Equity and Earn_6
Stockholders' Equity and Earnings per Common Share - Schedule of Stock Equivalents Excluded from Diluted Net Income Per Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Weighted-average restricted stock units outstanding | 199,709 | 315,260 |
Unexercised public and private warrants | 15,604,304 | 15,604,304 |
Expired and unexercised shares related to the Optional Subscription liability | 0 | 2,391,539 |
Total stock equivalents excluded | 15,804,013 | 18,311,103 |
Income Taxes - Additional infor
Income Taxes - Additional information (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Income Tax Disclosure [Abstract] | |
Uncertain tax positions | $ 0 |
Amount accrued for penalties or interest | $ 0 |
Nondeductible excise tax | 4.00% |
Equity Incentive Plan - Additio
Equity Incentive Plan - Additional information (Details) - shares | 10 Months Ended | 12 Months Ended |
Nov. 14, 2019 | Dec. 31, 2021 | |
2019 Stock Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares authorized | 5,000,000 | |
Shares available for grant | 3,644,068 | |
Restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 48 months | |
Restricted stock units | 2019 Stock Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance period | 3 years | |
Restricted stock units | 2019 Stock Incentive Plan | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Payout percentage | 0.00% | |
Restricted stock units | 2019 Stock Incentive Plan | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Payout percentage | 150.00% | |
Vesting period | 3 years |
Equity Incentive Plan - RSU's A
Equity Incentive Plan - RSU's Activity - (Details) - Restricted stock units - $ / shares | 10 Months Ended | 12 Months Ended |
Nov. 14, 2019 | Dec. 31, 2021 | |
Shares | ||
Outstanding at the beginning | 434,143 | |
Granted | 150 | 231,053 |
Vested | (466,001) | |
Forfeited | (13,837) | |
Outstanding at the end | 655,254 | |
Weighted Average Grant Date Fair Market Value | ||
Granted | $ 10.61 | |
Vested | 10.08 | |
Forfeited | $ 10.58 |
Equity Incentive Plan - Compens
Equity Incentive Plan - Compensation Additional information (Details) - Restricted stock units - USD ($) $ / shares in Units, $ in Millions | 10 Months Ended | 12 Months Ended |
Nov. 14, 2019 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation cost related to unvested stock-based compensation arrangements | $ 4.7 | |
Weighted-average recognition period | 1 year 8 months 12 days | |
Granted | 150 | 231,053 |
Fair value of grants | $ 10.61 | |
Vesting period | 48 months |
Commitments and Contingencies -
Commitments and Contingencies - Contractual Obligations (Details) $ in Thousands | Dec. 31, 2021USD ($) | |
Other Commitments [Line Items] | ||
Less than 1 year | $ 299,553 | |
1-3 years | 227,729 | |
3-5 years | 2,079 | |
More than 5 years | 5,971 | |
Total | 535,332 | |
Construction holdbacks | ||
Other Commitments [Line Items] | ||
Less than 1 year | 298,692 | [1] |
1-3 years | 225,770 | [1] |
3-5 years | 0 | [1] |
More than 5 years | 0 | [1] |
Total | 524,462 | [1] |
Operating lease obligations | ||
Other Commitments [Line Items] | ||
Less than 1 year | 861 | [2] |
1-3 years | 1,959 | [2] |
3-5 years | 2,079 | [2] |
More than 5 years | 5,971 | [2] |
Total | $ 10,870 | [2] |
[1] | The funding timing and amounts of construction holdbacks are uncertain as these commitments relate to loans for construction costs and depend on the progress and performance of the underlying projects. | |
[2] | The total operating lease obligation includes $ 2.9 million of imputed interest. |
Commitments and Contingencies_2
Commitments and Contingencies - Contractual Obligations (Parenthetical) (Details) | Dec. 31, 2021USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Imputed Interest | $ 2,900 |
Commitments and Contingencies_3
Commitments and Contingencies (Details) - Mortgage notes receivables - Geographic concentration risk | 12 Months Ended | |
Dec. 31, 2021StateCountry | Dec. 31, 2020 | |
Concentration Risk [Line Items] | ||
Number of states in mortgage loans were originated | State | 19 | |
Number of counties in which loan portfolio concentrated | Country | 10 | |
Major Country | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 46.60% | 43.20% |
Commitments and Contingencies_4
Commitments and Contingencies - Lease Commitments (Details) - USD ($) $ in Thousands | 2 Months Ended | 10 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Nov. 14, 2019 | [1] | Dec. 31, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |||||
Lease incentives | $ 11,700 | ||||
Right-of-use assets obtained in exchange | $ 0 | $ 0 | 6,360 | $ 0 | |
Tenant improvements | $ 0 | $ 0 | $ 1,959 | $ 0 | |
Discount rate for the operation lease | 6.00% | ||||
Imputed interest amount | $ 3,300 | ||||
[1] | Predecessor period is combined as disclosed in Note 1. |
Related Party Transactions Addi
Related Party Transactions Additional information (Details) - USD ($) $ / shares in Units, $ in Thousands | Aug. 31, 2021 | Dec. 31, 2019 | Nov. 14, 2019 | [1] | Dec. 31, 2021 | Dec. 31, 2020 |
Related Party Transaction [Line Items] | ||||||
Payments to acquire mortgage notes receivable | $ 0 | $ 0 | $ 43,498 | $ 0 | ||
Optional subscription | ||||||
Related Party Transaction [Line Items] | ||||||
Warrants outstanding | $ 0 | 0 | ||||
Farallon Entities | ||||||
Related Party Transaction [Line Items] | ||||||
Shares issued | 7,174,163 | |||||
Aggregate purchase price | $ 75,000 | |||||
Warrants outstanding (in shares) | 7,174,163 | |||||
Class of warrant or right, amendment fee per warrant | $ 1.60 | |||||
Ownership percentage | 5.00% | |||||
Farallon Entities | Optional subscription | ||||||
Related Party Transaction [Line Items] | ||||||
Common stock exercisable term | 365 days | |||||
Reference Price | $ 10.45352229 | |||||
Farallon Entities | Accounts payable and accrued liabilities | Optional subscription | ||||||
Related Party Transaction [Line Items] | ||||||
Warrants outstanding | $ 0 | $ 0 | ||||
Broadmark Private Reit Llc [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Payments to acquire mortgage notes receivable | $ 43,500 | |||||
Maximum | Farallon Entities | Optional subscription | ||||||
Related Party Transaction [Line Items] | ||||||
Additional shares of common stock | 25,000,000 | |||||
[1] | Predecessor period is combined as disclosed in Note 1. |
Subsequent Events Additional in
Subsequent Events Additional information (Details) - $ / shares | Feb. 14, 2022 | Jan. 14, 2022 |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Common stock dividend declared | $ 0.07 | $ 0.07 |