Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 31, 2022 | |
Document Information [Line Items] | ||
Entity Registrant Name | Broadmark Realty Capital Inc. | |
Entity Central Index Key | 0001784797 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2022 | |
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 Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 132,922,075 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
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 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Assets | ||
Cash and cash equivalents | $ 61,141 | $ 132,889 |
Mortgage notes receivable, net | 911,664 | 901,350 |
Interest and fees receivable, net | 17,184 | 17,526 |
Investment in real property, net | 93,506 | 68,067 |
Right-of-use assets | 5,714 | 6,016 |
Goodwill | 136,965 | 136,965 |
Other assets | 6,301 | 8,342 |
Total assets | 1,232,475 | 1,271,155 |
Liabilities and stockholders' equity | ||
Senior unsecured notes, net | 97,646 | 97,223 |
Dividends payable | 9,305 | 9,291 |
Accounts payable and accrued liabilities | 13,671 | 8,180 |
Lease liabilities | 7,643 | 7,993 |
Total liabilities | 128,265 | 122,687 |
Commitments and contingencies (Note 10) | ||
Preferred stock, $0.001 par value, 100,000,000 shares authorized, no shares issued and outstanding at September 30, 2022 and December 31, 2021 | 0 | 0 |
Common stock, $0.001 par value, 500,000,000 shares authorized, 132,914,051 and 132,716,338 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively | 132 | 132 |
Additional paid in capital | 1,219,754 | 1,216,957 |
Accumulated deficit | (115,676) | (68,621) |
Total stockholders' equity | 1,104,210 | 1,148,468 |
Total liabilities and stockholders' equity | $ 1,232,475 | $ 1,271,155 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
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) | 132,914,051 | 132,716,338 |
Common stock shares outstanding (in shares) | 132,914,051 | 132,716,338 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues | ||||
Revenues | $ 27,128 | $ 30,594 | $ 85,517 | $ 89,245 |
Operating expenses: | ||||
Compensation and employee benefits | 3,972 | 3,920 | 12,970 | 10,916 |
General and administrative | 3,429 | 2,905 | 9,832 | 8,321 |
Real property management expenses, net | 1,542 | 0 | 2,625 | 108 |
Interest expense | 2,242 | 721 | 6,477 | 1,719 |
Total expenses | 11,185 | 7,546 | 31,904 | 21,064 |
Impairment: | ||||
Provision for credit losses, net | 12,288 | 2,607 | 16,729 | 5,373 |
Other (expense) income: | ||||
Change in fair value of warrant liabilities | 415 | 1,244 | 593 | (2,490) |
Gain on sale of real property | 25 | 0 | 984 | 0 |
Impairment on real property | (1,485) | 0 | (1,831) | 0 |
Total other (expense) income | (1,045) | 1,244 | (254) | (2,490) |
Income before provision for income taxes | 2,610 | 21,685 | 36,630 | 60,318 |
Income tax provision | 0 | 0 | 0 | 0 |
Net income | $ 2,610 | $ 21,685 | $ 36,630 | $ 60,318 |
Earnings per common share: | ||||
Basic | $ 0.02 | $ 0.16 | $ 0.28 | $ 0.45 |
Diluted | $ 0.02 | $ 0.16 | $ 0.28 | $ 0.45 |
Weighted-average shares of common stock outstanding, basic and diluted | ||||
Basic | 132,884,407 | 132,658,661 | 132,867,288 | 132,575,852 |
Diluted | 132,906,780 | 132,752,471 | 132,936,411 | 132,663,437 |
Interest Income | ||||
Revenues | ||||
Revenues | $ 20,685 | $ 22,846 | $ 66,927 | $ 66,481 |
Fee Income | ||||
Revenues | ||||
Revenues | $ 6,443 | $ 7,748 | $ 18,590 | $ 22,764 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings (Accumulated Deficit) [Member] |
Balance at Dec. 31, 2020 | $ 1,174,421 | $ 132 | $ 1,213,987 | $ (39,698) | |
Balance, Shares at Dec. 31, 2020 | 132,532,383 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 20,381 | 20,381 | |||
Dividends | (27,838) | (27,838) | |||
Issuance of shares for vested restricted stock units (in shares) | 34,027 | ||||
Stock-based compensation expense for restricted stock units | 737 | 737 | |||
Balance at Mar. 31, 2021 | 1,167,701 | $ 132 | 1,214,724 | (47,155) | |
Balance, Shares at Mar. 31, 2021 | 132,566,410 | ||||
Balance at Dec. 31, 2020 | 1,174,421 | $ 132 | 1,213,987 | (39,698) | |
Balance, Shares at Dec. 31, 2020 | 132,532,383 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 60,318 | ||||
Balance at Sep. 30, 2021 | 1,153,402 | $ 132 | 1,216,192 | (62,922) | |
Balance, Shares at Sep. 30, 2021 | 132,684,541 | ||||
Balance at Mar. 31, 2021 | 1,167,701 | $ 132 | 1,214,724 | (47,155) | |
Balance, Shares at Mar. 31, 2021 | 132,566,410 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 18,252 | 18,252 | |||
Dividends | (27,843) | (27,843) | |||
Issuance of shares for vested restricted stock units (in shares) | 77,766 | ||||
Shares withheld for tax liability | (135) | (135) | |||
Shares withheld for tax liability (in shares) | (9,504) | ||||
Stock-based compensation expense for restricted stock units | 924 | 924 | |||
Balance at Jun. 30, 2021 | 1,158,899 | $ 132 | 1,215,513 | (56,746) | |
Balance, Shares at Jun. 30, 2021 | 132,634,672 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 21,685 | 21,685 | |||
Dividends | (27,861) | (27,861) | |||
Issuance of shares for vested restricted stock units (in shares) | 70,157 | ||||
Shares withheld for tax liability | (212) | (212) | |||
Shares withheld for tax liability (in shares) | (20,288) | ||||
Stock-based compensation expense for restricted stock units | 891 | 891 | |||
Balance at Sep. 30, 2021 | 1,153,402 | $ 132 | 1,216,192 | (62,922) | |
Balance, Shares at Sep. 30, 2021 | 132,684,541 | ||||
Balance at Dec. 31, 2021 | 1,148,468 | $ 0 | $ 132 | 1,216,957 | (68,621) |
Balance, Shares at Dec. 31, 2021 | 0 | 132,716,338 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 18,074 | 18,074 | |||
Dividends | (27,885) | (27,885) | |||
Issuance of shares for vested restricted stock units (in shares) | 109,355 | ||||
Issuance of shares for exercised Warrants - Shares | 25 | ||||
Shares withheld for tax liability | (328) | (328) | |||
Shares withheld for tax liability (in shares) | (32,276) | ||||
Stock-based compensation expense for restricted stock units | 985 | 985 | |||
Balance at Mar. 31, 2022 | 1,139,314 | $ 132 | 1,217,614 | (78,432) | |
Balance, Shares at Mar. 31, 2022 | 132,793,442 | ||||
Balance at Dec. 31, 2021 | 1,148,468 | $ 0 | $ 132 | 1,216,957 | (68,621) |
Balance, Shares at Dec. 31, 2021 | 0 | 132,716,338 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 36,630 | ||||
Balance at Sep. 30, 2022 | 1,104,210 | $ 132 | 1,219,754 | (115,676) | |
Balance, Shares at Sep. 30, 2022 | 132,914,051 | ||||
Balance at Mar. 31, 2022 | 1,139,314 | $ 132 | 1,217,614 | (78,432) | |
Balance, Shares at Mar. 31, 2022 | 132,793,442 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 15,946 | 15,946 | |||
Dividends | (27,892) | (27,892) | |||
Issuance of shares for vested restricted stock units (in shares) | 71,036 | ||||
Shares withheld for tax liability | (43) | (43) | |||
Shares withheld for tax liability (in shares) | (5,891) | ||||
Stock-based compensation expense for restricted stock units | 1,019 | 1,019 | |||
Balance at Jun. 30, 2022 | 1,128,344 | $ 132 | 1,218,590 | (90,378) | |
Balance, Shares at Jun. 30, 2022 | 132,858,587 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 2,610 | 2,610 | |||
Dividends | (27,908) | (27,908) | |||
Issuance of shares for vested restricted stock units (in shares) | 69,528 | ||||
Shares withheld for tax liability | (95) | (95) | |||
Shares withheld for tax liability (in shares) | (14,064) | ||||
Stock-based compensation expense for restricted stock units | 1,259 | 1,259 | |||
Balance at Sep. 30, 2022 | $ 1,104,210 | $ 132 | $ 1,219,754 | $ (115,676) | |
Balance, Shares at Sep. 30, 2022 | 132,914,051 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities | ||
Net income | $ 36,630 | $ 60,318 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Accretion of deferred origination and amendment fees | (16,926) | (20,754) |
Depreciation and amortization | 752 | 577 |
Amortization of right of use assets | 302 | 284 |
Amortization of debt issuance costs | 429 | 0 |
Amortization of credit facility costs | 1,133 | 879 |
Stock-based compensation expense for restricted stock units | 3,263 | 2,552 |
Provision for credit losses, net | 16,729 | 5,373 |
Gain on sale of real property | (984) | 0 |
Impairment on real property | 1,831 | 0 |
Change in fair value of warrant liabilities | (593) | 2,490 |
Changes in operating assets and liabilities: | ||
Interest and fees receivable, net | 342 | (409) |
Other assets | 511 | 1,644 |
Accounts payable and accrued liabilities | 5,562 | (2,226) |
Lease liabilities | (350) | (257) |
Net cash provided by operating activities | 48,631 | 50,471 |
Cash flows from investing activities: | ||
Fundings of mortgage notes receivable | (436,946) | (449,685) |
Principal collections | 386,648 | 338,358 |
Origination and amendment fees received on mortgage notes receivable | 11,009 | 5,951 |
Purchases of property and equipment | (128) | (419) |
Proceeds from sale of real property | 8,360 | 3,828 |
Improvements in real property | (5,185) | (3,328) |
Repurchase of participations in mortgage notes receivable | 0 | (43,498) |
Net cash used in investing activities | (36,242) | (148,793) |
Cash flows from financing activities: | ||
Dividends paid | (83,671) | (82,205) |
Payment of costs to obtain financing | 0 | (5,125) |
Proceeds from borrowings on credit facilities | 45,000 | 0 |
Repayment of borrowings on credit facilities | (45,000) | 0 |
Payment of taxes on shares withheld for tax liability | (466) | (347) |
Net cash used in financing activities | (84,137) | (87,677) |
Net decrease in cash and cash equivalents | (71,748) | (185,999) |
Cash and cash equivalents, beginning of period | 132,889 | 223,375 |
Cash and cash equivalents, end of period | 61,141 | 37,376 |
Supplemental disclosure of of cash flow information: | ||
Interest Paid | 2,693 | 0 |
Dividends payable | 9,305 | 9,289 |
Mortgage notes receivable converted to investment in real property | 54,350 | 43,497 |
Investments in real property converted to mortgage notes receivable | 25,900 | 0 |
Interest and fee receivables converted to investment in real property | 1,244 | 0 |
Operating lease right-of-use assets | 0 | 6,360 |
Lease liabilities arising from obtaining right-of-use assets | 0 | 8,319 |
Property and equipment purchased through tenant improvement allowance | $ 0 | $ 1,959 |
Organization and Business
Organization and Business | 9 Months Ended |
Sep. 30, 2022 | |
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 has historically operated 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. 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 generally 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 Note 12 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 annually distributes dividends equal to at least 90% of its REIT taxable income to its stockholders (determined without regard to the dividends-paid deduction and excluding net capital gains) by prescribed dates and complies with various other requirements. Broadmark Realty 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 - Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated interim financial statements include Broadmark Realty Capital Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. These unaudited condensed consolidated interim 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”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these unaudited condensed consolidated interim financial statements have been prepared in accordance with the accounting policies described in the audited consolidated financial statements and should be read in conjunction with the accompanying notes included in Broadmark Realty Capital Inc.’s Annual Report on Form 10-K for the year ended December 31, 2021, which was filed with the SEC on February 28, 2022. The condensed consolidated balance sheet as of December 31, 2021, included herein, was derived from the audited financial statements of Broadmark Realty Capital Inc. as of that date. The unaudited condensed consolidated interim financial statements, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly our financial position as of September 30, 2022, our results of operations and stockholders’ equity for the three and nine months ended September 30, 2022 and 2021, and our cash flows for the nine months ended September 30, 2022 and 2021. The results of the three and nine months ended September 30, 2022 is not necessarily indicative of the results to be expected for the year ending December 31, 2022 or for any interim period or for any other future year. Principles of 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 unaudited condensed 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, the loans were derecognized from our unaudited condensed 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 unaudited condensed consolidated financial statements as of and for the three and nine months ended September 30, 2021 have been reclassified to conform to the presentation of our current period unaudited condensed 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 and separately presenting real property management expenses, net and interest expense on the unaudited condensed consolidated statements of income. The reclassification within the condensed consolidated statement of cash flows for the change in amortization of credit facility costs to the change in other assets resulted in no change to the cash provided by operating activities. The reclassifications also included the separate presentation of origination and fundings of mortgage notes receivable, principal collections and proceeds from mortgage notes receivable and origination and amendment fees received on mortgage notes receivable on the unaudited condensed consolidated statements of cash flows. Use of Estimates The preparation of the unaudited condensed 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, the fair value of financial instruments, exit prices for collateral dependent loans and the fair value of investments in real property. 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 of the “as complete” property is based on a broker opinion of value including a capitalized income analysis and replacement cost analysis considering market rents, vacancy rates, capitalization rates, land cost comparisons, market trends and economic conditions. Depending on the stage of the underlying property, we also consider estimated costs to complete remaining construction and to lease up the finished property. 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: the economy in the areas we operate; the stability of the real estate market and the impact of interest rate changes; competition in our market; changes in government regulation affecting our business; public health crises, like the COVID-19 pandemic; natural disasters, catastrophic events and the physical effects of climate change; 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 loans secured by real estate. Recently Issued Accounting Pronouncements Not Yet Adopted In March 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, which eliminates the accounting guidance for troubled debt restructurings (“TDR”) for creditors that have adopted the current expected credit losses (“CECL” or “CECL allowance” or “allowance for credit losses”) standard and requires enhanced disclosures for loan modifications made to borrowers experiencing financial difficulty in the form of interest rate reductions, principal forgiveness, other-than-insignificant payment delays, or term extensions. In addition, the new guidance requires presentation in the vintage disclosures of current-period gross write-offs by year of origination. The guidance is effective for the Company in the first quarter of 2023. Entities are able to early adopt the guidance and have the ability to early adopt the TDR enhancements separately from the vintage disclosures. We have not yet adopted this ASU. While the guidance will result in expanded disclosures, we do not believe the adoption of this guidance will have a material impact on our financial position, results of operation or cash flows. |
Mortgage Notes Receivable
Mortgage Notes Receivable | 9 Months Ended |
Sep. 30, 2022 | |
Receivables [Abstract] | |
Mortgage Notes Receivable | Note 3 - 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. Loans are 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. Loans classified as held for sale are carried at the lower of amortized cost or fair value less costs to sell, thus are not subject to the CECL allowance. As of September 30, 2022 all mortgage notes receivable were classified as held for investment. The stated principal amount of mortgage notes receivable in our portfolio represents our interest in loans generally secured by first deeds of trust, security agreements or legal title to real estate located in the United States. Our lending standards typically 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 typically 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 at origination 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 September 30, 2022, the weighted average term of our active loans was 20 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 on our portfolio being 10.2 % as of September 30, 2022 . Most loans are structured with an interest reserve holdback that covers the interest payments for 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 condensed 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 the outstanding balance of mortgage notes receivable as of September 30, 2022 and December 31, 2021: (dollars in thousands) September 30, 2022 December 31, 2021 Total loan commitments $ 1,512,889 $ 1,489,055 Less: Construction holdbacks 530,425 524,462 Interest reserves 41,108 39,880 Total principal outstanding for our mortgage notes receivable 941,356 924,713 Less: Allowance for credit losses (1) 19,997 10,394 Deferred origination and amendment fees 9,695 12,969 Mortgage notes receivable, net $ 911,664 $ 901,350 (1) As of September 30, 2022, $ 1.4 million of the 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 condensed consolidated balance sheet. 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. As of September 30, 2022 and December 31, 2021, the principal outstanding on loans in contractual default status placed on non-accrual status was $ 115.4 and $ 101.9 million, respectively. In accordance with our CECL methodology, all loans including those on non-accrual status have an allowance for credit losses. As of September 30, 2022 and December 31, 2021, the total commitment on loans in contractual default was $ 286.1 and $ 191.4 million, respectively. 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 its portfolio and the historical loss experience in the commercial real estate industry provided by a third party adjusted to 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 nine months ended September 30, 2022 and 2021: CECL Allowance (dollars in thousands) Funded Unfunded (2) Total CECL allowance as of December 31, 2021 $ 10,394 $ 904 $ 11,298 Provision for credit losses, net 1,554 193 1,747 Charge-offs (1) ( 3,301 ) — ( 3,301 ) CECL allowance as of March 31, 2022 $ 8,647 $ 1,097 $ 9,744 Provision for credit losses, net 2,381 313 2,694 Charge-offs (1) ( 1,502 ) — ( 1,502 ) CECL allowance as of June 30, 2022 $ 9,526 $ 1,410 $ 10,936 Provision for credit losses, net 12,267 21 12,288 Charge-offs (1) ( 1,796 ) — ( 1,796 ) CECL allowance as of September 30, 2022 $ 19,997 $ 1,431 $ 21,428 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 1,761 947 2,708 Charge-offs (1) ( 1,688 ) — ( 1,688 ) CECL allowance as of March 31, 2021 $ 10,663 $ 947 $ 11,610 Provision for credit losses, net 280 ( 222 ) 58 CECL allowance as of June 30, 2021 $ 10,943 $ 725 $ 11,668 Provision for credit losses, net 2,471 136 2,607 Charge-offs (1) ( 695 ) — ( 695 ) CECL allowance as of September 30, 2021 $ 12,719 $ 861 $ 13,580 (1) Charge-offs result from either loan repayments where the proceeds are less than the principal outstanding or transfers to investment in real property at the time that we take ownership of the property 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 condensed consolidated balance sheet. In determining our CECL allowance, we segment loans with similar characteristics. All of our loans are 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: September 30, 2022 Year Originated (1) (dollars in thousands) Carrying Value % of Portfolio 2022 2021 2020 2019 2018 Prior Construction Type Vertical Construction $ 535,737 57.5 % $ 309,763 $ 135,257 $ 52,678 $ 1,903 $ — $ 36,136 Horizontal Development 213,666 22.9 109,260 95,615 8,791 — — — Acquisition 49,449 5.3 15,137 34,312 — — — — Investment 48,560 5.2 44,230 4,330 — — — — Rehabilitation 36,397 3.9 11,471 13,793 11,133 — — — Land Entitlement 25,891 2.8 1,806 24,085 — — — — Bridge 21,961 2.4 8,958 10,874 — 2,129 — — Total $ 931,661 100.0 % $ 500,625 $ 318,266 $ 72,602 $ 4,032 $ — $ 36,136 CECL allowance (2) ( 19,997 ) Carrying value, net $ 911,664 (1) Represents the year of either origination or amendment where the loan incurred a full re-underwriting in connection with the amendment. (2) Includes $ 12.1 million in loan specific allowances for loans deemed collateral dependent based on the excess amortized cost over the fair value of the underlying collateral. In addition, $ 1.4 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 condensed consolidated balance sheet. September 30, 2022 Year Originated (1) (dollars in thousands) Carrying Value % of Portfolio 2022 2021 2020 2019 2018 Prior Collateral Type Apartments $ 169,067 18.1 % $ 111,941 $ 39,609 $ 15,614 $ 1,903 $ — $ — Residential lots 123,055 13.2 % 49,947 64,317 8,791 — — — Single Family Housing 121,810 13.1 % 112,919 8,659 232 — — — Townhomes 107,515 11.5 % 80,277 26,445 793 — — — Commercial 87,779 9.4 % 12,750 75,029 — — — — Entitled Land 75,103 8.1 % 46,741 28,362 — — — — Condos 63,690 6.8 % 10,900 6,579 10,075 — — 36,136 Mixed Use 53,409 5.7 % 10,288 29,859 11,133 2,129 — — Hotel 30,036 3.2 % 14,007 — 16,029 — — — Unentitled Land 19,981 2.1 % 16,621 3,360 — — — — Offices 19,372 2.1 % 11,294 — 8,078 — — — Senior Housing 15,538 1.7 % — 15,538 — — — — Commercial other 12,845 1.4 % — 12,845 — — — — Duplex 11,089 1.2 % 11,089 — — — — — Retail 8,818 0.9 % 6,961 — 1,857 — — — Quadplex 7,664 0.8 % — 7,664 — — — — Commercial Lots 3,196 0.3 % 3,196 — — — — — Triplex 1,694 0.2 % 1,694 — — — — — Storage — 0.0 % — — — — — — Total $ 931,661 100.0 % $ 500,625 $ 318,266 $ 72,602 $ 4,032 $ — $ 36,136 CECL allowance (2) ( 19,997 ) Carrying value, net $ 911,664 (1) Represents the year of either origination or amendment where the loan incurred a full re-underwriting in connection with the amendment. (2) Includes $ 12.1 million in loan specific allowances for loans deemed collateral dependent based on the excess amortized cost over the fair value of the underlying collateral. In addition, $ 1.4 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 condensed consolidated balance sheet. September 30, 2022 Year Originated (1) (dollars in thousands) Carrying Value % of Portfolio 2022 2021 2020 2019 Prior LTV (2) 0 - 40% $ 25,348 2.7 % $ 18,231 $ 7,117 $ — $ — $ — 41 - 45% 29,546 3.2 7,567 21,979 — — — 46 - 50% 39,085 4.2 20,899 10,108 8,078 — — 51 - 55% 141,842 15.1 75,656 57,395 8,791 — — 56 - 60% 97,218 10.4 84,016 13,202 — — — 61 - 65% 481,317 51.7 224,147 187,256 31,875 1,903 36,136 66 - 70% 89,229 9.6 64,248 20,202 2,650 2,129 — 71 - 75% 3,518 0.4 3,518 — — — — 76- 80% 2,343 0.3 2,343 — — — — Above 80% 22,215 2.4 — 1,007 21,208 — — Total $ 931,661 100.0 % $ 500,625 $ 318,266 $ 72,602 $ 4,032 $ 36,136 CECL allowance (3) ( 19,997 ) Carrying value, net $ 911,664 (1) Represents the year of either origination or 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 $ 12.1 million in loan specific allowances for loans deemed collateral dependent based on the excess amortized cost over the fair value of the underlying collateral. In addition, $ 1.4 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 condensed consolidated balance sheet. December 31, 2021 Year Originated (1) (dollars in thousands) Carrying Value % of Portfolio 2021 2020 2019 2018 2017 Prior Construction Type Vertical Construction $ 478,475 52.5 % $ 234,861 $ 191,896 $ 1,177 $ 2,491 $ 47,789 $ 261 Horizontal Development 196,543 21.5 169,041 27,502 — — — — Acquisition 96,937 10.6 96,937 — — — — — Investment 65,703 7.2 42,509 2,101 — 3,608 17,485 — Rehabilitation 27,023 3.0 11,320 15,703 — — — — Land Entitlement 24,529 2.7 24,529 — — — — — Bridge 22,534 2.5 18,072 2,537 1,925 — — — 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 either origination or 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 excess amortized cost over 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 condensed consolidated balance sheet. 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 9.5 53,530 30,474 1,925 — — — Single Family Housing 87,902 9.6 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 either origination or 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 excess amortized cost over 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 condensed consolidated balance sheet. 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 - 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 either origination or 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 $ 0.7 million in loan specific allowances for loans deemed collateral dependent based on the excess amortized cost over 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 condensed consolidated balance sheet. The following tables allocate the carrying value of collateral dependent loans in our loan portfolio to the collateral type at the dates indicated: September 30, 2022 (dollars in thousands) Carrying Value CECL Allowance (1) Carrying Value, net Collateral Type Residential Lots $ 34,276 $ ( 2,242 ) $ 32,034 Hotel 16,029 ( 9,113 ) 6,916 Condos 10,075 ( 917 ) 9,158 Offices 8,078 ( 76 ) 8,002 Townhomes 3,945 ( 29 ) 3,916 Single Family Housing 3,761 ( 18 ) 3,743 Commercial Other 2,997 ( 38 ) 2,959 Mixed Use 2,764 ( 408 ) 2,356 Retail 1,857 ( 58 ) 1,799 Total $ 83,782 $ ( 12,899 ) $ 70,883 (1) Includes $ 12.1 million in loan specific allowances for loans deemed collateral dependent based on the excess amortized cost over the fair value of the underlying collateral. 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 loan specific allowances for loans deemed collateral dependent based on the excess amortized cost over the fair value of the underlying collateral. |
Investment in Real Property
Investment in Real Property | 9 Months Ended |
Sep. 30, 2022 | |
Real Estate [Abstract] | |
Investment in Real Property | Note 4 – Investment in Real Property As of September 30, 2022 and December 31, 2021, we owned 11 and nine properties or projects, with aggregate carrying value of $ 93.5 and $ 68.1 million, respectively. 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, less estimated costs to sell, which is 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 and expenditures for repairs and maintenance are charged to expense when incurred. In April 2022, the Company executed an agreement with an unrelated party to sell a real property with a carrying value of $ 28.4 million for a sales price of $ 29.0 million. As part of the sale, the Company executed a promissory note with the purchaser in the principal amount of $ 25.9 million. The note was amended to extend the financing term, resulting in an extension of the maturity date to December 31, 2022 after receiving partial payments on July 1, 2022 and August 31, 2022. This seller-financed sale of real property was evaluated for derecognition of the transferred assets and income recognition based on whether a sales contract existed and effective control was transferred to the purchaser and it was determined that the transaction met all of the criterion to be recognized as a sale. The following tables provide information about the carrying value of our owned real property at the dates indicated: (dollars in thousands) September 30, 2022 December 31, 2021 Collateral Type Senior Housing $ 49,916 $ — Offices 18,316 19,388 Townhomes 8,937 9,281 Single Family Housing 7,831 4,134 Apartments 5,453 — Residential Lots 3,053 3,012 Condos — 28,441 Retail — 3,811 Total $ 93,506 $ 68,067 (dollars in thousands) September 30, 2022 December 31, 2021 Held for sale $ 66,103 $ 52,531 Held for use 27,403 15,536 Total $ 93,506 $ 68,067 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 5 – Fair Value Measurements The accounting guidance on fair value measurements and disclosures 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. Our development of fair value estimates, particularly Level 3 fair value assets and liabilities with significant unobservable inputs, involves judgment and a high degree of subjectivity. While we anticipate that our valuation methods are appropriate and consistent with valuation methods used by other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. Likewise, due to the general illiquidity of some of these assets and liabilities, subsequent transactions may be at values significantly different from those reported. The following tables present estimated fair values of our financial instruments, as of the date indicated, whether or not recognized or recorded in the condensed consolidated balance sheets at the periods indicated: September 30, 2022 Fair Value Measurements Using (dollars in thousands) Carrying Value Estimated Fair Value Level 1 Level 2 Level 3 Financial Assets Cash and cash equivalents $ 61,141 $ 61,141 $ 61,141 $ — $ — Mortgage notes receivable, net 911,664 911,664 — — 911,664 Interest and fees receivable, net 17,184 17,184 — 17,184 — Financial Liabilities Senior unsecured notes, net 97,646 86,230 — 86,230 — Private placement warrant liability 1,245 1,245 — 1,245 — 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 Interest and fees receivable, net 17,526 17,526 — 17,526 — Financial Liabilities Senior unsecured notes, net 97,223 100,000 — 100,000 — Private placement warrant liability 1,838 1,838 — 1,838 — The following table sets forth assets measured and reported at fair value on a nonrecurring basis as of September 30, 2022 and December 31, 2021. All of these values are categorized as Level 3. The table also contains information about valuation methodologies and inputs. Carrying Value Fair Value (dollars in thousands) September 30, 2022 December 31, 2021 September 30, 2022 December 31, 2021 Valuation technique Unobservable inputs Range of inputs Investment in real property $ 29,615 $ — $ 30,226 $ — Collateral valuations Discount to appraised value based on comparable market prices, 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 (1) 20,266 436 20,980 835 Collateral valuations Discount to appraised value based on comparable market prices or broker opinion of value 0 - 10 % Total $ 49,881 $ 436 $ 51,206 $ 835 (1) Previously reported amounts included all real properties and collateral dependent loans regardless of whether a mark to fair value occurred in the reporting period. The current disclosure represents only those measured at fair value on a nonrecurring basis during the reporting periods. Fair Value on a Recurring Basis The private placement warrants are carried at fair value. 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. This valuation methodology 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 beginning 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 $ 0.06 per warrant or $0.24 per share to arrive at $ 1.2 million as of September 30, 2022. Refer to Note 7 for additional details on the private placement warrants. Fair Value on a Nonrecurring Basis Investments in real properties are initially recorded at the fair value less estimated costs to sell, which becomes the new cost basis for the real property. Costs related to acquisition, development, construction and improvements are capitalized to the extent the fair value less costs to sell is greater than the investment in real property. At each reporting date, the cost basis is compared to the fair value of real properties 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 % and are considered unobservable inputs in Level 3 within the fair value hierarchy. Any decline in the fair value of real property held for sale will be recorded in a valuation account to offset the cost basis and carry at fair value on a non-recurring basis. For collateral dependent loans, the fair values are based on the value of the underlying collateral less the estimated 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 as well as interest and fees receivable, accounts payable and accrued liabilities which are classified under Level 2 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 2 within the fair value hierarchy. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Note 6 - 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 maturing on February 19, 2024 . Advances under the revolving credit facility bear interest at prime rate plus 2.75 % and the facility has a commitment fee of 1.0 % of unfunded commitment per annum. We incurred fees of approximately $ 4.5 million in relation to the revolving credit facility, which were capitalized as deferred financing costs on the condensed consolidated balance sheets and are being amortized over the three-year term. As of September 30, 2022 and December 31, 2021 , the revolving credit facility has no principal outstanding. Our obligations under the revolving credit facility are secured by substantially all of the 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 compliance with leverage and coverage ratios and maintenance of minimum tangible net worth. 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 the notes accrues at the fixed rate of 5.0 % per annum, which is payable semi-annually on May 15 and November 15. The notes may be prepaid prior to their maturity date, subject to the payment of applicable premiums. The note purchase agreement governing the 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 under the notes will be due on November 15, 2026 . We incurred fees of approximately $ 2.9 million in relation to the issuance of the notes, which are amortized to interest expense over the remaining life of the respective loan term. The following table presents the carrying values of our senior unsecured notes as of the periods indicated: (dollars in thousands) September 30, 2022 December 31, 2021 Principal $ 100,000 $ 100,000 Debt issuance costs ( 2,861 ) ( 2,855 ) Amortization of debt issuance costs 507 78 Total notes, net $ 97,646 $ 97,223 The following tables summarize the interest expense related to our senior unsecured notes and revolving credit facility for the periods indicated: Three Months Ended September 30, 2022 September 30, 2021 (in thousands) Amortization of Deferred Debt Costs Interest Expense Undrawn Fees Amortization of Deferred Debt Costs Interest Accrued Undrawn Fees 5.0% senior unsecured notes $ 143 $ 1,236 $ — $ — $ — $ — Revolving credit facility 377 151 335 377 — 344 Total $ 520 $ 1,387 $ 335 $ 377 $ — $ 344 Nine Months Ended September 30, 2022 September 30, 2021 (in thousands) Amortization of Deferred Debt Costs Interest Expense Undrawn Fees Amortization of Deferred Debt Costs Interest Accrued Undrawn Fees 5.0% senior unsecured notes $ 429 $ 3,736 $ — $ — $ — $ — Revolving credit facility 1,133 151 1,028 879 — 840 Total $ 1,562 $ 3,887 $ 1,028 $ 879 $ — $ 840 |
Stockholders' Equity and Earnin
Stockholders' Equity and Earnings per Common Share | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Stockholders' Equity and Earnings per Common Share | Note 7 - Stockholders’ Equity and Earnings per Common Share Stockholders’ Equity Holders of our common stock are entitled to one vote for each share. 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 three and nine months ended September 30, 2022 and 2021. As of September 30, 2022 and December 31, 2021 there were 41.7 million public warrants outstanding and 5.2 million private placement warrants outstanding. 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 $ 1.2 million as of September 30, 2022 and is included in accounts payable and accrued liabilities in the condensed consolidated balance sheet. 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: Three Months Ended Nine Months Ended (dollars in thousands, except share and per share data): September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Net income $ 2,610 $ 21,685 $ 36,630 $ 60,318 Basic weighted-average shares of common stock outstanding 132,884,407 132,658,661 132,867,288 132,575,852 Dilutive effect of share-based compensation – unvested restricted stock units 22,373 93,810 69,122 87,585 Diluted weighted-average shares of common stock outstanding 132,906,780 132,752,471 132,936,411 132,663,437 Basic earnings per share $ 0.02 $ 0.16 $ 0.28 $ 0.45 Diluted earnings per share $ 0.02 $ 0.16 $ 0.28 $ 0.45 For the periods presented, the following common stock equivalents were excluded from the calculations of diluted earnings per share because their effect would have been anti-dilutive: Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Weighted-average restricted stock units outstanding 637,597 186,492 241,097 218,227 Unexercised public warrants and private placement warrants 15,604,279 15,604,304 15,604,279 15,604,304 Total stock equivalents excluded 16,241,876 15,790,796 15,845,376 15,822,531 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 8 - Income Taxes 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 Internal Revenue Code of 1986, as amended (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 September 30, 2022 and December 31, 2021, 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 unaudited condensed 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 unaudited condensed 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 | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Equity Incentive Plan | Note 9 - Equity Incentive Plan Stock Incentive Plan 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. Awards made to our employees and directors typically consist of restricted stock units (“RSUs”) with only a service vesting condition. Awards to certain of our employees contain both service vesting and market conditions and are referred to as performance restricted stock units (“pRSUs”). The RSUs granted under the Plan generally vest from one to three years depending on the terms of the specific award. All RSUs awarded will be settled upon vesting in shares of our common stock. For the Company's pRSUs, in addition to service conditions, the ultimate number of shares to be earned depends on the achievement of market-based performance conditions. The market-based performance conditions are based on the Company's achievement of a relative total shareholder return (“TSR”) performance requirement, on a percentile basis, compared to a defined group of peer companies over three year performance periods, or contingent upon achieving specific stock price milestones over a five year performance period. The Company uses a Monte Carlo simulation model to determine the grant-date fair value of awards with market-based performance conditions. The weighted average fair value and assumptions used to value the pRSU awards granted with market-based performance conditions are as follows: Nine Months Ended September 30, 2022 September 30, 2021 Performance share fair value $ 6.74 $ 8.20 Risk-free interest rate 1.74 % 0.27 % Expected volatility 30.48 % 25.71 % Expected life (in years) 2.85 2.77 Expected dividend yield 9.82 % 8.13 % Dividend equivalents are not accrued or paid on unvested equity awards granted to employees, executive officers and directors and accordingly those unvested equity awards 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. As of September 30, 2022, there were 3,166,727 shares available to be awarded under the Plan. The following tables summarize the activity related to RSUs and pRSUs during 2022: Shares Weighted Average Grant Date Fair Market Value Unvested RSUs outstanding as of December 31, 2021 541,296 Granted 419,101 $ 6.90 Vested ( 109,355 ) $ 9.50 Forfeited ( 5,691 ) $ 8.82 Unvested RSUs outstanding as of March 31, 2022 845,351 Granted 105,773 $ 6.49 Vested ( 71,036 ) $ 10.52 Forfeited ( 40,862 ) $ 8.84 Unvested RSUs outstanding as of June 30, 2022 839,226 Vested ( 69,528 ) $ 10.30 Forfeited ( 8,224 ) $ 7.52 Unvested RSUs outstanding as of September 30, 2022 761,474 Shares Weighted Average Grant Date Fair Market Value Unvested pRSUs outstanding as of December 31, 2021 56,978 Granted 276,679 $ 6.74 Unvested pRSUs outstanding as of March 31, 2022 333,657 Forfeited ( 39,084 ) $ 7.35 Unvested pRSUs outstanding as of June 30, 2022 294,573 Unvested pRSUs outstanding as of September 30, 2022 294,573 As of September 30, 2022, there was $ 5.7 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 1.8 years. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Note 10 - Commitments and Contingencies The following table illustrates our contractual obligations and commercial commitments by due date as of September 30, 2022: (dollars in thousands) Total Less than 1 year 1-3 years 3-5 years More than 5 years Construction holdbacks (1) $ 530,425 $ 353,051 $ 177,374 $ — $ — Operating lease obligations (2) 10,166 880 2,003 2,125 5,158 Total $ 540,591 $ 353,931 $ 179,377 $ 2,125 $ 5,158 (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 $ 2.5 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 3. 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 initial 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 as of September 30, 2022 is generally secured by first deed of trust liens on residential and commercial real estate located in 20 states and the District of Columbia. Our loan portfolio is also concentrated within ten counties, the largest being King County in Washington. As of September 30, 2022 and December 31, 2021, the top ten counties make up 45.5 % and 46.6 % of the total committed amount of loans in our total portfolio. |
Employee Benefit Plan
Employee Benefit Plan | 9 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plan | Note 11 - Employee Benefit Plan In 2022, we adopted a defined contribution 401(k) retirement plan covering Broadmark employees who have met certain eligibility requirements (the “Broadmark 401(k) Plan”). Eligible employees may contribute pre-tax compensation up to a maximum amount allowable under Internal Revenue Service limitations. Employee contributions and earnings thereon vest immediately. We currently match 3.5 % on employee contributions of up to 6 % of their annual compensation. The total expense related to the Broadmark 401(k) Plan was $ 0.1 and $ 0.3 million, respectively for the three and nine months ended September 30, 2022 . |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 12 - Related Party Transactions There are no related party transactions at September 30, 2022. 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 the Company. 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 approximated 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, was 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 | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 13 - Subsequent Events Dividend Declaration On September 15, 2022, our board of directors declared a monthly cash dividend of $ 0.07 per common share payable on October 17, 2022 to stockholders of record as of September 30, 2022, and on October 17, 2022, our board of directors declared a cash dividend of $ 0.07 per common share payable on November 15, 2022 to stockholders of record as of October 31, 2022 . |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated interim financial statements include Broadmark Realty Capital Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. These unaudited condensed consolidated interim 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”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these unaudited condensed consolidated interim financial statements have been prepared in accordance with the accounting policies described in the audited consolidated financial statements and should be read in conjunction with the accompanying notes included in Broadmark Realty Capital Inc.’s Annual Report on Form 10-K for the year ended December 31, 2021, which was filed with the SEC on February 28, 2022. The condensed consolidated balance sheet as of December 31, 2021, included herein, was derived from the audited financial statements of Broadmark Realty Capital Inc. as of that date. The unaudited condensed consolidated interim financial statements, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly our financial position as of September 30, 2022, our results of operations and stockholders’ equity for the three and nine months ended September 30, 2022 and 2021, and our cash flows for the nine months ended September 30, 2022 and 2021. The results of the three and nine months ended September 30, 2022 is not necessarily indicative of the results to be expected for the year ending December 31, 2022 or for any interim period or for any other future year. |
Principles of Consolidation | Principles of 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 unaudited condensed 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, the loans were derecognized from our unaudited condensed 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 unaudited condensed consolidated financial statements as of and for the three and nine months ended September 30, 2021 have been reclassified to conform to the presentation of our current period unaudited condensed 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 and separately presenting real property management expenses, net and interest expense on the unaudited condensed consolidated statements of income. The reclassification within the condensed consolidated statement of cash flows for the change in amortization of credit facility costs to the change in other assets resulted in no change to the cash provided by operating activities. The reclassifications also included the separate presentation of origination and fundings of mortgage notes receivable, principal collections and proceeds from mortgage notes receivable and origination and amendment fees received on mortgage notes receivable on the unaudited condensed consolidated statements of cash flows. |
Use of Estimates | Use of Estimates The preparation of the unaudited condensed 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, the fair value of financial instruments, exit prices for collateral dependent loans and the fair value of investments in real property. 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 of the “as complete” property is based on a broker opinion of value including a capitalized income analysis and replacement cost analysis considering market rents, vacancy rates, capitalization rates, land cost comparisons, market trends and economic conditions. Depending on the stage of the underlying property, we also consider estimated costs to complete remaining construction and to lease up the finished property. 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: the economy in the areas we operate; the stability of the real estate market and the impact of interest rate changes; competition in our market; changes in government regulation affecting our business; public health crises, like the COVID-19 pandemic; natural disasters, catastrophic events and the physical effects of climate change; 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 loans secured by real estate. |
Recent Accounting Pronouncements | Recently Issued Accounting Pronouncements Not Yet Adopted In March 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, which eliminates the accounting guidance for troubled debt restructurings (“TDR”) for creditors that have adopted the current expected credit losses (“CECL” or “CECL allowance” or “allowance for credit losses”) standard and requires enhanced disclosures for loan modifications made to borrowers experiencing financial difficulty in the form of interest rate reductions, principal forgiveness, other-than-insignificant payment delays, or term extensions. In addition, the new guidance requires presentation in the vintage disclosures of current-period gross write-offs by year of origination. The guidance is effective for the Company in the first quarter of 2023. Entities are able to early adopt the guidance and have the ability to early adopt the TDR enhancements separately from the vintage disclosures. We have not yet adopted this ASU. While the guidance will result in expanded disclosures, we do not believe the adoption of this guidance will have a material impact on our financial position, results of operation or cash flows. |
Mortgage Notes Receivable (Tabl
Mortgage Notes Receivable (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Receivables [Abstract] | |
Schedule of mortgage notes receivable | The following table reconciles outstanding mortgage loan commitments to the outstanding balance of mortgage notes receivable as of September 30, 2022 and December 31, 2021: (dollars in thousands) September 30, 2022 December 31, 2021 Total loan commitments $ 1,512,889 $ 1,489,055 Less: Construction holdbacks 530,425 524,462 Interest reserves 41,108 39,880 Total principal outstanding for our mortgage notes receivable 941,356 924,713 Less: Allowance for credit losses (1) 19,997 10,394 Deferred origination and amendment fees 9,695 12,969 Mortgage notes receivable, net $ 911,664 $ 901,350 (1) As of September 30, 2022, $ 1.4 million of the 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 condensed consolidated balance sheet. |
Schedule of activity in the CECL Allowance | The following tables summarize the activity in the CECL allowance during the nine months ended September 30, 2022 and 2021: CECL Allowance (dollars in thousands) Funded Unfunded (2) Total CECL allowance as of December 31, 2021 $ 10,394 $ 904 $ 11,298 Provision for credit losses, net 1,554 193 1,747 Charge-offs (1) ( 3,301 ) — ( 3,301 ) CECL allowance as of March 31, 2022 $ 8,647 $ 1,097 $ 9,744 Provision for credit losses, net 2,381 313 2,694 Charge-offs (1) ( 1,502 ) — ( 1,502 ) CECL allowance as of June 30, 2022 $ 9,526 $ 1,410 $ 10,936 Provision for credit losses, net 12,267 21 12,288 Charge-offs (1) ( 1,796 ) — ( 1,796 ) CECL allowance as of September 30, 2022 $ 19,997 $ 1,431 $ 21,428 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 1,761 947 2,708 Charge-offs (1) ( 1,688 ) — ( 1,688 ) CECL allowance as of March 31, 2021 $ 10,663 $ 947 $ 11,610 Provision for credit losses, net 280 ( 222 ) 58 CECL allowance as of June 30, 2021 $ 10,943 $ 725 $ 11,668 Provision for credit losses, net 2,471 136 2,607 Charge-offs (1) ( 695 ) — ( 695 ) CECL allowance as of September 30, 2021 $ 12,719 $ 861 $ 13,580 (1) Charge-offs result from either loan repayments where the proceeds are less than the principal outstanding or transfers to investment in real property at the time that we take ownership of the property 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 condensed consolidated balance sheet. |
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: September 30, 2022 Year Originated (1) (dollars in thousands) Carrying Value % of Portfolio 2022 2021 2020 2019 2018 Prior Construction Type Vertical Construction $ 535,737 57.5 % $ 309,763 $ 135,257 $ 52,678 $ 1,903 $ — $ 36,136 Horizontal Development 213,666 22.9 109,260 95,615 8,791 — — — Acquisition 49,449 5.3 15,137 34,312 — — — — Investment 48,560 5.2 44,230 4,330 — — — — Rehabilitation 36,397 3.9 11,471 13,793 11,133 — — — Land Entitlement 25,891 2.8 1,806 24,085 — — — — Bridge 21,961 2.4 8,958 10,874 — 2,129 — — Total $ 931,661 100.0 % $ 500,625 $ 318,266 $ 72,602 $ 4,032 $ — $ 36,136 CECL allowance (2) ( 19,997 ) Carrying value, net $ 911,664 (1) Represents the year of either origination or amendment where the loan incurred a full re-underwriting in connection with the amendment. (2) Includes $ 12.1 million in loan specific allowances for loans deemed collateral dependent based on the excess amortized cost over the fair value of the underlying collateral. In addition, $ 1.4 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 condensed consolidated balance sheet. September 30, 2022 Year Originated (1) (dollars in thousands) Carrying Value % of Portfolio 2022 2021 2020 2019 2018 Prior Collateral Type Apartments $ 169,067 18.1 % $ 111,941 $ 39,609 $ 15,614 $ 1,903 $ — $ — Residential lots 123,055 13.2 % 49,947 64,317 8,791 — — — Single Family Housing 121,810 13.1 % 112,919 8,659 232 — — — Townhomes 107,515 11.5 % 80,277 26,445 793 — — — Commercial 87,779 9.4 % 12,750 75,029 — — — — Entitled Land 75,103 8.1 % 46,741 28,362 — — — — Condos 63,690 6.8 % 10,900 6,579 10,075 — — 36,136 Mixed Use 53,409 5.7 % 10,288 29,859 11,133 2,129 — — Hotel 30,036 3.2 % 14,007 — 16,029 — — — Unentitled Land 19,981 2.1 % 16,621 3,360 — — — — Offices 19,372 2.1 % 11,294 — 8,078 — — — Senior Housing 15,538 1.7 % — 15,538 — — — — Commercial other 12,845 1.4 % — 12,845 — — — — Duplex 11,089 1.2 % 11,089 — — — — — Retail 8,818 0.9 % 6,961 — 1,857 — — — Quadplex 7,664 0.8 % — 7,664 — — — — Commercial Lots 3,196 0.3 % 3,196 — — — — — Triplex 1,694 0.2 % 1,694 — — — — — Storage — 0.0 % — — — — — — Total $ 931,661 100.0 % $ 500,625 $ 318,266 $ 72,602 $ 4,032 $ — $ 36,136 CECL allowance (2) ( 19,997 ) Carrying value, net $ 911,664 (1) Represents the year of either origination or amendment where the loan incurred a full re-underwriting in connection with the amendment. (2) Includes $ 12.1 million in loan specific allowances for loans deemed collateral dependent based on the excess amortized cost over the fair value of the underlying collateral. In addition, $ 1.4 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 condensed consolidated balance sheet. September 30, 2022 Year Originated (1) (dollars in thousands) Carrying Value % of Portfolio 2022 2021 2020 2019 Prior LTV (2) 0 - 40% $ 25,348 2.7 % $ 18,231 $ 7,117 $ — $ — $ — 41 - 45% 29,546 3.2 7,567 21,979 — — — 46 - 50% 39,085 4.2 20,899 10,108 8,078 — — 51 - 55% 141,842 15.1 75,656 57,395 8,791 — — 56 - 60% 97,218 10.4 84,016 13,202 — — — 61 - 65% 481,317 51.7 224,147 187,256 31,875 1,903 36,136 66 - 70% 89,229 9.6 64,248 20,202 2,650 2,129 — 71 - 75% 3,518 0.4 3,518 — — — — 76- 80% 2,343 0.3 2,343 — — — — Above 80% 22,215 2.4 — 1,007 21,208 — — Total $ 931,661 100.0 % $ 500,625 $ 318,266 $ 72,602 $ 4,032 $ 36,136 CECL allowance (3) ( 19,997 ) Carrying value, net $ 911,664 (1) Represents the year of either origination or 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 $ 12.1 million in loan specific allowances for loans deemed collateral dependent based on the excess amortized cost over the fair value of the underlying collateral. In addition, $ 1.4 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 condensed consolidated balance sheet. December 31, 2021 Year Originated (1) (dollars in thousands) Carrying Value % of Portfolio 2021 2020 2019 2018 2017 Prior Construction Type Vertical Construction $ 478,475 52.5 % $ 234,861 $ 191,896 $ 1,177 $ 2,491 $ 47,789 $ 261 Horizontal Development 196,543 21.5 169,041 27,502 — — — — Acquisition 96,937 10.6 96,937 — — — — — Investment 65,703 7.2 42,509 2,101 — 3,608 17,485 — Rehabilitation 27,023 3.0 11,320 15,703 — — — — Land Entitlement 24,529 2.7 24,529 — — — — — Bridge 22,534 2.5 18,072 2,537 1,925 — — — 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 either origination or 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 excess amortized cost over 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 condensed consolidated balance sheet. 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 9.5 53,530 30,474 1,925 — — — Single Family Housing 87,902 9.6 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 either origination or 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 excess amortized cost over 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 condensed consolidated balance sheet. 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 - 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 either origination or 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 $ 0.7 million in loan specific allowances for loans deemed collateral dependent based on the excess amortized cost over 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 condensed consolidated balance sheet. |
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: September 30, 2022 (dollars in thousands) Carrying Value CECL Allowance (1) Carrying Value, net Collateral Type Residential Lots $ 34,276 $ ( 2,242 ) $ 32,034 Hotel 16,029 ( 9,113 ) 6,916 Condos 10,075 ( 917 ) 9,158 Offices 8,078 ( 76 ) 8,002 Townhomes 3,945 ( 29 ) 3,916 Single Family Housing 3,761 ( 18 ) 3,743 Commercial Other 2,997 ( 38 ) 2,959 Mixed Use 2,764 ( 408 ) 2,356 Retail 1,857 ( 58 ) 1,799 Total $ 83,782 $ ( 12,899 ) $ 70,883 (1) Includes $ 12.1 million in loan specific allowances for loans deemed collateral dependent based on the excess amortized cost over the fair value of the underlying collateral. 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 loan specific allowances for loans deemed collateral dependent based on the excess amortized cost over the fair value of the underlying collateral. |
Investment in Real Property (Ta
Investment in Real Property (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Real Estate [Abstract] | |
Schedule of carrying value of owned real estate | The following tables provide information about the carrying value of our owned real property at the dates indicated: (dollars in thousands) September 30, 2022 December 31, 2021 Collateral Type Senior Housing $ 49,916 $ — Offices 18,316 19,388 Townhomes 8,937 9,281 Single Family Housing 7,831 4,134 Apartments 5,453 — Residential Lots 3,053 3,012 Condos — 28,441 Retail — 3,811 Total $ 93,506 $ 68,067 (dollars in thousands) September 30, 2022 December 31, 2021 Held for sale $ 66,103 $ 52,531 Held for use 27,403 15,536 Total $ 93,506 $ 68,067 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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 condensed consolidated balance sheets at the periods indicated: September 30, 2022 Fair Value Measurements Using (dollars in thousands) Carrying Value Estimated Fair Value Level 1 Level 2 Level 3 Financial Assets Cash and cash equivalents $ 61,141 $ 61,141 $ 61,141 $ — $ — Mortgage notes receivable, net 911,664 911,664 — — 911,664 Interest and fees receivable, net 17,184 17,184 — 17,184 — Financial Liabilities Senior unsecured notes, net 97,646 86,230 — 86,230 — Private placement warrant liability 1,245 1,245 — 1,245 — 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 Interest and fees receivable, net 17,526 17,526 — 17,526 — Financial Liabilities Senior unsecured notes, net 97,223 100,000 — 100,000 — Private placement warrant liability 1,838 1,838 — 1,838 — |
Schedule of valuation methodologies and inputs used for assets that are measured at fair value | The following table sets forth assets measured and reported at fair value on a nonrecurring basis as of September 30, 2022 and December 31, 2021. All of these values are categorized as Level 3. The table also contains information about valuation methodologies and inputs. Carrying Value Fair Value (dollars in thousands) September 30, 2022 December 31, 2021 September 30, 2022 December 31, 2021 Valuation technique Unobservable inputs Range of inputs Investment in real property $ 29,615 $ — $ 30,226 $ — Collateral valuations Discount to appraised value based on comparable market prices, 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 (1) 20,266 436 20,980 835 Collateral valuations Discount to appraised value based on comparable market prices or broker opinion of value 0 - 10 % Total $ 49,881 $ 436 $ 51,206 $ 835 (1) Previously reported amounts included all real properties and collateral dependent loans regardless of whether a mark to fair value occurred in the reporting period. The current disclosure represents only those measured at fair value on a nonrecurring basis during the reporting periods. |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Carrying Values of The Company's Debt | The following table presents the carrying values of our senior unsecured notes as of the periods indicated: (dollars in thousands) September 30, 2022 December 31, 2021 Principal $ 100,000 $ 100,000 Debt issuance costs ( 2,861 ) ( 2,855 ) Amortization of debt issuance costs 507 78 Total notes, net $ 97,646 $ 97,223 |
Schedule of Interest Expense Related to Senior Unsecured Notes and Revolving Credit Facility | The following tables summarize the interest expense related to our senior unsecured notes and revolving credit facility for the periods indicated: Three Months Ended September 30, 2022 September 30, 2021 (in thousands) Amortization of Deferred Debt Costs Interest Expense Undrawn Fees Amortization of Deferred Debt Costs Interest Accrued Undrawn Fees 5.0% senior unsecured notes $ 143 $ 1,236 $ — $ — $ — $ — Revolving credit facility 377 151 335 377 — 344 Total $ 520 $ 1,387 $ 335 $ 377 $ — $ 344 Nine Months Ended September 30, 2022 September 30, 2021 (in thousands) Amortization of Deferred Debt Costs Interest Expense Undrawn Fees Amortization of Deferred Debt Costs Interest Accrued Undrawn Fees 5.0% senior unsecured notes $ 429 $ 3,736 $ — $ — $ — $ — Revolving credit facility 1,133 151 1,028 879 — 840 Total $ 1,562 $ 3,887 $ 1,028 $ 879 $ — $ 840 |
Stockholders' Equity and Earn_2
Stockholders' Equity and Earnings per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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: Three Months Ended Nine Months Ended (dollars in thousands, except share and per share data): September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Net income $ 2,610 $ 21,685 $ 36,630 $ 60,318 Basic weighted-average shares of common stock outstanding 132,884,407 132,658,661 132,867,288 132,575,852 Dilutive effect of share-based compensation – unvested restricted stock units 22,373 93,810 69,122 87,585 Diluted weighted-average shares of common stock outstanding 132,906,780 132,752,471 132,936,411 132,663,437 Basic earnings per share $ 0.02 $ 0.16 $ 0.28 $ 0.45 Diluted earnings per share $ 0.02 $ 0.16 $ 0.28 $ 0.45 |
Schedule of common stock equivalents excluded from diluted net income per share | For the periods presented, the following common stock equivalents were excluded from the calculations of diluted earnings per share because their effect would have been anti-dilutive: Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Weighted-average restricted stock units outstanding 637,597 186,492 241,097 218,227 Unexercised public warrants and private placement warrants 15,604,279 15,604,304 15,604,279 15,604,304 Total stock equivalents excluded 16,241,876 15,790,796 15,845,376 15,822,531 |
Equity Incentive Plan (Tables)
Equity Incentive Plan (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of assumptions used in the Monte Carlo simulation model | The weighted average fair value and assumptions used to value the pRSU awards granted with market-based performance conditions are as follows: Nine Months Ended September 30, 2022 September 30, 2021 Performance share fair value $ 6.74 $ 8.20 Risk-free interest rate 1.74 % 0.27 % Expected volatility 30.48 % 25.71 % Expected life (in years) 2.85 2.77 Expected dividend yield 9.82 % 8.13 % |
Summary of the activity related to restricted stock | The following tables summarize the activity related to RSUs and pRSUs during 2022: Shares Weighted Average Grant Date Fair Market Value Unvested RSUs outstanding as of December 31, 2021 541,296 Granted 419,101 $ 6.90 Vested ( 109,355 ) $ 9.50 Forfeited ( 5,691 ) $ 8.82 Unvested RSUs outstanding as of March 31, 2022 845,351 Granted 105,773 $ 6.49 Vested ( 71,036 ) $ 10.52 Forfeited ( 40,862 ) $ 8.84 Unvested RSUs outstanding as of June 30, 2022 839,226 Vested ( 69,528 ) $ 10.30 Forfeited ( 8,224 ) $ 7.52 Unvested RSUs outstanding as of September 30, 2022 761,474 Shares Weighted Average Grant Date Fair Market Value Unvested pRSUs outstanding as of December 31, 2021 56,978 Granted 276,679 $ 6.74 Unvested pRSUs outstanding as of March 31, 2022 333,657 Forfeited ( 39,084 ) $ 7.35 Unvested pRSUs outstanding as of June 30, 2022 294,573 Unvested pRSUs outstanding as of September 30, 2022 294,573 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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 September 30, 2022: (dollars in thousands) Total Less than 1 year 1-3 years 3-5 years More than 5 years Construction holdbacks (1) $ 530,425 $ 353,051 $ 177,374 $ — $ — Operating lease obligations (2) 10,166 880 2,003 2,125 5,158 Total $ 540,591 $ 353,931 $ 179,377 $ 2,125 $ 5,158 (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 $ 2.5 million of imputed interest. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional information (Details) | 9 Months Ended |
Sep. 30, 2022 Segment | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Number of Reportable Segments | 1 |
Mortgage Notes Receivable - Add
Mortgage Notes Receivable - Additional Information (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Loans and Leases Receivable Disclosure [Line Items] | ||
Percentage of maximum loan to value ratio | 65% | |
Percentage of maximum of amount of a single loan | 10% | |
Percentage of maximum amount of loans to single borrower | 15% | |
Term of mortgage notes receivable | 20 months | |
Interest rate (as a percent) | 10.20% | |
Monthly interest rate payment term | 10 days | |
Principal outstanding on non accrual status | $ 115.4 | $ 101.9 |
Contractual loans | $ 286.1 | $ 191.4 |
Mortgage Notes Receivable - Inf
Mortgage Notes Receivable - Information pertaining to mortgage notes receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | |||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Total principal outstanding for our mortgage notes receivable | $ 931,661 | [1] | $ 911,744 | [2] | |||||||
Adoption of ASU 2016-13 | 19,997 | [3],[4] | $ 9,526 | $ 8,647 | 10,394 | [5],[6] | $ 12,719 | $ 10,943 | $ 10,663 | $ 10,590 | |
Mortgage notes receivable, net | 911,664 | 901,350 | |||||||||
Mortgage notes receivables | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Total loan commitments | 1,512,889 | 1,489,055 | |||||||||
Construction holdbacks | 530,425 | 524,462 | |||||||||
Interest reserves | 41,108 | 39,880 | |||||||||
Total principal outstanding for our mortgage notes receivable | 941,356 | 924,713 | |||||||||
Adoption of ASU 2016-13 | [7] | 19,997 | 10,394 | ||||||||
Deferred origination and amendment fees | 9,695 | 12,969 | |||||||||
Mortgage notes receivable, net | 911,664 | 901,350 | |||||||||
Unfunded Loan Commitment [Member] | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Adoption of ASU 2016-13 | [8] | 1,431 | 1,410 | 1,097 | 904 | 861 | 725 | 947 | 0 | ||
Unfunded Loan Commitment [Member] | Accounts payable and accrued liabilities | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Adoption of ASU 2016-13 | 1,400 | 1,400 | 900 | ||||||||
Funded And Unfunded Loan Commitment [Member] | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Adoption of ASU 2016-13 | $ 21,428 | $ 10,936 | $ 9,744 | $ 11,298 | $ 13,580 | $ 11,668 | $ 11,610 | $ 10,590 | |||
[1] 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. 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. Includes $ 12.1 million in loan specific allowances for loans deemed collateral dependent based on the excess amortized cost over the fair value of the underlying collateral. In addition, $ 1.4 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 condensed consolidated balance sheet. Includes $ 12.1 million in loan specific allowances for loans deemed collateral dependent based on the excess amortized cost over the fair value of the underlying collateral. In addition, $ 1.4 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 condensed consolidated balance sheet. September 30, 2022 Year Originated (1) (dollars in thousands) Carrying Value % of Portfolio 2022 2021 2020 2019 2018 Prior Collateral Type Apartments $ 169,067 18.1 % $ 111,941 $ 39,609 $ 15,614 $ 1,903 $ — $ — Residential lots 123,055 13.2 % 49,947 64,317 8,791 — — — Single Family Housing 121,810 13.1 % 112,919 8,659 232 — — — Townhomes 107,515 11.5 % 80,277 26,445 793 — — — Commercial 87,779 9.4 % 12,750 75,029 — — — — Entitled Land 75,103 8.1 % 46,741 28,362 — — — — Condos 63,690 6.8 % 10,900 6,579 10,075 — — 36,136 Mixed Use 53,409 5.7 % 10,288 29,859 11,133 2,129 — — Hotel 30,036 3.2 % 14,007 — 16,029 — — — Unentitled Land 19,981 2.1 % 16,621 3,360 — — — — Offices 19,372 2.1 % 11,294 — 8,078 — — — Senior Housing 15,538 1.7 % — 15,538 — — — — Commercial other 12,845 1.4 % — 12,845 — — — — Duplex 11,089 1.2 % 11,089 — — — — — Retail 8,818 0.9 % 6,961 — 1,857 — — — Quadplex 7,664 0.8 % — 7,664 — — — — Commercial Lots 3,196 0.3 % 3,196 — — — — — Triplex 1,694 0.2 % 1,694 — — — — — Storage — 0.0 % — — — — — — Total $ 931,661 100.0 % $ 500,625 $ 318,266 $ 72,602 $ 4,032 $ — $ 36,136 CECL allowance (2) ( 19,997 ) Carrying value, net $ 911,664 Includes $ 0.7 million in loan specific allowances for loans deemed collateral dependent based on the excess amortized cost over 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 condensed consolidated balance sheet. Includes $ 0.7 million in loan specific allowances for loans deemed collateral dependent based on the excess amortized cost over 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 condensed consolidated balance sheet. As of September 30, 2022, $ 1.4 million of the 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 condensed consolidated balance sheet. CECL allowance related to unfunded commitments is presented as a liability under accounts payable and accrued liabilities in our condensed consolidated balance sheet. |
Mortgage Notes Receivable - All
Mortgage Notes Receivable - Allowance for loan loss (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | ||||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||||||||||
Allowance for Credit Loss, Beginning Balance | $ 9,526 | $ 8,647 | $ 10,394 | [1],[2] | $ 10,943 | $ 10,663 | $ 10,590 | ||||
Adoption of ASU 2016-13 | 19,997 | [3],[4] | 9,526 | 8,647 | 12,719 | 10,943 | 10,663 | ||||
Provision for loan losses (benefits) | 12,267 | 2,381 | 1,554 | 2,471 | 280 | 1,761 | |||||
Charge offs | (1,796) | (3,301) | [5] | (695) | [5] | (1,502) | (1,688) | [5] | |||
Allowance for Credit Loss, Ending Balance | 19,997 | [3],[4] | 9,526 | 8,647 | 12,719 | 10,943 | 10,663 | ||||
Unfunded Loan Commitment [Member] | |||||||||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||||||||||
Allowance for Credit Loss, Beginning Balance | [6] | 1,410 | 1,097 | 904 | 725 | 947 | 0 | ||||
Adoption of ASU 2016-13 | [6] | 1,431 | 1,410 | 1,097 | 861 | 725 | 947 | ||||
Provision for loan losses (benefits) | [6] | 21 | 313 | 193 | 136 | (222) | 947 | ||||
Charge offs | [6] | 0 | 0 | [5] | 0 | 0 | [5] | ||||
Allowance for Credit Loss, Ending Balance | [6] | 1,431 | 1,410 | 1,097 | 861 | 725 | 947 | ||||
Funded And Unfunded Loan Commitment [Member] | |||||||||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||||||||||
Allowance for Credit Loss, Beginning Balance | 10,936 | 9,744 | 11,298 | 11,668 | 11,610 | 10,590 | |||||
Adoption of ASU 2016-13 | 21,428 | 10,936 | 9,744 | 13,580 | 11,668 | 11,610 | |||||
Provision for loan losses (benefits) | 12,288 | 2,694 | 1,747 | 2,607 | 58 | 2,708 | |||||
Charge offs | (1,796) | (3,301) | [5] | (695) | [5] | (1,502) | (1,688) | [5] | |||
Allowance for Credit Loss, Ending Balance | $ 21,428 | $ 10,936 | $ 9,744 | $ 13,580 | $ 11,668 | $ 11,610 | |||||
[1] Includes $ 0.7 million in loan specific allowances for loans deemed collateral dependent based on the excess amortized cost over 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 condensed consolidated balance sheet. Includes $ 0.7 million in loan specific allowances for loans deemed collateral dependent based on the excess amortized cost over 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 condensed consolidated balance sheet. Includes $ 12.1 million in loan specific allowances for loans deemed collateral dependent based on the excess amortized cost over the fair value of the underlying collateral. In addition, $ 1.4 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 condensed consolidated balance sheet. Includes $ 12.1 million in loan specific allowances for loans deemed collateral dependent based on the excess amortized cost over the fair value of the underlying collateral. In addition, $ 1.4 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 condensed consolidated balance sheet. September 30, 2022 Year Originated (1) (dollars in thousands) Carrying Value % of Portfolio 2022 2021 2020 2019 2018 Prior Collateral Type Apartments $ 169,067 18.1 % $ 111,941 $ 39,609 $ 15,614 $ 1,903 $ — $ — Residential lots 123,055 13.2 % 49,947 64,317 8,791 — — — Single Family Housing 121,810 13.1 % 112,919 8,659 232 — — — Townhomes 107,515 11.5 % 80,277 26,445 793 — — — Commercial 87,779 9.4 % 12,750 75,029 — — — — Entitled Land 75,103 8.1 % 46,741 28,362 — — — — Condos 63,690 6.8 % 10,900 6,579 10,075 — — 36,136 Mixed Use 53,409 5.7 % 10,288 29,859 11,133 2,129 — — Hotel 30,036 3.2 % 14,007 — 16,029 — — — Unentitled Land 19,981 2.1 % 16,621 3,360 — — — — Offices 19,372 2.1 % 11,294 — 8,078 — — — Senior Housing 15,538 1.7 % — 15,538 — — — — Commercial other 12,845 1.4 % — 12,845 — — — — Duplex 11,089 1.2 % 11,089 — — — — — Retail 8,818 0.9 % 6,961 — 1,857 — — — Quadplex 7,664 0.8 % — 7,664 — — — — Commercial Lots 3,196 0.3 % 3,196 — — — — — Triplex 1,694 0.2 % 1,694 — — — — — Storage — 0.0 % — — — — — — Total $ 931,661 100.0 % $ 500,625 $ 318,266 $ 72,602 $ 4,032 $ — $ 36,136 CECL allowance (2) ( 19,997 ) Carrying value, net $ 911,664 Charge-offs result from either loan repayments where the proceeds are less than the principal outstanding or transfers to investment in real property at the time that we take ownership of the property where the fair values of the underlying collateral are less than the principal outstanding. CECL allowance related to unfunded commitments is presented as a liability under accounts payable and accrued liabilities in our condensed consolidated balance sheet. |
Mortgage Notes Receivable - Com
Mortgage Notes Receivable - Composition of loan portfolio (Details) $ in Thousands | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Sep. 30, 2021 USD ($) | Jun. 30, 2021 USD ($) | Mar. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | $ 931,661 | [1] | $ 911,744 | [2] | |||||||
CECL Allowance | (19,997) | [3],[4] | $ (9,526) | $ (8,647) | (10,394) | [5],[6] | $ (12,719) | $ (10,943) | $ (10,663) | $ (10,590) | |
Carrying value, net | $ 911,664 | $ 901,350 | |||||||||
Percentage of portfolio | 100% | [1] | 100% | [2] | |||||||
2022 | $ 500,625 | [7] | $ 597,269 | [2],[8] | |||||||
2021 | 318,266 | [7] | 239,739 | [2],[8] | |||||||
2020 | 72,602 | [7] | 3,102 | [2],[8] | |||||||
2019 | 4,032 | [7] | 6,099 | [2],[8] | |||||||
2018 | 0 | [9] | 65,274 | [2],[8] | |||||||
Prior | 36,136 | [7] | $ 261 | [2],[8] | |||||||
LTV general percent indicating default status | 65 | 65 | |||||||||
Allowances on excess amortized cost over fair value | $ 700 | ||||||||||
0 - 40% | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | $ 25,348 | [1] | $ 53,907 | [2] | |||||||
Percentage of portfolio | 2.70% | [1] | 5.90% | [2] | |||||||
2022 | $ 18,231 | [1],[10] | $ 32,634 | [2],[11] | |||||||
2021 | [1],[10] | 7,117 | |||||||||
2019 | [2],[11] | 3,608 | |||||||||
2018 | [2],[11] | 17,665 | |||||||||
41 - 45% | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | $ 29,546 | [1] | $ 48,431 | [2] | |||||||
Percentage of portfolio | 3.20% | [1] | 5.30% | [2] | |||||||
2022 | $ 7,567 | [1],[10] | $ 44,380 | [2],[11] | |||||||
2021 | 21,979 | [1],[10] | 4,051 | [2],[11] | |||||||
2019 | [1],[10] | 0 | |||||||||
46 - 50% | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | $ 39,085 | [1] | $ 63,690 | [2] | |||||||
Percentage of portfolio | 4.20% | [1] | 7% | [2] | |||||||
2022 | $ 20,899 | [1],[10] | $ 41,356 | [2],[11] | |||||||
2021 | 10,108 | [1],[10] | 21,317 | [2],[11] | |||||||
2020 | [7] | 8,078 | |||||||||
2019 | 0 | [1],[10] | 1,017 | [2],[11] | |||||||
51 - 55% | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | $ 141,842 | [1] | $ 92,238 | [2] | |||||||
Percentage of portfolio | 15.10% | [1] | 10.10% | [2] | |||||||
2022 | $ 75,656 | [1],[10] | $ 74,978 | [2],[11] | |||||||
2021 | 57,395 | [1],[10] | 17,260 | [2],[11] | |||||||
2020 | [7] | 8,791 | |||||||||
2019 | [1],[10] | 0 | |||||||||
56 - 60% | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | $ 97,218 | [1] | $ 79,039 | [2] | |||||||
Percentage of portfolio | 10.40% | [1] | 8.70% | [2] | |||||||
2022 | $ 84,016 | [1],[10] | $ 27,115 | [2],[11] | |||||||
2021 | 13,202 | [1],[10] | 40,190 | [2],[11] | |||||||
2019 | [1],[10] | 0 | |||||||||
2018 | [2],[11] | 11,473 | |||||||||
Prior | [2],[11] | 261 | |||||||||
61 - 65% | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | $ 481,317 | [1] | $ 559,997 | [2] | |||||||
Percentage of portfolio | 51.70% | [1] | 61.40% | [2] | |||||||
2022 | $ 224,147 | [1],[10] | $ 372,645 | [2],[11] | |||||||
2021 | 187,256 | [1],[10] | 146,640 | [2],[11] | |||||||
2020 | [2],[11] | 3,102 | |||||||||
2019 | 1,903 | [1],[10] | 1,474 | [2],[11] | |||||||
2018 | 31,875 | [10] | 36,136 | [2],[11] | |||||||
Prior | [7] | 36,136 | |||||||||
66 - 70% | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | $ 89,229 | [1] | $ 645 | [2] | |||||||
Percentage of portfolio | 9.60% | [1] | 0.10% | [2] | |||||||
2022 | $ 64,248 | [1],[10] | $ 645 | [2],[11] | |||||||
2021 | [1],[10] | 20,202 | |||||||||
2020 | [7] | 2,650 | |||||||||
2019 | [11] | $ 2,129 | |||||||||
71-80% | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Percentage of portfolio | 0.30% | [1] | 0% | [2] | |||||||
71 - 75% | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | [1] | $ 3,518 | |||||||||
Percentage of portfolio | [1] | 0.40% | |||||||||
2022 | [1] | $ 3,518 | |||||||||
76 - 80% | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | [1] | 2,343 | |||||||||
2022 | [1] | 2,343 | |||||||||
Prior | [7] | 0 | |||||||||
Above 80% | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | 22,215 | [1] | $ 13,797 | [2] | |||||||
CECL Allowance | $ (19,997) | [12] | $ (10,394) | [13] | |||||||
Percentage of portfolio | 2.40% | [1] | 1.50% | [2] | |||||||
2022 | [2],[11] | $ 3,516 | |||||||||
2021 | $ 1,007 | [1],[10] | 10,281 | [2],[11] | |||||||
2020 | [7] | 21,208 | |||||||||
2019 | [1],[10] | 0 | |||||||||
Apartments | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | $ 169,067 | $ 107,765 | |||||||||
Percentage of portfolio | 18.10% | 11.80% | |||||||||
2022 | $ 111,941 | [9] | $ 38,232 | [8] | |||||||
2021 | 39,609 | [9] | 68,356 | [14] | |||||||
2020 | [9] | 15,614 | |||||||||
2019 | 1,903 | [9] | 1,177 | [14] | |||||||
2018 | [9] | 0 | |||||||||
Prior | [9] | 0 | |||||||||
Residential Lots | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | $ 123,055 | $ 111,644 | |||||||||
Percentage of portfolio | 13.20% | 12.20% | |||||||||
2022 | $ 49,947 | [9] | $ 85,219 | [8] | |||||||
2021 | 64,317 | [9] | 26,425 | [14] | |||||||
2020 | [9] | 8,791 | |||||||||
2019 | [9] | 0 | |||||||||
2018 | [9] | 0 | |||||||||
Prior | [9] | 0 | |||||||||
Single family housing | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | $ 121,810 | $ 87,902 | |||||||||
Percentage of portfolio | 13.10% | 9.60% | |||||||||
2022 | $ 112,919 | [9] | $ 84,703 | [8] | |||||||
2021 | 8,659 | [9] | 3,049 | [14] | |||||||
2020 | [9] | 232 | |||||||||
2019 | [9] | 0 | |||||||||
2018 | 0 | [9] | 150 | [14] | |||||||
Prior | [9] | 0 | |||||||||
Townhomes | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | $ 107,515 | $ 93,300 | |||||||||
Percentage of portfolio | 11.50% | 10.20% | |||||||||
2022 | $ 80,277 | [9] | $ 51,240 | [8] | |||||||
2021 | 26,445 | [9] | 28,979 | [14] | |||||||
2020 | [9] | 793 | |||||||||
2019 | 0 | [9] | 1,017 | [14] | |||||||
2018 | 0 | [9] | 11,803 | [14] | |||||||
Prior | 0 | [9] | 261 | [14] | |||||||
Commercial | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | $ 87,779 | $ 61,592 | |||||||||
Percentage of portfolio | 9.40% | 6.80% | |||||||||
2022 | $ 12,750 | [9] | $ 61,592 | [8] | |||||||
2021 | [9] | 75,029 | |||||||||
2020 | [9] | 0 | |||||||||
2019 | [9] | 0 | |||||||||
2018 | [9] | 0 | |||||||||
Prior | [9] | 0 | |||||||||
Mixed Use | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | $ 53,409 | $ 85,929 | |||||||||
Percentage of portfolio | 5.70% | 9.50% | |||||||||
2022 | $ 10,288 | [9] | $ 53,530 | [8] | |||||||
2021 | 29,859 | [9] | 30,474 | [14] | |||||||
2020 | 11,133 | [9] | 1,925 | [14] | |||||||
2019 | [9] | 2,129 | |||||||||
2018 | [9] | 0 | |||||||||
Prior | 0 | [9] | 0 | [14] | |||||||
Condos | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | $ 63,690 | $ 64,492 | |||||||||
Percentage of portfolio | 6.80% | 7.10% | |||||||||
2022 | $ 10,900 | [9] | $ 8,805 | [8] | |||||||
2021 | 6,579 | [9] | 18,227 | [14] | |||||||
2020 | [9] | 10,075 | |||||||||
2019 | 0 | [9] | 1,474 | [14] | |||||||
2018 | 0 | [9] | 35,986 | [14] | |||||||
Prior | 36,136 | [9] | 0 | [14] | |||||||
Senior Housing | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | $ 15,538 | $ 61,236 | |||||||||
Percentage of portfolio | 1.70% | 6.70% | |||||||||
2022 | $ 0 | [9] | $ 35,899 | [8] | |||||||
2021 | 15,538 | [9] | 25,337 | [14] | |||||||
2020 | [9] | 0 | |||||||||
2019 | [9] | 0 | |||||||||
2018 | [9] | 0 | |||||||||
Prior | [9] | 0 | |||||||||
Storage | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | $ 0 | $ 56,481 | |||||||||
Percentage of portfolio | 0% | 6.20% | |||||||||
2022 | $ 0 | [9] | $ 56,481 | [8] | |||||||
2021 | [9] | 0 | |||||||||
2020 | [9] | 0 | |||||||||
2019 | [9] | 0 | |||||||||
2018 | [9] | 0 | |||||||||
Prior | [9] | 0 | |||||||||
Unentitled Land | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | $ 19,981 | $ 46,019 | |||||||||
Percentage of portfolio | 2.10% | 5% | |||||||||
2022 | $ 16,621 | [9] | $ 42,411 | [8] | |||||||
2021 | [9] | 3,360 | |||||||||
2020 | [9] | 0 | |||||||||
2019 | [9] | 0 | |||||||||
2018 | 0 | [9] | 3,608 | [14] | |||||||
Prior | [9] | 0 | |||||||||
Entitled Land | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | $ 75,103 | $ 45,098 | |||||||||
Percentage of portfolio | 8.10% | 4.90% | |||||||||
2022 | $ 46,741 | [9] | $ 27,763 | [8] | |||||||
2021 | [9] | 28,362 | |||||||||
2020 | [9] | 0 | |||||||||
2019 | [9] | 0 | |||||||||
2018 | 0 | [9] | 17,335 | [14] | |||||||
Prior | [9] | 0 | |||||||||
Hotel | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | $ 30,036 | $ 31,665 | |||||||||
Percentage of portfolio | 3.20% | 3.50% | |||||||||
2022 | $ 14,007 | [9] | $ 4,886 | [8] | |||||||
2021 | 0 | [9] | 26,779 | [14] | |||||||
2020 | [9] | 16,029 | |||||||||
2019 | [9] | 0 | |||||||||
2018 | [9] | 0 | |||||||||
Prior | [9] | 0 | |||||||||
Offices | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | $ 19,372 | $ 15,348 | |||||||||
Percentage of portfolio | 2.10% | 1.70% | |||||||||
2022 | $ 11,294 | [9] | $ 8,280 | [8] | |||||||
2021 | 0 | [9] | 7,068 | [14] | |||||||
2020 | [9] | 8,078 | |||||||||
2019 | [9] | 0 | |||||||||
2018 | [9] | 0 | |||||||||
Prior | [9] | 0 | |||||||||
Quadplex | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | $ 7,664 | $ 9,769 | |||||||||
Percentage of portfolio | 0.80% | 1.10% | |||||||||
2022 | $ 0 | [9] | $ 9,769 | [8] | |||||||
2021 | [9] | 7,664 | |||||||||
2020 | [9] | 0 | |||||||||
2019 | [9] | 0 | |||||||||
2018 | [9] | 0 | |||||||||
Prior | [9] | 0 | |||||||||
Commercial Lots | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | $ 3,196 | $ 10,227 | |||||||||
Percentage of portfolio | 0.30% | 1.10% | |||||||||
2022 | $ 3,196 | [9] | $ 6,670 | [8] | |||||||
2021 | [9] | 0 | |||||||||
2020 | 0 | [9] | 3,557 | [14] | |||||||
2019 | [9] | 0 | |||||||||
2018 | [9] | 0 | |||||||||
Prior | [9] | 0 | |||||||||
Commercial other | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | $ 12,845 | $ 9,080 | |||||||||
Percentage of portfolio | 1.40% | 1% | |||||||||
2022 | $ 0 | [9] | $ 9,080 | [8] | |||||||
2021 | 12,845 | [9] | 0 | [14] | |||||||
2020 | [9] | 0 | |||||||||
2019 | [9] | 0 | |||||||||
2018 | [9] | 0 | |||||||||
Prior | [9] | 0 | |||||||||
Retail | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | $ 8,818 | $ 7,873 | |||||||||
Percentage of portfolio | 0.90% | 0.90% | |||||||||
2022 | $ 6,961 | [9] | $ 6,385 | [8] | |||||||
2021 | [9] | 0 | |||||||||
2020 | 1,857 | [9] | 1,488 | [14] | |||||||
2019 | 0 | [9] | 0 | [14] | |||||||
2018 | [9] | 0 | |||||||||
Prior | [9] | 0 | |||||||||
Duplex | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | $ 11,089 | $ 6,324 | |||||||||
Percentage of portfolio | 1.20% | 0.70% | |||||||||
2022 | $ 11,089 | [9] | $ 6,324 | [8] | |||||||
2021 | [9] | 0 | |||||||||
2020 | [9] | 0 | |||||||||
2019 | [9] | 0 | |||||||||
2018 | [9] | 0 | |||||||||
Prior | [9] | 0 | |||||||||
Triplex | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | $ 1,694 | ||||||||||
Percentage of portfolio | 0.20% | ||||||||||
2022 | [9] | $ 1,694 | |||||||||
2021 | [9] | 0 | |||||||||
2020 | [9] | 0 | |||||||||
2019 | [9] | 0 | |||||||||
2018 | [9] | 0 | |||||||||
Prior | [9] | 0 | |||||||||
Vertical Construction | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | $ 535,737 | $ 478,475 | |||||||||
Percentage of portfolio | 57.50% | 52.50% | |||||||||
2022 | $ 309,763 | [7] | $ 234,861 | [8] | |||||||
2021 | 135,257 | [7] | 191,896 | [8] | |||||||
2020 | 52,678 | [7] | 1,177 | [8] | |||||||
2019 | 1,903 | [7] | 2,491 | [8] | |||||||
2018 | [8] | 47,789 | |||||||||
Prior | 36,136 | [7] | 261 | [8] | |||||||
Horizontal Development | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | $ 213,666 | $ 196,543 | |||||||||
Percentage of portfolio | 22.90% | 21.50% | |||||||||
2022 | $ 109,260 | [7] | $ 169,041 | [8] | |||||||
2021 | 95,615 | [7] | 27,502 | [8] | |||||||
2020 | 8,791 | [7] | 0 | [8] | |||||||
2019 | 0 | [7] | 0 | [8] | |||||||
2018 | [8] | 0 | |||||||||
Prior | [8] | 0 | |||||||||
Acquisition | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | $ 49,449 | $ 96,937 | |||||||||
Percentage of portfolio | 5.30% | 10.60% | |||||||||
2022 | $ 15,137 | [7] | $ 96,937 | [8] | |||||||
2021 | 34,312 | [7] | 0 | [8] | |||||||
2020 | 0 | [7] | 0 | [8] | |||||||
2019 | 0 | [7] | 0 | [8] | |||||||
2018 | [8] | 0 | |||||||||
Prior | [8] | 0 | |||||||||
Investment | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | $ 48,560 | $ 65,703 | |||||||||
Percentage of portfolio | 5.20% | 7.20% | |||||||||
2022 | $ 44,230 | [7] | $ 42,509 | [8] | |||||||
2021 | 4,330 | [7] | 2,101 | [8] | |||||||
2020 | 0 | [7] | 0 | [8] | |||||||
2019 | 0 | [7] | 3,608 | [8] | |||||||
2018 | [8] | 17,485 | |||||||||
Prior | [8] | 0 | |||||||||
Rehabilitation | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | $ 36,397 | $ 27,023 | |||||||||
Percentage of portfolio | 3.90% | 3% | |||||||||
2022 | $ 11,471 | [7] | $ 11,320 | [8] | |||||||
2021 | 13,793 | [7] | 15,703 | [8] | |||||||
2020 | 11,133 | [7] | 0 | [8] | |||||||
2019 | 0 | [7] | 0 | [8] | |||||||
2018 | [8] | 0 | |||||||||
Prior | [8] | 0 | |||||||||
Land Entitlement | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | $ 25,891 | $ 24,529 | |||||||||
Percentage of portfolio | 2.80% | 2.70% | |||||||||
2022 | $ 1,806 | [7] | $ 24,529 | [8] | |||||||
2021 | 24,085 | [7] | 0 | [8] | |||||||
2020 | 0 | [7] | 0 | [8] | |||||||
2019 | 0 | [7] | 0 | [8] | |||||||
2018 | [8] | 0 | |||||||||
Prior | [8] | 0 | |||||||||
Bridge | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | $ 21,961 | $ 22,534 | |||||||||
Percentage of portfolio | 2.40% | 2.50% | |||||||||
2022 | $ 8,958 | [7] | $ 18,072 | [8] | |||||||
2021 | 10,874 | [7] | 2,537 | [8] | |||||||
2020 | 0 | [7] | 1,925 | [8] | |||||||
2019 | 2,129 | [7] | 0 | [8] | |||||||
2018 | [8] | 0 | |||||||||
Prior | [8] | 0 | |||||||||
Unfunded Loan Commitment [Member] | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
CECL Allowance | [15] | (1,431) | $ (1,410) | $ (1,097) | (904) | $ (861) | $ (725) | $ (947) | $ 0 | ||
Unfunded Loan Commitment [Member] | Accounts payable and accrued liabilities | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
CECL Allowance | (1,400) | (1,400) | $ (900) | ||||||||
Allowances on excess amortized cost over fair value | $ 12,100 | $ 12,100 | |||||||||
[1] 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. 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. Includes $ 12.1 million in loan specific allowances for loans deemed collateral dependent based on the excess amortized cost over the fair value of the underlying collateral. In addition, $ 1.4 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 condensed consolidated balance sheet. Includes $ 12.1 million in loan specific allowances for loans deemed collateral dependent based on the excess amortized cost over the fair value of the underlying collateral. In addition, $ 1.4 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 condensed consolidated balance sheet. September 30, 2022 Year Originated (1) (dollars in thousands) Carrying Value % of Portfolio 2022 2021 2020 2019 2018 Prior Collateral Type Apartments $ 169,067 18.1 % $ 111,941 $ 39,609 $ 15,614 $ 1,903 $ — $ — Residential lots 123,055 13.2 % 49,947 64,317 8,791 — — — Single Family Housing 121,810 13.1 % 112,919 8,659 232 — — — Townhomes 107,515 11.5 % 80,277 26,445 793 — — — Commercial 87,779 9.4 % 12,750 75,029 — — — — Entitled Land 75,103 8.1 % 46,741 28,362 — — — — Condos 63,690 6.8 % 10,900 6,579 10,075 — — 36,136 Mixed Use 53,409 5.7 % 10,288 29,859 11,133 2,129 — — Hotel 30,036 3.2 % 14,007 — 16,029 — — — Unentitled Land 19,981 2.1 % 16,621 3,360 — — — — Offices 19,372 2.1 % 11,294 — 8,078 — — — Senior Housing 15,538 1.7 % — 15,538 — — — — Commercial other 12,845 1.4 % — 12,845 — — — — Duplex 11,089 1.2 % 11,089 — — — — — Retail 8,818 0.9 % 6,961 — 1,857 — — — Quadplex 7,664 0.8 % — 7,664 — — — — Commercial Lots 3,196 0.3 % 3,196 — — — — — Triplex 1,694 0.2 % 1,694 — — — — — Storage — 0.0 % — — — — — — Total $ 931,661 100.0 % $ 500,625 $ 318,266 $ 72,602 $ 4,032 $ — $ 36,136 CECL allowance (2) ( 19,997 ) Carrying value, net $ 911,664 Includes $ 0.7 million in loan specific allowances for loans deemed collateral dependent based on the excess amortized cost over 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 condensed consolidated balance sheet. Includes $ 0.7 million in loan specific allowances for loans deemed collateral dependent based on the excess amortized cost over 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 condensed consolidated balance sheet. Represents the year of either origination or amendment where the loan incurred a full re-underwriting in connection with the amendment. Represents the year of either origination or amendment where the loan incurred a full re-underwriting in connection with the amendment. Represents the year of either origination or amendment where the loan incurred a full re-underwriting in connection with the amendment. Represents the year of either origination or amendment where the loan incurred a full re-underwriting in connection with the amendment. Represents the year of either origination or amendment where the loan incurred a full re-underwriting in connection with the amendment. Includes $ 12.1 million in loan specific allowances for loans deemed collateral dependent based on the excess amortized cost over the fair value of the underlying collateral. In addition, $ 1.4 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 condensed consolidated balance sheet. Includes $ 0.7 million in loan specific allowances for loans deemed collateral dependent based on the excess amortized cost over 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 condensed consolidated balance sheet. Represents the year of either origination or amendment where the loan incurred a full re-underwriting in connection with the amendment. CECL allowance related to unfunded commitments is presented as a liability under accounts payable and accrued liabilities in our condensed consolidated balance sheet. |
Mortgage Notes Receivable - Sch
Mortgage Notes Receivable - Schedule of carrying value of collateral dependent loans (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | |||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | $ 931,661 | [1] | $ 911,744 | [2] | |||||||
CECL Allowance | (19,997) | [3],[4] | $ (9,526) | $ (8,647) | (10,394) | [5],[6] | $ (12,719) | $ (10,943) | $ (10,663) | $ (10,590) | |
Financing Receivable, after Allowance for Credit Loss, Total | 911,664 | 901,350 | |||||||||
Allowances on excess amortized cost over fair value | 700 | ||||||||||
Financing Receivable, Allowance for Credit Loss | 19,997 | [3],[4] | $ 9,526 | $ 8,647 | 10,394 | [5],[6] | $ 12,719 | $ 10,943 | $ 10,663 | $ 10,590 | |
Loan portfolio [Member] | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | 83,782 | 45,772 | |||||||||
CECL Allowance | (12,899) | [7] | (1,834) | [8] | |||||||
Financing Receivable, after Allowance for Credit Loss, Total | 70,883 | 43,938 | |||||||||
Allowances on excess amortized cost over fair value | 12,100 | 700 | |||||||||
Financing Receivable, Allowance for Credit Loss | 12,899 | [7] | 1,834 | [8] | |||||||
Senior Housing [Member] | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | 15,538 | 61,236 | |||||||||
Senior Housing [Member] | Loan portfolio [Member] | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | 34,276 | 25,337 | |||||||||
CECL Allowance | (2,242) | [7] | (1,103) | [8] | |||||||
Financing Receivable, after Allowance for Credit Loss, Total | 32,034 | 24,234 | |||||||||
Financing Receivable, Allowance for Credit Loss | 2,242 | [7] | 1,103 | [8] | |||||||
Apartments | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | 169,067 | 107,765 | |||||||||
Entitled Land [Member] | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | 75,103 | 45,098 | |||||||||
Entitled Land [Member] | Loan portfolio [Member] | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | 17,335 | ||||||||||
CECL Allowance | [8] | (42) | |||||||||
Financing Receivable, after Allowance for Credit Loss, Total | 17,293 | ||||||||||
Financing Receivable, Allowance for Credit Loss | [8] | 42 | |||||||||
Single Family Housing [Member] | Loan portfolio [Member] | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | 3,761 | 1,730 | |||||||||
CECL Allowance | (18) | [4] | (15) | [8] | |||||||
Financing Receivable, after Allowance for Credit Loss, Total | 3,743 | 1,715 | |||||||||
Financing Receivable, Allowance for Credit Loss | 18 | [4] | 15 | [8] | |||||||
Condos [Member] | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | 63,690 | 64,492 | |||||||||
Condos [Member] | Loan portfolio [Member] | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | 10,075 | 1,109 | |||||||||
CECL Allowance | (917) | [7] | (673) | [8] | |||||||
Financing Receivable, after Allowance for Credit Loss, Total | 9,158 | 436 | |||||||||
Financing Receivable, Allowance for Credit Loss | 917 | [7] | 673 | [8] | |||||||
Townhomes [Member] | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | 107,515 | 93,300 | |||||||||
Townhomes [Member] | Loan portfolio [Member] | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | 3,945 | 261 | |||||||||
CECL Allowance | (29) | [7] | (1) | [8] | |||||||
Financing Receivable, after Allowance for Credit Loss, Total | 3,916 | 260 | |||||||||
Financing Receivable, Allowance for Credit Loss | 29 | [7] | 1 | [8] | |||||||
Hotel [Member] | Loan portfolio [Member] | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | 16,029 | ||||||||||
CECL Allowance | [4] | (9,113) | |||||||||
Financing Receivable, after Allowance for Credit Loss, Total | 6,916 | ||||||||||
Financing Receivable, Allowance for Credit Loss | [4] | 9,113 | |||||||||
Commercial Other [Member] | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | 12,845 | 9,080 | |||||||||
Commercial Other [Member] | Loan portfolio [Member] | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | 2,997 | ||||||||||
CECL Allowance | [4] | (38) | |||||||||
Financing Receivable, after Allowance for Credit Loss, Total | 2,959 | ||||||||||
Financing Receivable, Allowance for Credit Loss | [4] | 38 | |||||||||
Mixed Use [Member] | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | 53,409 | 85,929 | |||||||||
Mixed Use [Member] | Loan portfolio [Member] | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | 2,764 | ||||||||||
CECL Allowance | [4] | (408) | |||||||||
Financing Receivable, after Allowance for Credit Loss, Total | 2,356 | ||||||||||
Financing Receivable, Allowance for Credit Loss | [4] | 408 | |||||||||
Retail [Member] | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | 8,818 | 7,873 | |||||||||
Retail [Member] | Loan portfolio [Member] | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | 1,857 | ||||||||||
CECL Allowance | [4] | (58) | |||||||||
Financing Receivable, after Allowance for Credit Loss, Total | 1,799 | ||||||||||
Financing Receivable, Allowance for Credit Loss | [4] | 58 | |||||||||
Offices [Member] | Loan portfolio [Member] | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | 8,078 | ||||||||||
CECL Allowance | [3] | (76) | |||||||||
Financing Receivable, after Allowance for Credit Loss, Total | 8,002 | ||||||||||
Financing Receivable, Allowance for Credit Loss | [3] | 76 | |||||||||
Residential Lots [Member] | |||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||
Carrying Value | $ 123,055 | $ 111,644 | |||||||||
[1] 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. 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. Includes $ 12.1 million in loan specific allowances for loans deemed collateral dependent based on the excess amortized cost over the fair value of the underlying collateral. In addition, $ 1.4 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 condensed consolidated balance sheet. Includes $ 12.1 million in loan specific allowances for loans deemed collateral dependent based on the excess amortized cost over the fair value of the underlying collateral. In addition, $ 1.4 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 condensed consolidated balance sheet. September 30, 2022 Year Originated (1) (dollars in thousands) Carrying Value % of Portfolio 2022 2021 2020 2019 2018 Prior Collateral Type Apartments $ 169,067 18.1 % $ 111,941 $ 39,609 $ 15,614 $ 1,903 $ — $ — Residential lots 123,055 13.2 % 49,947 64,317 8,791 — — — Single Family Housing 121,810 13.1 % 112,919 8,659 232 — — — Townhomes 107,515 11.5 % 80,277 26,445 793 — — — Commercial 87,779 9.4 % 12,750 75,029 — — — — Entitled Land 75,103 8.1 % 46,741 28,362 — — — — Condos 63,690 6.8 % 10,900 6,579 10,075 — — 36,136 Mixed Use 53,409 5.7 % 10,288 29,859 11,133 2,129 — — Hotel 30,036 3.2 % 14,007 — 16,029 — — — Unentitled Land 19,981 2.1 % 16,621 3,360 — — — — Offices 19,372 2.1 % 11,294 — 8,078 — — — Senior Housing 15,538 1.7 % — 15,538 — — — — Commercial other 12,845 1.4 % — 12,845 — — — — Duplex 11,089 1.2 % 11,089 — — — — — Retail 8,818 0.9 % 6,961 — 1,857 — — — Quadplex 7,664 0.8 % — 7,664 — — — — Commercial Lots 3,196 0.3 % 3,196 — — — — — Triplex 1,694 0.2 % 1,694 — — — — — Storage — 0.0 % — — — — — — Total $ 931,661 100.0 % $ 500,625 $ 318,266 $ 72,602 $ 4,032 $ — $ 36,136 CECL allowance (2) ( 19,997 ) Carrying value, net $ 911,664 Includes $ 0.7 million in loan specific allowances for loans deemed collateral dependent based on the excess amortized cost over 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 condensed consolidated balance sheet. Includes $ 0.7 million in loan specific allowances for loans deemed collateral dependent based on the excess amortized cost over 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 condensed consolidated balance sheet. Includes $ 12.1 million in loan specific allowances for loans deemed collateral dependent based on the excess amortized cost over the fair value of the underlying collateral. Includes $ 0.7 million in loan specific allowances for loans deemed collateral dependent based on the excess amortized cost over the fair value of the underlying collateral. |
Investment in Real Property - S
Investment in Real Property - Schedule of carrying value of owned real estate (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Real Estate [Line Items] | ||
Investment in real property, net | $ 93,506 | $ 68,067 |
Real Estate, Held-for-Sale | 93,506 | 68,067 |
Condos [Member] | ||
Real Estate [Line Items] | ||
Investment in real property, net | 0 | 28,441 |
Senior Housing [Member] | ||
Real Estate [Line Items] | ||
Real Estate Owned, Carrying value | 49,916 | 0 |
Offices [Member] | ||
Real Estate [Line Items] | ||
Investment in real property, net | 18,316 | 19,388 |
Townhomes [Member] | ||
Real Estate [Line Items] | ||
Investment in real property, net | 8,937 | 9,281 |
Apartments [Member] | ||
Real Estate [Line Items] | ||
Real Estate Owned, Carrying value | 5,453 | 0 |
Single Family Housing [Member] | ||
Real Estate [Line Items] | ||
Investment in real property, net | 7,831 | 4,134 |
Retail [Member] | ||
Real Estate [Line Items] | ||
Investment in real property, net | 0 | 3,811 |
Residential Lots [Member] | ||
Real Estate [Line Items] | ||
Investment in real property, net | 3,053 | 3,012 |
Real Estate Held-for-sale One [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Held-for-Sale | 66,103 | 52,531 |
Real Estate Held-for-sale Two [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Held-for-Sale | $ 27,403 | $ 15,536 |
Investment in Real Property - A
Investment in Real Property - Additional Information (Details) $ in Millions | Sep. 30, 2022 USD ($) Property | Apr. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) Property |
Real Estate [Line Items] | |||
Real estate project value | $ 93.5 | $ 68.1 | |
Promissory note principal amount | $ 25.9 | ||
Number of properties | Property | 11 | 9 | |
Unrelated Party [Member] | |||
Real Estate [Line Items] | |||
Real property carrying value | 28.4 | ||
Real property sale price | $ 29 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair value of assets and liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Carrying Value | ||
Financial Assets | ||
Cash and cash equivalents | $ 61,141 | $ 132,889 |
Mortgage notes receivable, net | 911,664 | 901,350 |
Interest and fees receivable, net | 17,184 | 17,526 |
Financial Liabilities | ||
Senior unsecured notes | 97,646 | 97,223 |
Private placement warrant liability | 1,245 | 1,838 |
Estimated Fair Value | ||
Financial Assets | ||
Cash and cash equivalents | 61,141 | 132,889 |
Mortgage notes receivable, net | 911,664 | 901,350 |
Interest and fees receivable, net | 17,184 | 17,526 |
Financial Liabilities | ||
Senior unsecured notes | 86,230 | 100,000 |
Private placement warrant liability | 1,245 | 1,838 |
Level 1 | Estimated Fair Value | ||
Financial Assets | ||
Cash and cash equivalents | 61,141 | 132,889 |
Level 2 | Estimated Fair Value | ||
Financial Assets | ||
Interest and fees receivable, net | 17,184 | 17,526 |
Financial Liabilities | ||
Senior unsecured notes | 86,230 | 100,000 |
Private placement warrant liability | 1,245 | 1,838 |
Level 3 | Estimated Fair Value | ||
Financial Assets | ||
Mortgage notes receivable, net | $ 911,664 | $ 901,350 |
Fair Value Measurements - Valua
Fair Value Measurements - Valuation Methodologies and Inputs Used for Assets Measured at Fair Value (Details) - Non recurring $ in Thousands | Sep. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Private Placement Warrants | Minimum | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Range of inputs | 0 | ||
Private Placement Warrants | Maximum | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Range of inputs | 10 | ||
Real Property | Minimum | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Range of inputs | 0 | ||
Real Property | Maximum | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Range of inputs | 10 | ||
Collateral Dependent Loans | Minimum | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Range of inputs | 0 | ||
Collateral Dependent Loans | Maximum | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Range of inputs | 10 | ||
Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Carrying Value | $ 49,881 | $ 436 | |
Assets measured at fair value | 51,206 | 835 | |
Level 3 | Real Property | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Carrying Value | [1] | 29,615 | 0 |
Assets measured at fair value | [1] | 30,226 | 0 |
Level 3 | Collateral Dependent Loans | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Carrying Value | [1] | 20,266 | 436 |
Assets measured at fair value | [1] | $ 20,980 | $ 835 |
[1] Previously reported amounts included all real properties and collateral dependent loans regardless of whether a mark to fair value occurred in the reporting period. The current disclosure represents only those measured at fair value on a nonrecurring basis during the reporting periods. |
Fair Value Measurement - Additi
Fair Value Measurement - Additional Information (Details) - Private Placement Warrants - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Warrants outstanding (in shares) | 5.2 | 5.2 |
Warrants outstanding | $ 1.2 | |
Share price | $ 0.06 | |
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 $0.06 per warrant or $0.24 per share to arrive at $1.2 million as of September 30, 2022. Refer to Note 7 for additional details on the private placement warrants. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Additional Information) (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Goodwill | $ 136,965 | $ 136,965 |
Debt (Additional Information) (
Debt (Additional Information) (Details) - USD ($) $ in Thousands | Nov. 12, 2021 | Feb. 19, 2021 | Sep. 30, 2022 | Dec. 31, 2021 |
Line of Credit Facility [Line Items] | ||||
Principal | $ 100,000 | $ 100,000 | ||
Debt issuance cost | 97,646 | 97,223 | ||
5.0% senior unsecured notes due 2026 | Private offering [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Principal | $ 100,000 | |||
Fixed interest rate | 5% | |||
Debt issuance cost | $ 2,900 | |||
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 | |||
Commitment fee | 1% | |||
Maturity Date | Feb. 19, 2024 | |||
Amortization period | 3 years | |||
Revolving credit facility outstanding, amount | $ 0 | $ 0 | ||
Deferred financing costs | $ 4,500 | |||
Revolving Credit Facility [Member] | Prime Rate [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate | 2.75% |
Debt - Schedule of Carrying Val
Debt - Schedule of Carrying Values of The Company's Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Unsecured Senior Notes: | ||
Principal | $ 100,000 | $ 100,000 |
Debt issuance costs | (2,861) | (2,855) |
Amortization of debt issuance costs | 507 | 78 |
Total notes, net | $ 97,646 | $ 97,223 |
Debt - Schedule of Senior Unsec
Debt - Schedule of Senior Unsecured Notes (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Line of Credit Facility [Line Items] | ||
Principal | $ 100,000 | $ 100,000 |
Debt - Summary of Interest Expe
Debt - Summary of Interest Expense Related to Our Senior Unsecured Notes and Revolving Credit Facility (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Line of Credit Facility [Line Items] | ||||
Amortization of Deferred Debt Costs | $ 520 | $ 377 | $ 1,562 | $ 879 |
Interest Expense | 1,387 | 0 | 3,887 | 0 |
Undrawn Fee | 335 | 344 | 1,028 | 840 |
5.0% senior unsecured notes [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Amortization of Deferred Debt Costs | 143 | 0 | 429 | 0 |
Interest Expense | 1,236 | 0 | 3,736 | 0 |
Undrawn Fee | 0 | 0 | 0 | 0 |
Revolving Credit Facility [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Amortization of Deferred Debt Costs | 377 | 377 | 1,133 | 879 |
Interest Expense | 151 | 0 | 151 | 0 |
Undrawn Fee | $ 335 | $ 344 | $ 1,028 | $ 840 |
Stockholders' Equity and Earn_3
Stockholders' Equity and Earnings per Common Share - Stock (Details) | 9 Months Ended | ||
Sep. 30, 2022 Vote | Sep. 30, 2021 Vote | Mar. 02, 2021 USD ($) | |
Equity [Abstract] | |||
Common stock number of voting rights | Vote | 1 | 1 | |
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, shares in Millions, $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Class of Warrant or Right [Line Items] | ||
Exercise price per share (in dollars per share) | $ 11.50 | $ 11.50 |
Warrants issued | 15.6 | 15.6 |
Private placement warrant liabilities | $ 1.2 | |
Public Warrants | ||
Class of Warrant or Right [Line Items] | ||
Warrants outstanding (in shares) | 41.7 | 41.7 |
Private Placement Warrants | ||
Class of Warrant or Right [Line Items] | ||
Warrants outstanding (in shares) | 5.2 | 5.2 |
Stockholders' Equity and Earn_5
Stockholders' Equity and Earnings per Common Share - Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Net income | $ 2,610 | $ 21,685 | $ 36,630 | $ 60,318 |
Basic weighted-average shares of common stock outstanding | 132,884,407 | 132,658,661 | 132,867,288 | 132,575,852 |
Dilutive effect of share-based compensation - unvested restricted stock units | 22,373 | 93,810 | 69,122 | 87,585 |
Diluted weighted-average shares of common stock outstanding | 132,906,780 | 132,752,471 | 132,936,411 | 132,663,437 |
Basic earnings per share | $ 0.02 | $ 0.16 | $ 0.28 | $ 0.45 |
Diluted earnings per share | $ 0.02 | $ 0.16 | $ 0.28 | $ 0.45 |
Stockholders' Equity and Earn_6
Stockholders' Equity and Earnings per Common Share - Schedule of Common Stock Equivalents Excluded from Diluted Net Income Per Share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Earnings Per Share [Abstract] | ||||
Weighted-average restricted stock units outstanding | 637,597 | 186,492 | 241,097 | 218,227 |
Unexercised public and private warrants | 15,604,279 | 15,604,304 | 15,604,279 | 15,604,304 |
Total stock equivalents excluded | 16,241,876 | 15,790,796 | 15,845,376 | 15,822,531 |
Income Taxes - Additional infor
Income Taxes - Additional information (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Income Tax Disclosure [Abstract] | |
Uncertain tax positions | $ 0 |
Amount accrued for penalties or interest | $ 0 |
Nondeductible excise tax | 4% |
Equity Incentive Plan - Additio
Equity Incentive Plan - Additional information (Details) - 2019 Stock Incentive Plan - shares | Sep. 30, 2022 | Nov. 14, 2019 |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Shares authorized | 5,000,000 | |
Shares available for grant | 3,166,727 |
Equity Incentive Plan - RSU's a
Equity Incentive Plan - RSU's and pRSUs Activity - (Details) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2022 | |
Shares | ||||
Vested | (71,036) | |||
Restricted stock units | ||||
Shares | ||||
Outstanding at the beginning | 839,226 | 845,351 | 541,296 | 541,296 |
Granted | 105,773 | 419,101 | ||
Vested | (69,528) | (109,355) | ||
Forfeited | (8,224) | (40,862) | (5,691) | |
Outstanding at the end | 761,474 | 839,226 | 845,351 | 839,226 |
Weighted Average Grant Date Fair Market Value | ||||
Granted | $ 6.49 | $ 6.90 | ||
Vested | $ 10.30 | 10.52 | 9.50 | |
Forfeited | $ 7.52 | $ 8.84 | $ 8.82 | |
Performance Based Restricted Share Unit [Member] | ||||
Shares | ||||
Outstanding at the beginning | 294,573 | 333,657 | 56,978 | 56,978 |
Granted | 276,679 | |||
Forfeited | (39,084) | |||
Outstanding at the end | 294,573 | 294,573 | 333,657 | 294,573 |
Weighted Average Grant Date Fair Market Value | ||||
Granted | $ 6.74 | |||
Forfeited | $ 7.35 |
Equity Incentive Plan - Compens
Equity Incentive Plan - Compensation Additional information (Details) - Restricted stock units - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | |
Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Unrecognized compensation cost related to unvested stock-based compensation arrangements | $ 5.7 | ||
Weighted-average recognition period | 1 year 9 months 18 days | ||
Granted | 105,773 | 419,101 | |
Fair value of grants | $ 6.49 | $ 6.90 |
Equity Incentive Plan - Schedul
Equity Incentive Plan - Schedule of assumptions used in the Monte Carlo simulation model (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Share-Based Payment Arrangement [Abstract] | ||
Performance share fair value | $ 6,740 | $ 8,200 |
Risk-free interest rate | 1.74% | 0.27% |
Expected volatility | 30.48% | 25.71% |
Expected life (in years) | 2 years 10 months 6 days | 2 years 9 months 7 days |
Expected dividend yield | 9.82% | 8.13% |
Commitments and Contingencies -
Commitments and Contingencies - Contractual Obligations (Details) $ in Thousands | Sep. 30, 2022 USD ($) | |
Other Commitments [Line Items] | ||
Less than 1 year | $ 353,931 | |
1-3 years | 179,377 | |
3-5 years | 2,125 | |
More than 5 years | 5,158 | |
Total | 540,591 | |
Construction holdbacks | ||
Other Commitments [Line Items] | ||
Less than 1 year | 353,051 | [1] |
1-3 years | 177,374 | [1] |
3-5 years | 0 | [1] |
More than 5 years | 0 | [1] |
Total | 530,425 | [1] |
Operating lease obligations | ||
Other Commitments [Line Items] | ||
Less than 1 year | 880 | [2] |
1-3 years | 2,003 | [2] |
3-5 years | 2,125 | [2] |
More than 5 years | 5,158 | [2] |
Total | $ 10,166 | [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. The total operating lease obligation includes $ 2.5 million of imputed interest. |
Commitments and Contingencies_2
Commitments and Contingencies - Contractual Obligations (Parenthetical) (Details) $ in Millions | Sep. 30, 2022 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Imputed Interest | $ 2.5 |
Commitments and Contingencies_3
Commitments and Contingencies (Details) - Mortgage notes receivables - Geographic concentration risk | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 Country State | Dec. 31, 2021 | |
Concentration Risk [Line Items] | ||
Number of states in mortgage loans were originated | State | 20 | |
Number of counties in which loan portfolio concentrated | Country | 10 | |
Major Country | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 45.50% | 46.60% |
Commitments and Contingencies_4
Commitments and Contingencies - Lease Commitments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Lease incentives | $ 11,700 | |||
Right-of-use assets obtained in exchange | $ 6,400 | $ 0 | $ 6,360 | |
Tenant improvements | $ 2,000 | $ 0 | $ 1,959 | |
Discount rate for the operation lease | 6% | |||
Imputed interest amount | $ 3,300 |
Employee Benefit Plan (Addition
Employee Benefit Plan (Additional Information) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | |
Retirement Benefits [Abstract] | ||
Broadmark annual contributions on employee contributions | 3.50% | |
Employees contributions of annual compensation | 6% | |
Total expense of compensation | $ 0.1 | $ 0.3 |
Related Party Transactions - Ad
Related Party Transactions - Additional information (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Aug. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Related Party Transaction [Line Items] | |||
Payments to acquire mortgage notes receivable | $ 0 | $ 43,498 | |
Broadmark Private Reit Llc [Member] | |||
Related Party Transaction [Line Items] | |||
Payments to acquire mortgage notes receivable | $ 43,500 |
Subsequent Events - Additional
Subsequent Events - Additional information (Details) - $ / shares | Oct. 17, 2022 | Sep. 15, 2022 |
Subsequent Event [Line Items] | ||
Common stock dividend declared | $ 0.07 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Common stock dividend declared | $ 0.07 |