Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 13, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-39210 | |
Entity Registrant Name | NexPoint Real Estate Finance, Inc. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 84-2178264 | |
Entity Address, Address Line One | 300 Crescent Court, Suite 700 | |
Entity Address, City or Town | Dallas | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75201 | |
City Area Code | 214 | |
Local Phone Number | 276-6300 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 17,231,913 | |
Amendment Flag | false | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2023 | |
Current Fiscal Year End Date | --12-31 | |
Entity Central Index Key | 0001786248 | |
Common Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | NREF | |
Security Exchange Name | NYSE | |
Series A Cumulative Redeemable Preferred Stock, 8.5% | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 8.50% Series A Cumulative Redeemable Preferred Stock, par value 0.01 per share | |
Trading Symbol | NREF-PRA | |
Security Exchange Name | NYSE |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
ASSETS | ||
Cash and cash equivalents | $ 10,977 | $ 20,048 |
Restricted cash | 1,942 | 299 |
Real estate investments, net | 58,563 | 245,222 |
Common stock investment, at fair value | 60,709 | 78,264 |
Mortgage loans, held-for-investment, net | 708,003 | 726,531 |
Accrued interest and dividends | 21,489 | 15,665 |
Accounts receivable and other assets | 1,276 | 2,197 |
TOTAL ASSETS | 6,886,353 | 8,154,136 |
Liabilities: | ||
Secured financing agreements, net | 676,900 | 687,885 |
Master repurchase agreements | 298,009 | 331,020 |
Unsecured notes, net | 205,625 | 204,960 |
Mortgages payable, net | 32,205 | 121,236 |
Accounts payable and other accrued liabilities | 3,405 | 6,231 |
Accrued interest payable | 10,124 | 7,986 |
Bonds payable held in variable interest entities, at fair value | 5,225,922 | 6,249,804 |
Total Liabilities | 6,452,190 | 7,609,122 |
Redeemable noncontrolling interests in the OP | 89,148 | 96,501 |
Stockholders' Equity: | ||
Preferred stock | 16 | 16 |
Common stock | 172 | 171 |
Additional paid-in capital | 394,720 | 392,124 |
Retained earnings (accumulated deficit) | (37,226) | 4,435 |
Preferred stock held in treasury at cost; 355,000 shares and 355,000, respectively | (8,567) | (8,567) |
Common stock held in treasury at cost; 286,987 shares and 286,987 shares, respectively | (4,195) | (4,195) |
Total Stockholders' Equity | 345,015 | 448,513 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 6,886,353 | 8,154,136 |
CMBS Structured Pass Through Certificates | ||
ASSETS | ||
Debt securities, trading | 42,471 | 46,876 |
MSCR Notes | ||
ASSETS | ||
Debt securities, trading | 10,325 | 10,313 |
Collateralized Mortgage-Backed Securities | ||
ASSETS | ||
Debt securities, trading | 37,975 | 32,328 |
Consolidated Entity, Excluding Consolidated VIE | ||
ASSETS | ||
Loans and leases receivable, net amount | 320,151 | 256,147 |
Variable Interest Entity, Primary Beneficiary | ||
ASSETS | ||
Loans and leases receivable, net amount | 5,612,472 | 6,720,246 |
Subsidiaries | ||
Stockholders' Equity: | ||
Noncontrolling interest in subsidiary | $ 95 | $ 64,529 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Common stock investment, at fair value | $ 60,709 | $ 78,264 |
Preferred stock, par value per share (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, issued (in shares) | 2,000,000 | 2,000,000 |
Preferred stock, outstanding (in shares) | 1,645,000 | |
Common stock, par value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, issued (in shares) | 17,518,900 | 17,366,930 |
Common stock, outstanding (in shares) | 17,231,913 | 17,079,943 |
Treasury stock, preferred (in shares) | 355,000 | 355,000 |
Treasury stock, common (in shares) | 286,987 | 286,987 |
Affiliated Entity | ||
Loans and leases receivable, net amount | $ 31,416 | $ 46,022 |
Common stock investment, at fair value | $ 33,759 | $ 50,380 |
Consolidated Statement of Opera
Consolidated Statement of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Net interest income | ||||
Interest income | $ 18,014 | $ 14,893 | $ 51,474 | $ 62,420 |
Interest expense | (13,197) | (10,682) | (38,503) | (28,607) |
Total net interest income | 4,817 | 4,211 | 12,971 | 33,813 |
Other income (loss) | ||||
Change in unrealized gain (loss) on common stock investments | (16,464) | (3,189) | (17,556) | 159 |
Reversal of (provision for) credit losses | (6,276) | 7 | (6,236) | (57) |
Realized Losses | 0 | (1,084) | 0 | (1,084) |
Other income | 38 | 115 | 391 | 353 |
Gain on deconsolidation of real estate owned | 0 | 0 | 1,490 | 0 |
Gain on extinguishment of debt | 0 | 0 | 0 | 17 |
Equity in income (losses) of equity method investments | (1,675) | 0 | (2,564) | 0 |
Revenues from consolidated real estate owned | 1,083 | 3,455 | 3,147 | 9,108 |
Total other income (loss) | (15,535) | (7,521) | 4,784 | 1,757 |
Operating expenses | ||||
General and administrative expenses | 2,524 | 1,677 | 7,053 | 5,308 |
Loan servicing fees | 1,049 | 1,112 | 3,155 | 3,333 |
Management fees | 820 | 822 | 2,470 | 2,330 |
Expenses from consolidated real estate owned | 1,939 | 2,442 | 4,272 | 8,419 |
Total operating expenses | 6,332 | 6,053 | 16,950 | 19,390 |
Net income (loss) | (17,050) | (9,363) | 805 | 16,180 |
Net (income) loss attributable to preferred shareholders | (874) | (874) | (2,622) | (2,630) |
Net (income) loss attributable to redeemable noncontrolling interests | 2,374 | 1,889 | (1,419) | (5,080) |
Net income (loss) attributable to common stockholders | $ (15,550) | $ (9,289) | $ (3,236) | $ 6,967 |
Weighted-average common shares outstanding - basic (in shares) | 17,232 | 14,962 | 17,188 | 14,526 |
Weighted-average common shares outstanding - diluted (in shares) | 23,086 | 22,678 | 22,950 | 22,402 |
Earnings per share outstanding - basic (in dollars per share) | $ (0.90) | $ (0.62) | $ (0.19) | $ 0.48 |
Earnings per share outstanding - diluted (in dollars per share) | (0.90) | (0.62) | (0.19) | 0.48 |
Dividends declared per common share (in dollars per share) | $ 0.6850 | $ 0.5000 | $ 2.0550 | $ 1.5000 |
CMBS Structured Pass Through Certificates | ||||
Other income (loss) | ||||
Debt securities, trading, unrealized gain (loss) | $ 710 | $ (3,904) | $ 926 | $ (11,555) |
MSCR Notes | ||||
Other income (loss) | ||||
Debt securities, trading, unrealized gain (loss) | (15) | 44 | 13 | (147) |
Collateralized Mortgage-Backed Securities | ||||
Other income (loss) | ||||
Debt securities, trading, unrealized gain (loss) | 27 | (317) | 247 | (356) |
Variable Interest Entity, Primary Beneficiary | ||||
Other income (loss) | ||||
Change in net assets related to consolidated CMBS variable interest entities | 7,037 | (2,648) | 24,926 | 5,319 |
Debt securities, trading, unrealized gain (loss) | (2,767) | (12,103) | (6,408) | (20,304) |
Redeemable Noncontrolling Interests | ||||
Operating expenses | ||||
Net (income) loss attributable to redeemable noncontrolling interests | 2,374 | 1,889 | (1,419) | (5,080) |
Subsidiaries | ||||
Operating expenses | ||||
Net (income) loss attributable to redeemable noncontrolling interests | $ 0 | $ (941) | $ 0 | $ (1,503) |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity - USD ($) $ in Thousands | Total | At-the-market Offering | Cumulative Effect, Period of Adoption, Adjustment | Series A Preferred Stock | Common Stock | Common Stock At-the-market Offering | Additional Paid-in Capital | Additional Paid-in Capital At-the-market Offering | Retained Earnings (accumulated deficit) Less Dividends | Retained Earnings (accumulated deficit) Less Dividends Cumulative Effect, Period of Adoption, Adjustment | Common Stock Held in Treasury at Cost | Preferred Stock Held in Treasury at Cost | Noncontrolling Interest Variable Interest Entity, Primary Beneficiary | Noncontrolling Interest Subsidiaries |
Preferred stock, beginning balance (in shares) at Dec. 31, 2021 | 1,645,000 | |||||||||||||
Common stock, beginning balance (in shares) at Dec. 31, 2021 | 9,163,934 | |||||||||||||
Beginning balance at Dec. 31, 2021 | $ 245,283 | $ 16 | $ 92 | $ 222,300 | $ 28,367 | $ (4,195) | $ (8,567) | $ 7,175 | $ 95 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Vesting of stock-based compensation (in shares) | 114,494 | |||||||||||||
Vesting of stock-based compensation | 1,924 | $ 1 | 1,923 | |||||||||||
Adjustment to noncontrolling interest in subsidiary on consolidation of real estate | 52,433 | 490 | 51,943 | |||||||||||
Adjustment to noncontrolling interest | (7,175) | (7,175) | ||||||||||||
Issuance of common stock (in shares) | 531,728 | |||||||||||||
Issuance of common stock | $ 11,518 | $ 5 | $ 11,513 | |||||||||||
Conversion of redeemable noncontrolling interests in the OP (in shares) | 5,169,603 | |||||||||||||
Conversion of redeemable noncontrolling interests in the OP | 113,535 | $ 52 | 113,483 | |||||||||||
Net income attributable to preferred stockholders | 2,630 | 2,630 | ||||||||||||
Net loss attributable to common stockholders | 6,967 | 6,967 | ||||||||||||
Preferred stock dividends declared | (2,630) | (2,630) | ||||||||||||
Common stock dividends declared | (23,060) | (23,060) | ||||||||||||
Preferred stock, ending balance (in shares) at Sep. 30, 2022 | 1,645,000 | |||||||||||||
Common stock, ending balance (in shares) at Sep. 30, 2022 | 14,979,759 | |||||||||||||
Ending balance at Sep. 30, 2022 | 401,425 | $ 16 | $ 150 | 349,709 | 12,274 | (4,195) | (8,567) | 0 | 52,038 | |||||
Preferred stock, beginning balance (in shares) at Dec. 31, 2021 | 1,645,000 | |||||||||||||
Common stock, beginning balance (in shares) at Dec. 31, 2021 | 9,163,934 | |||||||||||||
Beginning balance at Dec. 31, 2021 | $ 245,283 | $ 16 | $ 92 | 222,300 | 28,367 | (4,195) | (8,567) | 7,175 | 95 | |||||
Preferred stock, ending balance (in shares) at Dec. 31, 2022 | 1,645,000 | 1,645,000 | ||||||||||||
Common stock, ending balance (in shares) at Dec. 31, 2022 | 17,079,943 | 17,079,943 | ||||||||||||
Ending balance at Dec. 31, 2022 | $ 448,513 | $ (1,624) | $ 16 | $ 171 | 392,124 | 4,435 | $ (1,624) | (4,195) | (8,567) | 64,529 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Accounting Standards Update [Extensible Enumeration] | Accounting Standards Update 2016-13 [Member] | |||||||||||||
Preferred stock, beginning balance (in shares) at Jun. 30, 2022 | 1,645,000 | |||||||||||||
Common stock, beginning balance (in shares) at Jun. 30, 2022 | 14,949,631 | |||||||||||||
Beginning balance at Jun. 30, 2022 | $ 398,951 | $ 16 | $ 150 | 348,266 | 29,339 | (4,195) | (8,567) | 33,942 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Stock-based compensation expense | 870 | 870 | ||||||||||||
Adjustment to noncontrolling interest in subsidiary on consolidation of real estate | 18,096 | 18,096 | ||||||||||||
Issuance of common stock (in shares) | 30,128 | |||||||||||||
Issuance of common stock | $ 573 | $ 573 | ||||||||||||
Net income attributable to preferred stockholders | 874 | 874 | ||||||||||||
Net loss attributable to common stockholders | (9,289) | (9,289) | ||||||||||||
Preferred stock dividends declared | (874) | (874) | ||||||||||||
Common stock dividends declared | (7,776) | (7,776) | ||||||||||||
Preferred stock, ending balance (in shares) at Sep. 30, 2022 | 1,645,000 | |||||||||||||
Common stock, ending balance (in shares) at Sep. 30, 2022 | 14,979,759 | |||||||||||||
Ending balance at Sep. 30, 2022 | $ 401,425 | $ 16 | $ 150 | 349,709 | 12,274 | (4,195) | (8,567) | $ 0 | 52,038 | |||||
Preferred stock, beginning balance (in shares) at Dec. 31, 2022 | 1,645,000 | 1,645,000 | ||||||||||||
Common stock, beginning balance (in shares) at Dec. 31, 2022 | 17,079,943 | 17,079,943 | ||||||||||||
Beginning balance at Dec. 31, 2022 | $ 448,513 | $ (1,624) | $ 16 | $ 171 | 392,124 | 4,435 | $ (1,624) | (4,195) | (8,567) | 64,529 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Vesting of stock-based compensation (in shares) | 151,970 | |||||||||||||
Vesting of stock-based compensation | 2,597 | $ 1 | 2,596 | |||||||||||
Adjustment to noncontrolling interest in subsidiary on consolidation of real estate | $ (64,434) | (64,434) | ||||||||||||
Conversion of redeemable noncontrolling interests in the OP (in shares) | 8,748,735 | |||||||||||||
Net income attributable to preferred stockholders | $ 2,622 | 2,622 | ||||||||||||
Net loss attributable to common stockholders | (3,236) | (3,236) | ||||||||||||
Preferred stock dividends declared | (2,622) | (2,622) | ||||||||||||
Common stock dividends declared | $ (36,801) | (36,801) | ||||||||||||
Preferred stock, ending balance (in shares) at Sep. 30, 2023 | 1,645,000 | |||||||||||||
Common stock, ending balance (in shares) at Sep. 30, 2023 | 17,231,913 | 17,231,913 | ||||||||||||
Ending balance at Sep. 30, 2023 | $ 345,015 | $ 16 | $ 172 | 394,720 | (37,226) | (4,195) | (8,567) | 95 | ||||||
Preferred stock, beginning balance (in shares) at Jun. 30, 2023 | 1,645,000 | |||||||||||||
Common stock, beginning balance (in shares) at Jun. 30, 2023 | 17,231,913 | |||||||||||||
Beginning balance at Jun. 30, 2023 | 371,643 | $ 16 | $ 172 | 393,435 | (9,313) | (4,195) | (8,567) | 95 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Stock-based compensation expense | 1,285 | 1,285 | ||||||||||||
Net income attributable to preferred stockholders | 874 | 874 | ||||||||||||
Net loss attributable to common stockholders | (15,550) | (15,550) | ||||||||||||
Preferred stock dividends declared | (874) | (874) | ||||||||||||
Common stock dividends declared | $ (12,363) | (12,363) | ||||||||||||
Preferred stock, ending balance (in shares) at Sep. 30, 2023 | 1,645,000 | |||||||||||||
Common stock, ending balance (in shares) at Sep. 30, 2023 | 17,231,913 | 17,231,913 | ||||||||||||
Ending balance at Sep. 30, 2023 | $ 345,015 | $ 16 | $ 172 | $ 394,720 | $ (37,226) | $ (4,195) | $ (8,567) | $ 95 |
Consolidated Statement of Sto_2
Consolidated Statement of Stockholders' Equity (Parentheticals) - $ / shares | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | |
Statement of Stockholders' Equity [Abstract] | |||
Preferred stock dividends declared (in usd per share) | $ 0.5313 | $ 0.5313 | $ 1.0626 |
Common stock dividends declared (in usd per share) | $ 0.6850 | $ 0.5000 | $ 2.0550 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities | ||
Net income | $ 805 | $ 16,180 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Amortization of premiums | 10,867 | 17,179 |
Accretion of discounts | (10,110) | (9,791) |
Depreciation and amortization of real estate investment | 1,430 | 2,435 |
Amortization of deferred financing costs | (4) | 36 |
Provision for (reversal of) credit losses, net | 6,236 | 57 |
Net change in unrealized (gain) loss on investments held at fair value | 22,780 | 32,202 |
Realized Losses | 0 | 1,084 |
Equity in (income) losses of unconsolidated equity method ventures | 2,564 | 0 |
Realized gain on deconsolidation of real estate owned | (1,490) | 0 |
Stock-based compensation expense | 3,394 | 2,414 |
Payment in kind income | (4,076) | (528) |
Gain on extinguishment of debt | 0 | (17) |
Changes in operating assets and liabilities: | ||
Accrued interest and dividends receivable | (3,775) | (7,605) |
Accounts receivable and other assets | 122 | (317) |
Accrued interest payable | 3,225 | 4,264 |
Accounts payable, accrued expenses and other liabilities | (3,540) | 1,202 |
Net cash provided by operating activities | 28,428 | 58,795 |
Cash flows from investing activities | ||
Proceeds from payments received on bridge loan | 0 | 13,500 |
Originations of bridge loan | 0 | (13,434) |
Originations of loans, held-for-investment, net | (76,355) | (91,587) |
Purchases of equity method investments | (2,564) | 0 |
Proceeds held in escrow for unsettled purchase | 0 | (3,990) |
Adjustment on deconsolidation of real estate | (4,992) | 0 |
Acquisitions of real estate investments | 0 | (184,552) |
Additions to real estate investments | (504) | (106) |
Net cash provided by investing activities | 639,485 | 713,195 |
Cash flows from financing activities | ||
Principal repayments on borrowings under secured financing agreements | (10,985) | (97,724) |
Borrowings under master repurchase agreements | 44,892 | 128,988 |
Principal repayments on borrowings under master repurchase agreements | (77,903) | (64,275) |
Proceeds received on borrowings under secured financing agreements | 0 | 89,634 |
Proceeds received from unsecured notes offering | 0 | 34,174 |
Repurchase of unsecured notes | 0 | (4,829) |
Borrowings under bridge facility | 0 | 55,000 |
Bridge facility payments | 0 | (55,000) |
Proceeds from issuance of common stock | 0 | 113,535 |
Principal repayments on mortgages payable | (16) | 0 |
Payments for taxes related to net share settlement of stock-based compensation | (797) | (490) |
Dividends paid to common stockholders | (35,379) | (22,161) |
Dividends paid to preferred stockholders | (2,622) | (2,630) |
Payments to Noncontrolling Interests | (9,069) | (10,812) |
Contributions from noncontrolling interests | 0 | 56,704 |
Net cash used in financing activities | (675,341) | (774,041) |
Net decrease in cash, cash equivalents and restricted cash | (7,428) | (2,051) |
Cash, cash equivalents and restricted cash, beginning of period | 20,347 | 33,232 |
Cash, cash equivalents and restricted cash, end of period | 12,919 | 31,181 |
Supplemental Disclosure of Cash Flow Information | ||
Interest paid | 35,700 | 23,723 |
Supplemental Disclosure of Noncash Investing and Financing Activities | ||
Adjustment to loans, held for investment, net on deconsolidation of real estate | 36,022 | 0 |
Adjustment to real estate investments, net on deconsolidation of real estate | (185,732) | 0 |
Adjustment to accrued interest and dividends on deconsolidation of real estate | 2,049 | 0 |
Adjustment to accounts receivable and other assets on deconsolidation of real estate | (799) | 0 |
Adjustment to mortgages payable, net on deconsolidation of real estate | 89,012 | 0 |
Adjustment to accrued interest payable on deconsolidation of real estate | 1,087 | 0 |
Adjustment to noncontrolling interest in subsidiary on deconsolidation of real estate | 64,434 | 0 |
Adjustment to retained earnings on deconsolidation of real estate | 1,490 | 0 |
Adjustment to redeemable noncontrolling interest in the OP on deconsolidation of real estate | (297) | 0 |
Increase in dividends payable upon vesting of restricted stock units | 863 | 899 |
Consolidation of mortgage loans and bonds payable held in variable interest entities | 0 | 1,244,826 |
Conversion of convertible notes to common stock | 0 | 25,000 |
Due to brokers for repurchase of unsecured notes, not yet settled | 0 | 7,980 |
Public Offering | ||
Cash flows from financing activities | ||
Proceeds from issuance of common stock | 0 | 11,518 |
At-the-market Offering | ||
Cash flows from financing activities | ||
Proceeds from issuance of common stock | 0 | (113,535) |
Collateralized Mortgage-Backed Securities | ||
Cash flows from investing activities | ||
Proceeds from sale of loans held-for-investment | 546 | 0 |
CMBS Structured Pass Through Certificates | ||
Cash flows from investing activities | ||
Proceeds from sale of loans held-for-investment | 44,788 | 6,962 |
Variable Interest Entity, Primary Beneficiary | ||
Cash flows from investing activities | ||
Proceeds from sale of loans held-for-investment | 626,053 | 964,225 |
Purchases of debt securities, at fair value | 0 | (115,276) |
Cash flows from financing activities | ||
Distributions to bondholders of variable interest entities | (583,462) | (892,138) |
Subsidiaries | ||
Supplemental Disclosure of Noncash Investing and Financing Activities | ||
Adjustment to accounts payable and accrued liabilities on deconsolidation of real estate | 705 | 0 |
Consolidated Entity, Excluding Consolidated VIE | ||
Cash flows from investing activities | ||
Proceeds from sale of loans held-for-investment | 58,246 | 178,306 |
Consolidated Entity, Excluding Consolidated VIE | Collateralized Mortgage-Backed Securities | ||
Cash flows from investing activities | ||
Purchases of debt securities, at fair value | (5,733) | (25,946) |
Consolidated Entity, Excluding Consolidated VIE | CMBS Structured Pass Through Certificates | ||
Cash flows from investing activities | ||
Purchases of debt securities, at fair value | 0 | (4,542) |
Consolidated Entity, Excluding Consolidated VIE | MSCR Notes | ||
Cash flows from investing activities | ||
Purchases of debt securities, at fair value | $ 0 | $ (10,365) |
Organization and Description of
Organization and Description of Business | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Organization and Description of Business NexPoint Real Estate Finance, Inc. (the “Company”, “we”, “our”) is a commercial mortgage real estate investment trust (a "REIT") incorporated in Maryland on June 7, 2019. The Company has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”), commencing with its taxable year ended December 31, 2020 and the Company believes the current organization and method of operation will enable it to maintain its status as a REIT. The Company is focused on originating, structuring and investing in first-lien mortgage loans, mezzanine loans, preferred equity, convertible notes, multifamily properties and common equity investments, as well as multifamily commercial mortgage-backed securities securitizations (“CMBS securitizations”), multifamily structured credit risk notes (“MSCR Notes”) and mortgage-backed securities, or our target assets. Substantially all of the Company’s business is conducted through NexPoint Real Estate Finance Operating Partnership, L.P. (the “OP”), the Company’s operating partnership. As of September 30, 2023, the Company holds approximately 83.41% of the common limited partnership units in the OP (“OP Units”) which represents 100.00% of the Class A OP Units, and the OP owned all of the common limited partnership units (“SubOP Units”) of its subsidiary partnerships (collectively, the “Subsidiary OPs”) (see Note 13). The OP also directly owns all of the membership interests of a limited liability company (the “Mezz LLC”) through which it owns a portfolio of mezzanine loans, as further discussed below. NexPoint Real Estate Finance OP GP, LLC (the “OP GP”) is the sole general partner of the OP. The Company commenced operations on February 11, 2020 upon the closing of its initial public offering of shares of its common stock (the “IPO”). Prior to the closing of the IPO, the Company engaged in a series of transactions through which it acquired an initial portfolio consisting of senior pooled mortgage loans backed by single family rental (“SFR”) properties (the “SFR Loans”), the junior most bonds of multifamily CMBS securitizations (the “CMBS B-Pieces”), mezzanine loan and preferred equity investments in real estate companies and properties in other structured real estate investments within the multifamily, SFR and self-storage asset classes (the “Initial Portfolio”). The Initial Portfolio was acquired from affiliates (the “Contribution Group”) of NexPoint Advisors, L.P. (our “Sponsor”), pursuant to a contribution agreement with the Contribution Group through which the Contribution Group contributed their interest in the Initial Portfolio to special purpose entities (“SPEs”) owned by the Subsidiary OPs, in exchange for SubOP Units (the “Formation Transaction”). Subsequent to the Formation Transaction, the Company has continued to invest in asset types and real estate sectors within the Initial Portfolio and expanded to include additional asset types and real estate sectors. The Company is externally managed by NexPoint Real Estate Advisors VII, L.P. (the “Manager”) through a management agreement dated February 6, 2020 and amended as of July 17, 2020 and November 3, 2021, that expires on February 6, 2024 and is automatically renewed for successive one-year terms thereafter unless earlier terminated (as amended, the “Management Agreement”), by and between the Company and the Manager. The Manager conducts substantially all of the Company’s operations and provides asset management services for its real estate investments. The Company expects it will only have accounting employees while the Management Agreement is in effect. All of the Company’s investment decisions are made by the Manager, subject to general oversight by the Manager’s investment committee and the Company’s board of directors (the “Board”). The Manager is wholly owned by our Sponsor. The Company’s primary investment objective is to generate attractive, risk-adjusted returns for stockholders over the long term. The Company intends to achieve this objective primarily by originating, structuring and investing in our target assets. The Company concentrates on investments in real estate sectors where our senior management team has operating expertise, including in the multifamily, SFR, self-storage, life science, hospitality and office sectors predominantly in the top 50 metropolitan statistical areas ("MSAs"). In addition, the Company targets lending or investing in properties that are stabilized or have a “light transitional” business plan, meaning a property that requires limited deferred funding to support leasing or ramp-up of operations and for which most capital expenditures are for value-add improvements. Through active portfolio management the Company seeks to take advantage of market opportunities to achieve a superior portfolio risk-mix that delivers attractive total returns. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting PoliciesReaders of this Quarterly Report on Form 10-Q (the "Quarterly Report") should refer to the audited financial statements and notes to consolidated financial statements of the Company for the year ended December 31, 2022, which are included in our Annual Report on Form 10-K ("Annual Report"), filed with the United States Securities and Exchange Commission (the "SEC") and also available on our website (nref.nexpoint.com), since we have omitted from this Quarterly Report certain footnote disclosures which would substantially duplicate those contained in such audited financial statements. You should also refer to Note 2, Summary of Significant Accounting Policies, in the notes to consolidated financial statements in our Annual Report for further discussion of our significant accounting policies and estimates. Information contained on, or accessible through, our website is not incorporated by reference into and does not constitute a part of this Quarterly Report or any other report or documents we file or furnish with the SEC. General In accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X as issued by the SEC, these Condensed Consolidated Financial Statements do not include all of the information and disclosures required by U.S. generally accepted accounting principles ("GAAP") for complete financial statements. Readers of this Quarterly Report should refer to the Company's audited Consolidated Financial Statements, which are included in the Company’s Annual Report. In the opinion of management, all normal recurring adjustments necessary for a fair presentation of the financial position, results of operations, comprehensive income, cash flows, and equity for the interim periods have been included. The results for the three and nine months ended September 30, 2023, are not necessarily indicative of the results that may be expected for the year ending December 31, 2023, and future fiscal years. Basis of Accounting The accompanying unaudited consolidated financial statements are presented in accordance with GAAP. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the unaudited consolidated financial statements and the amounts of revenues and expenses during the reporting periods. Actual amounts realized or paid could differ from those estimates. All significant intercompany accounts and transactions have been eliminated in consolidation. There have been no significant changes to the Company’s significant accounting policies during the nine months ended September 30, 2023. The accompanying unaudited consolidated financial statements have been prepared according to the rules and regulations of the SEC. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted according to such rules and regulations, although management believes that the disclosures are adequate to make the information presented not misleading. Use of Estimates and Assumptions The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. It is at least reasonably possible that these estimates could change in the near term. Estimates are inherently subjective in nature and actual results could differ from our estimates and the differences could be material. Principles of Consolidation The Company accounts for subsidiary partnerships in which it holds an ownership interest in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidation. The Company first evaluates whether each entity is a variable interest entity (“VIE”). Under the VIE model, the Company consolidates an entity when it has power to direct the activities of the VIE and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. Under the voting model, the Company consolidates an entity when it controls the entity through ownership of a majority voting interest. As of September 30, 2023, the Company has determined it must consolidate the OP and the Subsidiary OPs under the VIE model as it was determined the Company both controls the direct activities of the OP and Subsidiary OPs and possesses the right to receive benefits that could potentially be significant to the OP and Subsidiary OPs. The consolidated financial statements include the accounts of the Company and its subsidiaries, including the OP and its subsidiaries. The Company’s sole significant asset is its investment in the OP, and consequently, substantially all of the Company’s assets and liabilities represent those assets and liabilities of the OP. Variable Interest Entities The Company evaluates all of its interests in VIEs for consolidation. When the Company’s interests are determined to be variable interests, the Company assesses whether it is deemed to be the primary beneficiary of the VIE. The primary beneficiary of a VIE is required to consolidate the VIE. FASB ASC Topic 810, Consolidation , defines the primary beneficiary as the party that has both (i) the power to direct the activities of the VIE that most significantly impact its economic performance, and (ii) the obligation to absorb losses and the right to receive benefits from the VIE which could be potentially significant. The Company considers its variable interests, as well as any variable interests of its related parties in making this determination. Where both of these factors are present, the Company is deemed to be the primary beneficiary, and it consolidates the VIE. Where either one of these factors is not present, the Company is not the primary beneficiary, and it does not consolidate the VIE (see Note 6). CMBS Trusts The Company consolidates the trusts that issue beneficial ownership interests in mortgage loans secured by commercial real estate (commonly known as CMBS) when the Company holds a variable interest in, and management considers the Company to be the primary beneficiary of, those trusts. Management believes the performance of the assets that underlie CMBS issuances most significantly impact the economic performance of the trust, and the primary beneficiary is generally the entity that conducts activities that most significantly impact the performance of the underlying assets. In particular, the most subordinate tranches of CMBS expose the holder to greater variability of economic performance when compared to more senior tranches since the subordinate tranches absorb a disproportionately higher amount of the credit risk related to the underlying assets. Generally, a trust designates the most junior subordinate tranche outstanding as the controlling class, which entitles the holder of the controlling class to unilaterally appoint, remove and replace the special servicer for the trust. For the CMBS that the Company consolidates, the Company owns 100% of the most subordinate tranche of the securities. The subordinate tranche includes the controlling class and has the ability to remove and replace the special servicer. On the Consolidated Balance Sheets as of September 30, 2023, the Company consolidated each of the Freddie Mac K-Series securitization entities (the “CMBS Entities”) that were determined to be VIEs and for which the Company is the primary beneficiary. The CMBS Entities are independent of the Company, and the assets and liabilities of the CMBS Entities are not owned by and are not legal obligations of ours. Our exposure to the CMBS Entities is through the subordinated tranches. For financial reporting purposes, the underlying mortgage loans held by the trusts are recorded as a separate line item on the balance sheet under “Mortgage loans held in variable interest entities, at fair value.” The liabilities of the trusts consist solely of obligations to the CMBS holders of the consolidated trusts, excluding the CMBS B-Piece investments held by the Company. The liabilities are presented as “Bonds payable held in variable interest entities, at fair value” on the Consolidated Balance Sheets. The CMBS B-Pieces held by the Company, and the interest earned thereon are eliminated in consolidation. Management has elected the measurement alternative in ASC 810 to report the fair value of the assets and liabilities of the consolidated CMBS Entities in order to provide users of the financial statements with better information regarding the effects of credit risk and other market factors on the CMBS B-Pieces owned by the Company. Management has elected to show interest income and interest expense related to the CMBS Entities in aggregate with the change in fair value as “Change in net assets related to consolidated CMBS variable interest entities.” The residual difference between the fair value of the CMBS Entities’ assets and liabilities represents the Company’s investments in the CMBS B-Pieces at fair value. Mortgage and Other Loans Held-For-Investment, net Loans that are held-for-investment are carried at their aggregate outstanding face amount, net of applicable (i) unamortized origination or acquisition premium and discounts, (ii) unamortized deferred fees and other direct loan origination costs, (iii) valuation allowance for credit losses and (iv) write-downs of impaired loans. The effective interest method is used to amortize origination or acquisition premiums and discounts and deferred fees or other direct loan origination costs. In general, an increase in prepayment rates accelerates the amortization of purchase premiums, thereby reducing the interest income earned on the assets. Conversely, discounts on such assets are accreted into interest income. In general, an increase in prepayment rates accelerates the accretion of purchase discounts, thereby increasing the interest income earned on the assets. Allowance for Credit Losses In periods ending on or prior to December 31, 2022, the Company, with the assistance of an independent valuations firm, performed a quarterly evaluation of loans classified as held for investment for impairment on a loan-by-loan basis in accordance with ASC 310-10-35, Receivables, Subsequent Measurement (“ASC 310-10-35”). If the Company determined that it was probable that it would be unable to collect all amounts owed according to the contractual terms of a loan, impairment of that loan was indicated. If a loan was considered to be impaired, the Company would establish an allowance for loan losses, through a valuation provision in earnings that reduced carrying value of the loan to the present value of expected future cash flows discounted at the loan’s contractual effective rate or the fair value of the collateral, if repayment was expected solely from the collateral. For non-impaired loans with no specific allowance the Company determined an allowance for loan losses in accordance with ASC 450-20, Loss Contingencies (“ASC 450-20”), which represented management’s best estimate of incurred losses inherent in the portfolio at the balance sheet date, excluding impaired loans and loans carried at fair value. Management considered quantitative factors likely to cause estimated credit losses, including default rate and loss severity rates. The Company also evaluated qualitative factors such as macroeconomic conditions, evaluations of underlying collateral, trends in delinquencies and non-performing assets. Increases to (or reversals of) the allowance for loan loss for the fiscal year ended December 31, 2022 are included in “Loan loss (provision)” on the accompanying Consolidated Statements of Operations. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses on Financial Instruments (“ASU 2016-13”), which establishes credit losses on certain types of financial instruments. The new approach changes the impairment model for most financial assets and requires the use of a current expected credit loss ("CECL") model for financial instruments measured at amortized cost and certain other instruments. This model applies to trade and other receivables, loans, debt securities, net investments in leases and off-balance sheet credit exposures (such as loan commitments, standby letters of credit and financial guarantees not accounted for as insurance) and requires entities to estimate the lifetime expected credit loss on such instruments and record an allowance that represents the portion of the amortized cost basis that the entity does not expect to collect. We adopted the guidance as of January 1, 2023. The implementation process included the utilization of loan loss forecasting models, updates to our loan credit loss policy documentation, changes to internal reporting processes and related internal controls, and overall operational readiness for our adoption of the new standard. We have implemented loan loss forecasting models for estimating expected life-time credit losses, at the individual loan level, for our loan portfolio. The CECL forecasting methods used by the Company include (i) a probability of default and loss given default method using underlying third-party CMBS/Commercial Real Estate loan database with historical loan losses from 1998 to 2022, and (ii) probability weighted expected cash flow method, depending on the type of loan and the availability of relevant historical market loan loss data. We might use other acceptable alternative approaches in the future depending on, among other factors, the type of loan, underlying collateral, and availability of relevant historical market loan loss data. Significant inputs to our forecasting methods include (i) key loan-specific inputs such as loan-to-value, vintage year, loan-term, underlying property type, occupancy, geographic location, performance against the underwritten business plan, and our internal loan risk rating, and (ii) a macro-economic environment forecast. The reasonable and supportable forecast period is determined based on the Company’s assessment of the most likely scenario of assumptions and plausible outcomes for the U.S. economy, current portfolio composition, level of historical loss forecast estimates, material changes in growth and credit strategy and other factors that may affect its loss experience. The Company regularly evaluates the reasonable and supportable forecast period to determine if a change is needed. The Company has determined that economic forecasts used in our CECL model can be reasonable and supportable over four quarters as it provides enough time to account for the expected changes of the economic conditions and the performance of the underlying assets. Beyond the Company’s reasonable and supportable forecast period, the Company immediately reverts to historical loss information. The Company considers an immediate reversion period appropriate in the CECL model because it provides a suitable balance between the stability of historical data and the flexibility to account for changing market conditions. The allowance for loan and lease losses reserve as of December 31, 2022, was $0.7 million and the CECL reserve as of January 1, 2023, was $2.3 million. As such, the cumulative effect of adoption of ASU 2016-13 was a $1.6 million reduction in retained earnings. The provision for credit losses of $6.28 million for the three and nine months ended September 30, 2023 is included in other income on the accompanying Consolidated Statements of Operations, resulting in an ending allowance for credit loss of $8.54 million as of September 30, 2023. Significant judgment is required in determining impairment and in estimating the resulting loss allowance, and actual losses, if any, could materially differ from those estimates. The Company performs a quarterly review of the portfolio. In conjunction with this review, the Company assesses the risk factors of each loan, including, without limitation, loan-to-value ratio, debt yield, property type, geographic and local market dynamics, physical condition, collateral, cash-flow volatility, leasing and tenant profile, loan structure, exit plan and project sponsorship. Based on a 5-point scale, our loans are rated “1” through “5,” from least risk to greatest risk, respectively, which ratings are defined as follows: 1 – Outperform – Materially exceeds performance metrics (for example, technical milestones, occupancy, rents and net operating income) included in original or current credit underwriting and business plan; 2 – Exceeds Expectations – Collateral performance exceeds substantially all performance metrics included in original or current credit underwriting and business plan; 3 – Satisfactory – Collateral performance meets, or is on track to meet, underwriting; business plan is met or can reasonably be achieved; 4 – Underperformance – Collateral performance falls short of underwriting, material differences exist from business plan, or both; technical milestones have been missed; defaults may exist or may soon occur absent material improvement; and 5 – Risk of Impairment/Default – Collateral performance is significantly worse than underwriting; major variance from business plan; loan covenants or technical milestones have been breached; timely exit from loan via sale or refinancing is questionable. The Company regularly evaluates the extent and impact of any credit deterioration associated with the performance and/or value of the underlying collateral, as well as the financial and operating capability of the borrower. Specifically, the collateral’s operating results and any cash reserves are analyzed and used to assess (i) whether cash from operations is sufficient to cover the debt service requirements currently and into the future, (ii) the ability of the borrower to refinance the loan and/or (iii) the collateral’s liquidation value. The Company also evaluates the financial condition of any loan guarantors, as well as any changes in the borrower’s competency in managing and operating the collateral. In addition, the Company considers the overall economic environment, real estate or industry sector and geographic sub-market in which the borrower operates. Such impairment analyses are completed and reviewed by asset management and finance personnel who utilize various data sources, including (i) periodic financial data such as property operating statements, occupancy, tenant profile, rental rates, operating expenses, the borrower’s exit plan and capitalization and discount rates, (ii) site inspections and (iii) current credit spreads and discussions with market participants. The Company considers loans to be past-due when a monthly payment is due and unpaid for 60 days or more. Loans will be placed on nonaccrual status and considered non-performing when full payment of principal and interest is in doubt, which generally occurs when they become 120 days or more past-due unless the loan is both well secured and in the process of collection. Accrual of interest on individual loans is discontinued when management believes that, after considering economic and business conditions and collection efforts, the borrower’s financial condition is such that collection of interest is doubtful. Our policy is to cease accruing interest when a loan’s delinquency exceeds 120 days. All interest accrued but not collected for loans that are placed on nonaccrual status or subsequently charged-off are reversed against interest income. Income is subsequently recognized on the cash basis until, in management’s judgment, the borrower’s ability to make periodic principal and interest payments returns and future payments are reasonably assured, in which case the loan is returned to accrual status. For individual loans, a troubled debt restructuring is a formal restructuring of a loan where, for economic or legal reasons related to the borrower’s financial difficulties, a concession that would not otherwise be considered is granted to the borrower. The concession may be granted in various forms, including providing a below-market interest rate, a reduction in the loan balance or accrued interest, an extension of the maturity date or a combination of these. An individual loan that has had a troubled debt restructuring is considered to be impaired and is subject to the relevant accounting for impaired loans. As of and for the nine months ended September 30, 2023, the Company had no loan modifications, and, thus no troubled debt restructurings. A loan is written off when it is no longer realizable and/or it is legally discharged. The Company will evaluate acquired loans and debt securities for which it is probable at acquisition that all contractually required payments will not be collected in accordance with ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality . During the nine months ended September 30, 2023, there were no loans acquired with deteriorated credit quality. The Company also recognizes a liability for expected credit losses for off-balance sheet exposures if the Company has a present contractual obligation to extend the credit and the obligation is not unconditionally cancelable by the entity. Recent Accounting Pronouncements Section 107 of the Jumpstart Our Business Startups Act (“JOBS Act”) provides that an emerging growth company can take advantage of the extended transition period provided in Section 13(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), for complying with new or revised accounting standards applicable to public companies. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company has elected to take advantage of this extended transition period. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates for such new or revised standards. The Company may elect to comply with public company effective dates at any time, and such election would be irrevocable pursuant to Section 107(b) of the JOBS Act. In December 2022, the FASB issued ASU 2022-06, Deferral of the Sunset Date of Topic 848 ("ASU 2022-06") which was issued to defer the sunset date of Reference Rate Reform (Topic 848) : Facilitation of the Effects of Reference Rate Reform to December 31, 2024. ASU 2022-06 is effective immediately for all companies. ASU 2022-06 had no impact on the Company’s consolidated financial statements for the nine months ended September 30, 2023. |
Loans Held for Investment, Net
Loans Held for Investment, Net | 9 Months Ended |
Sep. 30, 2023 | |
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |
Loans Held for Investment, Net | Loans Held for Investment, Net The Company’s investments in mortgage loans, mezzanine loans, preferred equity and convertible notes are accounted for as loans held for investment. The mortgage loans are presented as “Mortgage loans, held-for-investment, net” and the mezzanine loans, preferred equity and convertible notes are presented as “Loans, held-for-investment, net” on the Consolidated Balance Sheets. The following tables summarize our loans held-for-investment as of September 30, 2023 and December 31, 2022, respectively (dollars in thousands): Loan Type Outstanding Face Amount Carrying Value (1) Loan Count Weighted Average Fixed Rate (2) Coupon (3) Life (years) (4) September 30, 2023 Mortgage loans, held-for-investment $ 675,844 $ 708,003 13 100.00 % 4.79 % 4.64 Mezzanine loans, held-for-investment 133,207 135,079 22 78.31 % 9.60 % 5.55 Preferred equity, held-for-investment 187,173 180,072 16 46.22 % 12.18 % 2.58 Promissory note, held-for-investment 5,000 5,000 1 11.00 % 11.00 % 1.00 $ 1,001,224 $ 1,028,154 52 86.62 % 6.85 % 4.36 Loan Type Outstanding Face Amount Carrying Value (1) Loan Count Weighted Average Fixed Rate (2) Coupon (3) Life (years) (4) December 31, 2022 Mortgage loans, held-for-investment $ 688,046 $ 726,531 15 100.00 % 4.81 % 5.36 Mezzanine loans, held-for-investment 163,021 165,182 23 63.99 % 10.42 % 5.39 Preferred equity, held-for-investment 91,382 90,965 10 67.69 % 11.51 % 2.76 $ 942,449 $ 982,678 48 90.64 % 6.43 % 5.11 (1) Carrying value includes the outstanding face amount plus unamortized purchase premiums/discounts and any allowance for loan losses. (2) The weighted-average of loans paying a fixed rate is weighted on current principal balance. (3) The weighted-average coupon is weighted on outstanding face amount. (4) The weighted-average life is weighted on outstanding face amount and assumes no prepayments. The maturity date for preferred equity investments represents the maturity date of the senior mortgage, as the preferred equity investments require repayment upon the sale or refinancing of the asset. For the nine months ended September 30, 2023 and 2022, the loan and preferred equity portfolio activity was as follows (in thousands): For the Nine Months Ended September 30, 2023 2022 Balance at January 1, $ 982,678 $ 1,088,881 Recognition of retained preferred equity investment upon deconsolidation of real estate (Note 14) 36,022 — Cumulative effect of adoption of ASU 2016-13 (See Note 2) (1,624) — Conversion of convertible bonds to common stock — (25,000) Originations 76,355 156,934 Proceeds from principal repayments (58,246) (196,825) PIK distribution reinvested in Preferred Units 4,076 528 Amortization of loan premium, net (1) (4,871) (11,591) (Provision for) reversal of credit losses, net (6,236) (57) Balance at September 30, $ 1,028,154 $ 1,012,870 (1) Includes net amortization of loan purchase premiums. As of September 30, 2023, and December 31, 2022, there were $36.0 million and $40.9 million of unamortized premiums on loans, held-for-investment, net, respectively, on the Consolidated Balance Sheets. As discussed in Note 2, the Company evaluates loans classified as held-for-investment on a loan-by-loan basis every quarter. In conjunction with the review of the portfolio, the Company assesses the risk factors of each loan and assign a risk rating based on a variety of factors. Loans are rated “1” through “5,” from least risk to greatest risk, respectively. See Note 2 for a more detailed discussion of the risk factors and ratings. The following tables allocate the principal balance and net book value of the loan portfolio based on our internal risk ratings (dollars in thousands): Risk Rating September 30, 2023 Number of Carrying % of Loan 1 — $ — — 2 — — — 3 48 999,080 97.17 % 4 3 25,199 2.45 % 5 1 3,875 0.38 % 52 $ 1,028,154 100.00 % Risk Rating December 31, 2022 Number of Carrying % of Loan 1 — $ — — 2 — — — 3 48 982,678 100.00 % 4 — — — 5 — — — 48 $ 982,678 100.00 % As of September 30, 2023, 52 loans held-for-investment in our portfolio were rated “3,” or “Satisfactory”, 3 loans held-for-investment in our portfolio were rated "4," or "Underperformance", and 1 loan held-for-investment in our portfolio was rated "5," or "Risk of Impairment/Default", based on the factors assessed by the Company and discussed in Note 2. Our loan portfolio had a weighted-average risk rating of 3.04 as of September 30, 2023, and 3.00 as of December 31, 2022. During the three months ended September 30, 2023, the Company identified a preferred equity investment secured by the underlying property in Atlanta, Georgia that was assigned a risk rating of “5” due to certain conditions that negatively impacted the preferred investment’s cash flow. The Company replaced the existing manager and took over the property’s operations. See Note 16 for additional information regarding Alexander at the District. As the loan was considered a collateral-dependent financial asset under GAAP, a specific allowance for credit losses of $5.8 million was recorded as of September 30, 2023 based on the Company’s estimation of the fair value of the underlying collateral property and the loan’s amortized cost basis. The following tables present the carrying value of the loan portfolio by the Company's internal risk rating and year of origination as of September 30, 2023 and December 31, 2022 (dollars in thousands): September 30, 2023 Carrying Value by Year of Origination (1) Risk Rating Number of Outstanding Face Amount 2023 2022 2021 2020 2019 Prior Total Carrying Value 1 — $ — $ — $ — $ — $ — $ — $ — $ — 2 — — — — — — — — — 3 48 966,711 70,402 70,733 44,133 19,159 774,691 19,962 999,080 4 3 24,763 — 8,438 — — 16,761 — 25,199 5 1 9,750 — — 3,875 — — — 3,875 52 $ 1,001,224 $ 70,402 $ 79,171 $ 48,008 $ 19,159 $ 791,452 $ 19,962 $ 1,028,154 December 31, 2022 Carrying Value by Year of Origination (1) Risk Rating Number of Outstanding Face Amount 2022 2021 2020 2019 2018 Prior Total Carrying Value 1 — $ — $ — $ — $ — $ — $ — $ — $ — 2 — — — — — — — — — 3 48 999,080 72,606 98,129 17,500 774,381 20,062 — 982,678 4 — — — — — — — — — 5 — — — — — — — — — 48 $ 999,080 $ 72,606 $ 98,129 $ 17,500 $ 774,381 $ 20,062 $ — $ 982,678 (1) Represents the date a loan was originated or acquired. The following tables present the geographies and property types of collateral underlying the Company’s loans held-for-investment as a percentage of the loans’ face amounts. Geography September 30, 2023 December 31, 2022 Georgia 32.45 % 34.04 % Florida 18.45 % 19.34 % Texas 12.65 % 11.21 % Nevada 2.75 % * Maryland 5.34 % 5.59 % Minnesota 6.65 % 6.97 % California 4.39 % 4.66 % Alabama 3.63 % 3.81 % North Carolina 2.69 % 2.65 % Virginia 1.66 % * Arkansas 1.35 % 1.42 % Other (18 and 19 states each at <1%) 7.99 % 10.31 % 100.00 % 100.00 % *Included in “Other.” Collateral Property Type September 30, 2023 December 31, 2022 Single Family Rental 69.26 % 72.26 % Multifamily 23.32 % 23.11 % Life Science 5.71 % 2.85 % Self-Storage 1.70 % 1.79 % 100.00 % 100.00 % |
CMBS Trusts
CMBS Trusts | 9 Months Ended |
Sep. 30, 2023 | |
Mortgage Banking [Abstract] | |
CMBS Trusts | CMBS Trusts As of September 30, 2023, the Company consolidated all of the CMBS Entities that it determined are VIEs and for which the Company is the primary beneficiary. The Company elected the fair-value measurement alternative in accordance with ASU 2014-13 for each of the trusts and carries the fair values of the trust’s assets and liabilities at fair value in its Consolidated Balance Sheets, recognizes changes in the trust’s net assets, including changes in fair-value adjustments and net interest earned, in its Consolidated Statements of Operations and records cash interest received from the trusts and cash interest paid to bondholders of the CMBS not beneficially owned by the Company as financing cash flows. The following table presents the Company’s recognized Trust’s Assets and Liabilities (in thousands): Trust's Assets September 30, 2023 December 31, 2022 Mortgage loans held in variable interest entities, at fair value $ 5,612,472 $ 6,720,246 Accrued interest receivable 3,390 4,029 Trust's Liabilities Bonds payable held in variable interest entities, at fair value (5,225,922) (6,249,804) Accrued interest payable (2,740) (3,207) The following table presents “Change in net assets related to consolidated CMBS variable interest entities” (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Net interest earned $ 9,804 $ 9,455 $ 31,334 $ 25,623 Unrealized gain (loss) (2,767) (12,103) (6,408) (20,304) Change in net assets related to consolidated CMBS variable interest entities $ 7,037 $ (2,648) $ 24,926 $ 5,319 The following tables present the geographies and property types of collateral underlying the CMBS trusts consolidated by the Company as a percentage of the collateral unpaid principal balance: Geography September 30, 2023 December 31, 2022 Texas 15.77 % 17.95 % Florida 14.07 % 13.82 % Arizona 4.02 % 6.98 % California 8.64 % 9.28 % Georgia 4.33 % 4.68 % Washington 7.71 % 6.88 % New Jersey 3.99 % 3.97 % Nevada 2.48 % 1.99 % Pennsylvania 1.26 % 1.01 % Colorado 7.70 % 6.21 % Connecticut 2.04 % 3.64 % North Carolina 4.14 % 3.53 % New York 3.35 % 2.76 % Ohio 2.48 % 2.00 % Virginia 2.02 % 1.62 % Indiana 2.11 % 1.69 % Illinois 1.64 % 1.37 % Michigan 1.37 % 1.11 % Maryland 1.17 % * Missouri 1.55 % 1.25 % Other (21 and 22 states each at <1%) 8.16 % 8.26 % 100.00 % 100.00 % *Included in “Other.” Collateral Property Type September 30, 2023 December 31, 2022 Multifamily 97.35 % 98.45 % Manufactured Housing 2.65 % 1.55 % 100.00 % 100.00 % |
Common Stock Investments
Common Stock Investments | 9 Months Ended |
Sep. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Common Stock Investments | Common Stock InvestmentsThe Company owns approximately 25.7% of the total outstanding shares of common stock of NexPoint Storage Partners, Inc. ("NSP") and thus can exercise significant influence over NSP. NSP is a VIE and the Company has determined that it is not the primary beneficiary of NSP. The investment qualifies to be accounted for using the equity method. However, the Company elected the fair-value option in accordance with ASC 825-10-10 for NSP. The investment in NSP is a Level 3 asset in the fair value hierarchy and was initially measured using the entry price of the asset. The Company's valuation policy for common stock is to use readily available market prices on the relevant valuation date to the extent they are available. On a quarterly basis, the Company determines the value using widely accepted valuation techniques. A bottoms up approach was used by valuing the wholly-owned self-storage assets in aggregate and development loans individually. In this bottoms-up approach, the discounted cash flow methodology is applied to the self-storage assets owned by NSP. Additionally, the income approach is used to determine the fair value of the development loans owned by NSP whereby contractual cash flows are discounted at observable market discount rates. In addition, as a secondary check for reasonableness, a top down approach was applied whereby observable market terminal capitalization rates and discount rates are applied to the consolidated NSP cash flows. The valuation relies primarily on the bottoms-up approach, but uses the top down approach to corroborate the bottoms-up conclusion with a reasonable precision. The Company owns approximately 6.36% of the total outstanding shares of common stock of a private ground lease REIT (the "Private REIT") as of September 30, 2023. The Company elected the fair-value option in accordance with ASC 825-10-10 for the Private REIT. The investment in the Private REIT is a Level 3 asset in the fair value hierarchy and was initially measured using the convertible notes conversion share price of $17.50. On April 14, 2022, the two convertible notes converted into 1,394,213 shares or $25.0 million of common stock in the Private REIT, the parent company of the borrower under the convertible notes. As of September 30, 2023, the Company valued this investment based on the Private REIT's market approach price of $19.33 per share. The Company owns approximately 98.0% of the total outstanding common equity of each of Resmark Forney Gateway Holdings, LLC ("RFGH") and Resmark The Brook, LLC ("RTB"). The investments in RFGH and RTB are equity method investments. These investments are held in entities that are considered VIEs as the power to direct activities is not proportional to ownership interests. The Company is not the primary beneficiary, but is deemed to have significant influence, and as such accounts for them using the equity method. The following table presents the common stock investments as of September 30, 2023 and December 31, 2022, respectively (in thousands, except share amounts): Investment Investment Property Type Shares Fair Value September 30, 2023 December 31, 2022 September 30, 2023 December 31, 2022 Common Stock NexPoint Storage Partners 11/6/2020 Self-storage 41,963 41,963 $ 33,759 $ 50,380 Private REIT 4/14/2022 Ground lease 1,394,213 1,394,213 26,950 27,884 The following table presents “Change in unrealized gain on common stock investments” (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Change in unrealized gain on NexPoint Storage Partners $ (17,258) $ (3,189) $ (16,621) $ (2,726) Change in unrealized gain (loss) on Private REIT 794 — (935) 2,885 Change in unrealized gain on common stock investments $ (16,464) $ (3,189) $ (17,556) $ 159 The following table presents the CMBS I/O Strips, MSCR Notes and mortgage backed securities as of September 30, 2023 (dollars in thousands): Investment Investment Carrying Value Property Type Interest Rate Current Yield (1) Maturity Date CMBS I/O Strips CMBS I/O Strip 5/18/2020 $ 1,638 Multifamily 2.09 % 15.13 % 9/25/2046 CMBS I/O Strip 8/6/2020 16,840 Multifamily 3.08 % 18.00 % 6/25/2030 CMBS I/O Strip 4/28/2021 (2) 5,078 Multifamily 1.71 % 18.36 % 1/25/2030 CMBS I/O Strip 5/27/2021 3,446 Multifamily 3.50 % 17.77 % 5/25/2030 CMBS I/O Strip 6/7/2021 404 Multifamily 2.39 % 22.06 % 11/25/2028 CMBS I/O Strip 6/11/2021 (3) 3,610 Multifamily 1.32 % 16.11 % 5/25/2029 CMBS I/O Strip 6/21/2021 815 Multifamily 1.28 % 19.34 % 5/25/2030 CMBS I/O Strip 8/10/2021 2,270 Multifamily 1.96 % 18.03 % 4/25/2030 CMBS I/O Strip 8/11/2021 1,225 Multifamily 3.20 % 15.30 % 7/25/2031 CMBS I/O Strip 8/24/2021 227 Multifamily 2.70 % 16.21 % 1/25/2031 CMBS I/O Strip 9/1/2021 3,400 Multifamily 2.04 % 17.47 % 6/25/2030 CMBS I/O Strip 9/11/2021 3,518 Multifamily 3.05 % 15.24 % 9/25/2031 Total $ 42,471 2.58 % 17.46 % MSCR Notes MSCR Notes 5/25/2022 $ 4,020 Multifamily 14.79 % 14.79 % 5/25/2052 MSCR Notes 5/25/2022 5,000 Multifamily 11.79 % 11.79 % 5/25/2052 MSCR Notes 9/23/2022 1,305 Multifamily 12.14 % 13.34 % 11/25/2051 Total $ 10,325 13.00 % 13.15 % Mortgage Backed Securities Mortgage Backed Securities 6/1/2022 $ 9,898 Single-Family 8.63 % 8.93 % 4/17/2026 Mortgage Backed Securities 6/1/2022 9,173 Single-Family 4.87 % 5.03 % 11/19/2025 Mortgage Backed Securities 7/28/2022 529 Single-Family 6.23 % 6.32 % 10/17/2027 Mortgage Backed Securities 7/28/2022 845 Single-Family 3.60 % 4.15 % 6/20/2028 Mortgage Backed Securities 9/12/2022 3,937 Multifamily 11.35 % 11.33 % 1/25/2031 Mortgage Backed Securities 9/29/2022 7,856 Self Storage 11.09 % 11.11 % 9/15/2027 Mortgage Backed Securities 3/10/2023 5,737 Multifamily 13.72 % 13.75 % 2/25/2025 Total $ 37,975 9.14 % 9.27 % (1) Current yield is the annualized income earned divided by the cost basis of the investment. (2) The Company, through the Subsidiary OPs, purchased approximately $50.0 million and $15.0 million aggregate notional amount of the X1 interest-only tranche of the FHMS K-107 CMBS I/O Strip on April 28, 2021 and May 4, 2021, respectively. (3) The Company, through the Subsidiary OPs, purchased approximately $80.0 million, $35.0 million, $40.0 million and $50.0 million aggregate notional amount of the X1 interest-only tranche of the FRESB 2019-SB64 CMBS I/O Strip on June 11, 2021, September 29, 2021, February 3, 2022 and March 18, 2022, respectively. The following table presents the CMBS I/O Strips, MSCR Notes and Mortgage Backed Securities as of December 31, 2022 (dollars in thousands): Investment Investment Carrying Value Property Type Interest Rate Current Yield (1) Maturity Date CMBS I/O Strips CMBS I/O Strip 5/18/2020 $ 1,807 Multifamily 2.02 % 14.56 % 9/25/2046 CMBS I/O Strip 8/6/2020 18,364 Multifamily 2.98 % 15.98 % 6/25/2030 CMBS I/O Strip 4/28/2021 (2) 5,676 Multifamily 1.59 % 15.52 % 1/25/2030 CMBS I/O Strip 5/27/2021 3,693 Multifamily 3.39 % 15.73 % 5/25/2030 CMBS I/O Strip 6/7/2021 455 Multifamily 2.31 % 18.91 % 11/25/2028 CMBS I/O Strip 6/11/2021 (3) 4,188 Multifamily 1.19 % 13.34 % 5/25/2029 CMBS I/O Strip 6/21/2021 1,117 Multifamily 1.18 % 16.77 % 5/25/2030 CMBS I/O Strip 8/10/2021 2,445 Multifamily 1.89 % 15.87 % 4/25/2030 CMBS I/O Strip 8/11/2021 1,333 Multifamily 3.10 % 13.74 % 7/25/2031 CMBS I/O Strip 8/24/2021 250 Multifamily 2.61 % 14.44 % 1/25/2031 CMBS I/O Strip 9/1/2021 3,726 Multifamily 1.92 % 15.03 % 6/25/2030 CMBS I/O Strip 9/11/2021 3,822 Multifamily 2.95 % 13.70 % 9/25/2031 Total $ 46,876 2.46 % 15.32 % MSCR Notes MSCR Notes 5/25/2022 $ 4,019 Multifamily 13.02 % 13.02 % 5/25/2052 MSCR Notes 5/25/2022 4,988 Multifamily 10.02 % 10.02 % 5/25/2052 MSCR Notes 9/23/2022 1,306 Multifamily 10.37 % 11.40 % 11/25/2051 Total $ 10,313 11.23 % 11.36 % Mortgage Backed Securities Mortgage Backed Securities 6/1/2022 $ 9,638 Single-Family 7.08 % 7.39 % 4/17/2026 Mortgage Backed Securities 6/1/2022 8,966 Single-Family 4.87 % 5.08 % 11/19/2025 Mortgage Backed Securities 7/28/2022 526 Single-Family 6.23 % 6.33 % 10/17/2027 Mortgage Backed Securities 7/28/2022 819 Single-Family 3.60 % 4.23 % 6/20/2028 Mortgage Backed Securities 9/12/2022 4,473 Multifamily 9.29 % 9.27 % 1/25/2031 Mortgage Backed Securities 9/29/2022 7,906 Self Storage 9.57 % 9.59 % 9/15/2027 Total $ 32,328 7.28 % 7.45 % (1) Current yield is the annualized income earned divided by the cost basis of the investment. (2) The Company, through the Subsidiary OPs, purchased approximately $50.0 million and $15.0 million aggregate notional amount of the X1 interest-only tranche of the FHMS K-107 CMBS I/O Strip on April 28, 2021 and May 4, 2021, respectively. (3) The Company, through the Subsidiary OPs, purchased approximately $80.0 million, $35.0 million, $40.0 million and $50.0 million aggregate notional amount of the X1 interest-only tranche of the FRESB 2019-SB64 CMBS I/O Strip on June 11, 2021, September 29, 2021, February 3, 2022 and March 18, 2022, respectively. The following table presents activity related to the Company’s CMBS I/O Strips, MSCR Notes and mortgage backed securities (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Net interest earned $ 775 $ 2,237 $ 2,270 $ 4,811 Change in unrealized gain (loss) on CMBS structured pass-through certificates 710 (3,904) 926 (11,555) Change in unrealized gain (loss) on MSCR notes (15) 44 13 (147) Change in unrealized (loss) on mortgage backed securities 27 (317) 247 (356) Total $ 1,497 $ (1,940) $ 3,456 $ (7,247) |
Variable Interest Entities
Variable Interest Entities | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | Variable Interest EntitiesConsolidated VIEs At the end of each reporting period, the Company reassesses whether it remains the primary beneficiary for VIEs consolidated under the VIE model. As of September 30, 2023, the Company has accounted for the following investments as unconsolidated VIEs: Entities Instrument Asset Type Percentage Ownership as of September 30, 2023 Relationship as of September 30, 2023 Unconsolidated Entities: NexPoint Storage Partners, Inc. Common Stock Self-storage 25.7 % VIE Resmark Forney Gateway Holdings, LLC Common Equity Multifamily 98.0 % VIE Resmark The Brook, LLC Common Equity Multifamily 98.0 % VIE Alexander at the District Common Equity Multifamily 25.7 % VIE |
CMBS Structured Pass Through Ce
CMBS Structured Pass Through Certificates, MSCR Notes and Mortgage Backed Securities | 9 Months Ended |
Sep. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
CMBS Structured Pass Through Certificates, MSCR Notes and Mortgage Backed Securities | Common Stock InvestmentsThe Company owns approximately 25.7% of the total outstanding shares of common stock of NexPoint Storage Partners, Inc. ("NSP") and thus can exercise significant influence over NSP. NSP is a VIE and the Company has determined that it is not the primary beneficiary of NSP. The investment qualifies to be accounted for using the equity method. However, the Company elected the fair-value option in accordance with ASC 825-10-10 for NSP. The investment in NSP is a Level 3 asset in the fair value hierarchy and was initially measured using the entry price of the asset. The Company's valuation policy for common stock is to use readily available market prices on the relevant valuation date to the extent they are available. On a quarterly basis, the Company determines the value using widely accepted valuation techniques. A bottoms up approach was used by valuing the wholly-owned self-storage assets in aggregate and development loans individually. In this bottoms-up approach, the discounted cash flow methodology is applied to the self-storage assets owned by NSP. Additionally, the income approach is used to determine the fair value of the development loans owned by NSP whereby contractual cash flows are discounted at observable market discount rates. In addition, as a secondary check for reasonableness, a top down approach was applied whereby observable market terminal capitalization rates and discount rates are applied to the consolidated NSP cash flows. The valuation relies primarily on the bottoms-up approach, but uses the top down approach to corroborate the bottoms-up conclusion with a reasonable precision. The Company owns approximately 6.36% of the total outstanding shares of common stock of a private ground lease REIT (the "Private REIT") as of September 30, 2023. The Company elected the fair-value option in accordance with ASC 825-10-10 for the Private REIT. The investment in the Private REIT is a Level 3 asset in the fair value hierarchy and was initially measured using the convertible notes conversion share price of $17.50. On April 14, 2022, the two convertible notes converted into 1,394,213 shares or $25.0 million of common stock in the Private REIT, the parent company of the borrower under the convertible notes. As of September 30, 2023, the Company valued this investment based on the Private REIT's market approach price of $19.33 per share. The Company owns approximately 98.0% of the total outstanding common equity of each of Resmark Forney Gateway Holdings, LLC ("RFGH") and Resmark The Brook, LLC ("RTB"). The investments in RFGH and RTB are equity method investments. These investments are held in entities that are considered VIEs as the power to direct activities is not proportional to ownership interests. The Company is not the primary beneficiary, but is deemed to have significant influence, and as such accounts for them using the equity method. The following table presents the common stock investments as of September 30, 2023 and December 31, 2022, respectively (in thousands, except share amounts): Investment Investment Property Type Shares Fair Value September 30, 2023 December 31, 2022 September 30, 2023 December 31, 2022 Common Stock NexPoint Storage Partners 11/6/2020 Self-storage 41,963 41,963 $ 33,759 $ 50,380 Private REIT 4/14/2022 Ground lease 1,394,213 1,394,213 26,950 27,884 The following table presents “Change in unrealized gain on common stock investments” (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Change in unrealized gain on NexPoint Storage Partners $ (17,258) $ (3,189) $ (16,621) $ (2,726) Change in unrealized gain (loss) on Private REIT 794 — (935) 2,885 Change in unrealized gain on common stock investments $ (16,464) $ (3,189) $ (17,556) $ 159 The following table presents the CMBS I/O Strips, MSCR Notes and mortgage backed securities as of September 30, 2023 (dollars in thousands): Investment Investment Carrying Value Property Type Interest Rate Current Yield (1) Maturity Date CMBS I/O Strips CMBS I/O Strip 5/18/2020 $ 1,638 Multifamily 2.09 % 15.13 % 9/25/2046 CMBS I/O Strip 8/6/2020 16,840 Multifamily 3.08 % 18.00 % 6/25/2030 CMBS I/O Strip 4/28/2021 (2) 5,078 Multifamily 1.71 % 18.36 % 1/25/2030 CMBS I/O Strip 5/27/2021 3,446 Multifamily 3.50 % 17.77 % 5/25/2030 CMBS I/O Strip 6/7/2021 404 Multifamily 2.39 % 22.06 % 11/25/2028 CMBS I/O Strip 6/11/2021 (3) 3,610 Multifamily 1.32 % 16.11 % 5/25/2029 CMBS I/O Strip 6/21/2021 815 Multifamily 1.28 % 19.34 % 5/25/2030 CMBS I/O Strip 8/10/2021 2,270 Multifamily 1.96 % 18.03 % 4/25/2030 CMBS I/O Strip 8/11/2021 1,225 Multifamily 3.20 % 15.30 % 7/25/2031 CMBS I/O Strip 8/24/2021 227 Multifamily 2.70 % 16.21 % 1/25/2031 CMBS I/O Strip 9/1/2021 3,400 Multifamily 2.04 % 17.47 % 6/25/2030 CMBS I/O Strip 9/11/2021 3,518 Multifamily 3.05 % 15.24 % 9/25/2031 Total $ 42,471 2.58 % 17.46 % MSCR Notes MSCR Notes 5/25/2022 $ 4,020 Multifamily 14.79 % 14.79 % 5/25/2052 MSCR Notes 5/25/2022 5,000 Multifamily 11.79 % 11.79 % 5/25/2052 MSCR Notes 9/23/2022 1,305 Multifamily 12.14 % 13.34 % 11/25/2051 Total $ 10,325 13.00 % 13.15 % Mortgage Backed Securities Mortgage Backed Securities 6/1/2022 $ 9,898 Single-Family 8.63 % 8.93 % 4/17/2026 Mortgage Backed Securities 6/1/2022 9,173 Single-Family 4.87 % 5.03 % 11/19/2025 Mortgage Backed Securities 7/28/2022 529 Single-Family 6.23 % 6.32 % 10/17/2027 Mortgage Backed Securities 7/28/2022 845 Single-Family 3.60 % 4.15 % 6/20/2028 Mortgage Backed Securities 9/12/2022 3,937 Multifamily 11.35 % 11.33 % 1/25/2031 Mortgage Backed Securities 9/29/2022 7,856 Self Storage 11.09 % 11.11 % 9/15/2027 Mortgage Backed Securities 3/10/2023 5,737 Multifamily 13.72 % 13.75 % 2/25/2025 Total $ 37,975 9.14 % 9.27 % (1) Current yield is the annualized income earned divided by the cost basis of the investment. (2) The Company, through the Subsidiary OPs, purchased approximately $50.0 million and $15.0 million aggregate notional amount of the X1 interest-only tranche of the FHMS K-107 CMBS I/O Strip on April 28, 2021 and May 4, 2021, respectively. (3) The Company, through the Subsidiary OPs, purchased approximately $80.0 million, $35.0 million, $40.0 million and $50.0 million aggregate notional amount of the X1 interest-only tranche of the FRESB 2019-SB64 CMBS I/O Strip on June 11, 2021, September 29, 2021, February 3, 2022 and March 18, 2022, respectively. The following table presents the CMBS I/O Strips, MSCR Notes and Mortgage Backed Securities as of December 31, 2022 (dollars in thousands): Investment Investment Carrying Value Property Type Interest Rate Current Yield (1) Maturity Date CMBS I/O Strips CMBS I/O Strip 5/18/2020 $ 1,807 Multifamily 2.02 % 14.56 % 9/25/2046 CMBS I/O Strip 8/6/2020 18,364 Multifamily 2.98 % 15.98 % 6/25/2030 CMBS I/O Strip 4/28/2021 (2) 5,676 Multifamily 1.59 % 15.52 % 1/25/2030 CMBS I/O Strip 5/27/2021 3,693 Multifamily 3.39 % 15.73 % 5/25/2030 CMBS I/O Strip 6/7/2021 455 Multifamily 2.31 % 18.91 % 11/25/2028 CMBS I/O Strip 6/11/2021 (3) 4,188 Multifamily 1.19 % 13.34 % 5/25/2029 CMBS I/O Strip 6/21/2021 1,117 Multifamily 1.18 % 16.77 % 5/25/2030 CMBS I/O Strip 8/10/2021 2,445 Multifamily 1.89 % 15.87 % 4/25/2030 CMBS I/O Strip 8/11/2021 1,333 Multifamily 3.10 % 13.74 % 7/25/2031 CMBS I/O Strip 8/24/2021 250 Multifamily 2.61 % 14.44 % 1/25/2031 CMBS I/O Strip 9/1/2021 3,726 Multifamily 1.92 % 15.03 % 6/25/2030 CMBS I/O Strip 9/11/2021 3,822 Multifamily 2.95 % 13.70 % 9/25/2031 Total $ 46,876 2.46 % 15.32 % MSCR Notes MSCR Notes 5/25/2022 $ 4,019 Multifamily 13.02 % 13.02 % 5/25/2052 MSCR Notes 5/25/2022 4,988 Multifamily 10.02 % 10.02 % 5/25/2052 MSCR Notes 9/23/2022 1,306 Multifamily 10.37 % 11.40 % 11/25/2051 Total $ 10,313 11.23 % 11.36 % Mortgage Backed Securities Mortgage Backed Securities 6/1/2022 $ 9,638 Single-Family 7.08 % 7.39 % 4/17/2026 Mortgage Backed Securities 6/1/2022 8,966 Single-Family 4.87 % 5.08 % 11/19/2025 Mortgage Backed Securities 7/28/2022 526 Single-Family 6.23 % 6.33 % 10/17/2027 Mortgage Backed Securities 7/28/2022 819 Single-Family 3.60 % 4.23 % 6/20/2028 Mortgage Backed Securities 9/12/2022 4,473 Multifamily 9.29 % 9.27 % 1/25/2031 Mortgage Backed Securities 9/29/2022 7,906 Self Storage 9.57 % 9.59 % 9/15/2027 Total $ 32,328 7.28 % 7.45 % (1) Current yield is the annualized income earned divided by the cost basis of the investment. (2) The Company, through the Subsidiary OPs, purchased approximately $50.0 million and $15.0 million aggregate notional amount of the X1 interest-only tranche of the FHMS K-107 CMBS I/O Strip on April 28, 2021 and May 4, 2021, respectively. (3) The Company, through the Subsidiary OPs, purchased approximately $80.0 million, $35.0 million, $40.0 million and $50.0 million aggregate notional amount of the X1 interest-only tranche of the FRESB 2019-SB64 CMBS I/O Strip on June 11, 2021, September 29, 2021, February 3, 2022 and March 18, 2022, respectively. The following table presents activity related to the Company’s CMBS I/O Strips, MSCR Notes and mortgage backed securities (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Net interest earned $ 775 $ 2,237 $ 2,270 $ 4,811 Change in unrealized gain (loss) on CMBS structured pass-through certificates 710 (3,904) 926 (11,555) Change in unrealized gain (loss) on MSCR notes (15) 44 13 (147) Change in unrealized (loss) on mortgage backed securities 27 (317) 247 (356) Total $ 1,497 $ (1,940) $ 3,456 $ (7,247) |
Real Estate Investments, net
Real Estate Investments, net | 9 Months Ended |
Sep. 30, 2023 | |
Real Estate Investments, Net [Abstract] | |
Real Estate Investment, net | Real Estate Investments, net On December 31, 2021 , the Company acquired a 204-unit multifamily property in Charlotte, North Carolina (Hudson Montford). The property was 95.1% and 96.1% occupied, with effective rent per occupied unit of $1,689 per month and $1,663, per month as of September 30, 2023, and December 31, 2022 , respectively. On February 1, 2022, the Company acquired a 368-unit multifamily property in Las Vegas, Nevada (Elysian at Hughes Center). As of December 31, 2022, the property was 94.0% occupied with effective rent per occupied unit of $1,927 per month as of December 31, 2022. The Company no longer maintains a common equity interest in this property and through a restructuring effective January 1, 2023, the investment is deconsolidated and presented solely as a preferred equity investment in 2023. As of September 30, 2023, the major components of the Company's investment in multifamily property was as follows (in thousands): Real Estate Investment, Net Land Buildings and Intangible Lease Construction in Progress Furniture, Totals Hudson Montford $ 10,996 $ 49,856 $ — $ 401 $ 680 $ 61,933 Accumulated depreciation and amortization — (3,025) — — (345) (3,370) Total Real Estate Investment, Net $ 10,996 $ 46,831 $ — $ 401 $ 335 $ 58,563 As of December 31, 2022, the major components of the Company's investments in multifamily properties were as follows (in thousands): Real Estate Investments, Net Land Buildings and Intangible Lease Construction in Progress Furniture, Totals Hudson Montford $ 10,996 $ 49,831 $ — $ 2 $ 602 $ 61,431 Elysian at Hughes 25,590 160,141 — — — 185,731 Accumulated depreciation and amortization — (1,752) — — (188) (1,940) Total Real Estate Investments, Net $ 36,586 $ 208,220 $ — $ 2 $ 414 $ 245,222 The following table reflects the revenue and expenses for the three and nine months ended September 30, 2023 and 2022, for our multifamily property (in thousands). For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Revenues Rental income $ 1,032 $ 3,061 $ 3,057 $ 8,136 Other income 51 394 90 972 Total revenues 1,083 3,455 3,147 9,108 Expenses Interest expense 664 1,016 1,876 2,886 Real estate taxes and insurance 164 363 512 1,135 Property operating expenses 201 793 590 1,793 Property general and administrative expenses 39 56 111 247 Property management fees 31 79 90 220 Depreciation and amortization 476 545 1,430 2,435 Rate cap (income) expense 345 (420) (181) (923) Debt service bridge — 10 — 626 Casualty loss 19 — (156) — Total expenses 1,939 2,442 4,272 8,419 Net income (loss) from consolidated real estate owned $ (856) $ 1,013 $ (1,125) $ 689 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt The following table summarizes the Company’s financing arrangements in place as of September 30, 2023 (dollars in thousands): September 30, 2023 Facility Collateral Date issued Outstanding Carrying value Final stated Weighted Weighted Outstanding Amortized cost Carrying value Weighted Master Repurchase Agreements CMBS Mizuho(4) 4/15/2020 $ 298,009 $ 298,009 N/A (5) 7.23 % 0.1 $ 853,574 $ 434,890 $ 425,949 6.6 Asset Specific Financing Single Family Rental loans Freddie Mac 7/12/2019 617,648 617,648 7/12/2029 2.34 % 4.6 675,844 708,003 708,003 4.6 Mezzanine loans Freddie Mac 10/20/2020 59,252 59,252 8/1/2031 0.30 % 6.5 96,817 98,898 98,898 6.5 Multifamily properties CBRE 12/31/2021 32,425 32,205 6/1/2028 (6) 7.78 % 4.7 N/A 58,563 58,563 4.7 Unsecured Financing Various 10/15/2020 36,500 35,768 10/25/2025 7.50 % 2.1 N/A N/A N/A N/A Various 4/20/2021 165,000 163,357 4/15/2026 5.75 % 2.5 N/A N/A N/A N/A Various 10/18/2022 6,500 6,500 10/18/2027 7.50 % 4.1 N/A N/A N/A N/A Total/weighted average $ 1,215,334 $ 1,212,739 4.23 % 3.2 $ 1,626,235 $ 1,300,354 $ 1,291,413 5.7 (1) Weighted-average interest rate using unpaid principal balances. (2) Weighted-average life is determined using the maximum maturity date of the corresponding loans, assuming all extension options are exercised by the borrower. (3) CMBS are shown at fair value on an unconsolidated basis. SFR Loans and mezzanine loans are shown at amortized cost. (4) On April 15, 2020, three of our subsidiaries entered into a master repurchase agreement with Mizuho Securities ("Mizuho"). Borrowings under these repurchase agreements are collateralized by portions of the CMBS B-Pieces, CMBS I/O Strips, MSCR Notes and mortgage backed securities. (5) The master repurchase agreement with Mizuho does not have a stated maturity date. The transactions in place have a one-month to two-month tenor and are expected to roll accordingly. (6) Debt was assumed upon acquisition of this property and recorded at the outstanding principal amount, net of debt issuance costs. The loan can be prepaid at a 1.0% prepayment premium on any unpaid principal. The loan is open to pre-payment in the last three months of the term. The following table summarizes the Company’s financing arrangements in place as of December 31, 2022 (dollars in thousands): December 31, 2022 Facility Collateral Date issued Outstanding Carrying Final stated Weighted Weighted Outstanding Amortized cost basis Carrying Weighted Master Repurchase Agreements CMBS Mizuho(4) 4/15/2020 $ 331,020 $ 331,020 N/A (5) 5.83 % 0.2 $ 974,440 $ 543,919 $ 539,736 7.0 Asset Specific Financing Single Family Rental loans Freddie Mac 7/12/2019 628,633 628,633 7/12/2029 2.35 % 5.4 688,046 726,531 726,531 5.4 Mezzanine loans Freddie Mac 10/20/2020 59,252 59,252 8/1/2031 0.30 % 7.3 105,817 108,390 108,390 7.3 Multifamily properties CBRE 12/31/2021 32,480 32,176 6/1/2028 (6) 5.80 % 5.4 N/A 59,491 59,491 5.4 CBRE 2/1/2022 89,634 89,060 2/1/2032 3.52 % 9.1 N/A 185,731 185,731 9.1 Unsecured Financing Various 10/15/2020 36,500 35,530 10/25/2025 7.50 % 2.8 N/A N/A N/A N/A Various 4/20/2021 165,000 162,930 4/15/2026 5.75 % 3.3 N/A N/A N/A N/A Various 10/18/2022 6,500 6,500 10/18/2027 7.50 % 4.8 N/A N/A N/A N/A Total/weighted average $ 1,349,019 $ 1,345,101 3.85 % 4.1 $ 1,768,303 $ 1,624,062 $ 1,619,879 6.4 (1) Weighted-average interest rate using unpaid principal balances. (2) Weighted-average life is determined using the maximum maturity date of the corresponding loans, assuming all extension options are exercised by the borrower. (3) CMBS are shown at fair value on an unconsolidated basis. SFR Loans and mezzanine loans are shown at amortized cost. (4) On April 15, 2020, three of our subsidiaries entered into a master repurchase agreement with Mizuho. Borrowings under these repurchase agreements are collateralized by portions of the CMBS B-Pieces, CMBS I/O Strips, MSCR Notes and mortgage backed securities. (5) The master repurchase agreement with Mizuho does not have a stated maturity date. The transactions in place have a one-month to two-month tenor and are expected to roll accordingly. (6) Debt was assumed upon acquisition of this property and recorded at the outstanding principal amount, net of debt issuance costs. The loan can be prepaid at a 1.0% prepayment premium on any unpaid principal. The loan is open to pre-payment in the last three months of the term. We, through the Subsidiary OPs, have borrowed approximately $298.0 million under our repurchase agreements and posted $1.2 billion par value of our CMBS B-Piece, CMBS I/O Strip, MSCR Notes and mortgage backed security investments as collateral as of September 30, 2023. The CMBS B-Pieces, CMBS I/O Strips, MSCR Notes and mortgage backed securities held as collateral are illiquid and irreplaceable in nature. These assets are restricted solely to satisfy the interest and principal balances owed to the lender, as described in our Annual Report. As of September 30, 2023, the outstanding principal balances related to the SFR Loans and levered Mezzanine Loans consisted of the following (dollars in thousands): Investment Investment Date Outstanding Principal Balance (1) Location Property Type Interest Type Interest Rate Maturity Date SFR Loans Senior loan 2/11/2020 $ 465,690 Various Single-family Fixed 2.24 % 9/1/2028 Senior loan 2/11/2020 46,094 Various Single-family Fixed 2.14 % 10/1/2025 Senior loan 2/11/2020 34,112 Various Single-family Fixed 2.70 % 11/1/2028 Senior loan 2/11/2020 9,170 Various Single-family Fixed 2.79 % 9/1/2028 Senior loan 2/11/2020 9,284 Various Single-family Fixed 2.45 % 3/1/2026 Senior loan 2/11/2020 8,558 Various Single-family Fixed 3.51 % 2/1/2028 Senior loan 2/11/2020 8,805 Various Single-family Fixed 3.30 % 10/1/2028 Senior loan 2/11/2020 7,913 Various Single-family Fixed 3.14 % 1/1/2029 Senior loan 2/11/2020 6,524 Various Single-family Fixed 2.98 % 2/1/2029 Senior loan 2/11/2020 5,874 Various Single-family Fixed 2.99 % 3/1/2029 Senior loan 2/11/2020 5,435 Various Single-family Fixed 2.40 % 2/1/2024 Senior loan 2/11/2020 5,240 Various Single-family Fixed 3.14 % 12/1/2028 Senior loan 2/11/2020 4,949 Various Single-family Fixed 2.64 % 10/1/2028 Total $ 617,648 2.34 % Mezzanine Loans Senior loan 10/20/2020 $ 8,723 Wilmington, DE Multifamily Fixed 0.30 % 6/1/2029 Senior loan 10/20/2020 7,344 White Marsh, MD Multifamily Fixed 0.30 % 4/1/2031 Senior loan 10/20/2020 6,353 Philadelphia, PA Multifamily Fixed 0.30 % 7/1/2031 Senior loan 10/20/2020 5,881 Daytona Beach, FL Multifamily Fixed 0.30 % 7/1/2031 Senior loan 10/20/2020 4,523 Laurel, MD Multifamily Fixed 0.30 % 7/1/2031 Senior loan 10/20/2020 4,179 Temple Hills, MD Multifamily Fixed 0.30 % 1/1/2029 Senior loan 10/20/2020 3,390 Temple Hills, MD Multifamily Fixed 0.30 % 5/1/2029 Senior loan 10/20/2020 3,348 Lakewood, NJ Multifamily Fixed 0.30 % 5/1/2029 Senior loan 10/20/2020 2,454 North Aurora, IL Multifamily Fixed 0.30 % 11/1/2028 Senior loan 10/20/2020 2,264 Rosedale, MD Multifamily Fixed 0.30 % 10/1/2028 Senior loan 10/20/2020 2,215 Cockeysville, MD Multifamily Fixed 0.30 % 7/1/2031 Senior loan 10/20/2020 2,026 Laurel, MD Multifamily Fixed 0.30 % 7/1/2029 Senior loan 10/20/2020 1,836 Vancouver, WA Multifamily Fixed 0.30 % 8/1/2031 Senior loan 10/20/2020 1,763 Tyler, TX Multifamily Fixed 0.30 % 11/1/2028 Senior loan 10/20/2020 1,307 Las Vegas, NV Multifamily Fixed 0.30 % 10/1/2028 Senior loan 10/20/2020 918 Atlanta, GA Multifamily Fixed 0.30 % 8/1/2031 Senior loan 10/20/2020 728 Des Moines, IA Multifamily Fixed 0.30 % 3/1/2029 Total $ 59,252 0.30 % For the nine months ended September 30, 2023 and 2022, the activity related to the carrying value of the master repurchase agreements, secured financing agreements and unsecured financing were as follows (in thousands): For the Nine Months Ended September 30, 2023 2022 Balances as of January 1, $ 1,345,101 $ 1,273,051 Adjustment to mortgages payable, net on deconsolidation of real estate (89,012) — Principal borrowings 44,892 252,796 Principal repayments (88,888) (161,999) Repurchase of unsecured notes — (2,879) Repurchase of unsecured notes, not yet settled — (1,950) Accretion of discounts 666 572 Amortization of deferred financing costs (20) 36 Balances as of September 30, $ 1,212,739 $ 1,359,627 Schedule of Debt Maturities The aggregate scheduled maturities, including amortizing principal payments, of total debt for the next five calendar years subsequent to September 30, 2023 are as follows (in thousands): Year Recourse Non-recourse Total 2023(1) $ — $ 298,009 $ 298,009 2024 — 5,435 5,435 2025 36,500 46,094 82,594 2026 197,426 9,284 206,710 2027 6,500 — 6,500 Thereafter — 616,086 616,086 $ 240,426 $ 974,908 $ 1,215,334 (1) The transactions in place in the master repurchase agreement with Mizuho have a one-month to two-month tenor and are expected to roll accordingly. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair-value measurements are determined based on the assumptions that market participants would use in pricing an asset or liability. As a basis for considering market-participant assumptions in fair-value measurements, ASC 820 establishes a fair-value hierarchy that distinguishes between market-participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market-participant assumptions (unobservable inputs classified within Level 3 of the hierarchy): • Level 1 inputs are adjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. • Level 2 inputs are other than quoted prices that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar instruments in active markets and inputs that are observable for the asset or liability (other than quoted prices), such as interest rates and yield curves, that are observable at commonly quoted intervals. • Level 3 inputs are unobservable inputs for the asset or liability and include situations where there is little, if any, related market activity for the asset or liability. The Company’s assessment of the significance of a particular input to the fair-value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Derivative Financial Instruments and Hedging Activities In the normal course of business, our operations are exposed to market risks, including the effect of changes in interest rates. We may enter into derivative financial instruments to offset this underlying market risk. There have been no significant changes in our policy and strategy from what was disclosed in the financial statements included in our Annual Report. Financial Instruments Carried at Fair Value See Note 2 and Notes 4 through 7 for additional information. Financial Instruments Not Carried at Fair Value The fair values of cash and cash equivalents, accrued interest and dividends, accounts payable and other accrued liabilities and accrued interest payable approximated their carrying values because of the short-term nature of these instruments. The estimated fair values of other financial instruments were determined by the Company using available market information and appropriate valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimated fair values. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company would realize on the disposition of the financial instruments. The use of different market assumptions or estimation methodologies may have a material effect on the estimated fair value amounts. In calculating the fair value of its long-term indebtedness, the Company used interest rate and spread assumptions that reflect current creditworthiness and market conditions available for the issuance of long-term debt with similar terms and remaining maturities. These financial instruments utilize Level 2 inputs. Amounts borrowed under master repurchase agreements are based on their contractual amounts that reasonably approximate their fair value given the short to moderate term and floating rate nature. The carrying values and fair values of the Company’s financial assets and liabilities recorded at fair value on a recurring basis, as well as other financial instruments not carried at fair value as of September 30, 2023 (in thousands): Fair Value Carrying Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents $ 10,977 $ 10,977 $ — $ — $ 10,977 Restricted cash 1,942 1,942 — — 1,942 Loans, held-for-investment, net 320,151 — — 329,344 329,344 Common stock investments, at fair value 60,709 — — 60,709 60,709 Mortgage loans, held-for-investment, net 708,003 — — 689,312 689,312 Accrued interest 21,489 21,489 — — 21,489 Mortgage loans held in variable interest entities, at fair value 5,612,472 — 5,612,472 — 5,612,472 CMBS structured pass-through certificates, at fair value 42,471 — 42,471 — 42,471 MSCR notes, at fair value 10,325 — 10,325 — 10,325 Mortgage backed securities, at fair value 37,975 — 37,975 — 37,975 Accounts receivable and other assets 1,276 1,276 — — 1,276 $ 6,827,790 $ 35,684 $ 5,703,243 $ 1,079,365 $ 6,818,292 Liabilities Secured financing agreements, net $ 676,900 $ — $ — $ 691,428 $ 691,428 Master repurchase agreements 298,009 — — 298,009 298,009 Unsecured notes, net 205,625 — 178,116 — 178,116 Mortgages payable, net 32,205 — — 25,471 25,471 Accounts payable and other accrued liabilities 3,405 3,405 — — 3,405 Accrued interest payable 10,124 10,124 — — 10,124 Bonds payable held in variable interest entities, at fair value 5,225,922 — 5,225,922 — 5,225,922 $ 6,452,190 $ 13,529 $ 5,404,038 $ 1,014,908 $ 6,432,475 The carrying values and fair values of the Company’s financial assets and liabilities recorded at fair value on a recurring basis, as well as other financial instruments not carried at fair value as of December 31, 2022 (in thousands): Fair Value Carrying Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents $ 20,048 $ 20,048 $ — $ — $ 20,048 Restricted cash 299 299 — — 299 Loans, held-for-investment, net 256,147 — — 255,254 255,254 Common stock investment, at fair value 78,264 — — 78,264 78,264 Mortgage loans, held-for-investment, net 726,531 — — 727,533 727,533 Accrued interest 15,665 15,665 — — 15,665 Mortgage loans held in variable interest entities, at fair value 6,720,246 — 6,720,246 — 6,720,246 CMBS structured pass-through certificates, at fair value 46,876 — 46,876 — 46,876 MSCR notes, at fair value 10,313 — 10,313 — 10,313 Mortgage backed securities, at fair value 32,328 — 32,328 — 32,328 Accounts receivable and other assets 2,197 2,197 — — 2,197 $ 7,908,914 $ 38,209 $ 6,809,763 $ 1,061,051 $ 7,909,023 Liabilities Secured financing agreements, net $ 687,885 $ — $ — $ 713,253 $ 713,253 Master repurchase agreements 331,020 — — 331,020 331,020 Unsecured notes, net 204,960 — 175,560 — 175,560 Mortgages payable, net 121,236 — — 121,236 121,236 Accounts payable and other accrued liabilities 6,231 6,236 — — 6,236 Accrued interest payable 7,986 7,986 — — 7,986 Bonds payable held in variable interest entities, at fair value 6,249,804 — 6,249,804 — 6,249,804 $ 7,609,122 $ 14,222 $ 6,425,364 $ 1,165,509 $ 7,605,095 The significant unobservable inputs used in the fair value measurement of the Company’s investment in NSP are the discount rate and terminal capitalization rate. Significant increases (decreases) in any of those inputs in isolation could result in a significantly lower (higher) fair value measurement. The Company's investment in the Private REIT was transferred out of level 2 to level 3 due to a lack of observable market data for the three months ended December 31, 2022. The following is a summary of significant unobservable inputs used in the fair valuation of the Company's Level 3 assets carried at fair value on the Consolidated Balance Sheets as of September 30, 2023 (dollars in thousands): Carrying Valuation Technique Unobservable Inputs Range Weighted Average (1) NexPoint Storage Partners $ 33,759 Discounted cash flow Terminal cap rate 5.13% - 5.63% 5.38 % Discount rate 7.75% - 9.75% 8.75 % Private REIT $ 26,950 Market approach NAV per share multiple 1.00 - 1.21x 1.11x (1) Averages are weighted based on the fair value of the related instrument The table below reflects a summary of changes for the Company's Level 3 common stock assets carried at fair value on the Consolidated Balance Sheets for the nine months ended September 30, 2023: Balance as of 12/31/22 Change in Unrealized Gains/(Losses) Balance as of 9/30/23 NexPoint Storage Partners $ 50,380 $ (16,621) $ 33,759 Private REIT $ 27,884 $ (934) $ 26,950 Other Financial Instruments Carried at Fair Value Redeemable noncontrolling interests in the OP have a redemption feature and are marked to their redemption value if such value exceeds the carrying value of the redeemable noncontrolling interests in the OP (see Note 13). The redemption value is based on the fair value of the Company’s common stock at the redemption date, and therefore, is calculated based on the fair value of the Company’s common stock at the balance sheet date. Since the valuation is based on observable inputs such as quoted prices for similar instruments in active markets, redeemable noncontrolling interests in the OP are classified as Level 2 if they are adjusted to their redemption value. At September 30, 2023, the redeemable noncontrolling interests in the OP are valued at their carrying value on the Consolidated Balance Sheets (see Note 13). |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2023 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Common Stock During the nine months ended September 30, 2023, the Company issued 151,970 shares of common stock pursuant to the NexPoint Real Estate Finance 2020 Long Term Incentive Plan (the "2020 LTIP"). As of September 30, 2023, the Company had 17,518,900 shares of common stock, par value $0.01 per share, issued and 17,231,913 shares of common stock, par value $0.01 per share, outstanding. Preferred Stock On July 24, 2020, the Company issued 2,000,000 shares of its 8.50% Series A Cumulative Redeemable Preferred Stock (the “Series A Preferred Stock”) at a price to the public of $24.00 per share, for gross proceeds of $48.0 million before deducting underwriting discounts and commissions of approximately $1.2 million and other offering expenses of approximately $0.8 million. The Series A Preferred Stock has a $25.00 per share liquidation preference. As of September 30, 2023, the Company has 1,645,000 shares of Series A Preferred Stock issued and outstanding. Share Repurchase Program On March 9, 2020, the Board authorized a share repurchase program (the “Prior Share Repurchase Program”) through which the Company could repurchase an indeterminate number of shares of our common stock at an aggregate market value of up to $10.0 million in shares of its common stock, par value $0.01 per share, during a two-year period that expired on March 9, 2022. On September 28, 2020, the Board authorized the expansion of the Prior Share Repurchase Program to include the Company’s Series A Preferred Stock with the same period and repurchase limit. The Company was able to utilize various methods to affect the repurchases, and the timing and extent of the repurchases will depend upon several factors, including market and business conditions, regulatory requirements and other corporate considerations, including whether the Company’s common stock is trading at a significant discount to net asset value ("NAV") per share. From inception through expiration, the Company repurchased 327,422 shares of its common stock, par value $0.01 per share, at a total cost of approximately $4.8 million, or $14.61 per share. These repurchased shares of common stock are classified as treasury stock and reduce the number of shares of the Company’s common stock outstanding and, accordingly, are considered in the weighted-average number of shares outstanding during the period. On March 3, 2021, the Company cancelled 40,435 shares of common stock, reducing the total classified as treasury stock to 286,987. On February 22, 2023, the Board authorized a share repurchase program (the “Share Repurchase Program”) through which the Company may repurchase an indeterminate number of shares of our common stock and Series A Preferred Stock at an aggregate market value of up to $20.0 million in shares of its common stock during a two-year period set to expire on February 22, 2025. The Company may utilize various methods to affect the repurchases, and the timing and extent of the repurchases will depend upon several factors, including market and business conditions, regulatory requirements and other corporate considerations, including whether the Company’s common stock is trading at a significant discount to NAV per share. Repurchases under this program may be discontinued at any time. The Company has not made any purchases under the Share Repurchase Program as of the date of this report. The following table includes the number of restricted stock units granted, vested, forfeited and outstanding as of September 30, 2023: 2023 Number of Units Weighted Average Outstanding January 1, 2023 577,360 $ 17.88 Granted 440,055 15.14 Vested (201,678) (1) 17.27 Forfeited — — Outstanding September 30, 2023 815,737 $ 16.71 (1) Certain key employees of the Manager elected to net the taxes owed upon vesting against the shares issued resulting in 151,970 shares being issued as shown on the consolidated statements of stockholders' equity. The following table includes the number of restricted stock units granted, vested, forfeited and outstanding as of September 30, 2023: Shares Vesting February April May Total 2024 120,640 126,042 68,564 315,246 2025 120,646 104,672 — 225,318 2026 65,832 104,670 — 170,502 2027 — 104,671 — 104,671 Total 307,118 440,055 68,564 815,737 At-The-Market-Offering On March 15, 2022, the Company, the OP and the Manager entered into separate equity distribution agreements (the “2022 Equity Distribution Agreements”) with each of Raymond James, Keefe, Bruyette & Woods, Inc., Robert W. Baird & Co. Incorporated and Virtu Americas LLC (collectively, the “2022 Sales Agents”), pursuant to which the Company could issue and sell from time to time shares of the Company's common stock and Series A Preferred Stock having an aggregate sales price of up to $100.0 million (the “2022 ATM Program”). The 2022 Equity Distribution Agreements provided for the issuance and sale of common stock or Series A Preferred Stock by the Company through a sales agent acting as a sales agent or directly to the sales agent acting as principal for its own account at a price agreed upon at the time of sale. Sales of shares of common stock or Series A Preferred Stock under the 2022 ATM Program, if any, may be made in transactions that are deemed to be “at the market” offerings, as defined in Rule 415 under the Securities Act of 1933 (the "Securities Act") including, without limitation, sales made by means of ordinary brokers' transactions on the New York Stock Exchange (the "NYSE"), to or through a market maker at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices based on prevailing market prices. The following table contains summary information of the 2022 ATM Program since its inception through September 30, 2023: Gross Proceeds $ 12,575,493 Shares of Common Stock Issued 531,728 Gross Average Sale Price per Share of Common Stock $ 23.65 Sales Commissions $ 188,655 Offering Costs 888,249 Net Proceeds $ 11,498,589 Average Price Per Share, net $ 21.62 Noncontrolling Interest in Subsidiary On April 1, 2021, a subsidiary of one of the Subsidiary OPs (such subsidiary, the “REIT Sub”) closed its issuance of 125 preferred membership units of the REIT Sub (the “Preferred Membership Units”) at a price of $1,000 per unit, for gross proceeds of approximately $0.1 million, net of offering costs and initial administrative expenses. Holders of Preferred Membership Units are entitled to receive distributions semiannually from the REIT Sub at a per annum rate equal to 12.0% of the total of the purchase price of $1,000 per unit plus accumulated and unpaid distributions. The Preferred Membership Units are generally redeemable by the REIT Sub at any time for $1,000 per unit plus accumulated and unpaid distributions and an additional redemption premium if the Preferred Membership Units are redeemed on or before December 31, 2023. The issuance of the 125 Preferred Membership Units is presented as “Noncontrolling interest in subsidiary” on the Consolidated Balance Sheets and Consolidated Statements of Stockholders’ Equity. OP Unit Redemptions At the 2021 annual meeting of the Company, the Company's stockholders approved the potential issuance of 13,758,906 shares of the Company's common stock to related parties in connection with the redemption of their OP Units or SubOP Units that may be redeemed for OP Units. As of September 30, 2023 and December 31, 2022, the Company had redeemed and issued 8,748,735 shares of the Company's common stock to redeeming unitholders. Dividends The Board declared a dividend to preferred stockholders of $0.53125 per share on December 15, 2022, which was paid on January 25, 2023, to preferred stockholders of record as of January 13, 2023. The Board declared a dividend to preferred stockholders of $0.53125 per share on February 22, 2023, which was paid on April 25, 2023, to preferred stockholders of record as of April 13, 2023. The Board declared the first regular quarterly dividend of 2023 to common stockholders of $0.50 per share on February 22, 2023, which was paid on March 31, 2023, to common stockholders of record on March 15, 2023. The Board declared a special dividend to common stockholders of $0.185 per share on February 22, 2023, which was paid on March 31, 2023, to common stockholders of record on March 15, 2023. The Board declared the second regular quarterly dividend of 2023 to common stockholders of $0.50 per share on April 24, 2023, which was paid on June 30, 2023, to common stockholders of record on June 15, 2023. The Board declared a special dividend to common stockholders of $0.185 per share on April 24, 2023, which was paid on June 30, 2023, to common stockholders of record on June 15, 2023. The Board declared a dividend to preferred stockholders of $0.53125 per share on June 13, 2023, which was paid on July 25, 2023, to preferred stockholders of record as of July 13, 2023. The Board declared the third regular quarterly dividend of 2023 to common stockholders of $0.50 per share on July 25, 2023, which was paid on September 29, 2023, to common stockholders of record on September 15, 2023. The Board declared a special dividend to common stockholders of $0.185 per share on July 25, 2023, which was paid on September 29, 2023, to common stockholders of record on September 15, 2023. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share is computed by dividing net income attributable to common stockholders by the weighted-average number of shares of the Company’s common stock outstanding and excludes any unvested restricted stock units issued pursuant to the 2020 LTIP. Diluted earnings per share is computed by adjusting basic earnings per share for the dilutive effect of the assumed vesting of restricted stock units. Additionally, the Company includes the dilutive effect of the potential redemption of OP Units for common shares in accordance with the amended partnership agreement of the OP (the "OP LPA"). During periods of net loss, the assumed vesting of restricted stock units is anti-dilutive and is not included in the calculation of earnings (loss) per share. The following table sets forth the computation of basic and diluted earnings per share for the periods presented (in thousands, except per share amounts): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Net income (loss) attributable to common stockholders $ (15,550) $ (9,289) $ (3,236) $ 6,967 Earnings for basic computations Net income (loss) attributable to redeemable noncontrolling interests (2,374) (1,889) 1,419 5,080 Net income for diluted computations $ (17,924) $ (11,178) $ (1,817) $ 12,047 Weighted-average common shares outstanding Average number of common shares outstanding - basic 17,232 14,962 17,188 14,526 Average number of unvested restricted stock units 816 578 723 569 Average number of OP Units and SubOP Units 5,038 7,138 5,038 7,307 Average number of common shares outstanding - diluted 23,086 22,678 22,949 22,402 Earnings per weighted average common share: Basic $ (0.90) $ (0.62) $ (0.19) $ 0.48 Diluted $ (0.90) $ (0.62) $ (0.19) $ 0.48 |
Noncontrolling Interests
Noncontrolling Interests | 9 Months Ended |
Sep. 30, 2023 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interests | Noncontrolling Interests Redeemable Noncontrolling Interests in the OP The following table sets forth the redeemable noncontrolling interests in the OP (reflecting the OP’s consolidation of the Subsidiary OPs) for the nine months ended September 30, 2023, and September 30, 2022 (in thousands): For the Nine Months Ended September 30, 2023 2022 Redeemable noncontrolling interests in the OP, January 1, $ 96,501 $ 261,423 Adjustment to redeemable noncontrolling interest in the OP on deconsolidation of real estate 297 — Net income attributable to redeemable noncontrolling interests in the OP 1,419 5,080 Redemption of redeemable noncontrolling interests in the OP — (113,535) Distributions to redeemable noncontrolling interests in the OP (9,069) (10,708) Redeemable noncontrolling interests in the OP, September 30, $ 89,148 $ 142,260 The table below presents the common shares and OP Units outstanding held by the noncontrolling interests (“NCI”), as the OP Units and SubOP Units held by the Company are eliminated in consolidation: Period End Common Shares Outstanding OP Units Held by NCI Combined Outstanding September 30, 2023 17,231,913 5,038,382 22,270,295 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Management Fee In accordance with the Management Agreement, the Company pays the Manager an annual management fee equal to 1.5% of Equity (as defined below), paid monthly, in cash or shares of Company common stock at the election of our Manager (the “Annual Fee”). The duties performed by the Company’s Manager under the terms of the Management Agreement include, but are not limited to: providing daily management for the Company, selecting and working with third-party service providers, formulating an investment strategy for the Company and selecting suitable investments, managing the Company’s outstanding debt and its interest rate exposure and determining when to sell assets. “Equity” means (a) the sum of (1) total stockholders’ equity immediately prior to the closing of the IPO, plus (2) the net proceeds received by the Company from all issuances of the Company’s equity securities in and after the IPO, plus (3) the Company’s cumulative Earnings Available for Distribution (“EAD”) (as defined below) from and after the IPO to the end of the most recently completed calendar quarter, (b) less (1) any distributions to the holders of the Company’s common stock from and after the IPO to the end of the most recently completed calendar quarter and (2) all amounts that the Company or any of its subsidiaries has paid to repurchase for cash the shares of the Company’s equity securities from and after the IPO to the end of the most recently completed calendar quarter. In the Company’s calculation of Equity, the Company will adjust its calculation of EAD to remove the compensation expense relating to awards granted under one or more of its long-term incentive plans that is added back in the calculation of EAD. Additionally, for the avoidance of doubt, Equity does not include the assets contributed to the Company in the Formation Transaction. “EAD” means the net income (loss) attributable to the common stockholders of the Company, computed in accordance with GAAP, including realized gains and losses not otherwise included in net income (loss), excluding any unrealized gains or losses or other similar non-cash items that are included in net income (loss) for the applicable reporting period, regardless of whether such items are included in other comprehensive income (loss), or in net income (loss) and adding back amortization of stock-based compensation. For the purpose of calculating EAD for the Annual Fee, net income (loss) attributable to common stockholders may also be adjusted for the effects of certain GAAP adjustments and transactions that may not be indicative of the Company’s current operations, in each case after discussions between the Manager and the independent directors of the Board and approved by a majority of the independent directors of the Board. EAD has replaced our prior presentation of Core Earnings. Pursuant to the terms of the Management Agreement, the Company is required to pay directly or reimburse the Manager for all documented Operating Expenses and Offering Expenses it incurs on behalf of the Company. “Operating Expenses” include legal, accounting, financial and due diligence services performed by the Manager that outside professionals or outside consultants would otherwise perform, the Company’s pro rata share of rent, telephone, utilities, office furniture, equipment, machinery and other office, internal and overhead expenses of the Manager required for the Company’s operations and compensation expenses under the 2020 LTIP. “Offering Expenses” include all expenses (other than underwriters’ discounts) in connection with an offering of securities, including, without limitation, legal, accounting, printing, mailing and filing fees and other documented offering expenses. For the nine months ended September 30, 2023, there were no Offering Expenses that were paid on the Company’s behalf for which the Company reimbursed the Manager. Connections at Buffalo Pointe Contribution On May 29, 2020, the OP entered into a contribution agreement (the “Buffalo Pointe Contribution Agreement”) with entities affiliated with executive officers of the Company and the Manager (the “BP Contributors”) whereby the BP Contributors contributed their respective preferred membership interests in NexPoint Buffalo Pointe Holdings, LLC (“Buffalo Pointe”), to the OP for total consideration of $10.0 million paid in OP Units. A total of 564,334 OP Units were issued to the BP Contributors, which was calculated by dividing the total consideration of $10.0 million by the combined book value of the Company’s common stock and the SubOP Units, on a per share or unit basis, as of the end of the first quarter, or $17.72 per OP Unit. The Company additionally contributed an aggregate of approximately $1.7 million on January 9, 2023, March 6, 2023, March 28, 2023, May 25, 2023, and August 16, 2023. Buffalo Pointe owns a stabilized multifamily property located in Houston, Texas with 90.5% occupancy as of September 30, 2023. The preferred equity investment pays current interest at a rate of 6.5%, deferred interest at a rate of 4.5%, has a loan-to-value ratio of 75.6% and a maturity date of May 1, 2030. Pursuant to the OP LPA and the Buffalo Pointe Contribution Agreement, the BP Contributors have the right to cause our OP to redeem their OP Units for cash or, at our election, shares of our common stock on a one-for-one basis, subject to adjustment, as provided and subject to the limitations in our OP LPA, provided the OP Units have been outstanding for at least one year and our stockholders have approved the issuance of shares of common stock to the BP Contributors. On May 11, 2021, our stockholders approved the issuance of such shares upon the exercise of the BP Contributors' redemption rights. RSU Issuance On May 8, 2020, in accordance with the 2020 LTIP, the Company granted 14,739 restricted stock units to its directors, on June 24, 2020, the Company granted 274,274 restricted stock units to its officers and other employees of the Manager, on November 2, 2020, the Company granted 1,838 restricted stock units to the sole member of the general partner of one of the Company’s subsidiaries, on February 22, 2021, the Company granted 233,385 restricted stock units to its directors, officers employees and certain key employees of the Manager and its affiliates, the Company granted 1,201 restricted stock units to the sole member of the general partner of one of the Company's subsidiaries, on February 21, 2022, the Company granted 264,476 restricted stock units to its officers and other employees of the Manager and 12,464 restricted stock units to its directors, and on April 4, 2023, the Company granted 418,685 restricted stock units to its officers and other employees of the Manager and 21,370 restricted stock units to its directors. OP Unit Redemptions At the 2021 annual meeting of the Company, the Company's stockholders approved the potential issuance of 13,758,906 shares of the Company's common stock to related parties in connection with the redemption of their OP Units or SubOP Units that may be redeemed for OP Units. As of September 30, 2023 and December 31, 2022, the Company had redeemed and issued 8,748,735 shares of the Company's common stock to redeeming unitholders. Expense Cap Pursuant to the terms of the Management Agreement, direct payment of operating expenses by the Company, which includes compensation expense relating to equity awards granted under the 2020 LTIP, together with reimbursement of operating expenses of the Manager, plus the Annual Fee, may not exceed 2.5% of equity book value (the “Expense Cap”) for any calendar year or portion thereof; provided, however, that this limitation will not apply to Offering Expenses, legal, accounting, financial, due diligence and other service fees incurred in connection with extraordinary litigation and mergers and acquisitions and other events outside the ordinary course of business or any out-of-pocket acquisition or due diligence expenses incurred in connection with the acquisition or disposition of certain real estate-related investments. For the nine months ended September 30, 2023, and 2022, operating expenses did not exceed the Expense Cap. For the nine months ended September 30, 2023 and 2022, the Company incurred management fees of $2.5 million and $2.3 million, respectively. Notes Offering On April 20, 2021, the Company issued $75.0 million aggregate amount of its 5.75% Notes at a price equal to 99.5% par value for proceeds of approximately $73.1 million after original issue discount and underwriting fees. An account advised by NexAnnuity Asset Management, L.P., an affiliate of the Manager, purchased $2.5 million par value of the 5.75% Notes at issuance. Bridge Loan On March 31, 2022, the Company, through one of the Subsidiary OPs, originated a bridge loan for $13.5 million to a subsidiary of an entity advised by an affiliate of the Manager. The bridge loan was secured by a development property in Las Vegas, Nevada, and was used by the borrower to finance the acquisition of the property prior to obtaining construction financing. The loan bore interest at a rate of 1.50% plus the WSJ Prime Rate and was set to mature on October 1, 2022. On August 9, 2022, the bridge loan was paid off. NSP Guaranty On December 8, 2022 and in connection with a restructuring of NSP, the Company, through REIT Sub, together with NexPoint Diversified Real Estate Trust, Highland Income Fund and NexPoint Real Estate Strategies Fund (collectively, the "Co-Guarantors"), as guarantors, entered into a sponsor guaranty agreement in favor of Extra Space Storage, LP ("Extra Space") pursuant to which REIT Sub and the Co-Guarantors guaranteed obligations of NSP with respect to NSP’s newly created Series D Preferred Stock and one promissory note in an aggregate principal amount of approximately $49.2 million issued to Extra Space (the "Sponsor Guaranty Agreement"). The guaranties by REIT Sub and the Co-Guarantors are capped at $97.6 million, which will be reduced as the guaranteed obligations of NSP are paid. Each of REIT Sub and the Co-Guarantors generally guaranteed the foregoing obligations of NSP up to the cap amount on a pro rata basis with respect to its percentage ownership of NSP’s common stock. The maximum liability of the Company under the guaranties is approximately $83.8 million. NSP Promissory Note On September 29, 2023, a subsidiary of NSP issued $5.0 million aggregate amount of a 11.00% note maturing on September 29, 2024 to a subsidiary of the Company (the "Promissory Note"). Convertible Promissory Note On October 18, 2022, the Company, through a subsidiary, borrowed $6.5 million from NFRO REIT Sub, LLC (the "Holder") and issued $6.5 million aggregate amount of a 7.50% note to the Holder maturing on October 18, 2027. Beginning on January 1, 2023 through June 30, 2027, the Holder may elect to convert all or any part of the outstanding principal and accrued but unpaid interest due, and all other amounts due and payable to the Holder thereunder or in connection therewith, into equity interests of an affiliate of the borrower. Elysian at Hughes Center On February 1, 2022, the Company, through a subsidiary (the “Trust”), purchased the Elysian at Hughes Center, a 368-unit multifamily property in Las Vegas, Nevada, for a total of $184.1 million. The Trust is managed by an affiliate of the Manager (the “Asset Manager”). Effective January 1, 2023, the Company restructured this investment such that it does not meet the requirements for consolidation under ASC 810 – Consolidation and has been deconsolidated herein as of January 1, 2023 and presented as a preferred equity investment. As of December 31, 2022, the Company owned a preferred equity investment and indirect common equity interests in Elysian at Hughes Center, which resulted in the consolidation at year end. However, the common equity interests have been transferred to the Asset Manager in exchange for $54,000 and a guarantee of payments due to the Company in respect of its preferred equity investment if the investment is not redeemed prior to the close of the ongoing private offering of Class I Beneficial Interests in the Trust, which will continue until the maximum offering amount of $115.3 million has been reached or, if earlier, until December 31, 2023. The Company’s preferred investments were initially made from December 28, 2021 through July 26, 2022 and totaled $65.3 million. Following the transfer of the common equity interests, the Company no longer is the primary beneficiary of the Trust and as such does not consolidate it. The Company recognized a gain on deconsolidation of $1.5 million related to the residual effect of removing the consolidated assets and liabilities from the Consolidated Balance Sheets. The fair value of the preferred equity investment still approximates its par value so no portion of the gain on deconsolidation is related to a remeasurement of the fair value of the preferred equity investment. Management determined the fair value of the preferred equity investment using a market approach and performing a benchmarking analysis to comparable transactions. As of September 30, 2023, $50.5 million of the Company's preferred investment in Elysian at Hughes Center had been redeemed, resulting in a remaining principal balance of $14.8 million. Cellipont On May 17, 2023, the Company, through one of the Subsidiary OPs, committed to purchase $4.2 million of the preferred units with respect to a life sciences property development located in Houston, Texas, of which $0.2 million was unfunded as of September 30, 2023. The investment was entered into as a co-investment with affiliates of the Company. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Except as otherwise disclosed below, the Company is not aware of any contractual obligations, legal proceedings or any other contingent obligations incurred in the normal course of business that would have a material adverse effect on our consolidated financial statements. On September 29, 2021, the Company, through one of the Subsidiary OPs, entered into an agreement to purchase up to $50.0 million in a new preferred equity investment (the “Preferred Units”) upon notice from the issuer. Subject to certain conditions, the Company may be required to purchase an additional $25.0 million of Preferred Units at the option of the issuer. The funds are expected to be used to capitalize special purpose limited liability companies (“PropCos”) to engage in sale-and-leaseback transactions and development transactions on life science real property. On September, 22, 2023, the issuer exercised its right to extend the final obligation date to purchase any additional Preferred Units to September 29, 2024. As of September 30, 2023, the Company may have the obligation to fund an additional $6.6 million by September 29, 2024, which the issuer may extend for up to one year at its option for an extension fee. The Preferred Units accrue distributions at a rate of 10.0% annually, compounded monthly. Distributions on the Preferred Units will be paid in cash with respect to stabilized PropCos and paid in kind with respect to unstabilized PropCos. The obligations of the issuer will be supported by a pledge of all equity units of the PropCos. All or a portion of the Preferred Units may be redeemed at any time for a redemption price equal to the purchase price of the Preferred Units to be redeemed plus any accrued and unpaid distributions thereon and a cash redemption fee. Upon the redemption of any Preferred Units and if the parties agree, the remaining amount to be funded by the Company may be increased by the aggregate purchase price of the redeemed Preferred Units. In addition, if the issuer experiences a change of control, the redemption price will also include a payment equal to the amount needed to achieve a multiple on invested capital ("MOIC") equal to 1.25x for unstabilized PropCos and 1.10x for stabilized PropCos. As of September 30, 2023, the Company has not recorded any contingencies on its Consolidated Balance Sheets as the obligation to fund additional Preferred Units other than under the existing commitment is considered remote. On March 14, 2023, the Company, through one of the Subsidiary OPs, committed to fund $24.0 million of preferred equity with respect to a ground up construction horizontal single-family property located in Phoenix, Arizona, of which $20.1 million was unfunded as of September 30, 2023. The preferred equity investment provides a floating annual return that is the greater of prime rate plus 5.0% or 11.25%, compounded monthly with a MOIC of 1.30x and 1.0% placement fee. The Company was also issued a common interest at the time of its first funding of preferred equity on May 16, 2023. The common interest allows the Company to receive a 10% profit share once aggregate distributions exceed the 20% IRR hurdle as shown below. There was no value ascribed to the common interest as of September 30, 2023. Further, once the Company's preferred equity and accrued interest has been repaid, any additional cash flow and net sale proceeds shall be distributed as follows: • 0% to the Company and 100% to issuer up to a 20.0% internal rate of return ("IRR") • 10% to the Company and 90% to issuer thereafter On February 10, 2023, the Company, through one of the Subsidiary OPs, through a unit purchase agreement, committed to purchase $30.3 million of the preferred units with respect to a multifamily property development located in Forney, Texas, of which $9.4 million was unfunded as of September 30, 2023. Further, the Company committed to purchase $4.3 million of common equity with respect to the same property, of which $3.3 million was unfunded as of September 30, 2023. On February 10, 2023, the Company, through one of the Subsidiary OPs, through a unit purchase agreement, committed to purchase $30.3 million of the preferred units with respect to a multifamily property development located in Richmond, Virginia, of which $16.1 million was unfunded as of September 30, 2023. Further, the Company committed to purchase $4.3 million of common equity with respect to the same property, of which $3.3 million was unfunded as of September 30, 2023. The table below shows the Company's unfunded commitments by investment type as of September 30, 2023 and December 31, 2022 (in thousands): Investment Type September 30, 2023 December 31, 2022 Unfunded Commitments Unfunded Commitments Preferred Equity $ 52,200 $ 25,000 Common Equity 6,600 — $ 58,800 $ 25,000 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Alexander at the District The Company, through its subsidiaries, holds a preferred equity investment in SPG Alexander JV LLC, which owns a 280 unit multifamily property in Atlanta, Georgia. On October 10, 2023, the Company exercised its right to terminate and replace the existing manager of SPG Alexander JV, LLC, with NREF Alexander Manager, LLC, which the Company has 100% ownership of through the OP. The OP is the primary beneficiary of SPG Alexander JV LLC as of October 10, 2023, the property is expected to be consolidated in our consolidated financial statements in the fourth quarter. Dividends Declared The Board declared the fourth regular quarterly dividend of 2023 to common stockholders of $0.50 per share on October 30, 2023, to be paid on December 29, 2023, to common stockholders of record on December 15, 2023. The Board declared a special dividend to common stockholders of $0.185 per share on October 30, 2023, to be paid on December 29, 2023, to common stockholders of record on December 15, 2023. Series B Preferred Stock Offering On November 2, 2023, the Company announced the launch of a continuous public offering of up to 16,000,000 shares of its newly designated 9.00% Series B Cumulative Redeemable Preferred Stock (the “Series B Preferred Stock”) at a price to the public of $25.00 per share, for gross proceeds of $400 million. NexPoint Securities, Inc., an affiliate of the Manager, will serve as the Company’s dealer manager (the "Dealer Manager") in connection with the offering. The Dealer Manager will use its reasonable best efforts to sell the shares of Series B Preferred Stock offered in the offering, and the Company will pay the Dealer Manager, subject to the discounts and other special circumstances described or referenced therein, (i) selling commissions of 7.0% of the aggregate gross proceeds from sales of Series B Preferred Stock in the offering (“Selling Commissions”) and (ii) a dealer manager fee of 3.0% of the gross proceeds from sales of Series B Preferred Stock in the offering (the “Dealer Manager Fee”). The Dealer Manager, subject to federal and state securities laws, will reallow all or any portion of the Selling Commissions and may reallow a portion of the Dealer Manager Fee to other securities dealers that the Dealer Manager may retain who sold the shares of Series B Preferred Stock as will be described more fully in the agreements between such dealers and the Dealer Manager. The Company expects that the offering will terminate on the earlier of the date the Company sells all 16,000,000 shares of the Series B Preferred Stock in the offering or March 14, 2025 (which is the third anniversary of the effective date of the Company’s registration statement), which may be extended by the Company’s board of directors in its sole discretion. The board of directors may elect to terminate this offering at any time. Preferred Equity Investments The Company, through one of the Subsidiary OPs, purchased $11.0 million of preferred units on November 9, 2023 with respect to a life science focused real estate company. NSP Promissory Note On October 27, 2023, the Promissory Note of $5.0 million was repaid in full plus accrued interest. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Accounting | Basis of Accounting The accompanying unaudited consolidated financial statements are presented in accordance with GAAP. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the unaudited consolidated financial statements and the amounts of revenues and expenses during the reporting periods. Actual amounts realized or paid could differ from those estimates. All significant intercompany accounts and transactions have been eliminated in consolidation. There have been no significant changes to the Company’s significant accounting policies during the nine months ended September 30, 2023. The accompanying unaudited consolidated financial statements have been prepared according to the rules and regulations of the SEC. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted according to such rules and regulations, although management believes that the disclosures are adequate to make the information presented not misleading. |
Use of Estimates and Assumptions | Use of Estimates and Assumptions The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. It is at least reasonably possible that these estimates could change in the near term. Estimates are inherently subjective in nature and actual results could differ from our estimates and the differences could be material. |
Principles of Consolidation | Principles of ConsolidationThe Company accounts for subsidiary partnerships in which it holds an ownership interest in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidation. The Company first evaluates whether each entity is a variable interest entity (“VIE”). Under the VIE model, the Company consolidates an entity when it has power to direct the activities of the VIE and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. Under the voting model, the Company consolidates an entity when it controls the entity through ownership of a majority voting interest. As of September 30, 2023, the Company has determined it must consolidate the OP and the Subsidiary OPs under the VIE model as it was determined the Company both controls the direct activities of the OP and Subsidiary OPs and possesses the right to receive benefits that could potentially be significant to the OP and Subsidiary OPs. The consolidated financial statements include the accounts of the Company and its subsidiaries, including the OP and its subsidiaries. The Company’s sole significant asset is its investment in the OP, and consequently, substantially all of the Company’s assets and liabilities represent those assets and liabilities of the OP. |
Variable Interest Entities | Variable Interest Entities The Company evaluates all of its interests in VIEs for consolidation. When the Company’s interests are determined to be variable interests, the Company assesses whether it is deemed to be the primary beneficiary of the VIE. The primary beneficiary of a VIE is required to consolidate the VIE. FASB ASC Topic 810, Consolidation , defines the primary beneficiary as the party that has both (i) the power to direct the activities of the VIE that most significantly impact its economic performance, and (ii) the obligation to absorb losses and the right to receive benefits from the VIE which could |
CMBS Trusts | CMBS Trusts The Company consolidates the trusts that issue beneficial ownership interests in mortgage loans secured by commercial real estate (commonly known as CMBS) when the Company holds a variable interest in, and management considers the Company to be the primary beneficiary of, those trusts. Management believes the performance of the assets that underlie CMBS issuances most significantly impact the economic performance of the trust, and the primary beneficiary is generally the entity that conducts activities that most significantly impact the performance of the underlying assets. In particular, the most subordinate tranches of CMBS expose the holder to greater variability of economic performance when compared to more senior tranches since the subordinate tranches absorb a disproportionately higher amount of the credit risk related to the underlying assets. Generally, a trust designates the most junior subordinate tranche outstanding as the controlling class, which entitles the holder of the controlling class to unilaterally appoint, remove and replace the special servicer for the trust. For the CMBS that the Company consolidates, the Company owns 100% of the most subordinate tranche of the securities. The subordinate tranche includes the controlling class and has the ability to remove and replace the special servicer. |
Mortgage and Other Loans Held-For-Investment, net | Mortgage and Other Loans Held-For-Investment, net Loans that are held-for-investment are carried at their aggregate outstanding face amount, net of applicable (i) unamortized origination or acquisition premium and discounts, (ii) unamortized deferred fees and other direct loan origination costs, (iii) valuation allowance for credit losses and (iv) write-downs of impaired loans. The effective interest method is used to amortize origination or acquisition premiums and discounts and deferred fees or other direct loan origination costs. In general, an increase in prepayment rates accelerates the amortization of purchase premiums, thereby reducing the interest income earned on the assets. Conversely, discounts on such assets are accreted into interest income. In general, an increase in prepayment rates accelerates the accretion of purchase discounts, thereby increasing the interest income earned on the assets. |
Allowance for Credit Losses | Allowance for Credit Losses In periods ending on or prior to December 31, 2022, the Company, with the assistance of an independent valuations firm, performed a quarterly evaluation of loans classified as held for investment for impairment on a loan-by-loan basis in accordance with ASC 310-10-35, Receivables, Subsequent Measurement (“ASC 310-10-35”). If the Company determined that it was probable that it would be unable to collect all amounts owed according to the contractual terms of a loan, impairment of that loan was indicated. If a loan was considered to be impaired, the Company would establish an allowance for loan losses, through a valuation provision in earnings that reduced carrying value of the loan to the present value of expected future cash flows discounted at the loan’s contractual effective rate or the fair value of the collateral, if repayment was expected solely from the collateral. For non-impaired loans with no specific allowance the Company determined an allowance for loan losses in accordance with ASC 450-20, Loss Contingencies (“ASC 450-20”), which represented management’s best estimate of incurred losses inherent in the portfolio at the balance sheet date, excluding impaired loans and loans carried at fair value. Management considered quantitative factors likely to cause estimated credit losses, including default rate and loss severity rates. The Company also evaluated qualitative factors such as macroeconomic conditions, evaluations of underlying collateral, trends in delinquencies and non-performing assets. Increases to (or reversals of) the allowance for loan loss for the fiscal year ended December 31, 2022 are included in “Loan loss (provision)” on the accompanying Consolidated Statements of Operations. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses on Financial Instruments (“ASU 2016-13”), which establishes credit losses on certain types of financial instruments. The new approach changes the impairment model for most financial assets and requires the use of a current expected credit loss ("CECL") model for financial instruments measured at amortized cost and certain other instruments. This model applies to trade and other receivables, loans, debt securities, net investments in leases and off-balance sheet credit exposures (such as loan commitments, standby letters of credit and financial guarantees not accounted for as insurance) and requires entities to estimate the lifetime expected credit loss on such instruments and record an allowance that represents the portion of the amortized cost basis that the entity does not expect to collect. We adopted the guidance as of January 1, 2023. The implementation process included the utilization of loan loss forecasting models, updates to our loan credit loss policy documentation, changes to internal reporting processes and related internal controls, and overall operational readiness for our adoption of the new standard. We have implemented loan loss forecasting models for estimating expected life-time credit losses, at the individual loan level, for our loan portfolio. The CECL forecasting methods used by the Company include (i) a probability of default and loss given default method using underlying third-party CMBS/Commercial Real Estate loan database with historical loan losses from 1998 to 2022, and (ii) probability weighted expected cash flow method, depending on the type of loan and the availability of relevant historical market loan loss data. We might use other acceptable alternative approaches in the future depending on, among other factors, the type of loan, underlying collateral, and availability of relevant historical market loan loss data. Significant inputs to our forecasting methods include (i) key loan-specific inputs such as loan-to-value, vintage year, loan-term, underlying property type, occupancy, geographic location, performance against the underwritten business plan, and our internal loan risk rating, and (ii) a macro-economic environment forecast. The reasonable and supportable forecast period is determined based on the Company’s assessment of the most likely scenario of assumptions and plausible outcomes for the U.S. economy, current portfolio composition, level of historical loss forecast estimates, material changes in growth and credit strategy and other factors that may affect its loss experience. The Company regularly evaluates the reasonable and supportable forecast period to determine if a change is needed. The Company has determined that economic forecasts used in our CECL model can be reasonable and supportable over four quarters as it provides enough time to account for the expected changes of the economic conditions and the performance of the underlying assets. Beyond the Company’s reasonable and supportable forecast period, the Company immediately reverts to historical loss information. The Company considers an immediate reversion period appropriate in the CECL model because it provides a suitable balance between the stability of historical data and the flexibility to account for changing market conditions. The allowance for loan and lease losses reserve as of December 31, 2022, was $0.7 million and the CECL reserve as of January 1, 2023, was $2.3 million. As such, the cumulative effect of adoption of ASU 2016-13 was a $1.6 million reduction in retained earnings. The provision for credit losses of $6.28 million for the three and nine months ended September 30, 2023 is included in other income on the accompanying Consolidated Statements of Operations, resulting in an ending allowance for credit loss of $8.54 million as of September 30, 2023. Significant judgment is required in determining impairment and in estimating the resulting loss allowance, and actual losses, if any, could materially differ from those estimates. The Company performs a quarterly review of the portfolio. In conjunction with this review, the Company assesses the risk factors of each loan, including, without limitation, loan-to-value ratio, debt yield, property type, geographic and local market dynamics, physical condition, collateral, cash-flow volatility, leasing and tenant profile, loan structure, exit plan and project sponsorship. Based on a 5-point scale, our loans are rated “1” through “5,” from least risk to greatest risk, respectively, which ratings are defined as follows: 1 – Outperform – Materially exceeds performance metrics (for example, technical milestones, occupancy, rents and net operating income) included in original or current credit underwriting and business plan; 2 – Exceeds Expectations – Collateral performance exceeds substantially all performance metrics included in original or current credit underwriting and business plan; 3 – Satisfactory – Collateral performance meets, or is on track to meet, underwriting; business plan is met or can reasonably be achieved; 4 – Underperformance – Collateral performance falls short of underwriting, material differences exist from business plan, or both; technical milestones have been missed; defaults may exist or may soon occur absent material improvement; and 5 – Risk of Impairment/Default – Collateral performance is significantly worse than underwriting; major variance from business plan; loan covenants or technical milestones have been breached; timely exit from loan via sale or refinancing is questionable. The Company regularly evaluates the extent and impact of any credit deterioration associated with the performance and/or value of the underlying collateral, as well as the financial and operating capability of the borrower. Specifically, the collateral’s operating results and any cash reserves are analyzed and used to assess (i) whether cash from operations is sufficient to cover the debt service requirements currently and into the future, (ii) the ability of the borrower to refinance the loan and/or (iii) the collateral’s liquidation value. The Company also evaluates the financial condition of any loan guarantors, as well as any changes in the borrower’s competency in managing and operating the collateral. In addition, the Company considers the overall economic environment, real estate or industry sector and geographic sub-market in which the borrower operates. Such impairment analyses are completed and reviewed by asset management and finance personnel who utilize various data sources, including (i) periodic financial data such as property operating statements, occupancy, tenant profile, rental rates, operating expenses, the borrower’s exit plan and capitalization and discount rates, (ii) site inspections and (iii) current credit spreads and discussions with market participants. The Company considers loans to be past-due when a monthly payment is due and unpaid for 60 days or more. Loans will be placed on nonaccrual status and considered non-performing when full payment of principal and interest is in doubt, which generally occurs when they become 120 days or more past-due unless the loan is both well secured and in the process of collection. Accrual of interest on individual loans is discontinued when management believes that, after considering economic and business conditions and collection efforts, the borrower’s financial condition is such that collection of interest is doubtful. Our policy is to cease accruing interest when a loan’s delinquency exceeds 120 days. All interest accrued but not collected for loans that are placed on nonaccrual status or subsequently charged-off are reversed against interest income. Income is subsequently recognized on the cash basis until, in management’s judgment, the borrower’s ability to make periodic principal and interest payments returns and future payments are reasonably assured, in which case the loan is returned to accrual status. For individual loans, a troubled debt restructuring is a formal restructuring of a loan where, for economic or legal reasons related to the borrower’s financial difficulties, a concession that would not otherwise be considered is granted to the borrower. The concession may be granted in various forms, including providing a below-market interest rate, a reduction in the loan balance or accrued interest, an extension of the maturity date or a combination of these. An individual loan that has had a troubled debt restructuring is considered to be impaired and is subject to the relevant accounting for impaired loans. As of and for the nine months ended September 30, 2023, the Company had no loan modifications, and, thus no troubled debt restructurings. A loan is written off when it is no longer realizable and/or it is legally discharged. The Company will evaluate acquired loans and debt securities for which it is probable at acquisition that all contractually required payments will not be collected in accordance with ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality . During the nine months ended September 30, 2023, there were no loans acquired with deteriorated credit quality. The Company also recognizes a liability for expected credit losses for off-balance sheet exposures if the Company has a present contractual obligation to extend the credit and the obligation is not unconditionally cancelable by the entity. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Section 107 of the Jumpstart Our Business Startups Act (“JOBS Act”) provides that an emerging growth company can take advantage of the extended transition period provided in Section 13(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), for complying with new or revised accounting standards applicable to public companies. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company has elected to take advantage of this extended transition period. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates for such new or revised standards. The Company may elect to comply with public company effective dates at any time, and such election would be irrevocable pursuant to Section 107(b) of the JOBS Act. In December 2022, the FASB issued ASU 2022-06, Deferral of the Sunset Date of Topic 848 ("ASU 2022-06") which was issued to defer the sunset date of Reference Rate Reform (Topic 848) : Facilitation of the Effects of Reference Rate Reform to December 31, 2024. ASU 2022-06 is effective immediately for all companies. ASU 2022-06 had no impact on the Company’s consolidated financial statements for the nine months ended September 30, 2023. |
Loans Held for Investment, Net
Loans Held for Investment, Net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivable | The following tables summarize our loans held-for-investment as of September 30, 2023 and December 31, 2022, respectively (dollars in thousands): Loan Type Outstanding Face Amount Carrying Value (1) Loan Count Weighted Average Fixed Rate (2) Coupon (3) Life (years) (4) September 30, 2023 Mortgage loans, held-for-investment $ 675,844 $ 708,003 13 100.00 % 4.79 % 4.64 Mezzanine loans, held-for-investment 133,207 135,079 22 78.31 % 9.60 % 5.55 Preferred equity, held-for-investment 187,173 180,072 16 46.22 % 12.18 % 2.58 Promissory note, held-for-investment 5,000 5,000 1 11.00 % 11.00 % 1.00 $ 1,001,224 $ 1,028,154 52 86.62 % 6.85 % 4.36 Loan Type Outstanding Face Amount Carrying Value (1) Loan Count Weighted Average Fixed Rate (2) Coupon (3) Life (years) (4) December 31, 2022 Mortgage loans, held-for-investment $ 688,046 $ 726,531 15 100.00 % 4.81 % 5.36 Mezzanine loans, held-for-investment 163,021 165,182 23 63.99 % 10.42 % 5.39 Preferred equity, held-for-investment 91,382 90,965 10 67.69 % 11.51 % 2.76 $ 942,449 $ 982,678 48 90.64 % 6.43 % 5.11 (1) Carrying value includes the outstanding face amount plus unamortized purchase premiums/discounts and any allowance for loan losses. (2) The weighted-average of loans paying a fixed rate is weighted on current principal balance. (3) The weighted-average coupon is weighted on outstanding face amount. (4) The weighted-average life is weighted on outstanding face amount and assumes no prepayments. The maturity date for preferred equity investments represents the maturity date of the senior mortgage, as the preferred equity investments require repayment upon the sale or refinancing of the asset. |
Schedule of Loan and Preferred Equity Portfolio Activity | For the nine months ended September 30, 2023 and 2022, the loan and preferred equity portfolio activity was as follows (in thousands): For the Nine Months Ended September 30, 2023 2022 Balance at January 1, $ 982,678 $ 1,088,881 Recognition of retained preferred equity investment upon deconsolidation of real estate (Note 14) 36,022 — Cumulative effect of adoption of ASU 2016-13 (See Note 2) (1,624) — Conversion of convertible bonds to common stock — (25,000) Originations 76,355 156,934 Proceeds from principal repayments (58,246) (196,825) PIK distribution reinvested in Preferred Units 4,076 528 Amortization of loan premium, net (1) (4,871) (11,591) (Provision for) reversal of credit losses, net (6,236) (57) Balance at September 30, $ 1,028,154 $ 1,012,870 (1) Includes net amortization of loan purchase premiums. |
Financing Receivable Credit Quality Indicators | The following tables allocate the principal balance and net book value of the loan portfolio based on our internal risk ratings (dollars in thousands): Risk Rating September 30, 2023 Number of Carrying % of Loan 1 — $ — — 2 — — — 3 48 999,080 97.17 % 4 3 25,199 2.45 % 5 1 3,875 0.38 % 52 $ 1,028,154 100.00 % Risk Rating December 31, 2022 Number of Carrying % of Loan 1 — $ — — 2 — — — 3 48 982,678 100.00 % 4 — — — 5 — — — 48 $ 982,678 100.00 % The following tables present the carrying value of the loan portfolio by the Company's internal risk rating and year of origination as of September 30, 2023 and December 31, 2022 (dollars in thousands): September 30, 2023 Carrying Value by Year of Origination (1) Risk Rating Number of Outstanding Face Amount 2023 2022 2021 2020 2019 Prior Total Carrying Value 1 — $ — $ — $ — $ — $ — $ — $ — $ — 2 — — — — — — — — — 3 48 966,711 70,402 70,733 44,133 19,159 774,691 19,962 999,080 4 3 24,763 — 8,438 — — 16,761 — 25,199 5 1 9,750 — — 3,875 — — — 3,875 52 $ 1,001,224 $ 70,402 $ 79,171 $ 48,008 $ 19,159 $ 791,452 $ 19,962 $ 1,028,154 December 31, 2022 Carrying Value by Year of Origination (1) Risk Rating Number of Outstanding Face Amount 2022 2021 2020 2019 2018 Prior Total Carrying Value 1 — $ — $ — $ — $ — $ — $ — $ — $ — 2 — — — — — — — — — 3 48 999,080 72,606 98,129 17,500 774,381 20,062 — 982,678 4 — — — — — — — — — 5 — — — — — — — — — 48 $ 999,080 $ 72,606 $ 98,129 $ 17,500 $ 774,381 $ 20,062 $ — $ 982,678 |
Schedule of Loans Held for Investment as a Percentage of Face Amount by Geographic Areas | The following tables present the geographies and property types of collateral underlying the Company’s loans held-for-investment as a percentage of the loans’ face amounts. Geography September 30, 2023 December 31, 2022 Georgia 32.45 % 34.04 % Florida 18.45 % 19.34 % Texas 12.65 % 11.21 % Nevada 2.75 % * Maryland 5.34 % 5.59 % Minnesota 6.65 % 6.97 % California 4.39 % 4.66 % Alabama 3.63 % 3.81 % North Carolina 2.69 % 2.65 % Virginia 1.66 % * Arkansas 1.35 % 1.42 % Other (18 and 19 states each at <1%) 7.99 % 10.31 % 100.00 % 100.00 % *Included in “Other.” Collateral Property Type September 30, 2023 December 31, 2022 Single Family Rental 69.26 % 72.26 % Multifamily 23.32 % 23.11 % Life Science 5.71 % 2.85 % Self-Storage 1.70 % 1.79 % 100.00 % 100.00 % |
CMBS Trusts (Tables)
CMBS Trusts (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Mortgage Banking [Abstract] | |
Schedule of Recognized Trusts Assets and Liabilities | The following table presents the Company’s recognized Trust’s Assets and Liabilities (in thousands): Trust's Assets September 30, 2023 December 31, 2022 Mortgage loans held in variable interest entities, at fair value $ 5,612,472 $ 6,720,246 Accrued interest receivable 3,390 4,029 Trust's Liabilities Bonds payable held in variable interest entities, at fair value (5,225,922) (6,249,804) Accrued interest payable (2,740) (3,207) |
Schedule of Change in Net Assets Related to Consolidated CMBS Variable Interest Entities | The following table presents “Change in net assets related to consolidated CMBS variable interest entities” (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Net interest earned $ 9,804 $ 9,455 $ 31,334 $ 25,623 Unrealized gain (loss) (2,767) (12,103) (6,408) (20,304) Change in net assets related to consolidated CMBS variable interest entities $ 7,037 $ (2,648) $ 24,926 $ 5,319 |
Summary Of Loan Collateral Unpaid Balance | The following tables present the geographies and property types of collateral underlying the CMBS trusts consolidated by the Company as a percentage of the collateral unpaid principal balance: Geography September 30, 2023 December 31, 2022 Texas 15.77 % 17.95 % Florida 14.07 % 13.82 % Arizona 4.02 % 6.98 % California 8.64 % 9.28 % Georgia 4.33 % 4.68 % Washington 7.71 % 6.88 % New Jersey 3.99 % 3.97 % Nevada 2.48 % 1.99 % Pennsylvania 1.26 % 1.01 % Colorado 7.70 % 6.21 % Connecticut 2.04 % 3.64 % North Carolina 4.14 % 3.53 % New York 3.35 % 2.76 % Ohio 2.48 % 2.00 % Virginia 2.02 % 1.62 % Indiana 2.11 % 1.69 % Illinois 1.64 % 1.37 % Michigan 1.37 % 1.11 % Maryland 1.17 % * Missouri 1.55 % 1.25 % Other (21 and 22 states each at <1%) 8.16 % 8.26 % 100.00 % 100.00 % *Included in “Other.” Collateral Property Type September 30, 2023 December 31, 2022 Multifamily 97.35 % 98.45 % Manufactured Housing 2.65 % 1.55 % 100.00 % 100.00 % |
Common Stock Investments (Table
Common Stock Investments (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Debt Securities, Trading, and Equity Securities, FV-NI | The following table presents the common stock investments as of September 30, 2023 and December 31, 2022, respectively (in thousands, except share amounts): Investment Investment Property Type Shares Fair Value September 30, 2023 December 31, 2022 September 30, 2023 December 31, 2022 Common Stock NexPoint Storage Partners 11/6/2020 Self-storage 41,963 41,963 $ 33,759 $ 50,380 Private REIT 4/14/2022 Ground lease 1,394,213 1,394,213 26,950 27,884 The following table presents the CMBS I/O Strips, MSCR Notes and mortgage backed securities as of September 30, 2023 (dollars in thousands): Investment Investment Carrying Value Property Type Interest Rate Current Yield (1) Maturity Date CMBS I/O Strips CMBS I/O Strip 5/18/2020 $ 1,638 Multifamily 2.09 % 15.13 % 9/25/2046 CMBS I/O Strip 8/6/2020 16,840 Multifamily 3.08 % 18.00 % 6/25/2030 CMBS I/O Strip 4/28/2021 (2) 5,078 Multifamily 1.71 % 18.36 % 1/25/2030 CMBS I/O Strip 5/27/2021 3,446 Multifamily 3.50 % 17.77 % 5/25/2030 CMBS I/O Strip 6/7/2021 404 Multifamily 2.39 % 22.06 % 11/25/2028 CMBS I/O Strip 6/11/2021 (3) 3,610 Multifamily 1.32 % 16.11 % 5/25/2029 CMBS I/O Strip 6/21/2021 815 Multifamily 1.28 % 19.34 % 5/25/2030 CMBS I/O Strip 8/10/2021 2,270 Multifamily 1.96 % 18.03 % 4/25/2030 CMBS I/O Strip 8/11/2021 1,225 Multifamily 3.20 % 15.30 % 7/25/2031 CMBS I/O Strip 8/24/2021 227 Multifamily 2.70 % 16.21 % 1/25/2031 CMBS I/O Strip 9/1/2021 3,400 Multifamily 2.04 % 17.47 % 6/25/2030 CMBS I/O Strip 9/11/2021 3,518 Multifamily 3.05 % 15.24 % 9/25/2031 Total $ 42,471 2.58 % 17.46 % MSCR Notes MSCR Notes 5/25/2022 $ 4,020 Multifamily 14.79 % 14.79 % 5/25/2052 MSCR Notes 5/25/2022 5,000 Multifamily 11.79 % 11.79 % 5/25/2052 MSCR Notes 9/23/2022 1,305 Multifamily 12.14 % 13.34 % 11/25/2051 Total $ 10,325 13.00 % 13.15 % Mortgage Backed Securities Mortgage Backed Securities 6/1/2022 $ 9,898 Single-Family 8.63 % 8.93 % 4/17/2026 Mortgage Backed Securities 6/1/2022 9,173 Single-Family 4.87 % 5.03 % 11/19/2025 Mortgage Backed Securities 7/28/2022 529 Single-Family 6.23 % 6.32 % 10/17/2027 Mortgage Backed Securities 7/28/2022 845 Single-Family 3.60 % 4.15 % 6/20/2028 Mortgage Backed Securities 9/12/2022 3,937 Multifamily 11.35 % 11.33 % 1/25/2031 Mortgage Backed Securities 9/29/2022 7,856 Self Storage 11.09 % 11.11 % 9/15/2027 Mortgage Backed Securities 3/10/2023 5,737 Multifamily 13.72 % 13.75 % 2/25/2025 Total $ 37,975 9.14 % 9.27 % (1) Current yield is the annualized income earned divided by the cost basis of the investment. (2) The Company, through the Subsidiary OPs, purchased approximately $50.0 million and $15.0 million aggregate notional amount of the X1 interest-only tranche of the FHMS K-107 CMBS I/O Strip on April 28, 2021 and May 4, 2021, respectively. (3) The Company, through the Subsidiary OPs, purchased approximately $80.0 million, $35.0 million, $40.0 million and $50.0 million aggregate notional amount of the X1 interest-only tranche of the FRESB 2019-SB64 CMBS I/O Strip on June 11, 2021, September 29, 2021, February 3, 2022 and March 18, 2022, respectively. The following table presents the CMBS I/O Strips, MSCR Notes and Mortgage Backed Securities as of December 31, 2022 (dollars in thousands): Investment Investment Carrying Value Property Type Interest Rate Current Yield (1) Maturity Date CMBS I/O Strips CMBS I/O Strip 5/18/2020 $ 1,807 Multifamily 2.02 % 14.56 % 9/25/2046 CMBS I/O Strip 8/6/2020 18,364 Multifamily 2.98 % 15.98 % 6/25/2030 CMBS I/O Strip 4/28/2021 (2) 5,676 Multifamily 1.59 % 15.52 % 1/25/2030 CMBS I/O Strip 5/27/2021 3,693 Multifamily 3.39 % 15.73 % 5/25/2030 CMBS I/O Strip 6/7/2021 455 Multifamily 2.31 % 18.91 % 11/25/2028 CMBS I/O Strip 6/11/2021 (3) 4,188 Multifamily 1.19 % 13.34 % 5/25/2029 CMBS I/O Strip 6/21/2021 1,117 Multifamily 1.18 % 16.77 % 5/25/2030 CMBS I/O Strip 8/10/2021 2,445 Multifamily 1.89 % 15.87 % 4/25/2030 CMBS I/O Strip 8/11/2021 1,333 Multifamily 3.10 % 13.74 % 7/25/2031 CMBS I/O Strip 8/24/2021 250 Multifamily 2.61 % 14.44 % 1/25/2031 CMBS I/O Strip 9/1/2021 3,726 Multifamily 1.92 % 15.03 % 6/25/2030 CMBS I/O Strip 9/11/2021 3,822 Multifamily 2.95 % 13.70 % 9/25/2031 Total $ 46,876 2.46 % 15.32 % MSCR Notes MSCR Notes 5/25/2022 $ 4,019 Multifamily 13.02 % 13.02 % 5/25/2052 MSCR Notes 5/25/2022 4,988 Multifamily 10.02 % 10.02 % 5/25/2052 MSCR Notes 9/23/2022 1,306 Multifamily 10.37 % 11.40 % 11/25/2051 Total $ 10,313 11.23 % 11.36 % Mortgage Backed Securities Mortgage Backed Securities 6/1/2022 $ 9,638 Single-Family 7.08 % 7.39 % 4/17/2026 Mortgage Backed Securities 6/1/2022 8,966 Single-Family 4.87 % 5.08 % 11/19/2025 Mortgage Backed Securities 7/28/2022 526 Single-Family 6.23 % 6.33 % 10/17/2027 Mortgage Backed Securities 7/28/2022 819 Single-Family 3.60 % 4.23 % 6/20/2028 Mortgage Backed Securities 9/12/2022 4,473 Multifamily 9.29 % 9.27 % 1/25/2031 Mortgage Backed Securities 9/29/2022 7,906 Self Storage 9.57 % 9.59 % 9/15/2027 Total $ 32,328 7.28 % 7.45 % (1) Current yield is the annualized income earned divided by the cost basis of the investment. (2) The Company, through the Subsidiary OPs, purchased approximately $50.0 million and $15.0 million aggregate notional amount of the X1 interest-only tranche of the FHMS K-107 CMBS I/O Strip on April 28, 2021 and May 4, 2021, respectively. (3) The Company, through the Subsidiary OPs, purchased approximately $80.0 million, $35.0 million, $40.0 million and $50.0 million aggregate notional amount of the X1 interest-only tranche of the FRESB 2019-SB64 CMBS I/O Strip on June 11, 2021, September 29, 2021, February 3, 2022 and March 18, 2022, respectively. |
Investment | The following table presents “Change in unrealized gain on common stock investments” (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Change in unrealized gain on NexPoint Storage Partners $ (17,258) $ (3,189) $ (16,621) $ (2,726) Change in unrealized gain (loss) on Private REIT 794 — (935) 2,885 Change in unrealized gain on common stock investments $ (16,464) $ (3,189) $ (17,556) $ 159 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Variable Interest Entities | As of September 30, 2023, the Company has accounted for the following investments as unconsolidated VIEs: Entities Instrument Asset Type Percentage Ownership as of September 30, 2023 Relationship as of September 30, 2023 Unconsolidated Entities: NexPoint Storage Partners, Inc. Common Stock Self-storage 25.7 % VIE Resmark Forney Gateway Holdings, LLC Common Equity Multifamily 98.0 % VIE Resmark The Brook, LLC Common Equity Multifamily 98.0 % VIE Alexander at the District Common Equity Multifamily 25.7 % VIE |
CMBS Structured Pass Through _2
CMBS Structured Pass Through Certificates, MSCR Notes and Mortgage Backed Securities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Debt Securities, Trading, and Equity Securities, FV-NI | The following table presents the common stock investments as of September 30, 2023 and December 31, 2022, respectively (in thousands, except share amounts): Investment Investment Property Type Shares Fair Value September 30, 2023 December 31, 2022 September 30, 2023 December 31, 2022 Common Stock NexPoint Storage Partners 11/6/2020 Self-storage 41,963 41,963 $ 33,759 $ 50,380 Private REIT 4/14/2022 Ground lease 1,394,213 1,394,213 26,950 27,884 The following table presents the CMBS I/O Strips, MSCR Notes and mortgage backed securities as of September 30, 2023 (dollars in thousands): Investment Investment Carrying Value Property Type Interest Rate Current Yield (1) Maturity Date CMBS I/O Strips CMBS I/O Strip 5/18/2020 $ 1,638 Multifamily 2.09 % 15.13 % 9/25/2046 CMBS I/O Strip 8/6/2020 16,840 Multifamily 3.08 % 18.00 % 6/25/2030 CMBS I/O Strip 4/28/2021 (2) 5,078 Multifamily 1.71 % 18.36 % 1/25/2030 CMBS I/O Strip 5/27/2021 3,446 Multifamily 3.50 % 17.77 % 5/25/2030 CMBS I/O Strip 6/7/2021 404 Multifamily 2.39 % 22.06 % 11/25/2028 CMBS I/O Strip 6/11/2021 (3) 3,610 Multifamily 1.32 % 16.11 % 5/25/2029 CMBS I/O Strip 6/21/2021 815 Multifamily 1.28 % 19.34 % 5/25/2030 CMBS I/O Strip 8/10/2021 2,270 Multifamily 1.96 % 18.03 % 4/25/2030 CMBS I/O Strip 8/11/2021 1,225 Multifamily 3.20 % 15.30 % 7/25/2031 CMBS I/O Strip 8/24/2021 227 Multifamily 2.70 % 16.21 % 1/25/2031 CMBS I/O Strip 9/1/2021 3,400 Multifamily 2.04 % 17.47 % 6/25/2030 CMBS I/O Strip 9/11/2021 3,518 Multifamily 3.05 % 15.24 % 9/25/2031 Total $ 42,471 2.58 % 17.46 % MSCR Notes MSCR Notes 5/25/2022 $ 4,020 Multifamily 14.79 % 14.79 % 5/25/2052 MSCR Notes 5/25/2022 5,000 Multifamily 11.79 % 11.79 % 5/25/2052 MSCR Notes 9/23/2022 1,305 Multifamily 12.14 % 13.34 % 11/25/2051 Total $ 10,325 13.00 % 13.15 % Mortgage Backed Securities Mortgage Backed Securities 6/1/2022 $ 9,898 Single-Family 8.63 % 8.93 % 4/17/2026 Mortgage Backed Securities 6/1/2022 9,173 Single-Family 4.87 % 5.03 % 11/19/2025 Mortgage Backed Securities 7/28/2022 529 Single-Family 6.23 % 6.32 % 10/17/2027 Mortgage Backed Securities 7/28/2022 845 Single-Family 3.60 % 4.15 % 6/20/2028 Mortgage Backed Securities 9/12/2022 3,937 Multifamily 11.35 % 11.33 % 1/25/2031 Mortgage Backed Securities 9/29/2022 7,856 Self Storage 11.09 % 11.11 % 9/15/2027 Mortgage Backed Securities 3/10/2023 5,737 Multifamily 13.72 % 13.75 % 2/25/2025 Total $ 37,975 9.14 % 9.27 % (1) Current yield is the annualized income earned divided by the cost basis of the investment. (2) The Company, through the Subsidiary OPs, purchased approximately $50.0 million and $15.0 million aggregate notional amount of the X1 interest-only tranche of the FHMS K-107 CMBS I/O Strip on April 28, 2021 and May 4, 2021, respectively. (3) The Company, through the Subsidiary OPs, purchased approximately $80.0 million, $35.0 million, $40.0 million and $50.0 million aggregate notional amount of the X1 interest-only tranche of the FRESB 2019-SB64 CMBS I/O Strip on June 11, 2021, September 29, 2021, February 3, 2022 and March 18, 2022, respectively. The following table presents the CMBS I/O Strips, MSCR Notes and Mortgage Backed Securities as of December 31, 2022 (dollars in thousands): Investment Investment Carrying Value Property Type Interest Rate Current Yield (1) Maturity Date CMBS I/O Strips CMBS I/O Strip 5/18/2020 $ 1,807 Multifamily 2.02 % 14.56 % 9/25/2046 CMBS I/O Strip 8/6/2020 18,364 Multifamily 2.98 % 15.98 % 6/25/2030 CMBS I/O Strip 4/28/2021 (2) 5,676 Multifamily 1.59 % 15.52 % 1/25/2030 CMBS I/O Strip 5/27/2021 3,693 Multifamily 3.39 % 15.73 % 5/25/2030 CMBS I/O Strip 6/7/2021 455 Multifamily 2.31 % 18.91 % 11/25/2028 CMBS I/O Strip 6/11/2021 (3) 4,188 Multifamily 1.19 % 13.34 % 5/25/2029 CMBS I/O Strip 6/21/2021 1,117 Multifamily 1.18 % 16.77 % 5/25/2030 CMBS I/O Strip 8/10/2021 2,445 Multifamily 1.89 % 15.87 % 4/25/2030 CMBS I/O Strip 8/11/2021 1,333 Multifamily 3.10 % 13.74 % 7/25/2031 CMBS I/O Strip 8/24/2021 250 Multifamily 2.61 % 14.44 % 1/25/2031 CMBS I/O Strip 9/1/2021 3,726 Multifamily 1.92 % 15.03 % 6/25/2030 CMBS I/O Strip 9/11/2021 3,822 Multifamily 2.95 % 13.70 % 9/25/2031 Total $ 46,876 2.46 % 15.32 % MSCR Notes MSCR Notes 5/25/2022 $ 4,019 Multifamily 13.02 % 13.02 % 5/25/2052 MSCR Notes 5/25/2022 4,988 Multifamily 10.02 % 10.02 % 5/25/2052 MSCR Notes 9/23/2022 1,306 Multifamily 10.37 % 11.40 % 11/25/2051 Total $ 10,313 11.23 % 11.36 % Mortgage Backed Securities Mortgage Backed Securities 6/1/2022 $ 9,638 Single-Family 7.08 % 7.39 % 4/17/2026 Mortgage Backed Securities 6/1/2022 8,966 Single-Family 4.87 % 5.08 % 11/19/2025 Mortgage Backed Securities 7/28/2022 526 Single-Family 6.23 % 6.33 % 10/17/2027 Mortgage Backed Securities 7/28/2022 819 Single-Family 3.60 % 4.23 % 6/20/2028 Mortgage Backed Securities 9/12/2022 4,473 Multifamily 9.29 % 9.27 % 1/25/2031 Mortgage Backed Securities 9/29/2022 7,906 Self Storage 9.57 % 9.59 % 9/15/2027 Total $ 32,328 7.28 % 7.45 % (1) Current yield is the annualized income earned divided by the cost basis of the investment. (2) The Company, through the Subsidiary OPs, purchased approximately $50.0 million and $15.0 million aggregate notional amount of the X1 interest-only tranche of the FHMS K-107 CMBS I/O Strip on April 28, 2021 and May 4, 2021, respectively. (3) The Company, through the Subsidiary OPs, purchased approximately $80.0 million, $35.0 million, $40.0 million and $50.0 million aggregate notional amount of the X1 interest-only tranche of the FRESB 2019-SB64 CMBS I/O Strip on June 11, 2021, September 29, 2021, February 3, 2022 and March 18, 2022, respectively. |
Schedule of Activity Related to Commercial Mortgage Backed Securities [Table Text Block] | The following table presents activity related to the Company’s CMBS I/O Strips, MSCR Notes and mortgage backed securities (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Net interest earned $ 775 $ 2,237 $ 2,270 $ 4,811 Change in unrealized gain (loss) on CMBS structured pass-through certificates 710 (3,904) 926 (11,555) Change in unrealized gain (loss) on MSCR notes (15) 44 13 (147) Change in unrealized (loss) on mortgage backed securities 27 (317) 247 (356) Total $ 1,497 $ (1,940) $ 3,456 $ (7,247) |
Real Estate Investments, net (T
Real Estate Investments, net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Real Estate Investments, Net [Abstract] | |
Schedule of Real Estate Properties | As of September 30, 2023, the major components of the Company's investment in multifamily property was as follows (in thousands): Real Estate Investment, Net Land Buildings and Intangible Lease Construction in Progress Furniture, Totals Hudson Montford $ 10,996 $ 49,856 $ — $ 401 $ 680 $ 61,933 Accumulated depreciation and amortization — (3,025) — — (345) (3,370) Total Real Estate Investment, Net $ 10,996 $ 46,831 $ — $ 401 $ 335 $ 58,563 As of December 31, 2022, the major components of the Company's investments in multifamily properties were as follows (in thousands): Real Estate Investments, Net Land Buildings and Intangible Lease Construction in Progress Furniture, Totals Hudson Montford $ 10,996 $ 49,831 $ — $ 2 $ 602 $ 61,431 Elysian at Hughes 25,590 160,141 — — — 185,731 Accumulated depreciation and amortization — (1,752) — — (188) (1,940) Total Real Estate Investments, Net $ 36,586 $ 208,220 $ — $ 2 $ 414 $ 245,222 |
Real Estate Investment Financial Statements, Disclosure | The following table reflects the revenue and expenses for the three and nine months ended September 30, 2023 and 2022, for our multifamily property (in thousands). For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Revenues Rental income $ 1,032 $ 3,061 $ 3,057 $ 8,136 Other income 51 394 90 972 Total revenues 1,083 3,455 3,147 9,108 Expenses Interest expense 664 1,016 1,876 2,886 Real estate taxes and insurance 164 363 512 1,135 Property operating expenses 201 793 590 1,793 Property general and administrative expenses 39 56 111 247 Property management fees 31 79 90 220 Depreciation and amortization 476 545 1,430 2,435 Rate cap (income) expense 345 (420) (181) (923) Debt service bridge — 10 — 626 Casualty loss 19 — (156) — Total expenses 1,939 2,442 4,272 8,419 Net income (loss) from consolidated real estate owned $ (856) $ 1,013 $ (1,125) $ 689 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt Instruments | The following table summarizes the Company’s financing arrangements in place as of September 30, 2023 (dollars in thousands): September 30, 2023 Facility Collateral Date issued Outstanding Carrying value Final stated Weighted Weighted Outstanding Amortized cost Carrying value Weighted Master Repurchase Agreements CMBS Mizuho(4) 4/15/2020 $ 298,009 $ 298,009 N/A (5) 7.23 % 0.1 $ 853,574 $ 434,890 $ 425,949 6.6 Asset Specific Financing Single Family Rental loans Freddie Mac 7/12/2019 617,648 617,648 7/12/2029 2.34 % 4.6 675,844 708,003 708,003 4.6 Mezzanine loans Freddie Mac 10/20/2020 59,252 59,252 8/1/2031 0.30 % 6.5 96,817 98,898 98,898 6.5 Multifamily properties CBRE 12/31/2021 32,425 32,205 6/1/2028 (6) 7.78 % 4.7 N/A 58,563 58,563 4.7 Unsecured Financing Various 10/15/2020 36,500 35,768 10/25/2025 7.50 % 2.1 N/A N/A N/A N/A Various 4/20/2021 165,000 163,357 4/15/2026 5.75 % 2.5 N/A N/A N/A N/A Various 10/18/2022 6,500 6,500 10/18/2027 7.50 % 4.1 N/A N/A N/A N/A Total/weighted average $ 1,215,334 $ 1,212,739 4.23 % 3.2 $ 1,626,235 $ 1,300,354 $ 1,291,413 5.7 (1) Weighted-average interest rate using unpaid principal balances. (2) Weighted-average life is determined using the maximum maturity date of the corresponding loans, assuming all extension options are exercised by the borrower. (3) CMBS are shown at fair value on an unconsolidated basis. SFR Loans and mezzanine loans are shown at amortized cost. (4) On April 15, 2020, three of our subsidiaries entered into a master repurchase agreement with Mizuho Securities ("Mizuho"). Borrowings under these repurchase agreements are collateralized by portions of the CMBS B-Pieces, CMBS I/O Strips, MSCR Notes and mortgage backed securities. (5) The master repurchase agreement with Mizuho does not have a stated maturity date. The transactions in place have a one-month to two-month tenor and are expected to roll accordingly. (6) Debt was assumed upon acquisition of this property and recorded at the outstanding principal amount, net of debt issuance costs. The loan can be prepaid at a 1.0% prepayment premium on any unpaid principal. The loan is open to pre-payment in the last three months of the term. The following table summarizes the Company’s financing arrangements in place as of December 31, 2022 (dollars in thousands): December 31, 2022 Facility Collateral Date issued Outstanding Carrying Final stated Weighted Weighted Outstanding Amortized cost basis Carrying Weighted Master Repurchase Agreements CMBS Mizuho(4) 4/15/2020 $ 331,020 $ 331,020 N/A (5) 5.83 % 0.2 $ 974,440 $ 543,919 $ 539,736 7.0 Asset Specific Financing Single Family Rental loans Freddie Mac 7/12/2019 628,633 628,633 7/12/2029 2.35 % 5.4 688,046 726,531 726,531 5.4 Mezzanine loans Freddie Mac 10/20/2020 59,252 59,252 8/1/2031 0.30 % 7.3 105,817 108,390 108,390 7.3 Multifamily properties CBRE 12/31/2021 32,480 32,176 6/1/2028 (6) 5.80 % 5.4 N/A 59,491 59,491 5.4 CBRE 2/1/2022 89,634 89,060 2/1/2032 3.52 % 9.1 N/A 185,731 185,731 9.1 Unsecured Financing Various 10/15/2020 36,500 35,530 10/25/2025 7.50 % 2.8 N/A N/A N/A N/A Various 4/20/2021 165,000 162,930 4/15/2026 5.75 % 3.3 N/A N/A N/A N/A Various 10/18/2022 6,500 6,500 10/18/2027 7.50 % 4.8 N/A N/A N/A N/A Total/weighted average $ 1,349,019 $ 1,345,101 3.85 % 4.1 $ 1,768,303 $ 1,624,062 $ 1,619,879 6.4 (1) Weighted-average interest rate using unpaid principal balances. (2) Weighted-average life is determined using the maximum maturity date of the corresponding loans, assuming all extension options are exercised by the borrower. (3) CMBS are shown at fair value on an unconsolidated basis. SFR Loans and mezzanine loans are shown at amortized cost. (4) On April 15, 2020, three of our subsidiaries entered into a master repurchase agreement with Mizuho. Borrowings under these repurchase agreements are collateralized by portions of the CMBS B-Pieces, CMBS I/O Strips, MSCR Notes and mortgage backed securities. (5) The master repurchase agreement with Mizuho does not have a stated maturity date. The transactions in place have a one-month to two-month tenor and are expected to roll accordingly. (6) Debt was assumed upon acquisition of this property and recorded at the outstanding principal amount, net of debt issuance costs. The loan can be prepaid at a 1.0% prepayment premium on any unpaid principal. The loan is open to pre-payment in the last three months of the term. |
Schedule of Debt | As of September 30, 2023, the outstanding principal balances related to the SFR Loans and levered Mezzanine Loans consisted of the following (dollars in thousands): Investment Investment Date Outstanding Principal Balance (1) Location Property Type Interest Type Interest Rate Maturity Date SFR Loans Senior loan 2/11/2020 $ 465,690 Various Single-family Fixed 2.24 % 9/1/2028 Senior loan 2/11/2020 46,094 Various Single-family Fixed 2.14 % 10/1/2025 Senior loan 2/11/2020 34,112 Various Single-family Fixed 2.70 % 11/1/2028 Senior loan 2/11/2020 9,170 Various Single-family Fixed 2.79 % 9/1/2028 Senior loan 2/11/2020 9,284 Various Single-family Fixed 2.45 % 3/1/2026 Senior loan 2/11/2020 8,558 Various Single-family Fixed 3.51 % 2/1/2028 Senior loan 2/11/2020 8,805 Various Single-family Fixed 3.30 % 10/1/2028 Senior loan 2/11/2020 7,913 Various Single-family Fixed 3.14 % 1/1/2029 Senior loan 2/11/2020 6,524 Various Single-family Fixed 2.98 % 2/1/2029 Senior loan 2/11/2020 5,874 Various Single-family Fixed 2.99 % 3/1/2029 Senior loan 2/11/2020 5,435 Various Single-family Fixed 2.40 % 2/1/2024 Senior loan 2/11/2020 5,240 Various Single-family Fixed 3.14 % 12/1/2028 Senior loan 2/11/2020 4,949 Various Single-family Fixed 2.64 % 10/1/2028 Total $ 617,648 2.34 % Mezzanine Loans Senior loan 10/20/2020 $ 8,723 Wilmington, DE Multifamily Fixed 0.30 % 6/1/2029 Senior loan 10/20/2020 7,344 White Marsh, MD Multifamily Fixed 0.30 % 4/1/2031 Senior loan 10/20/2020 6,353 Philadelphia, PA Multifamily Fixed 0.30 % 7/1/2031 Senior loan 10/20/2020 5,881 Daytona Beach, FL Multifamily Fixed 0.30 % 7/1/2031 Senior loan 10/20/2020 4,523 Laurel, MD Multifamily Fixed 0.30 % 7/1/2031 Senior loan 10/20/2020 4,179 Temple Hills, MD Multifamily Fixed 0.30 % 1/1/2029 Senior loan 10/20/2020 3,390 Temple Hills, MD Multifamily Fixed 0.30 % 5/1/2029 Senior loan 10/20/2020 3,348 Lakewood, NJ Multifamily Fixed 0.30 % 5/1/2029 Senior loan 10/20/2020 2,454 North Aurora, IL Multifamily Fixed 0.30 % 11/1/2028 Senior loan 10/20/2020 2,264 Rosedale, MD Multifamily Fixed 0.30 % 10/1/2028 Senior loan 10/20/2020 2,215 Cockeysville, MD Multifamily Fixed 0.30 % 7/1/2031 Senior loan 10/20/2020 2,026 Laurel, MD Multifamily Fixed 0.30 % 7/1/2029 Senior loan 10/20/2020 1,836 Vancouver, WA Multifamily Fixed 0.30 % 8/1/2031 Senior loan 10/20/2020 1,763 Tyler, TX Multifamily Fixed 0.30 % 11/1/2028 Senior loan 10/20/2020 1,307 Las Vegas, NV Multifamily Fixed 0.30 % 10/1/2028 Senior loan 10/20/2020 918 Atlanta, GA Multifamily Fixed 0.30 % 8/1/2031 Senior loan 10/20/2020 728 Des Moines, IA Multifamily Fixed 0.30 % 3/1/2029 Total $ 59,252 0.30 % |
Schedule of Line of Credit Facilities | For the nine months ended September 30, 2023 and 2022, the activity related to the carrying value of the master repurchase agreements, secured financing agreements and unsecured financing were as follows (in thousands): For the Nine Months Ended September 30, 2023 2022 Balances as of January 1, $ 1,345,101 $ 1,273,051 Adjustment to mortgages payable, net on deconsolidation of real estate (89,012) — Principal borrowings 44,892 252,796 Principal repayments (88,888) (161,999) Repurchase of unsecured notes — (2,879) Repurchase of unsecured notes, not yet settled — (1,950) Accretion of discounts 666 572 Amortization of deferred financing costs (20) 36 Balances as of September 30, $ 1,212,739 $ 1,359,627 |
Schedule of Maturities of Long-Term Debt | The aggregate scheduled maturities, including amortizing principal payments, of total debt for the next five calendar years subsequent to September 30, 2023 are as follows (in thousands): Year Recourse Non-recourse Total 2023(1) $ — $ 298,009 $ 298,009 2024 — 5,435 5,435 2025 36,500 46,094 82,594 2026 197,426 9,284 206,710 2027 6,500 — 6,500 Thereafter — 616,086 616,086 $ 240,426 $ 974,908 $ 1,215,334 (1) The transactions in place in the master repurchase agreement with Mizuho have a one-month to two-month tenor and are expected to roll accordingly. |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The carrying values and fair values of the Company’s financial assets and liabilities recorded at fair value on a recurring basis, as well as other financial instruments not carried at fair value as of September 30, 2023 (in thousands): Fair Value Carrying Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents $ 10,977 $ 10,977 $ — $ — $ 10,977 Restricted cash 1,942 1,942 — — 1,942 Loans, held-for-investment, net 320,151 — — 329,344 329,344 Common stock investments, at fair value 60,709 — — 60,709 60,709 Mortgage loans, held-for-investment, net 708,003 — — 689,312 689,312 Accrued interest 21,489 21,489 — — 21,489 Mortgage loans held in variable interest entities, at fair value 5,612,472 — 5,612,472 — 5,612,472 CMBS structured pass-through certificates, at fair value 42,471 — 42,471 — 42,471 MSCR notes, at fair value 10,325 — 10,325 — 10,325 Mortgage backed securities, at fair value 37,975 — 37,975 — 37,975 Accounts receivable and other assets 1,276 1,276 — — 1,276 $ 6,827,790 $ 35,684 $ 5,703,243 $ 1,079,365 $ 6,818,292 Liabilities Secured financing agreements, net $ 676,900 $ — $ — $ 691,428 $ 691,428 Master repurchase agreements 298,009 — — 298,009 298,009 Unsecured notes, net 205,625 — 178,116 — 178,116 Mortgages payable, net 32,205 — — 25,471 25,471 Accounts payable and other accrued liabilities 3,405 3,405 — — 3,405 Accrued interest payable 10,124 10,124 — — 10,124 Bonds payable held in variable interest entities, at fair value 5,225,922 — 5,225,922 — 5,225,922 $ 6,452,190 $ 13,529 $ 5,404,038 $ 1,014,908 $ 6,432,475 The carrying values and fair values of the Company’s financial assets and liabilities recorded at fair value on a recurring basis, as well as other financial instruments not carried at fair value as of December 31, 2022 (in thousands): Fair Value Carrying Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents $ 20,048 $ 20,048 $ — $ — $ 20,048 Restricted cash 299 299 — — 299 Loans, held-for-investment, net 256,147 — — 255,254 255,254 Common stock investment, at fair value 78,264 — — 78,264 78,264 Mortgage loans, held-for-investment, net 726,531 — — 727,533 727,533 Accrued interest 15,665 15,665 — — 15,665 Mortgage loans held in variable interest entities, at fair value 6,720,246 — 6,720,246 — 6,720,246 CMBS structured pass-through certificates, at fair value 46,876 — 46,876 — 46,876 MSCR notes, at fair value 10,313 — 10,313 — 10,313 Mortgage backed securities, at fair value 32,328 — 32,328 — 32,328 Accounts receivable and other assets 2,197 2,197 — — 2,197 $ 7,908,914 $ 38,209 $ 6,809,763 $ 1,061,051 $ 7,909,023 Liabilities Secured financing agreements, net $ 687,885 $ — $ — $ 713,253 $ 713,253 Master repurchase agreements 331,020 — — 331,020 331,020 Unsecured notes, net 204,960 — 175,560 — 175,560 Mortgages payable, net 121,236 — — 121,236 121,236 Accounts payable and other accrued liabilities 6,231 6,236 — — 6,236 Accrued interest payable 7,986 7,986 — — 7,986 Bonds payable held in variable interest entities, at fair value 6,249,804 — 6,249,804 — 6,249,804 $ 7,609,122 $ 14,222 $ 6,425,364 $ 1,165,509 $ 7,605,095 |
Fair Value Measurement Inputs and Valuation Techniques | The following is a summary of significant unobservable inputs used in the fair valuation of the Company's Level 3 assets carried at fair value on the Consolidated Balance Sheets as of September 30, 2023 (dollars in thousands): Carrying Valuation Technique Unobservable Inputs Range Weighted Average (1) NexPoint Storage Partners $ 33,759 Discounted cash flow Terminal cap rate 5.13% - 5.63% 5.38 % Discount rate 7.75% - 9.75% 8.75 % Private REIT $ 26,950 Market approach NAV per share multiple 1.00 - 1.21x 1.11x (1) Averages are weighted based on the fair value of the related instrument |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The table below reflects a summary of changes for the Company's Level 3 common stock assets carried at fair value on the Consolidated Balance Sheets for the nine months ended September 30, 2023: Balance as of 12/31/22 Change in Unrealized Gains/(Losses) Balance as of 9/30/23 NexPoint Storage Partners $ 50,380 $ (16,621) $ 33,759 Private REIT $ 27,884 $ (934) $ 26,950 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Stockholders' Equity Note [Abstract] | |
Share-Based Payment Arrangement, Restricted Stock Unit, Activity | The following table includes the number of restricted stock units granted, vested, forfeited and outstanding as of September 30, 2023: 2023 Number of Units Weighted Average Outstanding January 1, 2023 577,360 $ 17.88 Granted 440,055 15.14 Vested (201,678) (1) 17.27 Forfeited — — Outstanding September 30, 2023 815,737 $ 16.71 (1) Certain key employees of the Manager elected to net the taxes owed upon vesting against the shares issued resulting in 151,970 shares being issued as shown on the consolidated statements of stockholders' equity. The following table includes the number of restricted stock units granted, vested, forfeited and outstanding as of September 30, 2023: Shares Vesting February April May Total 2024 120,640 126,042 68,564 315,246 2025 120,646 104,672 — 225,318 2026 65,832 104,670 — 170,502 2027 — 104,671 — 104,671 Total 307,118 440,055 68,564 815,737 |
Schedule of Sale of Stock | The following table contains summary information of the 2022 ATM Program since its inception through September 30, 2023: Gross Proceeds $ 12,575,493 Shares of Common Stock Issued 531,728 Gross Average Sale Price per Share of Common Stock $ 23.65 Sales Commissions $ 188,655 Offering Costs 888,249 Net Proceeds $ 11,498,589 Average Price Per Share, net $ 21.62 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of basic and diluted earnings per share for the periods presented (in thousands, except per share amounts): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Net income (loss) attributable to common stockholders $ (15,550) $ (9,289) $ (3,236) $ 6,967 Earnings for basic computations Net income (loss) attributable to redeemable noncontrolling interests (2,374) (1,889) 1,419 5,080 Net income for diluted computations $ (17,924) $ (11,178) $ (1,817) $ 12,047 Weighted-average common shares outstanding Average number of common shares outstanding - basic 17,232 14,962 17,188 14,526 Average number of unvested restricted stock units 816 578 723 569 Average number of OP Units and SubOP Units 5,038 7,138 5,038 7,307 Average number of common shares outstanding - diluted 23,086 22,678 22,949 22,402 Earnings per weighted average common share: Basic $ (0.90) $ (0.62) $ (0.19) $ 0.48 Diluted $ (0.90) $ (0.62) $ (0.19) $ 0.48 |
Noncontrolling Interests (Table
Noncontrolling Interests (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Noncontrolling Interest [Abstract] | |
Redeemable Noncontrolling Interest | The following table sets forth the redeemable noncontrolling interests in the OP (reflecting the OP’s consolidation of the Subsidiary OPs) for the nine months ended September 30, 2023, and September 30, 2022 (in thousands): For the Nine Months Ended September 30, 2023 2022 Redeemable noncontrolling interests in the OP, January 1, $ 96,501 $ 261,423 Adjustment to redeemable noncontrolling interest in the OP on deconsolidation of real estate 297 — Net income attributable to redeemable noncontrolling interests in the OP 1,419 5,080 Redemption of redeemable noncontrolling interests in the OP — (113,535) Distributions to redeemable noncontrolling interests in the OP (9,069) (10,708) Redeemable noncontrolling interests in the OP, September 30, $ 89,148 $ 142,260 |
Consolidated Common Shares of Noncontrolling Interest | The table below presents the common shares and OP Units outstanding held by the noncontrolling interests (“NCI”), as the OP Units and SubOP Units held by the Company are eliminated in consolidation: Period End Common Shares Outstanding OP Units Held by NCI Combined Outstanding September 30, 2023 17,231,913 5,038,382 22,270,295 |
Commitment and Contingencies (T
Commitment and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Purchase Commitment, Excluding Long-Term Commitment | The table below shows the Company's unfunded commitments by investment type as of September 30, 2023 and December 31, 2022 (in thousands): Investment Type September 30, 2023 December 31, 2022 Unfunded Commitments Unfunded Commitments Preferred Equity $ 52,200 $ 25,000 Common Equity 6,600 — $ 58,800 $ 25,000 |
Organization and Description _2
Organization and Description of Business (Details) | 9 Months Ended |
Sep. 30, 2023 | |
NexPoint Real Estate Finance Operating Partnership, L.P. | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |
Limited partnership, ownership interest | 83.41% |
NexPoint Real Estate Finance Operating Partnership, L.P. | Class A OP Units | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |
Limited partnership, ownership interest | 100% |
Three Subsidiary Partnerships | NexPoint Real Estate Finance Operating Partnership, L.P. | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |
Limited partnership, ownership interest | 100% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) loan | Sep. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) | Jan. 01, 2023 USD ($) | Dec. 31, 2022 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Variable Interest Entity [Line Items] | |||||||||
Allowance for loan and lease losses reserve | $ 700 | ||||||||
Current expected credit loss reserve | $ 8,540 | $ 8,540 | $ 2,300 | ||||||
Cumulative effect of adoption of ASU 2016-13 (See Note 2) | (345,015) | $ (401,425) | (345,015) | $ (401,425) | $ (371,643) | (448,513) | $ (398,951) | $ (245,283) | |
Reversal of (provision for) credit losses | 6,276 | (7) | 6,236 | 57 | |||||
Retained Earnings (accumulated deficit) Less Dividends | |||||||||
Variable Interest Entity [Line Items] | |||||||||
Cumulative effect of adoption of ASU 2016-13 (See Note 2) | $ 37,226 | $ (12,274) | $ 37,226 | $ (12,274) | $ 9,313 | (4,435) | $ (29,339) | $ (28,367) | |
Cumulative Effect, Period of Adoption, Adjustment | |||||||||
Variable Interest Entity [Line Items] | |||||||||
Cumulative effect of adoption of ASU 2016-13 (See Note 2) | 1,624 | ||||||||
Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings (accumulated deficit) Less Dividends | |||||||||
Variable Interest Entity [Line Items] | |||||||||
Cumulative effect of adoption of ASU 2016-13 (See Note 2) | $ 1,624 | ||||||||
Financial Asset Acquired with Credit Deterioration | |||||||||
Variable Interest Entity [Line Items] | |||||||||
Number of loans acquired | loan | 0 | ||||||||
One Security | Variable Interest Entity, Primary Beneficiary | |||||||||
Variable Interest Entity [Line Items] | |||||||||
Variable interest entity, qualitative or quantitative information, ownership percentage | 100% |
Loans Held for Investment, Ne_2
Loans Held for Investment, Net - Summary of Loans Held for Investment (Details) $ in Thousands | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | Sep. 30, 2023 loan | Sep. 30, 2023 | Sep. 30, 2023 unit | Dec. 31, 2022 loan | Dec. 31, 2022 | Dec. 31, 2022 unit | |
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||||||
Outstanding Face Amount | $ 1,001,224 | $ 942,449 | ||||||
Carrying Value | $ 1,028,154 | $ 982,678 | ||||||
Loan Count | 52 | 52 | 48 | 48 | ||||
Weighted average, fixed rate | 86.62% | 90.64% | ||||||
Weighted average, coupon | 6.85% | 6.43% | ||||||
Weighted average, life (years) | 4 years 4 months 9 days | 5 years 1 month 9 days | ||||||
Mortgage loans, held-for-investment | ||||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||||||
Outstanding Face Amount | $ 675,844 | $ 688,046 | ||||||
Carrying Value | $ 708,003 | $ 726,531 | ||||||
Loan Count | loan | 13 | 15 | ||||||
Weighted average, fixed rate | 100% | 100% | ||||||
Weighted average, coupon | 4.79% | 4.81% | ||||||
Weighted average, life (years) | 4 years 7 months 20 days | 5 years 4 months 9 days | ||||||
Mezzanine loans, held-for-investment | ||||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||||||
Outstanding Face Amount | $ 133,207 | $ 163,021 | ||||||
Carrying Value | $ 135,079 | $ 165,182 | ||||||
Loan Count | loan | 22 | 23 | ||||||
Weighted average, fixed rate | 78.31% | 63.99% | ||||||
Weighted average, coupon | 9.60% | 10.42% | ||||||
Weighted average, life (years) | 5 years 6 months 18 days | 5 years 4 months 20 days | ||||||
Preferred equity, held-for-investment | ||||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||||||
Outstanding Face Amount | $ 187,173 | $ 91,382 | ||||||
Carrying Value | $ 180,072 | $ 90,965 | ||||||
Loan Count | loan | 16 | 10 | ||||||
Weighted average, fixed rate | 46.22% | 67.69% | ||||||
Weighted average, coupon | 12.18% | 11.51% | ||||||
Weighted average, life (years) | 2 years 6 months 29 days | 2 years 9 months 3 days | ||||||
Promissory note, held-for-investment | ||||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||||||
Outstanding Face Amount | $ 5,000 | |||||||
Carrying Value | $ 5,000 | |||||||
Loan Count | loan | 1 | |||||||
Weighted average, fixed rate | 11% | |||||||
Weighted average, coupon | 11% | |||||||
Weighted average, life (years) | 1 year |
Loans Held for Investment, Ne_3
Loans Held for Investment, Net - Loan and Preferred Equity Portfolio Activity (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Accounts, Notes, Loans and Financing Receivable [Roll Forward] | ||
Beginning balance | $ 982,678 | |
Originations of loans, held-for-investment, net | 76,355 | $ 91,587 |
Ending balance | 1,028,154 | |
Loans Receivable, Held for Investment | ||
Accounts, Notes, Loans and Financing Receivable [Roll Forward] | ||
Beginning balance | 982,678 | 1,088,881 |
Recognition of retained preferred equity investment upon deconsolidation of real estate (Note 14) | 36,022 | 0 |
Conversion of convertible bonds to common stock | 0 | (25,000) |
Originations of loans, held-for-investment, net | 76,355 | 156,934 |
Proceeds from principal repayments | (58,246) | (196,825) |
PIK distribution reinvested in Preferred Units | 4,076 | 528 |
Amortization of loan premium, net | (4,871) | (11,591) |
(Provision for) reversal of credit losses, net | (6,236) | (57) |
Ending balance | 1,028,154 | 1,012,870 |
Loans Receivable, Held for Investment | Cumulative Effect, Period of Adoption, Adjustment | ||
Accounts, Notes, Loans and Financing Receivable [Roll Forward] | ||
Beginning balance | $ (1,624) | $ 0 |
Loans Held for Investment, Ne_4
Loans Held for Investment, Net - Additional Information (Details) $ in Millions | Sep. 30, 2023 loan | Sep. 30, 2023 USD ($) | Sep. 30, 2023 | Sep. 30, 2023 unit | Dec. 31, 2022 loan | Dec. 31, 2022 USD ($) | Dec. 31, 2022 | Dec. 31, 2022 unit |
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | ||||||||
Financing receivable, unamortized purchase premium (discount) | $ 36 | $ 40.9 | ||||||
Loans and leases receivable, number of loans | 52 | 52 | 48 | 48 | ||||
Weighted average risk rating | 3.04 | 3 | ||||||
Allowance for credit loss | $ 5.8 |
Loans Held for Investment, Ne_5
Loans Held for Investment, Net - Principal Balance and Net Book Value of the Loan Portfolio Based on Internal Risk Ratings (Details) $ in Thousands | Sep. 30, 2023 loan | Sep. 30, 2023 USD ($) | Sep. 30, 2023 | Sep. 30, 2023 unit | Dec. 31, 2022 loan | Dec. 31, 2022 USD ($) | Dec. 31, 2022 | Dec. 31, 2022 unit |
Financing Receivable, Nonaccrual [Line Items] | ||||||||
Loan Count | 52 | 52 | 48 | 48 | ||||
Carrying Value | $ 1,028,154 | $ 982,678 | ||||||
% of Loan Portfolio | 1 | 1 | ||||||
Risk Rating 1 | ||||||||
Financing Receivable, Nonaccrual [Line Items] | ||||||||
Loan Count | 0 | 0 | 0 | 0 | ||||
Carrying Value | 0 | 0 | ||||||
% of Loan Portfolio | 0 | 0 | ||||||
Risk Rating 2 | ||||||||
Financing Receivable, Nonaccrual [Line Items] | ||||||||
Loan Count | 0 | 0 | 0 | 0 | ||||
Carrying Value | 0 | 0 | ||||||
% of Loan Portfolio | 0 | 0 | ||||||
Risk Rating 3 | ||||||||
Financing Receivable, Nonaccrual [Line Items] | ||||||||
Loan Count | 48 | 48 | 48 | 48 | ||||
Carrying Value | 999,080 | 982,678 | ||||||
% of Loan Portfolio | 0.9717 | 1 | ||||||
Risk Rating 4 | ||||||||
Financing Receivable, Nonaccrual [Line Items] | ||||||||
Loan Count | 3 | 3 | 0 | 0 | ||||
Carrying Value | 25,199 | 0 | ||||||
% of Loan Portfolio | 0.0245 | 0 | ||||||
Risk Rating 5 | ||||||||
Financing Receivable, Nonaccrual [Line Items] | ||||||||
Loan Count | 1 | 1 | 0 | 0 | ||||
Carrying Value | $ 3,875 | $ 0 | ||||||
% of Loan Portfolio | 0.0038 | 0 |
Loans Held for Investment, Ne_6
Loans Held for Investment, Net - Summary of Loans by Origination (Details) $ in Thousands | Sep. 30, 2023 loan | Sep. 30, 2023 unit | Sep. 30, 2023 USD ($) | Dec. 31, 2022 loan | Dec. 31, 2022 unit | Dec. 31, 2022 USD ($) |
Financing Receivable, Credit Quality Indicator [Line Items] | ||||||
Loans and leases receivable, number of loans | 52 | 52 | 48 | 48 | ||
Outstanding Face Amount | $ 1,001,224 | $ 999,080 | ||||
2023 | 70,402 | 72,606 | ||||
2022 | 79,171 | 98,129 | ||||
2021 | 48,008 | 17,500 | ||||
2020 | 19,159 | 774,381 | ||||
2019 | 791,452 | 20,062 | ||||
Prior | 19,962 | 0 | ||||
Loans and leases receivable, gross | 1,028,154 | 982,678 | ||||
Risk Rating 1 | ||||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||||
Loans and leases receivable, number of loans | 0 | 0 | 0 | 0 | ||
Outstanding Face Amount | 0 | 0 | ||||
2023 | 0 | 0 | ||||
2022 | 0 | 0 | ||||
2021 | 0 | 0 | ||||
2020 | 0 | 0 | ||||
2019 | 0 | 0 | ||||
Prior | 0 | 0 | ||||
Loans and leases receivable, gross | 0 | 0 | ||||
Risk Rating 2 | ||||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||||
Loans and leases receivable, number of loans | 0 | 0 | 0 | 0 | ||
Outstanding Face Amount | 0 | 0 | ||||
2023 | 0 | 0 | ||||
2022 | 0 | 0 | ||||
2021 | 0 | 0 | ||||
2020 | 0 | 0 | ||||
2019 | 0 | 0 | ||||
Prior | 0 | 0 | ||||
Loans and leases receivable, gross | 0 | 0 | ||||
Risk Rating 3 | ||||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||||
Loans and leases receivable, number of loans | 48 | 48 | 48 | 48 | ||
Outstanding Face Amount | 966,711 | 999,080 | ||||
2023 | 70,402 | 72,606 | ||||
2022 | 70,733 | 98,129 | ||||
2021 | 44,133 | 17,500 | ||||
2020 | 19,159 | 774,381 | ||||
2019 | 774,691 | 20,062 | ||||
Prior | 19,962 | 0 | ||||
Loans and leases receivable, gross | 999,080 | 982,678 | ||||
Risk Rating 4 | ||||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||||
Loans and leases receivable, number of loans | 3 | 3 | 0 | 0 | ||
Outstanding Face Amount | 24,763 | 0 | ||||
2023 | 0 | 0 | ||||
2022 | 8,438 | 0 | ||||
2021 | 0 | 0 | ||||
2020 | 0 | 0 | ||||
2019 | 16,761 | 0 | ||||
Prior | 0 | 0 | ||||
Loans and leases receivable, gross | 25,199 | 0 | ||||
Risk Rating 5 | ||||||
Financing Receivable, Credit Quality Indicator [Line Items] | ||||||
Loans and leases receivable, number of loans | 1 | 1 | 0 | 0 | ||
Outstanding Face Amount | 9,750 | 0 | ||||
2023 | 0 | 0 | ||||
2022 | 0 | 0 | ||||
2021 | 3,875 | 0 | ||||
2020 | 0 | 0 | ||||
2019 | 0 | 0 | ||||
Prior | 0 | 0 | ||||
Loans and leases receivable, gross | $ 3,875 | $ 0 |
Loans Held for Investment, Ne_7
Loans Held for Investment, Net - Geographies and Property Types of Collateral Underlying the Loans Held-for-investment as a Percentage of the Loans' Face Amounts (Details) | Sep. 30, 2023 | Dec. 31, 2022 |
Financing Receivable, Nonaccrual [Line Items] | ||
% of loan portfolio | 1 | 1 |
Single Family Rental | ||
Financing Receivable, Nonaccrual [Line Items] | ||
% of loan portfolio | 0.6926 | 0.7226 |
Multifamily | ||
Financing Receivable, Nonaccrual [Line Items] | ||
% of loan portfolio | 0.2332 | 0.2311 |
Life Science | ||
Financing Receivable, Nonaccrual [Line Items] | ||
% of loan portfolio | 0.0571 | 0.0285 |
Self-Storage | ||
Financing Receivable, Nonaccrual [Line Items] | ||
% of loan portfolio | 0.0170 | 0.0179 |
Georgia | ||
Financing Receivable, Nonaccrual [Line Items] | ||
% of loan portfolio | 0.3245 | 0.3404 |
Florida | ||
Financing Receivable, Nonaccrual [Line Items] | ||
% of loan portfolio | 0.1845 | 0.1934 |
Texas | ||
Financing Receivable, Nonaccrual [Line Items] | ||
% of loan portfolio | 0.1265 | 0.1121 |
Nevada | ||
Financing Receivable, Nonaccrual [Line Items] | ||
% of loan portfolio | 0.0275 | |
Maryland | ||
Financing Receivable, Nonaccrual [Line Items] | ||
% of loan portfolio | 0.0534 | 0.0559 |
Minnesota | ||
Financing Receivable, Nonaccrual [Line Items] | ||
% of loan portfolio | 0.0665 | 0.0697 |
California | ||
Financing Receivable, Nonaccrual [Line Items] | ||
% of loan portfolio | 0.0439 | 0.0466 |
Alabama | ||
Financing Receivable, Nonaccrual [Line Items] | ||
% of loan portfolio | 0.0363 | 0.0381 |
North Carolina | ||
Financing Receivable, Nonaccrual [Line Items] | ||
% of loan portfolio | 0.0269 | 0.0265 |
Virginia | ||
Financing Receivable, Nonaccrual [Line Items] | ||
% of loan portfolio | 0.0166 | |
Arkansas | ||
Financing Receivable, Nonaccrual [Line Items] | ||
% of loan portfolio | 0.0135 | 0.0142 |
Other | ||
Financing Receivable, Nonaccrual [Line Items] | ||
% of loan portfolio | 0.0799 | 0.1031 |
CMBS Trusts - Schedule of Recog
CMBS Trusts - Schedule of Recognized Trusts Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Loans and Leases Receivable Disclosure [Line Items] | ||
Bonds payable held in variable interest entities, at fair value | $ (1,215,334) | |
Variable Interest Entity, Primary Beneficiary | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Mortgage loans held in variable interest entities, at fair value | 5,612,472 | $ 6,720,246 |
Accrued interest receivable | 3,390 | 4,029 |
Bonds payable held in variable interest entities, at fair value | (5,225,922) | (6,249,804) |
Accrued interest payable | $ (2,740) | $ (3,207) |
CMBS Trusts - Schedule of Chang
CMBS Trusts - Schedule of Change in Net Assets Related to Consolidated CMBS Variable Interest Entities (Details) - Variable Interest Entity, Primary Beneficiary - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Securitization or Asset-Backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items] | ||||
Net interest earned | $ 9,804 | $ 9,455 | $ 31,334 | $ 25,623 |
Debt securities, trading, unrealized gain (loss) | (2,767) | (12,103) | (6,408) | (20,304) |
Change in net assets related to consolidated CMBS variable interest entities | $ 7,037 | $ (2,648) | $ 24,926 | $ 5,319 |
CMBS Trusts - Schedule of Geogr
CMBS Trusts - Schedule of Geographies and Property Types of Collateral Underlying the CMBS Trusts as Percentage of Collateral Unpaid Principal Balance (Details) - Variable Interest Entity, Primary Beneficiary | Sep. 30, 2023 | Dec. 31, 2022 |
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Percentage of collateral unpaid principal balance | 100% | 100% |
Multifamily | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Percentage of collateral unpaid principal balance | 97.35% | 98.45% |
Manufactured Housing | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Percentage of collateral unpaid principal balance | 2.65% | 1.55% |
Texas | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Percentage of collateral unpaid principal balance | 15.77% | 17.95% |
Florida | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Percentage of collateral unpaid principal balance | 14.07% | 13.82% |
Arizona | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Percentage of collateral unpaid principal balance | 4.02% | 6.98% |
California | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Percentage of collateral unpaid principal balance | 8.64% | 9.28% |
Georgia | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Percentage of collateral unpaid principal balance | 4.33% | 4.68% |
Washington | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Percentage of collateral unpaid principal balance | 7.71% | 6.88% |
New Jersey | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Percentage of collateral unpaid principal balance | 3.99% | 3.97% |
Nevada | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Percentage of collateral unpaid principal balance | 2.48% | 1.99% |
Pennsylvania | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Percentage of collateral unpaid principal balance | 1.26% | 1.01% |
Colorado | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Percentage of collateral unpaid principal balance | 7.70% | 6.21% |
Connecticut | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Percentage of collateral unpaid principal balance | 2.04% | 3.64% |
North Carolina | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Percentage of collateral unpaid principal balance | 4.14% | 3.53% |
New York | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Percentage of collateral unpaid principal balance | 3.35% | 2.76% |
Ohio | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Percentage of collateral unpaid principal balance | 2.48% | 2% |
Virginia | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Percentage of collateral unpaid principal balance | 2.02% | 1.62% |
Indiana | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Percentage of collateral unpaid principal balance | 2.11% | 1.69% |
Illinois | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Percentage of collateral unpaid principal balance | 1.64% | 1.37% |
Michigan | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Percentage of collateral unpaid principal balance | 1.37% | 1.11% |
Maryland | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Percentage of collateral unpaid principal balance | 1.17% | |
Missouri | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Percentage of collateral unpaid principal balance | 1.55% | 1.25% |
Other | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Percentage of collateral unpaid principal balance | 8.16% | 8.26% |
Common Stock Investments - Addi
Common Stock Investments - Additional Information (Details) $ / shares in Units, $ in Millions | Apr. 14, 2022 USD ($) convertible_note shares | Sep. 30, 2023 $ / shares |
Private REIT | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership percentage by noncontrolling owners | 6.36% | |
Private REIT | ||
Schedule of Equity Method Investments [Line Items] | ||
Private offering price per share (in usd per share) | $ 19.33 | |
Convertible Note | ||
Schedule of Equity Method Investments [Line Items] | ||
Debt instrument, convertible, conversion price (in usd per share) | $ 17.50 | |
Number of convertible notes | convertible_note | 2 | |
Stock issued during period, conversion of convertible securities (in shares) | shares | 1,394,213 | |
Conversion of convertible bonds to common stock | $ | $ 25 | |
NexPoint Storage Partners, Inc. (“NSP”) | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity method investment, ownership percentage | 25.70% | |
RFGH and RTB | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity method investment, ownership percentage | 98% |
Common Stock Investments - Sche
Common Stock Investments - Schedule of Common Stock Investments (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Schedule of Equity Method Investments [Line Items] | ||
Common stock investment, at fair value | $ 60,709 | $ 78,264 |
NexPoint Storage Partners | ||
Schedule of Equity Method Investments [Line Items] | ||
Investment owned, balance (in shares) | 41,963 | 41,963 |
Common stock investment, at fair value | $ 33,759 | $ 50,380 |
Private REIT | ||
Schedule of Equity Method Investments [Line Items] | ||
Investment owned, balance (in shares) | 1,394,213 | 1,394,213 |
Common stock investment, at fair value | $ 26,950 | $ 27,884 |
Common Stock Investments - Sc_2
Common Stock Investments - Schedule of Change in Unrealized Gain on Common Stock Investment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Schedule of Equity Method Investments [Line Items] | ||||
Change in unrealized gain (loss) on common stock investments | $ (16,464) | $ (3,189) | $ (17,556) | $ 159 |
NexPoint Storage Partners | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Change in unrealized gain (loss) on common stock investments | (17,258) | (3,189) | (16,621) | (2,726) |
Private REIT | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Change in unrealized gain (loss) on common stock investments | $ 794 | $ 0 | $ (935) | $ 2,885 |
Variable Interest Entities - Sc
Variable Interest Entities - Schedule of Variable Interest Entities (Details) - VIE | Sep. 30, 2023 |
NexPoint Storage Partners, Inc. | |
Variable Interest Entity [Line Items] | |
Effective ownership | 25.70% |
Resmark Forney Gateway Holdings, LLC | |
Variable Interest Entity [Line Items] | |
Effective ownership | 98% |
Resmark The Brook, LLC | |
Variable Interest Entity [Line Items] | |
Effective ownership | 98% |
Alexander at the District | |
Variable Interest Entity [Line Items] | |
Effective ownership | 25.70% |
Variable Interest Entities - Na
Variable Interest Entities - Narrative (Details) - USD ($) $ in Millions | 2 Months Ended | ||
Mar. 31, 2023 | Sep. 30, 2023 | Dec. 08, 2022 | |
NexPoint Storage Partners, Inc. | |||
Variable Interest Entity [Line Items] | |||
Maximum loss exposure | $ 33.8 | ||
RFGH and RTB | |||
Variable Interest Entity [Line Items] | |||
Maximum loss exposure | 1 | ||
Purchase of common equity, amount unfunded | $ 2.8 | ||
ATD Common Equity Investment | |||
Variable Interest Entity [Line Items] | |||
Maximum loss exposure | $ 0.6 | ||
REIT Sub | |||
Variable Interest Entity [Line Items] | |||
Guarantor obligations, maximum exposure | $ 83.8 |
CMBS Structured Pass Through _3
CMBS Structured Pass Through Certificates, MSCR Notes and Mortgage Backed Securities - Summary of CMBS I/O Strips (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||
Mar. 18, 2022 USD ($) | Feb. 03, 2022 USD ($) | Sep. 29, 2021 USD ($) | Jun. 11, 2021 USD ($) | May 04, 2021 USD ($) | Apr. 28, 2021 USD ($) | Mar. 31, 2023 | Sep. 30, 2023 USD ($) security strip note | Dec. 31, 2022 USD ($) | |
Debt and Equity Securities, FV-NI [Line Items] | |||||||||
Number of CMBS I/O Strips | strip | 12 | ||||||||
Number of MSCR Notes | note | 3 | ||||||||
Number of mortgage backed securities | security | 7 | ||||||||
MSCR Notes | |||||||||
Debt and Equity Securities, FV-NI [Line Items] | |||||||||
Carrying Value | $ 10,325 | $ 10,313 | |||||||
Collateralized Mortgage-Backed Securities | |||||||||
Debt and Equity Securities, FV-NI [Line Items] | |||||||||
Carrying Value | $ 37,975 | 32,328 | |||||||
Interest Rate | 7.28% | 9.14% | |||||||
Current Yield | 7.45% | 9.27% | |||||||
Multifamily | CMBS I/O Strip, One | |||||||||
Debt and Equity Securities, FV-NI [Line Items] | |||||||||
Carrying Value | $ 1,638 | 1,807 | |||||||
Interest Rate | 2.02% | 2.09% | |||||||
Current Yield | 14.56% | 15.13% | |||||||
Multifamily | CMBS I/O Strip, Two | |||||||||
Debt and Equity Securities, FV-NI [Line Items] | |||||||||
Carrying Value | $ 16,840 | 18,364 | |||||||
Interest Rate | 2.98% | 3.08% | |||||||
Current Yield | 15.98% | 18% | |||||||
Multifamily | CMBS I/O Strip, Three | |||||||||
Debt and Equity Securities, FV-NI [Line Items] | |||||||||
Carrying Value | $ 5,078 | 5,676 | |||||||
Interest Rate | 1.59% | 1.71% | |||||||
Current Yield | 15.52% | 18.36% | |||||||
Payments for purchase of securities | $ 15,000 | $ 50,000 | |||||||
Multifamily | CMBS I/O Strip, Four | |||||||||
Debt and Equity Securities, FV-NI [Line Items] | |||||||||
Carrying Value | $ 3,446 | 3,693 | |||||||
Interest Rate | 3.39% | 3.50% | |||||||
Current Yield | 15.73% | 17.77% | |||||||
Multifamily | CMBS I/O Strip, Five | |||||||||
Debt and Equity Securities, FV-NI [Line Items] | |||||||||
Carrying Value | $ 404 | 455 | |||||||
Interest Rate | 2.31% | 2.39% | |||||||
Current Yield | 18.91% | 22.06% | |||||||
Multifamily | CMBS I/O Strip, Six | |||||||||
Debt and Equity Securities, FV-NI [Line Items] | |||||||||
Carrying Value | $ 3,610 | 4,188 | |||||||
Interest Rate | 1.19% | 1.32% | |||||||
Current Yield | 13.34% | 16.11% | |||||||
Payments for purchase of securities | $ 50,000 | $ 40,000 | $ 35,000 | $ 80,000 | |||||
Multifamily | CMBS IO Strip Seven | |||||||||
Debt and Equity Securities, FV-NI [Line Items] | |||||||||
Carrying Value | $ 815 | 1,117 | |||||||
Interest Rate | 1.18% | 1.28% | |||||||
Current Yield | 16.77% | 19.34% | |||||||
Multifamily | CMBS IO Strip Eight | |||||||||
Debt and Equity Securities, FV-NI [Line Items] | |||||||||
Carrying Value | $ 2,270 | 2,445 | |||||||
Interest Rate | 1.89% | 1.96% | |||||||
Current Yield | 15.87% | 18.03% | |||||||
Multifamily | CMBS I/O Strip, Nine | |||||||||
Debt and Equity Securities, FV-NI [Line Items] | |||||||||
Carrying Value | $ 1,225 | 1,333 | |||||||
Interest Rate | 3.10% | 3.20% | |||||||
Current Yield | 13.74% | 15.30% | |||||||
Multifamily | CMBS I/O Strip, Ten | |||||||||
Debt and Equity Securities, FV-NI [Line Items] | |||||||||
Carrying Value | $ 227 | 250 | |||||||
Interest Rate | 2.61% | 2.70% | |||||||
Current Yield | 14.44% | 16.21% | |||||||
Multifamily | CMBS I/O Strip, Eleven | |||||||||
Debt and Equity Securities, FV-NI [Line Items] | |||||||||
Carrying Value | $ 3,400 | 3,726 | |||||||
Interest Rate | 1.92% | 2.04% | |||||||
Current Yield | 15.03% | 17.47% | |||||||
Multifamily | CMBS I/O Strip, Twelve | |||||||||
Debt and Equity Securities, FV-NI [Line Items] | |||||||||
Carrying Value | $ 3,518 | 3,822 | |||||||
Interest Rate | 2.95% | 3.05% | |||||||
Current Yield | 13.70% | 15.24% | |||||||
Multifamily | CMBS I/O Strips | |||||||||
Debt and Equity Securities, FV-NI [Line Items] | |||||||||
Carrying Value | $ 42,471 | 46,876 | |||||||
Interest Rate | 2.46% | 2.58% | |||||||
Current Yield | 15.32% | 17.46% | |||||||
Multifamily | MSCR Notes One | |||||||||
Debt and Equity Securities, FV-NI [Line Items] | |||||||||
Carrying Value | $ 4,020 | 4,019 | |||||||
Interest Rate | 13.02% | 14.79% | |||||||
Current Yield | 13.02% | 14.79% | |||||||
Multifamily | MSCR Notes Two | |||||||||
Debt and Equity Securities, FV-NI [Line Items] | |||||||||
Carrying Value | $ 5,000 | 4,988 | |||||||
Interest Rate | 10.02% | 11.79% | |||||||
Current Yield | 10.02% | 11.79% | |||||||
Multifamily | MSCR Notes Three | |||||||||
Debt and Equity Securities, FV-NI [Line Items] | |||||||||
Carrying Value | $ 1,305 | 1,306 | |||||||
Interest Rate | 10.37% | 12.14% | |||||||
Current Yield | 11.40% | 13.34% | |||||||
Multifamily | MSCR Notes | |||||||||
Debt and Equity Securities, FV-NI [Line Items] | |||||||||
Carrying Value | $ 10,325 | 10,313 | |||||||
Interest Rate | 11.23% | 13% | |||||||
Current Yield | 11.36% | 13.15% | |||||||
Multifamily | Mortgage Backed Securities 5 | |||||||||
Debt and Equity Securities, FV-NI [Line Items] | |||||||||
Carrying Value | $ 3,937 | 4,473 | |||||||
Interest Rate | 9.29% | 11.35% | |||||||
Current Yield | 9.27% | 11.33% | |||||||
Multifamily | Mortgage Backed Securities 7 | |||||||||
Debt and Equity Securities, FV-NI [Line Items] | |||||||||
Carrying Value | $ 5,737 | ||||||||
Interest Rate | 13.72% | ||||||||
Current Yield | 13.75% | ||||||||
Single-Family | Mortgage Backed Securities 1 | |||||||||
Debt and Equity Securities, FV-NI [Line Items] | |||||||||
Carrying Value | $ 9,898 | 9,638 | |||||||
Interest Rate | 7.08% | 8.63% | |||||||
Current Yield | 7.39% | 8.93% | |||||||
Single-Family | Mortgage Backed Securities 2 | |||||||||
Debt and Equity Securities, FV-NI [Line Items] | |||||||||
Carrying Value | $ 9,173 | 8,966 | |||||||
Interest Rate | 4.87% | 4.87% | |||||||
Current Yield | 5.08% | 5.03% | |||||||
Single-Family | Mortgage Backed Securities 3 | |||||||||
Debt and Equity Securities, FV-NI [Line Items] | |||||||||
Carrying Value | $ 529 | 526 | |||||||
Interest Rate | 6.23% | 6.23% | |||||||
Current Yield | 6.33% | 6.32% | |||||||
Single-Family | Mortgage Backed Securities 4 | |||||||||
Debt and Equity Securities, FV-NI [Line Items] | |||||||||
Carrying Value | $ 845 | 819 | |||||||
Interest Rate | 3.60% | 3.60% | |||||||
Current Yield | 4.23% | 4.15% | |||||||
Self Storage | Mortgage Backed Securities 6 | |||||||||
Debt and Equity Securities, FV-NI [Line Items] | |||||||||
Carrying Value | $ 7,856 | $ 7,906 | |||||||
Interest Rate | 9.57% | 11.09% | |||||||
Current Yield | 9.59% | 11.11% |
CMBS Structured Pass Through _4
CMBS Structured Pass Through Certificates, MSCR Notes and Mortgage Backed Securities - Schedule of Activity Related to CMBS I/O Strips (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Debt and Equity Securities, FV-NI [Line Items] | ||||
Total | $ 1,497 | $ (1,940) | $ 3,456 | $ (7,247) |
Commercial Mortgage-Backed Securities | ||||
Debt and Equity Securities, FV-NI [Line Items] | ||||
Net interest earned | 775 | 2,237 | 2,270 | 4,811 |
Debt securities, trading, unrealized gain (loss) | 710 | (3,904) | 926 | (11,555) |
MSCR Notes | ||||
Debt and Equity Securities, FV-NI [Line Items] | ||||
Debt securities, trading, unrealized gain (loss) | (15) | 44 | 13 | (147) |
Collateralized Mortgage-Backed Securities | ||||
Debt and Equity Securities, FV-NI [Line Items] | ||||
Debt securities, trading, unrealized gain (loss) | $ 27 | $ (317) | $ 247 | $ (356) |
Real Estate Investments, net -
Real Estate Investments, net - Additional Information (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 USD ($) | Sep. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | Feb. 01, 2022 unit | Dec. 31, 2021 unit | |
Real Estate Properties [Line Items] | |||||
Number of units in multifamily property | 368 | ||||
Charlotte, NC | |||||
Real Estate Properties [Line Items] | |||||
Number of units in multifamily property | 204 | ||||
Las Vegas, NV | |||||
Real Estate Properties [Line Items] | |||||
Number of units in multifamily property | 368 | ||||
Multifamily Property | Charlotte, NC | |||||
Real Estate Properties [Line Items] | |||||
Real estate property, percent occupied | 95.10% | 96.10% | |||
Real estate, effective rent per unit | $ | $ 1,663 | $ 1,689 | |||
Multifamily Property | Las Vegas, NV | |||||
Real Estate Properties [Line Items] | |||||
Real estate property, percent occupied | 94% | ||||
Real estate, effective rent per unit | $ | $ 1,927 |
Real Estate Investments, net _2
Real Estate Investments, net - Investments in Properties (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Real Estate Properties [Line Items] | ||
Accumulated depreciation and amortization | $ (3,370) | $ (1,940) |
Real estate investment property, net | 58,563 | 245,222 |
Land | ||
Real Estate Properties [Line Items] | ||
Accumulated depreciation and amortization | 0 | 0 |
Real estate investment property, net | 10,996 | 36,586 |
Buildings and Improvements | ||
Real Estate Properties [Line Items] | ||
Accumulated depreciation and amortization | (3,025) | (1,752) |
Real estate investment property, net | 46,831 | 208,220 |
Intangible Lease Assets | ||
Real Estate Properties [Line Items] | ||
Accumulated depreciation and amortization | 0 | 0 |
Real estate investment property, net | 0 | 0 |
Construction in Progress | ||
Real Estate Properties [Line Items] | ||
Accumulated depreciation and amortization | 0 | 0 |
Real estate investment property, net | 401 | 2 |
Furniture, Fixtures and Equipment | ||
Real Estate Properties [Line Items] | ||
Accumulated depreciation and amortization | (345) | (188) |
Real estate investment property, net | 335 | 414 |
Hudson Montford | ||
Real Estate Properties [Line Items] | ||
Real estate investment property, at cost | 61,933 | 61,431 |
Hudson Montford | Land | ||
Real Estate Properties [Line Items] | ||
Real estate investment property, at cost | 10,996 | 10,996 |
Hudson Montford | Buildings and Improvements | ||
Real Estate Properties [Line Items] | ||
Real estate investment property, at cost | 49,856 | 49,831 |
Hudson Montford | Intangible Lease Assets | ||
Real Estate Properties [Line Items] | ||
Real estate investment property, at cost | 0 | 0 |
Hudson Montford | Construction in Progress | ||
Real Estate Properties [Line Items] | ||
Real estate investment property, at cost | 401 | 2 |
Hudson Montford | Furniture, Fixtures and Equipment | ||
Real Estate Properties [Line Items] | ||
Real estate investment property, at cost | $ 680 | 602 |
Elysian at Hughes | ||
Real Estate Properties [Line Items] | ||
Real estate investment property, at cost | 185,731 | |
Elysian at Hughes | Land | ||
Real Estate Properties [Line Items] | ||
Real estate investment property, at cost | 25,590 | |
Elysian at Hughes | Buildings and Improvements | ||
Real Estate Properties [Line Items] | ||
Real estate investment property, at cost | 160,141 | |
Elysian at Hughes | Intangible Lease Assets | ||
Real Estate Properties [Line Items] | ||
Real estate investment property, at cost | 0 | |
Elysian at Hughes | Construction in Progress | ||
Real Estate Properties [Line Items] | ||
Real estate investment property, at cost | 0 | |
Elysian at Hughes | Furniture, Fixtures and Equipment | ||
Real Estate Properties [Line Items] | ||
Real estate investment property, at cost | $ 0 |
Real Estate Investments, net _3
Real Estate Investments, net - Revenue and Expenses of Property (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Real Estate Properties [Line Items] | ||||
Interest expense | $ 13,197 | $ 10,682 | $ 38,503 | $ 28,607 |
General and administrative expenses | 2,524 | 1,677 | 7,053 | 5,308 |
Depreciation and amortization of real estate investment | 1,430 | 2,435 | ||
Multifamily Property | ||||
Real Estate Properties [Line Items] | ||||
Other income | 51 | 394 | 90 | 972 |
Total revenues | 1,083 | 3,455 | 3,147 | 9,108 |
Interest expense | 664 | 1,016 | 1,876 | 2,886 |
Real estate taxes and insurance | 164 | 363 | 512 | 1,135 |
Property operating expenses | 201 | 793 | 590 | 1,793 |
General and administrative expenses | 39 | 56 | 111 | 247 |
Property management fees | 31 | 79 | 90 | 220 |
Depreciation and amortization of real estate investment | 476 | 545 | 1,430 | 2,435 |
Rate cap (income) expense | 345 | (420) | (181) | (923) |
Debt service bridge | 0 | 10 | 0 | 626 |
Casualty loss | 19 | 0 | (156) | 0 |
Total expenses | 1,939 | 2,442 | 4,272 | 8,419 |
Net income (loss) from consolidated real estate owned | (856) | 1,013 | (1,125) | 689 |
Multifamily Property | Rental Income | ||||
Real Estate Properties [Line Items] | ||||
Rental income | $ 1,032 | $ 3,061 | $ 3,057 | $ 8,136 |
Debt - Summary of Financing Arr
Debt - Summary of Financing Arrangements (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Mar. 31, 2023 | Sep. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | Oct. 18, 2022 USD ($) | Apr. 20, 2021 USD ($) | Apr. 15, 2020 subsidiary | |
Debt Instrument [Line Items] | ||||||
Number Of Subsidiaries | subsidiary | 3 | |||||
Facility | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding face amount | $ 1,215,334 | $ 1,349,019 | ||||
Carrying value | $ 1,212,739 | $ 1,345,101 | ||||
Weighted average interest rate | 4.23% | 3.85% | ||||
Weighted average life (years) | 4 years 1 month 6 days | 3 years 2 months 12 days | ||||
Collateral | ||||||
Debt Instrument [Line Items] | ||||||
Weighted average life (years) | 5 years 8 months 12 days | |||||
Collateral outstanding face amount | $ 1,626,235 | $ 1,768,303 | ||||
Collateral amortized cost basis | 1,300,354 | 1,624,062 | ||||
Collateral carrying value | 1,291,413 | 1,619,879 | ||||
Collateral weighted average life (years) | 6 years 4 months 24 days | |||||
Master Repurchase Agreements | Mizuho | Facility | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding face amount | 298,009 | 331,020 | ||||
Carrying value | $ 298,009 | $ 331,020 | ||||
Weighted average interest rate | 7.23% | 5.83% | ||||
Weighted average life (years) | 2 months 12 days | 1 month 6 days | ||||
Master Repurchase Agreements | Mizuho | Collateral | ||||||
Debt Instrument [Line Items] | ||||||
Weighted average life (years) | 6 years 7 months 6 days | |||||
Collateral outstanding face amount | $ 853,574 | $ 974,440 | ||||
Collateral amortized cost basis | 434,890 | 543,919 | ||||
Collateral carrying value | 425,949 | 539,736 | ||||
Collateral weighted average life (years) | 7 years | |||||
Asset Specific Financing | Freddie Mac | Facility | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding face amount | 617,648 | 628,633 | ||||
Carrying value | $ 617,648 | $ 628,633 | ||||
Weighted average interest rate | 2.34% | 2.35% | ||||
Weighted average life (years) | 5 years 4 months 24 days | 4 years 7 months 6 days | ||||
Asset Specific Financing | Freddie Mac | Collateral | ||||||
Debt Instrument [Line Items] | ||||||
Weighted average life (years) | 4 years 7 months 6 days | |||||
Collateral outstanding face amount | $ 675,844 | $ 688,046 | ||||
Collateral amortized cost basis | 708,003 | 726,531 | ||||
Collateral carrying value | 708,003 | 726,531 | ||||
Collateral weighted average life (years) | 5 years 4 months 24 days | |||||
Mezzanine loans | Freddie Mac | Facility | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding face amount | 59,252 | 59,252 | ||||
Carrying value | $ 59,252 | $ 59,252 | ||||
Weighted average interest rate | 0.30% | 0.30% | ||||
Weighted average life (years) | 7 years 3 months 18 days | 6 years 6 months | ||||
Mezzanine loans | Freddie Mac | Collateral | ||||||
Debt Instrument [Line Items] | ||||||
Weighted average life (years) | 6 years 6 months | |||||
Collateral outstanding face amount | $ 96,817 | $ 105,817 | ||||
Collateral amortized cost basis | 98,898 | 108,390 | ||||
Collateral carrying value | $ 98,898 | $ 108,390 | ||||
Collateral weighted average life (years) | 7 years 3 months 18 days | |||||
Multifamily Property Debt Due 2028 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, repayment premium, percent | 1% | 1% | ||||
Multifamily Property Debt Due 2028 | Facility | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding face amount | $ 32,425 | $ 32,480 | ||||
Carrying value | $ 32,205 | $ 32,176 | ||||
Weighted average interest rate | 7.78% | 5.80% | ||||
Weighted average life (years) | 5 years 4 months 24 days | 4 years 8 months 12 days | ||||
Multifamily Property Debt Due 2028 | Collateral | ||||||
Debt Instrument [Line Items] | ||||||
Weighted average life (years) | 4 years 8 months 12 days | |||||
Collateral amortized cost basis | $ 58,563 | $ 59,491 | ||||
Collateral carrying value | 58,563 | 59,491 | ||||
Collateral weighted average life (years) | 5 years 4 months 24 days | |||||
Multifamily Property Debt Due 2032 | Facility | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding face amount | 89,634 | |||||
Carrying value | $ 89,060 | |||||
Weighted average interest rate | 3.52% | |||||
Weighted average life (years) | 9 years 1 month 6 days | |||||
Multifamily Property Debt Due 2032 | Collateral | ||||||
Debt Instrument [Line Items] | ||||||
Collateral amortized cost basis | $ 185,731 | |||||
Collateral carrying value | 185,731 | |||||
Collateral weighted average life (years) | 9 years 1 month 6 days | |||||
The 7.50 Percent Senior Notes Due 2025 | Unsecured Debt | Facility | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding face amount | 36,500 | 36,500 | ||||
Carrying value | $ 35,768 | $ 35,530 | ||||
Weighted average interest rate | 7.50% | 7.50% | ||||
Weighted average life (years) | 2 years 9 months 18 days | 2 years 1 month 6 days | ||||
The 5.75 Percent Senior Notes Due 2026 | Unsecured Debt | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding face amount | $ 75,000 | |||||
The 5.75 Percent Senior Notes Due 2026 | Unsecured Debt | Facility | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding face amount | $ 165,000 | $ 165,000 | ||||
Carrying value | $ 163,357 | $ 162,930 | ||||
Weighted average interest rate | 5.75% | 5.75% | ||||
Weighted average life (years) | 3 years 3 months 18 days | 2 years 6 months | ||||
The 7.50 Percent Senior Notes Due 2027 | Unsecured Debt | Facility | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding face amount | $ 6,500 | $ 6,500 | $ 6,500 | |||
Carrying value | $ 6,500 | $ 6,500 | ||||
Weighted average interest rate | 7.50% | 7.50% | 7.50% | |||
Weighted average life (years) | 4 years 9 months 18 days | 4 years 1 month 6 days |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Facility | ||
Debt Instrument [Line Items] | ||
Outstanding face amount | $ 1,215,334 | $ 1,349,019 |
Master Repurchase Agreements | Collateral | ||
Debt Instrument [Line Items] | ||
Collateral posted | 1,200,000 | |
Master Repurchase Agreements | Mizuho | Facility | ||
Debt Instrument [Line Items] | ||
Outstanding face amount | $ 298,009 | $ 331,020 |
Debt - Schedule of Outstanding
Debt - Schedule of Outstanding Principal Balances Related to SFR Loans (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Secured financing agreements, net | $ 676,900 | $ 687,885 |
Senior Loan | Single Family Rental | ||
Debt Instrument [Line Items] | ||
Secured financing agreements, net | $ 617,648 | |
Interest Rate | 2.34% | |
Senior Loan | Single Family Rental | Debt Instrument One | ||
Debt Instrument [Line Items] | ||
Secured financing agreements, net | $ 465,690 | |
Interest Rate | 2.24% | |
Senior Loan | Single Family Rental | Debt Instrument Two | ||
Debt Instrument [Line Items] | ||
Secured financing agreements, net | $ 46,094 | |
Interest Rate | 2.14% | |
Senior Loan | Single Family Rental | Debt Instrument Three | ||
Debt Instrument [Line Items] | ||
Secured financing agreements, net | $ 34,112 | |
Interest Rate | 2.70% | |
Senior Loan | Single Family Rental | Debt Instrument Four | ||
Debt Instrument [Line Items] | ||
Secured financing agreements, net | $ 9,170 | |
Interest Rate | 2.79% | |
Senior Loan | Single Family Rental | Debt Instrument Five | ||
Debt Instrument [Line Items] | ||
Secured financing agreements, net | $ 9,284 | |
Interest Rate | 2.45% | |
Senior Loan | Single Family Rental | Debt Instrument Six | ||
Debt Instrument [Line Items] | ||
Secured financing agreements, net | $ 8,558 | |
Interest Rate | 3.51% | |
Senior Loan | Single Family Rental | Debt Instrument Seven | ||
Debt Instrument [Line Items] | ||
Secured financing agreements, net | $ 8,805 | |
Interest Rate | 3.30% | |
Senior Loan | Single Family Rental | Debt Instrument Eight | ||
Debt Instrument [Line Items] | ||
Secured financing agreements, net | $ 7,913 | |
Interest Rate | 3.14% | |
Senior Loan | Single Family Rental | Debt Instrument Nine | ||
Debt Instrument [Line Items] | ||
Secured financing agreements, net | $ 6,524 | |
Interest Rate | 2.98% | |
Senior Loan | Single Family Rental | Debt Instrument Ten | ||
Debt Instrument [Line Items] | ||
Secured financing agreements, net | $ 5,874 | |
Interest Rate | 2.99% | |
Senior Loan | Single Family Rental | Debt Instrument Eleven | ||
Debt Instrument [Line Items] | ||
Secured financing agreements, net | $ 5,435 | |
Interest Rate | 2.40% | |
Senior Loan | Single Family Rental | Debt Instrument Twelve | ||
Debt Instrument [Line Items] | ||
Secured financing agreements, net | $ 5,240 | |
Interest Rate | 3.14% | |
Senior Loan | Single Family Rental | Debt Instrument Thirteen | ||
Debt Instrument [Line Items] | ||
Secured financing agreements, net | $ 4,949 | |
Interest Rate | 2.64% | |
Senior Loan | Multifamily | Mezzanine Loans | ||
Debt Instrument [Line Items] | ||
Secured financing agreements, net | $ 59,252 | |
Interest Rate | 0.30% | |
Senior Loan | Multifamily | Debt Instrument One | Mezzanine Loans | Wilmington, DE | ||
Debt Instrument [Line Items] | ||
Secured financing agreements, net | $ 8,723 | |
Interest Rate | 0.30% | |
Senior Loan | Multifamily | Debt Instrument Two | Mezzanine Loans | White Marsh, MD | ||
Debt Instrument [Line Items] | ||
Secured financing agreements, net | $ 7,344 | |
Interest Rate | 0.30% | |
Senior Loan | Multifamily | Debt Instrument Three | Mezzanine Loans | Philadelphia, PA | ||
Debt Instrument [Line Items] | ||
Secured financing agreements, net | $ 6,353 | |
Interest Rate | 0.30% | |
Senior Loan | Multifamily | Debt Instrument Four | Mezzanine Loans | Daytona Beach, FL | ||
Debt Instrument [Line Items] | ||
Secured financing agreements, net | $ 5,881 | |
Interest Rate | 0.30% | |
Senior Loan | Multifamily | Debt Instrument Five | Mezzanine Loans | Laurel, MD | ||
Debt Instrument [Line Items] | ||
Secured financing agreements, net | $ 4,523 | |
Interest Rate | 0.30% | |
Senior Loan | Multifamily | Debt Instrument Six | Mezzanine Loans | Temple Hills, MD | ||
Debt Instrument [Line Items] | ||
Secured financing agreements, net | $ 4,179 | |
Interest Rate | 0.30% | |
Senior Loan | Multifamily | Debt Instrument Seven | Mezzanine Loans | Temple Hills, MD | ||
Debt Instrument [Line Items] | ||
Secured financing agreements, net | $ 3,390 | |
Interest Rate | 0.30% | |
Senior Loan | Multifamily | Debt Instrument Eight | Mezzanine Loans | Lakewood, NJ | ||
Debt Instrument [Line Items] | ||
Secured financing agreements, net | $ 3,348 | |
Interest Rate | 0.30% | |
Senior Loan | Multifamily | Debt Instrument Nine | Mezzanine Loans | North Aurora, IL | ||
Debt Instrument [Line Items] | ||
Secured financing agreements, net | $ 2,454 | |
Interest Rate | 0.30% | |
Senior Loan | Multifamily | Debt Instrument Ten | Mezzanine Loans | Rosedale, MD | ||
Debt Instrument [Line Items] | ||
Secured financing agreements, net | $ 2,264 | |
Interest Rate | 0.30% | |
Senior Loan | Multifamily | Debt Instrument Eleven | Mezzanine Loans | Cockeysville, MD | ||
Debt Instrument [Line Items] | ||
Secured financing agreements, net | $ 2,215 | |
Interest Rate | 0.30% | |
Senior Loan | Multifamily | Debt Instrument Twelve | Mezzanine Loans | Laurel, MD | ||
Debt Instrument [Line Items] | ||
Secured financing agreements, net | $ 2,026 | |
Interest Rate | 0.30% | |
Senior Loan | Multifamily | Debt Instrument Thirteen | Mezzanine Loans | Vancouver, WA | ||
Debt Instrument [Line Items] | ||
Secured financing agreements, net | $ 1,836 | |
Interest Rate | 0.30% | |
Senior Loan | Multifamily | Debt Instrument Fourteen | Mezzanine Loans | Tyler, TX | ||
Debt Instrument [Line Items] | ||
Secured financing agreements, net | $ 1,763 | |
Interest Rate | 0.30% | |
Senior Loan | Multifamily | Debt Instrument Fifteen | Mezzanine Loans | Las Vegas, NV | ||
Debt Instrument [Line Items] | ||
Secured financing agreements, net | $ 1,307 | |
Interest Rate | 0.30% | |
Senior Loan | Multifamily | Debt Instrument Sixteen | Mezzanine Loans | Atlanta, GA | ||
Debt Instrument [Line Items] | ||
Secured financing agreements, net | $ 918 | |
Interest Rate | 0.30% | |
Senior Loan | Multifamily | Debt Instrument Seventeen | Mezzanine Loans | Des Moines, IA | ||
Debt Instrument [Line Items] | ||
Secured financing agreements, net | $ 728 | |
Interest Rate | 0.30% |
Debt - Activity Related to Carr
Debt - Activity Related to Carrying Value of Secured Financing Agreements and Master Repurchase Agreements (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Line Of Credit Facility [Roll Forward] | ||
Adjustment to loans, held for investment, net on deconsolidation of real estate | $ (89,012) | $ 0 |
Repurchase of unsecured notes | 0 | (4,829) |
Amortization of deferred financing costs | (4) | 36 |
Secured Financing Agreements and Master Repurchase Agreements | ||
Line Of Credit Facility [Roll Forward] | ||
Balances as of January 1, | 1,345,101 | 1,273,051 |
Adjustment to loans, held for investment, net on deconsolidation of real estate | (89,012) | 0 |
Principal borrowings | 44,892 | 252,796 |
Principal repayments | (88,888) | (161,999) |
Repurchase of unsecured notes | 0 | (2,879) |
Repurchase of unsecured notes, not yet settled | 0 | (1,950) |
Accretion of discounts | 666 | 572 |
Amortization of deferred financing costs | (20) | 36 |
Balances as of September 30, | $ 1,212,739 | $ 1,359,627 |
Debt - Summary of Aggregate Sch
Debt - Summary of Aggregate Scheduled Maturities of Total Debt (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Debt Instrument [Line Items] | |
2023 | $ 298,009 |
2024 | 5,435 |
2025 | 82,594 |
2026 | 206,710 |
2027 | 6,500 |
Thereafter | 616,086 |
Total long-term debt | 1,215,334 |
Recourse | |
Debt Instrument [Line Items] | |
2023 | 0 |
2024 | 0 |
2025 | 36,500 |
2026 | 197,426 |
2027 | 6,500 |
Thereafter | 0 |
Total long-term debt | 240,426 |
Non-recourse | |
Debt Instrument [Line Items] | |
2023 | 298,009 |
2024 | 5,435 |
2025 | 46,094 |
2026 | 9,284 |
2027 | 0 |
Thereafter | 616,086 |
Total long-term debt | $ 974,908 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Schedule of Carrying Values and Fair Values of Financial Assets and Liabilities Recorded at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Assets | ||
Common stock investment, at fair value | $ 60,709 | $ 78,264 |
CMBS Structured Pass Through Certificates | ||
Assets | ||
Debt securities, trading | 42,471 | 46,876 |
MSCR Notes | ||
Assets | ||
Debt securities, trading | 10,325 | 10,313 |
Collateralized Mortgage-Backed Securities | ||
Assets | ||
Debt securities, trading | 37,975 | 32,328 |
Fair Value, Recurring | ||
Assets | ||
Cash and cash equivalents | 10,977 | 20,048 |
Restricted cash | 1,942 | 299 |
Loans receivable, fair value disclosure | 329,344 | 255,254 |
Common stock investment, at fair value | 60,709 | 78,264 |
Accrued interest | 21,489 | 15,665 |
Accounts receivable and other assets | 1,276 | 2,197 |
Assets, fair value disclosure | 6,818,292 | 7,909,023 |
Liabilities | ||
Secured financing agreements, net | 691,428 | 713,253 |
Master repurchase agreements | 298,009 | 331,020 |
Unsecured notes, net | 178,116 | 175,560 |
Mortgages payable, net | 25,471 | 121,236 |
Accounts Payable And Other Accrued Liabilities Fair Value Disclosure | 3,405 | 6,236 |
Accrued interest payable | 10,124 | 7,986 |
Financial and nonfinancial liabilities, fair value disclosure | 6,432,475 | 7,605,095 |
Fair Value, Recurring | Mortgages | ||
Assets | ||
Loans receivable, fair value disclosure | 689,312 | 727,533 |
Fair Value, Recurring | CMBS Structured Pass Through Certificates | ||
Assets | ||
Debt securities, trading | 42,471 | 46,876 |
Fair Value, Recurring | MSCR Notes | ||
Assets | ||
Debt securities, trading | 10,325 | 10,313 |
Fair Value, Recurring | Collateralized Mortgage-Backed Securities | ||
Assets | ||
Debt securities, trading | 37,975 | 32,328 |
Fair Value, Recurring | Variable Interest Entity, Primary Beneficiary | ||
Liabilities | ||
Bonds payable held in variable interest entities, at fair value | 5,225,922 | 6,249,804 |
Fair Value, Recurring | Variable Interest Entity, Primary Beneficiary | Mortgages | ||
Assets | ||
Loans receivable, fair value disclosure | 5,612,472 | 6,720,246 |
Fair Value, Recurring | Level 1 | ||
Assets | ||
Cash and cash equivalents | 10,977 | 20,048 |
Restricted cash | 1,942 | 299 |
Loans receivable, fair value disclosure | 0 | 0 |
Common stock investment, at fair value | 0 | 0 |
Accrued interest | 21,489 | 15,665 |
Accounts receivable and other assets | 1,276 | 2,197 |
Assets, fair value disclosure | 35,684 | 38,209 |
Liabilities | ||
Secured financing agreements, net | 0 | 0 |
Master repurchase agreements | 0 | 0 |
Unsecured notes, net | 0 | 0 |
Mortgages payable, net | 0 | 0 |
Accounts Payable And Other Accrued Liabilities Fair Value Disclosure | 3,405 | 6,236 |
Accrued interest payable | 10,124 | 7,986 |
Financial and nonfinancial liabilities, fair value disclosure | 13,529 | 14,222 |
Fair Value, Recurring | Level 1 | Mortgages | ||
Assets | ||
Loans receivable, fair value disclosure | 0 | 0 |
Fair Value, Recurring | Level 1 | CMBS Structured Pass Through Certificates | ||
Assets | ||
Debt securities, trading | 0 | 0 |
Fair Value, Recurring | Level 1 | MSCR Notes | ||
Assets | ||
Debt securities, trading | 0 | 0 |
Fair Value, Recurring | Level 1 | Collateralized Mortgage-Backed Securities | ||
Assets | ||
Debt securities, trading | 0 | 0 |
Fair Value, Recurring | Level 1 | Variable Interest Entity, Primary Beneficiary | ||
Liabilities | ||
Bonds payable held in variable interest entities, at fair value | 0 | 0 |
Fair Value, Recurring | Level 1 | Variable Interest Entity, Primary Beneficiary | Mortgages | ||
Assets | ||
Loans receivable, fair value disclosure | 0 | 0 |
Fair Value, Recurring | Level 2 | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
Restricted cash | 0 | 0 |
Loans receivable, fair value disclosure | 0 | 0 |
Common stock investment, at fair value | 0 | 0 |
Accrued interest | 0 | 0 |
Accounts receivable and other assets | 0 | 0 |
Assets, fair value disclosure | 5,703,243 | 6,809,763 |
Liabilities | ||
Secured financing agreements, net | 0 | 0 |
Master repurchase agreements | 0 | 0 |
Unsecured notes, net | 178,116 | 175,560 |
Mortgages payable, net | 0 | 0 |
Accounts Payable And Other Accrued Liabilities Fair Value Disclosure | 0 | 0 |
Accrued interest payable | 0 | 0 |
Financial and nonfinancial liabilities, fair value disclosure | 5,404,038 | 6,425,364 |
Fair Value, Recurring | Level 2 | Mortgages | ||
Assets | ||
Loans receivable, fair value disclosure | 0 | 0 |
Fair Value, Recurring | Level 2 | CMBS Structured Pass Through Certificates | ||
Assets | ||
Debt securities, trading | 42,471 | 46,876 |
Fair Value, Recurring | Level 2 | MSCR Notes | ||
Assets | ||
Debt securities, trading | 10,325 | 10,313 |
Fair Value, Recurring | Level 2 | Collateralized Mortgage-Backed Securities | ||
Assets | ||
Debt securities, trading | 37,975 | 32,328 |
Fair Value, Recurring | Level 2 | Variable Interest Entity, Primary Beneficiary | ||
Liabilities | ||
Bonds payable held in variable interest entities, at fair value | 5,225,922 | 6,249,804 |
Fair Value, Recurring | Level 2 | Variable Interest Entity, Primary Beneficiary | Mortgages | ||
Assets | ||
Loans receivable, fair value disclosure | 5,612,472 | 6,720,246 |
Fair Value, Recurring | Level 3 | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
Restricted cash | 0 | 0 |
Loans receivable, fair value disclosure | 329,344 | 255,254 |
Common stock investment, at fair value | 60,709 | 78,264 |
Accrued interest | 0 | 0 |
Accounts receivable and other assets | 0 | 0 |
Assets, fair value disclosure | 1,079,365 | 1,061,051 |
Liabilities | ||
Secured financing agreements, net | 691,428 | 713,253 |
Master repurchase agreements | 298,009 | 331,020 |
Unsecured notes, net | 0 | 0 |
Mortgages payable, net | 25,471 | 121,236 |
Accounts Payable And Other Accrued Liabilities Fair Value Disclosure | 0 | 0 |
Accrued interest payable | 0 | 0 |
Financial and nonfinancial liabilities, fair value disclosure | 1,014,908 | 1,165,509 |
Fair Value, Recurring | Level 3 | Mortgages | ||
Assets | ||
Loans receivable, fair value disclosure | 689,312 | 727,533 |
Fair Value, Recurring | Level 3 | CMBS Structured Pass Through Certificates | ||
Assets | ||
Debt securities, trading | 0 | 0 |
Fair Value, Recurring | Level 3 | MSCR Notes | ||
Assets | ||
Debt securities, trading | 0 | 0 |
Fair Value, Recurring | Level 3 | Collateralized Mortgage-Backed Securities | ||
Assets | ||
Debt securities, trading | 0 | 0 |
Fair Value, Recurring | Level 3 | Variable Interest Entity, Primary Beneficiary | ||
Liabilities | ||
Bonds payable held in variable interest entities, at fair value | 0 | 0 |
Fair Value, Recurring | Level 3 | Variable Interest Entity, Primary Beneficiary | Mortgages | ||
Assets | ||
Loans receivable, fair value disclosure | 0 | 0 |
Carrying Value | Fair Value, Recurring | ||
Assets | ||
Cash and cash equivalents | 10,977 | 20,048 |
Restricted cash | 1,942 | 299 |
Loans receivable, fair value disclosure | 320,151 | 256,147 |
Common stock investment, at fair value | 60,709 | 78,264 |
Accrued interest | 21,489 | 15,665 |
Accounts receivable and other assets | 1,276 | 2,197 |
Assets, fair value disclosure | 6,827,790 | 7,908,914 |
Liabilities | ||
Secured financing agreements, net | 676,900 | 687,885 |
Master repurchase agreements | 298,009 | 331,020 |
Unsecured notes, net | 205,625 | 204,960 |
Mortgages payable, net | 32,205 | 121,236 |
Accounts Payable And Other Accrued Liabilities Fair Value Disclosure | 3,405 | 6,231 |
Accrued interest payable | 10,124 | 7,986 |
Financial and nonfinancial liabilities, fair value disclosure | 6,452,190 | 7,609,122 |
Carrying Value | Fair Value, Recurring | Mortgages | ||
Assets | ||
Loans receivable, fair value disclosure | 708,003 | 726,531 |
Carrying Value | Fair Value, Recurring | CMBS Structured Pass Through Certificates | ||
Assets | ||
Debt securities, trading | 42,471 | 46,876 |
Carrying Value | Fair Value, Recurring | MSCR Notes | ||
Assets | ||
Debt securities, trading | 10,325 | 10,313 |
Carrying Value | Fair Value, Recurring | Collateralized Mortgage-Backed Securities | ||
Assets | ||
Debt securities, trading | 37,975 | 32,328 |
Carrying Value | Fair Value, Recurring | Variable Interest Entity, Primary Beneficiary | ||
Liabilities | ||
Bonds payable held in variable interest entities, at fair value | 5,225,922 | 6,249,804 |
Carrying Value | Fair Value, Recurring | Variable Interest Entity, Primary Beneficiary | Mortgages | ||
Assets | ||
Loans receivable, fair value disclosure | $ 5,612,472 | $ 6,720,246 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Significant Unobservable Inputs of Level 3 Assets (Details) $ in Thousands | Sep. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Carrying Value | $ 60,709 | $ 78,264 |
Discounted cash flow | Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Carrying Value | 33,759 | |
Market approach | Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Carrying Value | $ 26,950 | |
Terminal cap rate | Discounted cash flow | Level 3 | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Range | 0.0513 | |
Terminal cap rate | Discounted cash flow | Level 3 | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Range | 0.0563 | |
Terminal cap rate | Discounted cash flow | Level 3 | Weighted Average | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Range | 0.0538 | |
Discount rate | Discounted cash flow | Level 3 | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Range | 0.0775 | |
Discount rate | Discounted cash flow | Level 3 | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Range | 0.0975 | |
Discount rate | Discounted cash flow | Level 3 | Weighted Average | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Range | 0.0875 | |
NAV per share multiple | Market approach | Level 3 | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Range | 1 | |
NAV per share multiple | Market approach | Level 3 | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Range | 1.21 | |
NAV per share multiple | Market approach | Level 3 | Weighted Average | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Range | 0.0111 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Changes in Level 3 Assets (Details) - Equity Securities $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Discounted cash flow | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | $ 50,380 |
Change in Unrealized Gains/(Losses) | (16,621) |
Ending balance | 33,759 |
Market approach | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | 27,884 |
Change in Unrealized Gains/(Losses) | (934) |
Ending balance | $ 26,950 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | 24 Months Ended | ||||||||||||||||||
Sep. 30, 2023 | Jul. 25, 2023 | Apr. 24, 2023 | Feb. 22, 2023 | Dec. 31, 2022 | Apr. 01, 2021 | Mar. 03, 2021 | Jul. 24, 2020 | Mar. 09, 2020 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Mar. 09, 2022 | Jun. 30, 2023 | Jun. 13, 2023 | Dec. 15, 2022 | Jun. 30, 2022 | Mar. 15, 2022 | Dec. 31, 2021 | Sep. 08, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||||||||||
Common stock, issued (in shares) | 17,518,900 | 17,366,930 | 17,518,900 | 17,518,900 | |||||||||||||||||
Common stock, par value per share (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||||||||||
Common stock, outstanding (in shares) | 17,231,913 | 17,079,943 | 17,231,913 | 17,231,913 | |||||||||||||||||
Preferred stock, outstanding (in shares) | 1,645,000 | ||||||||||||||||||||
Stock repurchase program, authorized amount | $ 20 | $ 10 | |||||||||||||||||||
Stock repurchase program, period in force | 2 years | 2 years | |||||||||||||||||||
Treasury stock shares acquired (in shares) | 327,422 | ||||||||||||||||||||
Repurchase of common stock | $ 4.8 | ||||||||||||||||||||
Treasury stock acquired, average cost per share (in dollars per share) | $ 14.61 | ||||||||||||||||||||
Treasury stock, shares retired (in shares) | 40,435 | ||||||||||||||||||||
Treasury stock, ending balance (in shares) | 286,987 | ||||||||||||||||||||
Stock issuance agreement, number of shares (in shares) | 13,758,906 | ||||||||||||||||||||
Conversion of redeemable noncontrolling interests in the OP (in shares) | 8,748,735 | 8,748,735 | 8,748,735 | ||||||||||||||||||
Common stock dividends declared (in usd per share) | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.6850 | $ 0.5000 | $ 2.0550 | $ 1.5000 | ||||||||||||||
Common stock special dividends declared (in usd per share) | $ 0.185 | $ 0.185 | 0.185 | ||||||||||||||||||
Common Stock | |||||||||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||||||||||
Vesting of stock-based compensation (in shares) | 151,970 | 114,494 | |||||||||||||||||||
Common stock, outstanding (in shares) | 17,231,913 | 17,079,943 | 17,231,913 | 14,979,759 | 17,231,913 | 14,979,759 | 17,231,913 | 14,949,631 | 9,163,934 | ||||||||||||
Issuance of common stock (in shares) | 531,728 | ||||||||||||||||||||
Conversion of redeemable noncontrolling interests in the OP (in shares) | 5,169,603 | ||||||||||||||||||||
Dividends payable, amount per share (in dollars per share) | $ 0.53125 | $ 0.53125 | $ 0.53125 | ||||||||||||||||||
Series A Preferred Stock | |||||||||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||||||||||
Preferred stock, outstanding (in shares) | 1,645,000 | 1,645,000 | 1,645,000 | 1,645,000 | 1,645,000 | 1,645,000 | 1,645,000 | 1,645,000 | 1,645,000 | ||||||||||||
NREF OP IV REIT | |||||||||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||||||||||
Sale of stock, number of shares issued (in shares) | 125 | ||||||||||||||||||||
Sale of stock, price per share (in dollars per share) | $ 1,000 | ||||||||||||||||||||
Sale of stock, consideration received on transaction | $ 0.1 | ||||||||||||||||||||
Preferred units, distribution per year rate | 1,200% | ||||||||||||||||||||
Preferred units, purchase price (in dollars per share) | $ 1,000 | ||||||||||||||||||||
Preferred units, redemption value per share (in dollars per share) | $ 1,000 | ||||||||||||||||||||
At-the-market Offering | |||||||||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||||||||||
Equity distribution agreements, maximum aggregate sales price | $ 100 | ||||||||||||||||||||
Restricted Stock Units (RSUs) | |||||||||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||||||||||
Granted (in shares) | 440,055 | ||||||||||||||||||||
Series A Preferred Stock | |||||||||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||||||||||
Issuance of common stock (in shares) | 2,000,000 | ||||||||||||||||||||
Preferred stock, dividend rate, percentage | 85% | ||||||||||||||||||||
Preferred stock, redemption price per share (in dollars per share) | $ 24 | ||||||||||||||||||||
Proceeds from issuance of preferred stock | $ 48 | ||||||||||||||||||||
Underwriting discount and commission expenses | 1.2 | ||||||||||||||||||||
Payments of stock issuance costs | $ 0.8 | ||||||||||||||||||||
Preferred stock, liquidation preference per share (in dollars per share) | $ 25 |
Stockholders' Equity - Number o
Stockholders' Equity - Number of Restricted Stock Units Granted, Vested, Forfeited and Outstanding (Details) - Restricted Stock Units (RSUs) | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Number of Units | |
Outstanding, beginning balance (in shares) | shares | 577,360 |
Granted (in shares) | shares | 440,055 |
Vested (in shares) | shares | (201,678) |
Forfeited (in shares) | shares | 0 |
Outstanding, ending balance (in shares) | shares | 815,737 |
Weighted Average Grant Date Fair Value | |
Outstanding, Weighted Average Grant Date Fair Value, beginning balance (in dollars per share) | $ / shares | $ 17.88 |
Granted, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares | 15.14 |
Vested, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares | 17.27 |
Forfeited, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares | 0 |
Outstanding, Weighted Average Grant Date Fair Value, ending balance (in dollars per share) | $ / shares | $ 16.71 |
Stockholders' Equity - Vesting
Stockholders' Equity - Vesting Schedule (Details) - Restricted Stock Units (RSUs) - shares | Sep. 30, 2023 | Dec. 31, 2022 |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
2024 (in shares) | 315,246 | |
2025 (in shares) | 225,318 | |
2026 (in shares) | 170,502 | |
2027 (in shares) | 104,671 | |
Nonvested restricted stock units (in shares) | 815,737 | 577,360 |
February | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
2024 (in shares) | 120,640 | |
2025 (in shares) | 120,646 | |
2026 (in shares) | 65,832 | |
2027 (in shares) | 0 | |
Nonvested restricted stock units (in shares) | 307,118 | |
April | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
2024 (in shares) | 126,042 | |
2025 (in shares) | 104,672 | |
2026 (in shares) | 104,670 | |
2027 (in shares) | 104,671 | |
Nonvested restricted stock units (in shares) | 440,055 | |
May | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
2024 (in shares) | 68,564 | |
2025 (in shares) | 0 | |
2026 (in shares) | 0 | |
2027 (in shares) | 0 | |
Nonvested restricted stock units (in shares) | 68,564 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of ATM Program Sales (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Proceeds from issuance of common stock | $ 0 | $ 113,535,000 |
The 2022 At The Market Program (ATM) | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Gross Proceeds | $ 12,575,493 | |
Shares of common stock issued (in shares) | 531,728 | |
Gross Average Sale Price per Share of Common Stock (in usd per share) | $ 23.65 | |
Sales Commissions | $ 188,655 | |
Offering Costs | 888,249 | |
Proceeds from issuance of common stock | $ 11,498,589 | |
Average Price Per Share, net (in usd per share) | $ 21.62 |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Basic and Diluted Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Earnings Per Share [Abstract] | ||||
Net loss attributable to common stockholders | $ (15,550) | $ (9,289) | $ (3,236) | $ 6,967 |
Earnings for basic computations | ||||
Net income (loss) attributable to redeemable noncontrolling interests | (2,374) | (1,889) | 1,419 | 5,080 |
Net income for diluted computations | $ (17,924) | $ (11,178) | $ (1,817) | $ 12,047 |
Weighted-average common shares outstanding | ||||
Average number of common shares outstanding - basic (in shares) | 17,232 | 14,962 | 17,188 | 14,526 |
Average number of unvested restricted stock units (in shares) | 816 | 578 | 723 | 569 |
Average number of OP Units and SubOP Units (in shares) | 5,038 | 7,138 | 5,038 | 7,307 |
Average number of common shares outstanding - diluted (in shares) | 23,086 | 22,678 | 22,949 | 22,402 |
Earnings per weighted average common share: | ||||
Earnings per share outstanding - basic (in dollars per share) | $ (0.90) | $ (0.62) | $ (0.19) | $ 0.48 |
Earnings per share outstanding - diluted (in dollars per share) | $ (0.90) | $ (0.62) | $ (0.19) | $ 0.48 |
Noncontrolling Interests - Rede
Noncontrolling Interests - Redeemable Noncontrolling Interests in the OP (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||
Redeemable noncontrolling interests in the OP, beginning balance | $ 96,501 | $ 261,423 |
Adjustment to accounts payable and accrued liabilities on deconsolidation of real estate | 297 | 0 |
Net income attributable to redeemable noncontrolling interests in the OP | 1,419 | 5,080 |
Redemption of redeemable noncontrolling interests in the OP | 0 | (113,535) |
Distributions to redeemable noncontrolling interests in the OP | (9,069) | (10,708) |
Redeemable noncontrolling interests in the OP, ending balance | $ 89,148 | $ 142,260 |
Noncontrolling Interests - Cons
Noncontrolling Interests - Consolidated Common Shares (Details) - shares | Sep. 30, 2023 | Dec. 31, 2022 |
Noncontrolling Interest [Line Items] | ||
Common stock, outstanding (in shares) | 17,231,913 | 17,079,943 |
Combined outstanding (in shares) | 22,270,295 | |
OP Units | Noncontrolling Interest | ||
Noncontrolling Interest [Line Items] | ||
Partners' capital account units (in shares) | 5,038,382 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) | 3 Months Ended | 9 Months Ended | ||||||||||||||||||||||||||
Sep. 30, 2023 USD ($) shares | Aug. 16, 2023 USD ($) | May 25, 2023 USD ($) | Apr. 04, 2023 shares | Mar. 28, 2023 USD ($) | Mar. 06, 2023 USD ($) | Jan. 09, 2023 USD ($) | Jan. 01, 2023 USD ($) | Dec. 31, 2022 USD ($) shares | Feb. 21, 2022 shares | Feb. 01, 2022 USD ($) unit | Apr. 20, 2021 USD ($) | Feb. 22, 2021 shares | Nov. 02, 2020 shares | Jun. 24, 2020 shares | May 29, 2020 USD ($) $ / shares shares | May 08, 2020 shares | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) shares | Sep. 30, 2022 USD ($) | Sep. 29, 2023 USD ($) | May 17, 2023 USD ($) | Dec. 08, 2022 USD ($) | Oct. 18, 2022 USD ($) | Jul. 26, 2022 USD ($) | Jun. 30, 2022 USD ($) | Sep. 08, 2021 shares | |
Related Party Transaction [Line Items] | ||||||||||||||||||||||||||||
Payment for management fee | $ 0 | |||||||||||||||||||||||||||
Stock issuance agreement, number of shares (in shares) | shares | 13,758,906 | |||||||||||||||||||||||||||
Noncontrolling interest, shares redeemed (in shares) | shares | 8,748,735 | 8,748,735 | ||||||||||||||||||||||||||
Conversion of redeemable noncontrolling interests in the OP (in shares) | shares | 8,748,735 | 8,748,735 | 8,748,735 | |||||||||||||||||||||||||
Management fees | $ 820,000 | $ 822,000 | $ 2,470,000 | $ 2,330,000 | ||||||||||||||||||||||||
Number of units in multifamily property | unit | 368 | |||||||||||||||||||||||||||
Acquisitions of real estate investments | 0 | 184,552,000 | ||||||||||||||||||||||||||
Common equity interests transferred | $ 54,000 | |||||||||||||||||||||||||||
Preferred equity method investments | $ 14,800,000 | 14,800,000 | 14,800,000 | $ 65,300,000 | ||||||||||||||||||||||||
Preferred equity method investment, guaranteed payment | $ 115,300,000 | |||||||||||||||||||||||||||
Gain on deconsolidation of real estate owned | 0 | $ 0 | 1,490,000 | $ 0 | ||||||||||||||||||||||||
Redeemable Preferred Stock | ||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||||||
Stock redeemed during the period | 50,500,000 | |||||||||||||||||||||||||||
Facility | ||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||||||
Outstanding face amount | $ 1,215,334,000 | $ 1,349,019,000 | $ 1,215,334,000 | $ 1,215,334,000 | ||||||||||||||||||||||||
Weighted average interest rate | 4.23% | 3.85% | 4.23% | 4.23% | ||||||||||||||||||||||||
Elysian at Hughes | ||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||||||
Acquisitions of real estate investments | $ 184,100,000 | |||||||||||||||||||||||||||
Bridge Loan | Prime Rate | ||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||||||
Loans receivable, basis spread on variable rate | 1.50% | |||||||||||||||||||||||||||
Las Vegas, NV | ||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||||||
Number of units in multifamily property | unit | 368 | |||||||||||||||||||||||||||
Las Vegas, NV | Bridge Loan | ||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||||||
Financing receivable, after allowance for credit loss, current, total | $ 13,500,000 | |||||||||||||||||||||||||||
Houston, TX | ||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||||||
Preferred equity method investments | $ 4,200,000 | |||||||||||||||||||||||||||
Preferred equity method investments, unfunded | $ 200,000 | $ 200,000 | $ 200,000 | |||||||||||||||||||||||||
The 5.75 Percent Senior Notes Due 2026 | Unsecured Debt | ||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||||||
Outstanding face amount | $ 75,000,000 | |||||||||||||||||||||||||||
Interest rate, stated percentage | 5.75% | |||||||||||||||||||||||||||
Percentage of par value | 995% | |||||||||||||||||||||||||||
Proceeds from issuance of debt | $ 73,100,000 | |||||||||||||||||||||||||||
The 5.75 Percent Senior Notes Due 2026 | Unsecured Debt | Facility | ||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||||||
Outstanding face amount | $ 165,000,000 | $ 165,000,000 | $ 165,000,000 | $ 165,000,000 | ||||||||||||||||||||||||
Weighted average interest rate | 5.75% | 5.75% | 5.75% | 5.75% | ||||||||||||||||||||||||
The 7.50 Percent Senior Notes Due 2027 | Unsecured Debt | Facility | ||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||||||
Outstanding face amount | $ 6,500,000 | $ 6,500,000 | $ 6,500,000 | $ 6,500,000 | $ 6,500,000 | |||||||||||||||||||||||
Weighted average interest rate | 7.50% | 7.50% | 7.50% | 7.50% | 7.50% | |||||||||||||||||||||||
11.00% Notes Due September 29, 2024 | ||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||||||
Outstanding face amount | $ 5,000,000 | |||||||||||||||||||||||||||
Interest rate, stated percentage | 11% | |||||||||||||||||||||||||||
Restricted Stock Units (RSUs) | ||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||||||
Granted (in shares) | shares | 440,055 | |||||||||||||||||||||||||||
Director | Restricted Stock Units (RSUs) | 2020 LTIP | ||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||||||
Granted (in shares) | shares | 21,370 | 12,464 | 14,739 | |||||||||||||||||||||||||
Officers and Other Employees | Restricted Stock Units (RSUs) | 2020 LTIP | ||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||||||
Granted (in shares) | shares | 418,685 | 264,476 | 274,274 | |||||||||||||||||||||||||
General Partner of Subsidiary | Restricted Stock Units (RSUs) | 2020 LTIP | ||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||||||
Granted (in shares) | shares | 1,201 | 1,838 | ||||||||||||||||||||||||||
Directors, Officers and Certain Key Employees | Restricted Stock Units (RSUs) | 2020 LTIP | ||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||||||
Granted (in shares) | shares | 233,385 | |||||||||||||||||||||||||||
REIT Sub and the Co-Guarantors | ||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||||||
Guarantor obligations, current carrying value | $ 49,200,000 | |||||||||||||||||||||||||||
Guarantor obligations, maximum exposure | 97,600,000 | |||||||||||||||||||||||||||
REIT Sub | ||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||||||
Guarantor obligations, maximum exposure | $ 83,800,000 | |||||||||||||||||||||||||||
NexPoint Real Estate Advisors VII, L.P. | ||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||||||
Percentage of annual advisory paid monthly | 15% | |||||||||||||||||||||||||||
NexPoint Real Estate Advisors VII, L.P. | Maximum | ||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||||||
Percentage of direct payment of operating expense | 25% | |||||||||||||||||||||||||||
Buffalo Pointe | Contribution Agreement | ||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||||||
Percentage of occupancy of multifamily property | 90.50% | 90.50% | 90.50% | |||||||||||||||||||||||||
Percentage of preferred equity investment current interest rate | 6.50% | |||||||||||||||||||||||||||
Percentage of preferred equity investment deferred interest rate | 4.50% | |||||||||||||||||||||||||||
Percentage of loan to value | 75.60% | |||||||||||||||||||||||||||
Common stock conversion basis | 1 | |||||||||||||||||||||||||||
Buffalo Pointe | Contribution Agreement | NexPoint Real Estate Finance Operating Partnership, L.P. | ||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||||||
Payments of distributions to affiliates | $ 1,700,000 | $ 1,700,000 | $ 1,700,000 | $ 1,700,000 | $ 1,700,000 | $ 10,000,000 | ||||||||||||||||||||||
Partners' capital account, total sale of units (in shares) | shares | 564,334 | |||||||||||||||||||||||||||
Book value of common stock per share (in dollars per share) | $ / shares | $ 17.72 | |||||||||||||||||||||||||||
NexAnnuity Asset Management | The 5.75 Percent Senior Notes Due 2026 | Unsecured Debt | ||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||||||
Outstanding face amount | $ 2,500,000 | |||||||||||||||||||||||||||
Interest rate, stated percentage | 5.75% |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) | 5 Months Ended | 9 Months Ended | |||||
Mar. 14, 2023 USD ($) | Sep. 29, 2021 USD ($) | Jun. 30, 2023 USD ($) | Sep. 30, 2023 USD ($) | May 17, 2023 USD ($) | Feb. 10, 2023 USD ($) | Jul. 26, 2022 USD ($) | |
Other Commitments [Line Items] | |||||||
Purchase of preferred equity, purchase amount | $ 50,000,000 | ||||||
Purchase of preferred equity, purchase amount, option | $ 25,000,000 | $ 6,600,000 | |||||
Preferred units, extension term | 1 year | ||||||
Preferred units, distribution rate | 10,000% | ||||||
Preferred equity method investments | $ 14,800,000 | $ 65,300,000 | |||||
Multiple on invested capital | 1.30 | ||||||
Preferred equity investment, placement fee | 0.010 | ||||||
Phoenix, AZ | |||||||
Other Commitments [Line Items] | |||||||
Preferred equity method investments | $ 24,000,000 | ||||||
Preferred equity method investments, unfunded | 20,100,000 | ||||||
Houston, TX | |||||||
Other Commitments [Line Items] | |||||||
Preferred equity method investments | $ 4,200,000 | ||||||
Preferred equity method investments, unfunded | $ 200,000 | ||||||
Multifamily Property | Forney, Texas | |||||||
Other Commitments [Line Items] | |||||||
Purchase of preferred equity, purchase amount | $ 30,300,000 | ||||||
Purchase of preferred equity, amount unfunded | $ 9,400,000 | ||||||
Purchase of common equity, purchase amount | 4,300,000 | ||||||
Purchase of common equity, amount unfunded | 3,300,000 | ||||||
Multifamily Property | Richmond, Virginia | |||||||
Other Commitments [Line Items] | |||||||
Purchase of preferred equity, purchase amount | 30,300,000 | ||||||
Purchase of preferred equity, amount unfunded | 16,100,000 | ||||||
Purchase of common equity, purchase amount | $ 4,300,000 | ||||||
Purchase of common equity, amount unfunded | $ 3,300,000 | ||||||
Preferred Equity Investment, Return, Tranche One | |||||||
Other Commitments [Line Items] | |||||||
Internal rate of return | 20% | ||||||
Minimum | Prime Rate | |||||||
Other Commitments [Line Items] | |||||||
Preferred equity investment, basis spread on variable rate | 0.050 | ||||||
Maximum | Prime Rate | |||||||
Other Commitments [Line Items] | |||||||
Preferred equity investment, basis spread on variable rate | 0.1125 | ||||||
NexPoint Real Estate Finance, Inc. | Preferred Equity Investment, Return, Tranche One | |||||||
Other Commitments [Line Items] | |||||||
Preferred equity investment, return | 0 | ||||||
NexPoint Real Estate Finance, Inc. | Preferred Equity Investment, Return, Tranche Two | |||||||
Other Commitments [Line Items] | |||||||
Preferred equity investment, return | 0.10 | ||||||
Preferred Equity Issuer | Preferred Equity Investment, Return, Tranche One | |||||||
Other Commitments [Line Items] | |||||||
Preferred equity investment, return | 1 | ||||||
Preferred Equity Issuer | Preferred Equity Investment, Return, Tranche Two | |||||||
Other Commitments [Line Items] | |||||||
Preferred equity investment, return | 0.90 | ||||||
Unstabilized Special Purpose Limited Liability Company | |||||||
Other Commitments [Line Items] | |||||||
Preferred equity, invested capital ratio | 1.25 | ||||||
Stabilized Special Purpose Limited Liability Company | |||||||
Other Commitments [Line Items] | |||||||
Preferred equity, invested capital ratio | 1.10 | ||||||
Preferred Units | |||||||
Other Commitments [Line Items] | |||||||
Total other commitment | $ 0 |
Commitment and Contingencies -
Commitment and Contingencies - Schedule of Purchase Commitments (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Other Commitments [Line Items] | ||
Unfunded Commitments | $ 58,800 | $ 25,000 |
Preferred Equity | ||
Other Commitments [Line Items] | ||
Unfunded Commitments | 52,200 | 25,000 |
Common Equity | ||
Other Commitments [Line Items] | ||
Unfunded Commitments | $ 6,600 | $ 0 |
Subsequent Events (Details)
Subsequent Events (Details) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | |||||||||||
Nov. 02, 2023 USD ($) $ / shares shares | Oct. 30, 2023 $ / shares | Oct. 27, 2023 USD ($) | Oct. 24, 2023 $ / shares | Jul. 25, 2023 $ / shares | Apr. 24, 2023 $ / shares | Feb. 22, 2023 $ / shares | Sep. 30, 2023 unit $ / shares | Sep. 30, 2022 $ / shares | Sep. 30, 2023 unit $ / shares | Sep. 30, 2022 $ / shares | Nov. 09, 2023 USD ($) | Feb. 01, 2022 unit | |
Subsequent Event [Line Items] | |||||||||||||
Number of units in multifamily property | unit | 368 | ||||||||||||
Common stock dividends declared (in usd per share) | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.6850 | $ 0.5000 | $ 2.0550 | $ 1.5000 | ||||||
Common stock special dividends declared (in usd per share) | $ 0.185 | $ 0.185 | $ 0.185 | ||||||||||
Subsequent Event | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Common stock dividends declared (in usd per share) | $ 0.50 | ||||||||||||
Common stock special dividends declared (in usd per share) | $ 0.185 | ||||||||||||
Subsequent Event | Promissory note, held-for-investment | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Repayments of notes | $ | $ 5 | ||||||||||||
Subsequent Event | Series B Preferred Stock | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Sale of stock, number of shares issued (in shares) | shares | 16,000,000 | ||||||||||||
Preferred stock, dividend rate, percentage | 9% | ||||||||||||
Sale of stock, price per share (in dollars per share) | $ 25 | ||||||||||||
Sale of stock, consideration received on transaction | $ | $ 400 | ||||||||||||
Selling commissions (as a percent) | 7% | ||||||||||||
Dealer manager fee (as a percent) | 3% | ||||||||||||
SPG Alexander JV LLC | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Number of units in multifamily property | unit | 280 | 280 | |||||||||||
NREF Alexander Manager, LLC | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Equity method investment, ownership percentage | 100% | 100% | |||||||||||
Preferred Equity Investment | Subsequent Event | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Preferred equity method investments, redeemed | $ | $ 11 |