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TPG RE Finance Trust (TRTX)

TPG RE Finance Trust, Inc. is a commercial real estate finance company that originates, acquires, and manages primarily first mortgage loans secured by institutional properties located in primary and select secondary markets in the United States. The Company is externally managed by TPG RE Finance Trust Management, L.P., a part of TPG Real Estate, which is the real estate investment platform of global alternative asset firm TPG.

Company profile

Ticker
TRTX, TRTX+C
Exchange
CEO
Greta Guggenheim
Employees
Incorporated
Location
Fiscal year end
SEC CIK
Subsidiaries
TRTX Master Retention Holder, LLC • TPG RE Finance, Ltd. • TPG RE Finance • TPG RE Finance, LLC • TRT Securities 1, LLC • TRT Securities 2, LLC • TRT Securities 3, LLC • TRT Securities 4, LLC • TRT Securities 5, LLC • TPG Real Estate Finance ...

TRTX stock data

Analyst ratings and price targets

Last 3 months
JMP Securities
Maintains
Market Outperform
$13.00
1 Jul 22

Investment data

Data from SEC filings
Securities sold
Number of investors

Calendar

2 Aug 22
29 Sep 22
31 Dec 22
Quarter (USD) Jun 22 Mar 22 Dec 21 Sep 21
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Annual (USD) Dec 21 Dec 20 Dec 19 Dec 18
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Cash burn rate (est.) Burn method: Change in cash Burn method: Operating income Burn method: FCF (opex + capex)
Last Q Avg 4Q Last Q Avg 4Q Last Q Avg 4Q
Cash on hand (at last report) 356.78M 356.78M 356.78M 356.78M 356.78M 356.78M
Cash burn (monthly) (no burn) (no burn) 1.77M (no burn) (no burn) (no burn)
Cash used (since last report) n/a n/a 5.31M n/a n/a n/a
Cash remaining n/a n/a 351.47M n/a n/a n/a
Runway (months of cash) n/a n/a 198.3 n/a n/a n/a

Beta Read what these cash burn values mean

Date Owner Security Transaction Code Indirect 10b5-1 $Price #Shares $Value #Remaining
25 Jul 22 White Gregory Common Stock Grant Acquire A No No 9.49 606 5.75K 29,771
25 Jul 22 Silverstein Wendy Common Stock Grant Acquire A No No 9.49 606 5.75K 29,771
25 Jul 22 Schuster Todd Common Stock Grant Acquire A No No 9.49 83 787.67 8,536
25 Jul 22 Smith Michael Bradley Common Stock Grant Acquire A No No 9.49 606 5.75K 29,771
25 Jul 22 Gillmore Michael Common Stock Grant Acquire A No No 9.49 606 5.75K 29,771
13F holders Current Prev Q Change
Total holders 132 128 +3.1%
Opened positions 20 23 -13.0%
Closed positions 16 16
Increased positions 57 39 +46.2%
Reduced positions 38 42 -9.5%
13F shares Current Prev Q Change
Total value 489.38M 604.95M -19.1%
Total shares 56.16M 55.54M +1.1%
Total puts 12.2K 11.2K +8.9%
Total calls 198K 0 NEW
Total put/call ratio 0.1 Infinity NaN%
Largest owners Shares Value Change
Starwood Capital Group Global Ii 12M $90.12M 0.0%
TPG GP A 7.09M $63.85M 0.0%
Vanguard 5.78M $52.04M +0.5%
BLK Blackrock 5.44M $49.05M +4.4%
GS Goldman Sachs 3.99M $35.98M +36.0%
Nan Shan Life Insurance 3.38M $30.49M 0.0%
C Citigroup 1.92M $17.29M -4.1%
STT State Street 1.3M $12M +4.7%
Geode Capital Management 1.1M $9.91M +7.6%
DBRG DigitalBridge 838.42K $7.56M +15.0%
Largest transactions Shares Bought/sold Change
GS Goldman Sachs 3.99M +1.06M +36.0%
TCW 300.75K -637.59K -67.9%
Coulter & Justus Financial Services 404.63K +404.63K NEW
Millennium Management 685.19K -250.57K -26.8%
BLK Blackrock 5.44M +228.3K +4.4%
Brevan Howard Capital Management 707.94K +199.21K +39.2%
EMG 34.26K -183.74K -84.3%
Two Sigma Investments 214.99K -177.72K -45.3%
ExodusPoint Capital Management 66K -172.23K -72.3%
BAC Bank Of America 181.42K +140.96K +348.4%

Financial report summary

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Risks
  • Our success depends on the availability of attractive investment opportunities and our Manager’s ability to identify, structure, consummate, leverage, manage and realize returns on our investments.
  • Our commercial mortgage loans and other commercial real estate-related debt instruments expose us to risks associated with real estate investments generally.
  • Commercial real estate debt instruments that are secured or otherwise supported, directly or indirectly, by commercial property are subject to delinquency, foreclosure and loss, which could materially and adversely affect us.
  • There can be no assurances that the U.S. or global financial systems will remain stable, and the occurrence of another significant credit market disruption may negatively impact our ability to execute our investment strategy, which would materially and adversely affect us.
  • The planned discontinuance of LIBOR has affected and will continue to affect financial markets generally, and may adversely affect our interest income, interest expense, or both.
  • Difficulty in redeploying the proceeds from repayments of our existing loans and other investments could materially and adversely affect us.
  • If we are unable to successfully integrate new assets and manage our growth, our results of operations and financial condition may suffer.
  • We operate in a competitive market for the origination and acquisition of attractive investment opportunities and competition may limit our ability to originate or acquire attractive investments in our target assets, which could have a material adverse effect on us.
  • The due diligence process undertaken by our Manager in regard to our investment opportunities may not reveal all facts relevant to an investment and, as a result, we may experience losses, which could materially and adversely affect us.
  • Interest rate fluctuations could significantly decrease our ability to generate income on our investments, which could materially and adversely affect us.
  • Prepayment rates may adversely affect our financial performance and cash flows and the value of certain of our investments.
  • Our investments may be concentrated and could be subject to risk of default.
  • The illiquidity of certain of our loans and other investments may materially and adversely affect us.
  • Most of the commercial mortgage loans that we originate or acquire are nonrecourse loans and the assets securing these loans may not be sufficient to protect us from a partial or complete loss if the borrower defaults on the loan, which could materially and adversely affect us.
  • We may not have control over certain of our investments.
  • Future joint venture investments could be adversely affected by our lack of sole decision-making authority, our reliance on joint venture partners’ financial condition and liquidity and disputes between us and our joint venture partners.
  • We are subject to additional risks associated with investments in the form of loan participation interests.
  • Mezzanine loans, B-Notes and other investments that are subordinated or otherwise junior in an issuer’s capital structure, such as preferred equity, and that involve privately negotiated structures, will expose us to greater risk of loss.
  • Our origination or acquisition of construction loans exposes us to an increased risk of loss.
  • Risks of cost overruns and non-completion of the construction or renovation of the properties underlying loans we originate or acquire could materially and adversely affect us.
  • Investments that we make in CRE debt securities and other similar structured finance investments, as well as those that we structure, sponsor or arrange, pose additional risks.
  • Any credit ratings assigned to our investments will be subject to ongoing evaluations and revisions and we cannot assure you that those ratings will not be downgraded.
  • The United Kingdom’s exit from the European Union could materially and adversely affect us.
  • We may need to foreclose on certain of the loans we originate or acquire, which could result in losses that materially and adversely affect us.
  • Real estate valuation is inherently subjective and uncertain.
  • Our reserves for loan losses may prove inadequate, which could have a material adverse effect on us.
  • We may experience a decline in the fair value of investments we may make in CRE debt securities, which could materially and adversely affect us.
  • Some of our investments may be recorded at fair value and, as a result, there will be uncertainty as to the value of these investments.
  • Insurance proceeds on a property may not cover all losses, which could result in the corresponding non-performance of or loss on our investment related to such property.
  • The impact of any future terrorist attacks and the availability of affordable terrorism insurance expose us to certain risks.
  • Liability relating to environmental matters may impact the value of properties that we may acquire upon foreclosure of the properties underlying our loans.
  • We may be subject to lender liability claims, and if we are held liable under such claims, we could be subject to losses.
  • If the loans that we originate or acquire do not comply with applicable laws, we may be subject to penalties, which could materially and adversely affect us.
  • If we originate or acquire commercial mortgage loans or commercial real estate-related debt instruments secured by liens on facilities that are subject to a ground lease and such ground lease is terminated unexpectedly, our interests in such loans could be materially and adversely affected.
  • We have a significant amount of debt, which subjects us to increased risk of loss, and our charter and bylaws contain no limitation on the amount of debt we may incur or have outstanding.
  • There can be no assurance that we will be able to obtain or utilize additional financing arrangements in the future on similar or more favorable terms, or at all.
  • Certain of our current financing arrangements contain, and our future financing arrangements likely will contain, various financial and operational covenants, and a default of any such covenants could materially and adversely affect us.
  • Our financing arrangements may require us to provide additional collateral or repay debt.
  • Interest rate fluctuations could increase our financing costs, which could materially and adversely affect us.
  • We may enter into hedging transactions that could expose us to contingent liabilities in the future and adversely impact our financial condition.
  • Our investments may be subject to fluctuations in interest rates that may not be adequately protected, or protected at all, by our hedging strategies.
  • Our use of leverage may create a mismatch with the duration and index of the investments that we are financing.
  • Warehouse facilities that we may obtain in the future may limit our ability to originate or acquire assets, and we may incur losses if the collateral is liquidated.
  • We may be subject to losses arising from guarantees of debt and contingent obligations of our subsidiaries or joint venture or co-investment partners.
  • We are subject to counterparty risk associated with our debt obligations.
  • Certain of our current financing arrangements contain financial covenants that, if violated, could result in the diversion of cash flow from us to our lenders to pay interest due and reduce the principal amount outstanding of our borrowings until such time as the default is cured, which may reduce our cash available to pay interest and operating expenses, satisfy other obligations, and fund required distributions to common stockholders to maintain our qualification as a REIT.
  • We depend on our Manager and the personnel of TPG provided to our Manager for our success. We may not find a suitable replacement for our Manager if our Management Agreement is terminated, or if key personnel cease to be employed by TPG or otherwise become unavailable to us, which would materially and adversely affect us.
  • Other than any dedicated or partially dedicated chief financial officer that our Manager may elect to provide to us, the TPG personnel provided to our Manager, as our external manager, are not required to dedicate a specific portion of their time to the management of our business.
  • Our Manager manages our portfolio pursuant to broad investment guidelines and is not required to seek the approval of our board of directors for each investment, financing, asset allocation or hedging decision made by it, which may result in our making riskier loans and other investments and which could materially and adversely affect us.
  • Our Manager’s fee structure may not create proper incentives or may induce our Manager and its affiliates to make certain loans or other investments, including speculative investments, which increase the risk of our portfolio.
  • We may compete with existing and future TPG Funds, which may present various conflicts of interest that restrict our ability to pursue certain investment opportunities or take other actions that are beneficial to our business and result in decisions that are not in the best interests of our stockholders.
  • Termination of our Management Agreement would be costly.
  • Our Manager maintains a contractual as opposed to a fiduciary relationship with us. Our Manager’s liability is limited under our Management Agreement, and we have agreed to indemnify our Manager against certain liabilities.
  • We do not own the TPG name, but we may use it as part of our corporate name pursuant to a trademark license agreement with an affiliate of TPG. Use of the name by other parties or the termination of our trademark license agreement may harm our business.
  • Our business may be adversely affected if our reputation, the reputation of the Manager or TPG, or the reputation of counterparties with whom we associate is harmed.
  • Our investment strategy and guidelines, asset allocation and financing strategy may be changed without stockholder consent.
  • We may not be able to operate our business successfully or implement our operating policies and investment strategy.
  • TPG and our Manager may not be able to hire and retain qualified investment professional or grow and maintain our relationships with key borrowers and loan brokers, and if they are unable to do so, we could be materially and adversely affected.
  • Maintenance of our exemptions from registration as an investment company under the Investment Company Act imposes significant limits on our operations. Your investment return may be reduced if we are required to register as an investment company under the Investment Company Act.
  • Rapid changes in the market value or income potential of our assets may make it more difficult for us to maintain our qualification as a REIT or our exclusion or exemption from regulation under the Investment Company Act.
  • Failure to obtain, maintain or renew required licenses and authorizations necessary to operate our mortgage-related activities may materially and adversely affect us.
  • Actions of the U.S. government, including the U.S. Congress, Federal Reserve Board, U.S. Treasury Department and other governmental and regulatory bodies, designed to stabilize or reform the financial markets, or market response to those actions, may not achieve the intended effect and could materially and adversely affect us.
  • We depend on our Manager to develop appropriate systems and procedures to control operational risk.
  • Operational risks, including the risks of cyberattacks, may disrupt our businesses, result in losses or limit our growth.
  • We depend on Situs Asset Management, LLC (“SitusAMC”) for asset management services. We may not find a suitable replacement for SitusAMC if our agreement with SitusAMC is terminated, or if key personnel cease to be employed by SitusAMC or otherwise become unavailable to us.
  • Accounting rules for certain of our transactions are highly complex and involve significant judgment and assumptions. Changes in accounting interpretations or assumptions could impact our ability to timely prepare consolidated historical financial statements, which could materially and adversely affect us.
  • If we fail to remain qualified as a REIT, we will be subject to tax as a C corporation and could face a substantial tax liability, which would reduce the amount of cash available for distribution to our stockholders.
  • Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends.
  • Compliance with the REIT requirements may hinder our ability to grow, which could materially and adversely affect us.
  • We may choose to make distributions to our stockholders in our own common stock, in which case our stockholders could be required to pay income taxes in excess of the cash dividends they receive.
  • Even if we remain qualified as a REIT, we may face other tax liabilities that reduce our cash flow, which could materially and adversely affect us.
  • Complying with REIT requirements may cause us to forego otherwise attractive investment opportunities.
  • Complying with REIT requirements may force us to liquidate or restructure otherwise attractive investments.
  • We may be required to report taxable income from certain investments in excess of the economic income we ultimately realize from them.
  • The “taxable mortgage pool” rules may increase the taxes that we or our stockholders may incur, and may limit the manner in which we effect future securitizations.
  • The tax on prohibited transactions limits our ability to engage in transactions, including certain methods of securitizing mortgage loans, which would be treated as sales for U.S. federal income tax purposes.
  • Our investments in construction loans will require us to make estimates about the fair value of land improvements that may be challenged by the IRS.
  • The failure of a mezzanine loan to qualify as a real estate asset could adversely affect our ability to continue to qualify as a REIT.
  • Liquidation of assets may jeopardize our REIT qualification or create additional tax liability for us.
  • Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities.
  • Qualifying as a REIT involves highly technical and complex provisions of the Internal Revenue Code.
  • New legislation or administrative or judicial action, in each instance potentially with retroactive effect, could make it more difficult or impossible for us to remain qualified as a REIT or have other adverse effects on us.
  • The market price for our common stock may fluctuate significantly.
  • Common stock eligible for future sale may have adverse effects on the market price of our common stock.
  • Certain provisions of Maryland law could inhibit changes in control.
  • The authorized but unissued shares of our common stock and preferred stock may prevent a change in our control.
  • Ownership limitations may delay, defer or prevent a transaction or a change in our control that might involve a premium price for our common stock or otherwise be in the best interest of our stockholders.
  • Our charter contains provisions that make removal of our directors difficult, which makes it more difficult for our stockholders to effect changes to our management and may prevent a change in control of our company that is in the best interests of our stockholders.
  • Our rights and the rights of our stockholders to take action against our directors and officers are limited, which could limit your recourse in the event of actions not in your best interests.
  • We are a holding company with no direct operations and, as such, we rely on funds received from Holdco to pay liabilities and distributions to our stockholders, and the interests of our stockholders are structurally subordinated to all liabilities and any preferred equity of Holdco and its subsidiaries.
  • Measures that we have taken and may take in the future to maintain adequate liquidity have negatively impacted our business and may negatively impact our business in the future.
  • Market disruptions caused by COVID-19 have made it more difficult for us to determine the fair value of our investments.
  • Measures intended to prevent the spread of COVID-19 have disrupted our ability to operate our business.
  • The obligations associated with being a public company require significant resources and attention from our Manager’s senior leadership team.
  • If we fail to maintain an effective system of internal control, we may be unable to accurately determine our financial results or prevent fraud. As a result, our stockholders could lose confidence in our financial results, which could materially and adversely affect us.
  • We are subject to risks related to corporate social responsibility.
  • Social, political, and economic instability, unrest, and other circumstances beyond our control could adversely affect our business operations.
  • Future offerings of debt or equity securities, which would rank senior to our common stock, may adversely affect the market price of our common stock.
Management Discussion
  • Available liquidity as of December 31, 2021 of $321.1 million consisted of:
  • We have financed our loan investments as of December 31, 2021 utilizing three CLOs totaling $2.6 billion, one of which is open for reinvestment of eligible loan collateral at year end, $1.2 billion under secured credit agreements with total commitments of $3.1 billion provided by seven lenders, and a $132.0 million non-consolidated senior interest. As of December 31, 2021, approximately 68.7% of our borrowings were via our CLO vehicles and 31.3% were pursuant to our secured credit agreements.
  • Our ability to draw on our secured credit agreements is dependent upon our lenders’ willingness to accept as collateral loan investments we pledge to them to secure additional borrowings. These financing arrangements have credit spreads based upon the LTV and other risk characteristics of collateral pledged, and provide financing with mark-to-market provisions generally limited to collateral-specific events and, in only one instance, to capital markets-specific events. As of December 31, 2021, borrowings under these secured credit agreements had a weighted average credit spread of 1.8% (1.7% for facilities with mark-to-market provisions and 4.5% for one facility with no mark-to-market provisions until after October 30, 2022), and a weighted average term to extended maturity assuming exercise of all extension options and term-out provisions of 2.2 years. These financing arrangements are generally 25% recourse to Holdco.

Content analysis

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H.S. senior Avg
New words: BMO, broadly, cycle, description, disposition, dynamic, foregoing, franchise, half, impending, indefinitely, labor, license, monetary, qualitative, recession, remittance, resolution, rule, sequential, thousand, tightening, war
Removed: amendment, assessed, Cayman, concession, Concurrently, conform, delay, demonstrated, disrupt, earning, economy, exempted, Goldman, light, Master, predetermined, President, prospect, reclassified, render, represented, restructure, restructured, restructuring, Retention, retired, Seller, Stanley, TDR, unchanged, uncollectable, undesignated, unique, unissued