Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2022 | May 12, 2022 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Terra Secured Income Fund 5, LLC | |
Entity Central Index Key | 0001581874 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 000-55780 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 90-0967526 | |
Entity Address, Address Line One | 550 Fifth Avenue | |
Entity Address, Address Line Two | 6th Floor | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10036 | |
City Area Code | 212 | |
Local Phone Number | 753-5100 | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Common Stock, Shares Outstanding | 6,624.3 | |
Entity Shell Company | false | |
Entity Interactive Data Current | Yes | |
Title of 12(g) Security | Units of Limited Liability Company Interests |
Consolidated Statements of Fina
Consolidated Statements of Financial Condition - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Assets [Abstract] | |||
Equity investment in Terra JV, LLC at fair value (cost of $217,482,964 and $219,704,515, respectively) | $ 216,121,691 | $ 217,324,720 | |
Cash and cash equivalents | 777,694 | 836,052 | $ 225,214 |
Other assets | 31,586 | 33,830 | |
Total assets | 216,930,971 | 218,194,602 | |
Liabilities | |||
Accounts payable and accrued expenses | 185,249 | 118,025 | |
Total liabilities | 185,249 | 118,025 | |
Commitments and Contingencies | |||
Members' capital: | |||
Members' Capital | 216,745,722 | 218,076,577 | $ 235,417,419 |
Total liabilities and members' capital | $ 216,930,971 | $ 218,194,602 | |
Net asset value per unit | $ 32,659 | $ 32,860 | $ 35,467 |
Terra JV | |||
Assets [Abstract] | |||
Equity investment in Terra JV, LLC at fair value (cost of $217,482,964 and $219,704,515, respectively) | $ 216,121,691 | $ 217,324,720 | |
Managing member | |||
Members' capital: | |||
Members' Capital | 0 | 0 | $ 0 |
Non-managing member | |||
Members' capital: | |||
Members' Capital | $ 216,745,722 | $ 218,076,577 |
Consolidated Statements of Fi_2
Consolidated Statements of Financial Condition (Parentheticals) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Amortized cost | $ 217,482,964 | $ 219,704,515 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Dividend income | $ 758,110 | $ 1,126,895 |
Other operating income | 11 | 20 |
Total investment income | 758,121 | 1,126,915 |
Operating expenses | ||
Professional fees | 127,060 | 120,135 |
Other | 1,392 | 385 |
Total operating expenses | 128,452 | 120,520 |
Net investment income | 629,669 | 1,006,395 |
Net change in unrealized appreciation on investment | 1,018,522 | 492,466 |
Net increase in members’ capital resulting from operations | $ 1,648,191 | $ 1,498,861 |
Per unit data: | ||
Net investment income per unit | $ 95 | $ 152 |
Net increase in members’ capital resulting from operations per unit | $ 248 | $ 226 |
Weighted average units outstanding | 6,636.6 | 6,637.8 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Members' Capital - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Changes in Members' Capital [Roll Forward] | ||
Balance, beginning of period | $ 218,076,577 | $ 235,417,419 |
Capital distributions | (2,979,046) | (2,979,582) |
Increase in members' capital resulting from operations | ||
Net investment income | 629,669 | 1,006,395 |
Net change in unrealized appreciation on investment | 1,018,522 | 492,466 |
Net increase in members’ capital resulting from operations | 1,648,191 | 1,498,861 |
Balance, end of period | 216,745,722 | 233,936,698 |
Managing member | ||
Changes in Members' Capital [Roll Forward] | ||
Balance, beginning of period | 0 | 0 |
Capital distributions | 0 | 0 |
Increase in members' capital resulting from operations | ||
Net investment income | 0 | 0 |
Net change in unrealized appreciation on investment | 0 | 0 |
Net increase in members’ capital resulting from operations | 0 | 0 |
Balance, end of period | 0 | 0 |
Non-managing Members | ||
Changes in Members' Capital [Roll Forward] | ||
Balance, beginning of period | 218,076,577 | 235,417,419 |
Capital distributions | (2,979,046) | (2,979,582) |
Increase in members' capital resulting from operations | ||
Net investment income | 629,669 | 1,006,395 |
Net change in unrealized appreciation on investment | 1,018,522 | 492,466 |
Net increase in members’ capital resulting from operations | 1,648,191 | 1,498,861 |
Balance, end of period | $ 216,745,722 | $ 233,936,698 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Cash Flows [Abstract] | ||
Net increase in members’ capital resulting from operations | $ 1,648,191 | $ 1,498,861 |
Adjustments to reconcile net increase in members’ capital resulting from operations to net cash provided by operating activities: | ||
Return of capital on investment | 2,221,551 | 1,852,767 |
Net change in unrealized appreciation on investment | (1,018,522) | (492,466) |
Changes in operating assets and liabilities: | ||
Decrease in other assets | 2,244 | 7,500 |
Increase in accounts payable and accrued expenses | 67,224 | 23,360 |
Net cash provided by operating activities | 2,920,688 | 2,890,022 |
Cash flows from financing activities: | ||
Distributions paid | (2,979,046) | (2,979,582) |
Net cash used in financing activities | (2,979,046) | (2,979,582) |
Net decrease in cash and cash equivalents | (58,358) | (89,560) |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Beginning Balance | 836,052 | 225,214 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 777,694 | $ 135,654 |
Consolidated Schedules of Inves
Consolidated Schedules of Investments Statement - USD ($) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2022 | Dec. 31, 2021 | ||||
Schedule of Investments | |||||
Amortized cost | $ 217,482,964 | $ 219,704,515 | |||
Fair Value | 216,121,691 | 217,324,720 | |||
Minimum | |||||
Schedule of Investments | |||||
Principal Amount | 10,000,000 | ||||
Maximum | |||||
Schedule of Investments | |||||
Principal Amount | 50,000,000 | ||||
US | Terra Property Trust | |||||
Schedule of Investments | |||||
Principal Amount | 567,520,973 | 480,151,151 | |||
Amortized cost | 571,727,777 | 483,331,795 | |||
Fair Value | [1] | 557,006,957 | 467,201,619 | ||
US | Pro Rata | Terra Property Trust | |||||
Schedule of Investments | |||||
Fair Value | [2] | $ 426,110,321 | $ 357,409,238 | ||
% of Members Capital | 196.60% | [3] | 163.80% | [4] | |
US | Obligations Under Participation Agreements | Terra Property Trust | |||||
Schedule of Investments | |||||
Principal Amount | [5] | $ 95,283,106 | [6] | $ 76,569,398 | [7],[8] |
Amortized cost | [5] | 96,090,690 | [6] | 76,818,156 | [7],[8] |
Fair Value | [1],[5] | 95,483,175 | [6] | 75,900,089 | [7],[8] |
US | Obligations Under Participation Agreements | Pro Rata | Terra Property Trust | |||||
Schedule of Investments | |||||
Fair Value | [2],[5] | $ 73,044,629 | [6] | $ 58,063,568 | [7],[8] |
% of Members Capital | [5] | 33.70% | [3],[6] | 26.60% | [4],[7],[8] |
US | Investment Net | Terra Property Trust | |||||
Schedule of Investments | |||||
Principal Amount | $ 472,237,867 | $ 403,581,753 | |||
Amortized cost | 461,928,310 | 392,855,158 | |||
Fair Value | [1] | 461,523,782 | 391,301,530 | ||
Allowance for Loan and Lease Losses, Real Estate | (13,708,777) | [5],[6],[8] | (13,658,481) | ||
US | Investment Net | Pro Rata | Terra Property Trust | |||||
Schedule of Investments | |||||
Fair Value | [2] | $ 353,065,692 | $ 299,345,670 | ||
% of Members Capital | 162.90% | [3] | 137.20% | [4] | |
Revolving Credit Facility | US | Terra Property Trust | |||||
Schedule of Investments | |||||
Principal Amount | $ 46,000,000 | $ 25,000,000 | |||
Amortized cost | 46,885,375 | 25,206,964 | |||
Fair Value | [1] | 46,885,377 | 25,206,965 | ||
Encumbrance | 65,000,000 | 38,600,000 | |||
Revolving Credit Facility | US | Pro Rata | Terra Property Trust | |||||
Schedule of Investments | |||||
Fair Value | [2] | $ 35,867,314 | $ 19,283,328 | ||
% of Members Capital | 16.50% | [3] | 8.80% | [4] | |
Revolving Credit Facility | Post Brothers Holdings LLC | US | Minimum | Terra Property Trust | |||||
Schedule of Investments | |||||
Exit Fee | 4.60% | ||||
Revolving Credit Facility | Post Brothers Holdings LLC | US | Maximum | Terra Property Trust | |||||
Schedule of Investments | |||||
Exit Fee | 8.90% | ||||
Revolving Credit Facility | Post Brothers Holdings LLC | US | PA | Terra Property Trust | |||||
Schedule of Investments | |||||
Collateral Location | [6],[8] | US | |||
Coupon Rate | [6],[8] | 15.00% | |||
Current Interest Rate | [6],[8] | 15.00% | |||
Acquisition Date | [6],[8] | Mar. 29, 2022 | |||
Maturity Date | [6],[8] | Mar. 29, 2025 | |||
Principal Amount | [6],[8] | $ 21,000,000 | |||
Amortized cost | [6],[8] | 21,670,442 | |||
Fair Value | [1],[6],[8] | 21,670,443 | |||
Revolving Credit Facility | Post Brothers Holdings LLC | US | PA | Pro Rata | Terra Property Trust | |||||
Schedule of Investments | |||||
Fair Value | [2],[6],[8] | $ 16,577,889 | |||
% of Members Capital | [3],[6],[8] | 7.60% | |||
Revolving Credit Facility | William A. Shopoff and Cindy L. Shopoff | US | CA | Industrial | Terra Property Trust | |||||
Schedule of Investments | |||||
Collateral Location | [8] | US | [6] | US | [7] |
Coupon Rate | [8] | 15.00% | [6] | 15.00% | [7] |
Current Interest Rate | [8] | 15.00% | [6] | 15.00% | [7] |
Exit Fee | [8] | 1.00% | [6] | 1.00% | [7] |
Acquisition Date | [8] | Oct. 4, 2021 | [6] | Oct. 4, 2021 | [7] |
Maturity Date | [8] | Apr. 4, 2023 | [6] | Apr. 4, 2023 | [7] |
Principal Amount | [8] | $ 25,000,000 | [6] | $ 25,000,000 | [7] |
Amortized cost | [8] | 25,214,933 | [6] | 25,206,964 | [7] |
Fair Value | [1],[8] | 25,214,934 | [6] | 25,206,965 | [7] |
Revolving Credit Facility | William A. Shopoff and Cindy L. Shopoff | US | CA | Industrial | Pro Rata | Terra Property Trust | |||||
Schedule of Investments | |||||
Fair Value | [2],[8] | $ 19,289,425 | [6] | $ 19,283,328 | [7] |
% of Members Capital | [8] | 8.90% | [3],[6] | 8.80% | [4],[7] |
Mezzanine Loan | US | Terra Property Trust | |||||
Schedule of Investments | |||||
Principal Amount | $ 17,444,357 | $ 17,444,357 | |||
Amortized cost | 17,615,889 | 17,622,804 | |||
Fair Value | [1] | 17,371,312 | 17,518,902 | ||
Mezzanine Loan | US | Pro Rata | Terra Property Trust | |||||
Schedule of Investments | |||||
Fair Value | [2] | $ 13,289,053 | $ 13,401,959 | ||
% of Members Capital | 6.10% | [3] | 6.10% | [4] | |
Mezzanine Loan | 150 Blackstone River Road, LLC | US | MA | Industrial | Terra Property Trust | |||||
Schedule of Investments | |||||
Collateral Location | US | US | |||
Coupon Rate | 8.50% | 8.50% | |||
Current Interest Rate | 8.50% | 8.50% | |||
Exit Fee | 0.00% | 0.00% | |||
Acquisition Date | Sep. 21, 2017 | Sep. 21, 2017 | |||
Maturity Date | Sep. 6, 2027 | Sep. 6, 2027 | |||
Principal Amount | $ 7,000,000 | $ 7,000,000 | |||
Amortized cost | 7,000,000 | 7,000,000 | |||
Fair Value | [1] | 6,862,858 | 6,982,101 | ||
Mezzanine Loan | 150 Blackstone River Road, LLC | US | MA | Industrial | Pro Rata | Terra Property Trust | |||||
Schedule of Investments | |||||
Fair Value | [2] | $ 5,250,086 | $ 5,341,307 | ||
% of Members Capital | 2.40% | [3] | 2.40% | [4] | |
Mezzanine Loan | High Pointe Mezzanine Investments,, LLC | US | SC | Student Housing | Terra Property Trust | |||||
Schedule of Investments | |||||
Collateral Location | US | US | |||
Coupon Rate | 13.00% | 13.00% | |||
Current Interest Rate | 13.00% | 13.00% | |||
Exit Fee | 1.00% | 1.00% | |||
Acquisition Date | Dec. 27, 2013 | Dec. 27, 2013 | |||
Maturity Date | Jan. 6, 2024 | Jan. 6, 2024 | |||
Principal Amount | $ 3,000,000 | $ 3,000,000 | |||
Amortized cost | 3,137,435 | 3,145,614 | |||
Fair Value | [1] | 3,030,000 | 3,059,611 | ||
Mezzanine Loan | High Pointe Mezzanine Investments,, LLC | US | SC | Student Housing | Pro Rata | Terra Property Trust | |||||
Schedule of Investments | |||||
Fair Value | [2] | $ 2,317,950 | $ 2,340,602 | ||
% of Members Capital | 1.10% | [3] | 1.10% | [4] | |
Mezzanine Loan | UNJ Sole Member, LLC | US | CA | Mixed use | Terra Property Trust | |||||
Schedule of Investments | |||||
Collateral Location | [9] | US | US | ||
Coupon Rate | [9] | 15.00% | 15.00% | ||
Current Interest Rate | [9] | 15.00% | 15.00% | ||
Exit Fee | [9] | 1.00% | 1.00% | ||
Acquisition Date | [9] | Nov. 24, 2021 | Nov. 24, 2021 | ||
Maturity Date | [9] | Jun. 1, 2017 | Jun. 1, 2017 | ||
Principal Amount | [9] | $ 7,444,357 | $ 7,444,357 | ||
Amortized cost | [9] | 7,478,454 | 7,477,190 | ||
Fair Value | [1],[9] | 7,478,454 | 7,477,190 | ||
Mezzanine Loan | UNJ Sole Member, LLC | US | CA | Mixed use | Pro Rata | Terra Property Trust | |||||
Schedule of Investments | |||||
Fair Value | [2],[9] | $ 5,721,017 | $ 5,720,050 | ||
% of Members Capital | [9] | 2.60% | [3] | 2.60% | [4] |
Preferred Equity Investment | US | Terra Property Trust | |||||
Schedule of Investments | |||||
Principal Amount | $ 93,441,580 | $ 92,252,340 | |||
Amortized cost | 93,607,463 | 92,400,572 | |||
Fair Value | [1] | 78,932,071 | 77,315,271 | ||
Preferred Equity Investment | US | Pro Rata | Terra Property Trust | |||||
Schedule of Investments | |||||
Fair Value | [2] | $ 60,383,034 | $ 59,146,183 | ||
% of Members Capital | 27.90% | [3] | 27.10% | [4] | |
Preferred Equity Investment | 370 Lex Part Deux, LLC | US | NY | Office Building | Terra Property Trust | |||||
Schedule of Investments | |||||
Collateral Location | [8] | US | [6] | US | [7] |
Current Interest Rate | [8] | 10.70% | [6] | 10.70% | [7] |
Exit Fee | [8] | 0.00% | [6] | 0.00% | [7] |
Acquisition Date | [8] | Dec. 17, 2018 | [6] | Dec. 17, 2018 | [7] |
Maturity Date | [8] | Jan. 9, 2023 | [6] | Jan. 9, 2023 | [7] |
Principal Amount | [8] | $ 60,583,057 | [6] | $ 60,012,639 | [7] |
Amortized cost | [8] | 60,583,057 | [6] | 60,012,639 | [7] |
Fair Value | [1],[8] | $ 58,835,209 | [6] | $ 57,858,019 | [7] |
Description of variable rate basis | [8] | LIBOR | [6] | LIBOR | [7] |
Preferred Equity Investment | 370 Lex Part Deux, LLC | US | NY | Office Building | Pro Rata | Terra Property Trust | |||||
Schedule of Investments | |||||
Fair Value | [2],[8] | $ 45,008,935 | [6] | $ 44,261,385 | [7] |
% of Members Capital | [8] | 20.80% | [3],[6] | 20.30% | [4],[7] |
Preferred Equity Investment | 370 Lex Part Deux, LLC | US | NY | Office Building | LIBOR | Terra Property Trust | |||||
Schedule of Investments | |||||
Basis spread on variable rate | [8] | 8.25% | [6] | 8.25% | [7] |
LIBOR Floor | [8] | 2.44% | [6] | 2.44% | [7] |
Preferred Equity Investment | REEC Harlem Holdings Company LLC | US | NY | Mixed use | Terra Property Trust | |||||
Schedule of Investments | |||||
Collateral Location | US | [10] | US | [11] | |
Current Interest Rate | 13.00% | [10] | 12.60% | [11] | |
Exit Fee | 0.00% | [10] | 0.00% | [11] | |
Acquisition Date | Mar. 9, 2018 | [10] | Mar. 9, 2018 | [11] | |
Maturity Date | Mar. 9, 2023 | [10] | Mar. 9, 2023 | [11] | |
Principal Amount | $ 15,925,032 | [10] | $ 16,633,292 | [11] | |
Amortized cost | 15,925,032 | [10] | 16,633,292 | [11] | |
Fair Value | [1] | $ 2,998,624 | [10] | $ 3,708,310 | [11] |
Description of variable rate basis | LIBOR | [10] | LIBOR | [11] | |
Preferred Equity Investment | REEC Harlem Holdings Company LLC | US | NY | Mixed use | Pro Rata | Terra Property Trust | |||||
Schedule of Investments | |||||
Fair Value | [2] | $ 2,293,947 | [10] | $ 2,836,857 | [11] |
% of Members Capital | 1.10% | [3],[10] | 1.30% | [4],[11] | |
Preferred Equity Investment | REEC Harlem Holdings Company LLC | US | NY | Mixed use | LIBOR | Terra Property Trust | |||||
Schedule of Investments | |||||
Basis spread on variable rate | 12.50% | [10] | 12.50% | [11] | |
Preferred Equity Investment | RS JZ Driggs, LLC | US | NY | Multifamily | Terra Property Trust | |||||
Schedule of Investments | |||||
Collateral Location | [8] | US | [6],[12] | US | [7],[13] |
Coupon Rate | [8] | 12.30% | [6],[12] | 12.30% | [7],[13] |
Current Interest Rate | [8] | 12.30% | [6],[12] | 12.30% | [7],[13] |
Exit Fee | [8] | 1.00% | [6],[12] | 1.00% | [7],[13] |
Acquisition Date | [8] | May 1, 2018 | [6],[12] | May 1, 2018 | [7],[13] |
Maturity Date | [8] | Jan. 1, 2021 | [6],[12] | Jan. 1, 2021 | [7],[13] |
Principal Amount | [8] | $ 16,933,491 | [6],[12] | $ 15,606,409 | [7],[13] |
Amortized cost | [8] | 17,099,374 | [6],[12] | 15,754,641 | [7],[13] |
Fair Value | [1],[8] | 17,098,238 | [6],[12] | 15,748,942 | [7],[13] |
Preferred Equity Investment | RS JZ Driggs, LLC | US | NY | Multifamily | Pro Rata | Terra Property Trust | |||||
Schedule of Investments | |||||
Fair Value | [2],[8] | $ 13,080,152 | [6],[12] | $ 12,047,941 | [7],[13] |
% of Members Capital | [8] | 6.00% | [3],[6],[12] | 5.50% | [4],[7],[13] |
First Mortgage | US | Terra Property Trust | |||||
Schedule of Investments | |||||
Principal Amount | $ 410,635,036 | $ 345,454,454 | |||
Amortized cost | 413,619,050 | 348,101,455 | |||
Fair Value | [1] | 413,818,197 | 347,160,481 | ||
First Mortgage | US | Pro Rata | Terra Property Trust | |||||
Schedule of Investments | |||||
Fair Value | [2] | $ 316,570,920 | $ 265,577,768 | ||
% of Members Capital | 146.10% | [3] | 121.80% | [4] | |
First Mortgage | 14th & Alice Street Owner LLC | US | CA | Multifamily | Terra Property Trust | |||||
Schedule of Investments | |||||
Collateral Location | US | [14] | US | [15] | |
Current Interest Rate | 4.50% | [14] | 4.30% | [15] | |
Exit Fee | 2.00% | [14] | 2.00% | [15] | |
Acquisition Date | Oct. 15, 2021 | [14] | Oct. 15, 2021 | [15] | |
Maturity Date | Apr. 15, 2023 | [14] | Apr. 15, 2023 | [15] | |
Principal Amount | $ 39,468,000 | [14] | $ 39,384,000 | [15] | |
Amortized cost | 40,197,784 | [14] | 40,089,153 | [15] | |
Fair Value | [1] | $ 40,222,586 | [14] | $ 40,130,448 | [15] |
Description of variable rate basis | LIBOR | [14] | LIBOR | [15] | |
First Mortgage | 14th & Alice Street Owner LLC | US | CA | Multifamily | Pro Rata | Terra Property Trust | |||||
Schedule of Investments | |||||
Fair Value | [2] | $ 30,770,278 | [14] | $ 30,699,793 | [15] |
% of Members Capital | 14.20% | [3],[14] | 14.10% | [4],[15] | |
First Mortgage | 14th & Alice Street Owner LLC | US | CA | Multifamily | LIBOR | Terra Property Trust | |||||
Schedule of Investments | |||||
Basis spread on variable rate | 4.00% | [14] | 4.00% | [15] | |
LIBOR Floor | 0.25% | [14] | 0.25% | [15] | |
First Mortgage | 1389 Peachtree St LP; 1401 Peachtree St LP; 1409 Peachtree St LP | US | GA | Office Building | Terra Property Trust | |||||
Schedule of Investments | |||||
Collateral Location | US | [16] | US | [17] | |
Current Interest Rate | 5.00% | [16] | 4.60% | [17] | |
Exit Fee | 0.50% | [16] | 0.50% | [17] | |
Acquisition Date | Feb. 22, 2019 | [16] | Feb. 22, 2019 | [17] | |
Maturity Date | Aug. 10, 2023 | [16] | Aug. 10, 2023 | [17] | |
Principal Amount | $ 53,970,491 | [16] | $ 53,289,288 | [17] | |
Amortized cost | 54,221,854 | [16] | 53,536,884 | [17] | |
Fair Value | [1] | $ 53,083,178 | [16] | $ 52,031,363 | [17] |
Description of variable rate basis | LIBOR | [16] | LIBOR | [17] | |
First Mortgage | 1389 Peachtree St LP; 1401 Peachtree St LP; 1409 Peachtree St LP | US | GA | Office Building | Pro Rata | Terra Property Trust | |||||
Schedule of Investments | |||||
Fair Value | [2] | $ 40,608,631 | [16] | $ 39,803,993 | [17] |
% of Members Capital | 18.70% | [3],[16] | 18.30% | [4],[17] | |
First Mortgage | 1389 Peachtree St LP; 1401 Peachtree St LP; 1409 Peachtree St LP | US | GA | Office Building | LIBOR | Terra Property Trust | |||||
Schedule of Investments | |||||
Basis spread on variable rate | 4.50% | [16] | 4.50% | [17] | |
First Mortgage | 330 Tryon DE LLC | US | NC | Office Building | Terra Property Trust | |||||
Schedule of Investments | |||||
Collateral Location | US | [16] | US | [17] | |
Current Interest Rate | 4.70% | [16] | 4.40% | [17] | |
Exit Fee | 0.50% | [16] | 0.50% | [17] | |
Acquisition Date | Feb. 7, 2019 | [16] | Feb. 7, 2019 | [17] | |
Maturity Date | Mar. 1, 2024 | [16] | Mar. 1, 2024 | [17] | |
Principal Amount | $ 22,800,000 | [16] | $ 22,800,000 | [17] | |
Amortized cost | 22,903,651 | [16] | 22,902,354 | [17] | |
Fair Value | [1] | $ 22,638,331 | [16] | $ 22,594,654 | [17] |
Description of variable rate basis | LIBOR | [16] | LIBOR | [17] | |
First Mortgage | 330 Tryon DE LLC | US | NC | Office Building | Pro Rata | Terra Property Trust | |||||
Schedule of Investments | |||||
Fair Value | [2] | $ 17,318,323 | [16] | $ 17,284,910 | [17] |
% of Members Capital | 8.00% | [3],[16] | 7.90% | [4],[17] | |
First Mortgage | 330 Tryon DE LLC | US | NC | Office Building | LIBOR | Terra Property Trust | |||||
Schedule of Investments | |||||
Basis spread on variable rate | 4.25% | [16] | 4.25% | [17] | |
LIBOR Floor | 0.10% | [16] | 0.10% | [17] | |
First Mortgage | 606 Fayetteville LLC and 401 E, Lakewood LLC | US | NC | Land | Terra Property Trust | |||||
Schedule of Investments | |||||
Collateral Location | US | [18] | US | [19] | |
Coupon Rate | 9.00% | [18] | 9.00% | [19] | |
Current Interest Rate | 9.00% | [18] | 9.00% | [19] | |
Exit Fee | 1.00% | [18] | 1.00% | [19] | |
Acquisition Date | Aug. 16, 2021 | [18] | Aug. 16, 2021 | [19] | |
Maturity Date | Aug. 1, 2023 | [18] | Aug. 1, 2023 | [19] | |
Principal Amount | $ 17,536,492 | [18] | $ 16,829,962 | [19] | |
Amortized cost | 17,663,959 | [18] | 16,935,803 | [19] | |
Fair Value | [1] | 17,690,666 | [18] | 16,974,601 | [19] |
First Mortgage | 606 Fayetteville LLC and 401 E, Lakewood LLC | US | NC | Land | Pro Rata | Terra Property Trust | |||||
Schedule of Investments | |||||
Fair Value | [2] | $ 13,533,359 | [18] | $ 12,985,570 | [19] |
% of Members Capital | 6.20% | [3],[18] | 6.00% | [4],[19] | |
First Mortgage | 870 Santa Cruz, LLC | US | CA | Office Building | Terra Property Trust | |||||
Schedule of Investments | |||||
Collateral Location | US | [18] | US | ||
Current Interest Rate | 7.30% | [18] | 7.30% | ||
Exit Fee | 1.00% | [18] | 1.00% | ||
Acquisition Date | Dec. 15, 2020 | [18] | Dec. 15, 2020 | ||
Maturity Date | Dec. 15, 2023 | [18] | Dec. 15, 2023 | ||
Principal Amount | $ 19,760,033 | [18] | $ 17,540,875 | ||
Amortized cost | 19,934,619 | [18] | 17,669,303 | ||
Fair Value | [1] | $ 19,993,943 | [18] | $ 17,781,285 | |
Description of variable rate basis | LIBOR | [18] | LIBOR | [19] | |
First Mortgage | 870 Santa Cruz, LLC | US | CA | Office Building | Pro Rata | Terra Property Trust | |||||
Schedule of Investments | |||||
Fair Value | [2] | $ 15,295,366 | [18] | $ 13,602,683 | |
% of Members Capital | 7.10% | [3],[18] | 6.20% | [4] | |
First Mortgage | 870 Santa Cruz, LLC | US | CA | Office Building | LIBOR | Terra Property Trust | |||||
Schedule of Investments | |||||
Basis spread on variable rate | 6.75% | [18] | 6.75% | [19] | |
LIBOR Floor | 0.50% | [18] | 0.50% | [19] | |
First Mortgage | AARSHW Property LLC | US | NJ | Industrial | Terra Property Trust | |||||
Schedule of Investments | |||||
Collateral Location | [18] | US | |||
Current Interest Rate | [18] | 7.70% | |||
Exit Fee | [18] | 0.90% | |||
Acquisition Date | [18] | Mar. 7, 2022 | |||
Maturity Date | [18] | Mar. 7, 2024 | |||
Principal Amount | [18] | $ 18,771,608 | |||
Amortized cost | [18] | 18,541,648 | |||
Fair Value | [1],[18] | $ 18,911,932 | |||
Description of variable rate basis | [18] | SOFR | |||
First Mortgage | AARSHW Property LLC | US | NJ | Industrial | Pro Rata | Terra Property Trust | |||||
Schedule of Investments | |||||
Fair Value | [2],[18] | $ 14,467,628 | |||
% of Members Capital | [3],[18] | 6.70% | |||
First Mortgage | AARSHW Property LLC | US | NJ | Industrial | SOFR | Terra Property Trust | |||||
Schedule of Investments | |||||
Basis spread on variable rate | [18] | 7.50% | |||
LIBOR Floor | [18] | 0.15% | |||
First Mortgage | AAESUF Property LL | US | NJ | Industrial | Terra Property Trust | |||||
Schedule of Investments | |||||
Collateral Location | [18] | US | |||
Current Interest Rate | [18] | 12.10% | |||
Acquisition Date | [18] | Mar. 15, 2022 | |||
Maturity Date | [18] | Mar. 1, 2024 | |||
Principal Amount | [18] | $ 16,800,000 | |||
Amortized cost | [18] | 16,849,956 | |||
Fair Value | [1],[18] | $ 17,456,207 | |||
Description of variable rate basis | [18] | SOFR | |||
First Mortgage | AAESUF Property LL | US | NJ | Industrial | Pro Rata | Terra Property Trust | |||||
Schedule of Investments | |||||
Fair Value | [2],[18] | $ 13,353,998 | |||
% of Members Capital | [3],[18] | 6.20% | |||
First Mortgage | AAESUF Property LL | US | NJ | Industrial | Minimum | Terra Property Trust | |||||
Schedule of Investments | |||||
Exit Fee | [18] | 5.00% | |||
First Mortgage | AAESUF Property LL | US | NJ | Industrial | Maximum | Terra Property Trust | |||||
Schedule of Investments | |||||
Exit Fee | [18] | 10.00% | |||
First Mortgage | AAESUF Property LL | US | NJ | Industrial | SOFR | Terra Property Trust | |||||
Schedule of Investments | |||||
Basis spread on variable rate | [18] | 11.95% | |||
LIBOR Floor | [18] | 0.05% | |||
First Mortgage | AGRE DCP Palm Springs, LLC | US | CA | Hotel | Terra Property Trust | |||||
Schedule of Investments | |||||
Collateral Location | US | [16] | US | [17],[20] | |
Current Interest Rate | 6.80% | [16] | 6.80% | [17],[20] | |
Exit Fee | 1.50% | [16] | 1.50% | [17],[20] | |
Acquisition Date | Dec. 12, 2019 | [16] | Dec. 12, 2019 | [17],[20] | |
Maturity Date | Jan. 1, 2024 | [16] | Jan. 1, 2024 | [17],[20] | |
Principal Amount | $ 43,222,381 | [16] | $ 43,222,381 | [17],[20] | |
Amortized cost | 43,696,133 | [16] | 43,669,992 | [17],[20] | |
Fair Value | [1] | $ 43,738,712 | [16] | $ 43,829,842 | [17],[20] |
Description of variable rate basis | LIBOR | [16] | LIBOR | [17],[20] | |
Basis spread on variable rate | 5.00% | ||||
First Mortgage | AGRE DCP Palm Springs, LLC | US | CA | Hotel | Pro Rata | Terra Property Trust | |||||
Schedule of Investments | |||||
Fair Value | [2] | $ 33,460,115 | [16] | $ 33,529,829 | [17],[20] |
% of Members Capital | 15.40% | [3],[16] | 15.50% | [4],[17],[20] | |
First Mortgage | AGRE DCP Palm Springs, LLC | US | CA | Hotel | LIBOR | Terra Property Trust | |||||
Schedule of Investments | |||||
Basis spread on variable rate | 5.00% | [16] | 5.00% | [17],[20] | |
LIBOR Floor | 1.80% | [16] | 1.80% | [17],[20] | |
First Mortgage | Austin H. I. Borrower LLC | US | TX | Hotel | Terra Property Trust | |||||
Schedule of Investments | |||||
Collateral Location | US | [18] | US | [19],[21] | |
Current Interest Rate | 8.00% | [18] | 7.80% | [19],[21] | |
Exit Fee | 1.00% | [18] | 1.00% | [19],[21] | |
Acquisition Date | Sep. 21, 2021 | [18] | Sep. 21, 2021 | [19],[21] | |
Maturity Date | Oct. 1, 2024 | [18] | Oct. 1, 2024 | [19],[21] | |
Principal Amount | $ 13,695,947 | [18] | $ 13,625,000 | [19],[21] | |
Amortized cost | 13,824,587 | [18] | 13,725,690 | [19],[21] | |
Fair Value | [1] | $ 13,832,906 | [18] | $ 13,735,569 | [19],[21] |
Description of variable rate basis | LIBOR | LIBOR | |||
First Mortgage | Austin H. I. Borrower LLC | US | TX | Hotel | Pro Rata | Terra Property Trust | |||||
Schedule of Investments | |||||
Fair Value | [2] | $ 10,582,173 | [18] | $ 10,507,710 | [19],[21] |
% of Members Capital | 4.90% | [3],[18] | 4.80% | [4],[19],[21] | |
First Mortgage | Austin H. I. Borrower LLC | US | TX | Hotel | LIBOR | Terra Property Trust | |||||
Schedule of Investments | |||||
Basis spread on variable rate | 7.50% | 7.50% | |||
LIBOR Floor | 0.25% | 0.25% | |||
First Mortgage | D-G Acquisition #6, LLC and D-G Quimisa, LLC | US | CA | Land | Terra Property Trust | |||||
Schedule of Investments | |||||
Collateral Location | US | [18] | US | [19] | |
Current Interest Rate | 7.50% | [18] | 7.30% | [19] | |
Exit Fee | 0.50% | [18] | 0.50% | [19] | |
Acquisition Date | Jul. 21, 2021 | [18] | Jul. 21, 2021 | [19] | |
Maturity Date | Jul. 21, 2023 | [18] | Jul. 21, 2023 | [19] | |
Principal Amount | $ 8,846,216 | [18] | $ 8,607,092 | [19] | |
Amortized cost | 8,854,524 | [18] | 8,605,341 | [19] | |
Fair Value | [1] | $ 8,886,221 | [18] | $ 8,645,413 | [19] |
Description of variable rate basis | LIBOR | [18] | LIBOR | ||
First Mortgage | D-G Acquisition #6, LLC and D-G Quimisa, LLC | US | CA | Land | Pro Rata | Terra Property Trust | |||||
Schedule of Investments | |||||
Fair Value | [2] | $ 6,797,959 | [18] | $ 6,613,741 | [19] |
% of Members Capital | 3.10% | [3],[18] | 3.00% | [4],[19] | |
First Mortgage | D-G Acquisition #6, LLC and D-G Quimisa, LLC | US | CA | Land | LIBOR | Terra Property Trust | |||||
Schedule of Investments | |||||
Basis spread on variable rate | 7.00% | [18] | 7.00% | ||
LIBOR Floor | 0.25% | [18] | 0.25% | ||
First Mortgage | Grandviews Madison Place, LLC | US | WA | Multifamily | Terra Property Trust | |||||
Schedule of Investments | |||||
Collateral Location | [14] | US | |||
Current Interest Rate | [14] | 4.60% | |||
Exit Fee | [14] | 0.80% | |||
Acquisition Date | [14] | Feb. 10, 2022 | |||
Maturity Date | [14] | Feb. 10, 2025 | |||
Principal Amount | [14] | $ 17,000,000 | |||
Amortized cost | [14] | 17,111,299 | |||
Fair Value | [1],[14] | $ 17,111,299 | |||
Description of variable rate basis | [14] | SOFR | |||
First Mortgage | Grandviews Madison Place, LLC | US | WA | Multifamily | Pro Rata | Terra Property Trust | |||||
Schedule of Investments | |||||
Fair Value | [2],[14] | $ 13,090,144 | |||
% of Members Capital | [3],[14] | 6.00% | |||
First Mortgage | Grandviews Madison Place, LLC | US | WA | Multifamily | SOFR | Terra Property Trust | |||||
Schedule of Investments | |||||
Basis spread on variable rate | [14] | 4.45% | |||
LIBOR Floor | [14] | 0.05% | |||
First Mortgage | Hillsborough Owners LLC | US | NC | Mixed use | Terra Property Trust | |||||
Schedule of Investments | |||||
Collateral Location | [22] | US | US | ||
Current Interest Rate | [22] | 8.50% | 8.30% | ||
Exit Fee | [22] | 1.00% | 1.00% | ||
Acquisition Date | [22] | Oct. 27, 2021 | Oct. 27, 2021 | ||
Maturity Date | [22] | Nov. 1, 2023 | Nov. 1, 2023 | ||
Principal Amount | [22] | $ 5,444,696 | $ 4,863,009 | ||
Amortized cost | [22] | 5,458,850 | 4,866,542 | ||
Fair Value | [1],[22] | $ 5,468,477 | $ 4,883,878 | ||
Description of variable rate basis | LIBOR | [22] | LIBOR | ||
First Mortgage | Hillsborough Owners LLC | US | NC | Mixed use | Pro Rata | Terra Property Trust | |||||
Schedule of Investments | |||||
Fair Value | [2],[22] | $ 4,183,385 | $ 3,736,167 | ||
% of Members Capital | [22] | 1.90% | [3] | 1.70% | [4] |
First Mortgage | Hillsborough Owners LLC | US | NC | Mixed use | LIBOR | Terra Property Trust | |||||
Schedule of Investments | |||||
Basis spread on variable rate | 8.00% | [22] | 8.00% | ||
LIBOR Floor | 0.25% | [22] | 0.25% | ||
First Mortgage | NB Factory TIC 1, LLC, etc | US | UT | Student Housing | Terra Property Trust | |||||
Schedule of Investments | |||||
Collateral Location | US | [14] | US | [15] | |
Current Interest Rate | 5.50% | [14] | 5.30% | [15] | |
Exit Fee | 3.30% | [14] | 3.30% | [15] | |
Acquisition Date | Aug. 16, 2021 | [14] | Aug. 16, 2021 | [15] | |
Maturity Date | Mar. 5, 2023 | [14] | Mar. 5, 2023 | [15] | |
Principal Amount | $ 28,000,000 | [14] | $ 28,000,000 | [15] | |
Amortized cost | 28,529,857 | [14] | 28,420,056 | [15] | |
Fair Value | [1] | $ 28,861,172 | [14] | $ 28,851,547 | [15] |
Description of variable rate basis | LIBOR | [14] | LIBOR | ||
First Mortgage | NB Factory TIC 1, LLC, etc | US | UT | Student Housing | Pro Rata | Terra Property Trust | |||||
Schedule of Investments | |||||
Fair Value | [2] | $ 22,078,797 | [14] | $ 22,071,433 | [15] |
% of Members Capital | 10.30% | [3],[14] | 10.10% | [4],[15] | |
First Mortgage | NB Factory TIC 1, LLC, etc | US | UT | Student Housing | LIBOR | Terra Property Trust | |||||
Schedule of Investments | |||||
Basis spread on variable rate | 5.00% | [14] | 5.00% | ||
LIBOR Floor | 0.25% | [14] | 0.25% | ||
First Mortgage | Patrick Henry Recovery Acquisition, LLC | US | CA | Office Building | Terra Property Trust | |||||
Schedule of Investments | |||||
Collateral Location | US | [16] | US | [17] | |
Current Interest Rate | 4.50% | [16] | 4.50% | [17] | |
Exit Fee | 0.30% | [16] | 0.30% | [17] | |
Acquisition Date | Nov. 25, 2019 | [16] | Nov. 25, 2019 | [17] | |
Maturity Date | Dec. 1, 2023 | [16] | Dec. 1, 2023 | [17] | |
Principal Amount | $ 18,000,000 | [16] | $ 18,000,000 | [17] | |
Amortized cost | 18,041,590 | [16] | 18,041,124 | [17] | |
Fair Value | [1] | $ 18,049,540 | [16] | $ 18,055,377 | [17] |
Description of variable rate basis | LIBOR | [16] | LIBOR | ||
First Mortgage | Patrick Henry Recovery Acquisition, LLC | US | CA | Office Building | Pro Rata | Terra Property Trust | |||||
Schedule of Investments | |||||
Fair Value | [2] | $ 13,807,898 | [16] | $ 13,812,363 | [17] |
% of Members Capital | 6.40% | [3],[16] | 6.30% | [4],[17] | |
First Mortgage | Patrick Henry Recovery Acquisition, LLC | US | CA | Office Building | LIBOR | Terra Property Trust | |||||
Schedule of Investments | |||||
Basis spread on variable rate | 2.95% | [16] | 2.95% | ||
LIBOR Floor | 1.50% | [16] | 1.50% | ||
First Mortgage | The Lux Washington, LLC | US | WA | Land | Terra Property Trust | |||||
Schedule of Investments | |||||
Collateral Location | US | [18] | US | [19] | |
Current Interest Rate | 7.80% | [18] | 7.80% | [19] | |
Exit Fee | 1.00% | [18] | 1.00% | [19] | |
Acquisition Date | Jul. 22, 2021 | [18] | Jul. 22, 2021 | [19] | |
Maturity Date | Jan. 22, 2024 | [18] | Jan. 22, 2024 | [19] | |
Principal Amount | $ 7,424,855 | [18] | $ 3,523,401 | [19] | |
Amortized cost | 7,376,668 | [18] | 3,382,683 | [19] | |
Fair Value | [1] | $ 7,489,172 | [18] | $ 3,553,330 | [19] |
Description of variable rate basis | LIBOR | [18] | LIBOR | ||
First Mortgage | The Lux Washington, LLC | US | WA | Land | Pro Rata | Terra Property Trust | |||||
Schedule of Investments | |||||
Fair Value | [2] | $ 5,729,217 | [18] | $ 2,718,297 | [19] |
% of Members Capital | 2.60% | [3],[18] | 1.20% | [4],[19] | |
First Mortgage | The Lux Washington, LLC | US | WA | Land | LIBOR | Terra Property Trust | |||||
Schedule of Investments | |||||
Basis spread on variable rate | 7.00% | [18] | 7.00% | ||
LIBOR Floor | 0.75% | [18] | 0.75% | ||
First Mortgage | University Park Berkeley LLC | US | CA | Multifamily | Terra Property Trust | |||||
Schedule of Investments | |||||
Collateral Location | US | [16] | US | [17],[23] | |
Current Interest Rate | 5.70% | [16] | 5.70% | [17],[23] | |
Exit Fee | 0.80% | [16] | 0.80% | [17],[23] | |
Acquisition Date | Feb. 27, 2020 | [16] | Feb. 27, 2020 | [17],[23] | |
Maturity Date | Mar. 1, 2023 | [16] | Mar. 1, 2023 | [17],[23] | |
Principal Amount | $ 25,815,378 | [16] | $ 25,815,378 | [17],[23] | |
Amortized cost | 25,995,342 | [16] | 25,991,962 | [17],[23] | |
Fair Value | [1] | $ 26,008,381 | [16] | $ 26,015,500 | [17],[23] |
Description of variable rate basis | LIBOR | [16] | LIBOR | ||
First Mortgage | University Park Berkeley LLC | US | CA | Multifamily | Pro Rata | Terra Property Trust | |||||
Schedule of Investments | |||||
Fair Value | [2] | $ 19,896,411 | [16] | $ 19,901,858 | [17],[23] |
% of Members Capital | 9.20% | [3],[16] | 9.10% | [4],[17],[23] | |
First Mortgage | University Park Berkeley LLC | US | CA | Multifamily | LIBOR | Terra Property Trust | |||||
Schedule of Investments | |||||
Basis spread on variable rate | 4.20% | [16] | 4.20% | ||
LIBOR Floor | 1.50% | [16] | 1.50% | ||
First Mortgage | Windy Hill Pv Five Cm LLC | US | CA | Office Building | Terra Property Trust | |||||
Schedule of Investments | |||||
Collateral Location | [5] | US | US | ||
Current Interest Rate | [5] | 8.10% | 8.10% | ||
Exit Fee | [5] | 0.50% | 0.50% | ||
Acquisition Date | [5] | Sep. 20, 2019 | Sep. 20, 2019 | ||
Maturity Date | [5] | Sep. 20, 2022 | Sep. 20, 2022 | ||
Principal Amount | [5] | $ 54,078,939 | $ 49,954,068 | ||
Amortized cost | [5] | 54,416,729 | 50,264,568 | ||
Fair Value | [1],[5] | $ 54,375,474 | $ 50,077,674 | ||
Description of variable rate basis | LIBOR | [5] | LIBOR | ||
First Mortgage | Windy Hill Pv Five Cm LLC | US | CA | Office Building | Pro Rata | Terra Property Trust | |||||
Schedule of Investments | |||||
Fair Value | [2],[5] | $ 41,597,238 | $ 38,309,421 | ||
% of Members Capital | [5] | 19.20% | [3] | 17.60% | [4] |
First Mortgage | Windy Hill Pv Five Cm LLC | US | CA | Office Building | LIBOR | Terra Property Trust | |||||
Schedule of Investments | |||||
Basis spread on variable rate | 6.00% | [5] | 6.00% | ||
LIBOR Floor | 2.05% | [5] | 2.05% | ||
Operating real estate | US | Terra Property Trust | |||||
Schedule of Investments | |||||
Fair Value | $ 73,438,122 | [1] | $ 75,043,111 | ||
Encumbrance | 31,757,725 | 31,962,692 | |||
Net Real Estate Investment | $ 41,680,397 | $ 43,080,419 | |||
Operating real estate | US | Pro Rata | Terra Property Trust | |||||
Schedule of Investments | |||||
% of Members Capital | 14.70% | [3],[24] | 15.10% | ||
Net Real Estate Investment | $ 31,885,503 | [2] | $ 32,956,521 | ||
Operating real estate | US | CA | Office Building | Terra Property Trust | |||||
Schedule of Investments | |||||
Acquisition Date | Jul. 30, 2018 | [25] | Jul. 30, 2018 | ||
Fair Value | $ 65,043,111 | [1],[25] | $ 65,043,111 | ||
Encumbrance | 31,757,725 | [25] | 31,962,692 | ||
Net Real Estate Investment | $ 33,285,386 | [25] | $ 33,080,419 | ||
Operating real estate | US | CA | Office Building | Pro Rata | Terra Property Trust | |||||
Schedule of Investments | |||||
% of Members Capital | 11.70% | [3],[24],[25] | 11.60% | ||
Net Real Estate Investment | $ 25,463,320 | [2],[25] | $ 25,306,521 | ||
Operating real estate | US | PA | Land | Terra Property Trust | |||||
Schedule of Investments | |||||
Acquisition Date | Jan. 9, 2019 | [26] | Jan. 9, 2019 | ||
Fair Value | $ 8,395,011 | [1],[26] | $ 10,000,000 | ||
Encumbrance | 0 | [26] | 0 | ||
Net Real Estate Investment | $ 8,395,011 | [26] | $ 10,000,000 | ||
Operating real estate | US | PA | Land | Pro Rata | Terra Property Trust | |||||
Schedule of Investments | |||||
% of Members Capital | 3.00% | [3],[24],[26] | 3.50% | ||
Net Real Estate Investment | $ 6,422,183 | [2],[26] | $ 7,650,000 | ||
Marketable Securities | |||||
Schedule of Investments | |||||
Amortized cost | [27] | 475,201 | 1,176,006 | ||
Fair Value | [27] | 510,151 | 1,310,000 | ||
Marketable Securities | Pro Rata | |||||
Schedule of Investments | |||||
Fair Value | [2],[27] | $ 390,266 | $ 1,002,150 | ||
% of Members Capital | [27] | 0.20% | [3] | 0.50% | [4] |
Marketable Securities | Nextpoint Real Estate Finance, Inc | Series A Preferred Stock | |||||
Schedule of Investments | |||||
Dividend Yield | [27] | 8.50% | 8.50% | ||
Acquisition Date | [27] | Jul. 30, 2020 | Jul. 30, 2020 | ||
Maturity Date | [27] | Jul. 24, 2025 | Jul. 24, 2025 | ||
Amortized cost | [27] | $ 475,201 | $ 1,176,006 | ||
Fair Value | [27] | $ 510,151 | $ 1,310,000 | ||
Preferred Stock, Shares Issued | [27] | 20,204 | 50,000 | ||
Marketable Securities | Nextpoint Real Estate Finance, Inc | Series A Preferred Stock | Pro Rata | |||||
Schedule of Investments | |||||
Fair Value | [2],[27] | $ 390,266 | $ 1,002,150 | ||
% of Members Capital | [27] | 0.20% | [3] | 0.50% | [4] |
Equity Investments | |||||
Schedule of Investments | |||||
Amortized cost | $ 91,662,090 | $ 69,713,793 | |||
Fair Value | 95,947,859 | 68,898,535 | |||
Equity Investments | Pro Rata | |||||
Schedule of Investments | |||||
Fair Value | [2] | $ 73,400,112 | $ 52,707,379 | ||
% of Members Capital | 33.90% | [3] | 24.20% | [4] | |
Equity Investments | Mavik Real Estate Special Opportunities Fund, LP | |||||
Schedule of Investments | |||||
Equity Method Investment, Ownership Percentage | 44.00% | [28] | 50.00% | [29] | |
Amortized cost | $ 40,245,914 | [28] | $ 40,458,282 | [29] | |
Fair Value | 44,531,683 | [28] | 39,643,024 | [29] | |
Equity Investments | Mavik Real Estate Special Opportunities Fund, LP | Pro Rata | |||||
Schedule of Investments | |||||
Fair Value | [2] | $ 34,066,737 | [28] | $ 30,326,913 | [29] |
% of Members Capital | 15.70% | [3],[28] | 13.90% | [4],[29] | |
Equity Investments | LEL Arlington JV LLC | |||||
Schedule of Investments | |||||
Equity Method Investment, Ownership Percentage | 80.00% | [30] | 80.00% | [31] | |
Amortized cost | $ 23,962,388 | [30] | $ 23,949,044 | [31] | |
Fair Value | 23,962,388 | [30] | 23,949,044 | [31] | |
Equity Investments | LEL Arlington JV LLC | Pro Rata | |||||
Schedule of Investments | |||||
Fair Value | [2] | $ 18,331,227 | [30] | $ 18,321,019 | [31] |
% of Members Capital | 8.50% | [3],[30] | 8.40% | [4],[31] | |
Equity Investments | LEL NW 49th LV LLC | |||||
Schedule of Investments | |||||
Equity Method Investment, Ownership Percentage | 80.00% | [30] | 80.00% | [31] | |
Amortized cost | $ 4,838,353 | [30] | $ 5,306,467 | [31] | |
Fair Value | 4,838,353 | [30] | 5,306,467 | [31] | |
Equity Investments | LEL NW 49th LV LLC | Pro Rata | |||||
Schedule of Investments | |||||
Fair Value | [2] | $ 3,701,340 | [30] | $ 4,059,447 | [31] |
% of Members Capital | 1.70% | [3],[30] | 1.90% | [4],[31] | |
Equity Investments | TCG Corinthian FL Portfolio JV LLC | |||||
Schedule of Investments | |||||
Equity Method Investment, Ownership Percentage | [30] | 90.00% | |||
Amortized cost | [30] | $ 22,615,435 | |||
Fair Value | [30] | 22,615,435 | |||
Equity Investments | TCG Corinthian FL Portfolio JV LLC | Pro Rata | |||||
Schedule of Investments | |||||
Fair Value | [2],[30] | $ 17,300,808 | |||
% of Members Capital | [3],[30] | 8.00% | |||
Terra JV | |||||
Schedule of Investments | |||||
Acquisition Date | Mar. 2, 2020 | Mar. 2, 2020 | |||
Equity Method Investment, Ownership Percentage | 87.60% | 87.60% | |||
Amortized cost | $ 217,482,964 | $ 219,704,515 | |||
Fair Value | $ 216,121,691 | $ 217,324,720 | |||
% of Members Capital | 99.70% | 99.70% | |||
[1] | Because there is no readily available market for these investments, these loans were valued using significant unobservable inputs under Level 3 of the fair value hierarchy and were approved in good faith by Terra REIT Advisors, LLC (“Terra REIT Advisors”), Terra Property Trust’s manager, pursuant to Terra Property Trust’s valuation policy. | ||||
[2] | Amount represents the Company’s portion, or 76.5%, of the fair value or net investment value. | ||||
[3] | Percentage is based on the Company’s pro rata share of the fair value or net investment value over the Company’s total members’ capital of $216.7 million at March 31, 2022. | ||||
[4] | Percentage is based on the Company’s pro rata share of the fair value or net investment value over the Company’s total members’ capital of $218.1 million at December 31, 2021. | ||||
[5] | In March 2020, Terra Property Trust entered into a financing transaction where a third-party purchased an A-note position. Because the transaction does not qualify for sale accounting, the gross amount of the loan remains in the consolidated balance sheets. The liability is reflected as secured borrowing in Terra Property Trust’s consolidated balance sheets. | ||||
[6] | Terra Property Trust sold a portion of its interest in this loan through a participation agreement to Terra Income Fund 6, Inc. (“Terra Fund 6”), an affiliated fund advised by Terra Income Advisors, LLC, an affiliate of our sponsor and Terra REIT Advisors. | ||||
[7] | Terra Property Trust sold a portion of its interest in this loan through a participation agreement to Terra Fund 6, an affiliated fund advised by Terra Income Advisors, LLC, an affiliate of our sponsor and Terra REIT Advisors. | ||||
[8] | The loan participations from Terra Property Trust do not qualify for sale accounting and therefore, the gross amount of these loans remain in Terra Property Trust’s consolidated balance sheets. | ||||
[9] | Terra Property Trust purchased a portion of the interest in this loan from Mavik Real Estate Special Opportunities Fund REIT, LLC, a related-party real estate investment trust managed by Terra REIT Advisors, via a participation agreement. | ||||
[10] | For the three months ended March 31, 2022, Terra Property Trust suspended interest income accrual of $0.6 million on this loan, because recovery of such income was doubtful. Additionally, the fair value of the loan declined as a result of a decline in the fair value of the collateral. | ||||
[11] | For the year ended December 31, 2021, Terra Property Trust suspended interest income accrual of $2.3 million on this loan, because recovery of such income was doubtful. Additionally, the fair value of the loan declined as a result of a decline in the fair value of the collateral. | ||||
[12] | This loan is in maturity default. Terra Property Trust has exercised its rights and is facilitating the completion of construction of the asset in anticipation of lease up and disposition of the asset. For the three months ended March 31, 2022, Terra Property Trust suspended interest income accrual of $0.5 million on this loan because recovery of such income was doubtful. | ||||
[13] | This loan is in maturity default. Terra Property Trust has exercised its rights and is facilitating the completion of construction of the asset in anticipation of lease up and disposition of the asset. For the year ended December 31, 2021, Terra Property Trust suspended interest income accrual of $0.9 million on this loan because recovery of such income was doubtful. | ||||
[14] | These loans were used as collateral for $58.2 million of borrowings under a repurchase agreement. | ||||
[15] | These loans were used as collateral for $44.6 million of borrowings under a repurchase agreement. | ||||
[16] | These loans were used as collateral for $118.3 million of borrowings under a repurchase agreement. | ||||
[17] | These loans were used as collateral for $93.8 million of borrowings under a term loan payable. | ||||
[18] | These loans were used as collateral for $65.0 million of borrowings under a revolving line of credit. | ||||
[19] | These loans were used as collateral for $38.6 million of borrowings under a revolving line of credit. | ||||
[20] | In March 2021, Terra Property Trust amended the loan agreement to change the spread on the interest rate to 5.0%, increased the exit fee to 1.5% and extended the maturity to January 1, 2024. Additionally, under the loan amendment, the borrower made a partial repayment of $2.6 million. | ||||
[21] | In September 2021, Terra Property Trust refinanced a previously-defaulted mezzanine loan with a new first mortgage. This refinancing was accounted for as a troubled debt restructuring and Terra Property Trust recognized a loss of $0.3 million on the restructuring. | ||||
[22] | Terra Property Trust purchased a portion of the interest in this loan from Terra Fund 6 via a participation agreement. | ||||
[23] | In December 2020, Terra Property Trust entered into a forbearance agreement with the borrower pursuant to which interest accrues on the loan during the 90-day forbearance period from November 2020 to January 2021. In March 2021, the forbearance period was extended through August 2021. | ||||
[24] | Percentage is based on Terra Property Trust’s net exposure on the property (real estate owned less encumbrance). | ||||
[25] | Terra Property Trust acquired this property through foreclosure of a $54.0 million first mortgage. | ||||
[26] | Terra Property Trust acquired the collateral for this loan pursuant to a deed in lieu of foreclosure. The land is currently vacant and the fair value reflects its estimated selling price. In March 2022, Terra Property Trust entered into a sales agreement to sell the land. As of March 31, 2022, the land was classified as assets held-for-sale on Terra Property Trust’s consolidated balance sheets. | ||||
[27] | From time to time, Terra Property Trust may invest in short-term debt and equity securities. These securities are comprised of shares of common and preferred stock and bonds. | ||||
[28] | On August 3, 2020, Terra Property Trust entered into a subscription agreement with Mavik Real Estate Special Opportunities Fund, LP (“RESOF”) whereby Terra Property Trust committed to fund up to $50.0 million to purchase a limited partnership interest in RESOF. RESOF’s primary investment objective is to generate attractive risk-adjusted returns by purchasing performing and non-performing mortgages, loans, mezzanines and other credit instruments supported by underlying commercial real estate assets. As of March 31, 2022, the unfunded commitment was $16.4 million. | ||||
[29] | On August 3, 2020, Terra Property Trust entered into a subscription agreement with RESOF whereby Terra Property Trust committed to fund up to $50.0 million to purchase a limited partnership interest in RESOF. RESOF’s primary investment objective is to generate attractive risk-adjusted returns by purchasing performing and non-performing mortgages, loans, mezzanines and other credit instruments supported by underlying commercial real estate assets. As of December 31, 2021, the unfunded commitment was $15.1 million. | ||||
[30] | In the fourth quarter of 2021 and the first quarter of 2022, Terra Property Trust purchased equity interests in three joint ventures that invest in real estate properties. | ||||
[31] | In the fourth quarter of 2021, Terra Property Trust purchased equity interests in two joint ventures that invest in real estate properties. |
Consolidated Schedules of Inv_2
Consolidated Schedules of Investments Consolidated schedule of investment (Parenthetical 1) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 02, 2020 | Jan. 01, 2016 |
Terra Property Trust | ||||
Schedule of Investments | ||||
Common Stock, Shares, Issued | 4,574,470.35 | |||
Cash | $ 25,500,000 | |||
Common Stock, Value, Issued | $ 49,800,000 | |||
Equity Method Investment, Ownership Percentage | 87.40% | |||
Common Stock, Par or Stated Value Per Share | $ 0.01 | |||
Percent Of Common Stock Indirect Owned | 76.50% | 76.50% | ||
% of Members Capital | 100.00% | |||
Terra JV | ||||
Schedule of Investments | ||||
Equity Method Investment, Ownership Percentage | 87.60% | 87.60% | ||
% of Members Capital | 99.70% | 99.70% | ||
Terra JV | Terra Fund Five | ||||
Schedule of Investments | ||||
Equity Method Investment, Ownership Percentage | 87.60% | 87.60% | ||
Terra JV | Terra fund Seven | ||||
Schedule of Investments | ||||
Equity Method Investment, Ownership Percentage | 12.40% | 12.40% |
Consolidated Schedules of Inv_3
Consolidated Schedules of Investments Consolidated schedule of investment - subnotes (Parenthetical) - USD ($) | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2022 | Dec. 31, 2021 | Aug. 03, 2020 | ||||
Investments | ||||||
Members' Capital | $ 216,745,722 | $ 218,076,577 | ||||
Mavik Real Estate Special Opportunities Fund, LP | Equity Investments | ||||||
Investments | ||||||
Total Commitment | $ 50,000,000 | |||||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share, Unfunded Commitments | $ 16,400,000 | $ 15,100,000 | ||||
Terra Property Trust | ||||||
Investments | ||||||
% of Members Capital | 100.00% | |||||
Percent Of Common Stock Indirect Owned | 76.50% | 76.50% | ||||
Terra Property Trust | US | Revolving Credit Facility | ||||||
Investments | ||||||
Mortgage loan payable | $ 65,000,000 | $ 38,600,000 | ||||
Terra Property Trust | US | Repurchase Agreements | ||||||
Investments | ||||||
Mortgage loan payable | 58,200,000 | 44,600,000 | ||||
Terra Property Trust | US | Repurchase Agreement | ||||||
Investments | ||||||
Mortgage loan payable | 118,300,000 | |||||
Terra Property Trust | US | Term loan | ||||||
Investments | ||||||
Mortgage loan payable | 93,800,000 | |||||
Terra Property Trust | US | Operating real estate | ||||||
Investments | ||||||
Mortgage loan payable | 31,757,725 | 31,962,692 | ||||
Terra Property Trust | US | CA | Office Building | Operating real estate | ||||||
Investments | ||||||
Real Estate Acquired Through Foreclosure | 54,000,000 | 54,000,000 | ||||
Mortgage loan payable | $ 31,757,725 | [1] | 31,962,692 | |||
Terra Property Trust | US | CA | Hotel | AGRE DCP Palm Springs, LLC | First Mortgage | ||||||
Investments | ||||||
Repayment of Loan | $ 2,600,000 | |||||
Basis spread on variable rate | 5.00% | |||||
Exit Fee | 1.50% | [2] | 1.50% | [3],[4] | ||
Terra Property Trust | US | TX | Hotel | Austin H. I. Borrower LLC | First Mortgage | ||||||
Investments | ||||||
Gains (Losses) on Restructuring of Debt | $ 300,000 | |||||
Exit Fee | 1.00% | [5] | 1.00% | [6],[7] | ||
Terra Property Trust | US | NY | Mixed use | REEC Harlem Holdings Company LLC | Preferred Equity Investment | ||||||
Investments | ||||||
Interest Income accrual suspended | $ 600,000 | $ 2,300,000 | ||||
Terra Property Trust | US | NY | Multifamily | RS JZ Driggs, LLC | Preferred Equity Investment | ||||||
Investments | ||||||
Interest Income accrual suspended | $ 500,000 | $ 900,000 | ||||
Exit Fee | [9] | 1.00% | [8],[10] | 1.00% | [11],[12] | |
[1] | Terra Property Trust acquired this property through foreclosure of a $54.0 million first mortgage. | |||||
[2] | These loans were used as collateral for $118.3 million of borrowings under a repurchase agreement. | |||||
[3] | In March 2021, Terra Property Trust amended the loan agreement to change the spread on the interest rate to 5.0%, increased the exit fee to 1.5% and extended the maturity to January 1, 2024. Additionally, under the loan amendment, the borrower made a partial repayment of $2.6 million. | |||||
[4] | These loans were used as collateral for $93.8 million of borrowings under a term loan payable. | |||||
[5] | These loans were used as collateral for $65.0 million of borrowings under a revolving line of credit. | |||||
[6] | In September 2021, Terra Property Trust refinanced a previously-defaulted mezzanine loan with a new first mortgage. This refinancing was accounted for as a troubled debt restructuring and Terra Property Trust recognized a loss of $0.3 million on the restructuring. | |||||
[7] | These loans were used as collateral for $38.6 million of borrowings under a revolving line of credit. | |||||
[8] | Terra Property Trust sold a portion of its interest in this loan through a participation agreement to Terra Income Fund 6, Inc. (“Terra Fund 6”), an affiliated fund advised by Terra Income Advisors, LLC, an affiliate of our sponsor and Terra REIT Advisors. | |||||
[9] | The loan participations from Terra Property Trust do not qualify for sale accounting and therefore, the gross amount of these loans remain in Terra Property Trust’s consolidated balance sheets. | |||||
[10] | This loan is in maturity default. Terra Property Trust has exercised its rights and is facilitating the completion of construction of the asset in anticipation of lease up and disposition of the asset. For the three months ended March 31, 2022, Terra Property Trust suspended interest income accrual of $0.5 million on this loan because recovery of such income was doubtful. | |||||
[11] | Terra Property Trust sold a portion of its interest in this loan through a participation agreement to Terra Fund 6, an affiliated fund advised by Terra Income Advisors, LLC, an affiliate of our sponsor and Terra REIT Advisors. | |||||
[12] | This loan is in maturity default. Terra Property Trust has exercised its rights and is facilitating the completion of construction of the asset in anticipation of lease up and disposition of the asset. For the year ended December 31, 2021, Terra Property Trust suspended interest income accrual of $0.9 million on this loan because recovery of such income was doubtful. |
Business
Business | 3 Months Ended |
Mar. 31, 2022 | |
Limited Liability Companies LLCs [Abstract] | |
Business | Note 1. Business Terra Secured Income Fund 5, LLC (the “Company”), is a real estate credit focused company that originates, structures, funds and manages high yielding commercial real estate investments, including mezzanine loans, first mortgage loans, subordinated mortgage loans and preferred equity investments throughout the United States. The Company’s loans finance the acquisition, construction, development or redevelopment of quality commercial real estate in the United States. The Company focuses on the origination of middle market loans in the approximately $10 million to $50 million range, to finance properties in primary and secondary markets. The Company was formed as a Delaware limited liability company on April 24, 2013 and commenced operations on August 8, 2013. The Company makes substantially all of its investments and conducts substantially all of its real estate lending business through Terra Property Trust, which has elected to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes commencing with its taxable year ended December 31, 2016. The Company’s investment objectives are to (i) preserve its members’ capital contributions, (ii) realize income from its investments and (iii) make monthly distributions to its members from cash generated from investments. There can be no assurances that the Company will be successful in meeting its investment objectives. In December 2015, the members approved the merger of Terra Secured Income Fund, LLC (“Terra Fund 1”), Terra Secured Income Fund 2, LLC (“Terra Fund 2”), Terra Secured Income Fund 3, LLC (“Terra Fund 3”) and Terra Secured Income Fund 4, LLC (“Terra Fund 4”) with and into subsidiaries of the Company (individually, each a “Terra Fund” and collectively, the “Terra Funds”) through a series of separate mergers effective January 1, 2016 (collectively, the “Merger”). Following the Merger, the Company contributed the consolidated portfolio of net assets of the five Terra Funds to Terra Property Trust, a newly-formed and wholly-owned subsidiary of the Company that elected to be taxed as a REIT, in exchange for the shares of common stock of Terra Property Trust. Upon completion of the Merger, the Company became the parent company of Terra Funds 1 through 4 and the direct and indirect sole common stockholder of, and began conducting substantially all of its real estate lending business through, Terra Property Trust. On March 2, 2020, Terra Fund 1, Terra Fund 2 and Terra Fund 3 merged with and into Terra Fund 4, with Terra Fund 4 continuing as the surviving company (the “Terra Fund Merger”), and the Company consolidated its holdings of shares of common stock of Terra Property Trust in Terra Fund 4. Subsequent to the Terra Fund Merger, the legal name of Terra Fund 4 was changed to Terra JV. On March 2, 2020, Terra Property Trust engaged in a series of transactions pursuant to which Terra Property Trust issued an aggregate of 4,574,470.35 shares of its common stock in exchange for the settlement of an aggregate of $49.8 million of participation interests in loans that Terra Property Trust owned, cash of $25.5 million and other working capital. As of March 31, 2022, Terra JV held 87.4% of the issued and outstanding shares of Terra Property Trust’s common stock with the remainder held by Terra Offshore REIT, and the Company and Terra Fund 7 owned an 87.6% and 12.4% percentage interest, respectively, in Terra JV ( Note 4 ). The Company does not consolidate Terra JV because the Company and Terra Fund 7 share joint approval rights with respect to certain major decisions that are taken by Terra JV and Terra Property Trust ( Note 4 ). The Company’s investment activities are externally managed by Terra Fund Advisors, LLC (“Terra Fund Advisors” or the “Manager”). The Company does not currently have any employees and does not expect to have any employees. Services necessary for the Company’s business are provided by individuals who are employees of the Manager or its affiliates or by individuals who were contracted by the Company or by the Manager or its affiliates to work on behalf of the Company pursuant to the terms of the operating agreement, as amended. The Company’s amended and restated operating agreement provides that the Company’s existence will continue until December 31, 2023, unless sooner terminated. However, the Company expects that prior to such date it will consummate a liquidity transaction, which could occur as early as this year and may include an orderly liquidation of its assets or an alternative liquidity event such as a strategic business combination, a sale of the Company or an initial public offering and listing of Terra Property Trust’s shares of common stock on a national securities exchange. The Manager would pursue an alternative liquidity event only if it believes such a transaction would be in the best interests of the Company’s members. On April 1, 2021, Mavik Capital Management, LP (“Mavik”), an entity controlled by Vikram S. Uppal, the Chief Executive Officer of the Company, completed a series of related transactions that resulted in all of the outstanding interests in Terra Capital Partners, LLC, being acquired by Mavik for a combination of cash and interests in Mavik. As described in greater detail in Note 8 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies Basis of Presentation The interim financial statements have been prepared in accordance with United States generally accepted accounting principles (U.S. GAAP”) and include all of the Company’s accounts. The accompanying interim financial statements of the Company and related financial information have been prepared pursuant to the requirements for reporting on Form 10-Q and Articles 6 or 10 of Regulation S-X. The Company is an investment company, as defined under U.S. GAAP, and applies accounting and reporting guidance in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, Financial Services — Investment Companies . Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may ultimately differ from those estimates. The coronavirus (“COVID-19”) pandemic has had a significant impact on local, national and global economies and has resulted in a world-wide economic slowdown. However, after two years into the COVID-19 pandemic, the real estate market has started to recover from the dislocation it experienced. A strong pace of vaccination along with aggressive fiscal stimulus, has improved the outlook for the real estate market. The Company continues to closely monitor the impact of the COVID-19 pandemic on all aspects of its investments and operations. The Company believes the estimates and assumptions underlying its financial statements are reasonable and supportable based on the information available as of March 31, 2022; however, the extent to which the COVID-19 pandemic may impact the Company’s investments and operations going forward will depend on future developments, which are highly uncertain and cannot be predicted with confidence. These developments include the duration of the outbreak, the impact of the global vaccination effort, any new strains of the virus that are resistant to available vaccines, the impact of government stimulus, new information that may emerge concerning the severity of the COVID-19 pandemic, and actions taken by federal, state and local agencies as well as the general public to contain the COVID-19 pandemic or treat its impact, among others. Accordingly, any estimates and assumptions as of March 31, 2022 are inherently less certain than they would be absent the current and potential impacts of the COVID-19 pandemic. Equity Investment in Terra JV Equity investment in Terra JV represents the Company’s equity interest in Terra JV, which was initially recorded at cost. Subsequent to the asset contribution, the equity investment is reported, at each reporting date, at fair value on the statements of financial condition. Change in fair value is reported in net change in unrealized appreciation or depreciation on investment on the statements of operations. Revenue Recognition Dividend Income: Dividend income associated with the Company’s ownership of Terra JV or Terra Property Trust is recognized on the record date as declared by Terra JV or Terra Property Trust. Any excess of distributions over Terra JV or Terra Property Trust’s cumulative taxable net income are recorded as return of capital. Other Operating Income: All other income is recognized when earned. Cash and Cash Equivalents The Company considers all highly liquid investments, with original maturities of ninety days or less when purchased, as cash equivalents. Cash and cash equivalents are exposed to concentrations of credit risk. The Company maintains all of its cash at financial institutions which, at times, may exceed the amount insured by the Federal Deposit Insurance Corporation. Income Taxes No provision for U.S. federal and state income taxes has been made in the accompanying financial statements, as individual members are responsible for their proportionate share of the Company’s taxable income. The Company, however, may be liable for New York City Unincorporated Business Tax (the “NYC UBT”) and similar taxes of various other municipalities. New York City imposes the NYC UBT at a statutory rate of 4% on net income generated from ordinary business activities carried on in New York City. For the three months ended March 31, 2022 and 2021, none of the Company’s income was subject to the NYC UBT. Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statements and tax basis assets and liabilities using enacted tax rates in effect for the year in which differences are expected to reverse. Such deferred tax assets and liabilities were not material. The Company did not have any uncertain tax positions that met the recognition or measurement criteria of ASC 740-10-25, Income Taxes , nor did the Company have any unrecognized tax benefits as of the periods presented herein. The Company recognizes interest and penalties, if any, related to unrecognized tax liabilities as income tax expense in its statements of operations. For the three months ended March 31, 2022 and 2021, the Company did not incur any interest or penalties. Although the Company files federal and state tax returns, its primary tax jurisdiction is federal. The Company’s 2018-2020 federal tax years remain subject to examination by the Internal Revenue Service. Recent Accounting Pronouncement London Interbank Offered Rate (“LIBOR”) is a benchmark interest rate referenced in a variety of agreements that are used by all types of entities. In July 2017, the U.K. Financial Conduct Authority, which regulates the LIBOR administrator, ICE Benchmark Administration Limited (“IBA”), announced that it would cease to compel banks to participate in setting LIBOR as a benchmark by the end of 2021, which has subsequently been delay to June 30, 2023. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) — Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). The amendments in ASU 2020-04 provide optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848), which expanded the scope of Topic 848 to include derivative instruments impacted by discounting transition (“ASU 2021-01”). ASU 2020-04 and ASU 2021-01 are effective for all entities through December 31, 2022. The expedients and exceptions provided by the amendments do not apply to contract modifications and hedging relationships entered into or evaluated after December 31, 2022, except for hedging transactions as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. In the event LIBOR is unavailable, Terra Property Trust’s investment documents provide for a substitute index, on a basis generally consistent with market practice, intended to put the Terra Property Trust in substantially the same economic position as LIBOR. As a result, the Company does not expect the reference rate reform and the adoption of ASU 2020-04 and ASU 2021-01 to have a material impact on its financial statements and disclosures |
Investment and Fair Value
Investment and Fair Value | 3 Months Ended |
Mar. 31, 2022 | |
Investments [Abstract] | |
Investments And Fair Value Measurements [Text Block] | Note 3. Investment and Fair Value Equity Investment in Terra JV The Company invested substantially all of its equity capital in the purchase of shares of common stock of Terra Property Trust. As of both March 31, 2022 and December 31, 2021, Terra JV held 87.4% of the issued and outstanding shares of Terra Property Trust’s common stock with the remainder held by Terra Offshore REIT, and the Company and Terra Fund 7 owned an 87.6% and 12.4% percentage interest, respectively, in Terra JV, and Terra JV became the Company’s only investment ( Note 4 ). The following tables present a summary of the Company’s investment at March 31, 2022 and December 31, 2021: March 31, 2022 December 31, 2021 Investment Cost Fair Value % of Members’ Capital Cost Fair Value % of Members’ Capital 87.6% interest in Terra JV, LLC $ 217,482,964 $ 216,121,691 99.7 % $ 219,704,515 $ 217,324,720 99.7 % For the three months ended March 31, 2022 and 2021, the Company received approximately $3.0 million and $3.0 million of distributions from Terra JV, of which $2.2 million and $1.9 million were returns of capital, respectively. As of both March 31, 2022 and December 31, 2021, the Company indirectly beneficially owned 76.5% ( Note 4 ) of the outstanding shares of common stock of Terra Property Trust. The following tables present the summarized financial information of Terra Property Trust: March 31, 2022 December 31, 2021 Carrying value of loans held for investment $ 558,019,000 $ 469,673,314 Equity investment in unconsolidated investments 91,662,090 69,713,793 Real estate owned, net 62,448,945 65,776,839 Cash, cash equivalent and restricted cash 25,568,820 51,098,647 Other assets 34,897,190 37,279,565 Total assets 772,596,045 693,542,158 Term loan payable, unsecured notes payable, obligations under participation (448,176,646) (364,910,392) Accounts payable, accrued expenses and other liabilities (45,804,851) (45,078,478) Lease intangible liabilities (9,426,358) (9,709,710) Total liabilities (503,407,855) (419,698,580) Stockholder’s equity $ 269,188,190 $ 273,843,578 Three Months Ended March 31, 2022 2021 Revenues $ 12,112,270 $ 10,289,252 Expenses (14,241,581) (10,136,375) Realized gains on marketable securities 51,133 — Unrealized losses on marketable securities (99,044) (14,608) Equity income from unconsolidated investments 1,419,335 1,337,827 Net (loss) income $ (757,887) $ 1,476,096 Fair Value Measurements The Company adopted the provisions of ASC 820, Fair Value Measurement (“ASC 820”), which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC 820 established a fair value hierarchy that prioritizes and ranks the level of market price observability used in measuring investments at fair value. Market price observability is impacted by a number of factors, including the type of investment, the characteristics specific to the investment, and the state of the marketplace (including the existence and transparency of transactions between market participants). Investments with readily available, actively quoted prices or for which fair value can be measured from actively quoted prices in an orderly market will generally have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Investments measured and reported at fair value are classified and disclosed into one of the following categories based on the inputs as follows: Level 1 — Quoted prices (unadjusted) in active markets for identical assets and liabilities that the Company has the ability to access. Level 2 — Pricing inputs are other than quoted prices in active markets, including, but not limited to, quoted prices for similar assets and liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market corroborated inputs. Level 3 — Significant unobservable inputs are based on the best information available in the circumstances, to the extent observable inputs are not available, including the Company’s own assumptions used in determining the fair value of investments. Fair value for these investments are determined using valuation methodologies that consider a range of factors, including but not limited to the price at which the investment was acquired, the nature of the investment, local market conditions, trading values on public exchanges for comparable securities, current and projected operating performance, and financing transactions subsequent to the acquisition of the investment. The inputs into the determination of fair value require significant management judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. 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 investment. Assets and Liabilities Reported at Fair Value The following table summarizes the Company’s equity investment at fair value on a recurring basis as of March 31, 2022 and December 31, 2021: March 31, 2022 Fair Value Measurements Level 1 Level 2 Level 3 Total Investment: Equity investment in Terra JV $ — $ — $ 216,121,691 $ 216,121,691 December 31, 2021 Fair Value Measurements Level 1 Level 2 Level 3 Total Investment: Equity investment in Terra JV $ — $ — $ 217,324,720 $ 217,324,720 Changes in Level 3 investment for the three months ended March 31, 2022 and 2021 were as follows: Equity Investment in Terra JV Three Months Ended March 31, 2022 2021 Beginning balance $ 217,324,720 $ 235,357,977 Return of capital (2,221,551) (1,852,767) Net change in unrealized appreciation on investment 1,018,522 492,466 Ending balance $ 216,121,691 $ 233,997,676 Net change in unrealized appreciation on investment for the period relating to those $ 1,018,522 $ 492,466 Transfers between levels, if any, are recognized at the beginning of the period in which transfers occur. For the three months ended March 31, 2022 and 2021, there were no transfers. The Company estimated that its other financial assets and liabilities had fair values that approximated their carrying values at March 31, 2022 and December 31, 2021 due to their short-term nature. Valuation Process for Fair Value Measurement Market quotations are not readily available for the Company’s investment in Terra Property Trust or Terra JV, which is included in Level 3 of the fair value hierarchy. The fair value of the Company’s sole investment takes into consideration the fair value of Terra Property Trust’s assets and liabilities which are valued utilizing a yield approach, i.e. a discounted cash flow methodology. In following this methodology, loans are evaluated individually, and management takes into account, in determining the risk-adjusted discount rate for each of Terra Property Trust’s loans, relevant factors, which may include available current market data on applicable yields of comparable debt/preferred equity instruments; market credit spreads and yield curves; the investment’s yield; covenants of the investment, including prepayment provisions; the portfolio company’s ability to make payments, its net operating income, debt-service coverage ratio; construction progress reports and construction budget analysis; the nature, quality, and realizable value of any collateral (and loan-to-value ratio); and the forces that influence the local markets in which the asset (the collateral) is purchased and sold, such as capitalization rates, occupancy rates, rental rates, replacement costs and the anticipated duration of each real estate-related loan. Valuation of Terra Property Trust’s investment in a 4.9 acre development parcel is based on the estimated selling price. The fair value of Terra Property Trust’s investment in an office building is determined using the direct capitalization method. The Manager designates a valuation committee to oversee the entire valuation process of Terra Property Trust’s Level 3 investments. The valuation committee is comprised of members of the Manager’s senior management, deal and portfolio management teams, who meet on a quarterly basis, or more frequently as needed, to review Terra Property Trust investments being valued as well as the inputs used in the proprietary valuation model. Valuations determined by the valuation committee are supported by pertinent data and, in addition to a proprietary valuation model, are based on market data, third-party valuation data and discount rates or other methods the valuation committee deems to be appropriate. The following tables summarize the valuation techniques and significant unobservable inputs used by the Company to value the Level 3 investments as of March 31, 2022 and December 31, 2021. The tables are not intended to be all-inclusive, but instead identify the significant unobservable inputs relevant to the determination of fair values. Fair Value Primary Valuation Technique Unobservable Inputs March 31, 2022 Asset Category Minimum Maximum Weighted Average Assets: Equity investment in Terra JV $ 216,121,691 Discounted cash flow (1)(2) Discount rate (1)(2) 1.90 % 15.00 % 14.74 % Fair Value Primary Valuation Technique Unobservable Inputs December 31, 2021 Asset Category Minimum Maximum Weighted Average Assets: Equity investment in Terra JV $ 217,324,720 Discounted cash flow (1)(2) Discount rate (1)(2) 2.45 % 15.00 % 12.66 % _______________ (1) Discounted cash flows and discount rates applied to Terra Property Trust’s assets and liabilities. (2) The fair value of Terra Property Trust’s investment in an office building is determined using the direct capitalization method with cap rate ranges from 5.25% to 6.00% as of March 31, 2022 and December 31, 2021, respectively. Additionally, the fair value of Terra Property Trust’s investment in a 4.9 acre development parcel is based on the estimated selling price. Risks and Uncertainties The Company’s investment in Terra Property Trust through Terra JV is highly illiquid and there is no assurance that the Company will achieve its investment objectives, including targeted returns. Terra Property Trust’s loans are highly illiquid. Due to the illiquidity of the loans, valuation of the loans may be difficult, as there generally will be no established markets for these loans. The COVID-19 pandemic has resulted in extreme volatility in a variety of global markets, including the real estate-related debt markets. U.S. financial markets, in particular, are experiencing limited liquidity and forced selling by certain market |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | Note 4. Related Party Transactions Operating Agreement The Company has an operating agreement, as amended, with Terra Fund Advisors. The operating agreement, as amended, is scheduled to terminate on December 31, 2023 unless the Company is dissolved earlier. Starting January 1, 2016, the Company conducts all of its real estate lending business through Terra Property Trust. As such, Terra Property Trust is responsible for management compensation paid and operating expenses reimbursed to its manager pursuant to a management agreement with the manager. Dividend Income As discussed in Note 3 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | Note 5. Commitments and Contingencies The Company enters into contracts that contain a variety of indemnification provisions. The Company’s maximum exposure under these arrangements is unknown; however, the Company has not had prior claims or losses pursuant to these contracts. The Manager has reviewed the Company’s existing contracts and expects the risk of loss to the Company to be remote. The Company is not currently subject to any material legal proceedings and, to the Company’s knowledge, no material legal proceedings are threatened against the Company. From time to time, the Company may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of the Company’s rights under contracts with its portfolio companies. While the outcome of any legal proceedings cannot be predicted with certainty, the Company does not expect that any such proceedings will have a material adverse effect upon its financial condition or results of operations. |
Members' Capital
Members' Capital | 3 Months Ended |
Mar. 31, 2022 | |
Limited Liability Company (LLC) Members' Equity [Abstract] | |
Members' Capital | Note 6. Members’ Capital As of both March 31, 2022 and December 31, 2021, the Company had 6,636.6 units outstanding. The net asset value per unit was $32,659 and $32,860 as of March 31, 2022 and December 31, 2021, respectively. Capital Distributions At the discretion of the Manager, the Company may make distributions from net cash flow from operations, net disposition proceeds, or other cash available for distribution. Distributions are made to holders of Continuing Income Units (regular units of limited liability company interest in the Company) in proportion to their unit holdings until they receive a return of their initial Deemed Capital Contribution, as defined in the operating agreement, plus a preferred return ranging from 8.5% to 9.0% depending on the historical preferred return applicable to their Terra Fund units, after which time distributions are made 15% to the Manager which the Company refers to as the carried interest distribution, and 85% to the holders of Continuing Income Units. The preferred return applicable to the Continuing Income Units sold in the offering concurrent with the Merger is 8.5%. For the three months ended March 31, 2022 and 2021, the Company made total distributions to non-managing members of $3.0 million and $3.0 million, respectively. For the three months ended March 31, 2022 and 2021, the Company did not make any carried interest distributions to the Manager. Capital Redemptions At the discretion of the Manager, a reserve of 5% of cash from operations may be established in order to repurchase units from non-managing members. The Manager is under no obligation to redeem non-managing members’ units. As of March 31, 2022 and 2021, no such reserve was established. For the three months ended March 31, 2022 and 2021, the Company did not redeem any units. Allocation of Income (Loss) |
Financial Highlights
Financial Highlights | 3 Months Ended |
Mar. 31, 2022 | |
Investment Company, Financial Highlights [Abstract] | |
Financial Highlights | Note 7. Financial Highlights The financial highlights represent the per unit operating performance, return and ratios for the non-managing members’ class, taken as a whole, for the three months ended March 31, 2022 and 2021. These financial highlights consist of the operating performance, the internal rate of return (“IRR”) since inception of the Company, and the expense and net investment income ratios which are annualized except for the non-recurring expenses. The IRR, net of all fees and carried interest (if any), is computed based on actual dates of the cash inflows (capital contributions), outflows (capital distributions), and the ending capital at the end of the respective period (residual value) of the non-managing members’ capital account. The following summarizes the Company’s financial highlights for the three months ended March 31, 2022 and 2021: Three Months Ended March 31, 2022 2021 Per unit operating performance: Net asset value per unit, beginning of period $ 32,860 $ 35,467 Increase in members’ capital from operations (1) : Net investment income 95 152 Net change in unrealized appreciation on investment 153 74 Total increase in members’ capital from operations 248 226 Distributions to members (2) : Capital distributions (449) (449) Net decrease in members’ capital resulting from distributions (449) (449) Net asset value per unit, end of period $ 32,659 $ 35,244 Ratios to average net assets: Expenses 0.23 % 0.21 % Net investment income 1.13 % 1.72 % IRR, beginning of period 4.91 % 5.82 % IRR, end of period 4.86 % 5.73 % _______________ (1) The per unit data was derived by using the weighted average units outstanding during the applicable periods, which were 6,636.6 and 6,637.8 for the three months ended March 31, 2022 and 2021. (2) The per unit data for distributions reflects the actual amount of distributions paid per unit during the periods. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 8. Subsequent Events Management has evaluated subsequent events through the date the financial statements were available to be issued. Management has determined that there are no material events other than the one described below that would require adjustment to, or disclosure in, the Company’s financial statements. On May 2, 2022, Terra Property Trust, Terra Fund 6, Merger Sub, Terra Income Advisors, LLC and Terra REIT Advisors, LLC, entered into the Merger Agreement pursuant to which, subject to the terms and conditions therein, Terra Fund 6 will be merged with and into Merger Sub, with Merger Sub surviving as a wholly owned subsidiary of Terra Property Trust. Pursuant to the terms of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), except for any shares of common stock, par value $0.001 per share, of Terra Fund 6 (“Terra BDC Common Stock”) held by Terra Property Trust or any of its wholly owned subsidiary or Terra Fund 6, which will be automatically retired and cease to exist with no consideration paid therefor, each issued and outstanding share of Terra BDC Common Stock will be automatically cancelled and retired and converted into the right to receive (i) 0.595 shares (as such number may be adjusted in accordance with the Merger Agreement, the “Exchange Ratio”) of the newly designated Class B Common Stock, par value $0.01 per share, of Terra Property Trust (“Class B Common Stock”), and (ii) cash, without interest, in lieu of any fractional shares of Class B Common Stock otherwise issuable in an amount, rounded to the nearest whole cent, determined by multiplying (x) the fraction of a share of Class B Common to which such holder would otherwise be entitled by (y) $14.38. Prior to the Effective Time, Terra Property Trust will file with the State Department of Assessments and Taxation of Maryland Articles of Amendment to the Articles of Amendment and Restatement of Terra Property Trust (the “Charter Amendment”). Pursuant to the Charter Amendment, (i) the authorized shares of stock which Terra Property Trust has authority to issue will be increased from 500,000,000 to 950,000,000, consisting of 450,000,000 shares of Class A Common Stock, $0.01 par value per share (“Class A Common Stock”), 450,000,000 shares of Class B Common Stock, and 50,000,000 shares of Preferred Stock, $0.01 par value per share, and (ii) each share of Terra Property Trust’s common stock issued and outstanding immediately prior to the Effective Time will be automatically changed into one issued and outstanding share of Class B Common Stock. Except with respect to conversion, each share of Class B Common Stock will have identical preferences, rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications, and terms and conditions of redemption as each other share of Terra Property Trust’s common stock. On the date that is 180 calendar days (or, if such date is not a business day, the next business day) after the date of initial listing of shares of Class A Common Stock for trading on a national securities exchange or such earlier date as approved by Terra Property Trust’s board of directors (the “First Conversion Date”), one-third of the issued and outstanding shares of Class B Common Stock will automatically and without any action on the part of the holder thereof convert into an equal number of shares of Class A Common Stock. On the date that is 365 calendar days (or, if such date is not a business day, the next business day) after the date of initial listing of shares of Class A Common Stock for trading on a national securities exchange or such earlier date following the First Conversion Date as approved by Terra Property Trust’s board of directors (the “Second Conversion Date”), one-half of the issued and outstanding shares of Class B Common Stock will automatically and without any action on the part of the holder thereof convert into an equal number of shares of Class A Common Stock. On the date that is 545 calendar days (or, if such date is not a business day, the next business day) after the date of initial listing of shares of Class A Common Stock for trading on a national securities exchange or such earlier date following the Second Conversion Date as approved by Terra Property Trust’s board of directors, all of the issued and outstanding shares of Class B Common Stock will automatically and without any action on the part of the holder thereof convert into an equal number of shares of Class A Common Stock. Pursuant to the Merger Agreement, Terra Property Trust has agreed to take all necessary corporate action so that upon and after the Effective Time, the size of Terra Property Trust’s board of directors is increased from three to six, and three individuals designated by Terra Fund 6 (the “Terra BDC Designees”) are elected to the Board. If a Terra BDC Designee is not able or willing to serve on Terra Property Trust’s board of directors as of the Effective Time, Terra Fund 6 will select a replacement within a reasonable period of time prior to the Effective Time, and Terra Property Trust’s board of directors will elect such replacement as a member of Terra Property Trust’s board of directors as of the Effective Time. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation The interim financial statements have been prepared in accordance with United States generally accepted accounting principles (U.S. GAAP”) and include all of the Company’s accounts. The accompanying interim financial statements of the Company and related financial information have been prepared pursuant to the requirements for reporting on Form 10-Q and Articles 6 or 10 of Regulation S-X. The Company is an investment company, as defined under U.S. GAAP, and applies accounting and reporting guidance in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, Financial Services — Investment Companies |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may ultimately differ from those estimates. |
Equity Investment | Equity Investment in Terra JV Equity investment in Terra JV represents the Company’s equity interest in Terra JV, which was initially recorded at cost. Subsequent to the asset contribution, the equity investment is reported, at each reporting date, at fair value on the statements of financial condition. Change in fair value is reported in net change in unrealized appreciation or depreciation on investment on the statements of operations. |
Revenue Recognition | Revenue Recognition Dividend Income: Dividend income associated with the Company’s ownership of Terra JV or Terra Property Trust is recognized on the record date as declared by Terra JV or Terra Property Trust. Any excess of distributions over Terra JV or Terra Property Trust’s cumulative taxable net income are recorded as return of capital. Other Operating Income: All other income is recognized when earned. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments, with original maturities of ninety days or less when purchased, as cash equivalents. |
Income Taxes | Income Taxes No provision for U.S. federal and state income taxes has been made in the accompanying financial statements, as individual members are responsible for their proportionate share of the Company’s taxable income. The Company, however, may be liable for New York City Unincorporated Business Tax (the “NYC UBT”) and similar taxes of various other municipalities. New York City imposes the NYC UBT at a statutory rate of 4% on net income generated from ordinary business activities carried on in New York City. For the three months ended March 31, 2022 and 2021, none of the Company’s income was subject to the NYC UBT. Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statements and tax basis assets and liabilities using enacted tax rates in effect for the year in which differences are expected to reverse. Such deferred tax assets and liabilities were not material. The Company did not have any uncertain tax positions that met the recognition or measurement criteria of ASC 740-10-25, Income Taxes |
Fair Value Measurement | The Company adopted the provisions of ASC 820, Fair Value Measurement (“ASC 820”), which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC 820 established a fair value hierarchy that prioritizes and ranks the level of market price observability used in measuring investments at fair value. Market price observability is impacted by a number of factors, including the type of investment, the characteristics specific to the investment, and the state of the marketplace (including the existence and transparency of transactions between market participants). Investments with readily available, actively quoted prices or for which fair value can be measured from actively quoted prices in an orderly market will generally have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Investments measured and reported at fair value are classified and disclosed into one of the following categories based on the inputs as follows: Level 1 — Quoted prices (unadjusted) in active markets for identical assets and liabilities that the Company has the ability to access. Level 2 — Pricing inputs are other than quoted prices in active markets, including, but not limited to, quoted prices for similar assets and liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market corroborated inputs. Level 3 — Significant unobservable inputs are based on the best information available in the circumstances, to the extent observable inputs are not available, including the Company’s own assumptions used in determining the fair value of investments. Fair value for these investments are determined using valuation methodologies that consider a range of factors, including but not limited to the price at which the investment was acquired, the nature of the investment, local market conditions, trading values on public exchanges for comparable securities, current and projected operating performance, and financing transactions subsequent to the acquisition of the investment. The inputs into the determination of fair value require significant management judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. 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 investment. |
New Accounting Pronouncements | Recent Accounting Pronouncement London Interbank Offered Rate (“LIBOR”) is a benchmark interest rate referenced in a variety of agreements that are used by all types of entities. In July 2017, the U.K. Financial Conduct Authority, which regulates the LIBOR administrator, ICE Benchmark Administration Limited (“IBA”), announced that it would cease to compel banks to participate in setting LIBOR as a benchmark by the end of 2021, which has subsequently been delay to June 30, 2023. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) — Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). The amendments in ASU 2020-04 provide optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848), which expanded the scope of Topic 848 to include derivative instruments impacted by discounting transition (“ASU 2021-01”). ASU 2020-04 and ASU 2021-01 are effective for all entities through December 31, 2022. The expedients and exceptions provided by the amendments do not apply to contract modifications and hedging relationships entered into or evaluated after December 31, 2022, except for hedging transactions as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. In the event LIBOR is unavailable, Terra Property Trust’s investment documents provide for a substitute index, on a basis generally consistent with market practice, intended to put the Terra Property Trust in substantially the same economic position as LIBOR. As a result, the Company does not expect the reference rate reform and the adoption of ASU 2020-04 and ASU 2021-01 to have a material impact on its financial statements and disclosures |
Investment and Fair Value (Tabl
Investment and Fair Value (Tables) - Terra Property Trust | 3 Months Ended |
Mar. 31, 2022 | |
Investments | |
Summary Investment Holdings | The following tables present a summary of the Company’s investment at March 31, 2022 and December 31, 2021: March 31, 2022 December 31, 2021 Investment Cost Fair Value % of Members’ Capital Cost Fair Value % of Members’ Capital 87.6% interest in Terra JV, LLC $ 217,482,964 $ 216,121,691 99.7 % $ 219,704,515 $ 217,324,720 99.7 % |
Summary of financial information | The following tables present the summarized financial information of Terra Property Trust: March 31, 2022 December 31, 2021 Carrying value of loans held for investment $ 558,019,000 $ 469,673,314 Equity investment in unconsolidated investments 91,662,090 69,713,793 Real estate owned, net 62,448,945 65,776,839 Cash, cash equivalent and restricted cash 25,568,820 51,098,647 Other assets 34,897,190 37,279,565 Total assets 772,596,045 693,542,158 Term loan payable, unsecured notes payable, obligations under participation (448,176,646) (364,910,392) Accounts payable, accrued expenses and other liabilities (45,804,851) (45,078,478) Lease intangible liabilities (9,426,358) (9,709,710) Total liabilities (503,407,855) (419,698,580) Stockholder’s equity $ 269,188,190 $ 273,843,578 Three Months Ended March 31, 2022 2021 Revenues $ 12,112,270 $ 10,289,252 Expenses (14,241,581) (10,136,375) Realized gains on marketable securities 51,133 — Unrealized losses on marketable securities (99,044) (14,608) Equity income from unconsolidated investments 1,419,335 1,337,827 Net (loss) income $ (757,887) $ 1,476,096 |
Summary of Company's equity investment at fair value on a recurring basis | The following table summarizes the Company’s equity investment at fair value on a recurring basis as of March 31, 2022 and December 31, 2021: March 31, 2022 Fair Value Measurements Level 1 Level 2 Level 3 Total Investment: Equity investment in Terra JV $ — $ — $ 216,121,691 $ 216,121,691 December 31, 2021 Fair Value Measurements Level 1 Level 2 Level 3 Total Investment: Equity investment in Terra JV $ — $ — $ 217,324,720 $ 217,324,720 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | Changes in Level 3 investment for the three months ended March 31, 2022 and 2021 were as follows: Equity Investment in Terra JV Three Months Ended March 31, 2022 2021 Beginning balance $ 217,324,720 $ 235,357,977 Return of capital (2,221,551) (1,852,767) Net change in unrealized appreciation on investment 1,018,522 492,466 Ending balance $ 216,121,691 $ 233,997,676 Net change in unrealized appreciation on investment for the period relating to those $ 1,018,522 $ 492,466 |
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis, Valuation Techniques | The following tables summarize the valuation techniques and significant unobservable inputs used by the Company to value the Level 3 investments as of March 31, 2022 and December 31, 2021. The tables are not intended to be all-inclusive, but instead identify the significant unobservable inputs relevant to the determination of fair values. Fair Value Primary Valuation Technique Unobservable Inputs March 31, 2022 Asset Category Minimum Maximum Weighted Average Assets: Equity investment in Terra JV $ 216,121,691 Discounted cash flow (1)(2) Discount rate (1)(2) 1.90 % 15.00 % 14.74 % Fair Value Primary Valuation Technique Unobservable Inputs December 31, 2021 Asset Category Minimum Maximum Weighted Average Assets: Equity investment in Terra JV $ 217,324,720 Discounted cash flow (1)(2) Discount rate (1)(2) 2.45 % 15.00 % 12.66 % _______________ (1) Discounted cash flows and discount rates applied to Terra Property Trust’s assets and liabilities. |
Financial Highlights (Tables)
Financial Highlights (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Investment Company, Financial Highlights [Abstract] | |
Financial Highlights | The following summarizes the Company’s financial highlights for the three months ended March 31, 2022 and 2021: Three Months Ended March 31, 2022 2021 Per unit operating performance: Net asset value per unit, beginning of period $ 32,860 $ 35,467 Increase in members’ capital from operations (1) : Net investment income 95 152 Net change in unrealized appreciation on investment 153 74 Total increase in members’ capital from operations 248 226 Distributions to members (2) : Capital distributions (449) (449) Net decrease in members’ capital resulting from distributions (449) (449) Net asset value per unit, end of period $ 32,659 $ 35,244 Ratios to average net assets: Expenses 0.23 % 0.21 % Net investment income 1.13 % 1.72 % IRR, beginning of period 4.91 % 5.82 % IRR, end of period 4.86 % 5.73 % _______________ (1) The per unit data was derived by using the weighted average units outstanding during the applicable periods, which were 6,636.6 and 6,637.8 for the three months ended March 31, 2022 and 2021. (2) The per unit data for distributions reflects the actual amount of distributions paid per unit during the periods. |
Business (Details)
Business (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022USD ($)Number_of_Funds | Dec. 31, 2021 | Mar. 02, 2020USD ($)shares | |
Subsidiary of Limited Liability Company or Limited Partnership | |||
Operations Commenced Date | Aug. 8, 2013 | ||
Formation State | Delaware | ||
Formation Date | Apr. 24, 2013 | ||
LLC Exit Date | Dec. 31, 2023 | ||
Minimum | |||
Subsidiary of Limited Liability Company or Limited Partnership | |||
Investment Owned, Balance, Principal Amount | $ 10,000,000 | ||
Maximum | |||
Subsidiary of Limited Liability Company or Limited Partnership | |||
Investment Owned, Balance, Principal Amount | $ 50,000,000 | ||
Terra JV | |||
Subsidiary of Limited Liability Company or Limited Partnership | |||
Equity Method Investment, Ownership Percentage | 87.60% | 87.60% | |
Terra Property Trust | |||
Subsidiary of Limited Liability Company or Limited Partnership | |||
Common Stock, Shares, Issued | shares | 4,574,470.35 | ||
Common Stock, Value, Issued | $ 49,800,000 | ||
Cash | $ 25,500,000 | ||
Equity Method Investment, Ownership Percentage | 87.40% | 87.40% | |
Number Of Investment Funds | Number_of_Funds | 5 | ||
Equity Method Investment, Ownership Percentage | 87.40% | ||
Terra fund Seven | Terra JV | |||
Subsidiary of Limited Liability Company or Limited Partnership | |||
Equity Method Investment, Ownership Percentage | 12.40% | 12.40% | |
Terra Fund Five | Terra JV | |||
Subsidiary of Limited Liability Company or Limited Partnership | |||
Equity Method Investment, Ownership Percentage | 87.60% | ||
Equity Method Investment, Ownership Percentage | 87.60% | 87.60% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
UBT at statutory rate | 4.00% |
Open tax year start | 2018 |
Open tax year end | 2020 |
Investment and Fair Value (Narr
Investment and Fair Value (Narratives) (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022USD ($)a | Mar. 31, 2021USD ($) | Dec. 31, 2021a | |
Fair Value, Investment | |||
Return of capital on investment | $ 2,221,551 | $ 1,852,767 | |
Proceeds from Equity Method Investment, Distribution | $ 3,000,000 | $ 3,000,000 | |
Terra JV | |||
Fair Value, Investment | |||
Equity Method Investment, Ownership Percentage | 87.60% | 87.60% | |
Terra Property Trust | |||
Fair Value, Investment | |||
Equity Method Investment, Ownership Percentage | 87.40% | 87.40% | |
Equity Method Investment, Ownership Percentage | 87.40% | ||
Percent Of Common Stock Indirect Owned | 76.50% | 76.50% | |
Terra Property Trust | Estimated selling price method | |||
Fair Value, Investment | |||
Area of Land | a | 4.9 | 4.9 | |
Terra fund Seven | Terra JV | |||
Fair Value, Investment | |||
Equity Method Investment, Ownership Percentage | 12.40% | 12.40% | |
Terra Fund Five | Terra JV | |||
Fair Value, Investment | |||
Equity Method Investment, Ownership Percentage | 87.60% | ||
Equity Method Investment, Ownership Percentage | 87.60% | 87.60% |
Investment and Fair Value (Summ
Investment and Fair Value (Summary of the Investments) (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Investments | ||
Amortized Cost | $ 217,482,964 | $ 219,704,515 |
Fair Value | 216,121,691 | 217,324,720 |
Terra JV | ||
Investments | ||
Amortized Cost | 217,482,964 | 219,704,515 |
Fair Value | $ 216,121,691 | $ 217,324,720 |
% of Members Capital | 99.70% | 99.70% |
Terra JV | Level 3 | ||
Investments | ||
Fair Value | $ 216,121,691 | $ 217,324,720 |
Investment and Fair Value (Su_2
Investment and Fair Value (Summary of Financial Information of Terra Property Trust) (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Fair Value, Investment | ||||
Cash, cash equivalents and restricted cash | $ 777,694 | $ 836,052 | $ 135,654 | $ 225,214 |
Total assets | 216,930,971 | 218,194,602 | ||
Total liabilities | (185,249) | (118,025) | ||
Terra Property Trust | Equity Method Investment - Investee | ||||
Fair Value, Investment | ||||
Carrying value of loans held for investment | 558,019,000 | 469,673,314 | ||
Equity investment in unconsolidated investments | 91,662,090 | 69,713,793 | ||
Real estate owned, net | 62,448,945 | 65,776,839 | ||
Cash, cash equivalents and restricted cash | 25,568,820 | 51,098,647 | ||
Other assets | 34,897,190 | 37,279,565 | ||
Total assets | 772,596,045 | 693,542,158 | ||
Term loan payable, unsecured notes payable, obligations under participation agreements, repurchase agreement payable, mortgage loan payable, revolving line of credit and secured borrowing | (448,176,646) | (364,910,392) | ||
Accounts payable, accrued expenses and other liabilities | (45,804,851) | (45,078,478) | ||
Lease intangible liabilities | (9,426,358) | (9,709,710) | ||
Total liabilities | (503,407,855) | (419,698,580) | ||
Stockholder’s equity | $ 269,188,190 | $ 273,843,578 |
Investment and Fair Value (Su_3
Investment and Fair Value (Summary of Financial Information 2) (Details) - Terra Property Trust - Equity Method Investment - Investee - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Investments | ||
Revenues | $ 12,112,270 | $ 10,289,252 |
Operating Expenses | (14,241,581) | (10,136,375) |
Realized gains on marketable securities | 51,133 | 0 |
Unrealized losses on marketable securities | (99,044) | (14,608) |
Equity income from unconsolidated investments | 1,419,335 | 1,337,827 |
Net (loss) income | $ (757,887) | $ 1,476,096 |
Investment and Fair Value (Equi
Investment and Fair Value (Equity Investment at Fair Value on a recurring basis) (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Fair Value | $ 216,121,691 | $ 217,324,720 |
Terra JV | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Fair Value | 216,121,691 | 217,324,720 |
Level 1 | Terra JV | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Fair Value | 0 | 0 |
Level 2 | Terra JV | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Fair Value | 0 | 0 |
Level 3 | Terra JV | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Fair Value | $ 216,121,691 | $ 217,324,720 |
Investments and Fair Value (Cha
Investments and Fair Value (Changes in Level 3) (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Net change in unrealized appreciation on investment | $ 1,018,522 | $ 492,466 |
Terra JV | Level 3 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 217,324,720 | 235,357,977 |
Return of capital | (2,221,551) | (1,852,767) |
Net change in unrealized appreciation on investment | 1,018,522 | 492,466 |
Ending balance | 216,121,691 | 233,997,676 |
Net change in unrealized appreciation on investment for the period relating to those Level 3 assets that were still held by the Company | $ 1,018,522 | $ 492,466 |
Investment and Fair Value (Valu
Investment and Fair Value (Valuation techniques and significant unobservable inputs) (Details) | Mar. 31, 2022USD ($) | Dec. 31, 2021USD ($) |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value | $ 216,121,691 | $ 217,324,720 |
Terra JV | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value | 216,121,691 | 217,324,720 |
Level 3 | Terra JV | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value | $ 216,121,691 | $ 217,324,720 |
Level 3 | Terra JV | Discount Rate | Discounted Cash Flow | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Discount rate | 0.0190 | 0.0245 |
Level 3 | Terra JV | Discount Rate | Discounted Cash Flow | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Discount rate | 0.1500 | 0.1500 |
Level 3 | Terra JV | Discount Rate | Discounted Cash Flow | Weighted Average | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Discount rate | 0.1474 | 0.1266 |
Investment and Fair Value (Va_2
Investment and Fair Value (Valuation techniques and significant unobservable inputs) - subnote (Details) | Mar. 31, 2022a | Dec. 31, 2021a |
Terra JV | Cap rate | Direct Capitalization Method | Office Building | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Discount rate | 0.0525 | 0.0525 |
Terra JV | Cap rate | Direct Capitalization Method | Office Building | Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Discount rate | 0.0600 | 0.0600 |
Terra Property Trust | Estimated selling price method | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Area of Land | 4.9 | 4.9 |
Related Party Transactions - Op
Related Party Transactions - Operating agreement and dividend income (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Investments | ||
LLC Exit Date | Dec. 31, 2023 | |
Proceeds from Equity Method Investment, Distribution | $ 3,000,000 | $ 3,000,000 |
Return of capital on investment | $ 2,221,551 | $ 1,852,767 |
Members' Capital - Narratives (
Members' Capital - Narratives (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Members Capital | ||||
Net asset value per unit | $ 32,659 | $ 35,244 | $ 32,860 | $ 35,467 |
Capital distributions | $ 2,979,046 | $ 2,979,582 | ||
Common Unit, Outstanding | 6,636.6 | 6,636.6 | ||
Managing | ||||
Members Capital | ||||
Carried interest distributions to the Manager | 0 | 0 | ||
Distribution Percent | 15.00% | |||
Capital distributions | $ 0 | $ 0 | ||
Non-managing Members | ||||
Members Capital | ||||
Percent Of Cash Repurchase Capital Units | 5.00% | |||
Cash repurchase reserve | $ 0 | 0 | ||
Capital distributions | $ 2,979,046 | $ 2,979,582 | ||
Continuing Income Units Holder | ||||
Members Capital | ||||
Percent of distribution made to members depends on the historical preferred return applicale to Terra Fund units | 8.50% | |||
Distribution Percent | 85.00% | |||
Continuing Income Units Holder | Minimum | ||||
Members Capital | ||||
Percent of distribution made to members depends on the historical preferred return applicale to Terra Fund units | 8.50% | |||
Continuing Income Units Holder | Maximum | ||||
Members Capital | ||||
Percent of distribution made to members depends on the historical preferred return applicale to Terra Fund units | 9.00% |
Financial Highlights (Details)
Financial Highlights (Details) - $ / shares | 3 Months Ended | 89 Months Ended | 92 Months Ended | 101 Months Ended | 104 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2021 | Dec. 31, 2021 | Mar. 31, 2022 | |
Investment Company, Financial Highlights [Roll Forward] | ||||||
Net asset value per unit | $ 32,860 | $ 35,467 | ||||
Increase in members’ capital from operations (1): | ||||||
Net investment income | 95 | 152 | ||||
Net change in unrealized appreciation on investment | 153 | 74 | ||||
Total increase in members’ capital from operations | 248 | 226 | ||||
Distributions to members (2): | ||||||
Capital distributions | (449) | (449) | ||||
Net decrease in members’ capital resulting from distributions | (449) | (449) | ||||
Net asset value per unit | $ 32,659 | $ 35,244 | $ 35,467 | $ 35,244 | $ 32,860 | $ 32,659 |
Ratios to average net assets: | ||||||
Expenses | 0.23% | 0.21% | ||||
Net investment income | 1.13% | 1.72% | ||||
Internal Rate of Return since Inception | 5.82% | 5.73% | 4.91% | 4.86% | ||
Weighted average units outstanding | 6,636.6 | 6,637.8 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | May 02, 2022 | May 01, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Jan. 01, 2016 |
Subsequent Event | |||||||
Cash and cash equivalents | $ 777,694 | $ 836,052 | $ 135,654 | $ 225,214 | |||
Terra Property Trust | |||||||
Subsequent Event | |||||||
Common Stock, Par or Stated Value Per Share | $ 0.01 | ||||||
Subsequent Event | Terra Fund 6 | |||||||
Subsequent Event | |||||||
Common Stock, Par or Stated Value Per Share | $ 0.001 | ||||||
Subsequent Event | Terra Property Trust | |||||||
Subsequent Event | |||||||
Common Stock, Shares Authorized | 950,000,000 | 500,000,000 | |||||
Preferred Stock, Shares Authorized | 50,000,000 | ||||||
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | ||||||
Subsequent Event | Terra Property Trust | Class A common shares | |||||||
Subsequent Event | |||||||
Common Stock, Shares Authorized | 450,000,000 | ||||||
Common Stock, Par or Stated Value Per Share | $ 0.01 | ||||||
Subsequent Event | Terra Property Trust | Class B Common Share | |||||||
Subsequent Event | |||||||
Common Stock, Shares Authorized | 450,000,000 | ||||||
Common Stock, Par or Stated Value Per Share | $ 0.01 | ||||||
Conversion of Stock, Shares Converted | 0.595 | ||||||
Business Acquisition Share Conversion Rate | $ 14.38 |