Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 30, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-38199 | |
Entity Registrant Name | Tremont Mortgage Trust | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 82-1719041 | |
Entity Address, Address Line One | Two Newton Place | |
Entity Address, Address Line Two | 255 Washington Street | |
Entity Address, Address Line Three | Suite 300 | |
Entity Address, City or Town | Newton | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 02458-1634 | |
City Area Code | 617 | |
Local Phone Number | 796-8317 | |
Title of 12(b) Security | Common Shares of Beneficial Interest | |
Trading Symbol | TRMT | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Smaller Business Entity | true | |
Emerging Growth Company | true | |
Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 8,239,226 | |
Entity Central Index Key | 0001708405 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
ASSETS | ||
Cash and cash equivalents | $ 10,204 | $ 8,732 |
Restricted cash | 3 | 143 |
Loans held for investment, net | 271,487 | 242,078 |
Accrued interest receivable | 953 | 755 |
Prepaid expenses and other assets | 193 | 221 |
Total assets | 282,840 | 251,929 |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||
Accounts payable, accrued liabilities and deposits | 908 | 1,011 |
Master repurchase facility, net | 195,566 | 164,694 |
Due to related persons | 334 | 3 |
Total liabilities | 196,808 | 165,708 |
Commitments and contingencies | ||
Shareholders' equity: | ||
Common shares of beneficial interest, $0.01 par value per share; 25,000,000 shares authorized; 8,239,226 and 8,239,610 shares issued and outstanding, respectively | 82 | 82 |
Additional paid in capital | 88,909 | 88,869 |
Cumulative net income | 3,603 | 1,937 |
Cumulative distributions | (6,562) | (4,667) |
Total shareholders’ equity | 86,032 | 86,221 |
Total liabilities and shareholders' equity | $ 282,840 | $ 251,929 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common shares of beneficial interest, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common shares of beneficial interest, shares authorized | 25,000,000 | 25,000,000 |
Common shares of beneficial interest, shares issued | 8,239,226 | 8,239,610 |
Common shares of beneficial interest, shares outstanding | 8,239,226 | 8,239,610 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
INCOME FROM INVESTMENTS: | ||
Interest income from investments | $ 4,284 | $ 3,000 |
Less: interest and related expenses | (1,757) | (1,549) |
Income from investments, net | 2,527 | 1,451 |
OTHER EXPENSES: | ||
General and administrative expenses | 540 | 503 |
Reimbursement of shared services expenses | 321 | 370 |
Total expenses | 861 | 873 |
Net income | $ 1,666 | $ 578 |
Weighted average common shares outstanding - basic (in shares) | 8,169 | 3,136 |
Weighted average common shares outstanding - diluted (in shares) | 8,169 | 3,142 |
Net income per common share - basic and diluted (in dollars per share) | $ 0.20 | $ 0.18 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY - USD ($) $ in Thousands | Total | Common Shares | Additional Paid In Capital | Cumulative Net Loss | Cumulative Distributions |
Beginning balance (in shares) at Dec. 31, 2018 | 3,179,000 | ||||
Beginning balance at Dec. 31, 2018 | $ 59,668 | $ 32 | $ 62,540 | $ (2,904) | $ 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Share grants (in shares) | 0 | ||||
Share grants | 35 | 35 | |||
Net income | 578 | 578 | |||
Distributions | (350) | (350) | |||
Ending balance (in shares) at Mar. 31, 2019 | 3,179,000 | ||||
Ending balance at Mar. 31, 2019 | $ 59,931 | $ 32 | 62,575 | (2,326) | (350) |
Beginning balance (in shares) at Dec. 31, 2019 | 8,239,610 | 8,240,000 | |||
Beginning balance at Dec. 31, 2019 | $ 86,221 | $ 82 | 88,869 | 1,937 | (4,667) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Share grants (in shares) | 0 | ||||
Share grants | 42 | 42 | |||
Share repurchases (in shares) | (1,000) | ||||
Share repurchases | (2) | (2) | |||
Net income | 1,666 | 1,666 | |||
Distributions | $ (1,895) | (1,895) | |||
Ending balance (in shares) at Mar. 31, 2020 | 8,239,226 | 8,239,000 | |||
Ending balance at Mar. 31, 2020 | $ 86,032 | $ 82 | $ 88,909 | $ 3,603 | $ (6,562) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 1,666 | $ 578 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Share based compensation | 42 | 35 |
Amortization of deferred financing costs | 119 | 100 |
Amortization of loan origination and exit fees | (462) | (294) |
Changes in operating assets and liabilities: | ||
Accrued interest receivable | (231) | (339) |
Prepaid expenses and other assets | 28 | 111 |
Accounts payable, accrued liabilities and deposits | (185) | 186 |
Due to related persons | 331 | (126) |
Net cash provided by operating activities | 1,308 | 251 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Origination of loans held for investment | (25,738) | (44,105) |
Additional funding of loans held for investment | (3,176) | (668) |
Net cash used in investing activities | (28,914) | (44,773) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from master repurchase facility | 30,806 | 31,866 |
Payments of deferred financing costs | (53) | (1) |
Repurchase of common shares | (2) | 0 |
Distributions | (1,813) | (350) |
Net cash provided by financing activities | 28,938 | 31,515 |
Increase (decrease) in cash, cash equivalents and restricted cash | 1,332 | (13,007) |
Cash, cash equivalents and restricted cash at beginning of period | 8,875 | 27,335 |
Cash, cash equivalents and restricted cash at end of period | 10,207 | 14,328 |
SUPPLEMENTAL DISCLOSURES: | ||
Interest paid | 1,660 | 1,336 |
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows | $ 10,207 | $ 14,328 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements of Tremont Mortgage Trust and its consolidated subsidiaries are unaudited. Certain information and disclosures required by U.S. generally accepted accounting principles, or GAAP, for complete financial statements have been condensed or omitted. We believe the disclosures made are adequate to make the information presented not misleading. However, the accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes contained in our Annual Report on Form 10-K for the year ended December 31, 2019 or our 2019 Annual Report. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement of results for the interim period have been included. All intercompany transactions and balances with or among our consolidated subsidiaries have been eliminated. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect reported amounts. Actual results could differ from those estimates. Significant estimates in the accompanying condensed consolidated financial statements include the fair value of financial instruments. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Consolidation. For each investment we make, we evaluate whether consolidation of the borrower's financial statements is required under GAAP. GAAP addresses the application of consolidation principles to an investor with a controlling financial interest. Variable interest entities, or VIEs, are subject to consolidation under GAAP if their equity investors do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties, are not able to direct the entity’s most significant activities or are not exposed to the entity’s losses or entitled to its residual returns. VIEs are required to be consolidated by their primary beneficiaries, which are the entities with the power to direct the activities which are most significant to the economic performance of the VIE. These determinations often involve complex and subjective analyses. As of March 31, 2020 , we concluded that our investments were not VIEs. Cash, Cash Equivalents and Restricted Cash. We consider highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. Restricted cash primarily consists of deposit proceeds from potential borrowers when originating loans, which may be returned to the applicable borrower upon the closing of the loan, after deducting any transaction costs paid by us for the benefit of such borrower. Repurchase Agreements. Loans financed through repurchase agreements are treated as collateralized financing transactions, unless they meet sales treatment under GAAP. Pursuant to GAAP treatment of collateralized financing transactions, loans financed through repurchase agreements remain on our consolidated balance sheet as assets, and cash received from the purchasers is recorded on our consolidated balance sheet as liabilities. Interest paid in accordance with repurchase agreements is recorded as interest expense. Loans Held for Investment. Generally, our loans are classified as held for investment based upon our intent and ability to hold them until maturity. Loans that are held for investment are carried at cost, net of unamortized loan origination and accreted exit fees that are required to be recognized in the carrying value of the loans in accordance with GAAP, unless the loans are deemed to be impaired. Loans that we have a plan to sell or liquidate are held at the lower of cost or fair value less cost to sell. We evaluate each of our loans for impairment at least quarterly by assessing a variety of risk factors in relation to each loan and assigning a risk rating to each loan based on those factors. Factors considered in these evaluations include, but are not limited to, property type, geographic and local market dynamics, physical condition, leasing and tenant profile, projected cash flow, risk of loss, current loan to value ratio, or LTV, debt yield, collateral performance, structure, exit plan and sponsorship. Loans are rated “1” (less risk) through “5” (greater risk) as defined below: "1" lower risk—Criteria reflects a sponsor having a strong financial condition and low credit risk and our evaluation of management's experience; collateral performance exceeding performance metrics included in the business plan or credit underwriting; and the property demonstrating stabilized occupancy and/or market rates, resulting in strong current cash flow and net operating income and/or having a very low LTV. "2" average risk—Criteria reflects a sponsor having a stable financial condition and our evaluation of management's experience; collateral performance meeting or exceeding substantially all performance metrics included in the business plan or credit underwriting; and the property demonstrating improved occupancy at market rents, resulting in sufficient current cash flow and/or having a low LTV. "3" acceptable risk—Criteria reflects a sponsor having a history of repaying loans at maturity and meeting its credit obligations and our evaluation of management's experience; collateral performance expected to meet performance metrics included in the business plan or credit underwriting; and the property having a moderate LTV. New loans and loans with a limited history will typically be assigned this rating and will be adjusted to other levels from time to time as appropriate. "4" higher risk—Criteria reflects a sponsor having a history of unresolved missed or late payments, maturity extensions and difficulty timely fulfilling its credit obligations and our evaluation of management's experience; collateral performance failing to meet the business plan or credit underwriting; the existence of a risk of default possibly leading to a loss and/or potential weaknesses that deserve management’s attention; and/or the property having a high LTV. "5" impaired/loss likely—Criteria reflects a very high risk of realizing a principal loss or having incurred a principal loss; a sponsor having a history of default payments, trouble fulfilling its credit obligations, deeds in lieu of foreclosures, and/or bankruptcies; collateral performance is significantly worse than performance metrics included in the business plan; loan covenants or performance milestones having been breached or not attained; timely exit via sale or refinancing being uncertain; and/or the property having a very high LTV. See Note 4 for further information regarding our current loan portfolio’s assessment under our internal risk rating policy. Impairment occurs when it is deemed probable that we will not be able to collect all amounts due under a loan according to its contractual terms. Impairment will then be measured based on the present value of expected future cash flows discounted at the loan’s contractual effective rate and the fair value of any available collateral, net of any costs we expect to incur to realize that value. The determination of whether loans are impaired involves judgments and assumptions based on objective and subjective factors. Consideration will be given to various factors, such as business plans, property occupancies, tenant profiles, rental rates, operating expenses and borrowers’ repayment plans, among others, and will require significant judgments, including assumptions regarding the values of loans, the values of underlying collateral and other circumstances, such as guarantees, if any. Upon measurement of an impairment, we will record an allowance to reduce the carrying value of the loan accordingly, and record a corresponding charge to net income in our condensed consolidated statements of operations. Fair Value of Financial Instruments. Financial Accounting Standards Board, or FASB, Accounting Standards Codification TM , or ASC, Topic 820-10, Fair Value Measurements and Disclosures , defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands the required disclosure regarding fair value measurements. ASC Topic 820-10 defines fair value as the price that would be received for a financial instrument in a current sale, which assumes an orderly transaction between market participants on the measurement date. We determine the estimated fair value of financial assets and liabilities using the three-tier fair value hierarchy established by GAAP, which prioritizes the inputs used in measuring fair value. GAAP establishes market based or observable inputs as the preferred source of values followed by valuation models using management assumptions in the absence of market inputs. The three levels of inputs that may be used to measure fair value are as follows: Level I—Inputs include quoted prices in active markets for identical assets or liabilities that we have the ability to access. Level II—Inputs include quoted prices in markets that are less active or inactive or for which all significant inputs are observable, either directly or indirectly. Level III—Inputs include unobservable prices and are supported by little or no market activity and are significant to the overall fair value measurement. Loan Deferred Fees. Loan origination and exit fees are reflected in loans held for investment, net, in our condensed consolidated balance sheets and include fees charged to borrowers. These fees are amortized and accreted, respectively, into interest income over the life of the related loans held for investment. Deferred Financing Costs. Costs incurred in connection with financings are capitalized and recorded as an offset to the related liability and amortized over the respective financing terms and are recorded in our consolidated statements of operations as a component of interest and related expenses. At March 31, 2020 , we had approximately $778 of capitalized financing costs, net of amortization. Net Earnings Per Common Share. We calculate basic earnings per common share, or EPS, by dividing net income by the weighted average number of common shares outstanding during the period. We calculate diluted net EPS using the more dilutive of the two-class method or the treasury stock method. Revenue Recognition. Interest income related to our first mortgage whole loans secured by commercial real estate, or CRE, will generally be accrued based on the coupon rates applied to the outstanding principal balance of such loans. Fees, premiums and discounts, if any, will be amortized or accreted into interest income over the remaining lives of the loans using the effective interest method, as adjusted for any prepayments. If a loan's interest or principal payments are not paid when due and there is uncertainty that such payments will be collected, the loan may be categorized as non-accrual and no interest will be recorded unless it is collected. When all overdue payments are collected and, in our judgment, a loan is likely to remain current, it may be re-categorized as accrual. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, FASB issued Accounting Standards Update, or ASU, No. 2016-13, Financial Instruments - Credit Losses (Topic 326) : Measurement of Credit Losses on Financial Instruments , which requires that entities use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowance for credit losses. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. ASU No. 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. As an emerging growth company that has opted to take advantage of the extended transition period, we expect to adopt ASU No. 2016-13 on January 1, 2023. We are currently assessing the potential impact the adoption of ASU No. 2016-13 will have on our condensed consolidated financial statements. |
Loans Held for Investment
Loans Held for Investment | 3 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
Loans Held for Investment | Loans Held for Investment We originate first mortgage whole loans secured by middle market and transitional CRE, which are generally to be held as long term investments. We funded our existing loan portfolio using cash on hand and advancements under our master repurchase facility with Citibank, N.A., or Citibank, or our Master Repurchase Facility, and other debt financing. See Note 5 for further information regarding our Master Repurchase Facility. The table below details overall statistics for our loan portfolio as of March 31, 2020 and December 31, 2019: Balance at March 31, 2020 Balance at December 31, 2019 Number of loans 14 12 Total loan commitments $ 296,987 $ 260,167 Unfunded loan commitments (1) $ 24,753 $ 17,268 Principal balance $ 272,234 $ 242,899 Unamortized net deferred origination fees $ (747 ) $ (821 ) Carrying value $ 271,487 $ 242,078 Weighted average coupon rate 5.70 % 5.76 % Weighted average all in yield (2) 6.40 % 6.41 % Weighted average maximum maturity (years) (3) 3.4 3.6 Weighted average LTV 68 % 70 % (1) Unfunded commitments will primarily be funded to finance property and building improvements and leasing capital. These commitments will generally be funded over the term of each loan. (2) All in yield includes the amortization of deferred fees over the initial term of the loan. (3) Maximum maturity assumes all extension options are exercised, which options are subject to the borrower meeting certain conditions. The table below details our loan activities during the three months ended March 31, 2020: Principal Balance Deferred Fees Carrying Value Balance at December 31, 2019 $ 242,899 $ (821 ) $ 242,078 Additional funding 3,209 — 3,209 Originations 26,126 (388 ) 25,738 Net amortization of deferred fees — 462 462 Balance at March 31, 2020 $ 272,234 $ (747 ) $ 271,487 The tables below detail the property type and geographic distribution of the properties securing the loans in our portfolio as of March 31, 2020 and December 31, 2019: March 31, 2020 December 31, 2019 Property Type Number of Loans Carrying Value Percentage of Value Number of Loans Carrying Value Percentage of Value Office 5 $ 84,986 31 % 4 $ 71,446 30 % Hotel 1 23,817 9 % 1 23,101 10 % Retail 3 44,827 17 % 3 43,782 18 % Multifamily 3 69,043 25 % 3 68,911 28 % Industrial 2 48,814 18 % 1 34,838 14 % 14 $ 271,487 100 % 12 $ 242,078 100 % March 31, 2020 December 31, 2019 Geographic Location Number of Loans Carrying Value Percentage of Value Number of Loans Carrying Value Percentage of Value East 5 $ 104,123 37 % 4 $ 90,047 37 % South 5 104,598 39 % 5 103,295 43 % West 1 9,751 4 % 1 9,014 4 % Midwest 3 53,015 20 % 2 39,722 16 % 14 $ 271,487 100 % 12 $ 242,078 100 % Loan Risk Ratings As further described in Note 2, we evaluate each of our loans for impairment at least quarterly by assessing a variety of risk factors in relation to each loan and assigning a risk rating to each loan based on those factors. The following table allocates the carrying value of our loan portfolio at March 31, 2020 based on our internal risk rating policy: Risk Rating Number of Loans Carrying Value 1 — $ — 2 1 24,505 3 7 132,633 4 6 114,349 5 — — 14 $ 271,487 The weighted average risk rating of our loans by carrying value was 3.3 and 2.9 as of March 31, 2020 and December 31, 2019, respectively. The impact from the COVID-19 pandemic has negatively impacted some of our borrowers’ business operations or tenants, particularly in the cases of our retail, hospitality and office property collateral with exposure to the oil and gas industries, which are the types of properties that have been highly impacted by the pandemic. We expect that those negative impacts may continue and apply to other borrowers and their tenants. Therefore, certain of our borrowers’ business plans will likely take longer to execute than initially expected and certain of our borrowers may be unable to pay their debt service obligations owed to us as currently scheduled. As a result, we have downgraded six loans representing 42% of the carrying value of our loan portfolio to a loan risk rating of “4” or “higher risk”. We did not have any impaired loans or nonaccrual loans as of March 31, 2020 or December 31, 2019. However, subsequent to March 31, 2020, a borrower under one of our loans secured by a retail property that had been downgraded to "4" or "higher risk", as noted above, requested relief from its debt service obligation owed to us and failed to make its April 2020 debt servicing obligation, resulting in a default under the loan agreement. See Note 13 for further information regarding these requests. |
Debt Agreements
Debt Agreements | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt Agreements | Debt Agreements The table below is an overview of our debt agreements that provided financing for our loans held for investment: Debt Obligation Weighted Average Collateral Maximum Facility Size Principal Balance Carrying Value Coupon Rate Remaining Maturity (1) (years) Principal Balance Fair Value (2) March 31, 2020: Master repurchase facility $ 213,482 $ 196,344 $ 195,566 L + 2.00% 1.4 $ 272,234 $ 268,450 December 31, 2019: Master repurchase facility $ 213,482 $ 165,536 $ 164,694 L + 1.99% 1.6 $ 242,899 $ 242,763 (1) The weighted average remaining maturity is determined using the current maturity date of the corresponding loans, excluding extension options. (2) See Note 6 for further discussion of our financial assets and liabilities not carried at fair value. Under the agreements that govern our Master Repurchase Facility, or collectively, as amended, our Master Repurchase Agreement, the initial purchase price paid by Citibank for each purchased asset is up to 75% of the lesser of the market value of the purchased asset or the unpaid principal balance of such purchased asset, subject to Citibank’s approval. Upon the repurchase of a purchased asset, we are required to pay Citibank the outstanding purchase price of the purchased asset, accrued interest and all accrued and unpaid expenses of Citibank relating to such purchased asset. The price differential (or interest rate) relating to a purchased asset is equal to LIBOR plus a premium of 200 to 250 basis points, determined by the yield of the purchased asset and the property type of the purchased asset’s real estate collateral. Citibank has the discretion under our Master Repurchase Agreement to make advancements at margins higher than 75% and at premiums of less than 200 basis points. The weighted average interest rate for advancements under our Master Repurchase Facility was 3.50% and 4.47% for the three months ended March 31, 2020 and 2019 , respectively. For the three months ended March 31, 2020 and 2019, we recorded interest expense of $1,638 and $1,084 , respectively, in connection with our Master Repurchase Facility. In connection with our Master Repurchase Agreement, we entered into a guaranty, or, as amended, the Guaranty, which requires us to guarantee 25% of our subsidiary's prompt and complete payment of the purchase price, purchase price differential and any costs and expenses of Citibank related to our Master Repurchase Agreement. The Guaranty also requires us to comply with customary financial covenants, which include the maintenance of a minimum tangible net worth, minimum cash liquidity, a total indebtedness to tangible net worth ratio and a minimum interest coverage ratio. These maintenance provisions provide Citibank with the right, in certain circumstances related to a credit event, as defined in our Master Repurchase Agreement, to re-determine the value of purchased assets. Where a decline in the value of purchased assets has resulted in a margin deficit, Citibank may require us to eliminate such margin deficit through a combination of purchased asset repurchases and cash transfers to Citibank, subject to Citibank's approval. As of March 31, 2020, we have not received a margin call under our Master Repurchase agreement. Our Master Repurchase Agreement also provides for acceleration of the date of repurchase of the purchased assets and Citibank’s liquidation of the purchased assets upon the occurrence and continuation of certain events of default, including a change of control of us, which includes our Tremont Realty Advisors LLC, or our Manager, ceasing to act as our sole manager or to be a wholly owned subsidiary of The RMR Group LLC, or RMR LLC. As of March 31, 2020 , we were in compliance with all of the covenants and other terms under our Master Repurchase Agreement and the Guaranty. From July 2018 until August 2019, we were a party to a term loan facility, in the form of a note payable, with Texas Capital Bank, National Association, or the TCB note payable. Following our repayment of the $31,790 outstanding principal and accrued interest under the TCB note payable, the TCB note payable terminated in accordance with its terms. We recorded $368 of interest expense for the three months ended March 31, 2019 in connection with the TCB note payable. At March 31, 2020 , our outstanding advancements under our Master Repurchase Facility had the following remaining maturities: Year Principal Payments (1) 2020 $ 28,910 2021 167,434 2022 — 2023 — 2024 — $ 196,344 (1) The allocation of our outstanding advancements under our Master Repurchase Facility is based on the current maturity date of each loan investment with respect to which the individual borrowing relates. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments ASC 820, Fair Value Measurements , establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities (Level I), and the lowest priority to unobservable inputs (Level III). A financial asset’s or financial liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. As of March 31, 2020 and December 31, 2019 , the carrying values of cash and cash equivalents, restricted cash and accounts payable approximated their fair values due to the short term nature of these financial instruments. As of March 31, 2020 and December 31, 2019 , the outstanding principal balances under our Master Repurchase Facility approximated their fair values, as interest was based on floating rates based on LIBOR plus a spread, and the spread was consistent with those demanded by the market. We estimate the fair values of our loans held for investment by using Level III inputs, including discounted cash flow analyses and currently prevailing market terms as of the measurement date, determined by significant unobservable market inputs, which include holding periods, discount rates based on LTV, property types and loan pricing expectations which are corroborated by a comparison with other market participants to determine the appropriate market spread to add to the one month LIBOR (Level III inputs as defined in the fair value hierarchy under GAAP). The table below provides information regarding financial assets and liabilities not carried at fair value on a recurring basis in our condensed consolidated balance sheets: March 31, 2020 December 31, 2019 Carrying Value Fair Value Carrying Value Fair Value Financial assets Loans held for investment $ 271,487 $ 268,450 $ 242,078 $ 242,763 Financial liabilities Master repurchase facility $ 195,566 $ 196,344 $ 164,694 $ 165,536 There were no transfers of financial assets or liabilities within the fair value hierarchy during the three months ended March 31, 2020 |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders' Equity Common Share Issuances and Repurchases On January 9, 2020, we purchased an aggregate of 384 of our common shares, valued at $5.33 per common share, the closing price of our common shares on The Nasdaq Stock Market LLC, or Nasdaq, on that day, from former officers and employees of RMR LLC in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares. Distributions During the three months ended March 31, 2020 , we declared and paid a quarterly distribution to common shareholders as follows: Record Date Payment Date Distribution Per Share Total Distribution January 27, 2020 February 20, 2020 $0.22 $1,813 On March 31, 2020 , we declared a quarterly distribution of $0.01 per common share, or approximately $82 , to shareholders of record on April 10, 2020. We expect to pay this distribution on or about May 21, 2020 . |
Management Agreement with our M
Management Agreement with our Manager | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Management Agreement with our Manager | Management Agreement with our Manager We have no employees. The personnel and various services we require to operate our business are provided to us by our Manager pursuant to a management agreement, which provides for the day to day management of our operations by our Manager, subject to the oversight and direction of our Board of Trustees. We did not recognize any base management or incentive fees for the three months ended March 31, 2020 or 2019. Our Manager waived any base management or incentive fees otherwise due and payable by us under our management agreement through the period ending June 30, 2020. If our Manager had not waived these base management and incentive fees, we would have recognized $320 and $223 of base management fees for the three months ended March 31, 2020 and 2019 , respectively, and no incentive fees would have been paid or payable for either of the three months ended March 31, 2020 and 2019 . Our Manager, and not us, is responsible for the costs of its employees who provide services to us, including the cost of our Manager’s personnel who originate our loans, unless any such payment or reimbursement is specifically approved by a majority of our Independent Trustees, is a shared services cost or relates to awards made under any equity compensation plan adopted by us. We are required to pay or to reimburse our Manager and its affiliates for all other costs and expenses of our operations. Some of these overhead, professional and other services are provided by RMR LLC pursuant to a shared services agreement between our Manager and RMR LLC. We reimburse our Manager for shared services costs our Manager pays to RMR LLC and its affiliates. These reimbursements include an allocation of the cost of personnel employed by RMR LLC and our share of RMR LLC’s costs for providing our internal audit function. These shared services costs are subject to approval by a majority of our Independent Trustees at least annually. We incurred shared services costs of $359 and $402 payable to our Manager for the three months ended March 31, 2020 and 2019 , respectively. We include these amounts in reimbursement of shared services expenses or general and administrative expenses, as applicable, in our condensed consolidated statements of operations. |
Related Person Transactions
Related Person Transactions | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Person Transactions | Related Person Transactions We have relationships and historical and continuing transactions with our Manager, RMR LLC, The RMR Group Inc., or RMR Inc., and others related to them, including other companies to which RMR LLC or its subsidiaries provide management services and some of which have trustees, directors or officers who are also our Trustees or officers. Our Manager is a subsidiary of RMR LLC, which is a majority owned subsidiary of RMR Inc., and RMR Inc. is the managing member of RMR LLC. RMR LLC provides certain shared services to our Manager which are applicable to us, and we reimburse our Manager for the amounts it pays for those services. One of our Managing Trustees, Adam Portnoy, is the sole trustee, an officer and the controlling shareholder of ABP Trust, which is the controlling shareholder of RMR Inc., and he is also a director of our Manager, a managing director and the president and chief executive officer of RMR Inc., and an officer and employee of RMR LLC. David M. Blackman, our other Managing Trustee and our President and Chief Executive Officer, also serves as a director and the president, and chief executive officer of our Manager and is an officer and employee of RMR LLC, and each of our other officers is also an officer and/or employee of our Manager or RMR LLC. Our Independent Trustees also serve as independent directors or independent trustees of the RMR Real Estate Income Fund and of other public companies to which RMR LLC or its subsidiaries provide management services. Adam Portnoy serves as the chair of the boards of trustees and boards of directors of several of these public companies and as a managing director or managing trustee of all of these companies and other officers of RMR LLC, including Mr. Blackman and certain of our other officers, serve as managing trustees, managing directors or officers of certain of these companies. In addition, officers of our Manager, RMR LLC and RMR Inc. serve as our officers and officers of other companies to which RMR LLC or its subsidiaries provide management services. Our Manager, Tremont Realty Advisors LLC . We have a management agreement with our Manager to provide management services to us. See Note 8 for further information regarding our management agreement with our Manager. We were formerly a 100% owned subsidiary of our Manager. Our Manager is our largest shareholder and, as of March 31, 2020 , owned 1,600,100 of our common shares or approximately 19.4% of our outstanding common shares. Until May 23, 2019, we were a party to a credit agreement with our Manager as lender, or the RMR Credit Agreement. For further information about these and other such relationships and certain other related person transactions, refer to our 2019 Annual Report. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We have elected to be taxed as a real estate investment trust, or REIT, under the Internal Revenue Code of 1986, as amended, or the IRC. Accordingly, we generally are not, and will not be, subject to U.S. federal income tax, provided that we meet certain distribution and other requirements. We are subject to certain state and local taxes, certain of which amounts are or will be reported as income taxes in our condensed consolidated statements of operations. |
Weighted Average Common Shares
Weighted Average Common Shares | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Weighted Average Common Shares | Weighted Average Common Shares Unvested share awards and other potentially dilutive common share issuances and the related impact on earnings, are considered when calculating diluted EPS. The table below provides a reconciliation of the weighted average number of common shares used in the calculation of basic and diluted EPS (amounts in thousands): For the Three Months Ended March 31, 2020 2019 Weighted average common shares for basic earnings per share 8,169 3,136 Effect of dilutive securities: unvested share awards (1) — 6 Weighted average common shares for diluted earnings per share 8,169 3,142 (1) For the three months ended March 31, 2020 , 22 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Unfunded Commitments As of March 31, 2020 , we had unfunded commitments of $24,753 related to our loans held for investment. These commitments are not reflected in our condensed consolidated balance sheets. Loans held for investment related to our unfunded commitments had a weighted average initial maturity of 1.7 years. See Note 4 for further information related to loans held for investment. Secured Borrowings As of March 31, 2020 , we had an aggregate of $ 196,344 in principal amount outstanding under our Master Repurchase Facility with a weighted average life to maturity of 1.4 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The borrower under our loan related to a property located in Coppell, TX requested relief from its debt service obligation owed to us and failed to make its April 2020 debt service payment by the scheduled due date, resulting in a default under the loan agreement. This full recourse loan has an outstanding principal balance of $22,204, which accounts for approximately 8.2% of the aggregate outstanding principal balance of our loan portfolio. In response to this default, we implemented a cash flow sweep on this borrower's accounts and the loan agreement was modified to increase the interest reserve balance that may be used to make interest payments, if needed, and to waive the default. Before this loan modification and related waiver of default become effective, the borrower is required to pay us rent it collected for April 2020 to fulfill a portion of its debt service obligation. As of May 1, 2020, the borrower has not yet fulfilled this obligation . We have not recorded an allowance for loan loss with respect to this investment because we believe it is probable that we will ultimately collect all outstanding loan amounts due under this loan. As of May 1, 2020, all of our other borrowers have paid all of their debt service obligations owed to us and none of the other loans included in our investment portfolio are in default. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Consolidation. For each investment we make, we evaluate whether consolidation of the borrower's financial statements is required under GAAP. GAAP addresses the application of consolidation principles to an investor with a controlling financial interest. Variable interest entities, or VIEs, are subject to consolidation under GAAP if their equity investors do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties, are not able to direct the entity’s most significant activities or are not exposed to the entity’s losses or entitled to its residual returns. VIEs are required to be consolidated by their primary beneficiaries, which are the entities with the power to direct the activities which are most significant to the economic performance of the VIE. These determinations often involve complex and subjective analyses. As of March 31, 2020 , we concluded that our investments were not VIEs. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash. We consider highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. Restricted cash primarily consists of deposit proceeds from potential borrowers when originating loans, which may be returned to the applicable borrower upon the closing of the loan, after deducting any transaction costs paid by us for the benefit of such borrower. |
Repurchase Agreements | Repurchase Agreements. Loans financed through repurchase agreements are treated as collateralized financing transactions, unless they meet sales treatment under GAAP. Pursuant to GAAP treatment of collateralized financing transactions, loans financed through repurchase agreements remain on our consolidated balance sheet as assets, and cash received from the purchasers is recorded on our consolidated balance sheet as liabilities. Interest paid in accordance with repurchase agreements is recorded as interest expense. |
Loans Held for Investment | Loans Held for Investment. Generally, our loans are classified as held for investment based upon our intent and ability to hold them until maturity. Loans that are held for investment are carried at cost, net of unamortized loan origination and accreted exit fees that are required to be recognized in the carrying value of the loans in accordance with GAAP, unless the loans are deemed to be impaired. Loans that we have a plan to sell or liquidate are held at the lower of cost or fair value less cost to sell. We evaluate each of our loans for impairment at least quarterly by assessing a variety of risk factors in relation to each loan and assigning a risk rating to each loan based on those factors. Factors considered in these evaluations include, but are not limited to, property type, geographic and local market dynamics, physical condition, leasing and tenant profile, projected cash flow, risk of loss, current loan to value ratio, or LTV, debt yield, collateral performance, structure, exit plan and sponsorship. Loans are rated “1” (less risk) through “5” (greater risk) as defined below: "1" lower risk—Criteria reflects a sponsor having a strong financial condition and low credit risk and our evaluation of management's experience; collateral performance exceeding performance metrics included in the business plan or credit underwriting; and the property demonstrating stabilized occupancy and/or market rates, resulting in strong current cash flow and net operating income and/or having a very low LTV. "2" average risk—Criteria reflects a sponsor having a stable financial condition and our evaluation of management's experience; collateral performance meeting or exceeding substantially all performance metrics included in the business plan or credit underwriting; and the property demonstrating improved occupancy at market rents, resulting in sufficient current cash flow and/or having a low LTV. "3" acceptable risk—Criteria reflects a sponsor having a history of repaying loans at maturity and meeting its credit obligations and our evaluation of management's experience; collateral performance expected to meet performance metrics included in the business plan or credit underwriting; and the property having a moderate LTV. New loans and loans with a limited history will typically be assigned this rating and will be adjusted to other levels from time to time as appropriate. "4" higher risk—Criteria reflects a sponsor having a history of unresolved missed or late payments, maturity extensions and difficulty timely fulfilling its credit obligations and our evaluation of management's experience; collateral performance failing to meet the business plan or credit underwriting; the existence of a risk of default possibly leading to a loss and/or potential weaknesses that deserve management’s attention; and/or the property having a high LTV. "5" impaired/loss likely—Criteria reflects a very high risk of realizing a principal loss or having incurred a principal loss; a sponsor having a history of default payments, trouble fulfilling its credit obligations, deeds in lieu of foreclosures, and/or bankruptcies; collateral performance is significantly worse than performance metrics included in the business plan; loan covenants or performance milestones having been breached or not attained; timely exit via sale or refinancing being uncertain; and/or the property having a very high LTV. See Note 4 for further information regarding our current loan portfolio’s assessment under our internal risk rating policy. Impairment occurs when it is deemed probable that we will not be able to collect all amounts due under a loan according to its contractual terms. Impairment will then be measured based on the present value of expected future cash flows discounted at the loan’s contractual effective rate and the fair value of any available collateral, net of any costs we expect to incur to realize that value. The determination of whether loans are impaired involves judgments and assumptions based on objective and subjective factors. Consideration will be given to various factors, such as business plans, property occupancies, tenant profiles, rental rates, operating expenses and borrowers’ repayment plans, among others, and will require significant judgments, including assumptions regarding the values of loans, the values of underlying collateral and other circumstances, such as guarantees, if any. Upon measurement of an impairment, we will record an allowance to reduce the carrying value of the loan accordingly, and record a corresponding charge to net income in our condensed consolidated statements of operations. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments. Financial Accounting Standards Board, or FASB, Accounting Standards Codification TM , or ASC, Topic 820-10, Fair Value Measurements and Disclosures , defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands the required disclosure regarding fair value measurements. ASC Topic 820-10 defines fair value as the price that would be received for a financial instrument in a current sale, which assumes an orderly transaction between market participants on the measurement date. We determine the estimated fair value of financial assets and liabilities using the three-tier fair value hierarchy established by GAAP, which prioritizes the inputs used in measuring fair value. GAAP establishes market based or observable inputs as the preferred source of values followed by valuation models using management assumptions in the absence of market inputs. The three levels of inputs that may be used to measure fair value are as follows: Level I—Inputs include quoted prices in active markets for identical assets or liabilities that we have the ability to access. Level II—Inputs include quoted prices in markets that are less active or inactive or for which all significant inputs are observable, either directly or indirectly. |
Loan Deferred Fees | Loan Deferred Fees. Loan origination and exit fees are reflected in loans held for investment, net, in our condensed consolidated balance sheets and include fees charged to borrowers. These fees are amortized and accreted, respectively, into interest income over the life of the related loans held for investment. |
Deferred Financing Costs | Deferred Financing Costs. |
Net Earnings Per Common Share | Net Earnings Per Common Share. We calculate basic earnings per common share, or EPS, by dividing net income by the weighted average number of common shares outstanding during the period. We calculate diluted net EPS using the more dilutive of the two-class method or the treasury stock method. |
Revenue Recognition | Revenue Recognition. Interest income related to our first mortgage whole loans secured by commercial real estate, or CRE, will generally be accrued based on the coupon rates applied to the outstanding principal balance of such loans. Fees, premiums and discounts, if any, will be amortized or accreted into interest income over the remaining lives of the loans using the effective interest method, as adjusted for any prepayments. If a loan's interest or principal payments are not paid when due and there is uncertainty that such payments will be collected, the loan may be categorized as non-accrual and no interest will be recorded unless it is collected. When all overdue payments are collected and, in our judgment, a loan is likely to remain current, it may be re-categorized as accrual. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, FASB issued Accounting Standards Update, or ASU, No. 2016-13, Financial Instruments - Credit Losses (Topic 326) : Measurement of Credit Losses on Financial Instruments , which requires that entities use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowance for credit losses. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. ASU No. 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. As an emerging growth company that has opted to take advantage of the extended transition period, we expect to adopt ASU No. 2016-13 on January 1, 2023. We are currently assessing the potential impact the adoption of ASU No. 2016-13 will have on our condensed consolidated financial statements. |
Loans Held for Investment (Tabl
Loans Held for Investment (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
Schedule of Loans | The following table allocates the carrying value of our loan portfolio at March 31, 2020 based on our internal risk rating policy: Risk Rating Number of Loans Carrying Value 1 — $ — 2 1 24,505 3 7 132,633 4 6 114,349 5 — — 14 $ 271,487 The table below details overall statistics for our loan portfolio as of March 31, 2020 and December 31, 2019: Balance at March 31, 2020 Balance at December 31, 2019 Number of loans 14 12 Total loan commitments $ 296,987 $ 260,167 Unfunded loan commitments (1) $ 24,753 $ 17,268 Principal balance $ 272,234 $ 242,899 Unamortized net deferred origination fees $ (747 ) $ (821 ) Carrying value $ 271,487 $ 242,078 Weighted average coupon rate 5.70 % 5.76 % Weighted average all in yield (2) 6.40 % 6.41 % Weighted average maximum maturity (years) (3) 3.4 3.6 Weighted average LTV 68 % 70 % (1) Unfunded commitments will primarily be funded to finance property and building improvements and leasing capital. These commitments will generally be funded over the term of each loan. (2) All in yield includes the amortization of deferred fees over the initial term of the loan. (3) Maximum maturity assumes all extension options are exercised, which options are subject to the borrower meeting certain conditions. The table below details our loan activities during the three months ended March 31, 2020: Principal Balance Deferred Fees Carrying Value Balance at December 31, 2019 $ 242,899 $ (821 ) $ 242,078 Additional funding 3,209 — 3,209 Originations 26,126 (388 ) 25,738 Net amortization of deferred fees — 462 462 Balance at March 31, 2020 $ 272,234 $ (747 ) $ 271,487 The tables below detail the property type and geographic distribution of the properties securing the loans in our portfolio as of March 31, 2020 and December 31, 2019: March 31, 2020 December 31, 2019 Property Type Number of Loans Carrying Value Percentage of Value Number of Loans Carrying Value Percentage of Value Office 5 $ 84,986 31 % 4 $ 71,446 30 % Hotel 1 23,817 9 % 1 23,101 10 % Retail 3 44,827 17 % 3 43,782 18 % Multifamily 3 69,043 25 % 3 68,911 28 % Industrial 2 48,814 18 % 1 34,838 14 % 14 $ 271,487 100 % 12 $ 242,078 100 % March 31, 2020 December 31, 2019 Geographic Location Number of Loans Carrying Value Percentage of Value Number of Loans Carrying Value Percentage of Value East 5 $ 104,123 37 % 4 $ 90,047 37 % South 5 104,598 39 % 5 103,295 43 % West 1 9,751 4 % 1 9,014 4 % Midwest 3 53,015 20 % 2 39,722 16 % 14 $ 271,487 100 % 12 $ 242,078 100 % |
Debt Agreements (Tables)
Debt Agreements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The table below is an overview of our debt agreements that provided financing for our loans held for investment: Debt Obligation Weighted Average Collateral Maximum Facility Size Principal Balance Carrying Value Coupon Rate Remaining Maturity (1) (years) Principal Balance Fair Value (2) March 31, 2020: Master repurchase facility $ 213,482 $ 196,344 $ 195,566 L + 2.00% 1.4 $ 272,234 $ 268,450 December 31, 2019: Master repurchase facility $ 213,482 $ 165,536 $ 164,694 L + 1.99% 1.6 $ 242,899 $ 242,763 (1) The weighted average remaining maturity is determined using the current maturity date of the corresponding loans, excluding extension options. (2) See Note 6 for further discussion of our financial assets and liabilities not carried at fair value. |
Schedule of Maturities of Long-term Debt | At March 31, 2020 , our outstanding advancements under our Master Repurchase Facility had the following remaining maturities: Year Principal Payments (1) 2020 $ 28,910 2021 167,434 2022 — 2023 — 2024 — $ 196,344 (1) The allocation of our outstanding advancements under our Master Repurchase Facility is based on the current maturity date of each loan investment with respect to which the individual borrowing relates. |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The table below provides information regarding financial assets and liabilities not carried at fair value on a recurring basis in our condensed consolidated balance sheets: March 31, 2020 December 31, 2019 Carrying Value Fair Value Carrying Value Fair Value Financial assets Loans held for investment $ 271,487 $ 268,450 $ 242,078 $ 242,763 Financial liabilities Master repurchase facility $ 195,566 $ 196,344 $ 164,694 $ 165,536 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Dividends Declared | During the three months ended March 31, 2020 , we declared and paid a quarterly distribution to common shareholders as follows: Record Date Payment Date Distribution Per Share Total Distribution January 27, 2020 February 20, 2020 $0.22 $1,813 |
Weighted Average Common Shares
Weighted Average Common Shares (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Weighted Average Number of Common Shares | The table below provides a reconciliation of the weighted average number of common shares used in the calculation of basic and diluted EPS (amounts in thousands): For the Three Months Ended March 31, 2020 2019 Weighted average common shares for basic earnings per share 8,169 3,136 Effect of dilutive securities: unvested share awards (1) — 6 Weighted average common shares for diluted earnings per share 8,169 3,142 (1) For the three months ended March 31, 2020 , 22 unvested common shares were not included in the calculation of diluted EPS because to do so would have been antidilutive. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Accounting Policies [Abstract] | |
Debt financing costs | $ 778 |
Loans Held for Investment - Loa
Loans Held for Investment - Loan Portfolio Statistics (Details) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020USD ($)loan | Dec. 31, 2019USD ($)loan | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Number of loans | loan | 14 | 12 |
Total loan commitments | $ 296,987 | $ 260,167 |
Principal balance | 272,234 | 242,899 |
Unamortized net deferred origination fees | (747) | (821) |
Carrying value | $ 271,487 | $ 242,078 |
Weighted average coupon rate | 5.70% | 5.76% |
Weighted average all in yield | 6.40% | 6.41% |
Weighted average maximum maturity | 3 years 4 months 24 days | 3 years 7 months 6 days |
Weighted average LTV | 0.68 | 0.70 |
Unfunded commitments | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Unfunded loan commitments | $ 24,753 | $ 17,268 |
Weighted average maximum maturity | 1 year 8 months 12 days | |
First Mortgage Bridge Loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Carrying value | $ 271,487 | $ 242,078 |
Loans Held for Investment - L_2
Loans Held for Investment - Loan Activity (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
SEC Schedule, 12-29, Real Estate Companies, Investment in Movement in Mortgage Loans on Real Estate [Roll Forward] | |
Principal, beginning balance | $ 242,899 |
Deferred fees, beginning balance | (821) |
Beginning balance | 242,078 |
Additional funding | 3,209 |
Principal, Originations | 26,126 |
Deferred fees, Originations | (388) |
Net book value, Originations | 25,738 |
Net amortization of deferred fees | 462 |
Principal, ending balance | 272,234 |
Deferred fees, ending balance | (747) |
Ending balance | $ 271,487 |
Loans Held for Investment - L_3
Loans Held for Investment - Loan Portfolio (Details) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020USD ($)loan | Dec. 31, 2019USD ($)loan | |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of loans | loan | 14 | 12 |
Carrying value | $ | $ 271,487 | $ 242,078 |
Percentage of Value | 100.00% | 100.00% |
East | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of loans | loan | 5 | 4 |
Carrying value | $ | $ 104,123 | $ 90,047 |
Percentage of Value | 37.00% | 37.00% |
South | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of loans | loan | 5 | 5 |
Carrying value | $ | $ 104,598 | $ 103,295 |
Percentage of Value | 39.00% | 43.00% |
West | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of loans | loan | 1 | 1 |
Carrying value | $ | $ 9,751 | $ 9,014 |
Percentage of Value | 4.00% | 4.00% |
Midwest | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of loans | loan | 3 | 2 |
Carrying value | $ | $ 53,015 | $ 39,722 |
Percentage of Value | 20.00% | 16.00% |
Office | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of loans | loan | 5 | 4 |
Carrying value | $ | $ 84,986 | $ 71,446 |
Percentage of Value | 31.00% | 30.00% |
Hotel | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of loans | loan | 1 | 1 |
Carrying value | $ | $ 23,817 | $ 23,101 |
Percentage of Value | 9.00% | 10.00% |
Retail | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of loans | loan | 3 | 3 |
Carrying value | $ | $ 44,827 | $ 43,782 |
Percentage of Value | 17.00% | 18.00% |
Multifamily | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of loans | loan | 3 | 3 |
Carrying value | $ | $ 69,043 | $ 68,911 |
Percentage of Value | 25.00% | 28.00% |
Industrial | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of loans | loan | 2 | 1 |
Carrying value | $ | $ 48,814 | $ 34,838 |
Percentage of Value | 18.00% | 14.00% |
Loans Held for Investment - L_4
Loans Held for Investment - Loan Risk Ratings (Details) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020USD ($)loan | Dec. 31, 2019USD ($)loan | |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of loans | 14 | 12 |
Carrying value | $ | $ 271,487 | $ 242,078 |
Number of loans, downgraded | 6 | |
Percentage of loan portfolio, downgraded | 42.00% | |
Risk Rating, 2 | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of loans | 1 | |
Carrying value | $ | $ 24,505 | |
Risk Rating, 3 | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of loans | 7 | |
Carrying value | $ | $ 132,633 | |
Risk Rating, 4 | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of loans | 6 | |
Carrying value | $ | $ 114,349 |
Debt Agreements - Schedule of D
Debt Agreements - Schedule of Debt (Details) - Mortgages and Related Assets - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||
Maximum Facility Size | $ 213,482 | $ 213,482 |
Principal Balance | 196,344 | 165,536 |
Carrying Value | $ 195,566 | $ 164,694 |
Remaining Maturity | 1 year 4 months 24 days | 1 year 7 months 6 days |
Collateral, principal balance | $ 272,234 | $ 242,899 |
Collateral, fair value | $ 268,450 | $ 242,763 |
LIBOR | ||
Debt Instrument [Line Items] | ||
Interest rate spread | 2.00% | 1.99% |
Debt Agreements - Master Repurc
Debt Agreements - Master Repurchase Facility (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |
Aug. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Mortgages and Related Assets | |||
Assets Sold under Agreements to Repurchase [Line Items] | |||
Interest expense for repurchase agreement | $ 1,638 | $ 1,084 | |
Debt, weighted average interest rate | 3.50% | 4.47% | |
Percentage of loan guaranteed | 25.00% | ||
Citibank, N.A. | Mortgages and Related Assets | |||
Assets Sold under Agreements to Repurchase [Line Items] | |||
Percentage of purchased asset, initial purchase price | 75.00% | ||
Minimum percentage of margin to advance | 75.00% | ||
LIBOR | Citibank, N.A. | Mortgages and Related Assets | |||
Assets Sold under Agreements to Repurchase [Line Items] | |||
Variable basis spread | 2.00% | ||
LIBOR | Citibank, N.A. | Minimum | Mortgages and Related Assets | |||
Assets Sold under Agreements to Repurchase [Line Items] | |||
Variable basis spread | 2.00% | ||
LIBOR | Citibank, N.A. | Maximum | Mortgages and Related Assets | |||
Assets Sold under Agreements to Repurchase [Line Items] | |||
Variable basis spread | 2.50% | ||
Notes Payable | TCB Loan | |||
Assets Sold under Agreements to Repurchase [Line Items] | |||
Repayment of note payable | $ 31,790 | ||
Interest expense | $ 368 |
Debt Agreements - Debt Maturiti
Debt Agreements - Debt Maturities (Details) - Mortgages and Related Assets $ in Thousands | Mar. 31, 2020USD ($) |
Debt Instrument [Line Items] | |
2020 | $ 28,910 |
2021 | 167,434 |
2022 | 0 |
2023 | 0 |
2024 | 0 |
Total | $ 196,344 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Recurring Fair Value (Details) - Level III - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for investment | $ 271,487 | $ 242,078 |
Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for investment | 268,450 | 242,763 |
Master repurchase agreement | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Master repurchase facility | 195,566 | 164,694 |
Master repurchase agreement | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Master repurchase facility | $ 196,344 | $ 165,536 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 10, 2020 | Feb. 20, 2020 | Jan. 09, 2020 | Mar. 31, 2020 | Mar. 31, 2019 |
Subsidiary, Sale of Stock [Line Items] | |||||
Shares paid for tax withholding (in shares) | 384 | ||||
Shares paid for tax withholding (in dollars per share) | $ 5.33 | ||||
Distributions paid (in dollars per share) | $ 0.22 | ||||
Distributions | $ 1,813 | $ 1,895 | $ 350 | ||
Subsequent event | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Distributions | $ 82 | ||||
Distributions declared (in dollars per share) | $ 0.01 |
Management Agreement with our_2
Management Agreement with our Manager (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020USD ($)employee | Mar. 31, 2019USD ($) | |
Related Party Transaction [Line Items] | ||
Number of employees | employee | 0 | |
Management fees, including waived fees | $ 320 | $ 223 |
Reimbursement of shared services expenses | 321 | 370 |
Principal Owner | Shared Service Costs [Member] | ||
Related Party Transaction [Line Items] | ||
Reimbursement of shared services expenses | $ 359 | $ 402 |
Related Person Transactions (De
Related Person Transactions (Details) - Tremont Mortgage Trust - Tremont Realty Advisors LLC - shares | Sep. 29, 2017 | Mar. 31, 2020 |
Related Party Transaction [Line Items] | ||
Ownership percentage | 100.00% | |
Shares owned (in shares) | 1,600,100 | |
Noncontrolling ownership interest | 19.40% |
Weighted Average Common Share_2
Weighted Average Common Shares (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Weighted average common shares for basic earnings per share | 8,169 | 3,136 |
Effect of dilutive securities: unvested share awards | 0 | 6 |
Weighted average common shares for diluted earnings per share | 8,169 | 3,142 |
Antidilutive securities excluded from calculation of diluted EPS | 22 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Other Commitments [Line Items] | ||
Weighted average maximum maturity | 3 years 4 months 24 days | 3 years 7 months 6 days |
Unfunded commitments | ||
Other Commitments [Line Items] | ||
Unfunded commitments | $ 24,753 | $ 17,268 |
Weighted average maximum maturity | 1 year 8 months 12 days | |
Mortgages and Related Assets | ||
Other Commitments [Line Items] | ||
Borrowings outstanding | $ 196,344 | |
Weighted average maturity | 1 year 4 months 24 days | 1 year 7 months 6 days |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Thousands | Apr. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Subsequent Event [Line Items] | |||
Net book value balance | $ 271,487 | $ 242,078 | |
Percentage of loan portfolio | 100.00% | 100.00% | |
Subsequent event | Coppell, TX | |||
Subsequent Event [Line Items] | |||
Net book value balance | $ 22,204 | ||
Percentage of loan portfolio | 8.20% |