Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | May 05, 2021 | |
Document Information [Line Items] | ||
Entity Registrant Name | BROADMARK REALTY CAPITAL INC. | |
Entity Central Index Key | 0001784797 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2021 | |
Entity File Number | 001-39134 | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 84-2620891 | |
Entity Address, Address Line One | 1420 Fifth Avenue, Suite 2000 | |
Entity Address, City or Town | Seattle | |
Entity Address, State or Province | WA | |
Entity Address, Postal Zip Code | 98101 | |
City Area Code | 206 | |
Local Phone Number | 971-0800 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 132,573,178 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Common Stock [Member] | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common Stock | |
Trading Symbol | BRMK | |
Security Exchange Name | NYSE | |
Warrant | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Warrants | |
Trading Symbol | BRMK WS | |
Security Exchange Name | NYSEAMER |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Assets | ||
Cash and cash equivalents | $ 204,277 | $ 223,375 |
Mortgage notes receivable, net | 804,471 | 798,486 |
Interest and fees receivable, net | 16,503 | 14,357 |
Investment in real property, net | 13,113 | 8,473 |
Right-of-use assets | 6,304 | |
Goodwill | 136,965 | 136,965 |
Other assets | 10,263 | 5,663 |
Total assets | 1,191,896 | 1,187,319 |
Liabilities and Equity | ||
Accounts payable and accrued liabilities | 6,568 | 4,946 |
Lease Liabilities | 8,347 | |
Dividends payable | 9,280 | 7,952 |
Total liabilities | 24,195 | 12,898 |
Commitments and Contingencies (Note 10) | ||
Preferred stock, $0.001 par value, 100,000,000 shares authorized, no shares issued and outstanding at March 31, 2021 and December 31, 2020 | ||
Common stock, $0.001 par value, 500,000,000 shares authorized, 132,566,410 and 132,532,383 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively | 132 | 132 |
Additional Paid in Capital | 1,214,724 | 1,213,987 |
Accumulated deficit | (47,155) | (39,698) |
Total equity | 1,167,701 | 1,174,421 |
Total liabilities and equity | $ 1,191,896 | $ 1,187,319 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
Condensed Consolidated Balance Sheets | ||
Preferred stock par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock shares issued (in shares) | 0 | 0 |
Preferred stock shares outstanding (in shares) | 0 | 0 |
Common stock par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock shares issued (in shares) | 132,566,410 | 132,532,383 |
Common stock shares outstanding (in shares) | 132,566,410 | 132,532,383 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenues | ||
Revenues | $ 29,468 | $ 31,768 |
Other Income: | ||
Change in fair value of optional subscription liabilities | 4,604 | |
Impairment: | ||
Provision for credit losses, net | 2,708 | 4,432 |
Operating expenses: | ||
Compensation and employee benefits | 3,560 | 3,193 |
General and administrative | 2,819 | 2,278 |
Total Expenses | 9,087 | 9,903 |
Income before income taxes | 20,381 | 26,469 |
Income tax provision | 0 | 0 |
Net income | $ 20,381 | $ 26,469 |
Earnings per common share: | ||
Basic | $ 0.15 | $ 0.20 |
Diluted | $ 0.15 | $ 0.20 |
Weighted-average shares of common stock outstanding, basic and diluted | ||
Basic | 132,550,227 | 132,111,329 |
Diluted | 132,678,812 | 132,336,315 |
Interest Income | ||
Revenues | ||
Revenues | $ 22,017 | $ 24,553 |
Fee Income | ||
Revenues | ||
Revenues | $ 7,451 | $ 7,215 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings (Accumulated Deficit) [Member]Cumulative Effect, Period of Adoption, Adjustment [Member] | Retained Earnings (Accumulated Deficit) [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] | Total |
Balance at Dec. 31, 2019 | $ 132 | $ 1,209,120 | $ (1,975) | $ (24,780) | $ (1,975) | $ 1,184,472 |
Balance, Shares at Dec. 31, 2019 | 132,015,635 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net Income | 26,469 | (800) | 26,469 | |||
Dividends | (31,700) | (31,700) | ||||
Issuance of shares for vested restricted stock units (in shares) | 95,694 | |||||
Stock-based compensation expense for restricted stock units | 914 | 914 | ||||
Balance at Mar. 31, 2020 | $ 132 | 1,210,034 | (31,986) | 1,178,180 | ||
Balance, Shares at Mar. 31, 2020 | 132,111,329 | |||||
Increase (Decrease) In Members Equity [RollForward] | ||||||
Net Income | 26,469 | $ (800) | 26,469 | |||
Balance at Dec. 31, 2020 | $ 132 | 1,213,987 | (39,698) | 1,174,421 | ||
Balance, Shares at Dec. 31, 2020 | 132,532,383 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net Income | 20,381 | 20,381 | ||||
Dividends | (27,838) | (27,838) | ||||
Issuance of shares for vested restricted stock units (in shares) | 34,027 | |||||
Stock-based compensation expense for restricted stock units | 737 | 737 | ||||
Balance at Mar. 31, 2021 | $ 132 | $ 1,214,724 | (47,155) | 1,167,701 | ||
Balance, Shares at Mar. 31, 2021 | 132,566,410 | |||||
Increase (Decrease) In Members Equity [RollForward] | ||||||
Net Income | $ 20,381 | $ 20,381 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash flows from operating activities | ||
Net income | $ 20,381 | $ 26,469 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Accretion of deferred origination and amendment fees | (6,612) | (5,422) |
Depreciation and amortization | 163 | (904) |
Amortization of right of use assets | 94 | 110 |
Amortization of financing costs | 142 | |
Stock-based compensation expense for restricted stock units | 737 | 914 |
Provision for credit losses, net | 2,708 | 4,432 |
Change in fair value of optional subscription liabilities | (4,604) | |
Changes in operating assets and liabilities: | ||
Interest and fees receivable, net | (2,146) | (2,351) |
Other assets | 171 | (163) |
Accounts payable and accrued liabilities | 713 | (167) |
Lease liabilities | (10) | (110) |
Net cash provided by operating activities | 16,341 | 18,204 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (135) | |
Proceeds from sale of real property | 815 | 2,213 |
Improvements to investments in real property | (250) | (79) |
Change in mortgage notes receivable, net | (4,255) | 36,856 |
Net cash provided by (used in) investing activities | (3,825) | 38,990 |
Cash flows from financing activities: | ||
Dividends paid | (26,510) | (36,973) |
Payment of costs to obtain credit facility | (5,104) | |
Net cash provided by (used in) financing activities | (31,614) | (36,973) |
Net increase (decrease) in cash and cash equivalents | (19,098) | 20,221 |
Cash and cash equivalents, beginning of period | 223,375 | 238,214 |
Cash and cash equivalents, end of period | 204,277 | 258,435 |
Supplemental disclosure of non-cash investing and financing activities | ||
Dividends payable | 9,280 | 10,569 |
Measurement period adjustment to goodwill and intangible assets | $ 5,000 | |
Mortgage notes receivable converted to real property owned | 5,205 | |
Operating lease right-of-use assets | 6,360 | |
Lease liabilities arising from obtaining right-of-use assets | 8,319 | |
Property and equipment purchased through tenant improvement allowance | $ 1,959 |
Organization and business
Organization and business | 3 Months Ended |
Mar. 31, 2021 | |
Organization and business | |
Organization and business | Note 1 - Organization and business Broadmark Realty Capital Inc. (“Broadmark Realty,” “the Company,” “we,” “us” and “our”) is an internally managed commercial real estate finance company that provides secured financing to real estate investors and developers. Broadmark Realty’s objective is to preserve and protect shareholder capital while producing attractive risk-adjusted returns primarily through dividends generated from current income from its loan portfolio. Broadmark Realty operates in select states that it believes to have favorable demographic trends and provide Broadmark Realty the ability to efficiently access the underlying collateral in the event of borrower default. The consolidated subsidiaries of Broadmark Realty include BRMK Lending, LLC, BRMK Management, Corp., and Broadmark Private REIT Management, LLC. BRMK Lending, LLC originates short-term loans secured by first deed of trust liens on residential and commercial real estate. BRMK Management, Corp. (the “Manager”) manages the underwriting, closing, servicing and disposition of mortgage notes, and performs all general and administrative duties for Broadmark Realty. Broadmark Private REIT Management, LLC (the “Private REIT Manager”) manages Broadmark Private REIT, LLC (the “Private REIT”), an unconsolidated affiliate of the Company that primarily participates in loans originated, underwritten and serviced by a subsidiary of Broadmark Realty. Broadmark Realty has elected to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes. Broadmark Realty generally will not be subject to U.S. federal corporate income tax on that portion of its net income that is distributed to stockholders if it distributes at least 90% of its REIT taxable income to its stockholders by prescribed dates and complies with various other requirements. The Company also operates its business in a manner that permits it to maintain an exclusion from registration under the Investment Company Act of 1940. As a REIT, Broadmark Realty may own up to 100% of the stock of one or more taxable REIT subsidiaries (“TRSs”), which may earn income that would not be qualifying income if earned directly by a REIT. The Manager is a TRS and this election applies to the wholly-owned subsidiaries of the Manager, including the Private REIT Manager. |
Summary of significant accounti
Summary of significant accounting policies | 3 Months Ended |
Mar. 31, 2021 | |
Summary of significant accounting policies | |
Summary of significant accounting policies | Note 2 - Summary of significant accounting policies Basis of Presentation The accompanying condensed consolidated financial statements include Broadmark Realty Capital Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. These condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the audited financial statements and accompanying notes included in Broadmark Realty Capital Inc.’s Annual Report on Form 10-K/A for the year ended December 31, 2020, which was filed with the SEC on March 2, 2021. The condensed consolidated balance sheet as of December 31, 2020, included herein, was derived from the audited financial statements of Broadmark Realty Capital Inc. as of that date. The unaudited condensed consolidated interim financial statements, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly our financial position as of March 31, 2021, our results of operations and stockholders’ equity for the three month periods ended March 31, 2021 and 2020, and our cash flows for the three month periods ended March 31, 2021 and 2020. The results of the three month period ended March 31, 2021 is not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any interim period or for any other future year. Principles of Consolidation Broadmark Realty consolidates those entities in which it has control over significant operating, financial and investing decisions of the entity, as well as those entities deemed to be variable interest entities (“VIEs”), if any, in which Broadmark Realty is determined to be the primary beneficiary. Broadmark Realty is not the primary beneficiary of, and therefore does not consolidate, any VIEs. The Private REIT was determined to be a voting interest entity for which we, through our wholly-owned subsidiary acting as manager with no significant equity investment, do not hold a controlling interest in and do not consolidate. Furthermore, the Private REIT participation in loans originated by us meets the characteristics of a participating interest in accordance with GAAP and therefore, is treated as a sale of mortgage notes receivable and is derecognized from our consolidated financial statements. Reclassifications Certain amounts in our prior period condensed consolidated financial statements have been reclassified to conform to the presentation of our current period condensed consolidated financial statements. These reclassifications had no effect on our previously reported net income or stockholders’ equity. The reclassification for the separate presentation of accretion of deferred origination and amendment fees resulted in a reclassification of net cash provided by operating activities to net cash provided by investing activities, both as previously reported. The reclassifications also included the separate presentation of amortization of right of use assets and change in lease liabilities and the combined presentation of depreciation and amortization on the condensed consolidated statements of cash flows. Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts and disclosures at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. The most significant estimates relate to the expected credit losses on our loans and the fair value of financial instruments and investments in real property. Accordingly, actual results could differ from those estimates. The COVID-19 pandemic has introduced significant additional uncertainty with respect to estimates, judgments and assumptions, which may materially impact the estimates previously listed, among others. Certain Significant Risks and Uncertainties In the normal course of business, we encounter one primary type of economic risk in the form of credit risk. Credit risk is the risk of default on our investment in mortgage notes receivable resulting from a borrower’s inability or unwillingness to make contractually required payments. We believe that the carrying values of our loans reasonably consider this credit risk. In addition, we are subject to significant tax risks. If we were to fail to qualify as a REIT in any taxable year, we would be subject to U.S. federal corporate income tax, which could be material. We operate in a dynamic industry and, accordingly, can be affected by a variety of factors. For example, we believe that changes in any of the following areas could have a significant negative effect on us in terms of our future financial position, results of operations or cash flows: public health crises, like the COVID-19 pandemic; the economy in the areas we operate; competition in our market; the stability of the real estate market and the impact of interest rate changes; changes in government regulation affecting our business; natural disasters and catastrophic events; our ability to attract and retain qualified employees and key personnel; and protection of customers’ information and other privacy concerns, among other things. Reportable Segments We operate the business as one reportable segment, which originates, underwrites and services construction loans. BALANCE SHEET MEASUREMENT Cash and Cash Equivalents We consider all highly liquid investments with an original maturity of 90 days or less at the date of purchase to be cash equivalents. We have a cash management sweep account repurchase agreement whereby our bank nightly sweeps cash in excess of $750,000, sells us specific U.S. Government Agency securities and then repurchases these securities the next day. We maintain our cash and cash equivalents with financial institutions, which are insured up to a maximum of $250,000 per account as of March 31, 2021 and December 31, 2020. The balances in these accounts may exceed the insured limits. There were no restrictions on cash as of March 31, 2021 or December 31, 2020. Mortgage Notes Receivable Mortgage notes receivable (referred to herein as “mortgage notes receivable”, “construction loans”, “loans”, or “notes”) are classified as held for investment as we have the intent and ability to hold until maturity or payoff and are carried in the condensed consolidated balance sheets at amortized cost, net of construction holdbacks, interest reserves, allowance for credit losses and deferred origination and amendment fees. Participations in mortgage notes receivables are accounted for as sales and derecognized from the balance sheet when control over the transferred assets has been surrendered. Control over transferred assets is deemed to be surrendered when: (1) a group of financial assets or a participating interest in an entire financial asset has been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right, beyond a more than trivial benefit) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. If the sales do not meet these criteria, the sale of the participation is treated as a secured borrowing. As of March 31, 2021, all participations in mortgage notes receivable sold to the Private REIT have achieved sale accounting. Current Expected Credit Losses Allowance In the fourth quarter of 2020, we adopted the current expected credit loss (“CECL Standard”) for the full year ended December 31, 2020 as we ceased to qualify as an emerging growth company effective December 31, 2020. As a result, we were no longer permitted an extended transition period for complying with new or revised accounting standards affecting public companies. The initial CECL allowance adjustment of $2.0 million was recorded on January 1, 2020 as a cumulative-effect of change in accounting principle through a direct charge to accumulated deficit on our condensed consolidated statements of stockholders’ equity; however subsequent changes to the CECL allowance are recognized through net income on our condensed consolidated statements of income. Our condensed consolidated statement of income for the three months ended March 31, 2020 includes an additional provision for credit losses of $0.8 million associated with the adoption of the CECL Standard, as a result, our previously reported net income of $27.3 million for this period is lower by $0.8 million. The CECL Standard replaced the incurred loss model under existing guidance with an expected loss model for instruments measured at amortized cost. We now record an allowance for credit losses in accordance with the CECL Standard on our loan portfolio, including unfunded construction holdbacks, on a collective basis by assets with similar risk characteristics. In addition, for assets that are classified as collateral dependent based on foreclosure being probable, we continue to record loan specific allowances based on the fair value of the collateral for expected credit losses under the CECL Standard. Given the short-term nature of our loans, we evaluate the most recent external appraisal and depending on the age of the appraisal, may order a new appraisal or, where available, will evaluate against existing comparable sales or other pertinent information to estimate the fair value of the collateral for such loans. The CECL Standard requires an entity to consider historical loss experience, current conditions, and a reasonable and supportable forecast of the economic environment. The Company utilizes a probability of default/loss given default (“PD/LGD”) method approach for estimating current expected credit losses. In accordance with the PD/LGD method, an annual historical loss rate is applied to the amortized cost of an asset or pool of assets over the remaining expected life. The PD/LGD method requires consideration of the timing of expected future funding of existing commitments and repayments over each asset’s remaining life. An annual loss factor, adjusted for macroeconomic estimates, is applied over each subsequent period and aggregated to arrive at the CECL allowance. In determining the CECL allowance, we considered various factors including (i) historical loss experience in our portfolio, (ii) historical loss experience in the commercial real estate lending market, (iii) timing of expected pay offs including prepayments and extensions where reasonably expected, and (iv) our current and future view of the macroeconomic environment. We utilize a reasonable and supportable forecast period equal to the contractual term of the loan plus short-term extensions of one to three months that are reasonably expected for construction loans. Management estimates the allowance for credit losses using relevant information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. The allowance for credit losses is maintained at a level sufficient to provide for expected credit losses over the life of the loan based on evaluating historical credit loss experience and making adjustments to historical loss information for differences in the specific risk characteristics in the current loan portfolio. Refer to “Note 3 – Mortgage Notes Receivable” for further information regarding the CECL allowance. We have made an accounting policy election to exclude accrued interest receivable, included in interest and fees receivable, net on our consolidated balance sheets, from the amortized cost basis of the related mortgage notes receivable in determining the CECL allowance as any uncollected accrued interest receivable is written off in a timely manner. No interest income is recognized on mortgage notes receivable that are in contractual default unless the interest is paid in cash or collectability of all amounts due is reasonably assured. In addition, in certain instances, where the interest reserve on a current loan has been fully depleted and the interest payment is not expected to be collected from the borrower, we may place a current loan on non-accrual status and recognize interest income on a cash-basis. Deferred Income Deferred income represents the amount of our origination and amendment fees that have been deferred and will be recognized in income over the contractual maturity of the underlying loan. Origination fees are included in the total commitment to the borrower and financed at the time of loan origination. Amendment fees are either included in the total commitment to the borrower and financed at the time of the loan amendment or are billed to the borrower when the loan is amended and not capitalized into the principal outstanding. Deferred origination and amendment fees capitalized into the principal outstanding are included within mortgage notes receivable, net on the consolidated balance sheets. Deferred amendment fees that are not included in the principal outstanding are presented within interest and fees receivable, net on the condensed consolidated balance sheets. Interest and Fees Receivable Interest on performing loans is accrued and recognized as interest income at the contractual rate of interest, or at the contractual rate of monthly minimum interest. Extension fees are charged when we agree to extend the maturity dates of loans. In addition, late fees are changed when borrower payments are contractually past due. We monitor each note’s outstanding interest and fee receivables and, based on historical performance, generally reserve against the balance after a receivable is greater than 60 days past due unless collectability of all amounts due is reasonably assured. We have made an accounting policy election to exclude accrued interest and fee receivables from the amortized cost basis of the related mortgage notes receivable in determining the CECL allowance as any uncollected accrued interest receivable is written off in a timely manner. Real property Real property owned by us consists of real estate acquired in settlement of loans. Real estate acquired through foreclosure or deed in lieu of foreclosure is recorded at fair market value at the time of acquisition, which generally approximates the carrying value of the loan secured by such property. Costs related to acquisition, development, construction and improvements are capitalized to the extent the investment in the real property does not exceed the fair value less estimated costs to sell. Expenditures for repairs and maintenance are charged to expense when incurred. As of March 31, 2021 and December 31, 2020, we owned four and three properties or projects, respectively. Leases Our office space in Seattle, Washington is subject to an operating lease. Our operating lease is included in right of use assets and lease liabilities on our consolidated balance sheets. The lease agreement includes both lease components (e.g., fixed rent) and non-lease components (e.g., common area maintenance). We account for the lease and non-lease components as a single component. Right of use assets represent our right to use an underlying asset during the lease term and lease liabilities represent our obligation to make lease payments. Right of use assets and lease liabilities are recognized at the lease commencement date based on the present value of the total lease payments not yet paid, including lease incentives not yet received, with the right of use assets further adjusted for any prepaid or accrued lease payments, lease incentives received and/or initial direct costs incurred. Our lease arrangement also includes variable payments for costs such as common-area maintenance, utilities, taxes or other operating costs, which are based on a percentage of actual expenses incurred. These variable lease payments are excluded from the measurement of the right of use assets and lease liabilities. Our lease term is through January 2032, which includes an option to extend the lease term for an additional five years. When determining if a renewal option is reasonably certain of being exercised at lease commencement, we consider several factors, including but not limited to, contract-based, asset-based and entity-based factors. We reassess the term of the existing lease if there is a significant event or change in circumstances within our control that affects whether we are reasonably certain to exercise the option to extend the lease. Examples of such events or changes include construction of significant leasehold improvements or other modifications or customizations to the underlying asset, relevant business decisions or subleases. We have concluded that the renewal option is not reasonably certain of being exercised, therefore, the renewal is not included in the right of use asset and lease liability. As our lease did not provide an implicit rate, we use our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments. We recognize lease expense for our operating lease on a straight-line basis over the lease term. Variable lease payments are generally recognized when incurred. These expenses are included in general and administrative expenses in the consolidated statements of income. Goodwill Goodwill represents the excess of the cost of an acquired business over the fair value of the assets acquired at the date of acquisition and is not amortized. We assess the impairment of goodwill on an annual basis, in our fourth quarter, or whenever events or changes in circumstances indicate that goodwill may be impaired. In our evaluation of goodwill, we typically first perform a qualitative assessment to determine whether the carrying value of each reporting unit is greater than its fair value. If it is more likely than not that the carrying value of a reporting unit is greater than its fair value, we perform a quantitative assessment and an impairment charge is recorded in our statements of operations for the excess of carrying value of the reporting unit over its fair value. We reevaluated the fair value of the reporting unit during our annual assessment in the fourth quarter of 2020 and the fair value of the reporting unit exceeded the carrying value and there was no goodwill impairment. During the first quarter of 2021, we continued to monitor the impact of COVID-19 and determined there were no new triggering events to warrant a quantitative assessment of our goodwill. In the first quarter of 2020, we recorded a measurement period adjustment to reduce the preliminary fair value of intangible assets in the form of customer relationships by $5.0 million and increased our preliminary value of goodwill by $5.0 million. As a result of this adjustment to preliminary values, $0.9 million of amortization of intangible assets recorded in 2019 was reversed in the first quarter of 2020. Other Assets Other assets primarily consist of fixed assets, deferred financing costs, intangible assets, prepaid insurance and other operating receivables. Fixed Assets Fixed assets, which are included in other assets in the accompanying condensed consolidated balance sheets are stated at cost, less accumulated depreciation. Repairs and maintenance to these assets are charged to expense as incurred; major improvements enhancing the function and/or useful life are capitalized. When items are sold or retired, the related cost and accumulated depreciation are removed from the accounts and any gains or losses arising from such transactions are recognized. Depreciation is recorded on the straight-line basis over the estimated useful life of the assets. For computer equipment, office equipment, furniture and fixtures the useful lives range from three Deferred Financing Costs Deferred financing costs represent direct costs associated with the execution of the revolving credit facility. As the revolving credit facility has no principal outstanding and there is no recognized debt liability, the deferred financing costs are included in other assets on the condensed consolidated balance sheet. These costs are amortized on the straight-line basis over the initial term of our credit facility. Intangible Assets We record the intangible assets at fair value at the acquisition date and are amortizing the value of these finite-lived intangibles into expense over the expected useful life. All of our intangible assets relate to the value of customer relationships. As of March 31, 2021 and December 31, 2020, intangible assets net of accumulated amortization was $0.5 and $0.6 million, respectively. INCOME RECOGNITION Interest Income Interest income on mortgage notes receivable is accrued based on contractual rates applied to the principal balance outstanding, unless there is a minimum interest provision in the mortgage note. Many construction loans provide for minimum interest provisions, under which the contractual rate applies to, which are typically between 50% and 70% of the face amount of the note until the actual outstanding principal exceeds the minimum threshold. Mortgage notes receivable can be placed in contractual default status for any of the following reasons: (1) an interest payment is more than 30 days past due; (2) a note matures and the borrower fails to make payment of all amounts owed or extend the loan; or (3) the collateral becomes impaired in such a way that the ultimate collection of the note is doubtful. The accrual of interest income is suspended when a loan is in contractual default unless the interest is paid in cash or collectability of all amounts due is reasonably assured. In addition, in certain instances, where the interest reserve on a current loan has been fully depleted and the interest payment is not expected to be collected from the borrower, we may place a current loan on non-accrual status and recognize interest income on a cash-basis. Interest previously accrued may be reversed at that time, and such reversal is offset against interest income. The accrual of interest income resumes only when the suspended loan becomes contractually current or a credit analysis supports the ability to collect in accordance with the terms of the loan. Fee Income We charge loan origination fees in conjunction with origination. Amendment fees are charged when loan terms are modified, such as increases in interest reserves and construction holdbacks in line with our underwriting criteria or upon modification of a loan for the transition from horizontal development to vertical construction. We defer and amortize loan origination and amendment fees over the contractual terms of the loans. We charge inspection fees, which we use to hire independent inspectors to report on the status of construction projects. These fees are earned and recognized upon each construction draw request. EXPENSE RECOGNITION Operating Expenses Share‑Based Payments We measure compensation expense for all share-based awards at fair value on the date of grant and recognize compensation expense over the service period on a straight-line basis for awards expected to vest, which is generally three years for employees and one year for directors. Share-based awards are issued under the Broadmark Realty Capital Inc. 2019 Stock Incentive Plan. Awards made to our employees and directors, typically consist of restricted stock units (“RSUs”). For awards with only a service vesting condition, the fair value of the award is based on the grant date closing price of our common stock less the present value of expected dividends over the requisite service period as the awards are not entitled to dividends. For these awards, we recognize stock-based compensation expense on a straight-line basis over the requisite service period for the entire award, subject to periodic adjustments to ensure that the cumulative amount of expense recognized through the end of any reporting period is at least equal to the portion of the grant date fair value of the award that has vested through that date, and we account for forfeitures prospectively as they occur. For awards that contain both service vesting and market conditions, referred to as performance restricted stock units (“pRSUs”), we use a Monte Carlo simulation model to calculate the grant date fair value. For these market-condition awards, regardless of the outcome of the market condition, we recognize stock-based compensation expense on a straight-line basis over the longest of explicit and derived service periods, and we account for forfeitures prospectively as they occur. If there are any modifications or cancellations of the underlying unvested share-based awards, we may be required to accelerate or increase any remaining unrecognized or previously recorded stock-based compensation expense. Income Taxes We have elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, for U.S. federal income tax purposes (the “Code”). As a REIT, we generally are not subject to U.S. federal income taxes on net income we distribute to our shareholders. We intend to make timely distributions sufficient to satisfy the annual distribution requirements. If we fail to qualify as a REIT in any taxable year, we will be subject to U.S. federal income tax on our taxable income at regular corporate tax rates. Even if we qualify for taxation as a REIT, we may be subject to certain state and local taxes on our income and property and U.S. federal income and excise taxes on our undistributed income. Our TRSs are subject to U.S. federal income taxes. Earnings per Share We present both basic and diluted earnings per common share (“EPS”) amounts in our condensed consolidated financial statements. Basic EPS excludes dilution and is computed by dividing income available to common stockholders by the weighted-average number of shares of common stock outstanding for the period. Diluted EPS reflects the maximum potential dilution that could occur from our outstanding warrants and restricted stock units. We utilize the treasury stock method to measure dilution to earnings per share in calculating the net number of shares that would be issued assuming any related proceeds are used to buy back outstanding shares. Recent Accounting Pronouncements There are no recent accounting pronouncements that we have yet to adopt with an expected impact on our financial position, results of operations or cash flows. |
Mortgage notes receivable
Mortgage notes receivable | 3 Months Ended |
Mar. 31, 2021 | |
Mortgage notes receivable | |
Mortgage notes receivable | Note 3 - Mortgage notes receivable The stated principal amount of mortgage notes receivable in our portfolio represents our interest in loans secured by first deeds of trust, security agreements or legal title to real estate located in the United States. Our lending standards require that all mortgage notes receivable be secured by a first deed of trust lien on real estate and that the maximum loan to value ratio (“LTV”) be no greater than 65%. The LTV is calculated on an “as-complete” appraised value of the underlying collateral as determined by an independent appraiser at the time of the loan origination. The lending standards also limit the initial outstanding principal balance of the loan to a maximum LTV of up to 65% of the “as-is” appraised value of the underlying collateral as determined by an independent appraiser at the time of the loan origination. Unless otherwise indicated, LTV is measured by the total commitment amount of the loan divided by the “as-complete” appraisal. LTVs do not reflect interim loan activity such as construction draws or interest payments capitalized to loans, or partial repayments of the loan. The maximum amount of a single loan may not exceed 10% of our total assets and the maximum amount to a single borrower may not exceed 15% of our total assets. We consider the maximum LTV as an indicator for the credit quality of a mortgage note receivable. Mortgage notes receivable are considered to be short-term financings, with initial terms typically ranging from five Mortgage notes receivable are presented net of construction holdbacks, interest reserves, allowance for credit losses and deferred origination and amendment fee income in the condensed consolidated balance sheets. The construction holdback represents amounts withheld from the funding of construction loans until we deem construction to be sufficiently completed. The interest reserve represents amounts withheld from the funding of certain mortgage notes receivable for the purpose of satisfying monthly interest payments over all or part of the term of the related note. Accrued interest is paid out of the interest reserve and recognized as interest income at the end of each month. The deferred origination and amendment fee income represents amounts that will be recognized over the contractual life of the underlying mortgage notes receivable. The following table reconciles outstanding mortgage loan commitments to outstanding balance of mortgage notes receivable as of March 31, 2021 and December 31, 2020: (dollars in thousands) March 31, 2021 December 31, 2020 Total loan commitments $ 1,280,964 $ 1,245,963 Less: Construction holdbacks (1) 379,069 356,026 Interest reserves (1) 30,369 29,817 Private REIT participation (2) 42,740 37,729 Total principal outstanding for our mortgage notes receivable 828,786 822,391 Less: Allowance for credit losses (3) 10,663 10,590 Deferred origination and amendment fees 13,652 13,315 Mortgage notes receivable, net $ 804,471 $ 798,486 (1) Includes construction holdbacks of $42.1 and $40.4 million and interest reserves of $3.6 and $4.3 million on participating interests sold to the Private REIT as of March 31, 2021 and December 31, 2020, respectively. (2) The Private REIT’s participations in loans originated by us meet the characteristics of participating interests and, therefore, are treated as sales of mortgage notes receivable and are derecognized from our condensed consolidated financial statements. (3) $0.9 million of the CECL Allowance is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable and accrued liabilities in our condensed consolidated balance sheet. Non-accrual status As of March 31, 2021 and December 31, 2020, the principal outstanding on loans in contractual default status placed on non-accrual status was $177.7 and $126.8 million, respectively, and all non-accrual loans had an allowance for credit losses. Current Expected Credit Losses In assessing the CECL allowance, we consider historical loss experience, current conditions, and a reasonable and supportable forecast of the macroeconomic environment. We derived an annual historical loss rate based on the Company’s historical loss experience in our portfolio and historical loss experience in the commercial real estate industry provided by a third party adjusted to reflect our expectations of the macroeconomic environment based on forecast data per the Federal Reserve. The following tables summarize the activity in the CECL Allowance during the three months ended March 31, 2021 and 2020: CECL Allowance (dollars in thousands) Funded Unfunded (2) Total CECL allowance as of December 31, 2020 $ 10,590 $ — $ 10,590 Provision for credit losses, net 1,761 947 2,708 Charge-offs (1) (1,688) — (1,688) CECL allowance as of March 31, 2021 $ 10,663 $ 947 $ 11,610 (dollars in thousands) CECL Allowance Loan loss reserve as of December 31, 2019 $ 4,096 Adoption of ASU 2016-13 (3) 1,975 Provision for credit losses, net 4,432 Charge-offs (1) (537) CECL allowance as of March 31, 2020 $ 9,966 (1) Represents either loan repayments where the proceeds are less than the principal outstanding or transfers to real property owned upon foreclosure where the fair values of the underlying collateral are less than the principal outstanding. (2) CECL Allowance relates to unfunded commitments is presented as a liability under accounts payable and accrued liabilities in our condensed consolidated balance sheet. (3) Recorded as a direct charge to stockholders’ equity as a cumulative-effect of change in accounting principle. In determining our CECL allowance, we segment loans with similar characteristics. All of our loans are construction loans secured by residential or commercial real estate and, in assessing estimated credit losses, we evaluate various metrics, including, but not limited to, construction type, collateral type, LTV, market conditions of property location and borrower experience and financial strength. The following tables allocate the carrying value of our loan portfolio based on our internal credit quality indicators in assessing estimated credit losses and vintage of origination at the dates indicated: At March 31, 2021 Year Originated (1) (dollars in thousands) Carrying Value % of Portfolio 2021 2020 2019 2018 2017 Prior Construction Type Vertical Construction $ 505,347 62.0 % $ 118,678 $ 252,275 $ 37,051 $ 3,080 $ 88,973 $ 5,290 Horizontal Development 143,405 17.6 60,361 63,180 15,453 283 — 4,128 Investment 166,382 20.4 46,769 72,987 18,917 3,809 17,953 5,947 Total $ 815,134 100.0 % $ 225,808 $ 388,442 $ 71,421 $ 7,172 $ 106,926 $ 15,365 CECL allowance (2) (10,663) Carrying value, net $ 804,471 (1) Represents the year of origination or amendment where the loan incurred a full re-underwriting. (2) $0.9 million of the CECL Allowance is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable and accrued liabilities in our condensed consolidated balance sheet. At March 31, 2021 Year Originated (1) (dollars in thousands) Carrying Value % of Portfolio 2021 2020 2019 2018 2017 Prior Collateral Type Apartments $ 149,936 18.4 % $ 44,920 $ 54,135 $ 19,952 $ — $ 25,897 $ 5,032 Residential Lots 125,808 15.4 57,579 49,003 9,874 — — 9,352 Condos 85,240 10.5 9,269 39,408 200 1,326 35,037 — Single family housing 73,990 9.1 16,047 45,079 5,579 1,078 5,484 723 Land 73,237 9.0 40,678 12,321 — 3,052 17,186 — Townhomes 80,611 9.9 12,348 43,735 — 1,716 22,554 258 Mixed Use 40,429 5.0 9,884 28,622 1,923 — — — Hotel 53,253 6.5 1,192 42,990 9,071 — — — Senior Housing 38,149 4.7 — 38,149 — — — — Offices 31,525 3.9 — 9,480 22,045 — — — Commercial Lots 15,259 1.9 — 15,259 — — — — Retail 11,838 1.5 5,594 4,346 1,898 — — — Industrial 15,403 1.9 15,403 — — — — — Quadplex 5,915 0.7 — 5,915 — — — — Commercial 6,524 0.8 5,645 — 879 — — — Duplex 3,821 0.5 3,053 — — — 768 — Commercial other 4,196 0.3 4,196 — — — — — Total $ 815,134 100.0 % $ 225,808 $ 388,442 $ 71,421 $ 7,172 $ 106,926 $ 15,365 CECL allowance (2) (10,663) Carrying value, net $ 804,471 (1) Represents the year of origination or amendment where the loan incurred a full re-underwriting. (2) $0.9 million of the CECL Allowance is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable and accrued liabilities in our condensed consolidated balance sheet. At March 31, 2021 Year Originated (1) (dollars in thousands) Carrying Value % of Portfolio 2021 2020 2019 2018 2017 Prior LTV (2) 0 - 40% $ 45,090 5.5 % $ 21,356 $ 20,369 $ — $ 3,052 $ 313 $ — 41 - 45% 29,256 3.6 27,489 1,767 — — — — 46 - 50% 46,420 5.7 15,507 15,460 15,453 — — — 51 - 55% 77,277 9.5 27,310 29,594 2,777 — 16,873 723 56 - 60% 54,992 6.7 15,073 25,769 200 — 13,950 — 61 - 65% 532,281 65.3 118,559 270,307 52,991 4,120 75,790 10,514 66 - 70% 17,582 2.2 514 17,068 — — — — 71 - 75% — 0.0 — — — — — — 76 - 80% — 0.0 — — — — — — Above 80% 12,236 1.5 — 8,108 — — — 4,128 Total $ 815,134 100.0 % $ 225,808 $ 388,442 $ 71,421 $ 7,172 $ 106,926 $ 15,365 CECL allowance (3) (10,663) Carrying value, net $ 804,471 (1) Represents the year of origination or amendment where the loan incurred a full re-underwriting. (2) Represents LTV as of origination or latest amendment. LTVs above 65% generally represent loans in contractual default status where we have agreed to extend funds to the borrower above 65% in order to facilitate successful completion of the construction and return of capital. (3) $0.9 million of the CECL Allowance is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable and accrued liabilities in our condensed consolidated balance sheet. At December 31, 2020 Year Originated (1) (dollars in thousands) Carrying Value % of Portfolio 2020 2019 2018 2017 2016 Prior Construction Type Vertical Construction $ 514,136 63.5 % $ 354,012 $ 57,090 $ 6,853 $ 88,655 $ 7,526 $ — Horizontal Development 153,345 19.0 129,607 15,028 283 — 8,427 — Investment 141,595 17.5 98,146 18,657 7,259 16,444 — 1,089 Total $ 809,076 100.0 % $ 581,765 $ 90,775 $ 14,395 $ 105,099 $ 15,953 $ 1,089 CECL allowance (10,590) Carrying value, net $ 798,486 (1) Represents the year of origination or amendment where the loan incurred a full re-underwriting. At December 31, 2020 Year Originated (1) (dollars in thousands) Carrying Value % of Portfolio 2020 2019 2018 2017 2016 Prior Collateral Type Apartments $ 129,588 16.0 % $ 79,931 $ 18,953 $ — $ 24,232 $ 6,472 $ — Residential Lots 124,548 15.4 105,830 10,291 — — 8,427 — Condos 92,245 11.4 52,714 3,106 4,405 32,020 — — Single family housing 90,131 11.1 69,438 8,839 1,028 10,103 — 723 Land 72,913 9.0 48,844 — 7,259 16,444 — 366 Townhomes 72,773 9.0 47,391 1,061 1,703 21,564 1,054 — Mixed Use 66,092 8.2 60,232 5,860 — — — — Hotel 51,115 6.3 42,874 8,241 — — — — Senior Housing 34,283 4.2 34,283 — — — — — Offices 29,540 3.7 8,495 21,045 — — — — Commercial Lots 15,683 1.9 15,683 — — — — — Retail 11,397 1.4 9,500 1,897 — — — — Industrial 11,309 1.4 704 10,605 — — — — Quadplex 5,592 0.7 5,592 — — — — — Commercial 877 0.1 — 877 — — — — Duplex 736 0.1 — — — 736 — — Commercial other 254 0.1 254 — — — — — Total $ 809,076 100.0 % $ 581,765 $ 90,775 $ 14,395 $ 105,099 $ 15,953 $ 1,089 CECL allowance (10,590) Carrying value, net $ 798,486 (1) Represents the year of origination or amendment where the loan incurred a full re-underwriting. At December 31, 2020 Year Originated (1) (dollars in thousands) Carrying Value % of Portfolio 2020 2019 2018 2017 2016 Prior LTV (2) 0 - 40% $ 22,601 2.8 % $ 18,112 $ — $ 3,862 $ 261 $ — $ 366 41 - 45% 68,263 8.4 44,683 20,183 3,397 — — — 46 - 50% 23,864 2.9 15,917 7,224 — — — 723 51 - 55% 76,539 9.5 57,583 2,774 — 16,182 — — 56 - 60% 135,170 16.7 117,309 3,106 — 9,639 5,116 — 61 - 65% 450,253 55.7 301,964 57,488 7,136 76,139 7,526 — 66 - 70% 9,416 1.2 9,416 — — — — — 71 - 75% 1,983 0.2 1,983 — — — — — 76 - 80% 14,544 1.8 14,544 — — — — — Above 80% 6,443 0.8 254 — — 2,878 3,311 — Total $ 809,076 100.0 % $ 581,765 $ 90,775 $ 14,395 $ 105,099 $ 15,953 $ 1,089 CECL allowance (10,590) Carrying value, net $ 798,486 (1) Represents the year of origination or amendment where the loan incurred a full re-underwriting. (2) Represents LTV as of origination or latest amendment. LTVs above 65% generally represent loans in contractual default status where we have agreed to extend funds to the borrower above 65% in order to ensure successful completion of the construction and return of capital. |
Fair value measurements
Fair value measurements | 3 Months Ended |
Mar. 31, 2021 | |
Fair value measurements | |
Fair value measurements | Note 4 – Fair value measurements The following tables present estimated fair values of our financial instruments as of the period indicated, whether or not recognized or recorded in the consolidated balance sheets at the period indicated: March 31, 2021 Fair Value Measurements Using Carrying Estimated (dollars in thousands) Value Fair Value Level 1 Level 2 Level 3 Financial Assets Cash and cash equivalents $ 204,277 $ 204,277 $ 204,277 $ — $ — Mortgage notes receivable, net 804,471 804,471 — — 804,471 December 31, 2020 Fair Value Measurements Using Carrying Estimated (dollars in thousands) Value Fair Value Level 1 Level 2 Level 3 Financial Assets Cash and cash equivalents $ 223,375 $ 223,375 $ 223,375 $ — $ — Mortgage notes receivable, net 798,486 798,486 — — 798,486 We follow the accounting guidance in ASC 820, Fair Value Measurements and Disclosures, which requires the categorization of fair value measurement into three broad levels of the fair value hierarchy as follows: Level 1 – Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 – Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The following table sets forth assets and liabilities measured and reported at fair value on a recurring and nonrecurring basis, as well as for which fair value is only disclosed, as of March 31, 2021 and December 31, 2020. All of these fair values are categorized as Level 3. The table also contains information about valuation methodologies and inputs used for assets that are measured at fair value and categorized within Level 3 as of March 31, 2021 and December 31, 2020: Level 3 Valuation Unobservable Range of (dollars in thousands) March 31, 2021 December 31, 2020 technique inputs inputs Real property (1) 13,113 8,473 Collateral valuations Discount to appraised value based on comparable market prices 0 - 10 % Collateral dependent loans, net of allowance for credit losses (2) 60,634 30,920 Collateral valuations Discount to appraised value based on comparable market prices 0 - 10 % Total $ 73,747 $ 39,393 (1) Real property is stated at lower of cost or fair value, a non-recurring measurement of fair value. (2) Loans meeting the definition of collateral dependent are measured at the fair value less the costs to sell the underlying property. The carrying value of the collateral dependent loans, net of the allowance for credit losses, approximates fair value. Fair value on a nonrecurring basis Investments in real properties are initially recorded at the acquisition cost less estimated costs to sell, which approximates fair value. Upon transfer from mortgage notes receivable to investment in real estate property, the fair value less costs to sell becomes the new cost for the property. Costs related to acquisition, development, construction and improvements are capitalized. At each reporting date, the fair value of real properties is based upon the most recent independent third-party appraisals of value discounted based upon our experience with actual liquidation values. These discounts to the appraisals generally range from 0% to 10%. As the result of using unobservable inputs in the valuation, we classify investments in real properties as Level 3 within the fair value hierarchy. For collateral dependent loans, the fair values are based on the value of the underlying collateral less the costs to sell. At each reporting date, these loans are evaluated based upon the most recent independent third-party appraisals of value discounted based upon our experience with actual liquidation values. These discounts to the appraisals generally range from 0% to 10%. As the result of using unobservable inputs in the valuation, we classify collateral dependent as Level 3 within the fair value hierarchy. Fair value disclosure only For certain of our financial instruments, including cash equivalents, which are classified under Level 1 within the fair value hierarchy, the carrying amounts approximate fair value due to their short-term maturities. Our loans in mortgage notes receivable are evaluated for expected credit losses and mortgage notes receivable are presented net of an allowance for credit losses. Due to the short-term maturity of the mortgage notes receivable, a premium or discount is not material and the carrying value approximates fair value. We believe that our mortgage notes receivable net of the CECL allowance approximates fair value of the portfolio. As a result of the use of unobservable inputs, including third-party appraisals for estimating as-complete appraised values, we classify mortgage notes receivable as Level 3 within the fair value hierarchy. |
Stockholders' Equity and Member
Stockholders' Equity and Members' Equity | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' Equity and Members' Equity | |
Stockholders' Equity and Members' Equity | Note 5 - Stockholders’ Equity and Members’ Equity Stockholders’ Equity The Company is authorized to issue 500,000,000 shares of common stock with a par value of $0.001 per share and 100,000,000 shares of preferred stock with a par value of $0.001 per share. Holders of our common stock are entitled to one vote for each share. As of March 31, 2021 and December 31, 2020, there were 132,566,410 and 132,532,383 shares of common stock issued outstanding As of March 31, 2021 and December 31, 2020 Earnings per Share The table below presents the computation of basic and diluted net income per share of common stock for the periods presented: Three Months Ended Three Months Ended (dollars in thousands, except share and per share data): March 31, 2021 March 31, 2020 Net income $ 20,381 $ 26,469 Basic weighted-average shares of common stock outstanding 132,550,227 132,111,329 Dilutive effect of share-based compensation 128,585 224,986 Diluted weighted-average shares of common stock outstanding (1) 132,678,812 132,336,315 Basic earnings per share $ 0.15 $ 0.20 Diluted earnings per share $ 0.15 $ 0.20 (1) We exclude anti-dilutive shares from calculation of weighted-average shares for diluted earnings per share. For the three months ended March 31, 2021, there were 15.6 million shares related to the Public Warrants and Private Warrants and 371,318 shares of unvested restricted stock unit awards, which are not included in the above calculation of diluted earnings per share because in doing so they would be anti-dilutive. For the three months ended March 31, 2020, only the 15.6 million shares related to the Public Warrants and Private Warrants were anti-dilutive and not included in the above calculation of diluted earnings per share . |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2021 | |
Income Taxes | |
Income Taxes | Note 6 - Income Taxes The Manager has elected to be treated as a TRS and this election applies to the wholly-owned subsidiaries of the Manager, including the Private REIT Manager. Having TRSs permit us to participate in certain activities from which REITs are generally precluded, as long as these activities meet specific criteria, are conducted within the parameters of certain limitations established by the Code and are conducted in entities which elect to be treated as taxable subsidiaries under the Code. To the extent these criteria are met, we will continue to maintain the qualification as a REIT. We generally must distribute annually at least 90% of our net taxable income, subject to certain adjustments and excluding any net capital gain, in order for U.S. federal income tax not to apply to our earnings that we distribute. To the extent that we satisfy this distribution requirement but distribute less than 100% of our net taxable income, we will be subject to U.S. federal income tax on our undistributed taxable income. In addition, we will be subject to a 4% nondeductible excise tax if the actual amount that we pay out to our stockholders in a calendar year is less than a minimum amount specified under U.S. federal tax laws. Our qualification as a REIT also depends on our ability to meet various other requirements imposed by the Code, which relate to organizational structure, diversity of stock ownership, and certain restrictions with regard to the nature of assets and the sources of income. Even if we qualify as a REIT, we may be subject to certain U.S. federal income and excise taxes and state and local taxes on our income and assets. If we fail to maintain our qualification as a REIT for any taxable year, we may be subject to material penalties as well as federal, state, and local income tax on our taxable income at regular corporate rates and we would not be able to qualify as a REIT for the subsequent four full taxable years. As of March 31, 2021 and December 31, 2020, we were in compliance with all REIT requirements. Based on our evaluation, we concluded that there are no significant uncertain tax positions requiring recognition in our condensed consolidated financial statements of a contingent tax liability for uncertain tax positions. Additionally, there were no amounts accrued for penalties or interest as of or during the periods presented in the accompanying condensed consolidated financial statements. The state and local tax jurisdictions for which we are subject to tax-filing obligations recognize our status as a REIT, and therefore, we generally do not pay income tax in such jurisdictions. We may, however, be subject to certain minimum state and local tax filing fees as well as certain excise or business taxes. Our TRSs are subject to U.S. federal, state and local income taxes. |
Equity Incentive Plan
Equity Incentive Plan | 3 Months Ended |
Mar. 31, 2021 | |
Equity Incentive Plan | |
Equity Incentive Plan | Note 7 - Equity Incentive Plan Stock Incentive Plan The Broadmark Realty 2019 Stock Incentive Plan (the “Plan”) allows for the issuance of up to 5,000,000 stock options, stock appreciation rights, restricted stock awards, restricted stock units or other equity-based awards or any combination thereof to the directors, employees, consultants or any other party providing services to us. The Plan is administered by the compensation committee of our board of directors. As of March 31, 2021, 3,624,268 share awards were available to be issued under the Plan. The restricted stock units granted under the Plan generally vest from one three performance period. A variable level of shares of our common stock, ranging from of target level, will be earned based on the level of achievement of the Relative TSR goals. The earned pRSUs will be paid in the form of common stock promptly following the end of the performance period. The pRSUs are each measured at fair value based on Monte Carlo simulation models. All RSUs awarded will be settled upon vesting in shares of our common stock. If (1) the recipient becomes disabled and the recipient’s employment or service is terminated as a result, (2) the recipient dies during the vesting period, or (3) the recipient’s employment is terminated without cause (as defined in the Plan) in connection with, or in certain cases within a specified period following a change in control (as defined in the Plan), then the vesting of the RSUs will fully accelerate as of the date of termination of employment. Dividend equivalents are not accrued or paid on RSUs granted to employees, executive officers and directors and accordingly those RSUs are not considered participating securities. If an award granted under the Plan expires or terminates, the shares subject to any portion of the award that expires or terminates without having been exercised or paid will again become available for the issuance of additional awards. The following table summarizes the activity related to RSUs during the three months ended March 31, 2021: Weighted Average Grant Date Fair Shares Market Value Unvested RSUs outstanding as of December 31, 2020 434,143 Granted 424,866 $ 8.68 Vested (37,227) $ 11.08 Unvested RSUs outstanding as of March 31, 2021 821,782 For the three months ended March 31, 2021 and 2020, we recognized compensation expense related to RSUs of $0.7 and $0.9 million, respectively, based on amortizing the fair value of the awards over the service (vesting) period. As of March 31, 2021, there was $7.1 million of net unrecognized compensation cost related to unvested stock-based compensation arrangements. This compensation is recognized on a straight-line basis over a weighted-average recognition period of 2.3 years. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies. | |
Commitments and contingencies | Note 8 - Commitments and Contingencies The following table illustrates our contractual obligations and commercial commitments by due date as of March 31, 2021: Less than 1 More than (dollars in thousands) Total year 1-3 years 3-5 years 5 years Construction holdbacks (1) 379,069 237,632 141,437 — — Operating lease obligations $ 11,527 $ 812 $ 1,916 $ 2,033 $ 6,766 Total $ 390,596 $ 238,444 $ 143,353 $ 2,033 $ 6,766 (1) Includes construction holdbacks of $42.1 million on participating interests sold to the Private REIT as of March 31, 2021. The funding timing and amounts of construction holdbacks are uncertain as these commitments relate to loans for construction costs and depend on the progress and performance of the underlying projects. Construction Loans Our commitments and contingencies include usual obligations incurred by real estate lending companies in the normal course of business, including construction holdbacks as disclosed in Note 3. Lease Commitments On March 18, 2020, we entered into a non-cancelable operating lease agreement for our office space in Seattle with an original lease period expiring in 2032. The lease commencement date was in the first quarter of 2021. The total cash payments included in the measurement of our operating lease liabilities, net of lease incentives was $11.7 million. The right-of-use assets obtained in exchange for the new operating lease obligation and the tenant improvements were $6.4 and $2.0 million, respectively. The discount rate for the operation lease was 6.0%, resulting in an imputed interest amount of $3.3 million. Credit Facility On February 19, 2021, we entered into a credit agreement with a syndicate of lenders and JPMorgan Chase Bank, N.A., as administrative agent for the lenders, providing for a $135.0 million revolving credit facility. By providing backup liquidity for future draws on our construction loans, we expect the availability of the revolving credit facility will enable us to use a larger percentage of our cash balances for lending activities without planning to incur debt in the ordinary course of business. Our obligations under the revolving credit facility are secured by substantially all of our Company’s assets. The revolving credit facility contains covenants customary for financings of this type, including limitations on the incurrence of indebtedness, liens, asset dispositions, acquisitions, mergers and consolidations, certain dividends, distributions and other payments, advances and investments, payments to affiliates, optional prepayments and other modifications of certain other indebtedness, and amendments, terminations and waivers of certain material agreements, as well as a minimum tangible net worth and a total debt to equity ratio requirement. Among other things, the credit agreement provides that we may not pay cash dividends that would result in non-compliance with the financial covenants under the credit agreement or during an event of default under the credit agreement, except in the case of defaults other than payment defaults, for dividends in amounts necessary to maintain our REIT status. The revolving credit facility contains events of default customary for financings of this type, including failure to pay principal, interest and other amounts, materially incorrect representations or warranties, failure to observe covenants and other terms of the revolving credit facility, cross-defaults to other indebtedness, bankruptcy, insolvency, material judgments, certain ERISA violations, changes in control and failure to maintain REIT status, in some cases subject to customary grace periods. Legal Proceedings From time to time, we are named as a defendant in legal actions relating to transactions conducted in the ordinary course of business. Although there can be no assurance of the outcome of such legal actions, in the opinion of management, we do not have a potential liability related to any current legal proceeding or claim that would individually or in the aggregate materially affect our results of operations, financial condition or cash flows. Concentration Risk Our portfolio of active loans is primarily secured by first deed of trust liens on residential and commercial real estate located in 14 states and the District of Columbia. Our loan portfolio is also concentrated within ten counties, the largest being Utah county in Utah. As of March 31, 2021 and December 31, 2020, the top ten counties make up 44.5% and 43.2% of the total committed amount of loans in our total portfolio. |
Related party transactions
Related party transactions | 3 Months Ended |
Mar. 31, 2021 | |
Related party transactions | |
Related party transactions | Note 9 - Related party transactions Private Placement with Farallon On November 14, 2019, Broadmark Realty consummated a business combination (the “Business Combination”) pursuant to an Agreement and Plan of Merger, dated August 9, 2019 (the “Merger Agreement”). In connection with the Business Combination and the execution of the Merger Agreement, we entered into certain subscription agreements with affiliates of Farallon Capital Management, L.L.C. (the “Farallon Entities”) for a private placement (the “PIPE Investment”) of our shares of common stock, pursuant to which, immediately prior to the consummation of the Business Combination, we issued and sold to the Farallon Entities an aggregate of 7,174,163 shares of common stock for an aggregate purchase price of approximately $75.0 million at a price per share equal to $10.45352229 (the “Reference Price”). In connection with the PIPE Investment, we issued to the Farallon Entities an aggregate of 7,174,163 Public Warrants. The Farallon Entities received a fee for each warrant equal to the cash payable per each warrant held by unaffiliated Public Warrant holders in connection with the warrant amendment proposal approved as part of the Business Combination, in an amount equal to $1.60 per warrant. As a result of the PIPE Investment, the Farallon Entities own more than 5% of our outstanding common stock. We also provided the Farallon Entities with certain registration rights in connection with the PIPE Investment, pursuant to which we registered in December 2019 the shares of our common stock, Public Warrants and shares issuable upon exercise of the Public Warrants under the Securities Act. As part of the PIPE Investment, the Farallon Entities had an option (the “Optional Subscription”) to purchase up to $25 million of additional shares of common stock, which were exercisable during the 365-day Broadmark Private REIT, LLC The Private REIT is a private real estate finance company that primarily participates in short-term, first deed of trust loans secured by real estate that are originated, underwritten and serviced by Broadmark Realty Capital Inc. The Private REIT is managed by our subsidiary in accordance with a market-based arrangement and was determined to be a voting interest entity. We do not directly or indirectly control the Private REIT and own only a nominal interest in the Private REIT’s common units and, therefore, we do not consolidate the Private REIT. Furthermore, the Private REIT’s participations in loans originated by us meet the characteristics of participating interests and therefore, are treated as sales of mortgage notes receivable and are derecognized from our condensed consolidated financial statements. |
Subsequent events
Subsequent events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent events | |
Subsequent events | Note 10 - Subsequent events Dividend Declaration On April 16, 2021, our board of directors declared a cash dividend of $0.07 per common share payable on May 14, 2021 to stockholders of record as of April 30, 2021. |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Summary of significant accounting policies | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements include Broadmark Realty Capital Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. These condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the audited financial statements and accompanying notes included in Broadmark Realty Capital Inc.’s Annual Report on Form 10-K/A for the year ended December 31, 2020, which was filed with the SEC on March 2, 2021. The condensed consolidated balance sheet as of December 31, 2020, included herein, was derived from the audited financial statements of Broadmark Realty Capital Inc. as of that date. The unaudited condensed consolidated interim financial statements, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly our financial position as of March 31, 2021, our results of operations and stockholders’ equity for the three month periods ended March 31, 2021 and 2020, and our cash flows for the three month periods ended March 31, 2021 and 2020. The results of the three month period ended March 31, 2021 is not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any interim period or for any other future year. |
Principles of Consolidation | Principles of Consolidation Broadmark Realty consolidates those entities in which it has control over significant operating, financial and investing decisions of the entity, as well as those entities deemed to be variable interest entities (“VIEs”), if any, in which Broadmark Realty is determined to be the primary beneficiary. Broadmark Realty is not the primary beneficiary of, and therefore does not consolidate, any VIEs. The Private REIT was determined to be a voting interest entity for which we, through our wholly-owned subsidiary acting as manager with no significant equity investment, do not hold a controlling interest in and do not consolidate. Furthermore, the Private REIT participation in loans originated by us meets the characteristics of a participating interest in accordance with GAAP and therefore, is treated as a sale of mortgage notes receivable and is derecognized from our consolidated financial statements. |
Reclassifications | Reclassifications Certain amounts in our prior period condensed consolidated financial statements have been reclassified to conform to the presentation of our current period condensed consolidated financial statements. These reclassifications had no effect on our previously reported net income or stockholders’ equity. The reclassification for the separate presentation of accretion of deferred origination and amendment fees resulted in a reclassification of net cash provided by operating activities to net cash provided by investing activities, both as previously reported. The reclassifications also included the separate presentation of amortization of right of use assets and change in lease liabilities and the combined presentation of depreciation and amortization on the condensed consolidated statements of cash flows. |
Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts and disclosures at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. The most significant estimates relate to the expected credit losses on our loans and the fair value of financial instruments and investments in real property. Accordingly, actual results could differ from those estimates. The COVID-19 pandemic has introduced significant additional uncertainty with respect to estimates, judgments and assumptions, which may materially impact the estimates previously listed, among others. |
Certain Significant Risks and Uncertainties | Certain Significant Risks and Uncertainties In the normal course of business, we encounter one primary type of economic risk in the form of credit risk. Credit risk is the risk of default on our investment in mortgage notes receivable resulting from a borrower’s inability or unwillingness to make contractually required payments. We believe that the carrying values of our loans reasonably consider this credit risk. In addition, we are subject to significant tax risks. If we were to fail to qualify as a REIT in any taxable year, we would be subject to U.S. federal corporate income tax, which could be material. We operate in a dynamic industry and, accordingly, can be affected by a variety of factors. For example, we believe that changes in any of the following areas could have a significant negative effect on us in terms of our future financial position, results of operations or cash flows: public health crises, like the COVID-19 pandemic; the economy in the areas we operate; competition in our market; the stability of the real estate market and the impact of interest rate changes; changes in government regulation affecting our business; natural disasters and catastrophic events; our ability to attract and retain qualified employees and key personnel; and protection of customers’ information and other privacy concerns, among other things. |
Reportable Segments | Reportable Segments We operate the business as one reportable segment, which originates, underwrites and services construction loans. |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider all highly liquid investments with an original maturity of 90 days or less at the date of purchase to be cash equivalents. We have a cash management sweep account repurchase agreement whereby our bank nightly sweeps cash in excess of $750,000, sells us specific U.S. Government Agency securities and then repurchases these securities the next day. We maintain our cash and cash equivalents with financial institutions, which are insured up to a maximum of $250,000 per account as of March 31, 2021 and December 31, 2020. The balances in these accounts may exceed the insured limits. There were no restrictions on cash as of March 31, 2021 or December 31, 2020. |
Mortgage Notes Receivable | Mortgage Notes Receivable Mortgage notes receivable (referred to herein as “mortgage notes receivable”, “construction loans”, “loans”, or “notes”) are classified as held for investment as we have the intent and ability to hold until maturity or payoff and are carried in the condensed consolidated balance sheets at amortized cost, net of construction holdbacks, interest reserves, allowance for credit losses and deferred origination and amendment fees. Participations in mortgage notes receivables are accounted for as sales and derecognized from the balance sheet when control over the transferred assets has been surrendered. Control over transferred assets is deemed to be surrendered when: (1) a group of financial assets or a participating interest in an entire financial asset has been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right, beyond a more than trivial benefit) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. If the sales do not meet these criteria, the sale of the participation is treated as a secured borrowing. As of March 31, 2021, all participations in mortgage notes receivable sold to the Private REIT have achieved sale accounting. |
Current Expected Credit Losses Allowance | Current Expected Credit Losses Allowance In the fourth quarter of 2020, we adopted the current expected credit loss (“CECL Standard”) for the full year ended December 31, 2020 as we ceased to qualify as an emerging growth company effective December 31, 2020. As a result, we were no longer permitted an extended transition period for complying with new or revised accounting standards affecting public companies. The initial CECL allowance adjustment of $2.0 million was recorded on January 1, 2020 as a cumulative-effect of change in accounting principle through a direct charge to accumulated deficit on our condensed consolidated statements of stockholders’ equity; however subsequent changes to the CECL allowance are recognized through net income on our condensed consolidated statements of income. Our condensed consolidated statement of income for the three months ended March 31, 2020 includes an additional provision for credit losses of $0.8 million associated with the adoption of the CECL Standard, as a result, our previously reported net income of $27.3 million for this period is lower by $0.8 million. The CECL Standard replaced the incurred loss model under existing guidance with an expected loss model for instruments measured at amortized cost. We now record an allowance for credit losses in accordance with the CECL Standard on our loan portfolio, including unfunded construction holdbacks, on a collective basis by assets with similar risk characteristics. In addition, for assets that are classified as collateral dependent based on foreclosure being probable, we continue to record loan specific allowances based on the fair value of the collateral for expected credit losses under the CECL Standard. Given the short-term nature of our loans, we evaluate the most recent external appraisal and depending on the age of the appraisal, may order a new appraisal or, where available, will evaluate against existing comparable sales or other pertinent information to estimate the fair value of the collateral for such loans. The CECL Standard requires an entity to consider historical loss experience, current conditions, and a reasonable and supportable forecast of the economic environment. The Company utilizes a probability of default/loss given default (“PD/LGD”) method approach for estimating current expected credit losses. In accordance with the PD/LGD method, an annual historical loss rate is applied to the amortized cost of an asset or pool of assets over the remaining expected life. The PD/LGD method requires consideration of the timing of expected future funding of existing commitments and repayments over each asset’s remaining life. An annual loss factor, adjusted for macroeconomic estimates, is applied over each subsequent period and aggregated to arrive at the CECL allowance. In determining the CECL allowance, we considered various factors including (i) historical loss experience in our portfolio, (ii) historical loss experience in the commercial real estate lending market, (iii) timing of expected pay offs including prepayments and extensions where reasonably expected, and (iv) our current and future view of the macroeconomic environment. We utilize a reasonable and supportable forecast period equal to the contractual term of the loan plus short-term extensions of one to three months that are reasonably expected for construction loans. Management estimates the allowance for credit losses using relevant information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. The allowance for credit losses is maintained at a level sufficient to provide for expected credit losses over the life of the loan based on evaluating historical credit loss experience and making adjustments to historical loss information for differences in the specific risk characteristics in the current loan portfolio. Refer to “Note 3 – Mortgage Notes Receivable” for further information regarding the CECL allowance. We have made an accounting policy election to exclude accrued interest receivable, included in interest and fees receivable, net on our consolidated balance sheets, from the amortized cost basis of the related mortgage notes receivable in determining the CECL allowance as any uncollected accrued interest receivable is written off in a timely manner. No interest income is recognized on mortgage notes receivable that are in contractual default unless the interest is paid in cash or collectability of all amounts due is reasonably assured. In addition, in certain instances, where the interest reserve on a current loan has been fully depleted and the interest payment is not expected to be collected from the borrower, we may place a current loan on non-accrual status and recognize interest income on a cash-basis. |
Deferred Income | Deferred Income Deferred income represents the amount of our origination and amendment fees that have been deferred and will be recognized in income over the contractual maturity of the underlying loan. Origination fees are included in the total commitment to the borrower and financed at the time of loan origination. Amendment fees are either included in the total commitment to the borrower and financed at the time of the loan amendment or are billed to the borrower when the loan is amended and not capitalized into the principal outstanding. Deferred origination and amendment fees capitalized into the principal outstanding are included within mortgage notes receivable, net on the consolidated balance sheets. Deferred amendment fees that are not included in the principal outstanding are presented within interest and fees receivable, net on the condensed consolidated balance sheets. |
Interest and Fees Receivable | Interest and Fees Receivable Interest on performing loans is accrued and recognized as interest income at the contractual rate of interest, or at the contractual rate of monthly minimum interest. Extension fees are charged when we agree to extend the maturity dates of loans. In addition, late fees are changed when borrower payments are contractually past due. We monitor each note’s outstanding interest and fee receivables and, based on historical performance, generally reserve against the balance after a receivable is greater than 60 days past due unless collectability of all amounts due is reasonably assured. We have made an accounting policy election to exclude accrued interest and fee receivables from the amortized cost basis of the related mortgage notes receivable in determining the CECL allowance as any uncollected accrued interest receivable is written off in a timely manner. |
Real property | Real property Real property owned by us consists of real estate acquired in settlement of loans. Real estate acquired through foreclosure or deed in lieu of foreclosure is recorded at fair market value at the time of acquisition, which generally approximates the carrying value of the loan secured by such property. Costs related to acquisition, development, construction and improvements are capitalized to the extent the investment in the real property does not exceed the fair value less estimated costs to sell. Expenditures for repairs and maintenance are charged to expense when incurred. As of March 31, 2021 and December 31, 2020, we owned four and three properties or projects, respectively. |
Leases | Leases Our office space in Seattle, Washington is subject to an operating lease. Our operating lease is included in right of use assets and lease liabilities on our consolidated balance sheets. The lease agreement includes both lease components (e.g., fixed rent) and non-lease components (e.g., common area maintenance). We account for the lease and non-lease components as a single component. Right of use assets represent our right to use an underlying asset during the lease term and lease liabilities represent our obligation to make lease payments. Right of use assets and lease liabilities are recognized at the lease commencement date based on the present value of the total lease payments not yet paid, including lease incentives not yet received, with the right of use assets further adjusted for any prepaid or accrued lease payments, lease incentives received and/or initial direct costs incurred. Our lease arrangement also includes variable payments for costs such as common-area maintenance, utilities, taxes or other operating costs, which are based on a percentage of actual expenses incurred. These variable lease payments are excluded from the measurement of the right of use assets and lease liabilities. Our lease term is through January 2032, which includes an option to extend the lease term for an additional five years. When determining if a renewal option is reasonably certain of being exercised at lease commencement, we consider several factors, including but not limited to, contract-based, asset-based and entity-based factors. We reassess the term of the existing lease if there is a significant event or change in circumstances within our control that affects whether we are reasonably certain to exercise the option to extend the lease. Examples of such events or changes include construction of significant leasehold improvements or other modifications or customizations to the underlying asset, relevant business decisions or subleases. We have concluded that the renewal option is not reasonably certain of being exercised, therefore, the renewal is not included in the right of use asset and lease liability. As our lease did not provide an implicit rate, we use our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments. We recognize lease expense for our operating lease on a straight-line basis over the lease term. Variable lease payments are generally recognized when incurred. These expenses are included in general and administrative expenses in the consolidated statements of income. |
Goodwill | Goodwill Goodwill represents the excess of the cost of an acquired business over the fair value of the assets acquired at the date of acquisition and is not amortized. We assess the impairment of goodwill on an annual basis, in our fourth quarter, or whenever events or changes in circumstances indicate that goodwill may be impaired. In our evaluation of goodwill, we typically first perform a qualitative assessment to determine whether the carrying value of each reporting unit is greater than its fair value. If it is more likely than not that the carrying value of a reporting unit is greater than its fair value, we perform a quantitative assessment and an impairment charge is recorded in our statements of operations for the excess of carrying value of the reporting unit over its fair value. We reevaluated the fair value of the reporting unit during our annual assessment in the fourth quarter of 2020 and the fair value of the reporting unit exceeded the carrying value and there was no goodwill impairment. During the first quarter of 2021, we continued to monitor the impact of COVID-19 and determined there were no new triggering events to warrant a quantitative assessment of our goodwill. In the first quarter of 2020, we recorded a measurement period adjustment to reduce the preliminary fair value of intangible assets in the form of customer relationships by $5.0 million and increased our preliminary value of goodwill by $5.0 million. As a result of this adjustment to preliminary values, $0.9 million of amortization of intangible assets recorded in 2019 was reversed in the first quarter of 2020. |
Other Assets | Other Assets Other assets primarily consist of fixed assets, deferred financing costs, intangible assets, prepaid insurance and other operating receivables. |
Fixed Assets | Fixed Assets Fixed assets, which are included in other assets in the accompanying condensed consolidated balance sheets are stated at cost, less accumulated depreciation. Repairs and maintenance to these assets are charged to expense as incurred; major improvements enhancing the function and/or useful life are capitalized. When items are sold or retired, the related cost and accumulated depreciation are removed from the accounts and any gains or losses arising from such transactions are recognized. Depreciation is recorded on the straight-line basis over the estimated useful life of the assets. For computer equipment, office equipment, furniture and fixtures the useful lives range from three |
Deferred Financing Costs | Deferred Financing Costs Deferred financing costs represent direct costs associated with the execution of the revolving credit facility. As the revolving credit facility has no principal outstanding and there is no recognized debt liability, the deferred financing costs are included in other assets on the condensed consolidated balance sheet. These costs are amortized on the straight-line basis over the initial term of our credit facility. |
Intangible Assets | Intangible Assets We record the intangible assets at fair value at the acquisition date and are amortizing the value of these finite-lived intangibles into expense over the expected useful life. All of our intangible assets relate to the value of customer relationships. As of March 31, 2021 and December 31, 2020, intangible assets net of accumulated amortization was $0.5 and $0.6 million, respectively. |
Interest Income | Interest Income Interest income on mortgage notes receivable is accrued based on contractual rates applied to the principal balance outstanding, unless there is a minimum interest provision in the mortgage note. Many construction loans provide for minimum interest provisions, under which the contractual rate applies to, which are typically between 50% and 70% of the face amount of the note until the actual outstanding principal exceeds the minimum threshold. Mortgage notes receivable can be placed in contractual default status for any of the following reasons: (1) an interest payment is more than 30 days past due; (2) a note matures and the borrower fails to make payment of all amounts owed or extend the loan; or (3) the collateral becomes impaired in such a way that the ultimate collection of the note is doubtful. The accrual of interest income is suspended when a loan is in contractual default unless the interest is paid in cash or collectability of all amounts due is reasonably assured. In addition, in certain instances, where the interest reserve on a current loan has been fully depleted and the interest payment is not expected to be collected from the borrower, we may place a current loan on non-accrual status and recognize interest income on a cash-basis. Interest previously accrued may be reversed at that time, and such reversal is offset against interest income. The accrual of interest income resumes only when the suspended loan becomes contractually current or a credit analysis supports the ability to collect in accordance with the terms of the loan. |
Fee Income | Fee Income We charge loan origination fees in conjunction with origination. Amendment fees are charged when loan terms are modified, such as increases in interest reserves and construction holdbacks in line with our underwriting criteria or upon modification of a loan for the transition from horizontal development to vertical construction. We defer and amortize loan origination and amendment fees over the contractual terms of the loans. We charge inspection fees, which we use to hire independent inspectors to report on the status of construction projects. These fees are earned and recognized upon each construction draw request. |
Share-Based Payments | Share‑Based Payments We measure compensation expense for all share-based awards at fair value on the date of grant and recognize compensation expense over the service period on a straight-line basis for awards expected to vest, which is generally three years for employees and one year for directors. Share-based awards are issued under the Broadmark Realty Capital Inc. 2019 Stock Incentive Plan. Awards made to our employees and directors, typically consist of restricted stock units (“RSUs”). For awards with only a service vesting condition, the fair value of the award is based on the grant date closing price of our common stock less the present value of expected dividends over the requisite service period as the awards are not entitled to dividends. For these awards, we recognize stock-based compensation expense on a straight-line basis over the requisite service period for the entire award, subject to periodic adjustments to ensure that the cumulative amount of expense recognized through the end of any reporting period is at least equal to the portion of the grant date fair value of the award that has vested through that date, and we account for forfeitures prospectively as they occur. For awards that contain both service vesting and market conditions, referred to as performance restricted stock units (“pRSUs”), we use a Monte Carlo simulation model to calculate the grant date fair value. For these market-condition awards, regardless of the outcome of the market condition, we recognize stock-based compensation expense on a straight-line basis over the longest of explicit and derived service periods, and we account for forfeitures prospectively as they occur. If there are any modifications or cancellations of the underlying unvested share-based awards, we may be required to accelerate or increase any remaining unrecognized or previously recorded stock-based compensation expense. |
Income Taxes | Income Taxes We have elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, for U.S. federal income tax purposes (the “Code”). As a REIT, we generally are not subject to U.S. federal income taxes on net income we distribute to our shareholders. We intend to make timely distributions sufficient to satisfy the annual distribution requirements. If we fail to qualify as a REIT in any taxable year, we will be subject to U.S. federal income tax on our taxable income at regular corporate tax rates. Even if we qualify for taxation as a REIT, we may be subject to certain state and local taxes on our income and property and U.S. federal income and excise taxes on our undistributed income. Our TRSs are subject to U.S. federal income taxes. |
Earnings per Share | Earnings per Share We present both basic and diluted earnings per common share (“EPS”) amounts in our condensed consolidated financial statements. Basic EPS excludes dilution and is computed by dividing income available to common stockholders by the weighted-average number of shares of common stock outstanding for the period. Diluted EPS reflects the maximum potential dilution that could occur from our outstanding warrants and restricted stock units. We utilize the treasury stock method to measure dilution to earnings per share in calculating the net number of shares that would be issued assuming any related proceeds are used to buy back outstanding shares. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements There are no recent accounting pronouncements that we have yet to adopt with an expected impact on our financial position, results of operations or cash flows. |
Mortgage notes receivable (Tabl
Mortgage notes receivable (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Mortgage notes receivable | |
Schedule of mortgage notes receivable | (dollars in thousands) March 31, 2021 December 31, 2020 Total loan commitments $ 1,280,964 $ 1,245,963 Less: Construction holdbacks (1) 379,069 356,026 Interest reserves (1) 30,369 29,817 Private REIT participation (2) 42,740 37,729 Total principal outstanding for our mortgage notes receivable 828,786 822,391 Less: Allowance for credit losses (3) 10,663 10,590 Deferred origination and amendment fees 13,652 13,315 Mortgage notes receivable, net $ 804,471 $ 798,486 (1) Includes construction holdbacks of $42.1 and $40.4 million and interest reserves of $3.6 and $4.3 million on participating interests sold to the Private REIT as of March 31, 2021 and December 31, 2020, respectively. (2) The Private REIT’s participations in loans originated by us meet the characteristics of participating interests and, therefore, are treated as sales of mortgage notes receivable and are derecognized from our condensed consolidated financial statements. (3) $0.9 million of the CECL Allowance is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable and accrued liabilities in our condensed consolidated balance sheet. |
Schedule of activity in the CECL Allowance | CECL Allowance (dollars in thousands) Funded Unfunded (2) Total CECL allowance as of December 31, 2020 $ 10,590 $ — $ 10,590 Provision for credit losses, net 1,761 947 2,708 Charge-offs (1) (1,688) — (1,688) CECL allowance as of March 31, 2021 $ 10,663 $ 947 $ 11,610 (dollars in thousands) CECL Allowance Loan loss reserve as of December 31, 2019 $ 4,096 Adoption of ASU 2016-13 (3) 1,975 Provision for credit losses, net 4,432 Charge-offs (1) (537) CECL allowance as of March 31, 2020 $ 9,966 (1) Represents either loan repayments where the proceeds are less than the principal outstanding or transfers to real property owned upon foreclosure where the fair values of the underlying collateral are less than the principal outstanding. (2) CECL Allowance relates to unfunded commitments is presented as a liability under accounts payable and accrued liabilities in our condensed consolidated balance sheet. (3) Recorded as a direct charge to stockholders’ equity as a cumulative-effect of change in accounting principle. |
Schedule of composition of loan portfolio | At March 31, 2021 Year Originated (1) (dollars in thousands) Carrying Value % of Portfolio 2021 2020 2019 2018 2017 Prior Construction Type Vertical Construction $ 505,347 62.0 % $ 118,678 $ 252,275 $ 37,051 $ 3,080 $ 88,973 $ 5,290 Horizontal Development 143,405 17.6 60,361 63,180 15,453 283 — 4,128 Investment 166,382 20.4 46,769 72,987 18,917 3,809 17,953 5,947 Total $ 815,134 100.0 % $ 225,808 $ 388,442 $ 71,421 $ 7,172 $ 106,926 $ 15,365 CECL allowance (2) (10,663) Carrying value, net $ 804,471 (1) Represents the year of origination or amendment where the loan incurred a full re-underwriting. (2) $0.9 million of the CECL Allowance is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable and accrued liabilities in our condensed consolidated balance sheet. At March 31, 2021 Year Originated (1) (dollars in thousands) Carrying Value % of Portfolio 2021 2020 2019 2018 2017 Prior Collateral Type Apartments $ 149,936 18.4 % $ 44,920 $ 54,135 $ 19,952 $ — $ 25,897 $ 5,032 Residential Lots 125,808 15.4 57,579 49,003 9,874 — — 9,352 Condos 85,240 10.5 9,269 39,408 200 1,326 35,037 — Single family housing 73,990 9.1 16,047 45,079 5,579 1,078 5,484 723 Land 73,237 9.0 40,678 12,321 — 3,052 17,186 — Townhomes 80,611 9.9 12,348 43,735 — 1,716 22,554 258 Mixed Use 40,429 5.0 9,884 28,622 1,923 — — — Hotel 53,253 6.5 1,192 42,990 9,071 — — — Senior Housing 38,149 4.7 — 38,149 — — — — Offices 31,525 3.9 — 9,480 22,045 — — — Commercial Lots 15,259 1.9 — 15,259 — — — — Retail 11,838 1.5 5,594 4,346 1,898 — — — Industrial 15,403 1.9 15,403 — — — — — Quadplex 5,915 0.7 — 5,915 — — — — Commercial 6,524 0.8 5,645 — 879 — — — Duplex 3,821 0.5 3,053 — — — 768 — Commercial other 4,196 0.3 4,196 — — — — — Total $ 815,134 100.0 % $ 225,808 $ 388,442 $ 71,421 $ 7,172 $ 106,926 $ 15,365 CECL allowance (2) (10,663) Carrying value, net $ 804,471 (1) Represents the year of origination or amendment where the loan incurred a full re-underwriting. (2) $0.9 million of the CECL Allowance is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable and accrued liabilities in our condensed consolidated balance sheet. At March 31, 2021 Year Originated (1) (dollars in thousands) Carrying Value % of Portfolio 2021 2020 2019 2018 2017 Prior LTV (2) 0 - 40% $ 45,090 5.5 % $ 21,356 $ 20,369 $ — $ 3,052 $ 313 $ — 41 - 45% 29,256 3.6 27,489 1,767 — — — — 46 - 50% 46,420 5.7 15,507 15,460 15,453 — — — 51 - 55% 77,277 9.5 27,310 29,594 2,777 — 16,873 723 56 - 60% 54,992 6.7 15,073 25,769 200 — 13,950 — 61 - 65% 532,281 65.3 118,559 270,307 52,991 4,120 75,790 10,514 66 - 70% 17,582 2.2 514 17,068 — — — — 71 - 75% — 0.0 — — — — — — 76 - 80% — 0.0 — — — — — — Above 80% 12,236 1.5 — 8,108 — — — 4,128 Total $ 815,134 100.0 % $ 225,808 $ 388,442 $ 71,421 $ 7,172 $ 106,926 $ 15,365 CECL allowance (3) (10,663) Carrying value, net $ 804,471 (1) Represents the year of origination or amendment where the loan incurred a full re-underwriting. (2) Represents LTV as of origination or latest amendment. LTVs above 65% generally represent loans in contractual default status where we have agreed to extend funds to the borrower above 65% in order to facilitate successful completion of the construction and return of capital. (3) $0.9 million of the CECL Allowance is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable and accrued liabilities in our condensed consolidated balance sheet. At December 31, 2020 Year Originated (1) (dollars in thousands) Carrying Value % of Portfolio 2020 2019 2018 2017 2016 Prior Construction Type Vertical Construction $ 514,136 63.5 % $ 354,012 $ 57,090 $ 6,853 $ 88,655 $ 7,526 $ — Horizontal Development 153,345 19.0 129,607 15,028 283 — 8,427 — Investment 141,595 17.5 98,146 18,657 7,259 16,444 — 1,089 Total $ 809,076 100.0 % $ 581,765 $ 90,775 $ 14,395 $ 105,099 $ 15,953 $ 1,089 CECL allowance (10,590) Carrying value, net $ 798,486 (1) Represents the year of origination or amendment where the loan incurred a full re-underwriting. At December 31, 2020 Year Originated (1) (dollars in thousands) Carrying Value % of Portfolio 2020 2019 2018 2017 2016 Prior Collateral Type Apartments $ 129,588 16.0 % $ 79,931 $ 18,953 $ — $ 24,232 $ 6,472 $ — Residential Lots 124,548 15.4 105,830 10,291 — — 8,427 — Condos 92,245 11.4 52,714 3,106 4,405 32,020 — — Single family housing 90,131 11.1 69,438 8,839 1,028 10,103 — 723 Land 72,913 9.0 48,844 — 7,259 16,444 — 366 Townhomes 72,773 9.0 47,391 1,061 1,703 21,564 1,054 — Mixed Use 66,092 8.2 60,232 5,860 — — — — Hotel 51,115 6.3 42,874 8,241 — — — — Senior Housing 34,283 4.2 34,283 — — — — — Offices 29,540 3.7 8,495 21,045 — — — — Commercial Lots 15,683 1.9 15,683 — — — — — Retail 11,397 1.4 9,500 1,897 — — — — Industrial 11,309 1.4 704 10,605 — — — — Quadplex 5,592 0.7 5,592 — — — — — Commercial 877 0.1 — 877 — — — — Duplex 736 0.1 — — — 736 — — Commercial other 254 0.1 254 — — — — — Total $ 809,076 100.0 % $ 581,765 $ 90,775 $ 14,395 $ 105,099 $ 15,953 $ 1,089 CECL allowance (10,590) Carrying value, net $ 798,486 (1) Represents the year of origination or amendment where the loan incurred a full re-underwriting. At December 31, 2020 Year Originated (1) (dollars in thousands) Carrying Value % of Portfolio 2020 2019 2018 2017 2016 Prior LTV (2) 0 - 40% $ 22,601 2.8 % $ 18,112 $ — $ 3,862 $ 261 $ — $ 366 41 - 45% 68,263 8.4 44,683 20,183 3,397 — — — 46 - 50% 23,864 2.9 15,917 7,224 — — — 723 51 - 55% 76,539 9.5 57,583 2,774 — 16,182 — — 56 - 60% 135,170 16.7 117,309 3,106 — 9,639 5,116 — 61 - 65% 450,253 55.7 301,964 57,488 7,136 76,139 7,526 — 66 - 70% 9,416 1.2 9,416 — — — — — 71 - 75% 1,983 0.2 1,983 — — — — — 76 - 80% 14,544 1.8 14,544 — — — — — Above 80% 6,443 0.8 254 — — 2,878 3,311 — Total $ 809,076 100.0 % $ 581,765 $ 90,775 $ 14,395 $ 105,099 $ 15,953 $ 1,089 CECL allowance (10,590) Carrying value, net $ 798,486 (1) Represents the year of origination or amendment where the loan incurred a full re-underwriting. (2) Represents LTV as of origination or latest amendment. LTVs above 65% generally represent loans in contractual default status where we have agreed to extend funds to the borrower above 65% in order to ensure successful completion of the construction and return of capital. |
Fair value measurements (Tables
Fair value measurements (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Fair value measurements | |
Schedule of fair value of assets and liabilities | March 31, 2021 Fair Value Measurements Using Carrying Estimated (dollars in thousands) Value Fair Value Level 1 Level 2 Level 3 Financial Assets Cash and cash equivalents $ 204,277 $ 204,277 $ 204,277 $ — $ — Mortgage notes receivable, net 804,471 804,471 — — 804,471 December 31, 2020 Fair Value Measurements Using Carrying Estimated (dollars in thousands) Value Fair Value Level 1 Level 2 Level 3 Financial Assets Cash and cash equivalents $ 223,375 $ 223,375 $ 223,375 $ — $ — Mortgage notes receivable, net 798,486 798,486 — — 798,486 |
Schedule of valuation methodologies and inputs used for assets that are measured at fair value | Level 3 Valuation Unobservable Range of (dollars in thousands) March 31, 2021 December 31, 2020 technique inputs inputs Real property (1) 13,113 8,473 Collateral valuations Discount to appraised value based on comparable market prices 0 - 10 % Collateral dependent loans, net of allowance for credit losses (2) 60,634 30,920 Collateral valuations Discount to appraised value based on comparable market prices 0 - 10 % Total $ 73,747 $ 39,393 (1) Real property is stated at lower of cost or fair value, a non-recurring measurement of fair value. (2) Loans meeting the definition of collateral dependent are measured at the fair value less the costs to sell the underlying property. The carrying value of the collateral dependent loans, net of the allowance for credit losses, approximates fair value. |
Stockholders' Equity and Memb_2
Stockholders' Equity and Members' Equity (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' Equity and Members' Equity | |
Schedule of basic and diluted earnings per share | Three Months Ended Three Months Ended (dollars in thousands, except share and per share data): March 31, 2021 March 31, 2020 Net income $ 20,381 $ 26,469 Basic weighted-average shares of common stock outstanding 132,550,227 132,111,329 Dilutive effect of share-based compensation 128,585 224,986 Diluted weighted-average shares of common stock outstanding (1) 132,678,812 132,336,315 Basic earnings per share $ 0.15 $ 0.20 Diluted earnings per share $ 0.15 $ 0.20 (1) We exclude anti-dilutive shares from calculation of weighted-average shares for diluted earnings per share. For the three months ended March 31, 2021, there were 15.6 million shares related to the Public Warrants and Private Warrants and 371,318 shares of unvested restricted stock unit awards, which are not included in the above calculation of diluted earnings per share because in doing so they would be anti-dilutive. For the three months ended March 31, 2020, only the 15.6 million shares related to the Public Warrants and Private Warrants were anti-dilutive and not included in the above calculation of diluted earnings per share . |
Equity Incentive Plan (Tables)
Equity Incentive Plan (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Equity Incentive Plan | |
Summary of the activity related to restricted stock | Weighted Average Grant Date Fair Shares Market Value Unvested RSUs outstanding as of December 31, 2020 434,143 Granted 424,866 $ 8.68 Vested (37,227) $ 11.08 Unvested RSUs outstanding as of March 31, 2021 821,782 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies. | |
Schedule of contractual obligations and commercial commitments | Less than 1 More than (dollars in thousands) Total year 1-3 years 3-5 years 5 years Construction holdbacks (1) 379,069 237,632 141,437 — — Operating lease obligations $ 11,527 $ 812 $ 1,916 $ 2,033 $ 6,766 Total $ 390,596 $ 238,444 $ 143,353 $ 2,033 $ 6,766 (1) Includes construction holdbacks of $42.1 million on participating interests sold to the Private REIT as of March 31, 2021. The funding timing and amounts of construction holdbacks are uncertain as these commitments relate to loans for construction costs and depend on the progress and performance of the underlying projects. |
Summary of significant accoun_3
Summary of significant accounting policies - (Details) | 3 Months Ended | |||
Mar. 31, 2021USD ($)segmentproperty | Dec. 31, 2020USD ($)property | Mar. 31, 2020USD ($) | Jan. 01, 2020USD ($) | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Number of Reportable Segments | segment | 1 | |||
Threshold Sweep Account Balance | $ 750,000 | |||
Cash and cash equivalents insured maximum per account | 250,000 | $ 250,000 | ||
Restricted cash | 0 | 0 | ||
Accumulated deficit | (47,155,000) | $ (39,698,000) | ||
Provision for credit losses | 2,708,000 | $ 4,432,000 | ||
Net income (Loss) | $ 20,381,000 | 26,469,000 | ||
Number of properties | property | 4 | 3 | ||
Lessee, Operating Lease, Option to Extend | true | |||
Additional lease term | 5 years | |||
Impairment of goodwill | $ 0 | |||
Adjustment to goodwill | 5,000,000 | |||
Amortization reversed | 900,000 | |||
Intangible assets, net | $ 500,000 | $ 600,000 | ||
Provision for income taxes | $ 0 | 0 | ||
Previously Reported [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Net income (Loss) | 27,300,000 | |||
Cumulative Effect, Period of Adoption, Adjustment [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Accumulated deficit | $ 2,000,000 | |||
Provision for credit losses | 800,000 | |||
Net income (Loss) | (800,000) | |||
Employees | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Vesting period | 3 years | |||
Directors | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Vesting period | 1 year | |||
Customer relationships | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Adjustment to intangible assets | $ 5,000,000 | |||
Maximum | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Estimated Useful Lives of fixed assets | 7 years | |||
Contractual Rate | 70.00% | |||
Minimum | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Estimated Useful Lives of fixed assets | 3 years | |||
Contractual Rate | 50.00% |
Mortgage notes receivable - Add
Mortgage notes receivable - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Loans and Leases Receivable Disclosure [Line Items] | ||
Percentage of maximum loan to value ratio | 65.00% | |
Percentage of maximum of amount of a single loan | 10.00% | |
Percentage of maximum amount of loans to single borrower | 15.00% | |
Monthly interest rate payment term | 10 days | |
Principal outstanding on non accrual status | $ 177.7 | $ 126.8 |
Maximum | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Term of mortgage notes receivable | 18 months | |
Interest rate (as a percent) | 0.13% | |
Minimum | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Term of mortgage notes receivable | 5 months | |
Interest rate (as a percent) | 0.10% |
Mortgage notes receivable - Inf
Mortgage notes receivable - Information pertaining to mortgage notes receivable (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Loans and Leases Receivable Disclosure [Line Items] | ||||
Total principal outstanding for our mortgage notes receivable | $ 815,134 | $ 809,076 | ||
Allowance for loan losses | 10,663 | 10,590 | $ 9,966 | $ 4,096 |
Mortgage notes receivable, net | 804,471 | 798,486 | ||
Mortgage notes receivables | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Total loan commitments | 1,280,964 | 1,245,963 | ||
Construction holdbacks | 379,069 | 356,026 | ||
Interest reserves | 30,369 | 29,817 | ||
Private REIT participation | 42,740 | 37,729 | ||
Total principal outstanding for our mortgage notes receivable | 828,786 | 822,391 | ||
Allowance for loan losses | 10,663 | 10,590 | ||
Deferred origination and amendment fees | 13,652 | 13,315 | ||
Mortgage notes receivable, net | 804,471 | 798,486 | ||
Broadmark Private REIT, LLC | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Construction holdbacks | 42,100 | 40,400 | ||
Interest reserves | 3,600 | 4,300 | ||
Unfunded Loan Commitment [Member] | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Allowance for loan losses | 947 | |||
Unfunded Loan Commitment [Member] | Accounts payable and accrued liabilities | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Allowance for loan losses | 900 | 900 | ||
Funded And Unfunded Loan Commitment [Member] | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Allowance for loan losses | $ 11,610 | $ 10,590 |
Mortgage notes receivable - All
Mortgage notes receivable - Allowance for loan loss (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Allowance for Credit Loss, Beginning Balance | $ 10,590 | $ 4,096 |
Provision for loan losses (benefits) | 1,761 | 4,432 |
Charge offs | (1,688) | (537) |
Allowance for Credit Loss, Ending Balance | 10,663 | 9,966 |
Cumulative Effect, Period of Adoption, Adjustment [Member] | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Allowance for Credit Loss, Ending Balance | $ 1,975 | |
Unfunded Loan Commitment [Member] | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Provision for loan losses (benefits) | 947 | |
Allowance for Credit Loss, Ending Balance | 947 | |
Funded And Unfunded Loan Commitment [Member] | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Allowance for Credit Loss, Beginning Balance | 10,590 | |
Provision for loan losses (benefits) | 2,708 | |
Charge offs | (1,688) | |
Allowance for Credit Loss, Ending Balance | $ 11,610 |
Mortgage notes receivable - Com
Mortgage notes receivable - Composition of loan portfolio (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Loans and Leases Receivable Disclosure [Line Items] | ||||
Carrying Value | $ 815,134 | $ 809,076 | ||
CECL Allowance | (10,663) | (10,590) | $ (9,966) | $ (4,096) |
Carrying value, net | $ 804,471 | $ 798,486 | ||
Percentage of portfolio | 100.00% | 100.00% | ||
2021 | $ 225,808 | $ 581,765 | ||
2020 | 388,442 | 90,775 | ||
2019 | 71,421 | 14,395 | ||
2018 | 7,172 | 105,099 | ||
2017 | 106,926 | 15,953 | ||
Prior | $ 15,365 | $ 1,089 | ||
LTV general percent indicating default status | 65 | 65 | ||
0 - 40% | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Carrying Value | $ 45,090 | $ 22,601 | ||
Percentage of portfolio | 0.055% | 2.80% | ||
2021 | $ 21,356 | $ 18,112 | ||
2020 | 20,369 | |||
2019 | 3,862 | |||
2018 | 3,052 | 261 | ||
2017 | 313 | |||
Prior | 366 | |||
41 - 45% | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Carrying Value | $ 29,256 | $ 68,263 | ||
Percentage of portfolio | 0.036% | 8.40% | ||
2021 | $ 27,489 | $ 44,683 | ||
2020 | 1,767 | 20,183 | ||
2019 | 3,397 | |||
46 - 50% | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Carrying Value | $ 46,420 | $ 23,864 | ||
Percentage of portfolio | 0.057% | 2.90% | ||
2021 | $ 15,507 | $ 15,917 | ||
2020 | 15,460 | 7,224 | ||
2019 | 15,453 | |||
Prior | 723 | |||
51 - 55% | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Carrying Value | $ 77,277 | $ 76,539 | ||
Percentage of portfolio | 0.095% | 9.50% | ||
2021 | $ 27,310 | $ 57,583 | ||
2020 | 29,594 | 2,774 | ||
2019 | 2,777 | |||
2018 | 16,182 | |||
2017 | 16,873 | |||
Prior | 723 | |||
56 - 60% | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Carrying Value | $ 54,992 | $ 135,170 | ||
Percentage of portfolio | 0.067% | 16.70% | ||
2021 | $ 15,073 | $ 117,309 | ||
2020 | 25,769 | 3,106 | ||
2019 | 200 | |||
2018 | 9,639 | |||
2017 | 13,950 | 5,116 | ||
61 - 65% | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Carrying Value | $ 532,281 | $ 450,253 | ||
Percentage of portfolio | 0.653% | 55.70% | ||
2021 | $ 118,559 | $ 301,964 | ||
2020 | 270,307 | 57,488 | ||
2019 | 52,991 | 7,136 | ||
2018 | 4,120 | 76,139 | ||
2017 | 75,790 | 7,526 | ||
Prior | 10,514 | |||
66 - 70% | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Carrying Value | $ 17,582 | $ 9,416 | ||
Percentage of portfolio | 0.022% | 1.20% | ||
2021 | $ 514 | $ 9,416 | ||
2020 | $ 17,068 | |||
71 - 75% | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Carrying Value | $ 1,983 | |||
Percentage of portfolio | 0.00% | 0.20% | ||
2021 | $ 1,983 | |||
76 - 80% | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Carrying Value | $ 14,544 | |||
Percentage of portfolio | 0.00% | 1.80% | ||
2021 | $ 14,544 | |||
Above 80% | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Carrying Value | $ 12,236 | $ 6,443 | ||
Percentage of portfolio | 0.015% | 0.80% | ||
2021 | $ 254 | |||
2020 | $ 8,108 | |||
2018 | 2,878 | |||
2017 | 3,311 | |||
Prior | 4,128 | |||
Apartments | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Carrying Value | $ 149,936 | $ 129,588 | ||
Percentage of portfolio | 0.184% | 16.00% | ||
2021 | $ 44,920 | $ 79,931 | ||
2020 | 54,135 | 18,953 | ||
2019 | 19,952 | |||
2018 | 24,232 | |||
2017 | 25,897 | 6,472 | ||
Prior | 5,032 | |||
Residential Lots | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Carrying Value | $ 125,808 | $ 124,548 | ||
Percentage of portfolio | 0.154% | 15.40% | ||
2021 | $ 57,579 | $ 105,830 | ||
2020 | 49,003 | 10,291 | ||
2019 | 9,874 | |||
2017 | 8,427 | |||
Prior | 9,352 | |||
Condos | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Carrying Value | $ 85,240 | $ 92,245 | ||
Percentage of portfolio | 0.105% | 11.40% | ||
2021 | $ 9,269 | $ 52,714 | ||
2020 | 39,408 | 3,106 | ||
2019 | 200 | 4,405 | ||
2018 | 1,326 | 32,020 | ||
2017 | 35,037 | |||
Single family housing | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Carrying Value | $ 73,990 | $ 90,131 | ||
Percentage of portfolio | 0.091% | 11.10% | ||
2021 | $ 16,047 | $ 69,438 | ||
2020 | 45,079 | 8,839 | ||
2019 | 5,579 | 1,028 | ||
2018 | 1,078 | 10,103 | ||
2017 | 5,484 | |||
Prior | 723 | 723 | ||
Land | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Carrying Value | $ 73,237 | $ 72,913 | ||
Percentage of portfolio | 0.09% | 9.00% | ||
2021 | $ 40,678 | $ 48,844 | ||
2020 | 12,321 | |||
2019 | 7,259 | |||
2018 | 3,052 | 16,444 | ||
2017 | 17,186 | |||
Prior | 366 | |||
Townhomes | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Carrying Value | $ 80,611 | $ 72,773 | ||
Percentage of portfolio | 0.099% | 9.00% | ||
2021 | $ 12,348 | $ 47,391 | ||
2020 | 43,735 | 1,061 | ||
2019 | 1,703 | |||
2018 | 1,716 | 21,564 | ||
2017 | 22,554 | 1,054 | ||
Prior | 258 | |||
Mixed Use | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Carrying Value | $ 40,429 | $ 66,092 | ||
Percentage of portfolio | 0.05% | 8.20% | ||
2021 | $ 9,884 | $ 60,232 | ||
2020 | 28,622 | 5,860 | ||
2019 | 1,923 | |||
Hotel | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Carrying Value | $ 53,253 | $ 51,115 | ||
Percentage of portfolio | 0.065% | 6.30% | ||
2021 | $ 1,192 | $ 42,874 | ||
2020 | 42,990 | 8,241 | ||
2019 | 9,071 | |||
Senior Housing | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Carrying Value | $ 38,149 | $ 34,283 | ||
Percentage of portfolio | 0.047% | 4.20% | ||
2021 | $ 34,283 | |||
2020 | $ 38,149 | |||
Offices | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Carrying Value | $ 31,525 | $ 29,540 | ||
Percentage of portfolio | 0.039% | 3.70% | ||
2021 | $ 8,495 | |||
2020 | $ 9,480 | 21,045 | ||
2019 | 22,045 | |||
Commercial Lots | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Carrying Value | $ 15,259 | $ 15,683 | ||
Percentage of portfolio | 0.019% | 1.90% | ||
2021 | $ 15,683 | |||
2020 | $ 15,259 | |||
Retail | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Carrying Value | $ 11,838 | $ 11,397 | ||
Percentage of portfolio | 0.015% | 1.40% | ||
2021 | $ 5,594 | $ 9,500 | ||
2020 | 4,346 | 1,897 | ||
2019 | 1,898 | |||
Industrial | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Carrying Value | $ 15,403 | $ 11,309 | ||
Percentage of portfolio | 0.019% | 1.40% | ||
2021 | $ 15,403 | $ 704 | ||
2020 | 10,605 | |||
Quadplex | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Carrying Value | $ 5,915 | $ 5,592 | ||
Percentage of portfolio | 0.007% | 0.70% | ||
2021 | $ 5,592 | |||
2020 | $ 5,915 | |||
Commercial | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Carrying Value | $ 6,524 | $ 877 | ||
Percentage of portfolio | 0.008% | 0.10% | ||
2021 | $ 5,645 | |||
2020 | $ 877 | |||
2019 | 879 | |||
Duplex | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Carrying Value | $ 3,821 | $ 736 | ||
Percentage of portfolio | 0.005% | 0.10% | ||
2021 | $ 3,053 | |||
2018 | $ 736 | |||
2017 | 768 | |||
Commercial other | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Carrying Value | $ 4,196 | $ 254 | ||
Percentage of portfolio | 0.003% | 0.10% | ||
2021 | $ 4,196 | $ 254 | ||
Vertical Construction | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Carrying Value | $ 505,347 | $ 514,136 | ||
Percentage of portfolio | 0.62% | 63.50% | ||
2021 | $ 118,678 | $ 354,012 | ||
2020 | 252,275 | 57,090 | ||
2019 | 37,051 | 6,853 | ||
2018 | 3,080 | 88,655 | ||
2017 | 88,973 | 7,526 | ||
Prior | 5,290 | |||
Horizontal Development | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Carrying Value | $ 143,405 | $ 153,345 | ||
Percentage of portfolio | 0.176% | 19.00% | ||
2021 | $ 60,361 | $ 129,607 | ||
2020 | 63,180 | 15,028 | ||
2019 | 15,453 | 283 | ||
2018 | 283 | |||
2017 | 8,427 | |||
Prior | 4,128 | |||
Investment | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
Carrying Value | $ 166,382 | $ 141,595 | ||
Percentage of portfolio | 0.204% | 17.50% | ||
2021 | $ 46,769 | $ 98,146 | ||
2020 | 72,987 | 18,657 | ||
2019 | 18,917 | 7,259 | ||
2018 | 3,809 | 16,444 | ||
2017 | 17,953 | |||
Prior | 5,947 | 1,089 | ||
Unfunded Loan Commitment [Member] | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
CECL Allowance | (947) | |||
Unfunded Loan Commitment [Member] | Accounts payable and accrued liabilities | ||||
Loans and Leases Receivable Disclosure [Line Items] | ||||
CECL Allowance | $ (900) | $ (900) |
Fair value measurements - Fair
Fair value measurements - Fair value of assets and liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Carrying Value | ||
Financial Assets | ||
Cash and cash equivalents | $ 204,277 | $ 223,375 |
Mortgage notes receivable, net | 804,471 | 798,486 |
Estimated Fair Value | ||
Financial Assets | ||
Cash and cash equivalents | 204,277 | 223,375 |
Mortgage notes receivable, net | 804,471 | 798,486 |
Level 1 | Estimated Fair Value | ||
Financial Assets | ||
Cash and cash equivalents | 204,277 | 223,375 |
Level 3 | Estimated Fair Value | ||
Financial Assets | ||
Mortgage notes receivable, net | $ 804,471 | $ 798,486 |
Fair value measurements - Valua
Fair value measurements - Valuation Methodologies and Inputs Used for Assets Measured at Fair Value (Details) $ in Thousands | Mar. 31, 2021USD ($) | Dec. 31, 2020USD ($) |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | $ 73,747 | $ 39,393 |
Non recurring | Real Property | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Range of inputs | 0 | |
Non recurring | Real Property | Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Range of inputs | 10 | |
Non recurring | Collateral Dependent Loans [Member] | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Range of inputs | 0 | |
Non recurring | Collateral Dependent Loans [Member] | Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Range of inputs | 10 | |
Non recurring | Level 3 | Real Property | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | $ 13,113 | 8,473 |
Non recurring | Level 3 | Collateral Dependent Loans [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | $ 60,634 | $ 30,920 |
Stockholders' Equity and Memb_3
Stockholders' Equity and Members' Equity - Stock (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021Vote$ / sharesshares | Dec. 31, 2020Vote$ / sharesshares | |
Stockholders' Equity and Members' Equity | ||
Common stock shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 |
Preferred stock shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 |
Common stock number of voting rights | Vote | 1 | 1 |
Common stock shares issued (in shares) | 132,566,410 | 132,532,383 |
Common stock shares outstanding (in shares) | 132,566,410 | 132,532,383 |
Preferred stock shares issued (in shares) | 0 | 0 |
Preferred stock shares outstanding (in shares) | 0 | 0 |
Stockholders' Equity and Memb_4
Stockholders' Equity and Members' Equity - Warrant (Details) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
Class of Warrant or Right [Line Items] | ||
Exercise price per share (in dollars per share) | $ 11.50 | $ 11.50 |
Warrants issued | 15,600,000 | 15,600,000 |
Public Warrants | ||
Class of Warrant or Right [Line Items] | ||
Warrants outstanding (in shares) | 41,700,000 | 41,700,000 |
Exercise price per share (in dollars per share) | $ 2.875 | $ 2.875 |
Number of share per warrant | 0.25 | 0.25 |
Private Placement Warrants | ||
Class of Warrant or Right [Line Items] | ||
Warrants outstanding (in shares) | 5,200,000 | 5,200,000 |
Exercise price per share (in dollars per share) | $ 11.50 | $ 11.50 |
Number of share per warrant | 1 | 1 |
Farallon Entities | ||
Class of Warrant or Right [Line Items] | ||
Warrants outstanding (in shares) | 7,174,163 |
Stockholders' Equity and Memb_5
Stockholders' Equity and Members' Equity - Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Net income | $ 20,381 | $ 26,469 |
Basic weighted-average shares of common stock outstanding | 132,550,227 | 132,111,329 |
Dilutive effect of share-based compensation | 128,585 | 224,986 |
Diluted weighted-average shares of common stock outstanding | 132,678,812 | 132,336,315 |
Basic earnings per share | $ 0.15 | $ 0.20 |
Diluted earnings per share | $ 0.15 | $ 0.20 |
Public and Private Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities | 15,600,000 | |
Optional Subscription Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities | 15,600,000 | |
Restricted Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities | 371,318 |
Income Taxes - (Details)
Income Taxes - (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Income Taxes | ||
Uncertain tax positions | $ 0 | $ 0 |
Amount accrued for penalties or interest | $ 0 | $ 0 |
Equity Incentive Plan - (Detail
Equity Incentive Plan - (Details) - 2019 Stock Incentive Plan - shares | 3 Months Ended | |
Mar. 31, 2021 | Nov. 14, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares authorized | 5,000,000 | |
Shares available for grant | 3,624,268 | |
Restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance period | 3 years | |
Restricted stock units | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Payout percentage | 0.00% | |
Vesting period | 1 year | |
Restricted stock units | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Payout percentage | 150.00% | |
Vesting period | 3 years |
Equity Incentive Plan - RSU's A
Equity Incentive Plan - RSU's Activity - (Details) - Restricted stock units | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Shares | |
Outstanding at the beginning | 434,143 |
Granted | 424,866 |
Vested | (37,227) |
Outstanding at the end | 821,782 |
Weighted Average Grant Date Fair Market Value | |
Granted | $ / shares | $ 8.68 |
Vested | $ / shares | $ 11.08 |
Equity Incentive Plan - Compens
Equity Incentive Plan - Compensation (Details) - Restricted stock units - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share based compensation expense | $ 0.7 | $ 0.9 |
Unrecognized compensation cost related to unvested stock-based compensation arrangements | $ 7.1 | |
Weighted-average recognition period | 2 years 3 months 18 days |
Commitments and Contingencies -
Commitments and Contingencies - Contractual Obligations (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Other Commitments [Line Items] | ||
Less than 1 year | $ 238,444 | |
1-3 years | 143,353 | |
3-5 years | 2,033 | |
More than 5 years | 6,766 | |
Total | 390,596 | |
Construction holdbacks | ||
Other Commitments [Line Items] | ||
Less than 1 year | 237,632 | |
1-3 years | 141,437 | |
Total | 379,069 | |
Operating lease obligations | ||
Other Commitments [Line Items] | ||
Less than 1 year | 812 | |
1-3 years | 1,916 | |
3-5 years | 2,033 | |
More than 5 years | 6,766 | |
Total | 11,527 | |
Broadmark Private REIT, LLC | ||
Other Commitments [Line Items] | ||
Construction holdbacks | $ 42,100 | $ 40,400 |
Commitments and Contingencies_2
Commitments and Contingencies - Lease Commitments (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Commitments and Contingencies. | |
Lease incentives | $ 11,700 |
Right-of-use assets obtained in exchange | 6,360 |
Tenant improvements | $ 1,959 |
Discount rate for the operation lease | 6.00% |
Imputed interest amount | $ 3,300 |
Commitments and Contingencies_3
Commitments and Contingencies - Credit Facility (Details) $ in Millions | Feb. 19, 2021USD ($) |
Revolving Credit Facility [Member] | |
Concentration Risk [Line Items] | |
Amount of revolving credit facility | $ 135 |
Commitments and contingencies_4
Commitments and contingencies (Details) - Mortgage notes receivables - Geographic concentration risk | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021countystate | Dec. 31, 2020 | |
Concentration Risk [Line Items] | ||
Number of states in mortgage loans were originated | state | 14 | |
Number of counties in which loan portfolio concentrated | county | 10 | |
Concentration risk percentage | 44.50% | 43.20% |
Related party transactions (Det
Related party transactions (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | ||
Warrants issued | 15,600,000 | 15,600,000 |
Farallon Entities | ||
Related Party Transaction [Line Items] | ||
Shares issued | 7,174,163 | |
Aggregate purchase price | $ 75 | |
Warrants outstanding (in shares) | 7,174,163 | |
Class of Warrant or Right, Amendment Fee Price of Warrants or Rights | $ 1.60 | |
Farallon Entities | Optional subscription | ||
Related Party Transaction [Line Items] | ||
Common stock exercisable term | 365 days | |
Reference Price | $ 10.45352229 | |
Farallon Entities | Accounts payable and accrued liabilities | Optional subscription | ||
Related Party Transaction [Line Items] | ||
Warrants outstanding | $ 0 | |
Farallon Entities | Farallon Entities | ||
Related Party Transaction [Line Items] | ||
Ownership percentage | 5.00% | |
Maximum | Farallon Entities | Optional subscription | ||
Related Party Transaction [Line Items] | ||
Additional shares of common stock | 25,000,000 |
Subsequent events (Details)
Subsequent events (Details) | Apr. 16, 2021$ / shares |
Subsequent Event | |
Subsequent Event [Line Items] | |
Common stock dividend declared | $ 0.07 |