| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
| |
||
(Address of principal executive offices) |
(Zip Code) |
| Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
| N/A |
N/A | N/A |
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer |
☒ | Smaller reporting company | ||||
| Emerging growth company | ||||||
TABLE OF CONTENTS
September 30, 2022 (Unaudited) |
December 31, 2021 |
|||||||
Assets |
||||||||
Cash and cash equivalents |
$ | $ | ||||||
Restricted cash |
||||||||
Loans receivable, held-for-investment |
||||||||
Mortgage-backed securities held-to-maturity |
||||||||
Mortgage-backed securities available-for-sale, |
||||||||
Investment in real estate, net |
— | |||||||
Receivable for investments sold and repaid |
||||||||
Interest receivable |
||||||||
Deferred financing costs |
||||||||
Other assets |
||||||||
Total assets (1) |
$ | $ | ||||||
Liabilities |
||||||||
Collateralized loan obligations (net of deferred financing costs of $ |
$ | $ | ||||||
Repurchase agreements payable (net of deferred financing costs of $ |
||||||||
Credit facilities payable (net of deferred financing costs of $ |
||||||||
Mortgage note payable (net of deferred financing costs of $ |
— | |||||||
Due to related party |
||||||||
Interest payable |
||||||||
Payable for shares repurchased |
||||||||
Other liabilities |
||||||||
Total liabilities (1) |
||||||||
Commitments and contingencies (See Note 11) |
||||||||
Stockholders’ equity |
||||||||
Preferred stock, $ |
||||||||
Class F common stock, $ |
||||||||
Class Y common stock, $ |
||||||||
Class T common stock, $ |
||||||||
Class S common stock, $ |
||||||||
Class D common stock, $ |
||||||||
Class M common stock, $ |
||||||||
Class I common stock, $ |
||||||||
Additional paid-in capital |
||||||||
Accumulated other comprehensive income (loss) |
( |
) | ||||||
Retained earnings |
||||||||
Total stockholders’ equity |
||||||||
Total liabilities and stockholders’ equity |
$ | $ | ||||||
| (1) | The September 30, 2022 and December 31, 2021 consolidated balance sheets include assets of consolidated variable interest entities, or VIEs, that can only be used to settle obligations of the VIEs, and liabilities of consolidated VIEs for which creditors do not have recourse to the Company. As of September 30, 2022 and December 31, 2021, assets of the VIEs totaled $ |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
| Net interest income |
||||||||||||||||
| Interest income |
$ | $ | $ | $ | ||||||||||||
| Less: Interest expense |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Net interest income |
||||||||||||||||
| Other expenses |
||||||||||||||||
| Management and performance fees |
||||||||||||||||
| General and administrative expenses |
||||||||||||||||
| Less: Expense limitation |
— | — | — | ( |
) | |||||||||||
| Add: Expense recoupment to sponsor |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Net other expenses |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Other income (loss) |
||||||||||||||||
| Income (loss) from rental operations, net |
( |
) | — | ( |
) | — | ||||||||||
| Net change in unrealized gain on interest rate cap |
— | — | ||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total other income (loss) |
— | ( |
) | — | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Net income |
||||||||||||||||
| Preferred stock dividends |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Net income attributable to FS Credit Real Estate Income Trust, Inc. |
$ | $ | $ | $ | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Per share information—basic and diluted |
||||||||||||||||
| Net income per share of common stock (earnings per share) |
$ | $ | $ | $ | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Weighted average common stock outstanding |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Net income |
$ | $ | $ | $ | ||||||||||||
Other comprehensive income |
||||||||||||||||
Net change in unrealized gain (loss) on mortgage-backed securities available-for-sale |
( |
) | ( |
) | ||||||||||||
Total other comprehensive income (loss) |
( |
) | ( |
) | ||||||||||||
Comprehensive income |
$ | $ | $ | $ | ||||||||||||
Par Value |
||||||||||||||||||||||||||||||||||||||||||||
Common Stock Class F |
Common Stock Class Y |
Common Stock Class T |
Common Stock Class S |
Common Stock Class D |
Common Stock Class M |
Common Stock Class I |
Additional Paid-In Capital |
Accumulated Other Comprehensive Income (Loss) (1) |
Retained Earnings (Accumulated Deficit) |
Total Stockholders’ Equity |
||||||||||||||||||||||||||||||||||
Three Months Ended September 30, 2022 |
||||||||||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2022 |
$ | $ | $ | $ | $ | $ | $ | $ | $ | ( |
) | $ | $ | |||||||||||||||||||||||||||||||
Common stock issued |
— | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Distributions declared |
— | — | — | — | — | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||||||
Proceeds from distribution reinvestment plan |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Redemptions of common stock |
— | — | — | ( |
) | — | ( |
) | ( |
) | ( |
) | — | — | ( |
) | ||||||||||||||||||||||||||||
Stockholder servicing fees |
— | — | — | — | — | — | — | ( |
) | — | — | ( |
) | |||||||||||||||||||||||||||||||
Offering costs |
— | — | — | — | — | — | — | ( |
) | — | — | ( |
) | |||||||||||||||||||||||||||||||
Performance contingent rights issued |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Net income |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Dividends on preferred stock |
— | — | — | — | — | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||||||
Other comprehensive loss |
— | — | — | — | — | — | — | — | ( |
) | — | ( |
) | |||||||||||||||||||||||||||||||
Balance as of September 30, 2022 |
$ | $ | $ | $ | $ | $ | $ | $ | $ | ( |
) | $ | $ | |||||||||||||||||||||||||||||||
Three Months Ended September 30, 2021 |
||||||||||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2021 |
$ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
Common stock issued |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Distributions declared |
— | — | — | — | — | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||||||
Proceeds from distribution reinvestment plan |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Redemptions of common stock |
— | — | — | ( |
) | — | — | ( |
) | ( |
) | — | — | ( |
) | |||||||||||||||||||||||||||||
Stockholder servicing fees |
— | — | — | — | — | — | — | ( |
) | — | — | ( |
) | |||||||||||||||||||||||||||||||
Offering costs |
— | — | — | — | — | — | — | ( |
) | — | — | ( |
) | |||||||||||||||||||||||||||||||
Net income |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Dividends on preferred stock |
— | — | — | — | — | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||||||
Other comprehensive income |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Balance as of September 30, 2021 |
$ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
| (1) | Comprised solely of unrealized gain (loss) on mortgage-backed securities, available for sale. |
Par Value |
||||||||||||||||||||||||||||||||||||||||||||
Common Stock Class F |
Common Stock Class Y |
Common Stock Class T |
Common Stock Class S |
Common Stock Class D |
Common Stock Class M |
Common Stock Class I |
Additional Paid-In Capital |
Accumulated Other Comprehensive Income (Loss) (1) |
Retained Earnings (Accumulated Deficit) |
Total Stockholders’ Equity |
||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2022 |
||||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2021 |
$ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
Common stock issued |
— | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Distributions declared |
— | — | — | — | — | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||||||
Proceeds from distribution reinvestment plan |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Redemptions of common stock |
— | — | — | ( |
) | — | ( |
) | ( |
) | ( |
) | — | — | ( |
) | ||||||||||||||||||||||||||||
Stockholder servicing fees |
— | — | — | — | — | — | — | ( |
) | — | — | ( |
) | |||||||||||||||||||||||||||||||
Offering costs |
— | — | — | — | — | — | — | ( |
) | — | — | ( |
) | |||||||||||||||||||||||||||||||
Performance contingent rights issued |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Net income |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Dividends on preferred stock |
— | — | — | — | — | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||||||
Other comprehensive loss |
— | — | — | — | — | — | — | — | ( |
) | — | ( |
) | |||||||||||||||||||||||||||||||
Balance as of June 30, 2022 |
$ | $ | $ | $ | $ | $ | $ | $ | $ | ( |
) | $ | $ | |||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2021 |
||||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2020 |
$ | $ | $ | $ | $ | $ | $ | $ | $ | — | $ | $ | ||||||||||||||||||||||||||||||||
Common stock issued |
— | — | — | |||||||||||||||||||||||||||||||||||||||||
Distributions declared |
— | — | — | — | — | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||||||
Proceeds from distribution reinvestment plan |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Redemptions of common stock |
— | ( |
) | — | ( |
) | — | ( |
) | ( |
) | ( |
) | — | — | ( |
) | |||||||||||||||||||||||||||
Stockholder servicing fees |
— | — | — | — | — | — | — | ( |
) | — | — | ( |
) | |||||||||||||||||||||||||||||||
Offering costs |
— | — | — | — | — | — | — | ( |
) | — | — | ( |
) | |||||||||||||||||||||||||||||||
Net income |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Dividends on preferred stock |
— | — | — | — | — | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||||||
Other comprehensive income |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Balance as of September 30, 2021 |
$ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
| (1) | Comprised solely of unrealized gain (loss) on mortgage-backed securities, available for sale. |
Nine Months Ended September 30, |
||||||||
2022 |
2021 |
|||||||
Cash flows from operating activities |
||||||||
Net income |
$ | $ | ||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities |
||||||||
Performance contingent rights issued |
— | |||||||
Amortization of deferred fees on loans and debt securities |
( |
) | ( |
) | ||||
Amortization of deferred financing costs and discount |
||||||||
Net change in unrealized gain on interest rate cap |
( |
) | — | |||||
Depreciation and amortization |
— | |||||||
Changes in assets and liabilities |
||||||||
Reimbursement due from sponsor |
— | |||||||
Interest receivable |
( |
) | ( |
) | ||||
Other assets |
( |
) | ||||||
Due to related party |
||||||||
Interest payable |
||||||||
Other liabilities |
||||||||
Net cash provided by (used in) operating activities |
||||||||
Cash flows used in investing activities |
||||||||
Origination and fundings of loans receivable, held-for-investment |
( |
) | ( |
) | ||||
Principal collections from loans receivable, held-for-investment |
||||||||
Proceeds from sale of loans receivable, held-for-sale |
— | |||||||
Exit and extension fees received on loans receivable, held-for-investment |
||||||||
Purchases of mortgage-backed securities available-for-sale |
( |
) | ( |
) | ||||
Principal repayments of mortgage-backed securities available-for-sale |
— | |||||||
Purchases of mortgage-backed securities held-to-maturity |
( |
) | — | |||||
Acquisition of real estate |
( |
) | — | |||||
Net cash provided by (used in) investing activities |
( |
) | ( |
) | ||||
Cash flows from financing activities |
||||||||
Issuance of common stock |
||||||||
Redemptions of common stock |
( |
) | ( |
) | ||||
Stockholder distributions paid |
( |
) | ( |
) | ||||
Stockholder servicing fees |
( |
) | ( |
) | ||||
Offering costs paid |
( |
) | ( |
) | ||||
Borrowing under mortgage note payable |
— | |||||||
Borrowings under repurchase agreements |
||||||||
Repayments under repurchase agreements |
( |
) | ( |
) | ||||
Borrowings under credit facilities |
||||||||
Repayments under credit facilities |
( |
) | ( |
) | ||||
Proceeds from issuance of collateralized loan obligations |
||||||||
Repayment of collateralized loan obligations |
( |
) | — | |||||
Payment of deferred financing costs |
( |
) | ( |
) | ||||
Net cash provided by (used in) financing activities |
||||||||
Total increase (decrease) in cash, cash equivalents and restricted cash |
||||||||
Cash, cash equivalents and restricted cash at beginning of period |
||||||||
Cash, cash equivalents and restricted cash at end of period |
$ | $ | ||||||
Supplemental disclosure of cash flow information and non-cash financial activities |
||||||||
Payments of interest |
$ | $ | ||||||
Accrued stockholder servicing fee |
$ | $ | ||||||
Distributions payable |
$ | $ | ||||||
Reinvestment of stockholder distributions |
$ | $ | ||||||
Payable for shares repurchased |
$ | $ | ||||||
Loan principal payments held by servicer |
$ | $ | — | |||||
Loan transferred from loans receivable, held-for-investment held-for-sale |
$ | — | $ | |||||
September 30, |
||||||||
2022 |
2021 |
|||||||
| Cash and cash equivalents |
$ | $ | ||||||
| Restricted cash |
||||||||
| |
|
|
|
|||||
| Total cash, cash equivalents and restricted cash |
$ | $ | ||||||
| |
|
|
|
|||||
| Loan Risk Rating |
Summary Description | |
| 1 |
Very Low Risk | |
| 2 |
Low Risk | |
| 3 |
Medium Risk | |
| 4 |
High Risk/Potential for Loss: A loan that has a risk of realizing a principal loss | |
| 5 |
Impaired/Loss Likely: A loan that has a very high risk of realizing a principal loss or has otherwise incurred a principal loss |
| Description |
Depreciable Life | |
| Building |
| |
| Building and land improvements |
| |
| Furniture, fixtures and equipment |
| |
| Tenant improvements |
| |
| Lease intangibles |
|
Level 1: |
Generally includes only unadjusted quoted prices that are available in active markets for identical financial instruments as of the reporting date. | |
Level 2: |
Pricing inputs include quoted prices in active markets for similar instruments, quoted prices in less active or inactive markets for identical or similar instruments where multiple price quotes can be obtained, and other observable inputs, such as interest rates, yield curves, credit risks, and default rates. | |
Level 3: |
Pricing inputs are unobservable for the financial instruments and include situations where there is little, if any, market activity for the financial instrument. These inputs require significant judgment or estimation by management or third parties when determining fair value and generally represent anything that does not meet the criteria of Levels 1 and 2. | |
• |
Cash and cash equivalents: The carrying amount of cash on deposit and in money market funds approximates fair value. |
• |
Restricted cash: The carrying amount of restricted cash approximates fair value. |
• |
Loans receivable held-for-investment, |
• |
Mortgage-backed securities available-for-sale: |
• |
Mortgage-backed securities held-to-maturity: |
• |
Collateralized loan obligations, repurchase agreements payable, credit facilities payable, and mortgage note payable: The fair values for these instruments were estimated based on the rate at which similar credit facilities would have currently been priced. |
September 30, 2022 (Unaudited) |
December 31, 2021 |
|||||||
Number of loans |
||||||||
Principal balance |
$ | $ | ||||||
Net book value |
$ | $ | ||||||
Unfunded loan commitments (1) |
$ | $ | ||||||
Weighted-average cash coupon (2) |
+ |
% | + |
% | ||||
Weighted-average all-in yield(2) |
+ |
% | + |
% | ||||
Weighted-average maximum maturity (years) (3) |
||||||||
(1) |
The Company may be required to provide funding when requested by the borrowers in accordance with the terms of the underlying agreements. |
(2) |
The Company’s floating rate loans are expressed as a spread over the relevant benchmark rates, which include the London Interbank Offered Rate, or LIBOR, and the Secured Overnight Financing Rate, or SOFR. In addition to cash coupon, all-in yield includes accretion of discount (amortization of premium) and accrual of exit fees. |
(3) |
Maximum maturity assumes all extension options are exercised by the borrowers; however, loans may be repaid prior to such date. |
For the Nine Months Ended September 30, |
||||||||
2022 |
2021 |
|||||||
Balance at beginning of period |
$ | $ | ||||||
Loan fundings |
||||||||
Loan repayments |
( |
) | ( |
) | ||||
Amortization of deferred fees on loans |
||||||||
Exit and extension fees received on loans |
( |
) | ( |
) | ||||
Balance at end of period |
$ | $ | ||||||
September 30, 2022 (Unaudited) |
December 31, 2021 |
|||||||||||||||
Property Type |
Net Book Value |
Percentage |
Net Book Value |
Percentage |
||||||||||||
Multifamily |
$ | % | $ | % | ||||||||||||
Office |
% | % | ||||||||||||||
Hospitality |
% | % | ||||||||||||||
Industrial |
% | % | ||||||||||||||
Retail |
% | % | ||||||||||||||
Self Storage |
% | % | ||||||||||||||
Various |
% | % | ||||||||||||||
Mixed Use |
% | % | ||||||||||||||
Total |
$ | % | $ | % | ||||||||||||
September 30, 2022 (Unaudited) |
December 31, 2021 |
|||||||||||||||
Geographic Location (1) |
Net Book Value |
Percentage |
Net Book Value |
Percentage |
||||||||||||
South |
$ | % | $ | % | ||||||||||||
West |
% | % | ||||||||||||||
Northeast |
% | % | ||||||||||||||
Various |
% | % | ||||||||||||||
Midwest |
% | % | ||||||||||||||
Total |
$ | % | $ | % | ||||||||||||
(1) |
As defined by the United States Department of Commerce, Bureau of the Census. |
September 30, 2022 (Unaudited) |
December 31, 2021 |
|||||||||||||||||||||||
Risk Rating |
Number of Loans |
Net Book Value |
Percentage |
Number of Loans |
Net Book Value |
Percentage |
||||||||||||||||||
1 |
— | $ | — | — | — | $ | — | — | ||||||||||||||||
2 |
— | — | — | — | — | — | ||||||||||||||||||
3 |
% | % | ||||||||||||||||||||||
4 |
— | — | — | — | — | — | ||||||||||||||||||
5 |
— | — | — | — | — | — | ||||||||||||||||||
Total |
$ | % | $ | % | ||||||||||||||||||||
Gross Unrealized |
Weighted Average |
|||||||||||||||||||||||||||
Outstanding Face Amount |
Amortized Cost Basis |
Gains |
Losses |
Fair Value |
Coupon |
Remaining Duration (years) |
||||||||||||||||||||||
September 30, 2022 (Unaudited) |
||||||||||||||||||||||||||||
CMBS, available-for-sale |
$ | $ | $ | $ | ( |
) | $ | % | ||||||||||||||||||||
December 31, 2021 |
||||||||||||||||||||||||||||
CMBS, available-for-sale |
$ | $ | $ | $ | ( |
) | $ | % | ||||||||||||||||||||
Estimated Fair Value |
Unrealized Losses |
|||||||||||||||
Securities with a loss less than 12 months |
Securities with a loss greater than 12 months |
Securities with a loss less than 12 months |
Securities with a loss greater than 12 months |
|||||||||||||
September 30, 2022 (Unaudited) |
||||||||||||||||
CMBS, available-for-sale |
$ | $ | $ | ( |
) | $ | ||||||||||
December 31, 2021 |
||||||||||||||||
CMBS, available-for-sale |
$ | $ | $ | ( |
) | $ | ||||||||||
Net Carrying Amount (Amortized Cost) |
Gross Unrecognized Holding Gains |
Gross Unrecognized Holding Losses |
Fair Value |
|||||||||||||
| September 30, 2022 (Unaudited) |
||||||||||||||||
| CMBS, held-to-maturity |
$ | $ |
( |
) | $ | |||||||||||
| December 31, 2021 |
||||||||||||||||
| CMBS, held-to-maturity |
$ | $ | ||||||||||||||
Total |
Less than 1 year |
1-3 years |
3-5 years |
More than 5 years |
||||||||||||||||
| September 30, 2022 (Unaudited) |
||||||||||||||||||||
| CMBS, held-to-maturity |
$ | $ |
$ | $ | ||||||||||||||||
| December 31, 2021 |
||||||||||||||||||||
| CMBS, held-to-maturity |
$ | $ | ||||||||||||||||||
September 30, 2022 (Unaudited) |
||||
| Building and building improvements |
$ | |||
| Land and land improvements |
||||
| Furniture, fixtures and equipment |
||||
| In-place lease intangibles |
||||
| |
|
|||
| Total |
||||
| Accumulated depreciation and amortization |
( |
) | ||
| |
|
|||
| Real estate, net |
$ | |||
| |
|
|||
Amortization |
||||
| 2022 (remaining) |
$ |
|||
| 2023 |
||||
| 2024 |
||||
| 2025 |
||||
| 2026 |
||||
| 2027 |
||||
| Thereafter |
||||
| |
|
|||
| Total |
$ |
|||
| |
|
|||
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
| Rental income |
$ |
$ |
$ |
$ |
||||||||||||
| Less: depreciation and amortization |
( |
) |
( |
) |
||||||||||||
| Less: cost of rental operations (1) |
( |
) |
( |
) |
||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Rental operations, net |
$ |
( |
) |
$ |
$ |
( |
) |
$ |
||||||||
| |
|
|
|
|
|
|
|
|||||||||
(1) |
Cost of rental operations includes $ |
Amount |
||||
| Building and building improvements |
$ | |||
| Land and land improvements |
||||
| Furniture, fixtures and equipment |
||||
| In-place lease intangibles |
||||
| |
|
|||
| Net purchase price |
$ | |||
| |
|
|||
As of September 30, 2022 (Unaudited) |
||||||||||||||||||||||
Arrangement (1) |
Rate (2) |
Amount Outstanding |
Amount Available |
Maturity Date |
Carrying Amount of Collateral |
Fair Value of Collateral |
||||||||||||||||
Collateralized Loan Obligations |
||||||||||||||||||||||
2019-FL1 Notes |
(3) |
$ | $ | — | $ | $ | ||||||||||||||||
2021-FL2 Notes |
(3) |
— | ||||||||||||||||||||
2021-FL3 Notes |
(3) |
— | ||||||||||||||||||||
2022-FL4 Notes |
(6) |
— | ||||||||||||||||||||
2022-FL5 Notes |
(6) |
— | ||||||||||||||||||||
2022-FL6 Notes |
(6) |
— | ||||||||||||||||||||
| — | ||||||||||||||||||||||
Repurchase Agreements |
||||||||||||||||||||||
WF-1 Facility |
(4) |
|||||||||||||||||||||
GS-1 Facility |
(5) |
|||||||||||||||||||||
BB-1 Facility |
(6) |
|||||||||||||||||||||
RBC Facility |
— | N/A | ||||||||||||||||||||
Revolving Credit Facility |
||||||||||||||||||||||
MM-1 Facility |
(7)(8) |
|||||||||||||||||||||
Barclays Facility |
(7) |
|||||||||||||||||||||
Mortgage Loan |
||||||||||||||||||||||
Natixis Loan |
( 7) |
|||||||||||||||||||||
Total |
$ |
$ |
$ |
$ |
||||||||||||||||||
| (1) | The carrying amount outstanding under the facilities approximates their fair value. |
| (2) | The rates are expressed over the relevant floating benchmark rates, which include USD LIBOR, Term SOFR, and SOFR Average (compounded average of SOFR over a rolling 30-day period). |
| (3) | USD LIBOR is subject to a |
| (4) | Benchmark rate is subject to a |
| (5) | Term SOFR is subject to a GS-1 and Goldman Sachs may mutually agree on rates outside this range or a different floor on an asset by asset basis. |
| (6) | USD LIBOR, Term SOFR or SOFR Average (compounded average of SOFR over a rolling 30-day period), subject to a |
| (7) | Term SOFR is subject to a |
| (8) | The MM-1 Facility is subject to a credit spread adjustment of |
As of December 31, 2021 |
||||||||||||||||||||||||
Arrangement (1) |
Rate (2) |
Amount Outstanding |
Amount Available |
Maturity Date |
Carrying Amount of Collateral |
Fair Value of Collateral |
||||||||||||||||||
Collateralized Loan Obligation |
||||||||||||||||||||||||
2019-FL1 Notes |
(3) |
$ | $ | $ | $ | |||||||||||||||||||
2021-FL2 Notes |
(3) |
|||||||||||||||||||||||
2021-FL3 Notes |
(3) |
|||||||||||||||||||||||
Repurchase Agreements |
||||||||||||||||||||||||
WF-1 Facility |
(4) |
|||||||||||||||||||||||
GS-1 Facility |
(5) |
|||||||||||||||||||||||
BB-1 Facility |
||||||||||||||||||||||||
RBC Facility |
N/A | |||||||||||||||||||||||
Revolving Credit Facility |
||||||||||||||||||||||||
CNB Facility |
(6) |
|||||||||||||||||||||||
MM-1 Facility |
(3) |
|||||||||||||||||||||||
Total |
$ |
$ |
$ |
$ |
||||||||||||||||||||
| (1) | The carrying amount outstanding under the facilities approximates their fair value. |
| (2) | The rates are expressed over the relevant floating benchmark rates, which include USD LIBOR. |
| (3) | USD LIBOR is subject to a |
| (4) | USD LIBOR is subject to a WF-1 facility are using term SOFR as the reference rate, subject to the rates specified in their applicable transaction confirmations. |
| (5) | USD LIBOR is subject to a GS-1 and Goldman Sachs, may mutually agree on rates outside this range or a different LIBOR floor on an asset by asset basis. |
| (6) | USD LIBOR is subject to a |
Collateralized Loan Obligations (1) |
Repurchase Agreements |
Revolving Credit Facility |
Mortgage Loan |
Total |
||||||||||||||||
2022 |
$ | $ | $ | $ | $ | |||||||||||||||
2023 |
||||||||||||||||||||
2024 |
||||||||||||||||||||
2025 |
||||||||||||||||||||
2026 |
||||||||||||||||||||
Thereafter |
||||||||||||||||||||
Total |
$ | $ | $ | $ | $ | |||||||||||||||
(1) |
The allocation of repayments under the Company’s collateralized loan obligation is based on the the maturity date of each agreement, or the maximum maturity date assuming all extension options are exercised by the borrower if the reinvestment period has expired. |
As of September 30, 2022 (Unaudited) |
||||||||
Collateralized Loan Obligation |
Total Loans |
Principal Balance |
||||||
2019-FL1 Notes |
$ | |||||||
2021-FL2 Notes |
||||||||
2021-FL3 Notes |
||||||||
2022-FL4 Notes |
||||||||
2022-FL5 Notes |
||||||||
2022-FL6 Notes |
||||||||
Total |
$ | |||||||
As of September 30, 2022 (Unaudited) |
||||
Collateralized Loan Obligation |
Issuance Costs and Discount to be Amortized |
|||
2019-FL1 Notes |
$ | |||
2021-FL2 Notes |
||||
2021-FL3 Notes |
||||
2022-FL4 Notes |
||||
2022-FL5 Notes |
||||
2022-FL6 Notes |
||||
Total |
$ | |||
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||||||
Related Party |
Source Agreement |
Description |
2022 |
2021 |
2022 |
2021 |
||||||||||||||
FS Real Estate Advisor |
Advisory Agreement | Base Management Fee (1) |
$ | $ | $ | $ | ||||||||||||||
FS Real Estate Advisor |
Advisory Agreement | Performance Fee (2) |
$ | $ | $ | $ | ||||||||||||||
FS Real Estate Advisor |
Advisory Agreement | Administrative Services Expenses (3) |
$ | $ | $ | $ | ||||||||||||||
FS Real Estate Advisor |
Advisory Agreement |
Capital Markets Fees |
$ |
$ |
$ |
$ |
||||||||||||||
Rialto Capital Management |
Sub-Advisory Agreement |
Valuation Services Fees (4) |
$ |
$ |
$ |
$ |
||||||||||||||
| (1) | During the nine months ended September 30, 2022, FS Real Estate Advisor received $ |
| (2) | During the nine months ended September 30, 2022 and 2021, $ |
(3) |
During the nine months ended September 30, 2022 and 2021, $ |
(4) |
During the nine months ended September 30, 2022, $ |
| • | with respect to the Company’s outstanding Class T shares equal to |
| • | with respect to the Company’s outstanding Class S shares equal to |
| • | with respect to the Company’s outstanding Class D shares equal to |
| • | with respect to the Company’s outstanding Class M shares equal to |
Shares |
||||||||||||||||||||||||||||||||
Class F |
Class Y |
Class T |
Class S |
Class D |
Class M |
Class I |
Total |
|||||||||||||||||||||||||
Balance as of December 31, 2021 |
||||||||||||||||||||||||||||||||
Issuance of common stock |
||||||||||||||||||||||||||||||||
Reinvestment of distributions |
||||||||||||||||||||||||||||||||
Redemptions of common stock |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||
Transfers in or out |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
Balance as of September 30, 2022 |
||||||||||||||||||||||||||||||||
Amount |
||||||||||||||||||||||||||||||||
Class F |
Class Y |
Class T |
Class S |
Class D |
Class M |
Class I |
Total |
|||||||||||||||||||||||||
Balance as of December 31, 2021 |
$ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Issuance of common stock |
||||||||||||||||||||||||||||||||
Reinvestment of distributions |
||||||||||||||||||||||||||||||||
Redemptions of common stock |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||
Transfers in or out |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
Accrued stockholder servicing fees (1) |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||
Balance as of September 30, 2022 |
$ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Shares |
||||||||||||||||||||||||||||||||
Class F |
Class Y |
Class T |
Class S |
Class D |
Class M |
Class I |
Total |
|||||||||||||||||||||||||
Balance as of December 31, 2020 |
||||||||||||||||||||||||||||||||
Issuance of common stock |
||||||||||||||||||||||||||||||||
Reinvestment of distributions |
||||||||||||||||||||||||||||||||
Redemptions of common stock |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
Transfers in or out |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||
Balance as of September 30, 2021 |
||||||||||||||||||||||||||||||||
Amount |
||||||||||||||||||||||||||||||||
Class F |
Class Y |
Class T |
Class S |
Class D |
Class M |
Class I |
Total |
|||||||||||||||||||||||||
Balance as of December 31, 2020 |
$ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Issuance of common stock |
||||||||||||||||||||||||||||||||
Reinvestment of distributions |
||||||||||||||||||||||||||||||||
Redemptions of common stock |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
Transfers in or out |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||
Accrued stockholder servicing fees (1) |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||
Balance as of September 30, 2021 |
$ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| (1) | Stockholder servicing fees only apply to Class T, Class S, Class D and Class M shares. Under GAAP, the Company accrues future stockholder servicing fees in an amount equal to its best estimate of fees payable to FS Investment Solutions at the time such shares are sold. For purposes of NAV, the Company recognizes the stockholder servicing fee as a reduction of NAV on a monthly basis. As a result, the estimated liability for the future stockholder servicing fees, which are accrued at the time each share is sold, will have no effect on the NAV of any class. |
Record Date |
Class F |
Class Y |
Class T |
Class S |
Class D |
Class M |
Class I |
|||||||||||||||||||||
January 28, 2022 |
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
February 25, 2022 |
||||||||||||||||||||||||||||
March 30, 2022 |
||||||||||||||||||||||||||||
April 28, 2022 |
||||||||||||||||||||||||||||
May 27, 2022 |
||||||||||||||||||||||||||||
June 29, 2022 |
||||||||||||||||||||||||||||
July 28, 2022 |
||||||||||||||||||||||||||||
August 30, 2022 |
||||||||||||||||||||||||||||
September 29, 2022 |
||||||||||||||||||||||||||||
Total |
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Distributions: |
||||||||||||||||
Paid or payable in cash |
$ | $ | $ | $ | ||||||||||||
Reinvested in shares |
||||||||||||||||
Total distributions |
$ | $ | $ | $ | ||||||||||||
Source of distributions: |
||||||||||||||||
Cash flows from operating activities |
$ | $ | (1) |
$ | $ | |||||||||||
Offering proceeds |
||||||||||||||||
Total sources of distributions |
$ | $ | $ | $ | ||||||||||||
Net cash provided by (used in) operating activities (2) |
$ | $ | $ | $ | ||||||||||||
| (1) | The distributions for the three months ended September 30, 2021, were fully covered by cash flows from operating activities, including cash flows from prior periods of $ |
| (2) | Cash flows from operating activities are supported by expense support payments from FS Real Estate Advisor and Rialto pursuant to the Company’s expense limitation agreement. See Note 7 for additional information regarding the Company’s expense limitation agreement. |
Class F |
Class Y |
Class T |
Class S |
Class D |
Class M |
Class I | ||||||
$ |
$ |
$ |
$ |
$ |
$ |
$ |
September 30, 2022 (Unaudited) |
December 31, 2021 |
|||||||||||||||||||||||||||||||
Total |
Level 1 |
Level 2 |
Level 3 |
Total |
Level 1 |
Level 2 |
Level 3 |
|||||||||||||||||||||||||
Mortgage-backed securities available-for-sale |
$ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Interest rate cap |
$ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
September 30, 2022 (Unaudited) |
December 31, 2021 |
|||||||||||||||||||||||
Book Value |
Face Amount |
Fair Value |
Book Value |
Face Amount |
Fair Value |
|||||||||||||||||||
Financial Assets |
||||||||||||||||||||||||
Cash, cash equivalents and restricted cash |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Loans receivable—held-for-investment (1) |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Mortgage-backed securities held-to-maturity |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Financial Liabilities |
||||||||||||||||||||||||
Repurchase agreements (2) |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Credit facilities |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Collateralized loan obligations (2) |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Mortgage note payable (2) |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
| (1) | Book value of loans receivable represents the face amount, net of unamortized loan fees and costs and accrual of exit fees, as applicable. |
| (2) | Book value represents the face amount, net of deferred financing costs. |
September 30, 2022 (Unaudited) |
December 31, 2021 |
|||||||
Assets: |
||||||||
Restricted cash |
$ | $ | ||||||
Loans receivable, held-for-investment |
||||||||
Interest receivable |
||||||||
Other assets |
||||||||
Total assets |
$ | $ | ||||||
Liabilities |
||||||||
Collateralized loan obligations (net of deferred financing costs of $ |
$ | $ | ||||||
Interest payable |
||||||||
Other liabilities |
||||||||
Total liabilities |
$ | $ | ||||||
Type of Derivative |
Notional Amount |
Strike |
Effective Date |
Maturity Date |
Fair Value (1) |
|||||||||||
Interest Rate Cap |
$ | % | $ | |||||||||||||
| (1) | Included in Other assets in the Company’s consolidated balance sheets. |
Type of Derivative |
Realized/ Unrealized Gain (Loss) |
Location of Gain (Loss) Recognized in Net Income |
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||||||||||
Interest Rate Cap |
Unrealized Loss | (1 | ) | $ | $ | $ | $ | |||||||||||||||||
| (1) | Included in Other income (loss) in the Company’s consolidated statements of operations. |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations (in thousands, except share and per share amounts). |
The information contained in this section should be read in conjunction with the unaudited consolidated financial statements and related notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q. In this report, “we,” “us” and “our” refer to FS Credit Real Estate Income Trust, Inc.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), regarding, among other things, our business, including, in particular, statements about our plans, strategies and objectives. You can generally identify forward-looking statements by our use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue” or other similar words. These statements include our plans and objectives for future operations, including plans and objectives relating to future growth and availability of funds, and are based on current expectations that involve numerous risks and uncertainties. Assumptions relating to these statements involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to accurately predict and many of which are beyond our control. Although we believe the assumptions underlying the forward-looking statements, and the forward-looking statements themselves, are reasonable, any of the assumptions could be inaccurate and, therefore, there can be no assurance that these forward-looking statements will prove to be accurate and our actual results, performance and achievements may be materially different from that expressed or implied by these forward-looking statements. In light of the significant uncertainties inherent in these forward-looking statements, the inclusion of this information should not be regarded as a representation by us or any other person that our objectives and plans, which we consider to be reasonable, will be achieved. We undertake no duty to update or revise forward-looking statements, except as required by law.
Introduction
We were incorporated under the general corporation laws of the State of Maryland on November 7, 2016 and formally commenced investment operations on September 13, 2017. We are currently conducting a public offering of up to $2,750,000 of our Class T, Class S, Class D, Class M and Class I shares of common stock pursuant to a registration statement on Form S-11 filed with the SEC consisting of up to $2,500,000 in shares in our primary offering and up to $250,000 in shares pursuant to our distribution reinvestment plan. We are also conducting a private offering of our Class I common stock and previously conducted private offerings of our Class F common stock and Class Y common stock. We are managed by FS Real Estate Advisor pursuant to an advisory agreement between us and FS Real Estate Advisor. FS Real Estate Advisor is a subsidiary of our sponsor, FS Investments, a national sponsor of alternative investment funds designed for the individual investor. FS Real Estate Advisor has engaged Rialto to act as its sub-adviser.
We have elected to be taxed as a REIT for U.S. federal income tax purposes commencing with our taxable year ended December 31, 2017. We intend to be an investment vehicle of indefinite duration focused on real estate debt investments and other real estate-related assets. The shares of common stock are generally intended to be sold and repurchased by us on a continuous basis. We intend to conduct our operations so that we are not required to register under the 1940 Act.
Our primary investment objectives are to: provide current income in the form of regular, stable cash distributions to achieve an attractive dividend yield; preserve and protect invested capital; realize appreciation in net asset value, or NAV, from proactive management and asset management; and provide an investment alternative for stockholders seeking to allocate a portion of their long-term investment portfolios to commercial real estate debt with lower volatility than public real estate companies.
42
Our investment strategy is to originate, acquire and manage a portfolio of senior loans secured by commercial real estate primarily in the United States. We are focused on senior floating-rate mortgage loans, but we may also invest in other real estate-related assets, including: (i) other commercial real estate mortgage loans, including fixed-rate loans, subordinated loans, B-Notes, mezzanine loans and participations in commercial mortgage loans; and (ii) commercial real estate securities, including commercial mortgage-backed securities, or CMBS, unsecured debt of listed and non-listed REITs, collateralized debt obligations and equity or equity-linked securities. To a lesser extent we may invest in warehouse loans secured by commercial or residential mortgages, credit loans to commercial real estate companies, residential mortgage-backed securities, or RMBS, and portfolios of single family home mortgages.
Portfolio Overview
Loan Portfolio Overview
The following table details activity in our loans receivable portfolio for the three and nine months ended September 30, 2022 and 2021:
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Loan fundings(1) |
$ | 646,718 | $ | 971,997 | $ | 3,731,304 | $ | 1,990,205 | ||||||||
| Loan repayments(2) |
(94,796 | ) | (82,361 | ) | (483,832 | ) | (178,428 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total net fundings |
$ | 551,922 | $ | 889,636 | $ | 3,247,472 | $ | 1,811,777 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (1) | Includes new loan originations and additional fundings made under existing loans. |
| (2) | Excludes payment held by servicer as of December 31, 2021. |
The following table details overall statistics for our loans receivable portfolio as of September 30, 2022 and December 31, 2021:
| September 30, 2022 (Unaudited) |
December 31, 2021 | |||||||
| Number of loans |
140 | 102 | ||||||
| Principal balance |
$ | 7,093,134 | $ | 3,843,110 | ||||
| Net book value |
$ | 7,091,841 | $ | 3,841,868 | ||||
| Unfunded loan commitments(1) |
$ | 581,328 | $ | 414,818 | ||||
| Weighted-average cash coupon(2) |
+3.82 | % | +3.68 | % | ||||
| Weighted-average all-in yield(2) |
+3.89 | % | +3.73 | % | ||||
| Weighted-average maximum maturity (years)(3) |
4.1 | 4.5 | ||||||
| (1) | We may be required to provide funding when requested by the borrower in accordance with the terms of the underlying agreements. |
| (2) | Our floating rate loans are expressed as a spread over the relevant benchmark rates, which include the London Interbank Offered Rate, or LIBOR, and the Secured Overnight Financing Rate, or SOFR. In addition to cash coupon, all-in yield includes accretion of discount (amortization of premium) and accrual of exit fees. |
| (3) | Maximum maturity assumes all extension options are exercised by the borrower; however loans may be repaid prior to such date. |
43
The following table provides details of our loan receivable, held-for-investment portfolio, on a loan-by-loan basis, as of September 30, 2022:
| Loan Type | Origination Date(1) |
Total Loan |
Principal Balance |
Net Book Value |
Cash Coupon(2) |
All-in Yield(2) |
Maximum Maturity(3) |
Location | Property Type |
LTV(1) | ||||||||||||||||||||||||||||
| 1 |
Senior Loan | 6/9/2022 | $ | 365,611 | $ | 336,733 | $ | 336,685 | +3.30 | % | +3.30 | % | 6/9/2027 | Various | Multifamily | 74 | % | |||||||||||||||||||||
| 2 |
Senior Loan | 4/28/2022 | 195,000 | 195,000 | 195,024 | +4.65 | % | +4.76 | % | 5/9/2027 | New York, NY | Hospitality | 70 | % | ||||||||||||||||||||||||
| 3 |
Senior Loan | 12/7/2021 | 175,000 | 151,194 | 151,179 | +3.60 | % | +3.60 | % | 12/9/2026 | Miami, FL | Retail | 38 | % | ||||||||||||||||||||||||
| 4 |
Senior Loan | 6/8/2022 | 144,160 | 144,160 | 144,265 | +3.89 | % | +4.14 | % | 6/9/2027 | New York, NY | Multifamily | 73 | % | ||||||||||||||||||||||||
| 5 |
Senior Loan | 10/12/2021 | 130,747 | 130,747 | 130,747 | +3.00 | % | +3.00 | % | 6/9/2026 | Philadelphia, PA | Multifamily | 69 | % | ||||||||||||||||||||||||
| 6 |
Senior Loan | 3/31/2022 | 120,470 | 81,979 | 81,963 | +4.30 | % | +4.30 | % | 4/9/2027 | Addison, TX | Office | 67 | % | ||||||||||||||||||||||||
| 7 |
Senior Loan | 9/9/2021 | 118,265 | 118,265 | 118,251 | +3.20 | % | +3.20 | % | 9/9/2026 | Various, NY | Self Storage | 70 | % | ||||||||||||||||||||||||
| 8 |
Senior Loan | 6/14/2022 | 111,100 | 97,500 | 97,477 | +3.80 | % | +3.81 | % | 6/9/2027 | San Jose, CA | Office | 39 | % | ||||||||||||||||||||||||
| 9 |
Senior Loan | 3/10/2022 | 110,150 | 90,577 | 90,551 | +5.00 | % | +5.01 | % | 4/9/2027 | Santa Clara, CA | Office | 62 | % | ||||||||||||||||||||||||
| 10 |
Senior Loan | 5/26/2022 | 108,500 | 97,172 | 97,180 | +3.40 | % | +3.59 | % | 6/9/2027 | Mesa, AZ | Multifamily | 67 | % | ||||||||||||||||||||||||
| 11 |
Senior Loan | 7/15/2022 | 107,000 | 85,000 | 84,976 | +3.70 | % | +3.71 | % | 8/9/2027 | Middletown, DE | Industrial | 68 | % | ||||||||||||||||||||||||
| 12 |
Senior Loan | 1/13/2022 | 103,600 | 93,323 | 93,298 | +3.55 | % | +3.56 | % | 1/9/2027 | Austin, TX | Multifamily | 80 | % | ||||||||||||||||||||||||
| 13 |
Senior Loan | 6/30/2022 | 106,000 | 100,000 | 99,986 | +4.15 | % | +4.15 | % | 7/9/2027 | Lynwood, CA | Retail | 61 | % | ||||||||||||||||||||||||
| 14 |
Senior Loan | 5/18/2022 | 105,000 | 105,000 | 105,000 | +3.50 | % | +3.50 | % | 6/9/2027 | New Rochelle, NY |
Multifamily | 61 | % | ||||||||||||||||||||||||
| 15 |
Senior Loan | 9/22/2022 | 103,552 | 103,552 | 102,547 | +3.66 | % | +4.98 | % | 9/1/2024 | Various | Industrial | 74 | % | ||||||||||||||||||||||||
| 16 |
Senior Loan | 6/28/2022 | 100,000 | 100,000 | 99,976 | +3.15 | % | +3.16 | % | 7/9/2027 | Fayetteville, NC | Multifamily | 76 | % | ||||||||||||||||||||||||
| 17 |
Mezz Loan | 10/1/2021 | 99,949 | 99,949 | 99,330 | 10.00 | % | 10.25 | % | 4/1/2026 | Various | Various | 93 | % | ||||||||||||||||||||||||
| 18 |
Senior Loan | 12/30/2021 | 95,000 | 95,000 | 94,984 | +4.20 | % | +4.21 | % | 1/9/2027 | San Diego, CA | Hospitality | 58 | % | ||||||||||||||||||||||||
| 19 |
Senior Loan | 12/21/2021 | 93,900 | 78,197 | 78,183 | +3.80 | % | +3.81 | % | 1/9/2027 | Houston, TX | Multifamily | 76 | % | ||||||||||||||||||||||||
| 20 |
Senior Loan | 5/13/2022 | 93,500 | 85,278 | 85,292 | +4.25 | % | +4.40 | % | 5/9/2027 | New York, NY | Multifamily | 60 | % | ||||||||||||||||||||||||
| 21 |
Senior Loan | 4/29/2022 | 90,000 | 90,000 | 90,000 | +3.55 | % | +3.55 | % | 5/6/2027 | Reseda, CA | Multifamily | 69 | % | ||||||||||||||||||||||||
| 22 |
Senior Loan | 8/4/2022 | 90,000 | 90,000 | 89,985 | +3.65 | % | +3.66 | % | 8/9/2027 | Santa Barbara, CA |
Various | 60 | % | ||||||||||||||||||||||||
| 23 |
Senior Loan | 5/13/2022 | 89,500 | 76,267 | 76,279 | +4.25 | % | +4.40 | % | 5/9/2027 | New York, NY | Multifamily | 58 | % | ||||||||||||||||||||||||
| 24 |
Senior Loan | 2/4/2022 | 89,000 | 89,000 | 89,292 | +3.75 | % | +3.75 | % | 2/1/2025 | Temecula, CA | Multifamily | 75 | % | ||||||||||||||||||||||||
| 25 |
Senior Loan | 9/8/2022 | 87,000 | 72,123 | 72,128 | +4.25 | % | +4.34 | % | 9/9/2027 | Washington, DC | Hospitality | 52 | % | ||||||||||||||||||||||||
| 26 |
Senior Loan | 7/20/2022 | 85,690 | 79,375 | 79,365 | +3.65 | % | +3.74 | % | 8/9/2027 | Phoenix, AZ | Multifamily | 61 | % | ||||||||||||||||||||||||
| 27 |
Senior Loan | 12/15/2021 | 85,000 | 81,800 | 81,781 | +3.35 | % | +3.36 | % | 12/9/2026 | Sunny Isles, FL | Multifamily | 74 | % | ||||||||||||||||||||||||
| 28 |
Senior Loan | 5/12/2021 | 85,000 | 85,000 | 85,047 | +3.00 | % | +3.05 | % | 5/9/2026 | Detroit, MI | Industrial | 73 | % | ||||||||||||||||||||||||
| 29 |
Senior Loan | 3/9/2022 | 84,000 | 78,493 | 78,493 | +3.55 | % | +3.55 | % | 3/9/2027 | Temple Hills, MD |
Multifamily | 75 | % | ||||||||||||||||||||||||
| 30 |
Senior Loan | 12/23/2021 | 83,400 | 73,140 | 73,118 | +4.45 | % | +4.46 | % | 1/9/2027 | Westminster, CO | Retail | 65 | % | ||||||||||||||||||||||||
| 31 |
Senior Loan | 12/22/2021 | 81,500 | 54,000 | 54,083 | +4.75 | % | +4.93 | % | 1/9/2027 | Farmers Branch, TX |
Office | 62 | % | ||||||||||||||||||||||||
| 32 |
Senior Loan | 2/28/2022 | 75,000 | 72,500 | 72,500 | +3.85 | % | +3.85 | % | 3/9/2027 | Atlanta, GA | Multifamily | 68 | % | ||||||||||||||||||||||||
| 33 |
Senior Loan | 9/10/2021 | 71,201 | 67,082 | 67,063 | +2.90 | % | +2.90 | % | 10/9/2026 | Richardson, TX | Multifamily | 68 | % | ||||||||||||||||||||||||
| 34 |
Senior Loan | 4/26/2022 | 69,350 | 63,340 | 63,311 | +3.72 | % | +3.73 | % | 5/9/2027 | Tucson, AZ | Multifamily | 68 | % | ||||||||||||||||||||||||
| 35 |
Senior Loan | 4/26/2021 | 68,100 | 66,000 | 65,986 | +3.15 | % | +3.16 | % | 5/9/2026 | North Las Vegas, NV |
Multifamily | 72 | % | ||||||||||||||||||||||||
| 36 |
Senior Loan | 4/27/2022 | 67,940 | 57,720 | 57,712 | +4.00 | % | +4.06 | % | 5/9/2027 | Indianapolis, IN | Multifamily | 79 | % | ||||||||||||||||||||||||
| 37 |
Senior Loan | 12/21/2021 | 65,450 | 65,450 | 65,434 | +4.35 | % | +4.36 | % | 1/9/2027 | Dallas, TX | Hospitality | 58 | % | ||||||||||||||||||||||||
| 38 |
Senior Loan | 4/15/2021 | 64,460 | 63,331 | 63,317 | +2.80 | % | +2.80 | % | 5/9/2026 | Lawrenceville, GA |
Multifamily | 75 | % | ||||||||||||||||||||||||
| 39 |
Senior Loan | 5/20/2022 | 63,001 | 62,039 | 62,031 | +4.15 | % | +4.15 | % | 5/9/2027 | Montauk, NY | Hospitality | 80 | % | ||||||||||||||||||||||||
| 40 |
Senior Loan | 4/13/2022 | 62,650 | 53,847 | 53,818 | +3.90 | % | +3.92 | % | 5/9/2027 | Houston, TX | Multifamily | 78 | % | ||||||||||||||||||||||||
| 41 |
Senior Loan | 7/29/2021 | 62,500 | 62,500 | 62,497 | +3.10 | % | +3.10 | % | 8/9/2026 | Maitland, FL | Multifamily | 72 | % | ||||||||||||||||||||||||
| 42 |
Senior Loan | 7/22/2021 | 62,100 | 60,291 | 60,275 | +3.30 | % | +3.31 | % | 8/9/2026 | Nashville, TN | Multifamily | 75 | % | ||||||||||||||||||||||||
| 43 |
Senior Loan | 8/2/2021 | 60,130 | 58,697 | 58,679 | +2.80 | % | +2.81 | % | 8/9/2026 | Austin, TX | Multifamily | 73 | % | ||||||||||||||||||||||||
| 44 |
Senior Loan | 2/15/2022 | 58,750 | 56,201 | 56,181 | +3.50 | % | +3.51 | % | 3/9/2027 | Antioch, TN | Multifamily | 79 | % | ||||||||||||||||||||||||
| 45 |
Senior Loan | 5/12/2022 | 58,165 | 53,885 | 53,871 | +3.35 | % | +3.36 | % | 5/9/2027 | Denver, CO | Multifamily | 80 | % | ||||||||||||||||||||||||
| 46 |
Senior Loan | 1/7/2022 | 58,000 | 53,275 | 53,345 | +4.25 | % | +4.43 | % | 11/9/2026 | Miami, FL | Hospitality | 49 | % | ||||||||||||||||||||||||
| 47 |
Senior Loan | 8/13/2021 | 57,500 | 52,269 | 52,252 | +3.10 | % | +3.19 | % | 9/9/2026 | Various, FL | Industrial | 68 | % | ||||||||||||||||||||||||
| 48 |
Senior Loan | 7/7/2022 | 57,250 | 54,850 | 54,847 | +4.35 | % | +4.44 | % | 7/9/2027 | Birmingham, AL | Retail | 71 | % | ||||||||||||||||||||||||
| 49 |
Senior Loan | 6/23/2022 | 57,000 | 48,541 | 48,530 | +4.75 | % | +4.85 | % | 7/9/2027 | Seattle, WA | Multifamily | 68 | % | ||||||||||||||||||||||||
| 50 |
Senior Loan | 6/18/2021 | 56,000 | 56,000 | 55,994 | +3.50 | % | +3.51 | % | 7/9/2026 | Chicago, IL | Multifamily | 77 | % | ||||||||||||||||||||||||
| 51 |
Senior Loan | 11/5/2021 | 55,960 | 49,523 | 49,516 | +3.10 | % | +3.11 | % | 11/9/2026 | Houston, TX | Industrial | 74 | % | ||||||||||||||||||||||||
| 52 |
Senior Loan | 8/17/2022 | 55,600 | 53,017 | 52,999 | +3.85 | % | +3.95 | % | 9/9/2027 | Austin, TX | Multifamily | 62 | % | ||||||||||||||||||||||||
| 53 |
Senior Loan | 2/17/2022 | 55,400 | 46,497 | 46,505 | +4.10 | % | +4.12 | % | 3/9/2027 | Indianapolis, IN | Multifamily | 80 | % | ||||||||||||||||||||||||
| 54 |
Senior Loan | 3/7/2022 | 53,885 | 46,879 | 46,892 | +3.50 | % | +3.59 | % | 3/9/2027 | Humble, TX | Multifamily | 75 | % | ||||||||||||||||||||||||
| 55 |
Senior Loan | 8/9/2021 | 53,160 | 51,478 | 51,461 | +3.15 | % | +3.16 | % | 8/9/2026 | Philadelphia, PA | Multifamily | 79 | % | ||||||||||||||||||||||||
| 56 |
Senior Loan | 11/10/2021 | 52,969 | 45,450 | 45,473 | +3.75 | % | +4.10 | % | 11/9/2026 | Fayetteville, AR | Multifamily | 70 | % | ||||||||||||||||||||||||
| 57 |
Senior Loan | 6/16/2022 | 52,280 | 44,280 | 44,270 | +3.80 | % | +3.81 | % | 7/9/2027 | Jacksonville, FL | Multifamily | 71 | % | ||||||||||||||||||||||||
| 58 |
Senior Loan | 3/12/2021 | 52,250 | 32,466 | 32,452 | +5.75 | % | +5.76 | % | 3/9/2026 | San Francisco, CA |
Office | 65 | % | ||||||||||||||||||||||||
| 59 |
Senior Loan | 7/7/2021 | 52,200 | 45,939 | 45,924 | +3.00 | % | +3.00 | % | 7/9/2026 | Austin, FL | Multifamily | 74 | % | ||||||||||||||||||||||||
| 60 |
Senior Loan | 3/22/2022 | 50,750 | 50,750 | 50,750 | +3.60 | % | +3.60 | % | 4/9/2027 | Humble, TX | Multifamily | 72 | % | ||||||||||||||||||||||||
44
| Loan Type | Origination Date(1) |
Total Loan |
Principal Balance |
Net Book Value |
Cash Coupon(2) |
All-in Yield(2) |
Maximum Maturity(3) |
Location | Property Type |
LTV(1) | ||||||||||||||||||||||||||||
| 61 |
Senior Loan | 2/18/2022 | $ | 49,240 | $ | 33,480 | $ | 33,459 | +3.90 | % | +3.92 | % | 3/9/2027 | Atlanta, GA | Office | 60 | % | |||||||||||||||||||||
| 62 |
Senior Loan | 4/26/2022 | 49,125 | 44,925 | 44,921 | +4.05 | % | +4.15 | % | 5/9/2027 | Decatur, GA | Multifamily | 72 | % | ||||||||||||||||||||||||
| 63 |
Senior Loan | 12/15/2021 | 49,000 | 49,000 | 48,981 | +3.45 | % | +3.46 | % | 12/9/2026 | Ladson, SC | Multifamily | 77 | % | ||||||||||||||||||||||||
| 64 |
Senior Loan | 6/23/2021 | 48,944 | 45,662 | 45,647 | +2.80 | % | +2.81 | % | 7/9/2026 | Roswell, GA | Multifamily | 75 | % | ||||||||||||||||||||||||
| 65 |
Senior Loan | 11/1/2021 | 48,906 | 45,317 | 45,299 | +3.70 | % | +3.71 | % | 11/9/2026 | Fort Lauderdale, FL |
Office | 67 | % | ||||||||||||||||||||||||
| 66 |
Senior Loan | 11/23/2021 | 47,600 | 39,919 | 39,908 | +3.05 | % | +3.06 | % | 12/9/2026 | Dallas, TX | Multifamily | 69 | % | ||||||||||||||||||||||||
| 67 |
Senior Loan | 7/29/2021 | 47,500 | 47,500 | 47,498 | +3.10 | % | +3.10 | % | 8/9/2026 | Clearwater, FL | Multifamily | 79 | % | ||||||||||||||||||||||||
| 68 |
Senior Loan | 8/3/2021 | 46,500 | 46,500 | 46,491 | +3.10 | % | +3.11 | % | 8/9/2026 | San Antonio, TX | Multifamily | 72 | % | ||||||||||||||||||||||||
| 69 |
Senior Loan | 4/6/2022 | 46,500 | 44,000 | 43,978 | +3.50 | % | +3.52 | % | 4/9/2027 | Atlanta, GA | Multifamily | 79 | % | ||||||||||||||||||||||||
| 70 |
Senior Loan | 12/17/2021 | 46,100 | 36,500 | 36,511 | +4.30 | % | +4.40 | % | 1/9/2027 | Seattle, WA | Office | 53 | % | ||||||||||||||||||||||||
| 71 |
Senior Loan | 8/25/2022 | 45,000 | 45,000 | 45,007 | +3.50 | % | +4.00 | % | 9/9/2027 | McKinney, TX | Multifamily | 53 | % | ||||||||||||||||||||||||
| 72 |
Senior Loan | 1/28/2022 | 43,650 | 34,045 | 34,067 | +4.00 | % | +4.14 | % | 2/9/2027 | Milwaukee, WI | Office | 59 | % | ||||||||||||||||||||||||
| 73 |
Senior Loan | 7/28/2021 | 43,350 | 42,076 | 42,059 | +3.00 | % | +3.01 | % | 8/9/2026 | Sandy Springs, GA |
Multifamily | 77 | % | ||||||||||||||||||||||||
| 74 |
Senior Loan | 8/19/2021 | 43,000 | 43,000 | 42,983 | +3.10 | % | +3.11 | % | 9/9/2026 | Omaha, NE | Multifamily | 75 | % | ||||||||||||||||||||||||
| 75 |
Senior Loan | 8/9/2021 | 42,660 | 38,344 | 38,334 | +3.05 | % | +3.06 | % | 8/9/2026 | Southaven, MS | Multifamily | 57 | % | ||||||||||||||||||||||||
| 76 |
Senior Loan | 11/1/2021 | 42,300 | 40,323 | 40,304 | +3.50 | % | +3.52 | % | 11/9/2026 | Doraville, GA | Multifamily | 82 | % | ||||||||||||||||||||||||
| 77 |
Senior Loan | 3/14/2022 | 42,000 | 40,200 | 40,225 | +3.50 | % | +3.51 | % | 4/9/2027 | Dallas, TX | Multifamily | 76 | % | ||||||||||||||||||||||||
| 78 |
Senior Loan | 8/25/2021 | 41,395 | 40,404 | 40,387 | +3.15 | % | +3.16 | % | 9/9/2026 | Cypress, TX | Multifamily | 69 | % | ||||||||||||||||||||||||
| 79 |
Senior Loan | 7/21/2021 | 41,300 | 39,241 | 39,232 | +2.80 | % | +2.81 | % | 8/9/2026 | Evanston, IL | Multifamily | 77 | % | ||||||||||||||||||||||||
| 80 |
Senior Loan | 10/28/2021 | 40,200 | 37,106 | 37,087 | +3.00 | % | +3.02 | % | 11/9/2026 | Dallas, TX | Multifamily | 74 | % | ||||||||||||||||||||||||
| 81 |
Senior Loan | 4/27/2021 | 39,050 | 35,177 | 35,168 | +3.15 | % | +3.16 | % | 5/9/2026 | Jamaica, NY | Industrial | 61 | % | ||||||||||||||||||||||||
| 82 |
Senior Loan | 8/31/2021 | 38,700 | 35,781 | 35,764 | +3.10 | % | +3.12 | % | 9/9/2026 | Colorado Springs, CO |
Multifamily | 68 | % | ||||||||||||||||||||||||
| 83 |
Senior Loan | 6/24/2021 | 38,600 | 36,795 | 36,780 | +3.75 | % | +3.76 | % | 7/9/2026 | Austin, TX | Multifamily | 76 | % | ||||||||||||||||||||||||
| 84 |
Senior Loan | 8/3/2021 | 38,500 | 38,500 | 38,491 | +3.10 | % | +3.11 | % | 8/9/2026 | San Antonio, TX | Multifamily | 72 | % | ||||||||||||||||||||||||
| 85 |
Senior Loan | 11/30/2021 | 38,310 | 34,509 | 34,581 | +4.45 | % | +4.45 | % | 12/9/2026 | Memphis, TN | Office | 70 | % | ||||||||||||||||||||||||
| 86 |
Senior Loan | 4/9/2019 | 38,000 | 38,000 | 37,998 | +3.75 | % | +3.75 | % | 4/9/2024 | New York City, NY |
Mixed Use | 75 | % | ||||||||||||||||||||||||
| 87 |
Senior Loan | 11/4/2021 | 37,300 | 35,920 | 35,920 | +3.35 | % | +3.85 | % | 11/1/2024 | Boca Raton, FL | Multifamily | 81 | % | ||||||||||||||||||||||||
| 88 |
Senior Loan | 4/29/2022 | 37,136 | 34,262 | 34,261 | +3.75 | % | +3.76 | % | 5/9/2027 | Euless, TX | Multifamily | 80 | % | ||||||||||||||||||||||||
| 89 |
Senior Loan | 11/5/2021 | 36,325 | 33,860 | 33,840 | +3.10 | % | +3.12 | % | 11/9/2026 | Mesquite, TX | Multifamily | 73 | % | ||||||||||||||||||||||||
| 90 |
Senior Loan | 12/21/2021 | 36,000 | 36,000 | 35,981 | +3.45 | % | +3.47 | % | 1/9/2027 | Hackensack, NJ | Multifamily | 68 | % | ||||||||||||||||||||||||
| 91 |
Senior Loan | 1/7/2022 | 36,000 | 36,000 | 36,000 | +3.80 | % | +3.80 | % | 1/9/2027 | Jupiter, FL | Office | 72 | % | ||||||||||||||||||||||||
| 92 |
Senior Loan | 3/29/2021 | 35,880 | 34,247 | 34,233 | +3.60 | % | +3.60 | % | 4/9/2026 | Arlington, TX | Multifamily | 80 | % | ||||||||||||||||||||||||
| 93 |
Senior Loan | 5/28/2021 | 35,785 | 31,085 | 31,070 | +5.00 | % | +5.02 | % | 6/9/2026 | Austin, TX | Office | 57 | % | ||||||||||||||||||||||||
| 94 |
Senior Loan | 2/27/2020 | 35,641 | 33,521 | 33,523 | +3.15 | % | +3.15 | % | 3/9/2025 | Various, SC | Industrial | 72 | % | ||||||||||||||||||||||||
| 95 |
Senior Loan | 6/22/2021 | 34,500 | 31,617 | 31,608 | +3.60 | % | +3.61 | % | 7/9/2026 | Tallahassee, FL | Multifamily | 74 | % | ||||||||||||||||||||||||
| 96 |
Senior Loan | 9/30/2022 | 40,000 | 34,500 | 34,475 | +5.00 | % | +5.28 | % | 10/9/2027 | New Orleans, LA | Hospitality | 64 | % | ||||||||||||||||||||||||
| 97 |
Senior Loan | 12/3/2021 | 34,327 | 34,327 | 34,319 | +3.45 | % | +3.46 | % | 12/9/2026 | Various, NY | Self Storage | 63 | % | ||||||||||||||||||||||||
| 98 |
Senior Loan | 12/16/2021 | 33,000 | 30,950 | 30,931 | +3.55 | % | +3.57 | % | 1/9/2027 | Fort Worth, TX | Multifamily | 72 | % | ||||||||||||||||||||||||
| 99 |
Senior Loan | 11/23/2021 | 32,000 | 26,977 | 26,966 | +3.05 | % | +3.06 | % | 12/9/2026 | Dallas, TX | Multifamily | 69 | % | ||||||||||||||||||||||||
| 100 |
Senior Loan | 3/11/2021 | 32,000 | 30,000 | 29,992 | +4.50 | % | +4.51 | % | 3/9/2026 | Colleyville, TX | Retail | 58 | % | ||||||||||||||||||||||||
| 101 |
Senior Loan | 4/27/2022 | 31,800 | 22,925 | 22,912 | +4.30 | % | +4.30 | % | 5/9/2027 | Morrow, GA | Industrial | 62 | % | ||||||||||||||||||||||||
| 102 |
Senior Loan | 1/28/2022 | 31,229 | 31,229 | 31,241 | +3.70 | % | +3.71 | % | 9/9/2026 | Dallas, TX | Multifamily | 82 | % | ||||||||||||||||||||||||
| 103 |
Senior Loan | 12/29/2020 | 31,128 | 28,283 | 28,465 | +3.75 | % | +3.93 | % | 1/9/2026 | Brooklyn, NY | Multifamily | 60 | % | ||||||||||||||||||||||||
| 104 |
Senior Loan | 5/4/2021 | 30,000 | 19,777 | 19,771 | +5.55 | % | +5.56 | % | 5/9/2026 | Richardson, TX | Office | 65 | % | ||||||||||||||||||||||||
| 105 |
Senior Loan | 6/28/2019 | 28,500 | 28,500 | 28,711 | +5.35 | % | +5.48 | % | 7/9/2024 | Davis, CA | Hospitality | 72 | % | ||||||||||||||||||||||||
| 106 |
Senior Loan | 12/18/2020 | 28,440 | 24,738 | 24,736 | +4.50 | % | +4.50 | % | 1/9/2026 | Rockville, MD | Office | 69 | % | ||||||||||||||||||||||||
| 107 |
Senior Loan | 12/15/2021 | 28,400 | 26,854 | 26,842 | +3.30 | % | +3.31 | % | 12/9/2026 | Arlington, TX | Multifamily | 79 | % | ||||||||||||||||||||||||
| 108 |
Senior Loan | 11/18/2021 | 27,387 | 27,387 | 27,376 | +3.60 | % | +3.61 | % | 12/9/2026 | Brooklyn, NY | Self Storage | 70 | % | ||||||||||||||||||||||||
| 109 |
Senior Loan | 1/20/2021 | 25,250 | 22,586 | 22,576 | +4.75 | % | +4.75 | % | 2/9/2026 | Laguna Hills, CA | Office | 63 | % | ||||||||||||||||||||||||
| 110 |
Senior Loan | 3/31/2021 | 25,250 | 25,250 | 25,239 | +3.20 | % | +3.21 | % | 4/9/2026 | Tempe, AZ | Multifamily | 77 | % | ||||||||||||||||||||||||
| 111 |
Senior Loan | 6/25/2021 | 25,000 | 24,293 | 24,284 | +3.05 | % | +3.06 | % | 7/9/2026 | Austin, TX | Multifamily | 68 | % | ||||||||||||||||||||||||
| 112 |
Senior Loan | 1/28/2022 | 24,489 | 24,489 | 24,497 | +3.70 | % | +3.81 | % | 9/9/2026 | Mesquite, TX | Multifamily | 78 | % | ||||||||||||||||||||||||
| 113 |
Senior Loan | 7/18/2018 | 22,650 | 22,650 | 22,639 | +5.25 | % | +5.35 | % | 8/9/2023 | Gaithersburg, MD |
Hospitality | 80 | % | ||||||||||||||||||||||||
| 114 |
Senior Loan | 12/10/2020 | 22,300 | 17,420 | 17,410 | +5.25 | % | +5.25 | % | 1/9/2026 | Fox Hills, CA | Office | 55 | % | ||||||||||||||||||||||||
| 115 |
Senior Loan | 1/28/2022 | 22,149 | 22,149 | 22,155 | +3.70 | % | +3.81 | % | 9/9/2026 | Dallas, TX | Multifamily | 85 | % | ||||||||||||||||||||||||
| 116 |
Senior Loan | 8/26/2021 | 21,805 | 20,725 | 20,708 | +3.10 | % | +3.13 | % | 9/9/2026 | Seattle, WA | Multifamily | 69 | % | ||||||||||||||||||||||||
| 117 |
Senior Loan | 7/13/2021 | 21,350 | 21,350 | 21,334 | +3.40 | % | +3.42 | % | 8/9/2026 | Grand Prairie, TX | Multifamily | 72 | % | ||||||||||||||||||||||||
| 118 |
Senior Loan | 7/20/2021 | 21,136 | 18,372 | 18,377 | +3.25 | % | +3.36 | % | 8/9/2026 | Las Vegas, NV | Multifamily | 72 | % | ||||||||||||||||||||||||
| 119 |
Senior Loan | 8/6/2021 | 20,000 | 20,000 | 20,022 | +3.10 | % | +3.24 | % | 8/9/2026 | Sandy Springs, GA |
Multifamily | 74 | % | ||||||||||||||||||||||||
45
| Loan Type | Origination Date(1) |
Total Loan |
Principal Balance |
Net Book Value |
Cash Coupon(2) |
All-in Yield(2) |
Maximum Maturity(3) |
Location | Property Type |
LTV(1) | ||||||||||||||||||||||||||||||||
| 120 |
Senior Loan | 5/10/2021 | $ | 19,200 | $ | 17,892 | $ | 17,878 | +3.50 | % | +3.53 | % | 5/9/2026 | |
University City, PA |
|
Multifamily | 70 | % | |||||||||||||||||||||||
| 121 |
Senior Loan | 12/3/2021 | 18,828 | 18,828 | 18,821 | +3.45 | % | +3.46 | % | 12/9/2026 | Various, NY | Self Storage | 63 | % | ||||||||||||||||||||||||||||
| 122 |
Senior Loan | 2/26/2021 | 18,590 | 17,495 | 17,487 | +3.25 | % | +3.26 | % | 3/9/2026 | Newark, NJ | Industrial | 57 | % | ||||||||||||||||||||||||||||
| 123 |
Mezz Loan | 2/21/2020 | 18,102 | 18,102 | 18,102 | 10.00 | % | 10.00 | % | 3/1/2030 | Various, SC | Industrial | 70 | % | ||||||||||||||||||||||||||||
| 124 |
Senior Loan | 2/19/2020 | 18,000 | 14,400 | 14,405 | +3.50 | % | +3.49 | % | 3/9/2025 | Los Angeles, CA | Mixed Use | 71 | % | ||||||||||||||||||||||||||||
| 125 |
Senior Loan | 6/16/2021 | 17,500 | 16,615 | 16,606 | +3.25 | % | +3.27 | % | 7/9/2026 | Everett, WA | Multifamily | 69 | % | ||||||||||||||||||||||||||||
| 126 |
Senior Loan | 10/22/2019 | 17,500 | 15,675 | 15,762 | +4.50 | % | +4.66 | % | 11/9/2024 | Oakland, CA | Mixed Use | 70 | % | ||||||||||||||||||||||||||||
| 127 |
Senior Loan | 9/23/2021 | 16,300 | 14,875 | 14,904 | +4.25 | % | +4.55 | % | 9/9/2026 | Various, NJ | Multifamily | 77 | % | ||||||||||||||||||||||||||||
| 128 |
Senior Loan | 1/28/2021 | 16,100 | 16,100 | 16,133 | +4.50 | % | +4.63 | % | 2/9/2026 | Philadelphia, PA | Self Storage | 79 | % | ||||||||||||||||||||||||||||
| 129 |
Mezz Loan | 6/8/2022 | 15,840 | 15,840 | 15,852 | 7.50 | % | 7.75 | % | 6/9/2027 | New York, NY | Multifamily | 81 | % | ||||||||||||||||||||||||||||
| 130 |
Senior Loan | 6/16/2021 | 15,406 | 14,924 | 14,914 | +3.25 | % | +3.27 | % | 7/9/2026 | Everett, WA | Multifamily | 71 | % | ||||||||||||||||||||||||||||
| 131 |
Mezz Loan | 2/14/2020 | 15,000 | 15,000 | 15,000 | 7.50 | % | 7.50 | % | 12/5/2026 | Queens, NY | Multifamily | 75 | % | ||||||||||||||||||||||||||||
| 132 |
Senior Loan | 3/25/2021 | 13,405 | 12,411 | 12,420 | +3.25 | % | +3.35 | % | 4/9/2026 | Lithonia, GA | Multifamily | 67 | % | ||||||||||||||||||||||||||||
| 133 |
Senior Loan | 3/19/2021 | 12,718 | 12,718 | 12,742 | +3.95 | % | +4.13 | % | 4/9/2026 | Brooklyn, NY | Multifamily | 85 | % | ||||||||||||||||||||||||||||
| 134 |
Senior Loan | 1/28/2022 | 12,092 | 12,092 | 12,092 | +3.70 | % | +3.82 | % | 9/9/2026 | Duncanville, TX | Multifamily | 83 | % | ||||||||||||||||||||||||||||
| 135 |
Senior Loan | 3/7/2018 | 12,050 | 12,050 | 12,079 | +5.00 | % | +5.15 | % | 3/7/2023 | Las Vegas, NV | Hospitality | 71 | % | ||||||||||||||||||||||||||||
| 136 |
Senior Loan | 6/11/2018 | 8,000 | 8,000 | 8,040 | +4.50 | % | +4.61 | % | 3/9/2024 | Miami, FL | Retail | 68 | % | ||||||||||||||||||||||||||||
| 137 |
Senior Loan | 2/17/2021 | 7,000 | 7,000 | 7,014 | +3.85 | % | +4.04 | % | 3/9/2026 | Brooklyn, NY | Multifamily | 81 | % | ||||||||||||||||||||||||||||
| 138 |
Senior Loan | 6/11/2018 | 6,750 | 6,750 | 6,767 | +4.25 | % | +4.35 | % | 6/9/2023 | Miami, FL | Retail | 61 | % | ||||||||||||||||||||||||||||
| 139 |
Mezz Loan | 5/12/2022 | 5,785 | 5,785 | 5,785 | 10.50 | % | 10.50 | % | 5/9/2027 | Denver, CO | Multifamily | 86 | % | ||||||||||||||||||||||||||||
| 140 |
Mezz Loan | 4/6/2022 | 5,114 | 5,114 | 5,114 | 11.00 | % | 11.00 | % | 4/9/2027 | Atlanta, GA | Multifamily | 88 | % | ||||||||||||||||||||||||||||
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| Total/Weighted Average |
|
$ | 7,674,462 | $ | 7,093,134 | $ | 7,091,841 | +3.82 | % | +3.89 | % | |||||||||||||||||||||||||||||||
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| (1) | Date loan was originated or acquired by us, and the loan-to-value, or LTV, as of such date. Dates and LTV are not updated for subsequent loan modifications or upsizes. |
| (2) | The weighted-average cash coupon and all-in yield are expressed as a spread over the relevant floating benchmark rates, which include USD LIBOR and SOFR. In addition to cash coupon, all-in yield include accretion of discount (amortization of premium) and accrual of exit fees. |
| (3) | Maximum maturity assumes all extension options are exercised by the borrower, however loans may be repaid prior to such date. |
Real Estate Portfolio Overview
On June 23, 2022, we acquired 555 Aviation, a 260,000 square foot creative office building located in El Segundo, California. The property was built in 1966 and was renovated in 2017 to convert the property into a creative office building, including LEED Gold certification, a glass façade and an interior open-air atrium. The property sits on 13 acres and is located in a growing Los Angeles sub-market of El Segundo near Los Angeles International Airport. The property is currently 100% leased to three tenants.
46
Results of Operations
The following table sets forth information regarding our consolidated results of operations for the three and nine months ended September 30, 2022 and 2021:
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Net interest income |
||||||||||||||||
| Interest income |
$ | 111,575 | $ | 23,676 | $ | 226,436 | $ | 51,431 | ||||||||
| Less: Interest expense |
(59,107 | ) | (7,929 | ) | (104,506 | ) | (15,739 | ) | ||||||||
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|
|
|
|
|
|
|||||||||
| Net interest income |
52,468 | 15,747 | 121,930 | 35,692 | ||||||||||||
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|
|
|
|
|
|||||||||
| Other expenses |
||||||||||||||||
| Management and performance fees |
10,533 | 1,956 | 19,881 | 5,237 | ||||||||||||
| General and administrative expenses |
6,033 | 2,713 | 15,359 | 5,512 | ||||||||||||
| Less: Expense limitation |
— | — | — | (56 | ) | |||||||||||
| Add: Expense recoupment to sponsor |
256 | 8 | 3,026 | 398 | ||||||||||||
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|
|
|
|
|||||||||
| Net other expenses |
16,822 | 4,677 | 38,266 | 11,091 | ||||||||||||
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|
|
|
|||||||||
| Other income (loss) |
||||||||||||||||
| Income (loss) from rental operations, net |
(1,068 | ) | — | (1,068 | ) | — | ||||||||||
| Net change in unrealized gain on interest rate cap |
1,758 | — | 309 | — | ||||||||||||
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|
|||||||||
| Total other income (loss) |
690 | — | (759 | ) | — | |||||||||||
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|
|
|
|||||||||
| Net income |
36,336 | 11,070 | 82,905 | 24,601 | ||||||||||||
| Preferred stock dividends |
(3 | ) | (3 | ) | (11 | ) | (11 | ) | ||||||||
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|||||||||
| Net income attributable to FS Credit Real Estate Income Trust, Inc. |
$ | 36,333 | $ | 11,067 | $ | 82,894 | $ | 24,590 | ||||||||
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Net Interest Income
Net interest income is generated on our interest-earning assets less related interest-bearing liabilities. The increase in interest income was attributable to debt investments acquired or originated in our portfolio and non-recurring prepayment fee income. The increase in interest expense was attributable to an increase in borrowings in order to support our investment activities.
Other Expenses
Other expenses include management and performance fees payable to FS Real Estate Advisor and general and administrative expenses. General and administrative expenses include administrative services expenses, auditing and professional fees, independent director fees, transfer agent fees, loan servicing expenses and other costs associated with operating our business. The increase in other expenses can primarily be attributed to the increase of our management fee and various general and administrative expenses related to the growth of our net assets.
Expense Limitation
We have entered into an expense limitation agreement with FS Real Estate Advisor and Rialto pursuant to which FS Real Estate Advisor and Rialto have agreed to waive reimbursement of or pay, on a quarterly basis, our annualized ordinary operating expenses for such quarter to the extent such expenses exceed 1.5% per annum of our average net assets attributable to each of our classes of common stock. Ordinary operating expenses for each class of common stock consist of all ordinary expenses attributable to such class, including administration fees,
47
transfer agent fees, fees paid to our board of directors, loan servicing expenses, administrative services expenses, and related costs associated with legal, regulatory compliance and investor relations, but excluding the following: (a) advisory fees, (b) interest expense and other financing costs, (c) taxes, (d) distribution or shareholder servicing fees and (e) unusual, unexpected and/or nonrecurring expenses. We will repay FS Real Estate Advisor or Rialto on a quarterly basis any ordinary operating expenses previously waived or paid, but only if the reimbursement would not cause the then-current expense limitation, if any, to be exceeded. In addition, the reimbursement of expenses will be made only if payable not more than three years from the end of the fiscal quarter in which the expenses were paid or waived.
FS Real Estate Advisor and Rialto each agreed to waive the recoupment of any amounts that may be subject to conditional reimbursement during the quarterly period ended September 30, 2022. To the extent that the conditions to recoupment are satisfied in a future quarter (prior to the expiration of the three-year period for reimbursement set forth in the expense limitation agreement), such expenses may be subject to conditional recoupment in accordance with the terms of the expense limitation agreement.
During the period from September 13, 2017 (Commencement of Operations) to September 30, 2022, we received $5,839 for reimbursement of expenses that FS Real Estate Advisor and Rialto paid or waived, including $0 in reimbursements for the nine months ended September 30, 2022. As of September 30, 2022, $3,486 of expense recoupments were paid or payable to FS Real Estate Advisor and Rialto and $2,353 of expense reimbursements were no longer eligible for recoupment.
During the nine months ended September 30, 2022, $2,832 of expense recoupments were paid to FS Real Estate Advisor and Rialto. As of September 30, 2022, $256 of expense recoupments were payable to FS Real Estate Advisor and Rialto.
Valuation of Mortgage Debt
Commercial real estate debt and mortgage-backed securities held-to-maturity are valued at amortized cost, consistent with how they are recorded in accordance with GAAP, as these instruments are intended to be held-to-maturity. Liabilities are valued at amortized cost as these obligations are expected to be satisfied at their carrying value. See Note 8 to our unaudited consolidated financial statements included herein for additional information regarding a comparison of our carrying value and an estimate of the fair value of our commercial real estate debt, mortgage-backed securities held-to-maturity, repurchase agreements payable, credit facility payable, and collateralized loan obligations.
Non-GAAP Financial Measures
Funds from Operations and Modified Funds from Operations
We use Funds from Operations, or FFO, a widely accepted non-GAAP financial metric, to evaluate our performance. FFO provides a supplemental measure to compare our performance and operations to other REITs. Due to certain unique operating characteristics of real estate companies, the National Association of Real Estate Investment Trusts, or NAREIT, has promulgated a standard known as FFO, which it believes more accurately reflects the operating performance of a REIT. As defined by NAREIT, FFO means net income computed in accordance with GAAP, excluding gains (or losses) from sales of operating property, plus depreciation and amortization and after adjustments for unconsolidated entities. In addition, NAREIT has further clarified the FFO definition to add-back impairment write-downs of depreciable real estate or of investments in unconsolidated entities that are driven by measurable decreases in the fair value of depreciable real estate and to exclude the earnings impacts of cumulative effects of accounting changes. We have adopted the NAREIT definition for computing FFO.
Due to the unique features of publicly registered, non-listed REITs, the Institute for Portfolio Alternatives, or IPA, an industry trade group, published a standardized non-GAAP financial measure known as Modified
48
Funds from Operations, or MFFO, which the IPA has promulgated as a supplemental measure for publicly registered non-listed REITs and which may be another appropriate supplemental measure to reflect the operating performance of a non-listed REIT.
The IPA defines MFFO as FFO adjusted for acquisition fees and expenses, amounts relating to straight line rents and amortization of premiums or accretion of discounts on debt investments, non-recurring impairments of real estate-related investments, mark-to-market adjustments included in net income, non-recurring gains or losses included in net income from the extinguishment or sale of debt, hedges, foreign exchange, derivatives or securities holdings where trading of such holdings is not a fundamental attribute of the business plan, unrealized gains or losses resulting from consolidation from, or deconsolidation to, equity accounting, and after adjustments for consolidated and unconsolidated partnerships and joint ventures.
Because MFFO may be a recognized measure of operating performance within the non-listed REIT industry, MFFO and the adjustments used to calculate it may be useful in order to evaluate our performance against other non-listed REITs. Like FFO, MFFO is not equivalent to our net income or loss as determined under GAAP, as detailed in the table below, and MFFO may not be a useful measure of the impact of long-term operating performance on value if we continue to acquire a significant amount of investments.
Our presentation of FFO and MFFO may not be comparable to other similarly titled measures presented by other REITs. We believe that the use of FFO and MFFO provides a more complete understanding of our operating performance to stockholders and to management, and when compared year over year, reflects the impact on our operations from trends in operating costs, general and administrative expenses, and interest costs. Neither FFO nor MFFO is intended to be an alternative to “net income” or to “cash flows from operating activities” as determined by GAAP as a measure of our capacity to pay distributions. Management uses FFO and MFFO to compare our operating performance to that of other REITs and to assess our operating performance.
Neither the SEC, any other regulatory body nor NAREIT has passed judgment on the acceptability of the adjustments that we use to calculate FFO or MFFO. In the future, the SEC, another regulatory body or NAREIT may decide to standardize the allowable adjustments across the non-listed REIT industry and we would have to adjust our calculation and characterization of FFO or MFFO.
Our FFO and MFFO are calculated for the three and nine months ended September 30, 2022 and 2021 as follows:
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Net income (GAAP) |
$ | 36,336 | $ | 11,070 | $ | 82,905 | $ | 24,601 | ||||||||
| Adjustments to arrive at funds from operations: |
||||||||||||||||
| Real estate depreciation and amortization |
1,839 | — | 1,839 | — | ||||||||||||
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| Funds from operations |
$ | 38,175 | $ | 11,070 | $ | 84,744 | $ | 24,601 | ||||||||
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|||||||||
| Adjustments to arrive at modified funds from operations: |
||||||||||||||||
| Accretion of discount on mortgage-backed securities held-to-maturity |
(198 | ) | (138 | ) | (497 | ) | (409 | ) | ||||||||
| Straight-line rental income |
(342 | ) | — | (342 | ) | — | ||||||||||
| Net change in unrealized (gain) on interest rate cap |
(1,758 | ) | — | (309 | ) | — | ||||||||||
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| Modified funds from operations |
$ | 35,877 | $ | 10,932 | $ | 83,596 | $ | 24,192 | ||||||||
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49
NAV per Share
FS Real Estate Advisor calculates our NAV per share in accordance with the valuation guidelines approved by our board of directors for the purposes of establishing a price for shares sold in our public offering as well as establishing a repurchase price for shares repurchased pursuant to our share repurchase plan.
In general, our investments are valued by FS Real Estate Advisor based on market quotations, at amortized cost or at fair value determined in accordance with GAAP. In accordance with the valuation guidelines approved by our board of directors, FS Real Estate Advisor calculates our NAV per share for each class of our common stock as of the last calendar day of each month. For purposes of calculating our NAV, FS Real Estate Advisor uses the following valuation methods:
| • | Commercial real estate debt classified as held-for-investment is valued at amortized cost, net of unamortized acquisition premiums or discounts, loan fees, and origination costs, as applicable, unless the loans are deemed impaired. Impairment is indicated when it is deemed probable that we will not be able to collect all amounts due to us pursuant to the contractual terms of the loan. If a loan is determined to be impaired, the loan is written down through a charge to the provision for loan losses. See Note 2 to our unaudited consolidated financial statements included herein for additional information regarding our accounting for impaired loans, including significant judgments and assumptions included. At least quarterly, FS Real Estate Advisor, with assistance from our sub-adviser, evaluates for impairment each loan classified as held-for-investment. |
| • | Mortgage-backed securities are classified as held-to-maturity when we intend to and can hold such securities until maturity and are valued at amortized cost, net of unamortized acquisition premium or discount. |
| • | Mortgage-backed securities that we do not hold for the purpose of selling in the near-term or may dispose of prior to maturity, are classified as available-for-sale and are reported at fair value. On a monthly basis, FS Real Estate Advisor values such securities using quotations obtained from an independent third-party pricing service, which provides prevailing bid and ask prices that are screened for validity by the third-party pricing service on the valuation date. For investments for which a third-party pricing service is unable to obtain quoted prices, FS Real Estate Advisor obtains bid and ask prices directly from dealers who make a market in such securities. In all such cases, securities are valued at the mid-point of the average bid and ask prices obtained from such sources. |
| • | Investments in real estate will initially be valued at cost, which is expected to represent fair value at that time. FS Real Estate Advisor, with assistance from our sub-adviser, expects to receive an appraisal performed by an independent third-party appraisal firm on each property prior to or upon acquisition. Each property will then be valued by an independent third-party appraisal firm no less frequently than annually. FS Real Estate Advisor will update the valuations of our properties for each month in which we do not receive an appraisal report from a third-party appraisal firm. Such monthly update valuations will be based on the then most recent appraisals provided by a third-party appraisal firm, current market data and other relevant information. |
| • | Liabilities include repurchase agreements payable, credit facility payable, collateralized loan obligations, fees payable to FS Real Estate Advisor and the dealer manager, accounts payable, accrued operating expenses, any portfolio-level credit facilities, and other liabilities. All liabilities are valued at amounts payable, net of unamortized premium or discount, and net of unamortized debt issuance costs. Liabilities related to stockholder servicing fees allocable to Class T, Class S, Class D and Class M shares are only included in the NAV calculation for those classes. Liabilities related to the base management fee is a class-specific expense for Class T, Class S, Class D, Class M and Class I shares, and the performance fee is a class-specific expense for Class T, Class S, Class D, Class M, Class I and Class Y shares. Class I PCRs will not be treated as a liability unless and until Class I shares are issuable pursuant to the Advisory Agreement and Amended and Restated PCR Agreement. |
Commercial real estate debt and mortgage-backed securities held-to-maturity are valued at amortized cost, consistent with how they are recorded in accordance with GAAP, as these instruments are intended to be
50
held-to-maturity. Liabilities are valued at amortized cost as these obligations are expected to be satisfied at their carrying value. See Note 8 to our unaudited consolidated financial statements included herein for additional information including a comparison of our carrying value and an estimate of the fair value of our commercial real estate debt, mortgage-backed securities held-to-maturity, repurchase agreements payable, credit facility payable, and collateralized loan obligations.
The following table provides a breakdown of the major components of our total NAV as of September 30, 2022:
| Components of NAV |
September 30, 2022 | |||
| Cash and cash equivalents |
$ | 147,321 | ||
| Restricted cash |
26,121 | |||
| Loans receivable |
7,091,841 | |||
| Mortgage-backed securities held-to-maturity |
86,850 | |||
| Mortgage-backed securities available-for-sale, at fair value |
182,478 | |||
| Interest receivable |
22,441 | |||
| Deferred financing costs |
3,269 | |||
| Investment in real estate |
162,291 | |||
| Receivable for investment sold and repaid |
611 | |||
| Other assets |
41,106 | |||
| Repurchase agreements payable, net of deferred financing costs |
(880,604 | ) | ||
| Credit facility payable |
(695,722 | ) | ||
| Collateralized loan obligations, net of deferred financing costs |
(3,733,940 | ) | ||
| Mortgage note, net of deferred financing costs |
(122,568 | ) | ||
| Accrued servicing fees(1) |
(962 | ) | ||
| Other liabilities |
(62,783 | ) | ||
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| Net asset value |
$ | 2,267,750 | ||
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| (1) | See Reconciliation of Stockholders’ Equity to NAV below for an explanation of the differences between the stockholder servicing fees accrued for purposes of NAV and the amount accrued under GAAP. |
The following table provides a breakdown of our total NAV and NAV per share by share class as of September 30, 2022:
| NAV per Share |
Class F | Class Y | Class T | Class S | Class D | Class M | Class I | Total | ||||||||||||||||||||||||
| Net asset value |
$ | 21,282 | $ | 22,076 | $ | 39,714 | $ | 1,299,692 | $ | 18,139 | $ | 106,171 | $ | 760,676 | $ | 2,267,750 | ||||||||||||||||
| Number of outstanding shares |
850,244 | 906,648 | 1,592,037 | 51,622,706 | 726,163 | 4,238,466 | 31,177,412 | 91,113,676 | ||||||||||||||||||||||||
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| NAV per share as of September 30, 2022 |
$ | 25.0306 | $ | 24.3495 | $ | 24.9453 | $ | 25.1765 | $ | 24.9789 | $ | 25.0493 | $ | 24.3983 | ||||||||||||||||||
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Discount rate and exit capitalization rate are the key assumptions used in the discounted cash flow valuation of our investment in real estate. The weighted average discount rate and exit capitalization rate assumptions used in the September 30, 2022 investment in real estate valuation were 9.5% and 5.5%, respectively. A change in these assumptions would impact the calculation of the value of our real estate investment. For example, assuming
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all other factors remain unchanged, the changes listed below would result in the following effects on our investment values:
| Input |
Hypothetical Change |
Investment in Real Estate Values |
||||||
| Discount Rate |
0.25% decrease | +3.6 | % | |||||
| (weighted average) |
0.25% increase | -3.6 | % | |||||
| Exit Capitalization Rate |
0.25% decrease | +9.3 | % | |||||
| (weighted average) |
0.25% increase | -8.5 | % | |||||
The following table sets forth a reconciliation of our stockholders’ equity to our NAV as of September 30, 2022:
| Reconciliation of Stockholders’ Equity to NAV |
September 30, 2022 |
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| Total stockholders’ equity under GAAP |
$ | 2,163,769 | ||
| Preferred stock |
(125 | ) | ||
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| Total stockholders’ equity, net of preferred stock, under GAAP |
2,163,644 | |||
| Adjustments: |
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| Accrued stockholder servicing fees |
102,664 | |||
| Unrealized real estate appreciation |
619 | |||
| Accumulated depreciation and amortization |
1,474 | |||
| Straight line rent receivable |
(342 | ) | ||
| Net change in unrealized (gain) loss on interest rate cap |
(309 | ) | ||
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| Net asset value |
$ | 2,267,750 | ||
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The following details the adjustments to reconcile stockholders’ equity to our NAV:
| • | Stockholder servicing fees only apply to Class T, Class S, Class D and Class M shares. Under GAAP, we accrue future stockholder servicing fees in an amount equal to our best estimate of fees payable to FS Investment Solutions at the time such shares are sold. For purposes of NAV, we recognize the stockholder servicing fee as a reduction of NAV on a monthly basis. As a result, the estimated liability for the future stockholder servicing fees, which are accrued at the time each share is sold, will have no effect on the NAV of any class. |
| • | Our investment in real estate is presented at its depreciated cost basis in our GAAP consolidated financial statements. As such, any increases or decreases in the fair market value of our investment in real estate is not included in our GAAP results. For purposes of calculating our NAV, our investment in real estate is recorded at fair value. |
| • | We depreciate our investment in real estate and amortize certain other assets and liabilities in accordance with GAAP. Such depreciation and amortization is not recorded for purposes of determining our NAV. |
Limits on the Calculation of Our Per Share NAV
Although our primary goal in establishing our valuation guidelines is to produce a valuation that represents a fair and accurate estimate of the value of our investments, the methodologies used are based on judgments, assumptions and opinions about future events that may or may not prove to be correct, and if different judgments, assumptions or opinions were used, a different estimate would likely result. Furthermore, our published per share NAV may not fully reflect certain extraordinary events because we may not be able to immediately quantify the financial impact of such events on our portfolio. FS Real Estate Advisor monitors our portfolio between valuations to determine whether there have been any extraordinary events that may have materially changed the estimated market value of the portfolio, such as significant market events or disruptions or force majeure events. If required by
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applicable securities law, we will promptly disclose the occurrence of such event in a prospectus supplement and FS Real Estate Advisor will analyze the impact of such extraordinary event on our portfolio and determine, in coordination with third-party valuation services, the appropriate adjustment to be made to our NAV. We will not, however, retroactively adjust NAV. To the extent that the extraordinary events may result in a material change in value of a specific investment, FS Real Estate Advisor will order a new valuation of the investment, which will be prepared by a third-party valuation service. It is not known whether any resulting disparity will benefit stockholders whose shares are or are not being repurchased or purchasers of our common stock. In calculating the number of shares outstanding used in calculating our NAV, we include the number of estimated Class I shares, if any, issuable to the adviser and the sub-adviser pursuant to the PCR Agreement based on the achievement of the Performance Conditions (as defined in the PCR Agreement), which estimate we will true up following the issuance of such Class I shares pursuant to the PCR Agreement.
We include no discounts to our NAV for the illiquid nature of our shares, including the limitations on the ability to sell shares under our share repurchase plan and our ability to suspend or terminate our share repurchase plan at any time. Our NAV generally does not consider exit costs that would likely be incurred if our assets and liabilities were liquidated or sold. While we may use market pricing concepts to value individual components of our NAV, our per share NAV is not derived from the market pricing information of open-end real estate funds listed on stock exchanges.
We do not represent, warranty or guarantee that:
| • | a stockholder would be able to realize the NAV per share for the class of shares a stockholder owns if the stockholder attempts to sell its shares; |
| • | a stockholder would ultimately realize distributions per share equal to per share NAV upon a liquidation of our assets and settlement of our liabilities or upon any other liquidity event; |
| • | shares of our common stock would trade at per share NAV on a national securities exchange; |
| • | a third party in an arm’s-length transaction would offer to purchase all or substantially all of our shares of common stock at NAV; |
| • | NAV would equate to a market price for an open-end real estate fund; and |
| • | NAV would represent the fair value of our assets less liabilities under GAAP. |
Review of our Policies
Our board of directors, including our independent directors, has reviewed our policies described in this Quarterly Report on Form 10-Q and our registration statement and determined that they are in the best interests of our stockholders because: (i) they increase the likelihood that we will be able to originate, acquire and manage a diversified portfolio of senior loans secured by commercial real estate, thereby reducing risk in our portfolio; (ii) there are sufficient loan underwriting opportunities with the attributes that we seek; (iii) our executive officers, director, affiliates of our adviser and sub-adviser have expertise with the type of real estate investments we seek; and (iv) our borrowings will enable us to originate and acquire loan assets and earn revenue more quickly, thereby increasing our likelihood of generating income for our stockholders and preserving stockholder capital.
Liquidity and Capital Resources
As of September 30, 2022, we had $147,321 in cash and cash equivalents, which we and our wholly owned subsidiaries held in custodial accounts. In addition, as of September 30, 2022, we had $1,433,069 in borrowings available under our financing arrangements, subject to certain limitations. As of September 30, 2022, we had unfunded loan commitments of $581,328. We maintain sufficient cash on hand and available borrowings to fund such unfunded commitments should the need arise.
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We will obtain the funds required to purchase or originate investments and conduct our operations from the net proceeds of our public offering, the private placement of our Class I shares and any future offerings we may conduct, from secured and unsecured borrowings from banks and other lenders, and from any undistributed funds from operations. Our principal demands for funds will be for asset acquisitions/originations, the payment of operating expenses and distributions, the payment of interest on any outstanding indebtedness and repurchases of our common stock pursuant to our share repurchase plan. Generally, cash needs for items other than asset acquisitions/originations will be met from operations, and cash needs for asset acquisitions/originations will be funded by public offerings of our shares and debt financings. However, there may be a delay between the sale of our shares and our purchase/originations of assets, which could result in a delay in the benefits to our stockholders of returns generated from our investment operations. Our leverage may not exceed 300% of our total net assets (as defined in our charter) as of the date of any borrowing unless a majority of our independent directors vote to approve any borrowing in excess of this amount.
As of September 30, 2022, our ratio of leverage to total net assets was 247%. Our board of directors will continue to review our ratio of leverage to total net assets on a quarterly basis, as required by our charter.
If we are unable to continue to raise substantial funds in our public offering, we will make fewer investments resulting in less diversification in terms of the type, number and size of investments we make and the value of an investment in us will fluctuate with the performance of the specific assets we acquire. We have certain fixed operating expenses, including certain expenses as a publicly offered REIT, regardless of whether we are able to raise substantial funds in our public offering. Our inability to raise substantial funds would increase our fixed operating expenses as a percentage of gross income, reducing our net income and limiting our ability to make distributions.
Potential future sources of capital include proceeds from secured or unsecured financings from banks or other lenders or proceeds from the sale of assets or collection of loans receivable.
In addition to making investments in accordance with our investment objectives, we expect to use our capital resources to make certain payments to FS Real Estate Advisor and FS Investment Solutions, the dealer manager for our public offering. During the offering stage of our public offering, these payments will include payments to FS Real Estate Advisor and its affiliates for reimbursement of certain organization and offering expenses. We will reimburse FS Real Estate Advisor for the organization and offering costs it or Rialto incurs on our behalf only to the extent that the reimbursement would not cause the selling commissions, dealer manager fees, accountable due diligence expenses, stockholder servicing fees and the other organization and offering expenses borne by us to exceed 15.0% of the gross offering proceeds from the primary offering as the amount of proceeds increases. FS Real Estate Advisor may be reimbursed for any organization and offering expenses that it or Rialto has incurred on our behalf, up to a cap of 0.75% of gross proceeds raised. FS Investments funded our organization and offering costs in the amount of $19,645 for the period from November 7, 2016 (Inception) to September 30, 2022. Through September 30, 2022, we reimbursed $12,288 to FS Real Estate Advisor for organization and offering expenses previously funded. As of September 30, 2022, $7,114 of offering expenses previously funded remained subject to reimbursement to FS Real Estate Advisor and Rialto.
During our acquisition and development stage, subject to the limitations in the advisory agreement and sub-advisory agreement, we expect to make payments to FS Real Estate Advisor in connection with the management of our assets and costs incurred by FS Real Estate Advisor and Rialto in providing services to us. The advisory agreement has a one-year term but may be renewed for an unlimited number of successive one-year periods upon the mutual consent of FS Real Estate Advisor and our board of directors. On August 11, 2022, our board of directors approved the renewal of the advisory agreement effective as of August 18, 2022 for an additional one-year term expiring August 18, 2023. For a discussion of the compensation to be paid to FS Real Estate Advisor and FS Investment Solutions, see Note 7 to our unaudited consolidated financial statements included herein.
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Cash Flows
The following table provides a breakdown of the net change in our cash and cash equivalents and restricted cash ($ in thousands):
| Nine Months Ended September 30, 2022 |
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| 2022 | 2021 | |||||||
| Cash flows from operating activities |
$ | 96,098 | $ | 27,591 | ||||
| Cash flows used in investing activities |
(3,624,819 | ) | (1,831,904 | ) | ||||
| Cash flows from financing activities |
3,616,355 | 1,891,753 | ||||||
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| Net increase (decrease) in cash and cash equivalents and restricted cash |
$ | 87,634 | $ | 87,440 | ||||
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Cash flows provided by operating activities increased $68,507 during the nine months ended September 30, 2022 compared to the corresponding period in 2021 due to $58,304 increase to net income, $11,409 increase to performance contingent rights and $10,273 increase to interest payable.
Cash flows used in investing activities increased $1,792,915 during the nine months ended September 30, 2022 compared to the corresponding period in 2021 primarily due to the net increase of $1,741,099 in origination and fundings of loans receivables offset by a net increase in principal collections from loans receivable, held-for-investment of $320,093. Purchases of mortgage-backed securities available-for-sale increased $114,022, and purchases of mortgage-backed securities held-to-maturity increased $48,536. During the nine months ended September 30, 2022, we also acquired real estate and related intangibles for $193,868.
Cash flows provided by financing activities increased $1,724,602 during the nine months ended September 30, 2022 compared to the corresponding period in 2021 primarily due to a net increase in borrowings of $1,000,175 and the increase in issuance of common stock of $851,917. In addition, there was an increase in the redemptions of common stock of $67,230.
We utilize our credit and repurchase facilities primarily to finance our loan originations on a short-term basis prior to loan securitizations, including through CLOs. The timing, size, and frequency of our securitizations impact the balances of these borrowings, and produce some fluctuations. The following table provides additional information regarding the balances of our borrowings ($ in thousands):
| Quarter Ended |
Quarterly Average Unpaid Principal Balance |
End of Period Unpaid Principal Balance |
Maximum Unpaid Principal Balance at Any Month-End |
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| September 30, 2022 |
$ | 1,692,516 | $ | 1,528,931 | $ | 2,010,977 | ||||||
| June 30, 2022 |
$ | 1,318,687 | $ | 1,805,768 | $ | 2,010,977 | ||||||
| March 31, 2022 |
$ | 1,259,845 | $ | 808,973 | $ | 1,652,151 | ||||||
| December 31, 2021 |
$ | 746,986 | $ | 1,072,641 | $ | 1,112,861 | ||||||
| September 30, 2021 |
$ | 613,835 | $ | 922,152 | $ | 922,152 | ||||||
Portfolio Update
As of September 30, 2022, our portfolio continues to perform, generating consistent current income with low volatility; further, we had not recorded any impairments in our loan portfolio. In addition, 100% of our loan portfolio was current as of September 30, 2022.
Our portfolio remains well diversified by geography and property type, with multifamily and industrial representing 68% of the portfolio compared to 15% for hospitality and retail as of September 30, 2022. The pipeline for new deal activity remains strong, backed by a diverse mix of property types.
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Broadly, our lending strategy focused on originating short-term (2–3 years), floating-rate, senior loans has helped preserve investor capital while providing a natural turnover of the portfolio. The short-term nature of our typical loans allows us to regularly adjust the portfolio to current market conditions. As of September 30, 2022, approximately 97% of our portfolio consisted of investments sourced after July 2020.
Critical Accounting Estimates
Our financial statements are prepared in conformity with GAAP, which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Critical accounting policies are those that require the application of management’s most difficult, subjective or complex judgments, often because of the need to make estimates about the effect of matters that are inherently uncertain and that may change in subsequent periods. In preparing the financial statements, management also will utilize available information, including our past history, industry standards and the current economic environment, among other factors, in forming its estimates and judgments, giving due consideration to materiality. Actual results may differ from these estimates. In addition, other companies may utilize different estimates, which may impact the comparability of our results of operations to those of companies in similar businesses. As we execute our expected operating plans, we will describe additional critical accounting policies in the notes to our financial statements in addition to those discussed below.
Loans Receivable and Provision for Loan Losses: We originate and purchase commercial real estate debt and related instruments generally to be held as long-term investments at amortized cost. We are required to periodically evaluate each of these loans for possible impairment. Impairment is indicated when it is deemed probable that we will not be able to collect all amounts due to us pursuant to the contractual terms of the loan. If a loan is determined to be impaired, we write down the loan through a charge to the provision for loan losses. Impairment of these loans, which are collateral dependent, is measured by comparing the estimated fair value of the underlying collateral, less costs to sell, to the book value of the respective loan. These valuations require significant judgments, which include assumptions regarding capitalization rates, leasing, creditworthiness of major tenants, occupancy rates, availability of financing, exit plan, loan sponsorship, actions of other lenders, and other factors deemed necessary by FS Real Estate Advisor and Rialto. Actual losses, if any, could ultimately differ from these estimates. FS Real Estate Advisor and Rialto perform a quarterly review of our portfolio of loans.
In connection with this review, FS Real Estate Advisor and Rialto assess the risk factors of each loan and assign a risk rating based on a variety of factors, including, without limitation, LTV, debt yield, property type, geographic and local market dynamics, physical condition, cash flow volatility, leasing and tenant profile, loan structure and exit plan, and project sponsorship. Based on a 5-point scale, our loans are rated “1” through “5”, from less risk to greater risk, which ratings are defined as follows:
| Loan Risk Rating |
Summary Description | |
| 1 | Very Low Risk | |
| 2 | Low Risk | |
| 3 | Medium Risk | |
| 4 | High Risk/Potential for Loss: A loan that has a risk of realizing a principal loss | |
| 5 | Impaired/Loss Likely: A loan that has a very high risk of realizing a principal loss or has otherwise incurred a principal loss |
Revenue Recognition: Security transactions are accounted for on the trade date. We record interest income on an accrual basis to the extent that we expect to collect such amounts. We do not accrue as a receivable interest or dividends on loans and securities if there is reason to doubt the collectability of such income. Any loan origination fees, original issue discount, market discount and exit fees are capitalized and such amounts are amortized as interest income over the respective term of the investment. Upon the prepayment of a loan or
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security, any unamortized loan origination fees to which we are entitled are recorded as fee income. We will record prepayment premiums on loans and securities as fee income when we receive such amounts. We record dividend income on the ex-dividend date.
Loans are considered past due when payments are not made in accordance with the contractual terms. We do not accrue as receivable interest on loans if it is not probable that such income will be collected. Management places loans on non-accrual status when full repayment of principal and interest is in doubt, which generally occurs when principal or interest is 120 days or more past due unless the loan is both well secured and in the process of collection. Interest payments received on non-accrual loans are generally recognized as interest income on a cash basis. Recognition of interest income on non-performing loans on an accrual basis is resumed when it is probable that we will be able to collect amounts due according to the contractual terms.
See Note 2 to our unaudited consolidated financial statements included herein for additional information regarding our significant accounting estimates.
Related Party Transactions
Compensation of FS Real Estate Advisor, Rialto and the Dealer Manager
Pursuant to the advisory agreement, FS Real Estate Advisor is entitled to an annual base management fee equal to 1.25% of the NAV for our Class T, Class S, Class D, Class M and Class I shares and a performance fee based on our performance. We also reimburse FS Real Estate Advisor and Rialto for their actual cost incurred on providing administrative services to us, including the allocable portion of compensation and related expenses of certain personnel providing such administrative services. Further, origination fees of up to 1.0% of the loan amount for first lien, subordinated or mezzanine debt or preferred equity financing may be retained by Rialto or FS Real Estate Advisor. FS Real Estate Advisor has also received compensation for the structuring and negotiation of certain financing arrangements. Pursuant to the advisory agreement, we will reimburse FS Real Estate Advisor and its affiliates for expenses incurred relating to our organization and continuous public offering, including the allocable portion of compensation and related expenses of certain personnel of FS Investments related thereto. FS Real Estate Advisor previously agreed to advance all of our organization and offering expenses until we raised $250,000 of gross proceeds from our public offering. In April 2020, FS Real Estate Advisor and Rialto agreed to defer the recoupment of any organization and offering expenses that may be reimbursable by us under the advisory agreement with respect to gross proceeds raised in the offering in excess of $250,000 until FS Real Estate Advisor, in its sole discretion, determined that we had achieved economies of scale sufficient to ensure that we could bear a reasonable level of expenses in relation to our income. We began reimbursing FS Real Estate Advisor in September 2020 and, as such, FS Real Estate Advisor may be reimbursed for any organization and offering expenses that it or Rialto has incurred on our behalf, up to a cap of 0.75% of gross proceeds raised after such time.
The dealer manager for our continuous public offering is FS Investment Solutions, which is an affiliate of FS Real Estate Advisor. Under the dealer manager agreement, FS Investment Solutions is entitled to receive upfront selling commissions and dealer manager fees in connection with the sale of shares of common stock in our continuous public offering. FS Investment Solutions anticipates that all of the selling commissions and dealer manager fees will be reallowed to participating broker-dealers, unless a particular broker-dealer declines to accept some portion of the dealer manager fee they are otherwise eligible to receive. FS Investment Solutions is also entitled to receive stockholder servicing fees, which accrue daily and are paid on a monthly basis. FS Investment Solutions will reallow such stockholder servicing fees to participating broker-dealers, servicing broker-dealers and financial institutions (including bank trust departments) and will waive (pay back to us) stockholder servicing fees to the extent a broker-dealer or financial institution is not eligible or otherwise declines to receive all or a portion of such fees.
See Note 7 to our unaudited consolidated financial statements included herein for additional information regarding our related party transactions and relationships, including a description of the fees and amounts due to FS Real Estate Advisor, compensation of FS Investment Solutions, capital contributions by FS Investments and Rialto, our expense limitation agreement with FS Investments and our purchase of a mortgage loan from an affiliate of Rialto.
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FS Investment Solutions also serves or served as the placement agent for our private offerings of Class I, Class F and Class Y shares pursuant to placement agreements. FS Investment Solutions does not receive any compensation pursuant to these agreements.
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk. |
We are subject to financial market risks, including changes in interest rates. As of September 30, 2022, 97% of the outstanding principal of our debt investments were floating-rate investments. A rise in the general level of interest rates can be expected to lead to higher interest rates applicable to any variable rate investments we may hold and to declines in the value of any fixed rate investments we may hold. However, many of our variable rate investments provide for an interest rate floor, which may prevent our interest income from increasing until benchmark interest rates increase beyond a threshold amount. To the extent that a substantial portion of our investments may be in variable rate investments, an increase in interest rates beyond this threshold would make it easier for us to meet or exceed our performance fee hurdle rate and may result in a substantial increase in our net investment income and the amount of performance fees payable to FS Real Estate Advisor.
Pursuant to the terms of the FS Rialto 2019-FL1 Notes, 2021-FL2 Notes, 2021-FL3 Notes, 2022-FL4 Notes, 2022-FL5 Notes, 2022-FL6 Notes, WF-1 Facility, the GS-1 Facility, the BB-1 Facility, the Barclays Revolving Credit Facility, the Natixis loan, and the MM-1 Facility, borrowings are at a floating-rate based on LIBOR, and the pricing rate for any specific transaction executed under the RBC Facility may be charged, pursuant to the terms agreed for that transaction, at a floating-rate based on LIBOR. To the extent that any present or future credit facilities or other financing arrangements that we or any of our subsidiaries enter into are based on a floating interest rate, we will be subject to risks relating to changes in market interest rates. In periods of rising interest rates, when we have debt outstanding, our cost of funds would increase, which could reduce our net investment income, especially to the extent we hold fixed rate investments.
We may seek to limit the impact of rising interest rates on earnings and cash flows through the use of derivative financial instruments to hedge exposures to changes in interest rates on loans secured by our assets.
The following table shows the effect over a twelve-month period of changes in interest rates on our interest income, interest expense, and net interest income, assuming no changes in the composition of our investment portfolio, including the accrual status of our investments, and our financing arrangements in effect as of September 30, 2022:
| Basis Point Changes in Interest Rates |
Increase (Decrease) in Interest Income |
Increase (Decrease) in Interest Expense |
Increase (Decrease) in Net Interest Income |
Percentage Change in Net Interest Income |
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| Down 50 basis points(1) |
$ | (35,772 | ) | $ | (26,450 | ) | $ | (9,322 | ) | (4.2 | )% | |||||
| Down 25 basis points(1) |
$ | (17,900 | ) | $ | (13,225 | ) | $ | (4,675 | ) | (2.1 | )% | |||||
| No change |
— | — | — | — | ||||||||||||
| Up 25 basis points |
$ | 17,958 | $ | 13,225 | $ | 4,733 | 2.1 | % | ||||||||
| Up 50 basis points |
$ | 35,916 | $ | 26,450 | $ | 9,466 | 4.3 | % | ||||||||
| (1) | Decrease in rates assumes the applicable benchmark rate does not decrease below 0%. |
| Item 4. | Controls and Procedures. |
Evaluation of Disclosure Controls and Procedures
As required by Rule 13a-15(b) under the Exchange Act, we carried out an evaluation, under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2022.
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Based on the foregoing, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance that we would meet our disclosure obligations.
Changes in Internal Control Over Financial Reporting
There was no change in our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) or 15d-15(f)) that occurred during the three-month period ended September 30, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II—OTHER INFORMATION
| Item 1. | Legal Proceedings. |
We are not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us. From time to time, we may be party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of our rights under contracts with our portfolio companies. While the outcome of any legal proceedings cannot be predicted with certainty, we do not expect that these proceedings will have a material adverse effect upon our financial condition or results of operations.
| Item 1A. | Risk Factors. |
In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors that appeared under Item 1A. “Risk Factors” in our most recent Annual Report on Form 10-K, as supplemented by our quarterly report on Form 10-Q. There are no material changes from the risk factors included within our most recent Annual Report on Form 10-K for the year ended December 31, 2021 as supplemented by our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022.
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. |
Share Repurchase Program
On July 1, 2022, we received $2,000 relating to the sale and issuance of approximately 81,907 Class I shares to accredited investors at the per share purchase price of $24.4179 pursuant to a private placement exempt from registration under Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder (the “Class I Private Placement”).
On August 1, 2022, we received $3,577 relating to the sale and issuance of approximately 146,610 Class I shares to accredited investors at the per share purchase price of $24.4031 pursuant to the Class I Private Placement.
On September 1, 2022, we received $2,000 relating to the sale and issuance of approximately 81,982 Class I shares to accredited investors at the per share purchase price of $24.3957 pursuant to the Class I Private Placement.
We have adopted a share repurchase plan, whereby on a monthly basis, stockholders may request that we repurchase all or any portion of their shares. The repurchase of shares is limited to no more than 2% of our aggregate NAV per month of all classes of shares then participating in our share repurchase plan and no more than 5% of our aggregate NAV per calendar quarter of all classes of shares then participating in our share repurchase plan, which means that in any 12-month period, we limit repurchases to approximately 20% of the total NAV of all classes of shares then participating in the share repurchase plan.
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During the three months ended September 30, 2022, we repurchased shares of our common stock in the following amounts, which represented all of the share repurchase requested received for the same period:
| Period |
Total Number of Shares Purchased |
Average Price Paid per Share |
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs |
Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs(1) |
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| July 1—July 31, 2022 |
436,792 | $ | 24.80 | 436,792 | — | |||||||||||
| August 1—August 31, 2022 |
337,669 | $ | 24.74 | 337,669 | — | |||||||||||
| September 1—September 30, 2022 |
961,143 | $ | 24.95 | 961,143 | — | |||||||||||
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| Total |
1,735,604 | 1,735,604 | — | |||||||||||||
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| (1) | Repurchases are limited as described above. |
| Item 3. Defaults | upon Senior Securities. |
Not applicable.
| Item 4. | Mine Safety Disclosures. |
Not applicable.
| Item 5. | Other Information. |
Amended and Restated Performance-Contingent Right Agreement
On November 10, 2022, the Company’s board of directors approved an amended and restated PCR Agreement to, among other things, amend the calculation of Adjusted Core Earnings and amend the timing in which Class I PCRs convert into Class I shares. A copy of the amended and restated PCR Agreement is attached hereto as Exhibit 10.7.
| Item 6. | Exhibits. |
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| * | Filed herewith |
| + | This exhibit shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that Section. Such exhibit shall not be deemed incorporated into any filing under the Securities Act or the Exchange Act. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Quarterly Report to be signed on its behalf by the undersigned, thereunto duly authorized on November 14, 2022.
| FS CREDIT REAL ESTATE INCOME TRUST, INC. | ||
| By: | /s/ MICHAEL C. FORMAN | |
| Michael C. Forman Chief Executive Officer (Principal Executive Officer) | ||
| By: | /s/ EDWARD T. GALLIVAN, JR. | |
| Edward T. Gallivan, Jr. Chief Financial Officer (Principal Accounting and Financial Officer) | ||
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