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COMMERCIAL LOANS AND INVESTMENTS | 3 Months Ended
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Mar. 31, 2025
Receivables [Abstract] |
COMMERCIAL LOANS AND INVESTMENTS | NOTE 4. COMMERCIAL LOANS AND INVESTMENTS ​ Our investments in commercial loans or similarly structured investments, such as preferred equity, mezzanine loans or other subordinated debt, have been and are expected to continue to be secured by real estate or the borrower’s pledge of its ownership interest in the entity that owns the real estate. The investments are associated with commercial real estate located in the United States and its territories, and are current or performing with either a fixed or floating rate. Some of these loans may be syndicated in either a pari-passu or senior/subordinated structure. Commercial first mortgage loans generally provide for a higher recovery rate due to their senior position in the underlying collateral. Commercial mezzanine loans are typically secured by a pledge of the borrower’s equity ownership in the underlying commercial real estate. Unlike a mortgage, a mezzanine loan is not secured by a lien on the property. An investor’s rights in a mezzanine loan are usually governed by an intercreditor agreement that provides holders with the rights to cure defaults and exercise control on certain decisions of any senior debt secured by the same commercial property. 2025 Activity. During the three months ended March 31, 2025, no new commercial loans or investments were originated, however $1.4 million of funding was provided for existing construction loans. ​ 2024 Activity. During the three months ended March 31, 2024, the Company originated one commercial loan investment for an investment volume of $10.0 million at an initial fixed interest rate of 11.0% of which $6.6 million was funded at origination. Other Activity. Certain commercial loans and investments originated required determinations related to variable interest entity matters as described herein:
| ● | Series A Preferred Investment. On July 11, 2024, the Company funded $10.0 million into an escrow account, which escrow closed on August 1, 2024 in exchange for 10,000 shares of 14.000% Series A preferred stock, with a $0.01 par value per share, of a subsidiary of a publicly-traded hospitality, entertainment and real-estate company (the “Series A Preferred Investment”). In connection with the investment, the Company received an origination fee of 1.0% or $0.1 million. The investment is not redeemable prior to July 11, 2029, except upon the occurrence of certain specified events. The Company determined, pursuant to FASB ASC Topic 810, Consolidation, that we do not have a variable interest in the entity underlying the Series A Preferred Investment; accordingly, FASB Topic ASC 320, Investments-Debt Securities, was applied and the investment was recorded in the consolidated balance sheets as a commercial loan investment at the time of acquisition.
| ● | Watters Creek Investment. On April 7, 2022, the Company entered into a preferred equity agreement to provide $30.0 million of funding towards the total investment in Watters Creek at Montgomery Farm, a grocery-anchored, mixed-use property located in Allen, Texas (the “Watters Creek Investment”). Pursuant to FASB ASC Topic 810, Consolidation, the Company determined it is not the primary beneficiary of the entity underlying the Watters Creek Investment; accordingly, the $30.0 million was recorded on the consolidated balance sheets as a commercial loan investment at the time of acquisition. The initial maturity date for the Watters Creek Investment was April 6, 2025; however, during the three months ended March 31, 2025, the borrower exercised the first of two one-year extension options thereby extending the maturity date to April 6, 2026. The Watters Creek Investment bears a fixed interest rate of 8.50% at time of acquisition with increases during the initial term as well as the option terms, and requires payments of interest only prior to maturity. At closing, an origination fee of $0.15 million was received by the Company. The Watters Creek Investment represents $30.0 million, or approximately 23%, of funding towards the total investment in Watters Creek at Montgomery Farm, a grocery-anchored, mixed-use property located in Allen, Texas (the “Watters Creek Property”). The remaining funding is comprised of a combination of third-party sponsorship equity and a secured first mortgage.
The Company’s commercial loans and investments were comprised of the following at March 31, 2025 (in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Description |  | Date of Investment |  | Maturity Date |  | Original Face Amount |  | Current Face Amount |  | Carrying Value |  | Coupon Rate
Preferred Investment – Watters Creek – Allen, TX | ​ | April 2022 | ​ | April 2026 | ​ | $ | 30,000 | ​ | $ | 30,000 | ​ | $ | 29,924 | ​ | 9.00%
Mortgage Note – Founders Square – Dallas, TX | ​ | March 2023 | ​ | March 2026 | ​ | ​ | 15,000 | ​ | ​ | 15,000 | ​ | ​ | 14,954 | ​ | 8.75%
Promissory Note – Main Street – Daytona Beach, FL | ​ | June 2023 | ​ | May 2033 | ​ | ​ | 400 | ​ | ​ | 400 | ​ | ​ | 400 | ​ | 7.00%
Construction Loan - Hypoluxo - Lake Worth, FL | ​ | March 2024 | ​ | June 2025 | ​ | ​ | 5,638 | ​ | ​ | 4,000 | ​ | ​ | 3,984 | ​ | 11.00%
Series A Preferred Investment | ​ | July 2024 | ​ | July 2029 | ​ | ​ | 10,000 | ​ | ​ | 10,000 | ​ | ​ | 9,915 | ​ | 14.00%
Mortgage Note - Rivana - Herndon, VA | ​ | September 2024 | ​ | September 2026 | ​ | ​ | 42,000 | ​ | ​ | 42,000 | ​ | ​ | 41,597 | ​ | 11.00%
Construction Loan - Whole Foods - Forsyth, GA | ​ | November 2024 | ​ | May 2027 | ​ | ​ | 40,200 | ​ | ​ | 5,631 | ​ | ​ | 5,298 | ​ | 12.15%
​ | ​ | ​ | ​ | ​ | ​ | $ | 143,238 | ​ | $ | 107,031 | ​ | $ | 106,072 | ​ | ​
CECL Reserve | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | (1,072) | ​ | ​
Total Commercial Loans and Investments | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 105,000 | ​ | ​
​ The Company’s commercial loans and investments were comprised of the following at December 31, 2024 (in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Description |  | Date of Investment |  | Maturity Date |  | Original Face Amount |  | Current Face Amount |  | Carrying Value |  | Coupon Rate
Preferred Investment – Watters Creek – Allen, TX | ​ | April 2022 | ​ | April 2025 | ​ | $ | 30,000 | ​ | $ | 30,000 | ​ | $ | 29,987 | ​ | 9.00%
Mortgage Note – Founders Square – Dallas, TX | ​ | March 2023 | ​ | March 2026 | ​ | ​ | 15,000 | ​ | ​ | 15,000 | ​ | ​ | 14,942 | ​ | 8.75%
Promissory Note – Main Street – Daytona Beach, FL | ​ | June 2023 | ​ | May 2033 | ​ | ​ | 400 | ​ | ​ | 400 | ​ | ​ | 400 | ​ | 7.00%
Construction Loan - Hypoluxo - Lake Worth, FL | ​ | March 2024 | ​ | June 2025 | ​ | ​ | 5,638 | ​ | ​ | 5,638 | ​ | ​ | 5,598 | ​ | 11.00%
Series A Preferred Investment | ​ | July 2024 | ​ | July 2029 | ​ | ​ | 10,000 | ​ | ​ | 10,000 | ​ | ​ | 9,910 | ​ | 14.00%
Mortgage Note - Rivana - Herndon, VA | ​ | September 2024 | ​ | September 2026 | ​ | ​ | 42,000 | ​ | ​ | 42,000 | ​ | ​ | 41,530 | ​ | 11.00%
Construction Loan - Whole Foods - Forsyth, GA | ​ | November 2024 | ​ | May 2027 | ​ | ​ | 40,200 | ​ | ​ | 4,125 | ​ | ​ | 3,748 | ​ | 12.15%
​ | ​ | ​ | ​ | ​ | ​ | $ | 143,238 | ​ | $ | 107,163 | ​ | $ | 106,115 | ​ | ​
CECL Reserve | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | (1,072) | ​ | ​
Total Commercial Loans and Investments | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 105,043 | ​ | ​
​ The carrying value of the commercial loans and investments portfolio at March 31, 2025 and December 31, 2024 consisted of the following (in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | As of
​ |  | March 31, 2025 |  | December 31, 2024
Current Face Amount | ​ | $ | 107,031 | ​ | $ | 107,163
Unaccreted Origination Fees | ​ | ​ | (959) | ​ | ​ | (1,048)
CECL Reserve | ​ | ​ | (1,072) | ​ | ​ | (1,072)
Total Commercial Loans and Investments | ​ | $ | 105,000 | ​ | $ | 105,043
​

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- Definition The entire disclosure for claims held for amounts due to entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 310 -SubTopic 10 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/310-10/tableOfContent Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 835 -SubTopic 30 -Name Accounting Standards Codification -Section 45 -Paragraph 2 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482925/835-30-45-2 + Details
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