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Related Party Transactions and Investments in Non-Consolidated Entities | 9 Months Ended
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Sep. 30, 2021
Related Party Transactions and Investments in Non-Consolidated Entities |
Related Party Transactions and Investments in Non-Consolidated Entities | 2.  Related Party Transactions and Investments in Non-Consolidated Entities ​ Investment in Sponsored REITs: ​ At each of September 30, 2021 and December 31, 2020, the Company held a non-controlling common stock interest in two Sponsored REITs in which the Company no longer shares in economic benefit or risk. ​ Management fees and interest income from loans: ​ Asset management fees range from 1% to 5% of collected rents and the applicable contracts are cancellable with 30 days notice. Asset management fee income from non-consolidated entities amounted to approximately $50,000 and $59,000 for the nine months ended September 30, 2021 and 2020, respectively. ​ From time to time the Company may make secured loans (“Sponsored REIT Loans”) to Sponsored REITs in the form of mortgage loans or revolving lines of credit to fund construction costs, capital expenditures, leasing costs and for other purposes. The Company reviews the need for an allowance under CECL for Sponsored REIT Loans each reporting period. The Company regularly evaluates the extent and impact of any credit deterioration that could affect performance and the value of the secured property, as well as the financial and operating capability of the borrower. A property’s fair value, operating results and existing cash balances are considered and used to assess whether cash flows from operations are sufficient to cover the current and future operating and debt service requirements. The Company also evaluates the borrower’s competency in managing and operating the secured property and considers the overall economic environment, real estate sector and geographic sub-market in which the secured property is located. The Company applies normal loan review and underwriting procedures (as may be implemented or modified from time to time) in making that judgment. None of the Sponsored REIT loans have been impaired. ​ The Company anticipates the sole Sponsored REIT Loan outstanding will be repaid at maturity or earlier from refinancing, long term financings of the underlying property, cash flows from the underlying property or some other capital event. The outstanding Sponsored REIT Loan is secured by a mortgage on the underlying property and has a term of approximately two years. ​ The following is a summary of the sole Sponsored REIT Loan outstanding as of September 30, 2021: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  |  |  |  |  | Maximum |  | Amount | Interest |
(dollars in thousands, except footnotes) |  | ​ | ​ | Maturity | ​ | Amount | ​ | Outstanding | Rate at |
Sponsored REIT |  | Location | ​ | Date | ​ | of Loan | ​ | 30-Sep-21 | 30-Sep-21 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |
Mortgage loan secured by property | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
FSP Monument Circle LLC (1) | ​ | Indianapolis, IN | ​ | 6-Dec-22 | ​ | $ | 21,000 | ​ | $ | 21,000 | 7.51 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | $ | 21,000 | ​ | $ | 21,000 | ​ | ​
​
(1) | The interest rate is a fixed rate and this mortgage loan includes an origination fee of $164,000 and an exit fee of $38,000 when repaid by the borrower.
​ The Company recognized interest income and fees from the Sponsored REIT Loan of approximately $1,196,000 and $1,149,000 for the nine months ended September 30, 2021 and 2020, respectively. The financial instrument was classified within Level 3 of the fair value hierarchy and had a fair value of approximately $20.5 million as of September 30, 2021. ​ On December 6, 2020, the Company entered into a second amendment to the Sponsored REIT Loan with FSP Monument Circle LLC which qualified as a troubled debt restructuring. The amendment extended the maturity date of the loan for two years and increased the interest rate from 7.19% to 7.51%. There were no commitments in this amendment to lend additional funds to such Sponsored REIT and the loan is fully collateralized by the mortgage held on the Sponsored REIT's property. Repayment of this Sponsored REIT Loan is expected to be provided substantially through the sale of the collateral.

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