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Equity Investment in a Limited Partnership | 9 Months Ended
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Sep. 30, 2021
Equity Method Investments and Joint Ventures [Abstract] |
Equity Investment in a Limited Partnership | Note 5. Equity Investment in a Limited Partnership On August 3, 2020, the Company entered into a subscription agreement with Mavik Real Estate Special Opportunities Fund, LP (“Mavik RESOF”) (formerly known as Terra Real Estate Credit Opportunities Fund, LP) whereby the Company committed to fund up to $50.0 million to purchase a limited partnership interest in Mavik RESOF. Mavik RESOF’s primary investment objective is to generate attractive risk-adjusted returns by purchasing performing and non-performing mortgages, loans, mezzanines and other credit instruments supported by underlying commercial real estate assets. Mavik RESOF may also opportunistically originate high-yield mortgages or loans in real estate special situations including rescue financings, bridge loans, restructurings and bankruptcies (including debtor-in-possession loans). The general partner of Mavik RESOF is Mavik Real Estate Special Opportunities Fund GP, LLC (formerly known as Terra Real Estate Credit Opportunities Fund GP, LLC), which is a subsidiary of the Company’s sponsor, Terra Capital Partners. As of September 30, 2021, the Company has fully funded all of its commitment. As of December 31, 2020, the unfunded commitment was $14.1 million. The Company evaluated its equity interest in Mavik RESOF and determined it does not have a controlling financial interest and is not the primary beneficiary. Accordingly, the equity interest in Mavik RESOF is accounted for as an equity method investment. As of September 30, 2021 and December 31, 2020, the Company owned 71.1% and 90.3% of equity interest in Mavik RESOF, respectively. As of September 30, 2021 and December 31, 2020, the carrying value of the Company’s investment in MAVIK RESOF was $49.9 million and $36.3 million, respectively. For the three and nine months ended September 30, 2021, the Company recorded equity income from Mavik RESOF of $1.8 million and $4.6 million, respectively, and received distributions of $5.0 million from Mavik RESOF for both the three and nine months ended September 30, 2021. There was no such equity income recorded or distributions received for the three and nine months ended September 30, 2020. In connection with the equity investment in Mavik RESOF, the Company paid origination fees to the Manager totaling $0.5 million, to be amortized to equity income on a straight-line basis over the life of Mavik RESOF. The following tables present summarized financial information of the Company’s equity investment in Mavik RESOF. Amounts provided are the total amounts attributable to the investment and do not represent the Company’s proportionate share:
|  | September 30, 2021 |  | December 31, 2020
Investments at fair value (cost of $74,285,158 and $44,174,031, respectively) |  | $ | 74,891,687 |  |  | $ | 44,715,979 |
Other assets |  | 12,074,260 |  |  | 5,331,840 |
Total assets |  | 86,965,947 |  |  | 50,047,819 |
Obligations under participation agreement (proceeds of $6,808,000 and $6,295,100, respectively) |  | 6,878,371 |  |  | 6,347,478 |
Other liabilities |  | 10,755,766 |  |  | 4,204,147 |
Total liabilities |  | $ | 17,634,137 |  |  | $ | 10,551,625 |
Partners’ capital |  | $ | 69,331,810 |  |  | $ | 39,496,194 |
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2021 |  | 2020 |  | 2021 |  | 2020
Total investment income |  | $ | 3,116,999 |  |  | $ | — |  |  | $ | 7,857,322 |  |  | $ | — |
Total expenses |  | 490,011 |  |  | — |  |  | 1,505,586 |  |  | — |
Net investment income |  | 2,626,988 |  |  | — |  |  | 6,351,736 |  |  | — |
Unrealized appreciation on investments |  | (80,655) |  |  | — |  |  | 102,328 |  |  | — |
Net increase in partners' capital resulting from operations |  | $ | 2,546,333 |  |  | $ | — |  |  | $ | 6,454,064 |  |  | $ | — |

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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -URI http://asc.fasb.org/topic&trid=2196965 + Details
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