
	September 30, 2021									December 31, 2020
	Fixed Rate			Floating Rate (1)(2)(3)			Total			Fixed Rate			Floating Rate (1)(2)(3)			Total
Number of loans	5			14			19			6			14			20
Principal balance	$	92,808,312		$	389,281,253		$	482,089,565		$	56,335,792		$	367,838,966		$	424,174,758
Carrying value	$	93,656,356		$	386,806,296		$	480,462,652		$	56,464,310		$	365,816,205		$	422,280,515
Fair value	$	93,571,526		$	384,826,180		$	478,397,706		$	56,284,334		$	363,122,860		$	419,407,194
Weighted-average coupon rate	12.94		%	7.44		%	8.50		%	12.17		%	7.95		%	8.51		%
Weighted-average remaining term (years)	1.23			1.12			1.14			1.78			1.44			1.48

(2)As of September 30, 2021 and December 31, 2020, amounts included $162.8 million and $184.2 million of senior mortgages used as collateral for $93.6 million and $107.6 million of borrowings under a term loan, respectively (Note 9).

As of September 30, 2021, amounts also included $42.2 million of senior mortgages used as collateral for $25.3 million of borrowings under a revolving line of credit. Borrowings under the term loan bear interest at an annual rate of LIBOR plus 4.25% with a LIBOR floor of 1.00%. Borrowings under the revolving line of credit bear interest at a minimum rate of 4.0%.


	Loans Held for Investment		Loans Held for Investment through Participation Interests		Total
Balance, January 1, 2021	$	417,986,462	$	4,294,053	$	422,280,515
New loans made	163,504,926		—		163,504,926
Principal repayments received	(101,659,237)		(4,250,000)		(105,909,237)
PIK interest (1)	1,955,109		—		1,955,109
Net amortization of premiums on loans	(46,043)		—		(46,043)
Accrual, payment and accretion of investment-related fees and other, net	938,233		(44,053)		894,180
Realized loss on loan repayments (2)(3)	(651,553)		—		(651,553)
Provision for loan losses	(1,565,245)		—		(1,565,245)
Balance, September 30, 2021	$	480,462,652	$	—	$	480,462,652


	Loans Held for Investment		Loans Held for Investment through Participation Interests		Total
Balance, January 1, 2020	$	375,462,222	$	3,150,546	$	378,612,768
New loans made	84,629,411		1,129,112		85,758,523
Principal repayments received	(28,690,175)		—		(28,690,175)
PIK interest (1)	2,893,620		—		2,893,620
Net amortization of premiums on loans	(46,043)		—		(46,043)
Accrual, payment and accretion of investment-related fees, net	792,606		16,343		808,949
Provision for loan losses	(1,356,737)		—		(1,356,737)
Balance, September 30, 2020	$	433,684,904	$	4,296,001	$	437,980,905

(1)Certain loans in the Company’s portfolio contain PIK interest provisions. The PIK interest represents contractually deferred interest that is added to the principal balance. PIK interest related to obligations under participation agreements amounted to $1.0 million and $1.1 million for the nine months ended September 30, 2021 and 2020, respectively.

(2)On September 2, 2021, the Company foreclosed on a hotel property encumbered by a first mortgage and the related subordinated mezzanine loan, both of which were held by the Company, with an aggregate principal balance $14.6 million. On September 23, 2021, the hotel property was sold to a third party for $13.8 million. The net proceeds from the sale, together with a payment under a contractual guarantee of $0.8 million from the borrower, were used to pay off both loans in full. In connection with the loan repayment, the related obligation under participation agreement of $6.4 million was simultaneously satisfied. In connection with the loan repayment, the Company recorded a loss of $0.4 million related to the write-off of the interest accrued but uncollected in the third quarter of 2021, excluding the amount attributable to obligations under participation agreements of $0.1 million.

The tables below detail the types of loans in the Company’s loan portfolio, as well as the property type and geographic location of the properties securing these loans as of September 30, 2021 and December 31, 2020:


	September 30, 2021						December 31, 2020
Loan Structure	Principal Balance		Carrying Value		% of Total		Principal Balance		Carrying Value		% of Total
First mortgages	$	383,044,928	$	385,439,932	80.2	%	$	254,042,847	$	255,093,989	60.5	%
Preferred equity investments	89,044,637		89,182,058		18.6	%	141,590,632		142,002,144		33.6	%
Mezzanine loans	10,000,000		10,160,225		2.1	%	28,541,279		28,923,140		6.8	%
Allowance for loan losses	—		(4,319,563)		(0.9)	%	—		(3,738,758)		(0.9)	%
Total	$	482,089,565	$	480,462,652	100.0	%	$	424,174,758	$	422,280,515	100.0	%


	September 30, 2021						December 31, 2020
Property Type	Principal Balance		Carrying Value		% of Total		Principal Balance		Carrying Value		% of Total
Office	$	212,435,064	$	213,199,243	44.4	%	$	182,698,225	$	183,053,751	43.3	%
Infill land	79,495,651		79,895,793		16.6	%	10,442,567		10,537,512		2.5	%
Multifamily	78,724,866		79,265,718		16.5	%	150,873,173		151,768,347		35.9	%
Hotel - full/select service	56,847,381		57,365,987		11.9	%	49,142,809		49,393,251		11.7	%
Mixed use	16,586,603		16,586,603		3.5	%	16,767,984		16,767,984		4.0	%
Student housing	31,000,000		31,468,871		6.5	%	3,000,000		3,204,375		0.8	%
Industrial	7,000,000		7,000,000		1.5	%	7,000,000		7,000,000		1.7	%
Hotel - extended stay	—		—		—	%	4,250,000		4,294,053		1.0	%
Allowance for loan losses	—		(4,319,563)		(0.9)	%	—		(3,738,758)		(0.9)	%
Total	$	482,089,565	$	480,462,652	100.0	%	$	424,174,758	$	422,280,515	100.0	%

During the first quarter of 2021, the Company reclassified the property types of collateral on certain loans to multifamily to better reflect the tenant mix of each property. Additionally, the Company categorized hotel properties further to hotel - full/selected service and hotel - extended stay. The prior period amounts have been reclassified to conform to the current period presentation.


	September 30, 2021						December 31, 2020
Geographic Location	Principal Balance		Carrying Value		% of Total		Principal Balance		Carrying Value		% of Total
United States
California	$	194,558,815	$	195,789,977	40.7	%	$	200,279,688	$	200,990,328	47.6	%
New York	89,044,637		89,182,058		18.5	%	79,187,004		79,310,276		18.8	%
Georgia	52,921,315		53,194,876		11.0	%	74,116,787		74,505,752		17.6	%
Pennsylvania	52,000,000		52,464,277		10.9	%	—		—		—	%
North Carolina	39,570,042		39,774,232		8.3	%	33,242,567		33,438,806		7.9	%
Utah	28,000,000		28,308,646		5.9	%	—		—		—	%
Texas	13,625,000		13,721,970		2.9	%	3,848,712		3,887,200		0.9	%
Massachusetts	7,000,000		7,000,000		1.5	%	7,000,000		7,000,000		1.7	%
South Carolina	3,000,000		3,160,225		0.7	%	3,000,000		3,204,375		0.8	%
Washington	2,369,756		2,185,954		0.5	%	23,500,000		23,682,536		5.6	%
Allowance for loan losses	—		(4,319,563)		(0.9)	%	—		(3,738,758)		(0.9)	%
Total	$	482,089,565	$	480,462,652	100.0	%	$	424,174,758	$	422,280,515	100.0	%

As described in Note 2, the Manager evaluates the Company’s loan portfolio on a quarterly basis or more frequently as needed. In conjunction with the quarterly review of the Company’s loan portfolio, the Manager assesses the risk factors of each loan, and assigns a risk rating based on a five-point scale with “1” being the lowest risk and “5” being the greatest risk.


	September 30, 2021							December 31, 2020
Loan Risk Rating	Number of Loans	Principal Balance		Carrying Value		% of Total		Number of Loans	Principal Balance		Carrying Value		% of Total
1	—	$	—	$	—	—	%	—	$	—	$	—	—	%
2	2	25,000,000		25,040,664		5.2	%	1	7,000,000		7,000,000		1.6	%
3	13	354,419,928		356,837,523		73.5	%	14	323,696,475		325,284,285		76.4	%
4	1	58,419,764		58,429,227		12.1	%	3	72,861,587		73,079,804		17.2	%
5	—	—		—		—	%	1	3,848,712		3,887,200		0.9	%
Other (1)	3	44,249,873		44,474,801		9.2	%	1	16,767,984		16,767,984		3.9	%
	19	$	482,089,565	484,782,215		100.0	%	20	$	424,174,758	426,019,273		100.0	%
Allowance for loan losses				(4,319,563)							(3,738,758)
Total, net of allowance for loan losses				$	480,462,652						$	422,280,515

(1)Because these loans have an event of default, they are removed from the pool of loans on which a general allowance is calculated and are evaluated for collectibility individually. As of September 30, 2021 and December 31, 2020, the specific allowance for loan losses on these loans were $3.4 million and $2.5 million, respectively, as a result of a decline in the fair value of the collateral.

As of September 30, 2021, the Company had one loan with a loan risk rating of “4” and no loan with a loan risk rating of “5”, representing a decrease in loans with loan risk ratings of “4” and “5” from those as December 31, 2020, and the Company reversed the previously recorded general allowance for loan losses of $0.4 million for the nine months ended September 30, 2021. Additionally, as of September 30, 2021, the number of loans deemed impaired increased as compared to those as of December 31, 2020, and the Company recorded specific allowance for loan losses of $0.7 million and $2.0 million for the three and nine months ended September 30, 2021, respectively. As of September 30, 2020, the Company had five loans with a loan risk rating of “4”, and recorded a general allowance for loan losses of $0.04 million and $1.4 million for the three and nine months ended September 30, 2020, respectively.


	Nine Months Ended September 30,
	2021		2020
Allowance for loan losses, beginning of period	$	3,738,758	$	—
Provision for loan losses	1,565,245		1,356,737
Charge-offs (1)	(984,440)		—
Recoveries	—		—
Allowance for loan losses, end of period	$	4,319,563	$	1,356,737

As of both September 30, 2021 and December 31, 2020, the Company had one loan that was in maturity default. Additionally, for the three and nine months ended September 30, 2021, the Company suspended interest income accrual of $1.1 million and $2.4 million, respectively, on three loans, because recovery of such income was doubtful. There was no suspension of such interest income for the three and nine months ended September 30, 2020.

Due to financial difficulty resulting from the COVID-19 pandemic, a borrower defaulted on interest payments in May 2020 on a $3.5 million mezzanine loan and the Company subsequently suspended the interest accrual. The Company purchased the senior loan from a third-party lender on September 3, 2021 in order to facilitate a refinancing. Subsequently on September 23, 2021, the senior and mezzanine loans were refinanced and the Company issued a new senior loan with a committed amount of $14.7 million, of which $13.6 million was funded at closing. The concession granted in the refinancing was the forgiveness of principal and accrued interest of $1.3 million on the mezzanine loan, of which $1.0 million was previously recorded as an allowance for loan losses, in addition to $0.4 million of nonaccrual interest. The Company classified the refinancing as TDR as it met all the conditions to be considered TDR pursuant to ASC 310-40.

(1)As of September 30, 2021, the principal balance of this loan was $13.6 million and the carrying value of this loan, which includes the present value of the exit fee, was $13.7 million. There is no allowance for loan losses recorded for this new senior loan.

Once classified as a TDR, the new senior loan is classified as an impaired loan until it is extinguished and the carrying value is evaluated at each reporting date for collectability based on the fair value of the underlying collateral. Since the fair value of the collateral is greater than the carrying value of the new senior loan, no specific allowance was recorded as of September 30, 2021. For the period ended September 30, 2021, interest income from the new senior loan was $0.2 million.