Significant Accounting Policies (Policies) |
6 Months Ended |
|---|---|
Jun. 30, 2025 | |
| Accounting Policies [Abstract] | |
| Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation: The accompanying unaudited condensed consolidated financial statements and related notes of the Company are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The unaudited condensed consolidated financial statements include the accounts of the Company and its consolidated subsidiaries, and all intercompany transactions and balances have been eliminated. In the opinion of management, all adjustments considered necessary for a fair presentation of the Company’s balance sheets, results of operations and cash flows have been included and are of a normal and recurring nature. |
| Use of Estimates | Use of Estimates: The preparation of the condensed consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the balance sheet and the reported amounts of revenues. Actual results may ultimately differ materially from those estimates. |
| Cash and Cash Equivalents | Cash and Cash Equivalents: Cash and cash equivalents represents demand deposits held in banks and investments in overnight money market funds. The Company may have bank balances in the future that are in excess of federally insured amounts; however, the Company deposits its cash and cash equivalents with high credit-quality institutions to minimize credit risk exposure. Cash is carried at cost which approximates fair value. In accordance with the fair value hierarchy under Accounting Standards Codification 820-Fair Value Measurements, cash and cash equivalents are considered level 1. |
| Fair Value Option | Fair Value Option: The Company has elected the fair value option for certain eligible financial assets and liabilities including real estate loan investments, and the Company's debt obligations. The fair value elections were made to create a more direct alignment between the Company’s financial reporting and the calculation of net asset value per share used to determine the prices at which investors can purchase and redeem shares of the Company’s common stock. The decision to elect the fair value option is determined on an instrument-by-instrument basis and must be applied to an entire instrument and is irrevocable once elected. Assets and liabilities measured at fair value pursuant to this guidance are required to be reported separately on the Company’s balance sheets from those instruments using another accounting method. The Company’s fair value option elections will be made in accordance with the guidance in Accounting Standards Codification 825, Financial Instruments, that allows entities to make an irrevocable election of fair value as the initial and subsequent measurement attribute for certain eligible financial assets and liabilities. In the cases of real estate loan investments for which the fair value option is elected, costs related to the origination or acquisition of the instrument should be immediately recognized in earnings. Unrealized gains and losses on assets and liabilities for which the fair value option has been elected are also reported in earnings without deferral. This is because under the fair value option, a lender reports the instrument at its exit price (i.e., the price that would be received to sell the instrument in an orderly transaction), which reflects the market’s assessment of the instrument’s cash flows and risks and does not include any entity-specific costs or fees. As of June 30, 2025, the Company has elected the fair value option for its real estate loan investments reported in Note 3 and debt obligations reported in Note 4. |
| Redeemable Common Shares | Redeemable Common Shares: The Company classifies common shares held by the Advisors or affiliates of the Advisors as redeemable common shares on the Condensed Consolidated Balance Sheets at the greater of their carrying amount or their redemption value. Changes in the fair value of redeemable common shares are recorded to additional paid-in capital. |
| Real estate loan investments | Real estate loan investments: The Company originates or acquires mortgage loans secured by the borrower's interest in underlying real estate. In addition, the Company may acquire subordinate participation interests in mortgage or mezzanine loans originated by our affiliates or in the secondary market. Changes in fair value are recorded as unrealized gain (loss) on real estate loan investments in the Company’s Condensed Consolidated Statements of Operations. |
| Repurchase agreements | Repurchase agreements: The Company finances loan investments using repurchase agreements and secures these financing transactions with real estate loan investments. The repurchase agreements are therefore treated as collateralized financing transactions, and recorded at fair value within debt obligations on the Condensed Consolidated Balance Sheets. Changes in the fair value are recorded as unrealized gain (loss) on debt obligations in the Company’s Condensed Consolidated Statements of Operations. |
| Revenue Recognition | Revenue Recognition: Interest income on real estate loan investments is accrued based on the outstanding principal amount and contractual terms of the instrument. Other non loan investment interest income is earned on overnight cash investments and is recorded within other income. |
| Interest and fees on debt obligations | Interest and fees on debt obligations: The Company expenses contractual interest due in accordance with repurchase agreements and revolving credit facility agreements as incurred. Minimum utilization and unused fees are expensed as incurred in accordance with the terms of the respective debt agreements. |
| Income Taxes | Income Taxes: The Company intends to elect to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, commencing with its taxable year ending December 31, 2025. A REIT is subject to several organizational and operational requirements including that it must distribute at least 90% of its REIT taxable income to its shareholders each year. Even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed income. |
| Organization, Offering and Certain Operating Expenses | Organization, Offering and Certain Operating Expenses: The Advisors have agreed to advance all of the Company’s organization and offering expenses and certain operating expenses on its behalf through the first anniversary of the initial closing (the "Initial Retail Closing") of the Company's continuous, blind pool private offering (the "Private Offering") that includes investors other than the Sponsors and the Advisors. These expenses may include legal, accounting, printing, mailing, subscription processing and filing fees and expenses, reasonable bona fide due diligence expenses of participating broker-dealers supported by detailed and itemized invoices, costs in connection with preparing sales materials, design and website expenses, fees and expenses of our escrow agent and transfer agent, and expense reimbursements for actual costs incurred by employees of the Dealer Manager (as defined in Note 10) in the performance of wholesaling activities, but exclude upfront selling commissions, dealer manager fees and the shareholder servicing fee. The Company will reimburse the Advisors for all such advanced expenses ratably over the 60 months following the first anniversary of the Initial Retail Closing. As of June 30, 2025, total organization and offering expenses incurred by the Advisors as well as certain operating expenses subject to future reimbursement by the Company are estimated to be approximately $5.23 million, comprised of $3.67 million of organization expenses and offering costs and $1.56 million of certain general and administrative operating expenses. Organization costs include the legal costs of structuring and forming the Company, its subsidiaries and its board of trustees, drafting of the governing documents of the Company and its subsidiaries and service provider agreements, and legal costs and auditor fees related to various SEC filings. Offering costs are related to the marketing and selling of the Company’s common shares including costs incurred in the preparation of the private placement. These organization, offering and operating expenses are not recorded on the accompanying condensed consolidated financial statements because such costs are not the Company’s liabilities until the date on which the Company has its Initial Retail Closing. When recorded by the Company, organization and operating expenses will be expensed as incurred and offering expenses will be charged to shareholders’ equity. Any amount due to the Advisors but not paid will be recognized as a liability on the balance sheet. |
| Concentration of Credit Risk | Concentration of Credit Risk: Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, real estate loan investments and interest receivable. The Company may place cash in excess of insured amounts with high quality financial institutions. The Company performs ongoing analysis of credit risk concentrations in its investment portfolio by evaluating exposure to various markets, underlying property types, term, tenant mix and other credit metrics. |
| Segment Reporting | Segment Reporting: The Company operates and reports its business as a reportable segment, which includes originating, acquiring, managing and investing in real estate loan investments, including senior mortgage loans, subordinated debt and other similar investments. The Company’s chief operating decision maker (“CODM”) is our , comprised of our chief executive officer, our chief financial officer, and the investment management teams from our Advisors. The CODM makes key operating decisions, evaluates financial results, investment performance, and allocates resources at the consolidated level for the entire portfolio based on consolidated revenues, expenses, and net income as reported on the Condensed Consolidated Statements of Operations. Accordingly, the Company has a single operating and reportable segment and the CODM evaluates profitability using net income. Net income is used by the CODM in assessing the operating performance of the segment. All expense categories on the Condensed Consolidated Statements of Operations are significant and there are no significant segment expenses that require disclosure. The measure of segment assets is reported as total assets in our Condensed Consolidated Balance Sheets. |
| Recent Accounting Pronouncements | Recent Accounting Pronouncements: In November 2024, the FASB issued Accounting Standards Update No. 2024-03, “Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”, which requires disclosure of certain costs and expenses on an interim and annual basis in the notes to the condensed consolidated financial statements. The guidance is effective for annual reporting periods beginning after December 15, 2026 and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The guidance is to be applied either (1) prospectively to financial statements issued for reporting periods after the effective date or (2) retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the potential impact of adopting this new guidance on its condensed consolidated financial statements and related disclosures. |