TPG RE FINANCE TRUST, INC., 10-Q filed on 11/5/2018
Quarterly Report
v3.10.0.1
Document And Entity Information - shares
 9 Months Ended
Sep. 30, 2018
Nov. 02, 2018
Document Information [Line Items]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Sep. 30, 2018  
Document Fiscal Year Focus 2018  
Document Fiscal Period Focus Q3  
Trading Symbol TRTX  
Entity Registrant Name TPG RE Finance Trust, Inc.  
Entity Central Index Key 0001630472  
Current Fiscal Year End Date --12-31  
Entity Filer Category Non-accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Common Stock    
Document Information [Line Items]    
Entity Common Stock, Shares Outstanding   66,043,964
Class A Common Stock    
Document Information [Line Items]    
Entity Common Stock, Shares Outstanding   1,143,313
v3.10.0.1
Consolidated Balance Sheets (Unaudited) - USD ($)
$ in Thousands
Sep. 30, 2018
Dec. 31, 2017
ASSETS    
Cash and Cash Equivalents [1] $ 46,203 $ 75,037
Restricted Cash [1] 250 700
Accounts Receivable [1] 38 141
Accounts Receivable from Servicer/Trustee [1] 2,547 220
Accrued Interest Receivable [1] 19,338 16,861
Loans Held for Investment (includes $3,035,098 and $2,694,106 pledged as collateral under repurchase agreements and senior secured agreements) 4,157,653 3,175,672
Investment in Commercial Mortgage-Backed Securities, Available-for-Sale (includes $37,345 and $47,762 pledged as collateral under repurchase agreements) 75,414 85,895
Other Assets, net [1] 710 859
Total Assets [1] 4,302,153 3,355,385
Liabilities    
Accrued Interest Payable [1] 5,025 5,385
Accrued Expenses [1] 8,839 5,067
Collateralized Loan Obligation (net of deferred financing costs of $5,489 and $0) [1] 735,415  
Secured Revolving Repurchase and Senior Secured Agreements (net of deferred financing costs of $12,924 and $8,697) 2,087,118 1,827,104
Notes Payable (net of deferred financing costs of $506 and $1,601) [1] 100,832 287,886
Payable to Affiliates [1] 6,904 5,227
Deferred Revenue [1] 216 317
Dividend Payable [1] 28,918 23,068
Total Liabilities [1] 2,973,267 2,154,054
Commitments and Contingencies - See Note 14 [1]
Stockholders’ Equity:    
Preferred Stock ($0.001 par value; 100,000,000 shares authorized; 0 and 125 shares issued and outstanding, respectively) [1]
Additional Paid-in-Capital [1] 1,355,037 1,216,112
Accumulated Deficit [1] (25,070) (14,808)
Accumulated Other Comprehensive (Loss) (1,149) (34)
Total Stockholders' Equity [1] 1,328,886 1,201,331
Total Liabilities and Stockholders' Equity [1] 4,302,153 3,355,385
Common Stock, Undefined Class    
Stockholders’ Equity:    
Common Stock Value [1] 67 60
Class A Common Stock    
Stockholders’ Equity:    
Common Stock Value [1] 1 1
Total Stockholders' Equity $ 1 $ 1
[1] At December 31, 2017, there were no VIE assets or liabilities recorded in the Company’s Total Assets and Total Liabilities. The Company’s consolidated Total Assets and Total Liabilities at September 30, 2018 include VIE assets and liabilities of $954.4 million and $741.5 million, respectively. These assets can be used only to satisfy obligations of the VIE, and creditors of the VIE have recourse only to these assets, and not to TPG RE Finance Trust, Inc. See Note 5 to the Consolidated Financial Statements for details
v3.10.0.1
Consolidated Balance Sheets (Parenthetical) (unaudited) - USD ($)
$ in Thousands
Sep. 30, 2018
Dec. 31, 2017
Preferred stock, par value $ 0.001 $ 0.001
Preferred stock, authorized shares 100,000,000 100,000,000
Preferred stock, shares issued 0 125
Preferred stock, shares outstanding 0 125
Common stock, par value $ 0.001 $ 0.001
Common stock, authorized shares 300,000,000 300,000,000
Common stock, shares issued 66,043,964 59,440,112
Common stock, shares outstanding 66,043,964 59,440,112
Total assets [1] $ 4,302,153 $ 3,355,385
Total liabilities [1] 2,973,267 2,154,054
Variable Interest Entity, Primary Beneficiary    
Total assets 954,400 0
Total liabilities $ 741,500 $ 0
Class A Common Stock    
Common stock, par value $ 0.001 $ 0.001
Common stock, authorized shares 2,500,000 2,500,000
Common stock, shares issued 1,143,313 1,178,618
Common stock, shares outstanding 1,143,313 1,178,618
Repurchase Agreements    
Loans pledged as collateral $ 3,035,098 $ 2,694,106
Deferred financing costs 12,924 8,697
Commercial Mortgage-Backed Securities | Repurchase Agreements    
Available-for-sale securities pledged as collateral 37,345 47,762
Collateralized Loan Obligation    
Loans pledged as collateral 932,380  
Deferred financing costs 5,489 0
Notes Payable    
Deferred financing costs $ 506 $ 1,601
[1] At December 31, 2017, there were no VIE assets or liabilities recorded in the Company’s Total Assets and Total Liabilities. The Company’s consolidated Total Assets and Total Liabilities at September 30, 2018 include VIE assets and liabilities of $954.4 million and $741.5 million, respectively. These assets can be used only to satisfy obligations of the VIE, and creditors of the VIE have recourse only to these assets, and not to TPG RE Finance Trust, Inc. See Note 5 to the Consolidated Financial Statements for details
v3.10.0.1
Consolidated Statements of Income and Comprehensive Income (Unaudited) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Sep. 30, 2018
Sep. 30, 2017
INTEREST INCOME        
Interest Income $ 69,863 $ 46,734 $ 193,921 $ 146,411
Interest Expense (34,297) (19,150) (90,449) (56,585)
Net Interest Income 35,566 27,584 103,472 89,826
OTHER REVENUE        
Other (Loss) Income, net (55) 669 820 1,036
Total Other Revenue (55) 669 820 1,036
OTHER EXPENSES        
Professional Fees 905 1,256 2,659 2,448
General and Administrative 965 1,003 3,162 2,192
Servicing and Asset Management Fees 767 720 2,301 3,061
Management Fee 4,879 4,133 14,346 9,489
Collateral Management Fee   23   225
Incentive Management Fee 1,168 327 3,240 3,713
Total Other Expenses 8,684 7,462 25,708 21,128
Income Before Income Taxes 26,827 20,791 78,584 69,734
Income Tax Expense (3)   (208) (140)
Net Income 26,824 20,791 78,376 69,594
Preferred Stock Dividends   (4) (3) (12)
Net Income Attributable to TPG RE Finance Trust, Inc. $ 26,824 $ 20,787 $ 78,373 $ 69,582
Basic Earnings per Common Share [1] $ 0.42 $ 0.35 $ 1.27 $ 1.34
Diluted Earnings per Common Share [1] $ 0.42 $ 0.35 $ 1.27 $ 1.34
Weighted Average Number of Common Shares Outstanding        
Basic: [1] 64,295,973 58,685,979 61,635,988 51,969,733
Diluted: [1] 64,295,973 58,685,979 61,635,988 51,969,733
OTHER COMPREHENSIVE INCOME        
Net Income $ 26,824 $ 20,791 $ 78,376 $ 69,594
Unrealized Gain (Loss) on Commercial Mortgage-Backed Securities 523 (2,558) (1,115) (1,270)
Comprehensive Net Income $ 27,347 $ 18,233 $ 77,261 $ 68,324
[1] Share and per share data reflect the impact of the common stock and Class A common stock dividend which was paid upon completion of the Company’s initial public offering on July 25, 2017 to holders of record as of July 3, 2017. See Note 12 to the Consolidated Financial Statements for details.
v3.10.0.1
Consolidated Statement of Changes in Equity (Unaudited) - USD ($)
$ in Thousands
Total
Class A Common Stock
Preferred Stock
Common Stock
Additional Paid-in-Capital
Accumulated Deficit
Accumulated Other Comprehensive (Loss) Income
Balance at Dec. 31, 2016 $ 970,689 $ 1   $ 39 $ 979,467 $ (10,068) $ 1,250
Balance, Shares at Dec. 31, 2016   967,500 125 38,260,053      
Issuance of Class A Common Stock 365       365    
Issuance of Class A Common Stock, Shares   14,711          
Issuance of Common Stock 257,634     $ 12 257,622    
Issuance of Common Stock, Shares       12,642,166      
Common Stock and Class A Common Stock Dividend       $ 9 (9)    
Common Stock and Class A Common Stock Dividend, Shares   230,815   9,224,268      
Repurchases of Common Stock (6,558)       (7) (6,551)  
Repurchases of Common Stock, Shares       (334,745)      
Initial Public Offering Transaction Costs and Equity Issuance and Shelf Registration Statement Transaction Costs (20,713)       (20,713)    
Net Income 69,594         69,594  
Other Comprehensive (loss) (1,270)           (1,270)
Dividends on Preferred Stock (12)         (12)  
Dividends on Common Stock (Dividends Declared per Share) (60,566)         (60,566)  
Dividends on Class A Common Stock (Dividends Declared per Share) (1,365)         (1,365)  
Balance at Sep. 30, 2017 1,207,798 $ 1   $ 60 1,216,725 (8,968) (20)
Balance, Shares at Sep. 30, 2017   1,213,026 125 59,791,742      
Balance at Dec. 31, 2017 1,201,331 [1] $ 1   $ 60 1,216,112 (14,808) (34)
Balance, Shares at Dec. 31, 2017   1,178,618 125 59,440,112      
Issuance of Common Stock 139,440     $ 7 139,433    
Issuance of Common Stock, Shares       7,019,352      
Conversions of Class A Common Stock toCommon Stock   (35,305)   35,305      
Repurchases of Common Stock (8,508)       (9) (8,499)  
Repurchases of Common Stock, Shares       (450,805)      
Redemption of Series A Preferred Stock (125)       (125)    
Redemption of Series A Preferred Stock, Shares     (125)        
Initial Public Offering Transaction Costs and Equity Issuance and Shelf Registration Statement Transaction Costs (857)       (857)    
Amortization of Share Based Compensation 483       483    
Net Income 78,376         78,376  
Other Comprehensive (loss) (1,115)           (1,115)
Dividends on Preferred Stock (3)         (3)  
Dividends on Common Stock (Dividends Declared per Share) (78,663)         (78,663)  
Dividends on Class A Common Stock (Dividends Declared per Share) (1,473)         (1,473)  
Balance at Sep. 30, 2018 $ 1,328,886 [1] $ 1   $ 67 $ 1,355,037 $ (25,070) $ (1,149)
Balance, Shares at Sep. 30, 2018   1,143,313   66,043,964      
[1] At December 31, 2017, there were no VIE assets or liabilities recorded in the Company’s Total Assets and Total Liabilities. The Company’s consolidated Total Assets and Total Liabilities at September 30, 2018 include VIE assets and liabilities of $954.4 million and $741.5 million, respectively. These assets can be used only to satisfy obligations of the VIE, and creditors of the VIE have recourse only to these assets, and not to TPG RE Finance Trust, Inc. See Note 5 to the Consolidated Financial Statements for details
v3.10.0.1
Consolidated Statement of Changes in Equity (Unaudited) (Parenthetical) - $ / shares
 9 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Common stock dividends declared per share $ 1.28 $ 1.18
Class A Common Stock    
Common stock dividends declared per share $ 1.28 $ 1.18
v3.10.0.1
Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Cash Flows from Operating Activities:    
Net Income $ 78,376 $ 69,594
Adjustment to Reconcile Net Income to Net Cash Provided by Operating Activities:    
Amortization and Accretion of Premiums, Discounts and Loan Origination Fees, net (11,867) (15,867)
Amortization of Deferred Financing Costs 12,103 9,160
Capitalized Accrued Interest   1,865
Loss (Gain) on Sales of Loans Held for Investment and Commercial Mortgage-Backed Securities, net 524 (185)
Stock Compensation Expense 483  
Cash Flows Due to Changes in Operating Assets and Liabilities:    
Accounts Receivable 103 503
Accrued Interest Receivable (4,012) (776)
Accrued Expenses 1,113 (2,454)
Accrued Interest Payable (360) 826
Payable to Affiliates 1,677 5,193
Deferred Fee Income (101) 75
Other Assets 149 (694)
Net Cash Provided by Operating Activities 78,188 67,240
Cash Flows from Investing Activities:    
Origination of Loans Held for Investment (1,622,084) (1,149,911)
Advances on Loans Held for Investment (207,657) (226,187)
Principal Advances Held by Servicer/Trustee   496
Principal Repayments of Loans Held for Investment 858,130 975,258
Proceeds from Sales of Loans Held for Investment 2,174 65,054
Purchase of Commercial Mortgage-Backed Securities (143,643) (96,294)
Sales and Principal Repayments of Commercial Mortgage-Backed Securities 146,016 29,802
Purchases and Disposals of Fixed Assets   (108)
Net Cash Used in Investing Activities (967,064) (401,890)
Cash Flows from Financing Activities:    
Payments on Collateralized Loan Obligation   (559,574)
Proceeds from Collateralized Loan Obligation 745,904 16,254
Payments on Secured Financing Agreements (1,432,221) (621,552)
Proceeds from Secured Financing Agreements 1,508,313 1,293,530
Payment of Deferred Financing Costs (18,818) (6,207)
Proceeds from Issuance of Common Stock 139,440 243,654
Payments to Repurchase Common Stock (8,361) (6,000)
Payment of Equity Issuance and Shelf Registration Statement Transaction Costs (251) (4,341)
Net Cash Provided by Financing Activities 859,592 295,975
Net Change in Cash, Cash Equivalents, and Restricted Cash (29,284) (38,675)
Cash, Cash Equivalents and Restricted Cash at Beginning of Period 75,737 103,975
Cash, Cash Equivalents and Restricted Cash at End of Period 46,453 65,300
Supplemental Disclosure of Cash Flow Information:    
Interest Paid 78,707 46,600
Taxes Paid 208 141
Supplemental Disclosure of Non-Cash Investing and Financing Activities:    
Principal Repayments of Loans Held for Investment by Servicer/Trustee, net   51,076
Interest Payments of Loans Held for Investment and Commercial Mortgage-Backed Securities Held by Servicer/Trustee, net 1,677  
Principal Repayments of Commercial Mortgage-Backed Securities Held by Servicer/Trustee, net 870  
Accrued Equity Issuance and Shelf Registration Statement Transaction Costs 606 2,391
Dividends Declared, not paid 28,918 [1] 20,135
Accrued Deferred Financing Costs 3,469 2,290
Accrued Common Stock Retirement Costs   559
Accrued Share Based Compensation Taxes 147  
Commercial Mortgage-Backed Securities    
Cash Flows from Investing Activities:    
Purchase of Commercial Mortgage-Backed Securities (138,000)  
Supplemental Disclosure of Non-Cash Investing and Financing Activities:    
Unrealized (Loss) Gain on Commercial Mortgage-Backed Securities, Available-for-Sale (1,115) 1,270
Class A Common Stock    
Cash Flows from Financing Activities:    
Proceeds from Issuance of Common Stock   365
Dividends paid (1,429) (1,403)
Preferred Class A    
Cash Flows from Financing Activities:    
Payments to Redeem Series A Preferred Stock (125)  
Dividends paid (3) (8)
Common Stock, Undefined Class    
Cash Flows from Financing Activities:    
Dividends paid $ (72,857) $ (58,743)
[1] At December 31, 2017, there were no VIE assets or liabilities recorded in the Company’s Total Assets and Total Liabilities. The Company’s consolidated Total Assets and Total Liabilities at September 30, 2018 include VIE assets and liabilities of $954.4 million and $741.5 million, respectively. These assets can be used only to satisfy obligations of the VIE, and creditors of the VIE have recourse only to these assets, and not to TPG RE Finance Trust, Inc. See Note 5 to the Consolidated Financial Statements for details
v3.10.0.1
Business and Organization
 9 Months Ended
Sep. 30, 2018
Organization Consolidation And Presentation Of Financial Statements [Abstract]  
Business and Organization

(1) Business and Organization

TPG RE Finance Trust, Inc. (together with its consolidated subsidiaries, “we”, “us”, “our”, or the “Company”) is a Maryland corporation that was incorporated on October 24, 2014 and commenced operations on December 18, 2014 (“Inception”). We are organized as a holding company and conduct our operations primarily through our various subsidiaries. We conduct our operations as a real estate investment trust (“REIT”) for U.S. federal income tax purposes. We generally will not be subject to U.S. federal income taxes on our REIT taxable income to the extent that we annually distribute all of our REIT taxable income to stockholders and maintain our qualification as a REIT. We also operate our business in a manner that permits us to maintain an exclusion from registration under the Investment Company Act of 1940, as amended.

The Company’s principal business activity is to directly originate and acquire a diversified portfolio of commercial real estate related assets, consisting primarily of first mortgage loans and senior participation interests in first mortgage loans secured by institutional-quality properties in primary and select secondary markets in the United States, and commercial mortgage-backed securities (“CMBS”). As of September 30, 2018 and December 31, 2017, the Company conducted substantially all of its operations through a Delaware limited liability company, TPG RE Finance Trust Holdco, LLC (“Holdco”), and the Company’s other wholly-owned subsidiaries.
v3.10.0.1
Summary of Significant Accounting Policies
 9 Months Ended
Sep. 30, 2018
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

(2) Summary of Significant Accounting Policies

Basis of Presentation

The interim consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The interim consolidated financial statements include the Company’s accounts, consolidated variable interest entities for which the Company is the primary beneficiary, and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated.

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires estimates of assets, liabilities, revenues, expenses and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Actual results could differ from management’s estimates, and such differences could be material. Significant estimates made in the consolidated financial statements include, but are not limited to: impairment; adequacy of provisions for loan losses; and valuation of financial instruments.

Principles of Consolidation

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810—Consolidation (“ASC 810”) provides guidance on the identification of a VIE (a variable interest entity for which control is achieved through means other than voting rights) and the determination of which business enterprise, if any, should consolidate the VIE. An entity is considered a VIE if any of the following applies: (1) the equity investors (if any) lack one or more of the essential characteristics of a controlling financial interest; (2) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support; or (3) the equity investors have voting rights that are not proportionate to their economic interests and the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest. The Company consolidates VIEs in which it is considered to be the primary beneficiary. The primary beneficiary is defined as the entity having both of the following characteristics: (1) the power to direct the activities that, when taken together, most significantly impact the VIE’s performance; and (2) the obligation to absorb losses and right to receive the returns from the VIE that would be significant to the VIE.

At each reporting date, the Company reconsiders its primary beneficiary conclusion to determine if its obligation to absorb losses of, or its rights to receive benefits from, the VIE could potentially be more than insignificant, and will consolidate or not consolidate accordingly (see Note 5 for details).

Revenue Recognition

Interest income on loans is accrued using the interest method based on the contractual terms of the loan, adjusted for credit impairment, if any. The objective of the interest method is to arrive at periodic interest income including recognition of fees and costs at a constant effective yield. Premiums, discounts, and origination fees are amortized or accreted into interest income over the lives of the loans using the interest method, or on a straight line basis when it approximates the interest method. Extension and modification fees are accreted into income on a straight line basis, when it approximates the interest method, over the related extension or modification period. Exit fees are accreted into income on a straight line basis, when it approximates the interest method, over the lives of the loans to which they relate unless they can be waived by the Company or a co-lender in connection with a loan refinancing. Prepayment penalties from borrowers are recognized as interest income when received. Certain of the Company’s loan investments have in the past and may in the future provide for additional interest based on the borrower’s operating cash flow or appreciation of the underlying collateral. Such amounts are considered contingent interest and are reflected as interest income only upon certainty of collection.

The Company considers a loan to be non-performing and places the loan on non-accrual status when: (1) management determines the borrower is incapable of, or has ceased efforts toward, curing the cause of a default; (2) the loan becomes 90 days delinquent; or (3) the loan experiences a maturity default. Based on the Company’s judgment as to the collectability of principal, a loan on non-accrual status is either accounted for on a cash basis, where interest income is recognized only upon receipt of cash for principal and interest payments, or on a cost-recovery basis, where all cash receipts reduce the loan’s carrying value, and interest income is only recorded when such carrying value has been fully recovered. During the three and nine months ended September 30, 2018, no loans were placed on non-accrual status and no losses or impairments were recorded to our loan portfolio.

Loans Held for Investment

Loans that the Company has the intent and ability to hold for the foreseeable future, or until maturity or repayment, are reported at their outstanding principal balances net of any premiums, discounts, loan origination fees and an allowance for loan losses. Loan origination fees and direct loan origination costs are deferred and recognized in interest income over the estimated life of the loans using the interest method, or on a straight line basis when it approximates the interest method, adjusted for actual prepayments.

The Company evaluates each loan classified as a loan held for investment for impairment on a quarterly basis. Impairment occurs when it is deemed probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan. If the loan is considered to be impaired, an allowance is recorded to reduce the carrying value of the loan to the present value of the expected future cash flows discounted at the loan’s contractual effective rate, or the fair value of the collateral securing the impaired loan, less estimated costs to sell such collateral, if recovery of the Company’s investment is expected solely from the sale of such collateral. As part of the quarterly impairment review, we evaluate the risk of each loan and assign a risk rating based on a variety of factors, grouped as follows to include, among other factors: (i) loan and credit structure, including the as-is loan-to-value (“LTV”) and structural features; (ii) quality and stability of real estate value and operating cash flow, including debt yield, property type, dynamics of the geographic, property-type and local market, physical condition, stability of cash flow, leasing velocity and quality and diversity of tenancy; (iii) performance against underwritten business plan; and (iv) quality, experience and financial condition of sponsor, borrower and guarantor(s). Based on a 5-point scale, our loans are rated “1” through “5,” from least risk to greatest risk, respectively, which ratings are defined as follows:

 

1-

Outperform—Exceeds performance metrics (for example, technical milestones, occupancy, rents, net operating income) included in original or current credit underwriting and business plan;

 

2-

Meets or Exceeds Expectations—Collateral performance meets or exceeds substantially all performance metrics included in original or current underwriting / business plan;

 

3-

Satisfactory—Collateral performance meets or is on track to meet underwriting; business plan is met or can reasonably be achieved;

 

4-

Underperformance—Collateral performance falls short of original underwriting, material differences exist from business plan, or both; technical milestones have been missed; defaults may exist, or may soon occur absent material improvement; and

 

5-

Risk of Impairment/Default—Collateral performance is significantly worse than underwriting; major variance from business plan; loan covenants or technical milestones have been breached; timely exit from loan via sale or refinancing is questionable.

Since Inception, the Company has not recorded asset-specific loan loss reserves, nor has it recognized any impairments on its loan portfolio. Our determination of asset-specific loan loss reserves, should any such reserves be necessary, relies on material estimates regarding the fair value of loan collateral. Such losses could be caused by various factors, including, but not limited to, unanticipated adverse changes in the economy or events adversely affecting specific assets, borrowers, industries in which our borrowers operate or markets in which our borrowers or their properties are located. Significant judgment is required when evaluating loans for impairment.

The Company’s loans are typically collateralized by real estate, or in the case of mezzanine loans, by a partnership or similar equity interest in an entity that owns real estate. As a result, the Company regularly evaluates on a loan-by-loan basis the extent and impact of any credit deterioration associated with the performance and/or value of the underlying collateral property as well as the financial and operating capability of the borrower/sponsor. The Company also evaluates the financial strength of loan guarantors, if any, and the borrower’s competency in managing and operating the property or properties. In addition, the Company considers the overall economic environment, real estate sector, and geographic sub-market in which the borrower operates. Such impairment analyses are completed and reviewed by asset management personnel and evaluated by senior management, who utilize various data sources, including (i) periodic financial data such as property occupancy, tenant profile, rental rates, operating expenses, the borrower’s exit plan, and capitalization and discount rates, (ii) site inspections, (iii) sales and financing comparables, (iv) current credit spreads for refinancing and (v) other market data.

Commercial Mortgage-Backed Securities

The Company acquires CMBS investments primarily for cash management purposes, and also for investment purposes. The Company designates CMBS investments as available-for-sale on the acquisition date. CMBS investments that are classified as available-for-sale are recorded at fair value in the Company’s consolidated financial statements. Additionally, CMBS investments that are not classified as held-to-maturity and which the Company does not hold for the purpose of selling in the near-term, but may dispose of prior to maturity, are also designated as available-for-sale and are carried at fair value. The Company’s recognition of interest income from its CMBS, including its amortization of premium and discount, follows the Company’s revenue recognition policy as described under “Revenue Recognition” above. The Company uses a specific identification method when determining the cost of a security sold and the amount of unrealized gain or loss reclassified from accumulated other comprehensive income (loss) into earnings. Unrealized losses on securities that, in the judgment of management, are other than temporary are charged against earnings as a loss in the consolidated statements of income and comprehensive income. Significant valuation inputs are Level II in the fair value hierarchy as described below under “Fair Value Measurements”.

Portfolio Financing Arrangements

The Company finances certain loan and CMBS investments using secured revolving repurchase agreements, asset-specific financing arrangements (notes payable on the consolidated balance sheets), senior secured credit facilities, and collateralized loan obligations. The related borrowings are recorded as separate liabilities on the Company’s consolidated balance sheets. Interest income earned on the investments and interest expense incurred on the related borrowings are reported separately on the Company’s consolidated statements of income and comprehensive income.

In certain instances, the Company creates structural leverage through the co-origination or non-recourse syndication of a senior loan interest to a third party. For all such syndications the Company has completed through September 30, 2018, the Company has transferred 100% of the senior mortgage loan that the Company originated on a non-recourse basis to a third-party lender and has retained as a loan investment a separate mezzanine loan investment secured by a pledge of the equity in the mortgage borrower. With respect to the senior mortgage loan transferred, the Company retains: no control over the mortgage loan; no economic interest in the mortgage loan; and no recourse to the purchaser or the borrower. Consequently, based on these circumstances and because the Company does not have any continuing involvement with the transferred senior mortgage loan, these syndications are accounted for as sales under GAAP and are removed from the Company’s consolidated financial statements at the time of transfer. The Company’s consolidated balance sheets only include the separate mezzanine loan remaining after the transfer, and not the non-consolidated senior loan interest sold or co-originated that the Company transferred.

Fair Value Measurements

The Company follows ASC 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”), for its holdings of financial instruments. ASC 820-10 defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands disclosure of fair value measurements. ASC 820-10 determines fair value to be the price that would be received for a financial instrument in a current sale, which assumes an orderly transaction between market participants on the measurement date. The Company determines the estimated fair value of financial assets and liabilities using the three-tier fair value hierarchy established by GAAP, which prioritizes the inputs used in measuring fair value. GAAP establishes market-based or observable inputs as the preferred source of values followed by valuation models using management assumptions in the absence of market inputs. The financial instruments recorded at fair value on a recurring basis in the Company’s consolidated financial statements are cash and cash equivalents, restricted cash and available-for-sale CMBS investments. The three levels of inputs that may be used to measure fair value are as follows:

Level I—Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

Level II—Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level III—Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

For certain financial instruments, the various inputs that management uses to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for such financial instrument is based on the lowest level of input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument. The Company may use valuation techniques consistent with the market and income approaches to measure the fair value of its assets and liabilities. The market approach uses third-party valuations and information obtained from market transactions involving identical or similar assets or liabilities. The income approach uses projections of the future economic benefits of an instrument to determine its fair value, such as in the discounted cash flow methodology. The inputs or methodology used for valuing financial instruments are not necessarily an indication of the risk associated with investing in these financial instruments. Transfers between levels of the fair value hierarchy are assumed to occur at the end of the reporting period.

Income Taxes

The Company qualifies and has elected to be taxed as a REIT for U.S. federal income tax purposes under the Internal Revenue Code of 1986, as amended, commencing with its initial taxable year ended December 31, 2014. To the extent that it annually distributes at least 90% of its REIT taxable income to stockholders and complies with various other requirements as a REIT, the Company generally will not be subject to U.S. federal income taxes on its distributed REIT taxable income. If the Company fails to continue to qualify as a REIT in any taxable year and does not qualify for certain statutory relief provisions, the Company will be subject to U.S. federal and state income taxes at regular corporate rates beginning with the year in which it fails to qualify and may be precluded from being able to elect to be treated as a REIT for the Company’s four subsequent taxable years. Even though the Company currently qualifies for taxation as a REIT, the Company may be subject to certain U.S. federal, state, local and foreign taxes on the Company’s income and property and to U.S. federal income and excise taxes on the Company’s undistributed REIT taxable income.

Deferred tax assets and liabilities are recognized for future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the periods in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period in which the enactment date occurs. Under ASC Topic 740, Income Taxes (“ASC 740”), a valuation allowance is established when management believes it is more likely than not that a deferred tax asset will not be realized. The Company intends to continue to operate in a manner consistent with, and to continue to meet the requirements to be treated as, a REIT for tax purposes and to distribute all of its REIT taxable income. Accordingly, the Company does not expect to pay corporate level taxes.

Earnings per Common Share

The Company utilizes the two-class method when assessing participating securities to calculate earnings per common share. Basic and diluted earnings per common share is computed by dividing net income attributable to common stockholders (i.e., holders of common stock and Class A common stock), by the weighted-average number of common shares (both common stock and Class A common stock) outstanding during the period. The preferences, rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications and terms and conditions of redemption of the Class A common stock are identical to the common stock, except (1) the Class A common stock is not a “margin security” as defined in Regulation U of the Board of Governors of the U.S. Federal Reserve System (and rulings and interpretations thereunder) and may not be listed on a national securities exchange or a national market system and (2) each share of Class A common stock is convertible at any time or from time to time, at the option of the holder, for one fully paid and non-assessable share of common stock. The Class A common stock votes together with the common stock as a single class. Shares of Class A common stock have been issued to, and are owned by, TPG RE Finance Trust Management, L.P., a Delaware limited partnership (the “Manager”), and certain individuals or entities affiliated with the Manager, and the sale or conversion to common stock by investors of such shares of Class A common stock is subject to certain restrictions.

Diluted earnings per common share is calculated by including the effect of dilutive securities. The Company accounts for unvested share-based payment awards that contain non-forfeitable dividend rights or dividend equivalents (whether paid or unpaid) as participating securities, which are included in the computation of earnings per share pursuant to the two-class method.

Share-Based Compensation

Share-based compensation consists of awards issued by the Company to certain employees of affiliates of our Manager and certain members of our Board of Directors. These share-based awards generally vest in installments over a fixed period of time. Compensation expense is recognized in net income on a straight-line basis over the applicable award vesting period. Forfeitures of share-based awards are recognized as they occur.

Deferred Financing Costs

Deferred financing costs are reflected net of the collateralized loan obligation and secured financing agreements on the Company’s consolidated balance sheets. These costs are amortized in interest expense using the interest method or on a straight line basis when it approximates the interest method over the life of the related obligations.

Cash and Cash Equivalents

Cash and cash equivalents include cash held in banks or invested in money market funds with original maturities of less than 90 days. The Company deposits its cash and cash equivalents with high credit quality institutions to minimize credit risk exposure. The Company maintains cash accounts at several financial institutions, which are insured up to a maximum of $250,000 per account as of September 30, 2018 and December 31, 2017. The balances in these accounts may exceed the insured limits.

Restricted Cash

Restricted cash primarily represents deposit proceeds from potential borrowers which may be returned to borrowers, after deducting transaction costs paid by the Company for the benefit of the borrowers, upon the closing of a loan transaction.

Accounts Receivable from Servicer/Trustee

Accounts receivable from Servicer/Trustee represents cash proceeds from loan and CMBS investment activities that have not been remitted to the Company based on contractual procedures previously agreed upon. Amounts are generally held by the Servicer/Trustee for less than 60 days before being remitted to the Company.

Recently Issued Accounting Pronouncements

In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. ASU 2016-13 will replace the “incurred loss” model under existing guidance with an “expected loss” model for instruments measured at amortized cost, and require entities to record allowances for available-for-sale debt securities rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. Upon adoption, and resulting from this change, the 10 Company expects that it will be required to record a loan loss reserve at origination or acquisition of an individual loan or a loan portfolio. ASU 2016-13 also simplifies the accounting model for purchased credit-impaired debt securities and loans. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019 and is to be adopted through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Company is currently evaluating the impact ASU 2016-13 will have on its consolidated financial statements.

Recently Adopted Accounting Pronouncements

In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”). ASU 2018-07 expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The amendments state that Topic 718 applies to all share-based payment awards. ASU 2018-07 is effective for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted, but no earlier than an entity’s adoption of ASC 606, Revenue from Contracts with Customers. On July 1, 2018, the Company adopted these updates for share-based compensation payments made to certain individuals employed by an affiliate of the Manager. The Company’s adoption of the share-based compensation ASU on July 1, 2018 did not have a material impact on the Company’s consolidated financial statements.
v3.10.0.1
Loans Held for Investment
 9 Months Ended
Sep. 30, 2018
Receivables [Abstract]  
Loans Held for Investment

(3) Loans Held for Investment

The Company currently originates and acquires first mortgage and mezzanine loans secured by commercial properties. These loans can potentially subject the Company to concentrations of credit risk as measured by various attributes, including the property type collateralizing the loan, loan size, loans to a single sponsor and loans in a single geographic area, among others. The Company’s loans held for investment are accounted for at amortized cost.

During the nine months ended September 30, 2018, the Company originated 21 loans with a total commitment of approximately $1.9 billion, an initial unpaid principal balance of $1.6 billion, and unfunded commitments at closing of $264.5 million. To fund these loan originations, the Company used cash on hand, its secured revolving repurchase facilities and senior secured credit facilities.

The following tables present an overview of the loan investment portfolio as of September 30, 2018 and December 31, 2017 (dollars in thousands):

 

 

 

September 30, 2018

 

Loans Receivable

 

Outstanding

Principal

 

 

Unamortized

Premium

(Discount), Loan

Origination

Fees, net

 

 

Carrying

Amount

 

Senior loans

 

$

4,178,729

 

 

$

(21,076

)

 

$

4,157,653

 

Subordinated and mezzanine loans

 

 

—

 

 

 

—

 

 

 

—

 

Subtotal before allowance

 

 

4,178,729

 

 

 

(21,076

)

 

 

4,157,653

 

Allowance for loan losses

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

$

4,178,729

 

 

$

(21,076

)

 

$

4,157,653

 

 

 

 

December 31, 2017

 

Loans Receivable

 

Outstanding

Principal

 

 

Unamortized

Premium

(Discount), Loan

Origination

Fees, net

 

 

Carrying

Amount

 

Senior loans

 

$

3,122,670

 

 

$

(22,143

)

 

$

3,100,527

 

Subordinated and mezzanine loans

 

 

75,446

 

 

 

(301

)

 

 

75,145

 

Subtotal before allowance

 

 

3,198,116

 

 

 

(22,444

)

 

 

3,175,672

 

Allowance for loan losses

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

$

3,198,116

 

 

$

(22,444

)

 

$

3,175,672

 

 

For the nine months ended September 30, 2018, loan portfolio activity was as follows (dollars in thousands):

 

 

 

Carrying Value

 

Balance at December 31, 2017

 

$

3,175,672

 

Additions during the period:

 

 

 

 

Loans originated

 

 

1,622,084

 

Additional fundings

 

 

207,657

 

Amortization of discount and origination fees

 

 

12,858

 

Deductions during the period:

 

 

 

 

Collection of principal

 

 

(860,618

)

Balance at September 30, 2018

 

$

4,157,653

 

 

At September 30, 2018 and December 31, 2017, there was $0.0 million and $2.0 million of unamortized discount included in loans held for investment at amortized cost on the consolidated balance sheets.

On July 16, 2018, the Company sold its participation interest in a non-core, fixed rate performing loan purchased in December 2014 to a third party for total cash consideration of $2.7 million, including sale costs and fees, recognizing a loss on sale of $0.4 million which is recorded in Other (Loss) Income, net.

The table below summarizes the carrying values and results of the Company’s internal risk rating review performed as of September 30, 2018 and December 31, 2017 (dollars in thousands):

 

 

 

Carrying Value

 

Rating

 

September 30, 2018

 

 

December 31, 2017

 

1

 

$

78,898

 

 

$

—

 

2

 

 

1,089,790

 

 

 

1,318,816

 

3

 

 

2,775,828

 

 

 

1,680,913

 

4

 

 

213,137

 

 

 

175,943

 

5

 

 

—

 

 

 

—

 

Totals

 

$

4,157,653

 

 

$

3,175,672

 

Weighted Average Risk Rating(1)

 

 

2.8

 

 

 

2.6

 

 

(1)

Weighted Average Risk Rating calculated based on unpaid principal balance at period end.

 

The weighted average risk rating at September 30, 2018 and December 31, 2017 was 2.8 and 2.6, respectively. During the three months ended September 30, 2018, one loan was moved from the Company’s Category 2 risk rating into its Category 1 risk rating, resulting from asset-level occupancy increases and rents that have exceeded the Company’s underwriting. The Company also moved one loan that was classified in its Category 2 risk rating into its Category 3 risk rating due to slower than anticipated leasing activity. Additionally, the Company moved two loans from its Category 3 risk rating into its Category 2 risk rating as a result of an improvement in the operating performance of the underlying collateral.

At September 30, 2018 and December 31, 2017, there were no loans on non-accrual status or that were impaired; thus, the Company did not record a reserve for loan loss.

v3.10.0.1
Commercial Mortgage-Backed Securities
 9 Months Ended
Sep. 30, 2018
Investments Debt And Equity Securities [Abstract]  
Commercial Mortgage-Backed Securities

(4) Commercial Mortgage-Backed Securities

During the nine months ended September 30, 2018, the Company purchased for short-term cash management and investment purposes 17 CMBS investments for $138.0 million. The purchased CMBS investments consist of floating rate instruments which, in the aggregate, had a weighted average coupon of 2.9%. No CMBS investments were purchased during the three months ended September 30, 2018. In July 2018, the Company sold 17 CMBS investments for total cash consideration of $133.3 million, including selling costs and fees, recognizing a loss on the sale of $0.1 million, which is recorded in Other (Loss) Income, net.

As of September 30, 2018 and December 31, 2017, the Company had four and five CMBS, respectively, designated as available-for-sale securities. Details of the carrying and fair values of the Company’s CMBS portfolio are as follows (dollars in thousands):

 

 

 

September 30, 2018

 

 

 

Face

Amount

 

 

Unamortized

Premium (Discount), net

 

 

Gross

Unrealized Loss

 

 

Estimated

Fair Value

 

Investments, at Fair Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial mortgage-backed securities

 

$

76,603

 

 

$

(40

)

 

$

(1,149

)

 

$

75,414

 

 

 

 

December 31, 2017

 

 

 

Face

Amount

 

 

Unamortized

Premium (Discount), net

 

 

Gross

Unrealized Loss

 

 

Estimated

Fair Value

 

Investments, at Fair Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial mortgage-backed securities

 

$

85,661

 

 

$

268

 

 

$

(34

)

 

$

85,895

 

 

CMBS fair values are considered Level II fair value measurements within the fair value hierarchy of ASC 820-10. The CMBS fair values are based upon market, broker, and counterparty or pricing services quotations, which provide valuation estimates, based upon reasonable market order indications. The Company reviews the fair value quotations, which are subject to significant variability based on market conditions, such as interest rates, credit spreads and market liquidity, for reasonableness and consistency.

The Company’s CMBS have a weighted average contractual maturity, based on estimated fair value, of 15.0 years. The amortized cost and estimated fair value of the Company’s available-for-sale CMBS by contractual maturity are shown in the following table (dollars in thousands):

 

 

 

September 30, 2018

 

 

 

Amortized Cost

 

 

Estimated Fair Value

 

Maturity Date

 

 

 

 

 

 

 

 

After one, within five years

 

$

37,937

 

 

$

38,072

 

After five years

 

 

38,627

 

 

 

37,342

 

Total investment in commercial mortgage-backed

   securities, at amortized cost and estimated fair value

 

$

76,564

 

 

$

75,414

 

 

 

 

December 31, 2017

 

 

 

Amortized Cost

 

 

Estimated Fair Value

 

Maturity Date

 

 

 

 

 

 

 

 

After one, within five years

 

$

36,700

 

 

$

36,872

 

After five years

 

 

49,229

 

 

 

49,023

 

Total investment in commercial mortgage-backed

   securities, at amortized cost and estimated fair value

 

$

85,929

 

 

$

85,895

 

 

Certain of the Company’s CMBS investments were in an unrealized loss position as of September 30, 2018. During the preceding 12 months these CMBS investments traded at, or near, their respective carrying values, and interest and principal payments are current. Additionally, as of September 30, 2018, substantially all of the unrealized loss position relates to CMBS investments issued by a government sponsored enterprise. Currently, all of the underlying mortgage loans are performing. No other-than-temporary impairments were recognized through income during the three or nine months ended September 30, 2018 or the year ended December 31, 2017.

v3.10.0.1
Variable Interest Entities and Collateralized Loan Obligation
 9 Months Ended
Sep. 30, 2018
Organization Consolidation And Presentation Of Financial Statements [Abstract]  
Variable Interest Entities And Collateralized Loan Obligation

(5) Variable Interest Entities and Collateralized Loan Obligations

On February 14, 2018 (the “Closing Date”), the Company entered into a collateralized loan obligation (“TRTX 2018-FL1”) through its wholly-owned subsidiaries TPG Real Estate Finance 2018-FL1 Issuer, Ltd., an exempted company incorporated in the Cayman Islands with limited liability, as issuer (the “Issuer”), and TPG RE Finance Trust 2018-FL1 Co-Issuer, LLC, a Delaware limited liability company, as co-issuer (the “Co-Issuer” and together with the Issuer, the “Issuers”). On the Closing Date, the Issuer issued $820.5 million principal amount of notes (the “Notes”). The Co-Issuer co-issued $745.9 million principal amount of investment grade-rated notes which were purchased by third party investors. Concurrently with the issuance of the Notes, the Issuer also issued preferred shares, par value $0.001 per share and with an aggregate liquidation preference and notional amount equal to $1,000 per share (the “Preferred Shares” and, together with the Notes, the “Securities”), to TPG RE Finance Trust 2018-FL1 Retention Holder, LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company. The Company retained ownership of $186.5 million of the Notes sold and Preferred Shares. Additionally, the Company holds as an investment $5.0 million (principal amount) of TRTX 2018-FL1 Class A Notes.

Proceeds from the issuance of the Securities were used by the Issuers to purchase one commercial real estate whole loan (the “Whole Loan”) and 25 fully-funded pari passu participations (the “Pari Passu Participations,” and, together with the Whole Loan and the Contributed Companion Participation Interests (as defined below), the “Mortgage Assets”) in certain commercial real estate mortgage loans. The Mortgage Assets were purchased by the Issuer from TPG RE Finance Trust CLO Loan Seller, LLC, a Delaware limited liability company, wholly-owned subsidiary of the Company and an affiliate of the Issuers (the “Seller”). TRTX 2018-FL1 contains a replenishment feature that, subject to certain limitations, allows the Company to contribute companion participation interests (“Contributed Companion Participation Interests”) in loans in which TRTX 2018-FL1 already owns an interest in exchange for cash, which provides additional liquidity to the Company to originate new loan investments as underlying loans repay. For the three months ended September 30, 2018, the Company utilized the replenishment feature once, contributing Contributed Companion Participation Interests of $35.9 million, and receiving net cash proceeds of $10.0 million, after the repayment of $25.9 million of existing borrowings, including accrued interest, secured by the Contributed Companion Participation Interests.  For the nine months ended September 30, 2018, the Company utilized the replenishment feature three times, contributing Contributed Companion Participation Interests of $92.8 million, and receiving net cash proceeds of $23.9 million, after the repayment of $68.9 million of existing borrowings, including accrued interest, secured by the Contributed Companion Participation Interests.

The Mortgage Assets represented 22.3% of the aggregate unpaid principal balance of the Company’s loan investment portfolio, and had an aggregate principal balance of approximately $932.4 million, as of September 30, 2018.

In accordance with ASC 810, the Company evaluated the key attributes of the Issuers to determine if they were VIEs and, if so, whether the Company was the primary beneficiary of the Issuers’ operating activities. This analysis caused the Company to conclude that the Issuers were VIEs and that the Company was the primary beneficiary. The Company is the primary beneficiary of the VIEs because it has the ability to control the most significant activities of the Issuers, the obligation to absorb losses, and the right to receive benefits, that could potentially be significant to these entities. As a result, the Company consolidates the Issuers.

The carrying values of the Company’s total assets and total liabilities related to TRTX 2018-FL1 at September 30, 2018 included the following VIE assets and liabilities (dollars in thousands):

 

 

 

September 30, 2018

 

ASSETS

 

 

 

 

Cash and Cash Equivalents

 

$

18,988

 

Accrued Interest Receivable

 

 

3,010

 

Accounts Receivable from Servicer/Trustee

 

 

3

 

Loans Held for Investment

 

 

932,380

 

Total Assets

 

$

954,381

 

LIABILITIES

 

 

 

 

Accrued Interest Payable

 

$

(938

)

Accrued Expenses

 

 

(103

)

Collateralized Loan Obligation

 

 

(740,415

)

Total Liabilities

 

$

(741,456

)

 

Assets held by the Issuers are restricted and can only be used to settle obligations of the Issuers. The liabilities of the Issuers are non-recourse to the Company and can only be satisfied from the Issuers’ assets.

The following table outlines TRTX 2018-FL1 borrowings and loan collateral under the Company’s consolidated Issuers (dollars in thousands):

 

As of September 30, 2018

 

Collateral (loan investments)

 

 

Debt (notes issued)

 

Outstanding Principal

 

 

Carrying Value

 

 

Face Value

 

 

Carrying Value

 

$

932,380

 

 

$

932,380

 

 

$

(745,904

)

 

$

(740,415

)

 

On December 18, 2014, the Company entered into a collateralized loan obligation (“2014-CLO”) through TPG RE Finance Trust CLO Issuer, L.P., a wholly-owned subsidiary of the Company (“CLO Issuer”) and on December 29, 2014, the Company acquired from German American Capital Corporation (“GACC”) a portfolio of 75% participation interests in certain loans secured primarily by first mortgages on commercial properties, with a face value of approximately $2.4 billion. To partially fund the investment, on December 18, 2014, the CLO Issuer issued a Class A Note secured by the Company’s 75% participation interests in the portfolio of loans acquired. In accordance with ASC 810, the Company evaluated the key attributes of the CLO Issuer to determine if it was a VIE and, if so, whether the Company was the primary beneficiary of the CLO Issuer’s operating activities. This analysis resulted in the Company concluding that the CLO Issuer was a VIE, that the Company was the primary beneficiary, and that it would consolidate the entity.

On August 16, 2017, the outstanding principal balance of the Class A Note issued by the CLO Issuer was approximately $118.0 million. On August 16, 2017, the CLO Issuer sold to GACC two first mortgage loan participation interests with an aggregate unpaid principal balance of $12.8 million that collateralized the Class A Note in part and recognized in Other income, net a $0.2 million loss on sale. The sales price of the two first mortgage loans was approximately par value. These loans were sold because they were determined to no longer be consistent with the Company’s current investment strategy.

On August 18, 2017, one of the Company’s wholly-owned subsidiaries purchased from the CLO Issuer seven first mortgage loan participation interests with an aggregate unpaid principal balance of $138.5 million that collateralized the remainder of the Class A Note issued by the CLO Issuer. The first mortgage loan participation interests were sold by the CLO Issuer for approximately par value. On August 23, 2017, proceeds from both transactions were used in combination with approximately $3.0 million of Company cash to retire all amounts outstanding under the Class A Note issued by the CLO Issuer, which totaled $118.0 million, and the 2014-CLO was subsequently terminated.

For the three months ended September 30, 2018 and 2017, $7.7 million and $1.9 million, respectively, is included in the Company’s consolidated statements of income as interest expense related to TRTX 2018-FL1 and 2014-CLO (including amortization of deferred financing costs). For the nine months ended September 30, 2018 and 2017, $18.4 million and $11.9 million, respectively, is included in the Company’s consolidated statements of income as interest expense related to TRTX 2018-FL1 and 2014-CLO, respectively (including amortization of deferred financing costs). As of September 30, 2018 and December 31, 2017, the Company’s unamortized deferred financing costs related to TRTX 2018-FL1 and 2014-CLO were $5.5 million and $0.0 million, respectively.

v3.10.0.1
Secured Revolving Repurchase Agreements, Senior Secured Credit Facility and Notes Payable
 9 Months Ended
Sep. 30, 2018
Debt Disclosure [Abstract]  
Secured Revolving Repurchase Agreements, Senior Secured Credit Facility and Notes Payable

(6) Secured Revolving Repurchase Agreements, Senior Secured Credit Facility and Notes Payable

At September 30, 2018 and December 31, 2017, the Company had secured revolving repurchase agreements, senior secured credit facilities and notes payable for certain of the Company’s originated loans. These financing agreements bear interest at a rate equal to LIBOR plus a credit spread determined primarily by advance rate and property type. The agreements contain covenants that include certain financial requirements, including maintenance of minimum liquidity, minimum tangible net worth, maximum debt to net worth ratio, current ratio and limitations on capital expenditures, indebtedness, distributions, transactions with affiliates and maintenance of positive net income as defined in the agreements.

The following table presents certain information regarding the Company’s notes payable, secured revolving repurchase agreements, and senior secured credit facilities as of September 30, 2018 and December 31, 2017, respectively. Except as otherwise noted, all agreements are on a non-recourse basis. Amounts included are shown in thousands:

 

As of September 30, 2018

 

Notes Payable

 

Maturity

Date

 

Index Rate

 

Weighted Average Spread

 

 

Interest

Rate

 

 

Commitment

Amount

 

 

Maximum

Current

Availability

 

 

Balance

Outstanding

 

 

Principal

Balance of

Collateral

 

Bank of the Ozarks

 

08/23/19

 

1 Month Libor

 

 

4.5

%

 

 

5.8

%

 

$

76,161

 

 

$

7,323

 

 

$

68,838

 

 

$

98,340

 

BMO Harris Bank(1)

 

04/09/20

 

1 Month Libor

 

 

2.7

 

 

 

4.0

 

 

 

32,500

 

 

 

—

 

 

 

32,500

 

 

 

45,000

 

Subtotal

 

 

 

 

 

 

 

 

 

 

 

 

 

 

108,661

 

 

 

7,323

 

 

 

101,338

 

 

 

143,340

 

 

Repurchase Agreements

 

Maturity

Date

 

Index Rate

 

Weighted Average Spread

 

 

Interest

Rate

 

 

Commitment

Amount

 

 

Maximum

Current

Availability

 

 

Balance

Outstanding

 

 

Principal

Balance of

Collateral

 

Goldman Sachs(1)

 

08/19/19

 

1 Month Libor

 

 

2.3

%

 

 

4.4

%

 

$

750,000

 

 

$

378,430

 

 

$

371,570

 

 

$

780,647

 

Wells Fargo(1)

 

05/25/19

 

1 Month Libor

 

 

1.9

 

 

 

4.1

 

 

 

750,000

 

 

 

305,988

 

 

 

444,012

 

 

 

600,575

 

JP Morgan(1)

 

08/20/21

 

1 Month Libor

 

 

2.1

 

 

 

4.2

 

 

 

428,802

 

 

 

91,486

 

 

 

337,316

 

 

 

455,267

 

Morgan Stanley(1)

 

05/04/19

 

1 Month Libor

 

 

2.3

 

 

 

4.5

 

 

 

500,000

 

 

 

245,254

 

 

 

254,746

 

 

 

337,591

 

US Bank(1)

 

10/09/21

 

1 Month Libor

 

 

1.8

 

 

 

4.0

 

 

 

212,840

 

 

 

6,800

 

 

 

206,040

 

 

 

261,300

 

Goldman Sachs (CMBS)(2)

 

12/03/18

 

3 Month Libor

 

 

0.2

 

 

 

2.5

 

 

 

100,000

 

 

 

65,226

 

 

 

34,774

 

 

 

38,710

 

Royal Bank of Canada

   (CMBS)(2)

 

N/A

 

3 Month Libor

 

N/A

 

 

N/A

 

 

 

100,000

 

 

 

100,000

 

 

 

—

 

 

 

—

 

Subtotal

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,841,642

 

 

 

1,193,184

 

 

 

1,648,458

 

 

 

2,474,090

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Senior Secured Credit Facilities

 

Maturity

Date

 

Index Rate

 

Weighted Average Spread

 

 

Interest

Rate

 

 

Commitment

Amount

 

 

Maximum

Current

Availability

 

 

Balance

Outstanding

 

 

Principal

Balance of

Collateral

 

Bank of America(1)

 

09/29/20

 

1 Month Libor

 

 

1.9

%

 

 

4.1

%

 

$

500,000

 

 

$

112,560

 

 

 

387,440

 

 

 

486,666

 

Citibank (3)

 

07/12/20

 

1 Month Libor

 

 

2.3

 

 

 

4.5

 

 

 

160,000

 

 

 

95,856

 

 

 

64,144

 

 

 

133,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

660,000

 

 

$

208,416

 

 

$

451,584

 

 

$

619,666

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

$

3,610,303

 

 

$

1,408,923

 

 

$

2,201,380

 

 

$

3,237,096

 

 

 

(1)

Borrowings under secured revolving repurchase agreements, one senior secured credit facility, and one note payable with a guarantee for 25% recourse.

 

(2)

Borrowings under secured revolving repurchase agreements with a guarantee for 100% recourse. Maturity Date represents the sooner of the next maturity date of the CMBS secured revolving repurchase agreement, or roll date for the applicable underlying trade confirmation, subsequent to September 30, 2018.

 

(3)

Borrowings under the senior secured credit facility with a guarantee for 100% recourse.

 

As of December 31, 2017

 

Notes Payable

 

Maturity

Date

 

Index Rate

 

Weighted Average Spread

 

 

Interest

Rate

 

 

Commitment

Amount

 

 

Maximum

Current

Availability

 

 

Balance

Outstanding

 

 

Principal

Balance of

Collateral

 

Bank of the Ozarks

 

08/23/19

 

1 Month Libor

 

 

4.5

%

 

 

5.9

%

 

$

92,400

 

 

$

43,979

 

 

$

48,421

 

 

$

69,172

 

Bank of the Ozarks

 

08/31/18

 

1 Month Libor

 

 

4.0

 

 

 

5.4

 

 

 

68,600

 

 

 

14,151

 

 

 

54,449

 

 

 

77,784

 

Deutsche Bank

 

09/25/19

 

1 Month Libor

 

 

3.5

 

 

 

4.9

 

 

 

64,779

 

 

 

15,895

 

 

 

48,884

 

 

 

81,473

 

Deutsche Bank

 

06/29/18

 

1 Month Libor

 

 

3.3

 

 

 

4.6

 

 

 

49,644

 

 

 

18,224

 

 

 

31,420

 

 

 

48,339

 

Bank of the Ozarks

 

05/22/18

 

1 Month Libor

 

 

4.8

 

 

 

6.1

 

 

 

48,750

 

 

 

17,479

 

 

 

31,271

 

 

 

48,109

 

Deutsche Bank

 

12/09/18

 

1 Month Libor

 

 

3.7

 

 

 

5.0

 

 

 

42,543

 

 

 

1

 

 

 

42,542

 

 

 

60,775

 

BMO Harris Bank(1)

 

04/09/20

 

1 Month Libor

 

 

2.7

 

 

 

4.0

 

 

 

32,500

 

 

 

—

 

 

 

32,500

 

 

 

45,000

 

Subtotal

 

 

 

 

 

 

 

 

 

 

 

 

 

 

399,216

 

 

 

109,729

 

 

 

289,487

 

 

 

430,652

 

 

Repurchase Agreements

 

Maturity

Date

 

Index Rate

 

Weighted Average Spread

 

 

Interest

Rate

 

 

Commitment

Amount

 

 

Maximum

Current

Availability

 

 

Balance

Outstanding

 

 

Principal

Balance of

Collateral

 

Goldman Sachs(1)

 

08/19/18

 

1 Month Libor

 

 

2.2

%

 

 

3.6

%

 

$

750,000

 

 

$

183,253

 

 

$

566,747

 

 

$

890,736

 

Wells Fargo(1)

 

05/25/19

 

1 Month Libor

 

 

2.1

 

 

 

3.6

 

 

 

750,000

 

 

 

232,462

 

 

 

517,538

 

 

 

814,886

 

JP Morgan(1)

 

08/20/18

 

1 Month Libor

 

 

2.5

 

 

 

4.0

 

 

 

376,942

 

 

 

120,014

 

 

 

256,928

 

 

 

382,135

 

Morgan Stanley(1)

 

05/04/19

 

1 Month Libor

 

 

2.4

 

 

 

3.9

 

 

 

500,000

 

 

 

120,002

 

 

 

379,998

 

 

 

533,707

 

US Bank(1)

 

12/09/19

 

1 Month Libor

 

 

2.0

 

 

 

3.6

 

 

 

150,000

 

 

 

78,600

 

 

 

71,400

 

 

 

93,000

 

Goldman Sachs (CMBS)(2)

 

03/02/18

 

3 Month Libor

 

 

0.1

 

 

 

1.6

 

 

 

100,000

 

 

 

64,615

 

 

 

35,385

 

 

 

39,332

 

Royal Bank of Canada

   (CMBS)(2)

 

03/20/18

 

3 Month Libor

 

 

1.0

 

 

 

2.6

 

 

 

100,000

 

 

 

92,195

 

 

 

7,805

 

 

 

8,418

 

Subtotal

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,726,942

 

 

 

891,141

 

 

 

1,835,801

 

 

 

2,762,214

 

 

Senior Secured Credit Facility

 

Maturity

Date

 

Index Rate

 

Weighted Average Spread

 

 

Interest

Rate

 

 

Commitment

Amount

 

 

Maximum

Current

Availability

 

 

Balance

Outstanding

 

 

Principal

Balance of

Collateral

 

Bank of America(1)

 

09/29/20

 

1 Month Libor

 

 

—

 

 

 

—

 

 

$

250,000

 

 

$

250,000

 

 

 

—

 

 

 

—

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

$

3,376,158

 

 

$

1,250,870

 

 

$

2,125,288

 

 

$

3,192,866

 

 

(1)

Borrowings under secured revolving repurchase agreements, senior secured credit facility, and one note payable with a guarantee for 25% recourse.

(2)

Borrowings under secured revolving repurchase agreements with a guarantee for 100% recourse. Maturity Date represents the sooner of the next maturity date of the CMBS secured revolving repurchase agreement, or roll date for the applicable underlying trade confirmation, subsequent to December 31, 2017.

Notes Payable

The Company uses note-on-note financing agreements to finance certain of its lending activities. The Company designates these asset-specific financings as notes payable on the consolidated balance sheets. Our ability to draw the undrawn capacity is conditioned upon satisfaction by our borrower of conditions precedent to a funding on the underlying loan pledged as collateral, and by our pro rata funding with equity of the remaining future funding obligation. Amounts designated as undrawn capacity under our asset-specific financings may only be used to satisfy our future funding obligations on the respective underlying pledged loan.

As of September 30, 2018 and December 31, 2017, the Company had two and seven note-on-note financing agreements, respectively. These asset-specific financing arrangements allow for additional advances up to a specified cap. As of September 30, 2018 and December 31, 2017, the note-on-note financing agreements were secured by two and seven particular loans held for investment, respectively. During the three months ended September 30, 2018, the outstanding borrowings under the asset-specific financing arrangement with Deutsche Bank was repaid. The Company’s notes payable have the following guarantees:

 

(1)

Deutsche Bank and Bank of the Ozarks: Holdco has provided funding guarantees under which Holdco guarantees the funding obligations of the special purpose lending entity in limited circumstances. In addition, under the Deutsche Bank and Bank of the Ozarks asset-specific financings, Holdco has delivered limited non-recourse carve-out guarantees in favor of the lenders as additional credit support for the financings. These guarantees trigger recourse to Holdco as a result of certain “bad boy” defaults for actual losses incurred by such party, or the entire outstanding obligations of the financing borrower, depending on the nature of the “bad boy” default in question; and

 

(2)

BMO Harris: Holdco has delivered a payment guarantee in favor of the lender as additional credit support for the financing. The liability of Holdco under this guarantee is generally capped at 25% of the outstanding obligations of the special purpose subsidiary which is the primary obligor under the financing. In addition, Holdco has delivered a non-recourse carveout guarantee, which can trigger recourse to Holdco as a result of certain “bad boy” defaults for losses incurred by BMO Harris or the entire outstanding obligations of the financing borrower, depending on the nature of the “bad boy” default in question.

All notes payable at September 30, 2018 are guaranteed by Holdco, and the agreements include guarantor covenants regarding liquid assets and net worth requirements. One of these loans at September 30, 2018 is 25% recourse to Holdco. The Company believes it was in compliance with all covenants as of September 30, 2018 and December 31, 2017.

Secured Revolving Repurchase Agreements

The Company utilizes secured revolving repurchase agreements to finance the direct origination or acquisition of commercial real estate mortgage loans and CMBS. Under these secured revolving repurchase agreements, the Company transfers all of its rights, title and interest in the loans or CMBS to the repurchase counterparty in exchange for cash, and simultaneously agrees to reacquire the asset at a future date for an amount equal to the cash exchanged plus an interest factor. The repurchase counterparty collects all principal and interest on related loans or CMBS and remits to the Company only the net after collecting its interest and other fees. The loan and CMBS investment related secured revolving repurchase agreements are 25% and 100% recourse to Holdco, respectively.

At September 30, 2018 and December 31, 2017, the Company had five secured revolving repurchase agreements to finance its loan investing activities. Credit spreads vary depending upon the collateral type and advance rate. Assets pledged at September 30, 2018 and December 31, 2017 consisted of 54 and 48 mortgage loans, respectively. During the three months ended September 30, 2018, the Company amended its Goldman Sachs Bank USA and JPMorgan Chase Bank, National Association secured revolving repurchase facilities, extending the maturity dates to August 19, 2019 and August 20, 2021, respectively.

The following table summarizes certain characteristics of the Company’s secured revolving repurchase agreements secured by commercial mortgage loans, all of which are considered long-term borrowings, and comprise counterparty concentration risks, at September 30, 2018 (dollars in thousands):

 

 

 

September 30, 2018

 

 

 

Commitment

Amount

 

 

UPB of Collateral

 

 

Carrying Value

of Collateral(1)

 

 

Amounts

Payable under

Repurchase Agreements(2)

 

 

Net

Counterparty

Exposure(3)

 

 

Percent of

Stockholders'

Equity

 

 

Days to

Extended

Maturity

 

Goldman Sachs Bank

 

$

750,000

 

 

$

780,647

 

 

$

777,782

 

 

$

372,207

 

 

$

405,575

 

 

 

30.5

%

 

 

323

 

Wells Fargo Bank

 

 

750,000

 

 

 

600,575

 

 

 

599,306

 

 

 

444,777

 

 

 

154,529

 

 

 

11.6

 

 

 

968

 

Morgan Stanley Bank(4)

 

 

500,000

 

 

 

337,591

 

 

 

340,286

 

 

 

256,139

 

 

 

84,147

 

 

 

6.3

 

 

N/A

 

JP Morgan Chase Bank

 

 

428,802

 

 

 

455,267

 

 

 

454,381

 

 

 

337,879

 

 

 

116,502

 

 

 

8.8

 

 

 

1,785

 

US Bank

 

 

212,840

 

 

 

261,300

 

 

 

259,845

 

 

 

206,334

 

 

 

53,511

 

 

 

4.0

 

 

 

1,835

 

Subtotal / Weighted Average

 

 

2,641,642

 

 

 

2,435,380

 

 

 

2,431,600

 

 

 

1,617,336

 

 

 

814,264

 

 

 

 

 

 

 

1,126

 

 

(1)

Amounts shown in the table include interest receivable of $14.3 million and are net of premium, discount and origination fees of $18.1 million.

(2)

Amounts shown in the table include interest payable of $3.7 million and do not reflect unamortized deferred financing fees of $8.8 million.

(3)

Represents the net carrying value of the commercial real estate assets sold under agreements to repurchase, including accrued interest plus any cash or assets on deposit to secure the repurchase obligation, less the amount of the repurchase liability, including accrued interest.

(4)

The Morgan Stanley Bank credit facility is excluded from the Days to Extended Maturity calculation because it does not have a limit on the maximum number of permitted extensions.

At September 30, 2018 and December 31, 2017, the Company had two secured revolving repurchase agreements to finance its CMBS investing activities. Credit spreads vary depending upon the CMBS and advance rate. Assets pledged at September 30, 2018 and December 31, 2017 consisted of two mortgage-backed securities. The following table summarizes certain characteristics of the Company’s secured revolving repurchase agreements secured by CMBS, all of which are considered short-term borrowings, and comprise counterparty concentration risks, at September 30, 2018 (dollars in thousands):

 

 

 

September 30, 2018

 

 

 

Commitment

Amount

 

 

UPB of Collateral

 

 

Carrying Value

of Collateral(1)

 

 

Amounts

Payable under

Repurchase

Agreements(2)

 

 

Net

Counterparty

Exposure(3)

 

 

Percent of

Stockholders'

Equity

 

 

Days to

Extended

Maturity(4)

 

Goldman Sachs Bank

 

$

100,000

 

 

$

38,710

 

 

$

37,468

 

 

$

35,049

 

 

$

2,419

 

 

 

0.2

%

 

$

64

 

Royal Bank of Canada

 

 

100,000

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Subtotal / Weighted Average

 

$

200,000

 

 

$

38,710

 

 

$

37,468

 

 

$

35,049

 

 

$

2,419

 

 

 

 

 

 

 

64

 

Total / Weighted Average - Loans

   and CMBS

 

$

2,841,642

 

 

$

2,474,090

 

 

$

2,469,068

 

 

$

1,652,385

 

 

$

816,683

 

 

 

 

 

 

 

1,099

 

 

(1)

Amounts shown in the table include interest receivable of $0.1 million and are net of premium, discount, and unrealized gains of $1.4 million.

(2)

Amounts shown in the table include interest payable of $0.3 million.

(3)

Represents the net carrying value of available-for-sale securities sold under agreements to repurchase, including accrued interest plus any cash or assets on deposit to secure the repurchase obligation, less the amount of the repurchase liability, including accrued interest.

(4)

Represents the sooner of the next maturity date of the CMBS secured revolving repurchase agreement, or roll date for the applicable underlying trade confirmation, subsequent to September 30, 2018.

The following table summarizes certain characteristics of the Company’s secured revolving repurchase agreements secured by commercial mortgage loans, all of which are considered long-term borrowings, and comprise counterparty concentration risks, at December 31, 2017 (dollars in thousands):

 

 

 

December 31, 2017

 

 

 

Commitment

Amount

 

 

UPB of Collateral

 

 

Carrying Value

of Collateral(1)

 

 

Amounts

Payable under

Repurchase Agreements(2)

 

 

Net

Counterparty

Exposure(3)

 

 

Percent of

Stockholders'

Equity

 

 

Days to

Extended

Maturity

 

Goldman Sachs Bank

 

$

750,000

 

 

$

890,736

 

 

$

887,667

 

 

$

568,012

 

 

$

319,655

 

 

 

26.6

%

 

 

596

 

Wells Fargo Bank

 

 

750,000

 

 

 

814,886

 

 

 

811,257

 

 

 

518,353

 

 

 

292,904

 

 

 

24.4

 

 

 

1,241

 

Morgan Stanley Bank(4)

 

 

500,000

 

 

 

533,707

 

 

 

531,747

 

 

 

380,592

 

 

 

151,155

 

 

 

12.6

 

 

N/A

 

JP Morgan Chase Bank

 

 

376,942

 

 

 

382,135

 

 

 

382,542

 

 

 

257,484

 

 

 

125,058

 

 

 

10.4

 

 

 

963

 

US Bank

 

 

150,000

 

 

 

93,000

 

 

 

92,448

 

 

 

71,573

 

 

 

20,875

 

 

 

1.7

 

 

 

1,804

 

Subtotal / Weighted Average

 

 

2,526,942

 

 

 

2,714,464

 

 

 

2,705,661

 

 

 

1,796,014

 

 

 

909,647

 

 

 

 

 

 

 

960

 

 

(1)

Amounts shown in the table include interest receivable of $11.6 million and are net of premium, discount and origination fees of $20.4 million.

(2)

Amounts shown in the table include interest payable of $3.4 million and do not reflect unamortized deferred financing fees of $8.7 million.

(3)

Represents the net carrying value of the commercial real estate assets sold under agreements to repurchase, including accrued interest plus any cash or assets on deposit to secure the repurchase obligation, less the amount of the repurchase liability, including accrued interest.

(4)

The Morgan Stanley Bank credit facility is excluded from the Days to Extended Maturity calculation because it does not have a limit on the maximum number of permitted extensions.

The following table summarizes certain characteristics of the Company’s secured revolving repurchase agreements secured by CMBS, all of which are considered short-term borrowings, and comprise counterparty concentration risks, at December 31, 2017 (dollars in thousands):

 

 

 

December 31, 2017

 

 

 

Commitment

Amount

 

 

UPB of Collateral

 

 

Carrying Value

of Collateral(1)

 

 

Amounts

Payable under

Repurchase

Agreements(2)

 

 

Net

Counterparty

Exposure(3)

 

 

Percent of

Stockholders'

Equity

 

 

Days to

Extended

Maturity(4)

 

Goldman Sachs Bank

 

$

100,000

 

 

$

39,332

 

 

$

39,213

 

 

$

35,426

 

 

$

3,787

 

 

 

0.3

%

 

 

61

 

Royal Bank of Canada

 

 

100,000

 

 

 

8,418

 

 

 

8,675

 

 

 

7,879

 

 

 

796

 

 

 

0.1

 

 

 

79

 

Subtotal / Weighted Average

 

$

200,000

 

 

$

47,750

 

 

$

47,888

 

 

$

43,305

 

 

$

4,583

 

 

 

 

 

 

 

64

 

Total / Weighted Average - Loans

   and CMBS

 

$

2,726,942

 

 

$

2,762,214

 

 

$

2,753,549

 

 

$

1,839,319

 

 

$

914,230

 

 

 

 

 

 

 

933

 

 

(1)

Amounts shown in the table include interest receivable of $0.1 million.

(2)

Amounts shown in the table include interest payable of $0.1 million.

(3)

Represents the net carrying value of available-for-sale securities sold under agreements to repurchase, including accrued interest plus any cash or assets on deposit to secure the repurchase obligation, less the amount of the repurchase liability, including accrued interest.

(4)

Represents the sooner of the next maturity date of the CMBS secured revolving repurchase agreement, or roll date for the applicable underlying trade confirmation, subsequent to December 31, 2017.

The agreements include various covenants covering net worth, liquidity, recourse limitations, and debt coverage. The Company believes it was in compliance with all covenants as of September 30, 2018 and December 31, 2017.

 

Senior Secured Credit Facilities

On July 12, 2018, the Company entered into a credit agreement (the “Credit Agreement”), as borrower, with Citibank, N.A. as administrative agent and lender, and Citigroup Global Markets Inc. as sole lead arranger and sole lead book running manager. The Credit Agreement governs a secured revolving credit facility with aggregate secured borrowing capacity of up to $160.0 million, subject to borrowing base availability and certain other conditions, which the Company occasionally uses to finance originations or acquisitions of eligible loans on an interim basis until permanent financing is arranged. The Credit Agreement has an initial maturity date of July 12, 2020, and borrowings bear interest at an interest rate per annum equal to one-month LIBOR or the applicable base rate plus a margin of 2.25%. The initial advance rate on borrowings under the Credit Agreement with respect to individual pledged assets is 70%, and declines over a 90-day period, after which borrowings against that respective asset must be repaid.

On September 29, 2017, the Company and Bank of America N.A. entered into a senior secured credit facility agreement that had a maximum facility amount of $250 million, which could increase from time to time, up to $500 million, at the Company’s request and agreement by the lender. The Company previously exercised its accordion feature to increase the maximum facility amount to $500 million. The current extended maturity of this facility is September 29, 2022. The following table details the senior secured credit facilities as of September 30, 2018 (dollars in thousands):

 

 

 

September 30, 2018

 

Senior Secured Credit Facilities

 

Maturity

Date

 

Index Rate

 

Weighted

Average

Spread

 

 

Interest

Rate

 

 

Commitment

Amount

 

 

Maximum

Current

Availability

 

 

Balance

Outstanding

 

Bank of America

 

9/29/2020

 

1 Month Libor

 

 

1.9

%

 

 

4.1

%

 

$

500,000

 

 

$

112,560

 

 

$

387,440

 

Citibank

 

7/12/2020

 

1 Month Libor

 

 

2.3

%

 

 

4.5

%

 

$

160,000

 

 

$

95,856

 

 

$

64,144

 

 

There were no amounts outstanding on the Bank of America senior secured credit facility at December 31, 2017.

The Bank of America senior secured credit facility is 25% recourse to Holdco. The Holdco guaranty includes various covenants covering net worth, liquidity, recourse limitations and debt coverage. The Citibank credit facility is 100% recourse to Holdco. The Company believes it was in compliance with all covenants as of September 30, 2018 and December 31, 2017.
v3.10.0.1
Schedule of Maturities
 9 Months Ended
Sep. 30, 2018
Debt Disclosure [Abstract]  
Schedule of Maturities

(7) Schedule of Maturities

The future principal payments for the five years subsequent to September 30, 2018 and thereafter are as follows (in thousands):

 

 

 

CLO

(TRTX 2018-FL1)

 

 

Senior Secured

Credit Facilities

 

 

Repurchase

Agreements

 

 

Notes

Payable

 

2018

 

$

—

 

 

$

—

 

 

$

60,081

 

 

$

—

 

2019

 

 

474,632

 

 

 

—

 

 

 

1,216,535

 

 

 

68,838

 

2020

 

 

213,615

 

 

 

451,584

 

 

 

94,536

 

 

 

32,500

 

2021

 

 

52,657

 

 

 

—

 

 

 

277,306

 

 

 

—

 

2022

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Thereafter

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

$

740,904

 

 

$

451,584

 

 

$

1,648,458

 

 

$

101,338

 

 
v3.10.0.1
Fair Value Measurements
 9 Months Ended
Sep. 30, 2018
Fair Value Disclosures [Abstract]  
Fair Value Measurements

(8) Fair Value Measurements

The Company’s consolidated balance sheet includes Level I fair value measurements related to cash equivalents, restricted cash, accounts receivable, and accrued liabilities. At September 30, 2018, the Company had $42.5 million invested in money market funds with original maturities of less than 90 days. The carrying values of these financial assets and liabilities are reasonable estimates of fair value because of the short-term maturities of these instruments. The consolidated balance sheet also includes Loans Held for Investment, the assets and liabilities of TRTX 2018-FL1 (collateralized loan obligation (as of September 30, 2018)), and secured financing arrangements that are considered Level III fair value measurements that are not measured at fair value on a recurring basis, but are subject to fair value adjustments utilizing the fair value of the underlying collateral when there is evidence of impairment. The Company did not have any non-recurring fair value items as of September 30, 2018 and December 31, 2017.

The following tables provide information about financial assets and liabilities not carried at fair value on a recurring basis in our consolidated balance sheet (dollars in thousands):

 

 

 

September 30, 2018

 

 

 

Carrying Value

 

 

Level I

 

 

Level II

 

 

Level III

 

Financial Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans Held for Investment

 

$

4,157,653

 

 

$

—

 

 

$

—

 

 

$

4,187,202

 

Financial Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CLO (TRTX 2018-FL1)

 

 

735,415

 

 

 

—

 

 

 

—

 

 

 

735,415

 

Secured Financing Arrangements

 

 

2,187,950

 

 

 

—

 

 

 

—

 

 

 

2,187,950

 

 

 

 

December 31, 2017

 

 

 

Carrying Value

 

 

Level I

 

 

Level II

 

 

Level III

 

Financial Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans Held for Investment

 

$

3,175,672

 

 

$

—

 

 

$

—

 

 

$

3,202,150

 

Financial Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured Financing Arrangements

 

 

2,114,990

 

 

 

—

 

 

 

—

 

 

 

2,114,990

 

Level III fair values were determined based on standardized valuation models and significant unobservable market inputs, including holding period, discount rates based on loan to value, property type and loan pricing expectations developed by the Manager that were corroborated with other institutional lenders to determine a market spread that was added to the one-month LIBOR forward curve. There were no transfers of financial assets or liabilities within the fair value hierarchy during the three months ended September 30, 2018 or year ended December 31, 2017.

At September 30, 2018 and December 31, 2017, the estimated fair value of Loans Held for Investment was $4.2 billion and $3.2 billion, respectively. The weighted average gross spread at September 30, 2018 and December 31, 2017 was 4.2% and 4.8%, respectively. The weighted average years to maturity at September 30, 2018 and December 31, 2017 was 3.8 years and 3.6 years, respectively, assuming full extension of all loans.

At September 30, 2018 and December 31, 2017, the carrying value of the secured financing agreements approximates fair value as current borrowing spreads reflect market terms. At September 30, 2018, the carrying value of the assets and liabilities of TRTX 2018-FL1 approximates fair value as current borrowing spreads reflect market terms.
v3.10.0.1
Income Taxes
 9 Months Ended
Sep. 30, 2018
Income Tax Disclosure [Abstract]  
Income Taxes

(9) Income Taxes

As of September 30, 2018 and December 31, 2017, the Company indirectly owned 100% of the equity of multiple taxable REIT subsidiaries, including certain of its TRTX 2018-FL1 subsidiaries (the “TRSs”). As a result, the TRSs had operating activities during the nine months ended September 30, 2018.

The TRSs are subject to applicable U.S. federal, state, local and foreign income tax on their taxable income. In addition, as a REIT, the Company also may be subject to a 100% excise tax on certain transactions between it and its TRSs that are not conducted on an arm’s-length basis. The Company files income tax returns in the United States as well as various state and local jurisdictions. The filings are subject to normal reviews by regulatory agencies until the related statute of limitations expires, with open tax years for all years since the Company’s initial capitalization in 2014. The years open to examination range from 2014 to present.

ASC 740 also prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company has analyzed its various federal and state filing positions and believes that its income tax filing positions and deductions are well documented and supported. As of September 30, 2018 and December 31, 2017, based on the Company’s evaluation, there is no reserve for any uncertain income tax positions.

The Company’s policy is to classify interest and penalties associated with underpayment of U.S. federal and state income taxes, if any, as a component of general and administrative expense on its consolidated statements of income. For the nine months ended September 30, 2018 and September 30, 2017, the Company did not have interest or penalties associated with the underpayment of any income taxes.

For the three months ended September 30, 2018 and 2017, the Company incurred no federal, state and local tax expense relating to its TRSs. For the nine months ended September 30, 2018 and 2017, the Company incurred $0.2 million and $0.1 million, respectively, of federal, state and local tax expense relating to its TRSs. At September 30, 2018 and 2017, the Company’s effective tax rate was 0.26% and 0.20%, respectively.

At September 30, 2018 and December 31, 2017, the Company had no deferred tax assets or liabilities.
v3.10.0.1
Related Party Transactions
 9 Months Ended
Sep. 30, 2018
Related Party Transactions [Abstract]  
Related Party Transactions

(10) Related Party Transactions

Management Agreements

Post-IPO Management Agreement

The Company is externally managed and advised by the Manager. During the year ended December 31, 2017, upon the completion of the Company’s initial public offering on July 25, 2017, the pre-IPO Management Agreement (as defined below) terminated without payment of any termination fee to the Manager, and the Company entered into a new management agreement with the Manager (the “Management Agreement”). On May 2, 2018, the Company and the Manager amended the Management Agreement solely for the purpose of amending the definitions of “Equity,” “Core Earnings” and “Incentive Compensation” in the Management Agreement. The changes were effected to include equity issued by subsidiaries of the Company in the definition of Equity, and to exclude distributions on equity issued by subsidiaries from the calculation of the Manager’s Incentive Compensation. For the three and nine months ended September 30, 2018, the management fee and incentive management fee were calculated under the Management Agreement.

Pursuant to the Management Agreement, the Company pays the Manager a base management fee equal to the greater of $250,000 per annum ($62,500 per quarter) and 1.50% per annum (0.375% per quarter) of the Company’s “Equity.” The base management fee is payable in cash, quarterly in arrears. As amended, “Equity” means (a) the sum of (1) the net proceeds received by the Company and, without duplication, the Company’s subsidiaries, from all issuances of the Company’s and the subsidiaries’ equity securities, including for the avoidance of doubt issuances of common stock and Class A common stock by the Company prior to the completion of the Company’s initial public offering (for purposes of calculating this amount, the net proceeds received by the Company from all issuances of the Company’s outstanding common stock and Class A common stock prior to the completion of the Company’s initial public offering equals approximately $1.0 billion), plus (2) the value of contributions, including, without limitation, contributions of assets or interests in assets in exchange for equity securities, made by persons other than the Company or a subsidiary of the Company, from time to time, to the capital of the Company or another subsidiary of the Company plus (3) the Company’s cumulative Core Earnings for the period commencing on the completion of the Company’s initial public offering to the end of the most recently completed calendar quarter, and (b) less (1) any distributions made by the Company to the holders of the Company’s equity securities and any distributions made by the Company’s subsidiaries to the holders of the subsidiaries’ equity securities (other than to the Company or another subsidiary of the Company) following the completion of the Company’s initial public offering, (2) any amount that the Company or any of the Company’s subsidiaries has paid to repurchase for cash the Company’s common stock or Class A common stock following the completion of the Company’s initial public offering and (3) any Incentive Compensation earned by the Manager following the completion of the Company’s initial public offering. With respect to that portion of the period from and after the completion of the Company’s initial public offering that is used in the calculation of Incentive Compensation or the base management fee, all items in the foregoing sentence (other than the Company’s cumulative Core Earnings) will be calculated on a daily weighted average basis.

The Manager is entitled to incentive compensation which is calculated and payable in cash with respect to each calendar quarter following the completion of the Company’s initial public offering (or part thereof that the Management Agreement is in effect) in arrears in an amount, not less than zero, equal to the difference between: (1) the product of (a) 20% and (b) the difference between (i) the Company’s Core Earnings for the most recent 12-month period (or such lesser number of completed calendar quarters, if applicable), including the calendar quarter (or part thereof) for which the calculation of incentive compensation is being made (the “applicable period”), and (ii) the product of (A) the Company’s Equity in the most recent 12-month period (or such lesser number of completed calendar quarters, if applicable), including the applicable period, and (B) 7% per annum; and (2) the sum of any incentive compensation paid to the Manager with respect to the first three calendar quarters of the most recent 12-month period (or such lesser number of completed calendar quarters preceding the applicable period, if applicable). No incentive compensation is payable to the Manager with respect to any calendar quarter unless Core Earnings for the 12 most recently completed calendar quarters (or such lesser number of completed calendar quarters following the completion of the Company’s initial public offering) is greater than zero. For purposes of calculating the Manager’s incentive compensation, the Management Agreement, as amended, specifies that equity securities of the Company or any of the Company’s subsidiaries that are entitled to a specified periodic distribution or have other debt characteristics will not constitute equity securities and will not be included in “Equity” for the purpose of calculating incentive compensation. Instead, the aggregate distribution amount that accrues to such equity securities during the calendar quarter of such calculation will be subtracted from Core Earnings, before incentive compensation for purposes of calculating incentive compensation, unless such distribution is otherwise excluded from Core Earnings.

As amended, “Core Earnings” means the net income (loss) attributable to the holders of the Company’s common stock and Class A common stock and, without duplication, the holders of the Company’s subsidiaries’ equity securities (other than the Company or any of the Company’s subsidiaries), computed in accordance with GAAP, including realized gains and losses not otherwise included in net income (loss), and excluding (i) non-cash equity compensation expense, (ii) the Incentive Compensation, (iii) depreciation and amortization, (iv) any unrealized gains or losses or other similar non-cash items that are included in net income for the applicable period, regardless of whether such items are included in other comprehensive income or loss or in net income and (v) one-time events pursuant to changes in GAAP and certain material non-cash income or expense items, in each case after discussions between the Manager and the Company’s independent directors and approved by a majority of the Company’s independent directors.  

The Company is required to reimburse the Manager or its affiliates for documented costs and expenses incurred by it and its affiliates on the Company’s behalf except those specifically required to be borne by the Manager or its affiliates under the Management Agreement. The Company’s reimbursement obligation is not subject to any dollar limitation. The Manager or its affiliates is responsible for, and the Company will not reimburse the Manager or its affiliates for, the expenses related to the personnel of the Manager and its affiliates who provide services to the Company. However, the Company will reimburse the Manager for the Company’s allocable share of the compensation (including, without limitation, annual base salary, bonus, any related withholding taxes and employee benefits) paid to (1) the Manager’s personnel serving as the Company’s chief financial officer based on the percentage of his or her time spent managing the Company’s affairs and (2) other corporate finance, tax, accounting, internal audit, legal risk management, operations, compliance and other non-investment personnel of the Manager or its affiliates who spend all or a portion of their time managing the Company’s affairs, based on the percentage of time devoted by such personnel to the Company’s and the Company’s subsidiaries’ affairs.

Pre-IPO Management Agreement

Through July 24, 2017, the Company paid the Manager a management fee in accordance with the management agreement which was executed on December 15, 2014 (the “pre-IPO Management Agreement”). For the three and nine months ended September 30, 2017, the management fee and incentive management fee were calculated under both the pre-IPO and post-IPO Management Agreements. Under the pre-IPO Management Agreement, the management fee was equal to 1.25% of the Company’s stockholders’ equity per annum, and was calculated and payable quarterly in arrears. For purposes of calculating the management fee under the pre-IPO Management Agreement, stockholders’ equity meant: (i) the sum of (A) the net proceeds received by the Company from all issuances of the Company’s common stock, plus (B) the Company’s cumulative Core Earnings from and after the date of the pre-IPO Management Agreement to the end of the most recently completed calendar quarter, (ii) less (A) any distributions to the Company’s stockholders from and after the date of the pre-IPO Management Agreement, (B) any amount that the Company or any of its subsidiaries had paid to repurchase the Company’s common stock since the date of the pre-IPO Management Agreement, and (C) any incentive management fee paid from and after the date of the pre-IPO Management Agreement. With respect to that portion of the period from and after the date of the pre-IPO Management Agreement that was used in any calculation of the incentive management fee or the management fee, all items in the foregoing sentence (other than clause (i) (B)) were calculated on a daily weighted average basis.

In addition, pursuant to the pre-IPO Management Agreement, the Manager was entitled to an incentive management fee each calendar quarter in arrears in an amount, not less than zero, equal to (I) the product of (i) 16% and (ii) the positive sum, if any, remaining after (A) Core Earnings of the Company for the previous 12 month period were reduced by (B) the product of (1) the average of  the Company’s stockholders’ equity as of the end of each calendar quarter during such previous 12 month period, and (2) 7% per annum, minus (II) the sum of any incentive management fee paid to the Manager with respect to the first three calendar quarters of such previous 12 month period; provided, however, that no incentive management fee was payable with respect to any calendar quarter unless Core Earnings for the 12 most recently completed calendar quarters in the aggregate was greater than zero.

2014-CLO Collateral Management Fee

The Manager also served as Collateral Manager for the 2014-CLO under a collateral management agreement (the “Collateral Management Agreement”). The collateral management fee was equal to 0.075% per annum of the aggregate par amount of the loans in the 2014-CLO, and was calculated and payable monthly in arrears in cash. Pursuant to an arrangement that the Company had with the Manager prior to the Company’s initial public offering, the Company was entitled to reduce the base management fee payable to the Manager under the pre-IPO Management Agreement by an amount equal to the collateral management fee the Manager was entitled to receive for acting as the collateral manager for the 2014-CLO. After the completion of the initial public offering and prior to the termination of the 2014-CLO, the Manager was entitled to earn a collateral management fee for acting as the collateral manager for the 2014-CLO without any reduction or offset right to the base management fee payable to the Manager under the Management Agreement. As of September 30, 2017, the aggregate par amount of the loans in the 2014-CLO was $181.1 million.

Management Fees Incurred and Paid for the three and nine months ended September 30, 2018 and September 30, 2017

For the three and nine months ended September 30, 2018 and 2017, the Company incurred and paid the following management fees, incentive management fees, and collateral management fees related to its pre-IPO and Post-IPO Management Agreements and the 2014-CLO Collateral Management Agreement (dollars in thousands):

 

 

 

Three Months Ended September 30,

 

 

 

2018

 

 

2017

 

Post-IPO Management Agreement fees incurred

 

$

6,047

 

 

$

3,404

 

Post-IPO Management Agreement fees paid

 

 

5,909

 

 

 

—

 

 

 

 

 

 

 

 

 

 

Pre-IPO Management Agreement and Collateral Management fees incurred

 

 

—

 

 

 

1,079

 

Pre-IPO Management Agreement and Collateral Management fees paid

 

 

—

 

 

 

4,574

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

 

 

2018

 

 

2017

 

Post-IPO Management Agreement fees incurred

 

$

17,586

 

 

$

—

 

Post-IPO Management Agreement fees paid

 

 

16,771

 

 

 

—

 

 

 

 

 

 

 

 

 

 

Pre-IPO Management Agreement and Collateral Management fees incurred

 

 

—

 

 

 

10,023

 

Pre-IPO Management Agreement and Collateral Management fees paid

 

 

—

 

 

 

11,930

 

Management fees, incentive management fees, and collateral management fees included in payable to affiliates on the consolidated balance sheets at September 30, 2018 and December 31, 2017 are $6.0 million and $5.2 million, respectively.

The Company is responsible for reimbursing the Manager for certain expenses paid by the Manager on behalf of the Company or for certain services provided by the Manager to the Company. Expenses incurred by the Manager and reimbursed by the Company are reflected in the respective consolidated statements of income expense category or the consolidated balance sheets based on the nature of the item. For the three months ended September 30, 2018, the Manager incurred $0.3 million of expenses that were reimbursable by the Company. During the nine months ended September 30, 2018, the Manager incurred a total of $0.9 million of expenses that were reimbursable by the Company. As of September 30, 2018, $0.6 million remained outstanding and was reimbursable by the Company to the Manager. For the nine months ended September 30, 2017, $1.0 million was incurred by the Manager and reimbursable by the Company.  

Termination Fee

A termination fee will be payable to the Manager upon termination of the Management Agreement by the Company absent a cause event. The termination fee would also be payable to the Manager upon termination of the Management Agreement by the Manager if the Company materially breaches the Management Agreement. The termination fee is equal to three times the sum of (x) the average annual base management fee and (y) the average annual incentive compensation earned by the Manager, in each case during the 24-month period immediately preceding the most recently completed calendar quarter prior to the date of termination or, if such termination occurs prior to July 25, 2019, and such termination fee is payable, the base management fees and the incentive compensation will be annualized for the period from July 25, 2017 to July 25, 2019 based on such fees actually received by the Manager during such period.
v3.10.0.1
Earnings per Share
 9 Months Ended
Sep. 30, 2018
Earnings Per Share [Abstract]  
Earnings per Share

(11) Earnings per Share

The Company calculates its basic and diluted earnings per share using the two-class method for all periods presented, as the unvested restricted shares of its common stock granted to certain employees and affiliates of the Manager, qualify as participating securities. These restricted shares have the same rights as the Company’s other shares of common stock and Class A common stock, including participating in any dividends, and therefore have been included in the Company’s basic and diluted earnings per share calculation. For the three and nine months ended September 30, 2018, $0.0 million and $0.1 million, respectively of common stock dividends declared and undistributed net income attributable to common stockholders were allocated to unvested shares of our common stock pursuant to stock grants made under the Company’s Incentive Plan (see Note 13 for details). For the three and nine months ended September 30, 2017, there were no common stock dividends declared or undistributed net income attributable to common stockholders were allocated to unvested shares of our common stock.

At September 30, 2018, all share and per share data reflect the impact of the common stock and Class A common stock dividend which was paid upon completion of the Company’s initial public offering on July 25, 2017 to holders of record as of July 3, 2017. The following table sets forth the calculation of basic and diluted earnings per common share (common stock and Class A common stock) based on the weighted-average number of shares of common stock and Class A common stock outstanding (in thousands, except share and per share data):

 

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Net Income Attributable to TPG RE Finance Trust, Inc.

 

$

26,824

 

 

$

20,787

 

 

$

78,373

 

 

$

69,582

 

Participating Securities' Share in Earnings

 

 

(27

)

 

 

—

 

 

 

(96

)

 

 

—

 

Net Income Attributable to Common Stockholders

 

$

26,797

 

 

$

20,787

 

 

$

78,277

 

 

$

69,582

 

Weighted Average Common Shares Outstanding, Basic and Diluted

 

 

64,295,973

 

 

 

58,685,979

 

 

 

61,635,988

 

 

 

51,969,733

 

Per Common Share Amount, Basic and Diluted

 

$

0.42

 

 

$

0.35

 

 

$

1.27

 

 

$

1.34

 

 
v3.10.0.1
Stockholders' Equity
 9 Months Ended
Sep. 30, 2018
Stockholders Equity Note [Abstract]  
Stockholders' Equity

(12) Stockholders’ Equity

Common Stock Issuance

On August 10, 2018, the Company completed a common stock offering of 7 million shares at a price of $19.82 per share generating gross proceeds of $138.7 million. The Company intends to use the proceeds from the offering to originate or acquire commercial mortgage loans consistent with its investment strategy and investment guidelines. The Manager reimbursed offering costs of $0.7 million.

The shares were sold pursuant to the Company’s effective shelf registration statement on Form S-3ASR (File No. 333-226642) and the related prospectus dated August 7, 2018, as supplemented by a prospectus supplement dated August 7, 2018.

Stock Dividend

On July 3, 2017, we declared a stock dividend that resulted in the issuance of 9,224,268 shares of our common stock and 230,815 shares of our Class A common stock upon the completion of our initial public offering. The stock dividend was paid on July 25, 2017 to holders of record of our common stock and Class A common stock as of July 3, 2017. All prior periods have been restated to give effect to the impact of these transactions on our common and Class A common stock issued, shares outstanding, per share calculations, and basic and diluted weighted average number of common shares outstanding.

10b5-1 Purchase Plan

The Company entered into an agreement and related amendments (the “10b5-1 Purchase Plan”) with Goldman Sachs & Co. LLC, as our agent, to buy in the open market up to $35.0 million in shares of our common stock in the aggregate during the period beginning on or about August 21, 2017 and ending 12 months thereafter or, if sooner, the date on which all the capital committed has been exhausted. On August 1, 2018, the Company’s Board of Directors authorized the Company to extend the repurchase period for the remaining capital committed to the 10b5-1 Purchase Plan. No other changes to the terms of the 10b5-1 Purchase Plan were authorized. Under the amended 10b5-1 Purchase Plan, the repurchase period was extended to February 28, 2019 or, if sooner, the date on which all the capital committed to the 10b5-1 Purchase Plan has been exhausted.

The 10b5-1 Purchase Plan requires Goldman Sachs & Co. LLC to purchase for us shares of our common stock when the market price per share is below the threshold price specified in the 10b5-1 Purchase Plan which is based on our book value per common share.  No shares were repurchased by the Company during the three months ended September 30, 2018. During the nine months ended September 30, 2018, the Company repurchased 0.4 million shares of common stock, at a weighted average price of $18.83 per share, for total consideration (including commissions and related fees) of $8.4 million.

Through September 30, 2018, the Company has purchased 1.2 million shares of common stock, at a weighted average price of $19.28 per share, for total consideration (including commissions and related fees) of $22.5 million. At September 30, 2018, the Company’s remaining commitment under the 10b5-1 Purchase Plan is $12.5 million.

Dividends

Prior to the completion of the Company’s initial public offering, dividends were accrued at the time of approval by the Special Actions Committee (the “Committee”), a standing committee comprised of directors who are employed by TPG Global, LLC or an affiliate thereof. Subsequent to the completion of the Company’s initial public offering, dividends are accrued at the time of approval by the Company’s Board of Directors. Upon the approval of the Committee, or the Company’s Board of Directors, as applicable, dividends are paid first to the holders of the Company’s Series A preferred stock at the rate of 12.5% of the total $0.001 million liquidation preference per annum plus all accumulated and unpaid dividends thereon, and second to the holders of the Company’s common stock and Class A common stock. The Company’s Series A preferred stock was redeemed on February 28, 2018 for $0.1 million. The Company intends to distribute each year substantially all of its taxable income to its stockholders to comply with the REIT provisions of the Internal Revenue Code of 1986, as amended.

On September 18, 2018, the Company’s Board of Directors declared a dividend for the third quarter of 2018 in the amount of $0.43 per share of common stock and Class A common stock, or $28.9 million in the aggregate, which dividend was payable on October 25, 2018 to holders of record of our common stock and Class A common stock as of September 28, 2018. On September 26, 2017, the Company declared a dividend associated with the third quarter of 2017 in the amount of $0.33 per share of common stock and Class A common stock, or $20.1 million in the aggregate, which was paid on October 26, 2017.

For the nine months ended September 30, 2018 and 2017, common stock and Class A common stock dividends in the amount of $80.1 million and $61.9 million were declared and approved, respectively. As of September 30, 2018 and December 31, 2017, $28.9 million and $23.1 million, respectively, remain unpaid and are reflected in dividends payable on the Company’s consolidated balance sheets.

Other Comprehensive (Loss) Income

For the three months ended September 30, 2018 and 2017, other comprehensive (loss) income was $0.5 million and $(2.6) million, respectively. For the nine months ended September 30, 2018 and 2017, other comprehensive (loss) income was $(1.1) million and $(1.3) million, respectively. Other comprehensive (loss) income is a result of unrealized (losses) gains on CMBS available-for-sale.
v3.10.0.1
Share-based Incentive Plan
 9 Months Ended
Sep. 30, 2018
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Share-based Incentive Plan

(13) Share-based Incentive Plan

The Company does not have any employees as it is externally managed by the Manager. However, as of September 30, 2018, certain individuals employed by an affiliate of the Manager and certain members of the Company’s Board of Directors were compensated, in part, through the issuance of share-based instruments.

The Company’s Board of Directors has adopted, and the Company’s stockholders have approved, the TPG RE Finance Trust, Inc. 2017 Equity Incentive Plan (the “Incentive Plan”). The Incentive Plan provides for the grant of equity-based awards to the Company’s, and its affiliates’, directors, officers, employees (if any) and consultants, and the members, officers, directors, employees and consultants of the Manager or its affiliates, as well as to the Manager and other entities that provide services to the Company and its affiliates and the employees of such entities. The total number of shares of common stock or long term incentive plan (“LTIP”) units that may be awarded under the Incentive Plan is 4,600,463, or 7.5% of the issued and outstanding shares of the Company’s common stock after completion of the Company’s common and Class A common stock dividend, initial public offering and the issuance of shares in connection with the partial exercise of the option to purchase additional shares related to the initial public offering. The Incentive Plan will automatically expire on the tenth anniversary of its effective date, unless terminated earlier by the Company’s Board of Directors. No equity grants were awarded in conjunction with the Company’s initial public offering.

The shares generally vest in installments over a three-year period, pursuant to the terms of the award and the Incentive Plan. As of September 30, 2018, there were 63,919 shares of common stock outstanding and total unrecognized compensation cost related to unvested share-based compensation arrangements of $1.1 million, which is expected to be recognized over a weighted average period of 1.6 years from September 30, 2018. For the three and nine months ended September 30, 2018, the Company recognized $0.1 million and $0.5 million, respectively, of share-based compensation expense as general and administrative expense in the consolidated statements of income and comprehensive income.

v3.10.0.1
Commitments and Contingencies
 9 Months Ended
Sep. 30, 2018
Commitments And Contingencies Disclosure [Abstract]  
Commitments and Contingencies

(14) Commitments and Contingencies

Unfunded Commitments

As of September 30, 2018 and December 31, 2017, the Company had $527.1 million and $529.0 million, respectively, of unfunded commitments related to loans held for investment. These commitments are not reflected on the consolidated balance sheets.

Litigation

From time to time, the Company may be involved in various claims and legal actions arising in the ordinary course of business. The Company establishes an accrued liability for loss contingencies when a settlement arising from a legal proceeding is both probable and reasonably estimable. If a legal matter is not probable and reasonably estimable, no such liability is recorded. Examples of this include (i) early stages of a legal proceeding, (ii) damages that are unspecified or cannot be determined, (iii) discovery has not started or is incomplete or (iv) there is uncertainty as to the outcome of pending appeals or motions. If these items exist, an estimated range of potential loss cannot be determined and as such the Company does not record an accrued liability.

As of September 30, 2018 and December 31, 2017, the Company was not involved in any material legal proceedings and has not recorded an accrued liability for loss contingencies.

v3.10.0.1
Concentration of Credit Risk
 9 Months Ended
Sep. 30, 2018
Risks And Uncertainties [Abstract]  
Concentration of Credit Risk

(15) Concentration of Credit Risk

Property Type

A summary of the loan portfolio by property type as of September 30, 2018 and December 31, 2017 based on total loan commitment and current unpaid principal balance (“UPB”) is as follows (dollars in thousands):

 

 

 

September 30, 2018

 

Property Type

 

Loan

Commitment

 

 

Unfunded

Commitment

 

 

% of Loan

Commitment

 

 

Loan UPB

 

 

% of Loan UPB

 

Office

 

$

1,776,866

 

 

$

272,336

 

 

 

37.8

%

 

$

1,504,530

 

 

 

36.0

%

Multifamily

 

 

950,808

 

 

 

76,023

 

 

 

20.2

 

 

 

874,785

 

 

 

20.9

 

Mixed Use

 

 

758,500

 

 

 

87,567

 

 

 

16.1

 

 

 

670,933

 

 

 

16.1

 

Hotel

 

 

627,994

 

 

 

13,290

 

 

 

13.3

 

 

 

614,704

 

 

 

14.7

 

Condominium

 

 

276,044

 

 

 

25,462

 

 

 

5.9

 

 

 

250,582

 

 

 

6.0

 

Retail

 

 

239,058

 

 

 

52,424

 

 

 

5.1

 

 

 

186,634

 

 

 

4.5

 

Industrial

 

 

66,500

 

 

 

—

 

 

 

1.4

 

 

 

66,500

 

 

 

1.6

 

Other

 

 

10,061

 

 

 

—

 

 

 

0.2

 

 

 

10,061

 

 

 

0.2

 

Total

 

$

4,705,831

 

 

$

527,102

 

 

 

100.0

%

 

$

4,178,729

 

 

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2017

 

Property Type

 

Loan

Commitment

 

 

Unfunded

Commitment

 

 

% of Loan

Commitment

 

 

Loan UPB

 

 

% of Loan UPB

 

Office

 

$

836,826

 

 

$

160,450

 

 

 

22.5

%

 

$

676,376

 

 

 

21.1

%

Multifamily

 

 

813,775

 

 

 

75,509

 

 

 

21.8

 

 

 

738,266

 

 

 

23.1

 

Hotel

 

 

693,569

 

 

 

27,980

 

 

 

18.6

 

 

 

665,589

 

 

 

20.8

 

Condominium

 

 

679,779

 

 

 

166,358

 

 

 

18.2

 

 

 

513,421

 

 

 

16.1

 

Mixed Use

 

 

431,500

 

 

 

57,243

 

 

 

11.6

 

 

 

374,257

 

 

 

11.7

 

Retail

 

 

195,012

 

 

 

41,500

 

 

 

5.2

 

 

 

153,512

 

 

 

4.8

 

Industrial

 

 

66,500

 

 

 

—

 

 

 

1.8

 

 

 

66,500

 

 

 

2.1

 

Other

 

 

10,195

 

 

 

—

 

 

 

0.3

 

 

 

10,195

 

 

 

0.3

 

Total

 

$

3,727,156

 

 

$

529,040

 

 

 

100.0

%

 

$

3,198,116

 

 

 

100.0

%

 

Geography

All of the Company’s loans held for investment are secured by properties within the United States. The geographic composition of loans held for investment based on total loan commitment and current UPB as of September 30, 2018 and December 31, 2017 is as follows (dollars in thousands):

 

 

 

September 30, 2018

 

Geographic Region

 

Loan

Commitment

 

 

Unfunded

Commitment

 

 

% Loan

Commitment

 

 

Loan UPB

 

 

% Loan UPB

 

East

 

$

2,068,065

 

 

$

163,056

 

 

 

44.0

%

 

$

1,905,009

 

 

 

45.6

%

South

 

 

1,442,929

 

 

 

257,013

 

 

 

30.7

 

 

 

1,185,916

 

 

 

28.4

 

West

 

 

744,940

 

 

 

87,885

 

 

 

15.8

 

 

 

657,055

 

 

 

15.7

 

Midwest

 

 

400,897

 

 

 

19,148

 

 

 

8.5

 

 

 

381,749

 

 

 

9.1

 

Various

 

 

49,000

 

 

 

—

 

 

 

1.0

 

 

 

49,000

 

 

 

1.2

 

Total

 

$

4,705,831

 

 

$

527,102

 

 

 

100.0

%

 

$

4,178,729

 

 

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2017

 

Geographic Region

 

Loan

Commitment

 

 

Unfunded

Commitment

 

 

% Loan

Commitment

 

 

Loan UPB

 

 

% Loan UPB

 

East

 

$

1,600,619

 

 

$

167,447

 

 

 

42.9

%

 

$

1,433,172

 

 

 

44.8

%

South

 

 

1,147,510

 

 

 

278,890

 

 

 

30.8

 

 

 

868,620

 

 

 

27.2

 

West

 

 

674,123

 

 

 

67,746

 

 

 

18.1

 

 

 

606,377

 

 

 

19.0

 

Midwest

 

 

255,904

 

 

 

14,957

 

 

 

6.9

 

 

 

240,947

 

 

 

7.5

 

Various

 

 

49,000

 

 

 

—

 

 

 

1.3

 

 

 

49,000

 

 

 

1.5

 

Total

 

$

3,727,156

 

 

$

529,040

 

 

 

100.0

%

 

$

3,198,116

 

 

 

100.0

%

 

Category

A summary of the loan portfolio by category as of September 30, 2018 and December 31, 2017 based on total loan commitment and current UPB is as follows (dollars in thousands):

 

 

 

September 30, 2018

 

Loan Category

 

Loan

Commitment

 

 

Unfunded

Commitment

 

 

% Loan

Commitment

 

 

Loan UPB

 

 

% Loan UPB

 

Bridge

 

$

2,503,711

 

 

$

203,679

 

 

 

53.2

%

 

$

2,300,032

 

 

 

55.0

%

Light Transitional

 

 

1,365,820

 

 

 

194,652

 

 

 

29.0

 

 

 

1,171,168

 

 

 

28.0

 

Moderate Transitional

 

 

727,499

 

 

 

118,309

 

 

 

15.5

 

 

 

609,190

 

 

 

14.6

 

Construction

 

 

108,801

 

 

 

10,462

 

 

 

2.3

 

 

 

98,339

 

 

 

2.4

 

Total

 

$

4,705,831

 

 

$

527,102

 

 

 

100.0

%

 

$

4,178,729

 

 

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2017

 

Loan Category

 

Loan

Commitment

 

 

Unfunded

Commitment

 

 

% Loan

Commitment

 

 

Loan UPB

 

 

% Loan UPB

 

Bridge

 

$

1,927,488

 

 

$

176,316

 

 

 

51.7

%

 

$

1,751,172

 

 

 

54.7

%

Moderate Transitional

 

 

723,075

 

 

 

132,483

 

 

 

19.4

 

 

 

590,592

 

 

 

18.5

 

Construction

 

 

609,468

 

 

 

166,358

 

 

 

16.4

 

 

 

443,110

 

 

 

13.9

 

Light Transitional

 

 

467,125

 

 

 

53,883

 

 

 

12.5

 

 

 

413,242

 

 

 

12.9

 

Total

 

$

3,727,156

 

 

$

529,040

 

 

 

100.0

%

 

$

3,198,116

 

 

 

100.0

%

 
v3.10.0.1
Subsequent Events
 9 Months Ended
Sep. 30, 2018
Subsequent Events [Abstract]  
Subsequent Events

(16) Subsequent Events

The following events occurred subsequent to September 30, 2018:

Senior Mortgage Loan Originations

From October 1, 2018 through November 5, 2018, the Company has closed, or is in the process of closing, four first mortgage loans with a total loan commitment amount of $540.0 million. These loans will be funded with a combination of cash-on-hand and borrowings.

Cash Dividend

On October 25, 2018, the Company paid a cash dividend on its common stock and Class A common stock of $0.43 per share, or $28.9 million, to stockholders of record as of September 28, 2018.

v3.10.0.1
Summary of Significant Accounting Policies (Policies)
 9 Months Ended
Sep. 30, 2018
Accounting Policies [Abstract]  
Basis of Presentation

Basis of Presentation

The interim consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The interim consolidated financial statements include the Company’s accounts, consolidated variable interest entities for which the Company is the primary beneficiary, and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated.

Use of Estimates

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires estimates of assets, liabilities, revenues, expenses and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Actual results could differ from management’s estimates, and such differences could be material. Significant estimates made in the consolidated financial statements include, but are not limited to: impairment; adequacy of provisions for loan losses; and valuation of financial instruments.

Principles of Consolidation

Principles of Consolidation

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810—Consolidation (“ASC 810”) provides guidance on the identification of a VIE (a variable interest entity for which control is achieved through means other than voting rights) and the determination of which business enterprise, if any, should consolidate the VIE. An entity is considered a VIE if any of the following applies: (1) the equity investors (if any) lack one or more of the essential characteristics of a controlling financial interest; (2) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support; or (3) the equity investors have voting rights that are not proportionate to their economic interests and the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest. The Company consolidates VIEs in which it is considered to be the primary beneficiary. The primary beneficiary is defined as the entity having both of the following characteristics: (1) the power to direct the activities that, when taken together, most significantly impact the VIE’s performance; and (2) the obligation to absorb losses and right to receive the returns from the VIE that would be significant to the VIE.

At each reporting date, the Company reconsiders its primary beneficiary conclusion to determine if its obligation to absorb losses of, or its rights to receive benefits from, the VIE could potentially be more than insignificant, and will consolidate or not consolidate accordingly (see Note 5 for details).
Revenue Recognition

Revenue Recognition

Interest income on loans is accrued using the interest method based on the contractual terms of the loan, adjusted for credit impairment, if any. The objective of the interest method is to arrive at periodic interest income including recognition of fees and costs at a constant effective yield. Premiums, discounts, and origination fees are amortized or accreted into interest income over the lives of the loans using the interest method, or on a straight line basis when it approximates the interest method. Extension and modification fees are accreted into income on a straight line basis, when it approximates the interest method, over the related extension or modification period. Exit fees are accreted into income on a straight line basis, when it approximates the interest method, over the lives of the loans to which they relate unless they can be waived by the Company or a co-lender in connection with a loan refinancing. Prepayment penalties from borrowers are recognized as interest income when received. Certain of the Company’s loan investments have in the past and may in the future provide for additional interest based on the borrower’s operating cash flow or appreciation of the underlying collateral. Such amounts are considered contingent interest and are reflected as interest income only upon certainty of collection.

The Company considers a loan to be non-performing and places the loan on non-accrual status when: (1) management determines the borrower is incapable of, or has ceased efforts toward, curing the cause of a default; (2) the loan becomes 90 days delinquent; or (3) the loan experiences a maturity default. Based on the Company’s judgment as to the collectability of principal, a loan on non-accrual status is either accounted for on a cash basis, where interest income is recognized only upon receipt of cash for principal and interest payments, or on a cost-recovery basis, where all cash receipts reduce the loan’s carrying value, and interest income is only recorded when such carrying value has been fully recovered. During the three and nine months ended September 30, 2018, no loans were placed on non-accrual status and no losses or impairments were recorded to our loan portfolio.
Loans Held for Investment

Loans Held for Investment

Loans that the Company has the intent and ability to hold for the foreseeable future, or until maturity or repayment, are reported at their outstanding principal balances net of any premiums, discounts, loan origination fees and an allowance for loan losses. Loan origination fees and direct loan origination costs are deferred and recognized in interest income over the estimated life of the loans using the interest method, or on a straight line basis when it approximates the interest method, adjusted for actual prepayments.

The Company evaluates each loan classified as a loan held for investment for impairment on a quarterly basis. Impairment occurs when it is deemed probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan. If the loan is considered to be impaired, an allowance is recorded to reduce the carrying value of the loan to the present value of the expected future cash flows discounted at the loan’s contractual effective rate, or the fair value of the collateral securing the impaired loan, less estimated costs to sell such collateral, if recovery of the Company’s investment is expected solely from the sale of such collateral. As part of the quarterly impairment review, we evaluate the risk of each loan and assign a risk rating based on a variety of factors, grouped as follows to include, among other factors: (i) loan and credit structure, including the as-is loan-to-value (“LTV”) and structural features; (ii) quality and stability of real estate value and operating cash flow, including debt yield, property type, dynamics of the geographic, property-type and local market, physical condition, stability of cash flow, leasing velocity and quality and diversity of tenancy; (iii) performance against underwritten business plan; and (iv) quality, experience and financial condition of sponsor, borrower and guarantor(s). Based on a 5-point scale, our loans are rated “1” through “5,” from least risk to greatest risk, respectively, which ratings are defined as follows:

 

1-

Outperform—Exceeds performance metrics (for example, technical milestones, occupancy, rents, net operating income) included in original or current credit underwriting and business plan;

 

2-

Meets or Exceeds Expectations—Collateral performance meets or exceeds substantially all performance metrics included in original or current underwriting / business plan;

 

3-

Satisfactory—Collateral performance meets or is on track to meet underwriting; business plan is met or can reasonably be achieved;

 

4-

Underperformance—Collateral performance falls short of original underwriting, material differences exist from business plan, or both; technical milestones have been missed; defaults may exist, or may soon occur absent material improvement; and

 

5-

Risk of Impairment/Default—Collateral performance is significantly worse than underwriting; major variance from business plan; loan covenants or technical milestones have been breached; timely exit from loan via sale or refinancing is questionable.

Since Inception, the Company has not recorded asset-specific loan loss reserves, nor has it recognized any impairments on its loan portfolio. Our determination of asset-specific loan loss reserves, should any such reserves be necessary, relies on material estimates regarding the fair value of loan collateral. Such losses could be caused by various factors, including, but not limited to, unanticipated adverse changes in the economy or events adversely affecting specific assets, borrowers, industries in which our borrowers operate or markets in which our borrowers or their properties are located. Significant judgment is required when evaluating loans for impairment.

The Company’s loans are typically collateralized by real estate, or in the case of mezzanine loans, by a partnership or similar equity interest in an entity that owns real estate. As a result, the Company regularly evaluates on a loan-by-loan basis the extent and impact of any credit deterioration associated with the performance and/or value of the underlying collateral property as well as the financial and operating capability of the borrower/sponsor. The Company also evaluates the financial strength of loan guarantors, if any, and the borrower’s competency in managing and operating the property or properties. In addition, the Company considers the overall economic environment, real estate sector, and geographic sub-market in which the borrower operates. Such impairment analyses are completed and reviewed by asset management personnel and evaluated by senior management, who utilize various data sources, including (i) periodic financial data such as property occupancy, tenant profile, rental rates, operating expenses, the borrower’s exit plan, and capitalization and discount rates, (ii) site inspections, (iii) sales and financing comparables, (iv) current credit spreads for refinancing and (v) other market data.
Commercial Mortgage-Backed Securities

Commercial Mortgage-Backed Securities

The Company acquires CMBS investments primarily for cash management purposes, and also for investment purposes. The Company designates CMBS investments as available-for-sale on the acquisition date. CMBS investments that are classified as available-for-sale are recorded at fair value in the Company’s consolidated financial statements. Additionally, CMBS investments that are not classified as held-to-maturity and which the Company does not hold for the purpose of selling in the near-term, but may dispose of prior to maturity, are also designated as available-for-sale and are carried at fair value. The Company’s recognition of interest income from its CMBS, including its amortization of premium and discount, follows the Company’s revenue recognition policy as described under “Revenue Recognition” above. The Company uses a specific identification method when determining the cost of a security sold and the amount of unrealized gain or loss reclassified from accumulated other comprehensive income (loss) into earnings. Unrealized losses on securities that, in the judgment of management, are other than temporary are charged against earnings as a loss in the consolidated statements of income and comprehensive income. Significant valuation inputs are Level II in the fair value hierarchy as described below under “Fair Value Measurements”.
Portfolio Financing Arrangements

Portfolio Financing Arrangements

The Company finances certain loan and CMBS investments using secured revolving repurchase agreements, asset-specific financing arrangements (notes payable on the consolidated balance sheets), senior secured credit facilities, and collateralized loan obligations. The related borrowings are recorded as separate liabilities on the Company’s consolidated balance sheets. Interest income earned on the investments and interest expense incurred on the related borrowings are reported separately on the Company’s consolidated statements of income and comprehensive income.

In certain instances, the Company creates structural leverage through the co-origination or non-recourse syndication of a senior loan interest to a third party. For all such syndications the Company has completed through September 30, 2018, the Company has transferred 100% of the senior mortgage loan that the Company originated on a non-recourse basis to a third-party lender and has retained as a loan investment a separate mezzanine loan investment secured by a pledge of the equity in the mortgage borrower. With respect to the senior mortgage loan transferred, the Company retains: no control over the mortgage loan; no economic interest in the mortgage loan; and no recourse to the purchaser or the borrower. Consequently, based on these circumstances and because the Company does not have any continuing involvement with the transferred senior mortgage loan, these syndications are accounted for as sales under GAAP and are removed from the Company’s consolidated financial statements at the time of transfer. The Company’s consolidated balance sheets only include the separate mezzanine loan remaining after the transfer, and not the non-consolidated senior loan interest sold or co-originated that the Company transferred.

Fair Value Measurements

Fair Value Measurements

The Company follows ASC 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”), for its holdings of financial instruments. ASC 820-10 defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands disclosure of fair value measurements. ASC 820-10 determines fair value to be the price that would be received for a financial instrument in a current sale, which assumes an orderly transaction between market participants on the measurement date. The Company determines the estimated fair value of financial assets and liabilities using the three-tier fair value hierarchy established by GAAP, which prioritizes the inputs used in measuring fair value. GAAP establishes market-based or observable inputs as the preferred source of values followed by valuation models using management assumptions in the absence of market inputs. The financial instruments recorded at fair value on a recurring basis in the Company’s consolidated financial statements are cash and cash equivalents, restricted cash and available-for-sale CMBS investments. The three levels of inputs that may be used to measure fair value are as follows:

Level I—Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

Level II—Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level III—Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

For certain financial instruments, the various inputs that management uses to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for such financial instrument is based on the lowest level of input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument. The Company may use valuation techniques consistent with the market and income approaches to measure the fair value of its assets and liabilities. The market approach uses third-party valuations and information obtained from market transactions involving identical or similar assets or liabilities. The income approach uses projections of the future economic benefits of an instrument to determine its fair value, such as in the discounted cash flow methodology. The inputs or methodology used for valuing financial instruments are not necessarily an indication of the risk associated with investing in these financial instruments. Transfers between levels of the fair value hierarchy are assumed to occur at the end of the reporting period.

Income Taxes

Income Taxes

The Company qualifies and has elected to be taxed as a REIT for U.S. federal income tax purposes under the Internal Revenue Code of 1986, as amended, commencing with its initial taxable year ended December 31, 2014. To the extent that it annually distributes at least 90% of its REIT taxable income to stockholders and complies with various other requirements as a REIT, the Company generally will not be subject to U.S. federal income taxes on its distributed REIT taxable income. If the Company fails to continue to qualify as a REIT in any taxable year and does not qualify for certain statutory relief provisions, the Company will be subject to U.S. federal and state income taxes at regular corporate rates beginning with the year in which it fails to qualify and may be precluded from being able to elect to be treated as a REIT for the Company’s four subsequent taxable years. Even though the Company currently qualifies for taxation as a REIT, the Company may be subject to certain U.S. federal, state, local and foreign taxes on the Company’s income and property and to U.S. federal income and excise taxes on the Company’s undistributed REIT taxable income.

Deferred tax assets and liabilities are recognized for future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the periods in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period in which the enactment date occurs. Under ASC Topic 740, Income Taxes (“ASC 740”), a valuation allowance is established when management believes it is more likely than not that a deferred tax asset will not be realized. The Company intends to continue to operate in a manner consistent with, and to continue to meet the requirements to be treated as, a REIT for tax purposes and to distribute all of its REIT taxable income. Accordingly, the Company does not expect to pay corporate level taxes.
Earnings per Common Share

Earnings per Common Share

The Company utilizes the two-class method when assessing participating securities to calculate earnings per common share. Basic and diluted earnings per common share is computed by dividing net income attributable to common stockholders (i.e., holders of common stock and Class A common stock), by the weighted-average number of common shares (both common stock and Class A common stock) outstanding during the period. The preferences, rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications and terms and conditions of redemption of the Class A common stock are identical to the common stock, except (1) the Class A common stock is not a “margin security” as defined in Regulation U of the Board of Governors of the U.S. Federal Reserve System (and rulings and interpretations thereunder) and may not be listed on a national securities exchange or a national market system and (2) each share of Class A common stock is convertible at any time or from time to time, at the option of the holder, for one fully paid and non-assessable share of common stock. The Class A common stock votes together with the common stock as a single class. Shares of Class A common stock have been issued to, and are owned by, TPG RE Finance Trust Management, L.P., a Delaware limited partnership (the “Manager”), and certain individuals or entities affiliated with the Manager, and the sale or conversion to common stock by investors of such shares of Class A common stock is subject to certain restrictions.

Diluted earnings per common share is calculated by including the effect of dilutive securities. The Company accounts for unvested share-based payment awards that contain non-forfeitable dividend rights or dividend equivalents (whether paid or unpaid) as participating securities, which are included in the computation of earnings per share pursuant to the two-class method.
Share-Based Compensation

Share-Based Compensation

Share-based compensation consists of awards issued by the Company to certain employees of affiliates of our Manager and certain members of our Board of Directors. These share-based awards generally vest in installments over a fixed period of time. Compensation expense is recognized in net income on a straight-line basis over the applicable award vesting period. Forfeitures of share-based awards are recognized as they occur.

Deferred Financing Costs

Deferred Financing Costs

Deferred financing costs are reflected net of the collateralized loan obligation and secured financing agreements on the Company’s consolidated balance sheets. These costs are amortized in interest expense using the interest method or on a straight line basis when it approximates the interest method over the life of the related obligations.
Cash and Cash Equivalents

Cash and Cash Equivalents

Cash and cash equivalents include cash held in banks or invested in money market funds with original maturities of less than 90 days. The Company deposits its cash and cash equivalents with high credit quality institutions to minimize credit risk exposure. The Company maintains cash accounts at several financial institutions, which are insured up to a maximum of $250,000 per account as of September 30, 2018 and December 31, 2017. The balances in these accounts may exceed the insured limits.
Restricted Cash

Restricted Cash

Restricted cash primarily represents deposit proceeds from potential borrowers which may be returned to borrowers, after deducting transaction costs paid by the Company for the benefit of the borrowers, upon the closing of a loan transaction.
Accounts Receivable from Servicer/Trustee

Accounts Receivable from Servicer/Trustee

Accounts receivable from Servicer/Trustee represents cash proceeds from loan and CMBS investment activities that have not been remitted to the Company based on contractual procedures previously agreed upon. Amounts are generally held by the Servicer/Trustee for less than 60 days before being remitted to the Company.
Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. ASU 2016-13 will replace the “incurred loss” model under existing guidance with an “expected loss” model for instruments measured at amortized cost, and require entities to record allowances for available-for-sale debt securities rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. Upon adoption, and resulting from this change, the 10 Company expects that it will be required to record a loan loss reserve at origination or acquisition of an individual loan or a loan portfolio. ASU 2016-13 also simplifies the accounting model for purchased credit-impaired debt securities and loans. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019 and is to be adopted through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Company is currently evaluating the impact ASU 2016-13 will have on its consolidated financial statements.

Recently Adopted Accounting Pronouncements

In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”). ASU 2018-07 expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The amendments state that Topic 718 applies to all share-based payment awards. ASU 2018-07 is effective for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted, but no earlier than an entity’s adoption of ASC 606, Revenue from Contracts with Customers. On July 1, 2018, the Company adopted these updates for share-based compensation payments made to certain individuals employed by an affiliate of the Manager. The Company’s adoption of the share-based compensation ASU on July 1, 2018 did not have a material impact on the Company’s consolidated financial statements.
v3.10.0.1
Loans Held for Investment (Tables)
 9 Months Ended
Sep. 30, 2018
Receivables [Abstract]  
Schedule of Loan Investment Portfolio

The following tables present an overview of the loan investment portfolio as of September 30, 2018 and December 31, 2017 (dollars in thousands):

 

 

 

September 30, 2018

 

Loans Receivable

 

Outstanding

Principal

 

 

Unamortized

Premium

(Discount), Loan

Origination

Fees, net

 

 

Carrying

Amount

 

Senior loans

 

$

4,178,729

 

 

$

(21,076

)

 

$

4,157,653

 

Subordinated and mezzanine loans

 

 

—

 

 

 

—

 

 

 

—

 

Subtotal before allowance

 

 

4,178,729

 

 

 

(21,076

)

 

 

4,157,653

 

Allowance for loan losses

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

$

4,178,729

 

 

$

(21,076

)

 

$

4,157,653

 

 

 

 

December 31, 2017

 

Loans Receivable

 

Outstanding

Principal

 

 

Unamortized

Premium

(Discount), Loan

Origination

Fees, net

 

 

Carrying

Amount

 

Senior loans

 

$

3,122,670

 

 

$

(22,143

)

 

$

3,100,527

 

Subordinated and mezzanine loans

 

 

75,446

 

 

 

(301

)

 

 

75,145

 

Subtotal before allowance

 

 

3,198,116

 

 

 

(22,444

)

 

 

3,175,672

 

Allowance for loan losses

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

$

3,198,116

 

 

$

(22,444

)

 

$

3,175,672

 

 
Summary of Loan Portfolio Activity

For the nine months ended September 30, 2018, loan portfolio activity was as follows (dollars in thousands):

 

 

 

Carrying Value

 

Balance at December 31, 2017

 

$

3,175,672

 

Additions during the period:

 

 

 

 

Loans originated

 

 

1,622,084

 

Additional fundings

 

 

207,657

 

Amortization of discount and origination fees

 

 

12,858

 

Deductions during the period:

 

 

 

 

Collection of principal

 

 

(860,618

)

Balance at September 30, 2018

 

$

4,157,653

 

 
Summary of Carrying Values and Results of Internal Risk Rating Review

The table below summarizes the carrying values and results of the Company’s internal risk rating review performed as of September 30, 2018 and December 31, 2017 (dollars in thousands):

 

 

 

Carrying Value

 

Rating

 

September 30, 2018

 

 

December 31, 2017

 

1

 

$

78,898

 

 

$

—

 

2

 

 

1,089,790

 

 

 

1,318,816

 

3

 

 

2,775,828

 

 

 

1,680,913

 

4

 

 

213,137

 

 

 

175,943

 

5

 

 

—

 

 

 

—

 

Totals

 

$

4,157,653

 

 

$

3,175,672

 

Weighted Average Risk Rating(1)

 

 

2.8

 

 

 

2.6

 

 

(1)

Weighted Average Risk Rating calculated based on unpaid principal balance at period end.

 
v3.10.0.1
Commercial Mortgage-Backed Securities (Tables)
 9 Months Ended
Sep. 30, 2018
Investments Debt And Equity Securities [Abstract]  
Available-for-Sale Commercial Mortgage-Backed Securities

Details of the carrying and fair values of the Company’s CMBS portfolio are as follows (dollars in thousands):

 

 

 

September 30, 2018

 

 

 

Face

Amount

 

 

Unamortized

Premium (Discount), net

 

 

Gross

Unrealized Loss

 

 

Estimated

Fair Value

 

Investments, at Fair Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial mortgage-backed securities

 

$

76,603

 

 

$

(40

)

 

$

(1,149

)

 

$

75,414

 

 

 

 

December 31, 2017

 

 

 

Face

Amount

 

 

Unamortized

Premium (Discount), net

 

 

Gross

Unrealized Loss

 

 

Estimated

Fair Value

 

Investments, at Fair Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial mortgage-backed securities

 

$

85,661

 

 

$

268

 

 

$

(34

)

 

$

85,895

 

 
Available-for-Sale Commercial Mortgage-Backed Securities by Contractual Maturity

The Company’s CMBS have a weighted average contractual maturity, based on estimated fair value, of 15.0 years. The amortized cost and estimated fair value of the Company’s available-for-sale CMBS by contractual maturity are shown in the following table (dollars in thousands):

 

 

 

September 30, 2018

 

 

 

Amortized Cost

 

 

Estimated Fair Value

 

Maturity Date

 

 

 

 

 

 

 

 

After one, within five years

 

$

37,937

 

 

$

38,072

 

After five years

 

 

38,627

 

 

 

37,342

 

Total investment in commercial mortgage-backed

   securities, at amortized cost and estimated fair value

 

$

76,564

 

 

$

75,414

 

 

 

 

December 31, 2017

 

 

 

Amortized Cost

 

 

Estimated Fair Value

 

Maturity Date

 

 

 

 

 

 

 

 

After one, within five years

 

$

36,700

 

 

$

36,872

 

After five years

 

 

49,229

 

 

 

49,023

 

Total investment in commercial mortgage-backed

   securities, at amortized cost and estimated fair value

 

$

85,929

 

 

$

85,895

 

 
v3.10.0.1
Variable Interest Entities and Collateralized Loan Obligation (Tables)
 9 Months Ended
Sep. 30, 2018
Summary of Variable Interest Entities Assets and Liabilities

The carrying values of the Company’s total assets and total liabilities related to TRTX 2018-FL1 at September 30, 2018 included the following VIE assets and liabilities (dollars in thousands):

 

 

 

September 30, 2018

 

ASSETS

 

 

 

 

Cash and Cash Equivalents

 

$

18,988

 

Accrued Interest Receivable

 

 

3,010

 

Accounts Receivable from Servicer/Trustee

 

 

3

 

Loans Held for Investment

 

 

932,380

 

Total Assets

 

$

954,381

 

LIABILITIES

 

 

 

 

Accrued Interest Payable

 

$

(938

)

Accrued Expenses

 

 

(103

)

Collateralized Loan Obligation

 

 

(740,415

)

Total Liabilities

 

$

(741,456

)

 
Collateralized Loan Obligation  
Schedule of Borrowings and Corresponding Collateral

The following table outlines TRTX 2018-FL1 borrowings and loan collateral under the Company’s consolidated Issuers (dollars in thousands):

 

As of September 30, 2018

 

Collateral (loan investments)

 

 

Debt (notes issued)

 

Outstanding Principal

 

 

Carrying Value

 

 

Face Value

 

 

Carrying Value

 

$

932,380

 

 

$

932,380

 

 

$

(745,904

)

 

$

(740,415

)

 
v3.10.0.1
Secured Revolving Repurchase Agreements, Senior Secured Credit Facility and Notes Payable (Tables)
 9 Months Ended
Sep. 30, 2018
Debt Instrument [Line Items]  
Schedule of Information Related to Notes Payable, Repurchase Agreement, Senior Secured Credit Facility

The following table presents certain information regarding the Company’s notes payable, secured revolving repurchase agreements, and senior secured credit facilities as of September 30, 2018 and December 31, 2017, respectively. Except as otherwise noted, all agreements are on a non-recourse basis. Amounts included are shown in thousands:

 

As of September 30, 2018

 

Notes Payable

 

Maturity

Date

 

Index Rate

 

Weighted Average Spread

 

 

Interest

Rate

 

 

Commitment

Amount

 

 

Maximum

Current

Availability

 

 

Balance

Outstanding

 

 

Principal

Balance of

Collateral

 

Bank of the Ozarks

 

08/23/19

 

1 Month Libor

 

 

4.5

%

 

 

5.8

%

 

$

76,161

 

 

$

7,323

 

 

$

68,838

 

 

$

98,340

 

BMO Harris Bank(1)

 

04/09/20

 

1 Month Libor

 

 

2.7

 

 

 

4.0

 

 

 

32,500

 

 

 

—

 

 

 

32,500

 

 

 

45,000

 

Subtotal

 

 

 

 

 

 

 

 

 

 

 

 

 

 

108,661

 

 

 

7,323

 

 

 

101,338

 

 

 

143,340

 

 

Repurchase Agreements

 

Maturity

Date

 

Index Rate

 

Weighted Average Spread

 

 

Interest

Rate

 

 

Commitment

Amount

 

 

Maximum

Current

Availability

 

 

Balance

Outstanding

 

 

Principal

Balance of

Collateral

 

Goldman Sachs(1)

 

08/19/19

 

1 Month Libor

 

 

2.3

%

 

 

4.4

%

 

$

750,000

 

 

$

378,430

 

 

$

371,570

 

 

$

780,647

 

Wells Fargo(1)

 

05/25/19

 

1 Month Libor

 

 

1.9

 

 

 

4.1

 

 

 

750,000

 

 

 

305,988

 

 

 

444,012

 

 

 

600,575

 

JP Morgan(1)

 

08/20/21

 

1 Month Libor

 

 

2.1

 

 

 

4.2

 

 

 

428,802

 

 

 

91,486

 

 

 

337,316

 

 

 

455,267

 

Morgan Stanley(1)

 

05/04/19

 

1 Month Libor

 

 

2.3

 

 

 

4.5

 

 

 

500,000

 

 

 

245,254

 

 

 

254,746

 

 

 

337,591

 

US Bank(1)

 

10/09/21

 

1 Month Libor

 

 

1.8

 

 

 

4.0

 

 

 

212,840

 

 

 

6,800

 

 

 

206,040

 

 

 

261,300

 

Goldman Sachs (CMBS)(2)

 

12/03/18

 

3 Month Libor

 

 

0.2

 

 

 

2.5

 

 

 

100,000

 

 

 

65,226

 

 

 

34,774

 

 

 

38,710

 

Royal Bank of Canada

   (CMBS)(2)

 

N/A

 

3 Month Libor

 

N/A

 

 

N/A

 

 

 

100,000

 

 

 

100,000

 

 

 

—

 

 

 

—

 

Subtotal

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,841,642

 

 

 

1,193,184

 

 

 

1,648,458

 

 

 

2,474,090

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Senior Secured Credit Facilities

 

Maturity

Date

 

Index Rate

 

Weighted Average Spread

 

 

Interest

Rate

 

 

Commitment

Amount

 

 

Maximum

Current

Availability

 

 

Balance

Outstanding

 

 

Principal

Balance of

Collateral

 

Bank of America(1)

 

09/29/20

 

1 Month Libor

 

 

1.9

%

 

 

4.1

%

 

$

500,000

 

 

$

112,560

 

 

 

387,440

 

 

 

486,666

 

Citibank (3)

 

07/12/20

 

1 Month Libor

 

 

2.3

 

 

 

4.5

 

 

 

160,000

 

 

 

95,856

 

 

 

64,144

 

 

 

133,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

660,000

 

 

$

208,416

 

 

$

451,584

 

 

$

619,666

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

$

3,610,303

 

 

$

1,408,923

 

 

$

2,201,380

 

 

$

3,237,096

 

 

 

(1)

Borrowings under secured revolving repurchase agreements, one senior secured credit facility, and one note payable with a guarantee for 25% recourse.

 

(2)

Borrowings under secured revolving repurchase agreements with a guarantee for 100% recourse. Maturity Date represents the sooner of the next maturity date of the CMBS secured revolving repurchase agreement, or roll date for the applicable underlying trade confirmation, subsequent to September 30, 2018.

 

(3)

Borrowings under the senior secured credit facility with a guarantee for 100% recourse.

 

As of December 31, 2017

 

Notes Payable

 

Maturity

Date

 

Index Rate

 

Weighted Average Spread

 

 

Interest

Rate

 

 

Commitment

Amount

 

 

Maximum

Current

Availability

 

 

Balance

Outstanding

 

 

Principal

Balance of

Collateral

 

Bank of the Ozarks

 

08/23/19

 

1 Month Libor

 

 

4.5

%

 

 

5.9

%

 

$

92,400

 

 

$

43,979

 

 

$

48,421

 

 

$

69,172

 

Bank of the Ozarks

 

08/31/18

 

1 Month Libor

 

 

4.0

 

 

 

5.4

 

 

 

68,600

 

 

 

14,151

 

 

 

54,449

 

 

 

77,784

 

Deutsche Bank

 

09/25/19

 

1 Month Libor

 

 

3.5

 

 

 

4.9

 

 

 

64,779

 

 

 

15,895

 

 

 

48,884

 

 

 

81,473

 

Deutsche Bank

 

06/29/18

 

1 Month Libor

 

 

3.3

 

 

 

4.6

 

 

 

49,644

 

 

 

18,224

 

 

 

31,420

 

 

 

48,339

 

Bank of the Ozarks

 

05/22/18

 

1 Month Libor

 

 

4.8

 

 

 

6.1

 

 

 

48,750

 

 

 

17,479

 

 

 

31,271

 

 

 

48,109

 

Deutsche Bank

 

12/09/18

 

1 Month Libor

 

 

3.7

 

 

 

5.0

 

 

 

42,543

 

 

 

1

 

 

 

42,542

 

 

 

60,775

 

BMO Harris Bank(1)

 

04/09/20

 

1 Month Libor

 

 

2.7

 

 

 

4.0

 

 

 

32,500

 

 

 

—

 

 

 

32,500

 

 

 

45,000

 

Subtotal

 

 

 

 

 

 

 

 

 

 

 

 

 

 

399,216

 

 

 

109,729

 

 

 

289,487

 

 

 

430,652

 

 

Repurchase Agreements

 

Maturity

Date

 

Index Rate

 

Weighted Average Spread

 

 

Interest

Rate

 

 

Commitment

Amount

 

 

Maximum

Current

Availability

 

 

Balance

Outstanding

 

 

Principal

Balance of

Collateral

 

Goldman Sachs(1)

 

08/19/18

 

1 Month Libor

 

 

2.2

%

 

 

3.6

%

 

$

750,000

 

 

$

183,253

 

 

$

566,747

 

 

$

890,736

 

Wells Fargo(1)

 

05/25/19

 

1 Month Libor

 

 

2.1

 

 

 

3.6

 

 

 

750,000

 

 

 

232,462

 

 

 

517,538

 

 

 

814,886

 

JP Morgan(1)

 

08/20/18

 

1 Month Libor

 

 

2.5

 

 

 

4.0

 

 

 

376,942

 

 

 

120,014

 

 

 

256,928

 

 

 

382,135

 

Morgan Stanley(1)

 

05/04/19

 

1 Month Libor

 

 

2.4

 

 

 

3.9

 

 

 

500,000

 

 

 

120,002

 

 

 

379,998

 

 

 

533,707

 

US Bank(1)

 

12/09/19

 

1 Month Libor

 

 

2.0

 

 

 

3.6

 

 

 

150,000

 

 

 

78,600

 

 

 

71,400

 

 

 

93,000

 

Goldman Sachs (CMBS)(2)

 

03/02/18

 

3 Month Libor

 

 

0.1

 

 

 

1.6

 

 

 

100,000

 

 

 

64,615

 

 

 

35,385

 

 

 

39,332

 

Royal Bank of Canada

   (CMBS)(2)

 

03/20/18

 

3 Month Libor

 

 

1.0

 

 

 

2.6

 

 

 

100,000

 

 

 

92,195

 

 

 

7,805

 

 

 

8,418

 

Subtotal

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,726,942

 

 

 

891,141

 

 

 

1,835,801

 

 

 

2,762,214

 

 

Senior Secured Credit Facility

 

Maturity

Date

 

Index Rate

 

Weighted Average Spread

 

 

Interest

Rate

 

 

Commitment

Amount

 

 

Maximum

Current

Availability

 

 

Balance

Outstanding

 

 

Principal

Balance of

Collateral

 

Bank of America(1)

 

09/29/20

 

1 Month Libor

 

 

—

 

 

 

—

 

 

$

250,000

 

 

$

250,000

 

 

 

—

 

 

 

—

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

$

3,376,158

 

 

$

1,250,870

 

 

$

2,125,288

 

 

$

3,192,866

 

 

(1)

Borrowings under secured revolving repurchase agreements, senior secured credit facility, and one note payable with a guarantee for 25% recourse.

(2)

Borrowings under secured revolving repurchase agreements with a guarantee for 100% recourse. Maturity Date represents the sooner of the next maturity date of the CMBS secured revolving repurchase agreement, or roll date for the applicable underlying trade confirmation, subsequent to December 31, 2017.
Summary of Repurchase Agreements Secured by CMBS, Short-term Borrowings, and Counterparty Concentration

 

 

 

September 30, 2018

 

 

 

Commitment

Amount

 

 

UPB of Collateral

 

 

Carrying Value

of Collateral(1)

 

 

Amounts

Payable under

Repurchase

Agreements(2)

 

 

Net

Counterparty

Exposure(3)

 

 

Percent of

Stockholders'

Equity

 

 

Days to

Extended

Maturity(4)

 

Goldman Sachs Bank

 

$

100,000

 

 

$

38,710

 

 

$

37,468

 

 

$

35,049

 

 

$

2,419

 

 

 

0.2

%

 

$

64

 

Royal Bank of Canada

 

 

100,000

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Subtotal / Weighted Average

 

$

200,000

 

 

$

38,710

 

 

$

37,468

 

 

$

35,049

 

 

$

2,419

 

 

 

 

 

 

 

64

 

Total / Weighted Average - Loans

   and CMBS

 

$

2,841,642

 

 

$

2,474,090

 

 

$

2,469,068

 

 

$

1,652,385

 

 

$

816,683

 

 

 

 

 

 

 

1,099

 

 

(1)

Amounts shown in the table include interest receivable of $0.1 million and are net of premium, discount, and unrealized gains of $1.4 million.

(2)

Amounts shown in the table include interest payable of $0.3 million.

(3)

Represents the net carrying value of available-for-sale securities sold under agreements to repurchase, including accrued interest plus any cash or assets on deposit to secure the repurchase obligation, less the amount of the repurchase liability, including accrued interest.

(4)

Represents the sooner of the next maturity date of the CMBS secured revolving repurchase agreement, or roll date for the applicable underlying trade confirmation, subsequent to September 30, 2018.

The following table summarizes certain characteristics of the Company’s secured revolving repurchase agreements secured by CMBS, all of which are considered short-term borrowings, and comprise counterparty concentration risks, at December 31, 2017 (dollars in thousands):

 

 

 

December 31, 2017

 

 

 

Commitment

Amount

 

 

UPB of Collateral

 

 

Carrying Value

of Collateral(1)

 

 

Amounts

Payable under

Repurchase

Agreements(2)

 

 

Net

Counterparty

Exposure(3)

 

 

Percent of

Stockholders'

Equity

 

 

Days to

Extended

Maturity(4)

 

Goldman Sachs Bank

 

$

100,000

 

 

$

39,332

 

 

$

39,213

 

 

$

35,426

 

 

$

3,787

 

 

 

0.3

%

 

 

61

 

Royal Bank of Canada

 

 

100,000

 

 

 

8,418

 

 

 

8,675

 

 

 

7,879

 

 

 

796

 

 

 

0.1

 

 

 

79

 

Subtotal / Weighted Average

 

$

200,000

 

 

$

47,750

 

 

$

47,888

 

 

$

43,305

 

 

$

4,583

 

 

 

 

 

 

 

64

 

Total / Weighted Average - Loans

   and CMBS

 

$

2,726,942

 

 

$

2,762,214

 

 

$

2,753,549

 

 

$

1,839,319

 

 

$

914,230

 

 

 

 

 

 

 

933

 

 

(1)

Amounts shown in the table include interest receivable of $0.1 million.

(2)

Amounts shown in the table include interest payable of $0.1 million.

(3)

Represents the net carrying value of available-for-sale securities sold under agreements to repurchase, including accrued interest plus any cash or assets on deposit to secure the repurchase obligation, less the amount of the repurchase liability, including accrued interest.

(4)

Represents the sooner of the next maturity date of the CMBS secured revolving repurchase agreement, or roll date for the applicable underlying trade confirmation, subsequent to December 31, 2017.

The agreements include various covenants covering net worth, liquidity, recourse limitations, and debt coverage. The Company believes it was in compliance with all covenants as of September 30, 2018 and December 31, 2017.

 
Senior Secured Credit Facilities  
Debt Instrument [Line Items]  
Schedule of Information Related to Notes Payable, Repurchase Agreement, Senior Secured Credit Facility

 

 

 

September 30, 2018

 

Senior Secured Credit Facilities

 

Maturity

Date

 

Index Rate

 

Weighted

Average

Spread

 

 

Interest

Rate

 

 

Commitment

Amount

 

 

Maximum

Current

Availability

 

 

Balance

Outstanding

 

Bank of America

 

9/29/2020

 

1 Month Libor

 

 

1.9

%

 

 

4.1

%

 

$

500,000

 

 

$

112,560

 

 

$

387,440

 

Citibank

 

7/12/2020

 

1 Month Libor

 

 

2.3

%

 

 

4.5

%

 

$

160,000

 

 

$

95,856

 

 

$

64,144

 

 
Commercial Mortgage Loans  
Debt Instrument [Line Items]  
Summary of Repurchase Agreements Secured by Commercial Mortgage Loans, Long - term Borrowings, and Counterparty Concentration

At September 30, 2018 and December 31, 2017, the Company had five secured revolving repurchase agreements to finance its loan investing activities. Credit spreads vary depending upon the collateral type and advance rate. Assets pledged at September 30, 2018 and December 31, 2017 consisted of 54 and 48 mortgage loans, respectively. During the three months ended September 30, 2018, the Company amended its Goldman Sachs Bank USA and JPMorgan Chase Bank, National Association secured revolving repurchase facilities, extending the maturity dates to August 19, 2019 and August 20, 2021, respectively.

The following table summarizes certain characteristics of the Company’s secured revolving repurchase agreements secured by commercial mortgage loans, all of which are considered long-term borrowings, and comprise counterparty concentration risks, at September 30, 2018 (dollars in thousands):

 

 

 

September 30, 2018

 

 

 

Commitment

Amount

 

 

UPB of Collateral

 

 

Carrying Value

of Collateral(1)

 

 

Amounts

Payable under

Repurchase Agreements(2)

 

 

Net

Counterparty

Exposure(3)

 

 

Percent of

Stockholders'

Equity

 

 

Days to

Extended

Maturity

 

Goldman Sachs Bank

 

$

750,000

 

 

$

780,647

 

 

$

777,782

 

 

$

372,207

 

 

$

405,575

 

 

 

30.5

%

 

 

323

 

Wells Fargo Bank

 

 

750,000

 

 

 

600,575

 

 

 

599,306

 

 

 

444,777

 

 

 

154,529

 

 

 

11.6

 

 

 

968

 

Morgan Stanley Bank(4)

 

 

500,000

 

 

 

337,591

 

 

 

340,286

 

 

 

256,139

 

 

 

84,147

 

 

 

6.3

 

 

N/A

 

JP Morgan Chase Bank

 

 

428,802

 

 

 

455,267

 

 

 

454,381

 

 

 

337,879

 

 

 

116,502

 

 

 

8.8

 

 

 

1,785

 

US Bank

 

 

212,840

 

 

 

261,300

 

 

 

259,845

 

 

 

206,334

 

 

 

53,511

 

 

 

4.0

 

 

 

1,835

 

Subtotal / Weighted Average

 

 

2,641,642

 

 

 

2,435,380

 

 

 

2,431,600

 

 

 

1,617,336

 

 

 

814,264

 

 

 

 

 

 

 

1,126

 

 

(1)

Amounts shown in the table include interest receivable of $14.3 million and are net of premium, discount and origination fees of $18.1 million.

(2)

Amounts shown in the table include interest payable of $3.7 million and do not reflect unamortized deferred financing fees of $8.8 million.

(3)

Represents the net carrying value of the commercial real estate assets sold under agreements to repurchase, including accrued interest plus any cash or assets on deposit to secure the repurchase obligation, less the amount of the repurchase liability, including accrued interest.

(4)

The Morgan Stanley Bank credit facility is excluded from the Days to Extended Maturity calculation because it does not have a limit on the maximum number of permitted extensions.

The following table summarizes certain characteristics of the Company’s secured revolving repurchase agreements secured by commercial mortgage loans, all of which are considered long-term borrowings, and comprise counterparty concentration risks, at December 31, 2017 (dollars in thousands):

 

 

 

December 31, 2017

 

 

 

Commitment

Amount

 

 

UPB of Collateral

 

 

Carrying Value

of Collateral(1)

 

 

Amounts

Payable under

Repurchase Agreements(2)

 

 

Net

Counterparty

Exposure(3)

 

 

Percent of

Stockholders'

Equity

 

 

Days to

Extended

Maturity

 

Goldman Sachs Bank

 

$

750,000

 

 

$

890,736

 

 

$

887,667

 

 

$

568,012

 

 

$

319,655

 

 

 

26.6

%

 

 

596

 

Wells Fargo Bank

 

 

750,000

 

 

 

814,886

 

 

 

811,257

 

 

 

518,353

 

 

 

292,904

 

 

 

24.4

 

 

 

1,241

 

Morgan Stanley Bank(4)

 

 

500,000

 

 

 

533,707

 

 

 

531,747

 

 

 

380,592

 

 

 

151,155

 

 

 

12.6

 

 

N/A

 

JP Morgan Chase Bank

 

 

376,942

 

 

 

382,135

 

 

 

382,542

 

 

 

257,484

 

 

 

125,058

 

 

 

10.4

 

 

 

963

 

US Bank

 

 

150,000

 

 

 

93,000

 

 

 

92,448

 

 

 

71,573

 

 

 

20,875

 

 

 

1.7

 

 

 

1,804

 

Subtotal / Weighted Average

 

 

2,526,942

 

 

 

2,714,464

 

 

 

2,705,661

 

 

 

1,796,014

 

 

 

909,647

 

 

 

 

 

 

 

960

 

 

(1)

Amounts shown in the table include interest receivable of $11.6 million and are net of premium, discount and origination fees of $20.4 million.

(2)

Amounts shown in the table include interest payable of $3.4 million and do not reflect unamortized deferred financing fees of $8.7 million.

(3)

Represents the net carrying value of the commercial real estate assets sold under agreements to repurchase, including accrued interest plus any cash or assets on deposit to secure the repurchase obligation, less the amount of the repurchase liability, including accrued interest.

(4)

The Morgan Stanley Bank credit facility is excluded from the Days to Extended Maturity calculation because it does not have a limit on the maximum number of permitted extensions.
v3.10.0.1
Schedule of Maturities (Tables)
 9 Months Ended
Sep. 30, 2018
Debt Disclosure [Abstract]  
Schedule of Future Principal Payments

The future principal payments for the five years subsequent to September 30, 2018 and thereafter are as follows (in thousands):

 

 

 

CLO

(TRTX 2018-FL1)

 

 

Senior Secured

Credit Facilities

 

 

Repurchase

Agreements

 

 

Notes

Payable

 

2018

 

$

—

 

 

$

—

 

 

$

60,081

 

 

$

—

 

2019

 

 

474,632

 

 

 

—

 

 

 

1,216,535

 

 

 

68,838

 

2020

 

 

213,615

 

 

 

451,584

 

 

 

94,536

 

 

 

32,500

 

2021

 

 

52,657

 

 

 

—

 

 

 

277,306

 

 

 

—

 

2022

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Thereafter

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

$

740,904

 

 

$

451,584

 

 

$

1,648,458

 

 

$

101,338

 

 
v3.10.0.1
Fair Value Measurements (Tables)
 9 Months Ended
Sep. 30, 2018
Fair Value Disclosures [Abstract]  
Summary of Financial Assets and Liabilities Not Carried at Fair Value On Recurring Basis

The following tables provide information about financial assets and liabilities not carried at fair value on a recurring basis in our consolidated balance sheet (dollars in thousands):

 

 

September 30, 2018

 

 

 

Carrying Value

 

 

Level I

 

 

Level II

 

 

Level III

 

Financial Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans Held for Investment

 

$

4,157,653

 

 

$

—

 

 

$

—

 

 

$

4,187,202

 

Financial Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CLO (TRTX 2018-FL1)

 

 

735,415

 

 

 

—

 

 

 

—

 

 

 

735,415

 

Secured Financing Arrangements

 

 

2,187,950

 

 

 

—

 

 

 

—

 

 

 

2,187,950

 

 

 

 

December 31, 2017

 

 

 

Carrying Value

 

 

Level I

 

 

Level II

 

 

Level III

 

Financial Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans Held for Investment

 

$

3,175,672

 

 

$

—

 

 

$

—

 

 

$

3,202,150

 

Financial Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured Financing Arrangements

 

 

2,114,990

 

 

 

—

 

 

 

—

 

 

 

2,114,990

 

 
v3.10.0.1
Related Party Transactions (Tables)
 9 Months Ended
Sep. 30, 2018
Related Party Transactions [Abstract]  
Summary of Management Agreement Fees Incurred and Paid Related to Pre-IPO and Post-IPO Management Agreements and Collateral Management Agreement

For the three and nine months ended September 30, 2018 and 2017, the Company incurred and paid the following management fees, incentive management fees, and collateral management fees related to its pre-IPO and Post-IPO Management Agreements and the 2014-CLO Collateral Management Agreement (dollars in thousands):

 

 

 

Three Months Ended September 30,

 

 

 

2018

 

 

2017

 

Post-IPO Management Agreement fees incurred

 

$

6,047

 

 

$

3,404

 

Post-IPO Management Agreement fees paid

 

 

5,909

 

 

 

—

 

 

 

 

 

 

 

 

 

 

Pre-IPO Management Agreement and Collateral Management fees incurred

 

 

—

 

 

 

1,079

 

Pre-IPO Management Agreement and Collateral Management fees paid

 

 

—

 

 

 

4,574

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

 

 

2018

 

 

2017

 

Post-IPO Management Agreement fees incurred

 

$

17,586

 

 

$

—

 

Post-IPO Management Agreement fees paid

 

 

16,771

 

 

 

—

 

 

 

 

 

 

 

 

 

 

Pre-IPO Management Agreement and Collateral Management fees incurred

 

 

—

 

 

 

10,023

 

Pre-IPO Management Agreement and Collateral Management fees paid

 

 

—

 

 

 

11,930

 

 
v3.10.0.1
Earnings per Share (Tables)
 9 Months Ended
Sep. 30, 2018
Earnings Per Share [Abstract]  
Schedule of Calculation of Basic and Diluted Earnings per Common Share

The following table sets forth the calculation of basic and diluted earnings per common share (common stock and Class A common stock) based on the weighted-average number of shares of common stock and Class A common stock outstanding (in thousands, except share and per share data):

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Net Income Attributable to TPG RE Finance Trust, Inc.

 

$

26,824

 

 

$

20,787

 

 

$

78,373

 

 

$

69,582

 

Participating Securities' Share in Earnings

 

 

(27

)

 

 

—

 

 

 

(96

)

 

 

—

 

Net Income Attributable to Common Stockholders

 

$

26,797

 

 

$

20,787

 

 

$

78,277

 

 

$

69,582

 

Weighted Average Common Shares Outstanding, Basic and Diluted

 

 

64,295,973

 

 

 

58,685,979

 

 

 

61,635,988

 

 

 

51,969,733

 

Per Common Share Amount, Basic and Diluted

 

$

0.42

 

 

$

0.35

 

 

$

1.27

 

 

$

1.34

 

 
v3.10.0.1
Concentration of Credit Risk (Tables)
 9 Months Ended
Sep. 30, 2018
Loans And Leases Receivable Disclosure [Line Items]  
Summary of Loan Portfolio by Property/ Loan Category Type

Property Type

A summary of the loan portfolio by property type as of September 30, 2018 and December 31, 2017 based on total loan commitment and current unpaid principal balance (“UPB”) is as follows (dollars in thousands):

 

 

 

September 30, 2018

 

Property Type

 

Loan

Commitment

 

 

Unfunded

Commitment

 

 

% of Loan

Commitment

 

 

Loan UPB

 

 

% of Loan UPB

 

Office

 

$

1,776,866

 

 

$

272,336

 

 

 

37.8

%

 

$

1,504,530

 

 

 

36.0

%

Multifamily

 

 

950,808

 

 

 

76,023

 

 

 

20.2

 

 

 

874,785

 

 

 

20.9

 

Mixed Use

 

 

758,500

 

 

 

87,567

 

 

 

16.1

 

 

 

670,933

 

 

 

16.1

 

Hotel

 

 

627,994

 

 

 

13,290

 

 

 

13.3

 

 

 

614,704

 

 

 

14.7

 

Condominium

 

 

276,044

 

 

 

25,462

 

 

 

5.9

 

 

 

250,582

 

 

 

6.0

 

Retail

 

 

239,058

 

 

 

52,424

 

 

 

5.1

 

 

 

186,634

 

 

 

4.5

 

Industrial

 

 

66,500

 

 

 

—

 

 

 

1.4

 

 

 

66,500

 

 

 

1.6

 

Other

 

 

10,061

 

 

 

—

 

 

 

0.2

 

 

 

10,061

 

 

 

0.2

 

Total

 

$

4,705,831

 

 

$

527,102

 

 

 

100.0

%

 

$

4,178,729

 

 

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2017

 

Property Type

 

Loan

Commitment

 

 

Unfunded

Commitment

 

 

% of Loan

Commitment

 

 

Loan UPB

 

 

% of Loan UPB

 

Office

 

$

836,826

 

 

$

160,450

 

 

 

22.5

%

 

$

676,376

 

 

 

21.1

%

Multifamily

 

 

813,775

 

 

 

75,509

 

 

 

21.8

 

 

 

738,266

 

 

 

23.1

 

Hotel

 

 

693,569

 

 

 

27,980

 

 

 

18.6

 

 

 

665,589

 

 

 

20.8

 

Condominium

 

 

679,779

 

 

 

166,358

 

 

 

18.2

 

 

 

513,421

 

 

 

16.1

 

Mixed Use

 

 

431,500

 

 

 

57,243

 

 

 

11.6

 

 

 

374,257

 

 

 

11.7

 

Retail

 

 

195,012

 

 

 

41,500

 

 

 

5.2

 

 

 

153,512

 

 

 

4.8

 

Industrial

 

 

66,500

 

 

 

—

 

 

 

1.8

 

 

 

66,500

 

 

 

2.1

 

Other

 

 

10,195

 

 

 

—

 

 

 

0.3

 

 

 

10,195

 

 

 

0.3

 

Total

 

$

3,727,156

 

 

$

529,040

 

 

 

100.0

%

 

$

3,198,116

 

 

 

100.0

%

 
Summary of Geographic Composition of Loans Held for Investment Based on Current UPB and Loan Commitment

All of the Company’s loans held for investment are secured by properties within the United States. The geographic composition of loans held for investment based on total loan commitment and current UPB as of September 30, 2018 and December 31, 2017 is as follows (dollars in thousands):

 

 

 

September 30, 2018

 

Geographic Region

 

Loan

Commitment

 

 

Unfunded

Commitment

 

 

% Loan

Commitment

 

 

Loan UPB

 

 

% Loan UPB

 

East

 

$

2,068,065

 

 

$

163,056

 

 

 

44.0

%

 

$

1,905,009

 

 

 

45.6

%

South

 

 

1,442,929

 

 

 

257,013

 

 

 

30.7

 

 

 

1,185,916

 

 

 

28.4

 

West

 

 

744,940

 

 

 

87,885

 

 

 

15.8

 

 

 

657,055

 

 

 

15.7

 

Midwest

 

 

400,897

 

 

 

19,148

 

 

 

8.5

 

 

 

381,749

 

 

 

9.1

 

Various

 

 

49,000

 

 

 

—

 

 

 

1.0

 

 

 

49,000

 

 

 

1.2

 

Total

 

$

4,705,831

 

 

$

527,102

 

 

 

100.0

%

 

$

4,178,729

 

 

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2017

 

Geographic Region

 

Loan

Commitment

 

 

Unfunded

Commitment

 

 

% Loan

Commitment

 

 

Loan UPB

 

 

% Loan UPB

 

East

 

$

1,600,619

 

 

$

167,447

 

 

 

42.9

%

 

$

1,433,172

 

 

 

44.8

%

South

 

 

1,147,510

 

 

 

278,890

 

 

 

30.8

 

 

 

868,620

 

 

 

27.2

 

West

 

 

674,123

 

 

 

67,746

 

 

 

18.1

 

 

 

606,377

 

 

 

19.0

 

Midwest

 

 

255,904

 

 

 

14,957

 

 

 

6.9

 

 

 

240,947

 

 

 

7.5

 

Various

 

 

49,000

 

 

 

—

 

 

 

1.3

 

 

 

49,000

 

 

 

1.5

 

Total

 

$

3,727,156

 

 

$

529,040

 

 

 

100.0

%

 

$

3,198,116

 

 

 

100.0

%

 
Loan Category  
Loans And Leases Receivable Disclosure [Line Items]  
Summary of Loan Portfolio by Property/ Loan Category Type

A summary of the loan portfolio by category as of September 30, 2018 and December 31, 2017 based on total loan commitment and current UPB is as follows (dollars in thousands):

 

 

 

September 30, 2018

 

Loan Category

 

Loan

Commitment

 

 

Unfunded

Commitment

 

 

% Loan

Commitment

 

 

Loan UPB

 

 

% Loan UPB

 

Bridge

 

$

2,503,711

 

 

$

203,679

 

 

 

53.2

%

 

$

2,300,032

 

 

 

55.0

%

Light Transitional

 

 

1,365,820

 

 

 

194,652

 

 

 

29.0

 

 

 

1,171,168

 

 

 

28.0

 

Moderate Transitional

 

 

727,499

 

 

 

118,309

 

 

 

15.5

 

 

 

609,190

 

 

 

14.6

 

Construction

 

 

108,801

 

 

 

10,462

 

 

 

2.3

 

 

 

98,339

 

 

 

2.4

 

Total

 

$

4,705,831

 

 

$

527,102

 

 

 

100.0

%

 

$

4,178,729

 

 

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2017

 

Loan Category

 

Loan

Commitment

 

 

Unfunded

Commitment

 

 

% Loan

Commitment

 

 

Loan UPB

 

 

% Loan UPB

 

Bridge

 

$

1,927,488

 

 

$

176,316

 

 

 

51.7

%

 

$

1,751,172

 

 

 

54.7

%

Moderate Transitional

 

 

723,075

 

 

 

132,483

 

 

 

19.4

 

 

 

590,592

 

 

 

18.5

 

Construction

 

 

609,468

 

 

 

166,358

 

 

 

16.4

 

 

 

443,110

 

 

 

13.9

 

Light Transitional

 

 

467,125

 

 

 

53,883

 

 

 

12.5

 

 

 

413,242

 

 

 

12.9

 

Total

 

$

3,727,156

 

 

$

529,040

 

 

 

100.0

%

 

$

3,198,116

 

 

 

100.0

%

 
v3.10.0.1
Summary of Significant Accounting Policies - Additional Information (Details)
 9 Months Ended
Sep. 30, 2018
USD ($)
Loan
Dec. 31, 2017
USD ($)
Loan
Accounting Policies [Abstract]    
Threshold period of delinquency 90 days  
Number of loans on non-accrual status | Loan 0 0
Percentage of senior mortgage loan transferred to third-party 100.00%  
Maximum insured amount of each cash account | $ $ 250,000 $ 250,000
v3.10.0.1
Loans Held for Investment - Additional Information (Details)
 3 Months Ended 9 Months Ended
Jul. 16, 2018
USD ($)
Sep. 30, 2018
USD ($)
Rating
Loan
Sep. 30, 2018
USD ($)
Rating
Loan
Sep. 30, 2017
USD ($)
Dec. 31, 2017
USD ($)
Rating
Loan
Accounts Notes And Loans Receivable [Line Items]          
Total loan commitment amount   $ 4,705,831,000 $ 4,705,831,000   $ 3,727,156,000
Unfunded loan commitments   527,102,000 527,102,000   529,040,000
Unaccreted discount   $ 0 0   $ 2,000,000
Sale of participation interest in non-core, fixed rate performing loan, cash consideration     $ 2,174,000 $ 65,054,000  
Number of loans on non-accrual status | Loan   0 0   0
Reserve   $ 0 $ 0   $ 0
Weighted average risk rating | Rating   2.8 2.8   2.6
Moved from Two Risk Rating into One Risk Rating          
Accounts Notes And Loans Receivable [Line Items]          
Number of loans selected for risk rate changes | Loan   1      
Moved from Two Risk Rating into Three Risk Rating          
Accounts Notes And Loans Receivable [Line Items]          
Number of loans selected for risk rate changes | Loan   1      
Moved from Three Risk Rating into Two Risk Rating          
Accounts Notes And Loans Receivable [Line Items]          
Number of loans selected for risk rate changes | Loan   2      
Non-core | Fixed Rate Loan Investment          
Accounts Notes And Loans Receivable [Line Items]          
Sale of participation interest in non-core, fixed rate performing loan, cash consideration $ 2,700,000        
Loss on sale of investments $ 400,000        
German American Capital Corporation          
Accounts Notes And Loans Receivable [Line Items]          
Number of loans originated or acquired | Loan     21    
Total loan commitment amount   $ 1,900,000,000 $ 1,900,000,000    
Unpaid principal balance   1,600,000,000 1,600,000,000    
Unfunded loan commitments   $ 264,500,000 $ 264,500,000    
v3.10.0.1
Loans Held for Investment - Schedule of Loan Investment Portfolio (Details) - USD ($)
$ in Thousands
Sep. 30, 2018
Dec. 31, 2017
Loans And Leases Receivable Disclosure [Line Items]    
Outstanding Principal, before allowance for loan losses $ 4,178,729 $ 3,198,116
Unamortized Premium (Discount), Loan Origination Fees net, before allowance for loan losses (21,076) (22,444)
Carrying Amount, before allowance for loan losses 4,157,653 3,175,672
Outstanding Principal, after allowance for loan losses 4,178,729 3,198,116
Unamortized Premium (Discount), Loan Origination Fees net, after allowance for loan losses (21,076) (22,444)
Carrying Amount, after allowance for loan losses 4,157,653 3,175,672
Senior Loans    
Loans And Leases Receivable Disclosure [Line Items]    
Outstanding Principal, before allowance for loan losses 4,178,729 3,122,670
Unamortized Premium (Discount), Loan Origination Fees net, before allowance for loan losses (21,076) (22,143)
Carrying Amount, before allowance for loan losses $ 4,157,653 3,100,527
Subordinated and Mezzanine Loans    
Loans And Leases Receivable Disclosure [Line Items]    
Outstanding Principal, before allowance for loan losses   75,446
Unamortized Premium (Discount), Loan Origination Fees net, before allowance for loan losses   (301)
Carrying Amount, before allowance for loan losses   $ 75,145
v3.10.0.1
Loans Held for Investment - Summary of Loan Portfolio Activity (Details)
$ in Thousands
 9 Months Ended
Sep. 30, 2018
USD ($)
Loans And Leases Receivable Disclosure [Abstract]  
Balance at December 31, 2017 $ 3,175,672
Loans originated 1,622,084
Additional fundings 207,657
Amortization of discount and origination fees 12,858
Collection of principal (860,618)
Balance at September 30, 2018 $ 4,157,653
v3.10.0.1
Loans Held for Investment - Summary of Carrying Values and Results of Internal Risk Rating Review Performed (Details)
$ in Thousands
Sep. 30, 2018
USD ($)
Rating
Dec. 31, 2017
USD ($)
Rating
Accounts Notes And Loans Receivable [Line Items]    
Carrying Value $ 4,157,653 $ 3,175,672
Weighted Average Risk Rating | Rating 2.8 2.6
Rating 1    
Accounts Notes And Loans Receivable [Line Items]    
Carrying Value $ 78,898  
Rating 2    
Accounts Notes And Loans Receivable [Line Items]    
Carrying Value 1,089,790 $ 1,318,816
Rating 3    
Accounts Notes And Loans Receivable [Line Items]    
Carrying Value 2,775,828 1,680,913
Rating 4    
Accounts Notes And Loans Receivable [Line Items]    
Carrying Value $ 213,137 $ 175,943
v3.10.0.1
Commercial Mortgage-Backed Securities - Additional Information (Details)
 1 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended
Jul. 31, 2018
USD ($)
Investment
Sep. 30, 2018
USD ($)
Investment
Sep. 30, 2018
USD ($)
Investment
Sep. 30, 2017
USD ($)
Dec. 31, 2017
USD ($)
Investment
Schedule Of Available For Sale Securities [Line Items]          
Payments to acquire investments     $ 143,643,000 $ 96,294,000  
Weighted average contractual maturity, Terms     15 years    
Commercial Mortgage-Backed Securities          
Schedule Of Available For Sale Securities [Line Items]          
Number of investments purchased | Investment   0 17    
Weighted average coupon rate     2.90%    
Payments to acquire investments     $ 138,000,000    
Number of Investments | Investment   4 4   5
Number of investments sold | Investment 17        
Total cash consideration including selling costs and fees $ 133,300,000        
Loss on sale of investments $ 100,000        
Other than temporary impairments on available-for-sale   $ 0 $ 0   $ 0
v3.10.0.1
Commercial Mortgage-Backed Securities - Available-for-Sale Commercial Mortgage-Backed Securities (Details) - USD ($)
$ in Thousands
Sep. 30, 2018
Dec. 31, 2017
Schedule Of Available For Sale Securities [Line Items]    
Estimated Fair Value $ 75,414 $ 85,895
Commercial Mortgage-Backed Securities    
Schedule Of Available For Sale Securities [Line Items]    
Face Amount 76,603 85,661
Unamortized Premium (Discount), net (40) 268
Gross Unrealized Loss (1,149) (34)
Estimated Fair Value $ 75,414 $ 85,895
v3.10.0.1
Commercial Mortgage-Backed Securities - Available-for-Sale Commercial Mortgage-Backed Securities by Contractual Maturity (Details) - USD ($)
$ in Thousands
Sep. 30, 2018
Dec. 31, 2017
Estimated Fair Value    
Total investment in commercial mortgage-backed securities, at amortized cost and estimated fair value $ 75,414 $ 85,895
Commercial Mortgage-Backed Securities    
Amortized Cost    
After one, within five years 37,937 36,700
After five years 38,627 49,229
Total investment in commercial mortgage-backed securities, at amortized cost and estimated fair value 76,564 85,929
Estimated Fair Value    
After one, within five years 38,072 36,872
After five years 37,342 49,023
Total investment in commercial mortgage-backed securities, at amortized cost and estimated fair value $ 75,414 $ 85,895
v3.10.0.1
Variable Interest Entities and Collateralized Loan Obligation - Additional Information (Details)
 3 Months Ended 9 Months Ended
Feb. 14, 2018
USD ($)
$ / shares
Aug. 23, 2017
USD ($)
Aug. 16, 2017
USD ($)
Loan
Sep. 30, 2018
USD ($)
Sep. 30, 2017
USD ($)
Sep. 30, 2018
USD ($)
Sep. 30, 2017
USD ($)
Dec. 31, 2017
USD ($)
Aug. 18, 2017
USD ($)
Loan
Dec. 29, 2014
USD ($)
Variable Interest Entities and Collateralized Loan Obligation [Line Items]                    
Principal amount of notes issued       $ 3,610,303,000   $ 3,610,303,000   $ 3,376,158,000    
Loans held for investment, aggregate unpaid principal balance percentage       22.30%   22.30%        
Outstanding principal balance       $ 2,201,380,000   $ 2,201,380,000   2,125,288,000    
Amortization of deferred financing costs recorded to interest expense           12,103,000 $ 9,160,000      
German American Capital Corporation                    
Variable Interest Entities and Collateralized Loan Obligation [Line Items]                    
Percentage of interest in loans acquired                   75.00%
Loans secured, face value                   $ 2,400,000,000
Class A Senior Secured Note                    
Variable Interest Entities and Collateralized Loan Obligation [Line Items]                    
Unpaid principal balance of loan     $ 12,800,000              
Loss on sale of first mortgage loan participation interests     (200,000)              
Class A Senior Secured Note | CLO Issuer                    
Variable Interest Entities and Collateralized Loan Obligation [Line Items]                    
Outstanding principal balance     $ 118,000,000              
Number of first mortgage loan participation interests sold | Loan     2           7  
Unpaid principal balance of loan                 $ 138,500,000  
Cash   $ 3,000,000                
Repayment of Class A Note   $ 118,000,000                
Securities                    
Variable Interest Entities and Collateralized Loan Obligation [Line Items]                    
Liquidation preference notional amount $ 1,000                  
Variable interest entity retained ownership amount $ 186,500,000                  
TPG Real Estate Finance 2018-FL1 Issuer, Ltd. and TPG RE Finance Trust 2018-FL1 Co-Issuer, LLC                    
Variable Interest Entities and Collateralized Loan Obligation [Line Items]                    
Preferred shares par value per share | $ / shares $ 0.001                  
TPG Real Estate Finance 2018-FL1 Issuer, Ltd. and TPG RE Finance Trust 2018-FL1 Co-Issuer, LLC | Notes                    
Variable Interest Entities and Collateralized Loan Obligation [Line Items]                    
Principal amount of notes issued $ 820,500,000                  
Co-Issuer                    
Variable Interest Entities and Collateralized Loan Obligation [Line Items]                    
Principal amount of notes issued 745,900,000                  
Mortgage Asset                    
Variable Interest Entities and Collateralized Loan Obligation [Line Items]                    
Principal amount of notes issued       932,400,000   932,400,000        
Collateralized Loan Obligation                    
Variable Interest Entities and Collateralized Loan Obligation [Line Items]                    
Principal amount of notes issued       745,904,000   745,904,000        
Net cash proceeds utilizing replenishment feature       10,000,000   23,900,000        
Companion participation interests related to replenishment       35,900,000   92,800,000        
Repayment of existing borrowings including accrued interest       25,900,000   68,900,000        
Amortization of deferred financing costs recorded to interest expense       7,700,000 $ 1,900,000 18,400,000 $ 11,900,000      
Unamortized deferred financing costs       $ 5,500,000   $ 5,500,000   $ 0    
Collateralized Loan Obligation | Class A Senior Secured Note                    
Variable Interest Entities and Collateralized Loan Obligation [Line Items]                    
Payments to acquire variable interest entity as an investment (principal amount) $ 5,000,000                  
v3.10.0.1
Variable Interest Entities and Collateralized Loan Obligation - Summary of Variable Interest Entities Assets and Liabilities (Details) - Variable Interest Entity, Primary Beneficiary
$ in Thousands
Sep. 30, 2018
USD ($)
ASSETS  
Total Assets $ 954,381
LIABILITIES  
Total Liabilities (741,456)
Cash and Cash Equivalents  
ASSETS  
Total Assets 18,988
Accounts Receivable from Servicer/Trustee  
ASSETS  
Total Assets 3
Accrued Interest Receivable  
ASSETS  
Total Assets 3,010
Loans Held for Investment  
ASSETS  
Total Assets 932,380
Accrued Interest Payable  
LIABILITIES  
Total Liabilities (938)
Accrued Expenses  
LIABILITIES  
Total Liabilities (103)
Collateralized Loan Obligation  
LIABILITIES  
Total Liabilities $ (740,415)
v3.10.0.1
Variable Interest Entities and Collateralized Loan Obligation - Schedule of Borrowings and Corresponding Collateral (Details) - USD ($)
$ in Thousands
Sep. 30, 2018
Dec. 31, 2017
Debt Instrument [Line Items]    
Collateral (loans), Outstanding Principal $ 3,237,096 $ 3,192,866
Debt, Face Value (3,610,303) $ (3,376,158)
Debt, Carrying Value [1] (735,415)  
Collateralized Loan Obligation    
Debt Instrument [Line Items]    
Collateral (loans), Outstanding Principal 932,380  
Collateral (loans), Carrying Value 932,380  
Debt, Face Value (745,904)  
Debt, Carrying Value $ (740,415)  
[1] At December 31, 2017, there were no VIE assets or liabilities recorded in the Company’s Total Assets and Total Liabilities. The Company’s consolidated Total Assets and Total Liabilities at September 30, 2018 include VIE assets and liabilities of $954.4 million and $741.5 million, respectively. These assets can be used only to satisfy obligations of the VIE, and creditors of the VIE have recourse only to these assets, and not to TPG RE Finance Trust, Inc. See Note 5 to the Consolidated Financial Statements for details
v3.10.0.1
Summary of Notes Payable, Secured Revolving Repurchase Agreements, Senior Secured Credit Facility (Details) - USD ($)
$ in Thousands
 9 Months Ended 12 Months Ended
Sep. 30, 2018
Dec. 31, 2017
Debt Instrument [Line Items]    
Index Rate one-month LIBOR  
Commitment Amount $ 3,610,303 $ 3,376,158
Maximum Current Availability 1,408,923 1,250,870
Balance Outstanding 2,201,380 2,125,288
Principal Balance of Collateral 3,237,096 3,192,866
Repurchase Agreements    
Debt Instrument [Line Items]    
Commitment Amount 2,841,642 2,726,942
Maximum Current Availability 1,193,184 891,141
Balance Outstanding 1,648,458 1,835,801
Principal Balance of Collateral 2,474,090 2,762,214
Senior Secured Credit Facilities    
Debt Instrument [Line Items]    
Commitment Amount 660,000  
Maximum Current Availability 208,416  
Balance Outstanding 451,584  
Principal Balance of Collateral 619,666  
Notes Payable    
Debt Instrument [Line Items]    
Commitment Amount 108,661 399,216
Maximum Current Availability 7,323 109,729
Balance Outstanding 101,338 289,487
Principal Balance of Collateral $ 143,340 $ 430,652
Debt Instrument, Interest Rate at 3.6% | Repurchase Agreements    
Debt Instrument [Line Items]    
Maturity Date   Dec. 09, 2019
Index Rate   1 Month Libor
Weighted Average Spread   2.00%
Interest Rate   3.60%
Commitment Amount   $ 150,000
Maximum Current Availability   78,600
Balance Outstanding   71,400
Principal Balance of Collateral   $ 93,000
Bank of the Ozarks | Debt Instrument, Interest Rate at 5.8% | Notes Payable    
Debt Instrument [Line Items]    
Maturity Date Aug. 23, 2019  
Index Rate 1 Month Libor  
Weighted Average Spread 4.50%  
Interest Rate 5.80%  
Commitment Amount $ 76,161  
Maximum Current Availability 7,323  
Balance Outstanding 68,838  
Principal Balance of Collateral $ 98,340  
Bank of the Ozarks | Debt Instrument, Interest Rate at 5.9% | Notes Payable    
Debt Instrument [Line Items]    
Maturity Date   Aug. 23, 2019
Index Rate   1 Month Libor
Weighted Average Spread   4.50%
Interest Rate   5.90%
Commitment Amount   $ 92,400
Maximum Current Availability   43,979
Balance Outstanding   48,421
Principal Balance of Collateral   $ 69,172
Bank of the Ozarks | Debt Instrument, Interest Rate at 5.4% | Notes Payable    
Debt Instrument [Line Items]    
Maturity Date   Aug. 31, 2018
Index Rate   1 Month Libor
Weighted Average Spread   4.00%
Interest Rate   5.40%
Commitment Amount   $ 68,600
Maximum Current Availability   14,151
Balance Outstanding   54,449
Principal Balance of Collateral   $ 77,784
Bank of the Ozarks | Debt Instrument, Interest Rate at 6.1% | Notes Payable    
Debt Instrument [Line Items]    
Maturity Date   May 22, 2018
Index Rate   1 Month Libor
Weighted Average Spread   4.80%
Interest Rate   6.10%
Commitment Amount   $ 48,750
Maximum Current Availability   17,479
Balance Outstanding   31,271
Principal Balance of Collateral   $ 48,109
Deutsche Bank | Debt Instrument, Interest Rate at 4.9% | Notes Payable    
Debt Instrument [Line Items]    
Maturity Date   Sep. 25, 2019
Index Rate   1 Month Libor
Weighted Average Spread   3.50%
Interest Rate   4.90%
Commitment Amount   $ 64,779
Maximum Current Availability   15,895
Balance Outstanding   48,884
Principal Balance of Collateral   $ 81,473
Deutsche Bank | Debt Instrument, Interest Rate at 4.6% | Notes Payable    
Debt Instrument [Line Items]    
Maturity Date   Jun. 29, 2018
Index Rate   1 Month Libor
Weighted Average Spread   3.30%
Interest Rate   4.60%
Commitment Amount   $ 49,644
Maximum Current Availability   18,224
Balance Outstanding   31,420
Principal Balance of Collateral   $ 48,339
Deutsche Bank | Debt Instrument, Interest Rate at 5.0% | Notes Payable    
Debt Instrument [Line Items]    
Maturity Date   Dec. 09, 2018
Index Rate   1 Month Libor
Weighted Average Spread   3.70%
Interest Rate   5.00%
Commitment Amount   $ 42,543
Maximum Current Availability   1
Balance Outstanding   42,542
Principal Balance of Collateral   $ 60,775
BMO Harris Bank | Debt Instrument, Interest Rate at 4.0% | Notes Payable    
Debt Instrument [Line Items]    
Maturity Date Apr. 09, 2020 Apr. 09, 2020
Index Rate 1 Month Libor 1 Month Libor
Weighted Average Spread 2.70% 2.70%
Interest Rate 4.00% 4.00%
Commitment Amount $ 32,500 $ 32,500
Balance Outstanding 32,500 32,500
Principal Balance of Collateral $ 45,000 $ 45,000
Goldman Sachs | Debt Instrument, Interest Rate at 4.4% | Repurchase Agreements    
Debt Instrument [Line Items]    
Maturity Date Aug. 19, 2019  
Index Rate 1 Month Libor  
Weighted Average Spread 2.30%  
Interest Rate 4.40%  
Commitment Amount $ 750,000  
Maximum Current Availability 378,430  
Balance Outstanding 371,570  
Principal Balance of Collateral $ 780,647  
Goldman Sachs | Debt Instrument, Interest Rate at 2.5% | CMBS | Repurchase Agreements    
Debt Instrument [Line Items]    
Maturity Date Dec. 03, 2018  
Index Rate 3 Month Libor  
Weighted Average Spread 0.20%  
Interest Rate 2.50%  
Commitment Amount $ 100,000  
Maximum Current Availability 65,226  
Balance Outstanding 34,774  
Principal Balance of Collateral $ 38,710  
Goldman Sachs | Debt Instrument, Interest Rate at 3.6% | Repurchase Agreements    
Debt Instrument [Line Items]    
Maturity Date   Aug. 19, 2018
Index Rate   1 Month Libor
Weighted Average Spread   2.20%
Interest Rate   3.60%
Commitment Amount   $ 750,000
Maximum Current Availability   183,253
Balance Outstanding   566,747
Principal Balance of Collateral   $ 890,736
Goldman Sachs | Debt Instrument, Interest Rate at 1.6% | CMBS | Repurchase Agreements    
Debt Instrument [Line Items]    
Maturity Date   Mar. 02, 2018
Index Rate   3 Month Libor
Weighted Average Spread   0.10%
Interest Rate   1.60%
Commitment Amount   $ 100,000
Maximum Current Availability   64,615
Balance Outstanding   35,385
Principal Balance of Collateral   $ 39,332
Wells Fargo | Debt Instrument, Interest Rate at 4.1% | Repurchase Agreements    
Debt Instrument [Line Items]    
Maturity Date May 25, 2019  
Index Rate 1 Month Libor  
Weighted Average Spread 1.90%  
Interest Rate 4.10%  
Commitment Amount $ 750,000  
Maximum Current Availability 305,988  
Balance Outstanding 444,012  
Principal Balance of Collateral $ 600,575  
Wells Fargo | Debt Instrument, Interest Rate at 3.6% | Repurchase Agreements    
Debt Instrument [Line Items]    
Maturity Date   May 25, 2019
Index Rate   1 Month Libor
Weighted Average Spread   2.10%
Interest Rate   3.60%
Commitment Amount   $ 750,000
Maximum Current Availability   232,462
Balance Outstanding   517,538
Principal Balance of Collateral   $ 814,886
JP Morgan | Debt Instrument, Interest Rate at 4.0% | Repurchase Agreements    
Debt Instrument [Line Items]    
Maturity Date   Aug. 20, 2018
Index Rate   1 Month Libor
Weighted Average Spread   2.50%
Interest Rate   4.00%
Commitment Amount   $ 376,942
Maximum Current Availability   120,014
Balance Outstanding   256,928
Principal Balance of Collateral   $ 382,135
JP Morgan | Debt Instrument, Interest Rate at 4.2% | Repurchase Agreements    
Debt Instrument [Line Items]    
Maturity Date Aug. 20, 2021  
Index Rate 1 Month Libor  
Weighted Average Spread 2.10%  
Interest Rate 4.20%  
Commitment Amount $ 428,802  
Maximum Current Availability 91,486  
Balance Outstanding 337,316  
Principal Balance of Collateral $ 455,267  
Morgan Stanley | Debt Instrument, Interest Rate at 4.5% | Repurchase Agreements    
Debt Instrument [Line Items]    
Maturity Date May 04, 2019  
Index Rate 1 Month Libor  
Weighted Average Spread 2.30%  
Interest Rate 4.50%  
Commitment Amount $ 500,000  
Maximum Current Availability 245,254  
Balance Outstanding 254,746  
Principal Balance of Collateral $ 337,591  
Morgan Stanley | Debt Instrument, Interest Rate at 3.9% | Repurchase Agreements    
Debt Instrument [Line Items]    
Maturity Date   May 04, 2019
Index Rate   1 Month Libor
Weighted Average Spread   2.40%
Interest Rate   3.90%
Commitment Amount   $ 500,000
Maximum Current Availability   120,002
Balance Outstanding   379,998
Principal Balance of Collateral   $ 533,707
US Bank | Debt Instrument, Interest Rate at 4.0% | Repurchase Agreements    
Debt Instrument [Line Items]    
Maturity Date Oct. 09, 2021  
Index Rate 1 Month Libor  
Weighted Average Spread 1.80%  
Interest Rate 4.00%  
Commitment Amount $ 212,840  
Maximum Current Availability 6,800  
Balance Outstanding 206,040  
Principal Balance of Collateral $ 261,300  
Royal Bank of Canada | CMBS | Repurchase Agreements    
Debt Instrument [Line Items]    
Index Rate 3 Month Libor  
Commitment Amount $ 100,000  
Maximum Current Availability $ 100,000  
Royal Bank of Canada | Debt Instrument, Interest Rate at 2.6% | CMBS | Repurchase Agreements    
Debt Instrument [Line Items]    
Maturity Date   Mar. 20, 2018
Index Rate   3 Month Libor
Weighted Average Spread   1.00%
Interest Rate   2.60%
Commitment Amount   $ 100,000
Maximum Current Availability   92,195
Balance Outstanding   7,805
Principal Balance of Collateral   $ 8,418
Bank of America | Senior Secured Credit Facilities    
Debt Instrument [Line Items]    
Maturity Date Sep. 29, 2020 Sep. 29, 2020
Index Rate 1 Month Libor 1 Month Libor
Weighted Average Spread 1.90%  
Interest Rate 4.10%  
Commitment Amount $ 500,000 $ 250,000
Maximum Current Availability 112,560 250,000
Balance Outstanding 387,440 $ 0
Principal Balance of Collateral $ 486,666  
Bank of America | Debt Instrument, Interest Rate at 4.1% | Senior Secured Credit Facilities    
Debt Instrument [Line Items]    
Maturity Date Sep. 29, 2020  
Index Rate 1 Month Libor  
Weighted Average Spread 1.90%  
Interest Rate 4.10%  
Commitment Amount $ 500,000  
Maximum Current Availability 112,560  
Balance Outstanding $ 387,440  
Citibank | Debt Instrument, Interest Rate at 4.5% | Senior Secured Credit Facilities    
Debt Instrument [Line Items]    
Maturity Date Jul. 12, 2020  
Index Rate 1 Month Libor  
Weighted Average Spread 2.30%  
Interest Rate 4.50%  
Commitment Amount $ 160,000  
Maximum Current Availability 95,856  
Balance Outstanding 64,144  
Principal Balance of Collateral $ 133,000  
v3.10.0.1
Summary of Notes Payable, Secured Revolving Repurchase Agreements, Senior Secured Credit Facility (Parenthetical) (Details)
 9 Months Ended 12 Months Ended
Sep. 30, 2018
Dec. 31, 2017
Repurchase Agreements, Senior Secured Credit Facility and Note Payable    
Debt Instrument [Line Items]    
Recourse guarantee percentage 25.00% 25.00%
Repurchase Agreements    
Debt Instrument [Line Items]    
Recourse guarantee percentage 100.00% 100.00%
Senior Secured Credit Facilities    
Debt Instrument [Line Items]    
Recourse guarantee percentage 100.00%  
v3.10.0.1
Secured Revolving Repurchase Agreements, Senior Secured Credit Facility and Notes Payable - Additional Information (Details)
 3 Months Ended 9 Months Ended 12 Months Ended
Jul. 12, 2018
USD ($)
Sep. 29, 2017
USD ($)
Sep. 30, 2018
USD ($)
Loan
Agreement
Sep. 30, 2018
USD ($)
Loan
Agreement
Dec. 31, 2017
USD ($)
Loan
Agreement
Jun. 15, 2018
USD ($)
Debt Instrument [Line Items]            
Index Rate       one-month LIBOR    
Balance Outstanding     $ 2,201,380,000 $ 2,201,380,000 $ 2,125,288,000  
Senior Secured Credit Facilities            
Debt Instrument [Line Items]            
Balance Outstanding     451,584,000 $ 451,584,000    
Repurchase Agreements            
Debt Instrument [Line Items]            
Recourse guarantee percentage       100.00% 100.00%  
Number of repurchase agreements | Agreement       5 5  
Balance Outstanding     $ 1,648,458,000 $ 1,648,458,000 $ 1,835,801,000  
Repurchase Agreements | Goldman Sachs Bank            
Debt Instrument [Line Items]            
Line of credit facility, extended maturity date     Aug. 19, 2019      
Repurchase Agreements | JP Morgan Chase Bank            
Debt Instrument [Line Items]            
Line of credit facility, extended maturity date     Aug. 20, 2021      
Repurchase Agreements | Commercial Mortgage Loans            
Debt Instrument [Line Items]            
Number of repurchase agreements | Agreement       54 48  
Repurchase Agreements | CMBS            
Debt Instrument [Line Items]            
Number of repurchase agreements | Agreement       2 2  
Repurchase Agreements | Mortgage-backed Securities            
Debt Instrument [Line Items]            
Number of repurchase agreements | Agreement       2 2  
Citi Senior Revolving Credit Facility            
Debt Instrument [Line Items]            
Line of credit facility, maximum borrowing capacity $ 160,000,000          
Line of credit facility, initial maturity date Jul. 12, 2020          
Percentage of individual pledged assets 70.00%          
Individual pledged assets term 90 days          
Citi Senior Revolving Credit Facility | LIBOR            
Debt Instrument [Line Items]            
Index Rate one-month LIBOR          
Line of credit, spread on variable rate 2.25%          
Bank of America | Senior Secured Credit Facilities            
Debt Instrument [Line Items]            
Line of credit facility, extended maturity date   Sep. 29, 2022        
Line of credit facility, maximum borrowing capacity   $ 250,000,000        
Index Rate       1 Month Libor 1 Month Libor  
Credit agreement initiation date   Sep. 29, 2017        
Line of credit facility, maximum borrowing capacity subject to condition   $ 500,000,000        
Line of credit facility, increased maximum borrowing capacity           $ 500,000,000
Balance Outstanding     $ 387,440,000 $ 387,440,000 $ 0  
Holdco | Repurchase Agreements            
Debt Instrument [Line Items]            
Recourse guarantee percentage       25.00%    
Holdco | Repurchase Agreements | CMBS            
Debt Instrument [Line Items]            
Recourse guarantee percentage       100.00%    
Holdco | Bank of America | Senior Secured Credit Facilities            
Debt Instrument [Line Items]            
Recourse guarantee percentage       25.00%    
Holdco | Citibank | Senior Secured Credit Facilities            
Debt Instrument [Line Items]            
Recourse guarantee percentage       100.00%    
Notes Payable            
Debt Instrument [Line Items]            
Number of financing agreements | Agreement     2 2 7  
Number of loans held for investment | Loan     2 2 7  
Balance Outstanding     $ 101,338,000 $ 101,338,000 $ 289,487,000  
Notes Payable | Holdco            
Debt Instrument [Line Items]            
Number of recourse loans | Loan     1 1    
Percentage of recourse loans       25.00%    
Notes Payable | Holdco | BMO Harris Bank            
Debt Instrument [Line Items]            
Guaranteed capped rate of outstanding obligations       25.00%    
v3.10.0.1
Summary of Repurchase Agreements Secured by Commercial Mortgage Loans, Long - term Borrowings, and Counterparty Concentration (Details) - USD ($)
$ in Thousands
 9 Months Ended 12 Months Ended
Sep. 30, 2018
Dec. 31, 2017
Repurchase Agreement Counterparty [Line Items]    
Commitment Amount $ 3,610,303 $ 3,376,158
Commercial Mortgage Loans | Long-term Borrowings    
Repurchase Agreement Counterparty [Line Items]    
Commitment Amount 2,641,642 2,526,942
UPB of Collateral 2,435,380 2,714,464
Carrying Value of Collateral 2,431,600 2,705,661
Amounts Payable under Repurchase Agreements 1,617,336 1,796,014
Net Counterparty Exposure $ 814,264 $ 909,647
Days to Extended Maturity 1126 days 960 days
Goldman Sachs Bank | Commercial Mortgage Loans | Long-term Borrowings    
Repurchase Agreement Counterparty [Line Items]    
Commitment Amount $ 750,000 $ 750,000
UPB of Collateral 780,647 890,736
Carrying Value of Collateral 777,782 887,667
Amounts Payable under Repurchase Agreements 372,207 568,012
Net Counterparty Exposure $ 405,575 $ 319,655
Percent of Stockholders' Equity 30.50% 26.60%
Days to Extended Maturity 323 days 596 days
Wells Fargo Bank | Commercial Mortgage Loans | Long-term Borrowings    
Repurchase Agreement Counterparty [Line Items]    
Commitment Amount $ 750,000 $ 750,000
UPB of Collateral 600,575 814,886
Carrying Value of Collateral 599,306 811,257
Amounts Payable under Repurchase Agreements 444,777 518,353
Net Counterparty Exposure $ 154,529 $ 292,904
Percent of Stockholders' Equity 11.60% 24.40%
Days to Extended Maturity 968 days 1241 days
Morgan Stanley Bank | Commercial Mortgage Loans | Long-term Borrowings    
Repurchase Agreement Counterparty [Line Items]    
Commitment Amount $ 500,000 $ 500,000
UPB of Collateral 337,591 533,707
Carrying Value of Collateral 340,286 531,747
Amounts Payable under Repurchase Agreements 256,139 380,592
Net Counterparty Exposure $ 84,147 $ 151,155
Percent of Stockholders' Equity 6.30% 12.60%
JP Morgan Chase Bank | Commercial Mortgage Loans | Long-term Borrowings    
Repurchase Agreement Counterparty [Line Items]    
Commitment Amount $ 428,802 $ 376,942
UPB of Collateral 455,267 382,135
Carrying Value of Collateral 454,381 382,542
Amounts Payable under Repurchase Agreements 337,879 257,484
Net Counterparty Exposure $ 116,502 $ 125,058
Percent of Stockholders' Equity 8.80% 10.40%
Days to Extended Maturity 1785 days 963 days
US Bank | Commercial Mortgage Loans | Long-term Borrowings    
Repurchase Agreement Counterparty [Line Items]    
Commitment Amount $ 212,840 $ 150,000
UPB of Collateral 261,300 93,000
Carrying Value of Collateral 259,845 92,448
Amounts Payable under Repurchase Agreements 206,334 71,573
Net Counterparty Exposure $ 53,511 $ 20,875
Percent of Stockholders' Equity 4.00% 1.70%
Days to Extended Maturity 1835 days 1804 days
v3.10.0.1
Summary of Repurchase Agreements Secured by Commercial Mortgage Loans, Long - term Borrowings, and Counterparty Concentration (Parenthetical) (Details) - USD ($)
$ in Thousands
 9 Months Ended 12 Months Ended
Sep. 30, 2018
Dec. 31, 2017
Repurchase Agreement Counterparty [Line Items]    
Interest receivable [1] $ 19,338 $ 16,861
Accrued Interest Payable [1] 5,025 5,385
Commercial Mortgage Loans | Long-term Borrowings    
Repurchase Agreement Counterparty [Line Items]    
Interest receivable 14,300 11,600
Premium, discount and origination fees 18,100 20,400
Accrued Interest Payable 3,700 3,400
Unamortized deferred financing fees $ 8,800 $ 8,700
[1] At December 31, 2017, there were no VIE assets or liabilities recorded in the Company’s Total Assets and Total Liabilities. The Company’s consolidated Total Assets and Total Liabilities at September 30, 2018 include VIE assets and liabilities of $954.4 million and $741.5 million, respectively. These assets can be used only to satisfy obligations of the VIE, and creditors of the VIE have recourse only to these assets, and not to TPG RE Finance Trust, Inc. See Note 5 to the Consolidated Financial Statements for details
v3.10.0.1
Summary of Repurchase Agreements Secured by CMBS, Short-term Borrowings, and Counterparty Concentration (Details) - USD ($)
$ in Thousands
 9 Months Ended 12 Months Ended
Sep. 30, 2018
Dec. 31, 2017
Repurchase Agreement Counterparty [Line Items]    
Commitment Amount $ 3,610,303 $ 3,376,158
Short-term Debt    
Repurchase Agreement Counterparty [Line Items]    
Commitment Amount 2,841,642 2,726,942
UPB of Collateral 2,474,090 2,762,214
Carrying Value of Collateral 2,469,068 2,753,549
Amounts Payable under Repurchase Agreements 1,652,385 1,839,319
Net Counterparty Exposure $ 816,683 $ 914,230
Days to Extended Maturity 1099 days 933 days
CMBS | Short-term Debt    
Repurchase Agreement Counterparty [Line Items]    
Commitment Amount $ 200,000 $ 200,000
UPB of Collateral 38,710 47,750
Carrying Value of Collateral 37,468 47,888
Amounts Payable under Repurchase Agreements 35,049 43,305
Net Counterparty Exposure $ 2,419 $ 4,583
Days to Extended Maturity 64 days 64 days
Goldman Sachs | CMBS | Short-term Debt    
Repurchase Agreement Counterparty [Line Items]    
Commitment Amount $ 100,000 $ 100,000
UPB of Collateral 38,710 39,332
Carrying Value of Collateral 37,468 39,213
Amounts Payable under Repurchase Agreements 35,049 35,426
Net Counterparty Exposure $ 2,419 $ 3,787
Percent of Stockholders' Equity 0.20% 0.30%
Days to Extended Maturity 64 days 61 days
Royal Bank of Canada | CMBS | Short-term Debt    
Repurchase Agreement Counterparty [Line Items]    
Commitment Amount $ 100,000 $ 100,000
UPB of Collateral   8,418
Carrying Value of Collateral   8,675
Amounts Payable under Repurchase Agreements   7,879
Net Counterparty Exposure   $ 796
Percent of Stockholders' Equity   0.10%
Days to Extended Maturity   79 days
v3.10.0.1
Summary of Repurchase Agreements Secured by CMBS, Short-term Borrowings, and Counterparty Concentration (Parenthetical) (Details) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2018
Dec. 31, 2017
Repurchase Agreement Counterparty [Line Items]    
Accrued Interest Receivable [1] $ 19,338 $ 16,861
Accrued Interest Payable [1] 5,025 5,385
Short-term Debt    
Repurchase Agreement Counterparty [Line Items]    
Accrued Interest Receivable 100 100
Premium, discount and origination fees 1,400  
Accrued Interest Payable $ 300 $ 100
[1] At December 31, 2017, there were no VIE assets or liabilities recorded in the Company’s Total Assets and Total Liabilities. The Company’s consolidated Total Assets and Total Liabilities at September 30, 2018 include VIE assets and liabilities of $954.4 million and $741.5 million, respectively. These assets can be used only to satisfy obligations of the VIE, and creditors of the VIE have recourse only to these assets, and not to TPG RE Finance Trust, Inc. See Note 5 to the Consolidated Financial Statements for details
v3.10.0.1
Senior Secured Credit Facilities (Details) - USD ($)
$ in Thousands
 9 Months Ended 12 Months Ended
Sep. 30, 2018
Dec. 31, 2017
Debt Instrument [Line Items]    
Index Rate one-month LIBOR  
Commitment Amount $ 3,610,303 $ 3,376,158
Maximum Current Availability 1,408,923 1,250,870
Balance Outstanding 2,201,380 $ 2,125,288
Senior Secured Credit Facilities    
Debt Instrument [Line Items]    
Commitment Amount 660,000  
Maximum Current Availability 208,416  
Balance Outstanding $ 451,584  
Bank of America | Senior Secured Credit Facilities    
Debt Instrument [Line Items]    
Maturity Date Sep. 29, 2020 Sep. 29, 2020
Index Rate 1 Month Libor 1 Month Libor
Weighted Average Spread 1.90%  
Interest Rate 4.10%  
Commitment Amount $ 500,000 $ 250,000
Maximum Current Availability 112,560 250,000
Balance Outstanding $ 387,440 $ 0
Bank of America | Debt Instrument, Interest Rate at 4.1% | Senior Secured Credit Facilities    
Debt Instrument [Line Items]    
Maturity Date Sep. 29, 2020  
Index Rate 1 Month Libor  
Weighted Average Spread 1.90%  
Interest Rate 4.10%  
Commitment Amount $ 500,000  
Maximum Current Availability 112,560  
Balance Outstanding $ 387,440  
Citibank | Debt Instrument, Interest Rate at 4.5% | Senior Secured Credit Facilities    
Debt Instrument [Line Items]    
Maturity Date Jul. 12, 2020  
Index Rate 1 Month Libor  
Weighted Average Spread 2.30%  
Interest Rate 4.50%  
Commitment Amount $ 160,000  
Maximum Current Availability 95,856  
Balance Outstanding $ 64,144  
v3.10.0.1
Schedule of Maturities - Schedule of Future Principal Payments (Details)
$ in Thousands
Sep. 30, 2018
USD ($)
Collateralized Loan Obligation  
Debt Instrument [Line Items]  
2019 $ 474,632
2020 213,615
2021 52,657
Total 740,904
Senior Secured Credit Facilities  
Debt Instrument [Line Items]  
2020 451,584
Total 451,584
Repurchase Agreements  
Debt Instrument [Line Items]  
2018 60,081
2019 1,216,535
2020 94,536
2021 277,306
Total 1,648,458
Notes Payable  
Debt Instrument [Line Items]  
2019 68,838
2020 32,500
Total $ 101,338
v3.10.0.1
Fair Value Measurements - Additional Information (Details) - USD ($)
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2018
Sep. 30, 2018
Dec. 31, 2017
Fair Value Disclosures [Abstract]      
Money market funds $ 42,500,000 $ 42,500,000  
Threshold period of delinquency   90 days  
Market spread   one-month LIBOR  
Transfers of financial assets or liabilities with in fair value hierarchy 0   $ 0
Estimated fair value of loans held for investment $ 4,200,000,000 $ 4,200,000,000 $ 3,200,000,000
Weighted average gross spread percentage 4.20% 4.20% 4.80%
Weighted average maturity period   3 years 9 months 18 days 3 years 7 months 6 days
v3.10.0.1
Fair Value Measurements - Summary of Financial Assets and Liabilities Not Carried at Fair Value On Recurring Basis (Details) - Fair Value Measurements Nonrecurring - USD ($)
$ in Thousands
Sep. 30, 2018
Dec. 31, 2017
Carrying Value | Loans Held for Investment    
Financial Assets    
Financial Assets, Nonrecurring $ 4,157,653 $ 3,175,672
Carrying Value | Collateralized Loan Obligation    
Financial Liabilities    
CLO (TRTX 2018-FL1) 735,415  
Carrying Value | Secured Financing Arrangements    
Financial Liabilities    
CLO (TRTX 2018-FL1) 2,187,950 2,114,990
Estimate of Fair Value Measurement | Level III | Loans Held for Investment    
Financial Assets    
Financial Assets, Nonrecurring 4,187,202 3,202,150
Estimate of Fair Value Measurement | Level III | Collateralized Loan Obligation    
Financial Liabilities    
CLO (TRTX 2018-FL1) 735,415  
Estimate of Fair Value Measurement | Level III | Secured Financing Arrangements    
Financial Liabilities    
CLO (TRTX 2018-FL1) $ 2,187,950 $ 2,114,990
v3.10.0.1
Income Taxes - Additional Information (Details) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Sep. 30, 2018
Sep. 30, 2017
Dec. 31, 2017
Income Tax [Line Items]          
Reserve for uncertain income tax positions $ 0   $ 0   $ 0
Interest for underpayment of income taxes     0 $ 0  
Penalties for underpayment of income taxes     $ 0 $ 0  
Effective income tax rate     0.26% 0.20%  
Deferred tax asset 0   $ 0   0
Deferred tax liabilities $ 0   $ 0   $ 0
TRSs          
Income Tax [Line Items]          
Equity interest percentage by parent 100.00%   100.00%   100.00%
Current portion of income tax expense $ 0 $ 0 $ 200,000 $ 100,000  
v3.10.0.1
Related Party Transactions - Additional Information (Details) - USD ($)
 3 Months Ended 9 Months Ended
Jul. 25, 2017
Dec. 15, 2014
Sep. 30, 2018
Sep. 30, 2018
Sep. 30, 2017
Dec. 31, 2017
Related Party Transaction [Line Items]            
Aggregate par amount of loans     $ 3,237,096,000 $ 3,237,096,000   $ 3,192,866,000
Management fees, incentive management fees, and collateral management fees payable [1]     6,904,000 $ 6,904,000   5,227,000
Termination fee, description       A termination fee will be payable to the Manager upon termination of the Management Agreement by the Company absent a cause event. The termination fee would also be payable to the Manager upon termination of the Management Agreement by the Manager if the Company materially breaches the Management Agreement. The termination fee is equal to three times the sum of (x) the average annual base management fee and (y) the average annual incentive compensation earned by the Manager, in each case during the 24-month period immediately preceding the most recently completed calendar quarter prior to the date of termination or, if such termination occurs prior to July 25, 2019, and such termination fee is payable, the base management fees and the incentive compensation will be annualized for the period from July 25, 2017 to July 25, 2019 based on such fees actually received by the Manager during such period    
Post-IPO Management Agreement            
Related Party Transaction [Line Items]            
Description of management and incentive management fee calculation       For the three and nine months ended September 30, 2018, the management fee and incentive management fee were calculated under the Management Agreement.    
Incentive management fee, description       The Manager is entitled to incentive compensation which is calculated and payable in cash with respect to each calendar quarter following the completion of the Company’s initial public offering (or part thereof that the Management Agreement is in effect) in arrears in an amount, not less than zero, equal to the difference between: (1) the product of (a) 20% and (b) the difference between (i) the Company’s Core Earnings for the most recent 12-month period (or such lesser number of completed calendar quarters, if applicable), including the calendar quarter (or part thereof) for which the calculation of incentive compensation is being made (the “applicable period”), and (ii) the product of (A) the Company’s Equity in the most recent 12-month period (or such lesser number of completed calendar quarters, if applicable), including the applicable period, and (B) 7% per annum; and (2) the sum of any incentive compensation paid to the Manager with respect to the first three calendar quarters of the most recent 12-month period (or such lesser number of completed calendar quarters preceding the applicable period, if applicable). No incentive compensation is payable to the Manager with respect to any calendar quarter unless Core Earnings for the 12 most recently completed calendar quarters (or such lesser number of completed calendar quarters following the completion of the Company’s initial public offering) is greater than zero. For purposes of calculating the Manager’s incentive compensation, the Management Agreement, as amended, specifies that equity securities of the Company or any of the Company’s subsidiaries that are entitled to a specified periodic distribution or have other debt characteristics will not constitute equity securities and will not be included in “Equity” for the purpose of calculating incentive compensation. Instead, the aggregate distribution amount that accrues to such equity securities during the calendar quarter of such calculation will be subtracted from Core Earnings, before incentive compensation for purposes of calculating incentive compensation, unless such distribution is otherwise excluded from Core Earnings    
Incentive management fee percentage of Core Earnings less seven percent of stockholders equity 20.00%          
Percentage multiplied by stockholders equity included in incentive management fee 7.00%          
Percentage of annual base management fee 1.50%          
Percentage of quarterly base management fee 0.375%          
Amount incurred and reimbursable     300,000 $ 900,000 $ 1,000,000  
Reimbursable expenses remained outstanding     600,000 $ 600,000    
Post-IPO Management Agreement | Minimum            
Related Party Transaction [Line Items]            
Management fee payable per annum $ 250,000          
Management fee payable per quarter $ 62,500          
Pre-IPO Management Agreement            
Related Party Transaction [Line Items]            
Description of management and incentive management fee calculation       For the three and nine months ended September 30, 2017, the management fee and incentive management fee were calculated under both the pre-IPO and post-IPO Management Agreements.    
Incentive management fee, description       Manager was entitled to an incentive management fee each calendar quarter in arrears in an amount, not less than zero, equal to (I) the product of (i) 16% and (ii) the positive sum, if any, remaining after (A) Core Earnings of the Company for the previous 12 month period were reduced by (B) the product of (1) the average of the Company’s stockholders’ equity as of the end of each calendar quarter during such previous 12 month period, and (2) 7% per annum, minus (II) the sum of any incentive management fee paid to the Manager with respect to the first three calendar quarters of such previous 12 month period; provided, however, that no incentive management fee was payable with respect to any calendar quarter unless Core Earnings for the 12 most recently completed calendar quarters in the aggregate was greater than zero.    
Incentive management fee percentage of Core Earnings less seven percent of stockholders equity       16.00%    
Percentage multiplied by stockholders equity included in incentive management fee       7.00%    
Percentage of annual base management fee   1.25%        
Pre-IPO Management Agreement | 2014 Collateralized Loan Obligation            
Related Party Transaction [Line Items]            
Percentage of collateral management fee   0.075%        
Aggregate par amount of loans         $ 181,100,000  
Pre-IPO and Post-IPO Management Agreement            
Related Party Transaction [Line Items]            
Management fees, incentive management fees, and collateral management fees payable     $ 6,000 $ 6,000   $ 5,200
[1] At December 31, 2017, there were no VIE assets or liabilities recorded in the Company’s Total Assets and Total Liabilities. The Company’s consolidated Total Assets and Total Liabilities at September 30, 2018 include VIE assets and liabilities of $954.4 million and $741.5 million, respectively. These assets can be used only to satisfy obligations of the VIE, and creditors of the VIE have recourse only to these assets, and not to TPG RE Finance Trust, Inc. See Note 5 to the Consolidated Financial Statements for details
v3.10.0.1
Related Party Transactions - Summary of Management Agreement Fees Incurred and Paid Related to Pre-IPO and Post-IPO Management Agreements and Collateral Management Agreement (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Sep. 30, 2018
Sep. 30, 2017
Post-IPO Management Agreement        
Related Party Transaction [Line Items]        
Management Agreement and Collateral Management fees incurred $ 6,047 $ 3,404 $ 17,586  
Management Agreement and Collateral Management fees paid $ 5,909   $ 16,771  
Pre-IPO Management Agreement        
Related Party Transaction [Line Items]        
Management Agreement and Collateral Management fees incurred   1,079   $ 10,023
Management Agreement and Collateral Management fees paid   $ 4,574   $ 11,930
v3.10.0.1
Earnings per Share - Additional Information (Details) - USD ($)
 3 Months Ended 9 Months Ended
Jul. 03, 2017
Sep. 30, 2018
Sep. 30, 2017
Sep. 30, 2018
Sep. 30, 2017
Earnings Per Share [Abstract]          
Dividends declared   $ 0 $ 0 $ 100,000 $ 0
Undistributed net income attributable to common stockholders   $ 0 $ 0 $ 100,000 $ 0
Dividend payable declared date Jul. 03, 2017     Jul. 25, 2017  
Dividend payable date Jul. 25, 2017     Jul. 03, 2017  
v3.10.0.1
Earnings per Share - Schedule of Calculation of Basic and Diluted Earnings per Common Share (Details) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Sep. 30, 2018
Sep. 30, 2017
Earnings Per Share [Abstract]        
Net Income Attributable to TPG RE Finance Trust, Inc. $ 26,824 $ 20,787 $ 78,373 $ 69,582
Participating Securities' Share in Earnings (27)   (96)  
Net Income Attributable to Common Stockholders $ 26,797 $ 20,787 $ 78,277 $ 69,582
Weighted Average Common Shares Outstanding, Basic and Diluted 64,295,973 58,685,979 61,635,988 51,969,733
Per Common Share Amount, Basic and Diluted $ 0.42 $ 0.35 $ 1.27 $ 1.34
v3.10.0.1
Stockholders' Equity - Additional Information (Details) - USD ($)
 1 Months Ended 3 Months Ended 9 Months Ended
Sep. 18, 2018
Aug. 10, 2018
Feb. 28, 2018
Oct. 26, 2017
Sep. 26, 2017
Jul. 03, 2017
Sep. 30, 2018
Sep. 30, 2018
Sep. 30, 2017
Sep. 30, 2018
Sep. 30, 2017
Dec. 31, 2017
 [1]
Aug. 21, 2017
Class Of Stock [Line Items]                          
Gross proceeds from issuance of common stock                   $ 139,440,000 $ 243,654,000    
Dividend payable declared date           Jul. 03, 2017       Jul. 25, 2017      
Dividend payable date           Jul. 25, 2017       Jul. 03, 2017      
Redemption of Preferred Stock                   $ (125,000)      
Unpaid dividends $ 28,900,000           $ 28,918,000 [1] $ 28,918,000 [1] $ 20,135,000 28,918,000 [1] 20,135,000 $ 23,068,000  
Dividends       $ 20,100,000           80,100,000 61,900,000    
Other comprehensive (loss) income               $ 523,000 $ (2,558,000) $ (1,115,000) (1,270,000)    
Goldman Sachs & Co. LLC                          
Class Of Stock [Line Items]                          
Number of common shares issued                         35,000,000
Description on purchase plan agreement                   as our agent, to buy in the open market up to $35.0 million in shares of our common stock in the aggregate during the period beginning on or about August 21, 2017 and ending 12 months thereafter or, if sooner, the date on which all the capital committed has been exhausted. On August 1, 2018, the Company’s Board of Directors authorized the Company to extend the repurchase period for the remaining capital committed to the 10b5-1 Purchase Plan. No other changes to the terms of the 10b5-1 Purchase Plan were authorized. Under the amended 10b5-1 Purchase Plan, the repurchase period was extended to February 28, 2019 or, if sooner, the date on which all the capital committed to the 10b5-1 Purchase Plan has been exhausted.      
Stock repurchased during period, shares             1.2 0   400,000      
Average price of repurchased shares             $ 19.28     $ 18.83      
Stock repurchased during period, value             $ 22,500     $ 8,400      
Stock repurchase program, remaining repurchase amount             12,500 $ 12,500   12,500      
Class A Common Stock                          
Class Of Stock [Line Items]                          
Number of common shares issued           230,815              
Gross proceeds from issuance of common stock                     365,000    
Dividend declared per share $ 0.43       $ 0.33                
Dividends                   $ 80,100,000 $ 61,900,000    
Series A Preferred Stock                          
Class Of Stock [Line Items]                          
Dividend rate                   12.50%      
Preferred stock, liquidation preference per annum             $ 1,000 $ 1,000   $ 1,000      
Redemption of Preferred Stock     $ 100,000                    
Common Stock And Class A Common Stock                          
Class Of Stock [Line Items]                          
Dividend payable declared date         Sep. 26, 2017                
Dividend payable date Oct. 25, 2018     Oct. 26, 2017                  
Dividend record date Sep. 28, 2018                        
Common Stock                          
Class Of Stock [Line Items]                          
Number of common shares issued   7,000,000       9,224,268       7,019,352 12,642,166    
Shares issued, price per share   $ 19.82                      
Gross proceeds from issuance of common stock   $ 138,700,000                      
Offering costs reimbursed by manager   $ 700,000                      
Dividend declared per share $ 0.43       $ 0.33                
[1] At December 31, 2017, there were no VIE assets or liabilities recorded in the Company’s Total Assets and Total Liabilities. The Company’s consolidated Total Assets and Total Liabilities at September 30, 2018 include VIE assets and liabilities of $954.4 million and $741.5 million, respectively. These assets can be used only to satisfy obligations of the VIE, and creditors of the VIE have recourse only to these assets, and not to TPG RE Finance Trust, Inc. See Note 5 to the Consolidated Financial Statements for details
v3.10.0.1
Share-based Incentive Plan - Additional Information (Details)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2018
USD ($)
shares
Sep. 30, 2018
USD ($)
shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Stock Compensation Expense | $   $ 483
2017 Equity Incentive Plan    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Number of shares authorized under the plan | shares 4,600,463 4,600,463
Percentage of issued and outstanding ordinary shares authorized for issuance under plan   7.50%
Number of shares awarded for grant | shares   0
Share vesting installment period   3 years
Total unrecognized compensation cost relating to unvested share-based compensation arrangements | $ $ 1,100 $ 1,100
Unrecognized compensation cost, recognition period   1 year 7 months 6 days
Stock Compensation Expense | $ $ 100 $ 500
2017 Equity Incentive Plan | Common Stock    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Shares of common stock outstanding | shares 63,919 63,919
v3.10.0.1
Commitments and Contingencies - Additional Information (Detail) - USD ($)
$ in Millions
Sep. 30, 2018
Dec. 31, 2017
Commitments And Contingencies Disclosure [Abstract]    
Unfunded commitments related to loans held for investment $ 527.1 $ 529.0
v3.10.0.1
Concentration of Credit Risk - Summary of Loan Portfolio by Property Type (Details) - USD ($)
$ in Thousands
Sep. 30, 2018
Dec. 31, 2017
Loans And Leases Receivable Disclosure [Line Items]    
Loan Commitment $ 4,705,831 $ 3,727,156
Unfunded Commitment $ 527,102 $ 529,040
% of Loan Commitment 100.00% 100.00%
Loan UPB $ 4,178,729 $ 3,198,116
% of Loan UPB 100.00% 100.00%
Condominium    
Loans And Leases Receivable Disclosure [Line Items]    
Loan Commitment $ 276,044 $ 679,779
Unfunded Commitment $ 25,462 $ 166,358
% of Loan Commitment 5.90% 18.20%
Loan UPB $ 250,582 $ 513,421
% of Loan UPB 6.00% 16.10%
Multifamily    
Loans And Leases Receivable Disclosure [Line Items]    
Loan Commitment $ 950,808 $ 813,775
Unfunded Commitment $ 76,023 $ 75,509
% of Loan Commitment 20.20% 21.80%
Loan UPB $ 874,785 $ 738,266
% of Loan UPB 20.90% 23.10%
Office    
Loans And Leases Receivable Disclosure [Line Items]    
Loan Commitment $ 1,776,866 $ 836,826
Unfunded Commitment $ 272,336 $ 160,450
% of Loan Commitment 37.80% 22.50%
Loan UPB $ 1,504,530 $ 676,376
% of Loan UPB 36.00% 21.10%
Hotel    
Loans And Leases Receivable Disclosure [Line Items]    
Loan Commitment $ 627,994 $ 693,569
Unfunded Commitment $ 13,290 $ 27,980
% of Loan Commitment 13.30% 18.60%
Loan UPB $ 614,704 $ 665,589
% of Loan UPB 14.70% 20.80%
Mixed Use    
Loans And Leases Receivable Disclosure [Line Items]    
Loan Commitment $ 758,500 $ 431,500
Unfunded Commitment $ 87,567 $ 57,243
% of Loan Commitment 16.10% 11.60%
Loan UPB $ 670,933 $ 374,257
% of Loan UPB 16.10% 11.70%
Retail    
Loans And Leases Receivable Disclosure [Line Items]    
Loan Commitment $ 239,058 $ 195,012
Unfunded Commitment $ 52,424 $ 41,500
% of Loan Commitment 5.10% 5.20%
Loan UPB $ 186,634 $ 153,512
% of Loan UPB 4.50% 4.80%
Industrial    
Loans And Leases Receivable Disclosure [Line Items]    
Loan Commitment $ 66,500 $ 66,500
% of Loan Commitment 1.40% 1.80%
Loan UPB $ 66,500 $ 66,500
% of Loan UPB 1.60% 2.10%
Other    
Loans And Leases Receivable Disclosure [Line Items]    
Loan Commitment $ 10,061 $ 10,195
% of Loan Commitment 0.20% 0.30%
Loan UPB $ 10,061 $ 10,195
% of Loan UPB 0.20% 0.30%
v3.10.0.1
Concentration of Credit Risk - Summary of Geographic Composition of Loans Held for Investment Based on Current UPB and Loan Commitment (Details) - USD ($)
$ in Thousands
Sep. 30, 2018
Dec. 31, 2017
Loans And Leases Receivable Disclosure [Line Items]    
Loan Commitment $ 4,705,831 $ 3,727,156
Unfunded Commitment $ 527,102 $ 529,040
% Loan Commitment 100.00% 100.00%
Loan UPB $ 4,178,729 $ 3,198,116
% Loan UPB 100.00% 100.00%
East    
Loans And Leases Receivable Disclosure [Line Items]    
Loan Commitment $ 2,068,065 $ 1,600,619
Unfunded Commitment $ 163,056 $ 167,447
% Loan Commitment 44.00% 42.90%
Loan UPB $ 1,905,009 $ 1,433,172
% Loan UPB 45.60% 44.80%
South    
Loans And Leases Receivable Disclosure [Line Items]    
Loan Commitment $ 1,442,929 $ 1,147,510
Unfunded Commitment $ 257,013 $ 278,890
% Loan Commitment 30.70% 30.80%
Loan UPB $ 1,185,916 $ 868,620
% Loan UPB 28.40% 27.20%
West    
Loans And Leases Receivable Disclosure [Line Items]    
Loan Commitment $ 744,940 $ 674,123
Unfunded Commitment $ 87,885 $ 67,746
% Loan Commitment 15.80% 18.10%
Loan UPB $ 657,055 $ 606,377
% Loan UPB 15.70% 19.00%
Midwest    
Loans And Leases Receivable Disclosure [Line Items]    
Loan Commitment $ 400,897 $ 255,904
Unfunded Commitment $ 19,148 $ 14,957
% Loan Commitment 8.50% 6.90%
Loan UPB $ 381,749 $ 240,947
% Loan UPB 9.10% 7.50%
Various    
Loans And Leases Receivable Disclosure [Line Items]    
Loan Commitment $ 49,000 $ 49,000
% Loan Commitment 1.00% 1.30%
Loan UPB $ 49,000 $ 49,000
% Loan UPB 1.20% 1.50%
v3.10.0.1
Concentration of Credit Risk - Summary of Loan Portfolio by Loan Category Type (Details) - USD ($)
$ in Thousands
Sep. 30, 2018
Dec. 31, 2017
Loans And Leases Receivable Disclosure [Line Items]    
Loan Commitment $ 4,705,831 $ 3,727,156
Unfunded Commitment $ 527,102 $ 529,040
% Loan Commitment 100.00% 100.00%
Loan UPB $ 4,178,729 $ 3,198,116
% Loan UPB 100.00% 100.00%
Bridge    
Loans And Leases Receivable Disclosure [Line Items]    
Loan Commitment $ 2,503,711 $ 1,927,488
Unfunded Commitment $ 203,679 $ 176,316
% Loan Commitment 53.20% 51.70%
Loan UPB $ 2,300,032 $ 1,751,172
% Loan UPB 55.00% 54.70%
Moderate Transitional    
Loans And Leases Receivable Disclosure [Line Items]    
Loan Commitment $ 727,499 $ 723,075
Unfunded Commitment $ 118,309 $ 132,483
% Loan Commitment 15.50% 19.40%
Loan UPB $ 609,190 $ 590,592
% Loan UPB 14.60% 18.50%
Construction    
Loans And Leases Receivable Disclosure [Line Items]    
Loan Commitment $ 108,801 $ 609,468
Unfunded Commitment $ 10,462 $ 166,358
% Loan Commitment 2.30% 16.40%
Loan UPB $ 98,339 $ 443,110
% Loan UPB 2.40% 13.90%
Light Transitional    
Loans And Leases Receivable Disclosure [Line Items]    
Loan Commitment $ 1,365,820 $ 467,125
Unfunded Commitment $ 194,652 $ 53,883
% Loan Commitment 29.00% 12.50%
Loan UPB $ 1,171,168 $ 413,242
% Loan UPB 28.00% 12.90%
v3.10.0.1
Subsequent Events - Additional Information (Details)
 1 Months Ended 9 Months Ended
Oct. 25, 2018
USD ($)
$ / shares
Jul. 03, 2017
Nov. 05, 2018
USD ($)
Loan
Sep. 30, 2018
USD ($)
Sep. 18, 2018
USD ($)
$ / shares
Dec. 31, 2017
USD ($)
Sep. 30, 2017
USD ($)
Sep. 26, 2017
$ / shares
Subsequent Event [Line Items]                
Principal amount of notes issued       $ 3,610,303,000   $ 3,376,158,000    
Dividend payable date   Jul. 25, 2017   Jul. 03, 2017        
Dividends Payable       $ 28,918,000 [1] $ 28,900,000 $ 23,068,000 [1] $ 20,135,000  
Common Stock                
Subsequent Event [Line Items]                
Dividend amount per share | $ / shares         $ 0.43     $ 0.33
Subsequent Events                
Subsequent Event [Line Items]                
Number of first mortgage loans closed | Loan     4          
Principal amount of notes issued     $ 540,000,000          
Subsequent Events | Common Stock                
Subsequent Event [Line Items]                
Dividend payable date Oct. 25, 2018              
Dividend amount per share | $ / shares $ 0.43              
Dividends Payable $ 28,900,000              
[1] At December 31, 2017, there were no VIE assets or liabilities recorded in the Company’s Total Assets and Total Liabilities. The Company’s consolidated Total Assets and Total Liabilities at September 30, 2018 include VIE assets and liabilities of $954.4 million and $741.5 million, respectively. These assets can be used only to satisfy obligations of the VIE, and creditors of the VIE have recourse only to these assets, and not to TPG RE Finance Trust, Inc. See Note 5 to the Consolidated Financial Statements for details