0000950170-23-036482.txt : 20230801 0000950170-23-036482.hdr.sgml : 20230801 20230801161637 ACCESSION NUMBER: 0000950170-23-036482 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 110 CONFORMED PERIOD OF REPORT: 20230630 FILED AS OF DATE: 20230801 DATE AS OF CHANGE: 20230801 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Claros Mortgage Trust, Inc. CENTRAL INDEX KEY: 0001666291 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 474074900 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-40993 FILM NUMBER: 231131931 BUSINESS ADDRESS: STREET 1: C/O MACK REAL ESTATE GROUP STREET 2: 60 COLUMBUS CIRCLE, 20TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10023 BUSINESS PHONE: 212-484-0050 MAIL ADDRESS: STREET 1: C/O MACK REAL ESTATE GROUP STREET 2: 60 COLUMBUS CIRCLE, 20TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10023 10-Q 1 cmtg-20230630.htm 10-Q 10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-40993

 

Claros Mortgage Trust, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Maryland

47-4074900

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

c/o Mack Real Estate Credit Strategies, L.P.

 

60 Columbus Circle, 20th Floor, New York, NY

10023

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (212) 484-0050

Former name, former address and former fiscal year, if changed since last report: N/A

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Stock, $0.01 par value per share

 

CMTG

 

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

 

 

 

 

Non-accelerated filer

Smaller reporting company

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

As of August 1, 2023, the registrant had 138,385,904 shares of common stock, $0.01 par value per share, outstanding.

 

 


 

Table of Contents

 

Page

PART I.

FINANCIAL INFORMATION

3

Item 1.

Financial Statements (Unaudited)

3

Consolidated Balance Sheets

3

Consolidated Statements of Operations

4

Consolidated Statements of Changes in Equity

5

Consolidated Statements of Cash Flows

6

Notes to Consolidated Financial Statements

8

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

31

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

50

Item 4.

Controls and Procedures

53

PART II.

OTHER INFORMATION

 

Item 1.

Legal Proceedings

54

Item 1A.

Risk Factors

54

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

54

Item 3.

Defaults Upon Senior Securities

54

Item 4.

Mine Safety Disclosures

54

Item 5.

Other Information

54

Item 6.

Exhibits

55

Signatures

56

 

 

 

2


 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Claros Mortgage Trust, Inc.

Consolidated Balance Sheets

(unaudited, in thousands, except share data)

 

 

 

June 30, 2023

 

 

December 31, 2022

 

Assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

253,055

 

 

$

306,456

 

Restricted cash

 

 

32,035

 

 

 

41,703

 

Loan principal payments held by servicer

 

 

641

 

 

 

-

 

Loans receivable held-for-investment

 

 

7,520,017

 

 

 

7,489,074

 

Less: current expected credit loss reserve

 

 

(103,651

)

 

 

(128,647

)

Loans receivable held-for-investment, net

 

 

7,416,366

 

 

 

7,360,427

 

Equity method investment

 

 

42,547

 

 

 

41,880

 

Real estate owned, net

 

 

522,427

 

 

 

401,189

 

Other assets

 

 

133,533

 

 

 

89,858

 

Total assets

 

$

8,400,604

 

 

$

8,241,513

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

 

Repurchase agreements

 

$

4,043,983

 

 

$

3,966,859

 

Term participation facility

 

 

346,140

 

 

 

257,531

 

Loan participations sold, net

 

 

264,082

 

 

 

263,798

 

Notes payable, net

 

 

218,373

 

 

 

149,521

 

Secured term loan, net

 

 

713,975

 

 

 

736,853

 

Debt related to real estate owned, net

 

 

289,651

 

 

 

289,389

 

Other liabilities

 

 

61,909

 

 

 

59,223

 

Dividends payable

 

 

52,424

 

 

 

52,001

 

Management fee payable - affiliate

 

 

9,641

 

 

 

9,867

 

Total liabilities

 

 

6,000,178

 

 

 

5,785,042

 

 

 

 

 

 

 

Commitments and contingencies - Note 14

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

Common stock, $0.01 par value, 500,000,000 shares authorized, 138,385,904 and
     
140,055,714 shares issued and 138,385,904 and 138,376,144 shares outstanding
     at June 30, 2023 and December 31, 2022, respectively

 

 

1,400

 

 

 

1,400

 

Additional paid-in capital

 

 

2,720,168

 

 

 

2,712,316

 

Accumulated deficit

 

 

(321,142

)

 

 

(257,245

)

Total equity

 

 

2,400,426

 

 

 

2,456,471

 

Total liabilities and equity

 

$

8,400,604

 

 

$

8,241,513

 

 

The accompanying notes are an integral part of these consolidated financial statements.

3


 

Claros Mortgage Trust, Inc.

Consolidated Statements of Operations

(unaudited, in thousands, except share and per share data)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30, 2023

 

 

June 30, 2022

 

 

June 30, 2023

 

 

June 30, 2022

 

Revenue

 

 

 

 

 

 

 

 

Interest and related income

 

$

180,735

 

 

$

98,993

 

 

$

344,901

 

 

$

189,687

 

Less: interest and related expense

 

 

119,676

 

 

 

46,871

 

 

 

225,703

 

 

 

86,451

 

Net interest income

 

 

61,059

 

 

 

52,122

 

 

 

119,198

 

 

 

103,236

 

Revenue from real estate owned

 

 

19,866

 

 

 

17,118

 

 

 

30,829

 

 

 

23,931

 

Total net revenue

 

 

80,925

 

 

 

69,240

 

 

 

150,027

 

 

 

127,167

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

Management fees - affiliate

 

 

9,641

 

 

 

9,843

 

 

 

19,297

 

 

 

19,650

 

Incentive fees - affiliate

 

 

-

 

 

 

-

 

 

 

1,558

 

 

 

-

 

General and administrative expenses

 

 

4,492

 

 

 

4,748

 

 

 

9,417

 

 

 

9,091

 

Stock-based compensation expense

 

 

4,395

 

 

 

604

 

 

 

7,761

 

 

 

604

 

Real estate owned:

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

11,269

 

 

 

10,536

 

 

 

21,268

 

 

 

18,316

 

Interest expense

 

 

5,865

 

 

 

2,719

 

 

 

11,309

 

 

 

5,303

 

Depreciation

 

 

2,092

 

 

 

1,998

 

 

 

4,150

 

 

 

3,938

 

Total expenses

 

 

37,754

 

 

 

30,448

 

 

 

74,760

 

 

 

56,902

 

 

 

 

 

 

 

 

 

 

 

 

 

Realized gain on sale of loan

 

 

-

 

 

 

30,090

 

 

 

-

 

 

 

30,090

 

Proceeds from interest rate cap

 

 

1,495

 

 

 

-

 

 

 

2,678

 

 

 

-

 

Unrealized (loss) gain on interest rate cap

 

 

(259

)

 

 

2,837

 

 

 

(1,662

)

 

 

2,837

 

(Loss) income from equity method investment

 

 

(895

)

 

 

-

 

 

 

668

 

 

 

-

 

Gain on extinguishment of debt

 

 

2,217

 

 

 

-

 

 

 

2,217

 

 

 

-

 

Provision for current expected credit loss reserve

 

 

(41,476

)

 

 

(8,530

)

 

 

(38,237

)

 

 

(10,632

)

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

4,253

 

 

 

63,189

 

 

 

40,931

 

 

 

92,560

 

Net loss attributable to non-controlling interests

 

 

-

 

 

 

(45

)

 

 

-

 

 

 

(86

)

Net income attributable to common stock

 

$

4,253

 

 

$

63,234

 

 

$

40,931

 

 

$

92,646

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share of common stock:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

0.02

 

 

$

0.45

 

 

$

0.28

 

 

$

0.66

 

Weighted-average shares of common stock outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

138,399,446

 

 

 

139,637,949

 

 

 

138,392,666

 

 

 

139,675,019

 

 

The accompanying notes are an integral part of these consolidated financial statements.

4


 

Claros Mortgage Trust, Inc.

Consolidated Statements of Changes in Equity

(unaudited, in thousands, except share data)

 

 

 

Common Stock

 

 

Additional Paid-In

 

 

Accumulated

 

 

 

 

 

 

 

 

 

Shares

 

 

Par Value

 

 

Capital

 

 

Deficit

 

 

Total Equity

 

 

 

 

Balance at December 31, 2022

 

 

138,376,144

 

 

$

1,400

 

 

$

2,712,316

 

 

$

(257,245

)

 

$

2,456,471

 

 

 

 

Stock-based compensation expense

 

 

-

 

 

 

-

 

 

 

3,409

 

 

 

-

 

 

 

3,409

 

 

 

 

Dividends declared

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(52,404

)

 

 

(52,404

)

 

 

 

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

36,678

 

 

 

36,678

 

 

 

 

Balance at March 31, 2023

 

 

138,376,144

 

 

$

1,400

 

 

$

2,715,725

 

 

$

(272,971

)

 

$

2,444,154

 

 

 

 

Stock-based compensation expense

 

 

9,760

 

 

 

-

 

 

 

4,443

 

 

 

-

 

 

 

4,443

 

 

 

 

Dividends declared

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(52,424

)

 

 

(52,424

)

 

 

 

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

4,253

 

 

 

4,253

 

 

 

 

Balance at June 30, 2023

 

 

138,385,904

 

 

$

1,400

 

 

$

2,720,168

 

 

$

(321,142

)

 

$

2,400,426

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Additional Paid-In

 

 

Accumulated

 

 

Non-Controlling

 

 

 

 

 

 

Shares

 

 

Par Value

 

 

Capital

 

 

Deficit

 

 

Interests

 

 

Total Equity

 

Balance at December 31, 2021

 

 

139,840,088

 

 

$

1,400

 

 

$

2,726,190

 

 

$

(160,959

)

 

$

37,636

 

 

$

2,604,267

 

Repurchased Shares

 

 

(186,289

)

 

 

-

 

 

 

(3,179

)

 

 

-

 

 

 

-

 

 

 

(3,179

)

Contributions from non-controlling interests

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

539

 

 

 

539

 

Offering costs

 

 

-

 

 

 

-

 

 

 

(30

)

 

 

-

 

 

 

-

 

 

 

(30

)

Dividends declared

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(51,672

)

 

 

-

 

 

 

(51,672

)

Net income (loss)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

29,412

 

 

 

(41

)

 

 

29,371

 

Balance at March 31, 2022

 

 

139,653,799

 

 

$

1,400

 

 

$

2,722,981

 

 

$

(183,219

)

 

$

38,134

 

 

$

2,579,296

 

Repurchased Shares

 

 

(33,721

)

 

 

-

 

 

 

(592

)

 

 

-

 

 

 

-

 

 

 

(592

)

Contributions from non-controlling interests

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

367

 

 

 

367

 

Stock-based compensation expense

 

 

-

 

 

 

-

 

 

 

604

 

 

 

-

 

 

 

-

 

 

 

604

 

Dividends declared

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(52,458

)

 

 

-