InPoint Increases Distributions, Provides Operations and Portfolio Update
InPoint Commercial Real Estate Income Inc., a commercial mortgage non-traded real estate investment trust, has increased monthly distributions to shareholders and provided an operations and portfolio update.
InPoint Commercial Real Estate Income Inc., a commercial mortgage non-traded real estate investment trust, has increased monthly distributions to shareholders and provided an operations and portfolio update, according to a prospectus supplement filed with the Securities and Exchange Commission.
The company declared a monthly distribution of $0.1042 per share ($1.25 per share annualized) for stockholders of record as of June 30, 2021 that will be paid around July 19, 2021. The annualized rate is approximately 6.2 percent based on the most recently reported net asset value per share of $20.25 as of May 31, 2021. Shares were originally priced at $25.00 each. The previous month’s distribution was $0.0958 per share, or 5.7 percent/$1.15 per share annualized.
Beginning January 2021, 50 percent of the management fee had been waived, continuing until July 1, 2021. Effective July 1, 2021, the fixed component of the advisor’s management fee has been reduced by up to 50 percent, adjusted from 1/12th of 1.25 percent of average invested assets (up to a limit of 1/12th of 2.5 percent of the average NAV) to 1/12th of 1.25 percent of the average NAV.
Effective July 1, 2021, the company said that reimbursement of operating expenses has been updated to include reimbursement to advisors for ordinary operating expenses up to 1.5 percent of average monthly net assets. Before July 1, 2021, the REIT did not reimburse advisors for overhead or personnel costs, or fees paid to affiliates except for fees for legal and marketing services.
“Our NAV per share has been stable during 2021, and we believe our loan portfolio is well-positioned,” the company said in the filing. “Although our ownership of the Renaissance O’Hare hotel, which we acquired through a deed-in-lieu of foreclosure transaction in August 2020, has had a negative impact on our NAV during the COVID-19 pandemic, the Renaissance O’Hare has shown improved operating performance during 2021.”
The REIT noted that for the month of May 2021, the occupancy rate at Renaissance O’Hare was 44.8 percent, average daily rate was $87, and revenue per available room was $39.32. For the month of June 2021 through June 19, the occupancy rate was 53.3 percent, average daily rate was $90 and revenue per available room was $48.34.
Since March 31, 2021, InPoint Commercial Real Estate Income originated 10 first mortgage loans with an approximate principal balance of $142 million. Five of the loans are secured by multifamily properties, two are secured by industrial properties, one is secured by an office property, and two are mixed-use.
The REIT had approximately $45 million of cash and cash equivalents as of July 1, 2021, of which approximately $30 million is maintained to satisfy the liquidity requirements of its debt obligations and the rest available to use for other purposes.
As of June 30, 2021, more than 95 percent of the portfolio was invested in first mortgage loans.
“We believe our first mortgage loan portfolio performed well through the pandemic,” the company said. “Other than the loan secured by the ground lease of the Renaissance O’Hare hotel that we acquired from the borrower upon the borrower’s default, every loan has made monthly debt service and principal payments in accordance with their current terms, including payment modifications made to one hospitality loan and one retail loan, and extension modifications made to one office loan, one industrial loan and one multifamily loan.”
As of June 30, 2021, InPoint Commercial Real Estate Income’s portfolio is comprised of 36 debt investments with total unpaid principal balances of $554.8 million and one owned property, the Renaissance O’Hare, with a fair value of approximately $14 million. The company raised $276.7 million in its private offering from October 2016 to July 2019 and raised $38.3 million in its public offering from May 2019 through May 2021.
In March 2020, the board temporarily suspended the public offering, share repurchase plan, distributions, and distribution reinvestment plan, citing the coronavirus (COVID-19) pandemic as the reason for the decision. The public offering was reinstated in October 2020, distributions were reinstated in August 2020, and the share repurchase plan was reinstated for death or disability in March 2021 and for all shareholders on July 1, 2021.
InPoint is advised by an affiliate of Inland Real Estate Investment Corporation and sub-advised by an affiliate of Sound Point Capital Management LP.
