TRMT is a REIT that plans to focus primarily on originating and investing in first mortgage loans secured by middle market (properties valued up to $75.0 million) and transitional commercial real estate (CRE). Its manager is Tremont Realty, which is owned by the RMR Group (RMR), which had approximately $27.9 billion of CRE assets under management as of June 30, 2017.
While it expects to primarily focus on originating and investing in floating rate first mortgage loans of less than $50.0 million, its target investments will also include subordinated mortgages, mezzanine loans, and preferred equity interests in entities that own middle market and transitional CRE.
The company believes that middle market CRE will provide it opportunities to achieve higher returns relative to properties that have values over $75 million. The company believes that there is currently an imbalance in the CRE debt financing market that is marked by reduced supply of CRE debt capital and increased demand for CRE debt capital when compared to a decade ago.
TRMT also believes that this imbalance is especially pronounced for middle market and transitional CRE. Further, it says that this market dynamic creates an opportunity for alternative lenders to provide CRE debt financing to commercial property owners who in the past have obtained debt financing from historical CRE debt providers, such as banks and insurance companies.
At this point, TRMT doesn't have any financial history. As a REIT, it must pay regular quarterly distributions, equally at least 90% of its taxable income.