The following discussion should be read in conjunction with our condensed consolidated financial statements and accompanying notes included elsewhere in this Quarterly Report on Form 10-Q and in our 2021 Annual Report.

OVERVIEW (dollars in thousands, except share data)



We are a Maryland REIT. Our business strategy is focused on originating and
investing in floating rate first mortgage loans secured by middle market and
transitional CRE. We define middle market CRE as commercial properties that have
values up to $100,000 and transitional CRE as commercial properties subject to
redevelopment or repositioning activities that are expected to increase the
value of the properties. These mortgage loans are classified as loans held for
investment in our condensed consolidated balance sheets. Loans held for
investment are reported at cost, net of any unamortized loan fees, origination
costs, premiums, discounts or reserves for loan losses, as applicable.

Tremont is registered with the Securities and Exchange Commission, or SEC, as an
investment adviser under the Investment Advisers Act of 1940, as amended. We
believe that Tremont provides us with significant experience and expertise in
investing in middle market and transitional CRE.

We operate our business in a manner consistent with our qualification for
taxation as a REIT under the IRC. As such, we generally are not subject to U.S.
federal income tax, provided that we meet certain distribution and other
requirements. We also operate our business in a manner that permits us to
maintain our exemption from registration under the Investment Company Act of
1940, as amended, or the 1940 Act.

Non-GAAP Financial Measures



We present Distributable Earnings, Distributable Earnings per common share,
Adjusted Distributable Earnings, Adjusted Distributable Earnings per common
share and Adjusted Book Value per common share, which are considered "non-GAAP
financial measures" within the meaning of the applicable SEC rules. These
non-GAAP financial measures do not represent net income, net income per common
share or cash generated from operating activities and should not be considered
as an alternative to net income or net income per common share determined in
accordance with GAAP or as an indication of our cash flows from operations
determined in accordance with GAAP, measures of our liquidity or operating
performance or an indication of funds available for our cash needs. In addition,
our methodologies for calculating these non-GAAP financial measures may differ
from the methodologies employed by other companies to calculate the same or
similar supplemental performance measures; therefore, our reported Distributable
Earnings, Distributable Earnings per common share, Adjusted Distributable
Earnings and Adjusted Distributable Earnings per common share may not be
comparable to distributable earnings, distributable earnings per common share,
adjusted distributable earnings and adjusted distributable earnings per common
share, as reported by other companies.

We believe that Adjusted Book Value per common share is a meaningful measure of
our capital adequacy because it excludes the unaccreted purchase discount
resulting from the excess of the fair value of the loans TRMT then held for
investment and that we acquired as a result of the Merger over the consideration
we paid in the Merger. Adjusted Book Value per common share does not represent
book value per common share or alternative measures determined in accordance
with GAAP. Our methodology for calculating Adjusted Book Value per common share
may differ from the methodologies employed by other companies to calculate the
same or similar supplemental capital adequacy measures; therefore, our Adjusted
Book Value per common share may not be comparable to the adjusted book value per
common share reported by other companies.

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In order to maintain our qualification for taxation as a REIT, we are generally
required to distribute substantially all of our taxable income, subject to
certain adjustments, to our shareholders. We believe that one of the factors
that investors consider important in deciding whether to buy or sell securities
of a REIT is its distribution rate. Over time, Distributable Earnings,
Distributable Earnings per common share, Adjusted Distributable Earnings and
Adjusted Distributable Earnings per common share may be useful indicators of
distributions to our shareholders and are measures that are considered by our
Board of Trustees when determining the amount of distributions. We believe that
Distributable Earnings, Distributable Earnings per common share, Adjusted
Distributable Earnings and Adjusted Distributable Earnings per common share
provide meaningful information to consider in addition to net income, net income
per common share and cash flows from operating activities determined in
accordance with GAAP. These measures help us to evaluate our performance
excluding the effects of certain transactions, the variability of any management
incentive fees that may be paid or payable and GAAP adjustments that we believe
are not necessarily indicative of our current loan portfolio and operations. In
addition, Distributable Earnings is used in determining the amount of base
management and management incentive fees payable by us to Tremont under our
management agreement.

Distributable Earnings and Adjusted Distributable Earnings



We calculate Distributable Earnings and Distributable Earnings per common share
as net income and net income per common share, respectively, computed in
accordance with GAAP, including realized losses not otherwise included in net
income determined in accordance with GAAP, and excluding: (a) the management
incentive fees earned by Tremont, if any; (b) depreciation and amortization, if
any; (c) non-cash equity compensation expense; (d) unrealized gains, losses and
other similar non-cash items that are included in net income for the period of
the calculation (regardless of whether such items are included in or deducted
from net income or in other comprehensive income under GAAP), if any; and (e)
one-time events pursuant to changes in GAAP and certain non-cash items, if any.
Distributable Earnings are reduced for realized losses on loan investments when
amounts are deemed uncollectable.

We define Adjusted Distributable Earnings and Adjusted Distributable Earnings
per common share as Distributable Earnings and Distributable Earnings per common
share, respectively, excluding the effects of certain non-recurring
transactions.


Reconciliation of Book Value per Common Share to Adjusted Book Value per Common Share

The table below calculates our book value per common share and demonstrates how we calculate Adjusted Book Value per common share:



                                                 June 30, 2022       December 31, 2021
Shareholders' equity                            $      266,730      $       

257,694


Total outstanding common shares                         14,638              

14,597


Book value per common share                              18.22              

17.65


Unaccreted purchase discount per common share             0.67              

1.20

Adjusted Book Value per common share (1) $ 18.89 $

18.85




(1)Adjusted Book Value per common share is a non-GAAP financial measure that
excludes the impact of the unaccreted purchase discount resulting from the
excess of the fair value of the loans TRMT then held for investment and that we
acquired as a result of the Merger over the consideration we paid in the Merger.
The purchase discount of $36,443 was allocated to each acquired loan and is
being accreted into income over the remaining term of the respective loan. As of
June 30, 2022 and December 31, 2021, the unaccreted purchase discount was $9,820
and $17,391, respectively.

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Our Loan Portfolio

The table below details overall statistics for our loan portfolio as of June 30, 2022 and December 31, 2021:



                                                      As of June 30, 2022            As of December 31, 2021
Number of loans                                                           28                                 26
Total loan commitments                              $                734,883       $                    648,266
Unfunded loan commitments (1)                       $                 52,694       $                     57,772
Principal balance                                   $                682,285       $                    590,590

Carrying value                                      $                670,185       $                    570,780
Weighted average coupon rate                                       5.14  %                              4.54  %
Weighted average all in yield (2)                                  5.64  %                              5.08  %
Weighted average floor                                             0.61  %                              0.68  %
Weighted average maximum maturity (years) (3)                            3.6                                3.8
Weighted average risk rating                                             2.7                                2.9
Weighted average LTV (4)                                             68  %                                68  %


(1)  Unfunded loan commitments are primarily used to finance property and
building improvements and leasing capital and are generally funded over the term
of the loan.
(2)   All in yield represents the yield on a loan, including amortization of
deferred fees over the initial term of the loan and excluding any purchase
discount accretion.
(3)  Maximum maturity assumes all borrower loan extension options have been
exercised, which options are subject to the borrower meeting certain conditions.
(4)  LTV represents the initial loan amount divided by the underwritten in-place
value of the underlying collateral at closing.


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Loan Portfolio Details

The table below details our loan portfolio as of June 30, 2022:



                                                                                         Committed
                                                                                         Principal           Principal                                        All in            Maximum Maturity (2)
        Location                    Property Type             Origination Date             Amount             Balance                  Coupon Rate           Yield (1)                 (date)                  LTV(3)           Risk Rating
First mortgage loans
St. Louis, MO                          Office                    12/19/2018            $    29,500          $  28,917                      L + 3.25%           L + 3.74%                    12/19/2023             72  %             2
Coppell, TX                            Retail                    02/05/2019                 19,365             19,365                      L + 3.50%           L + 4.24%                    08/12/2022             73  %             3
Yardley, PA                            Office                    12/19/2019                 16,500             14,972                      L + 4.97%           L + 5.67%                    12/19/2024             75  %             4
Allentown, PA                        Industrial                  01/24/2020                 10,078             10,078                      L + 3.50%           L + 4.03%                    01/24/2025             67  %             2
Dublin, OH                             Office                    02/18/2020                 22,820             22,507                      S + 3.75%           S + 4.95%                    02/18/2023             33  %             2
Downers Grove, IL                      Office                    09/25/2020                    30,000             29,500                   L + 4.25%           L + 4.69%                    11/25/2024             67  %             3
Los Angeles, CA                        Retail                    12/17/2020                 24,600             21,040                      L + 4.25%           L + 5.03%                    12/17/2024             67  %             2
Aurora, IL                       Office / Industrial             12/18/2020                 17,460             15,105                      L + 4.35%           L + 5.03%                    12/18/2024             73  %             2
Olmstead Falls, OH                   Multifamily                 01/28/2021                    54,575             46,083                   L + 4.00%           L + 4.64%                    01/28/2026             63  %             3
Colorado Springs, CO             Office / Industrial             04/06/2021                    34,275             30,210                   L + 4.50%           L + 5.02%                    04/06/2025             73  %             2
Westminster, CO                        Office                    05/25/2021                    15,250             13,894                   L + 3.75%           L + 4.20%                    05/25/2026             66  %             2
Plano, TX                              Office                    07/01/2021                    27,385             25,209                   L + 4.75%           L + 5.17%                    07/01/2026             78  %             3
Portland, OR                         Multifamily                 07/09/2021                 19,687             19,687                      L + 3.57%           L + 3.97%                    07/09/2026             75  %             3
Portland, OR                         Multifamily                 07/30/2021                 13,400             13,400                      L + 3.57%           L + 3.98%                    07/30/2026             71  %             4
Seattle, WA                          Multifamily                 08/16/2021                    12,500             12,265                   L + 3.55%           L + 3.89%                    08/16/2026             70  %             3
Dallas, TX                             Office                    08/25/2021                 50,000             43,450                      L + 3.25%           L + 3.61%                    08/25/2026             72  %             3
Sandy Springs, GA                      Retail                    09/23/2021                 16,488             15,017                      L + 3.75%           L + 4.11%                    09/23/2026             72  %             2
Carlsbad, CA                           Office                    10/27/2021                 24,750             23,825                      L + 3.25%           L + 3.58%                    10/27/2026             78  %             3
Bellevue, WA                           Office                    11/05/2021                 21,000             20,000                      L + 3.85%           L + 4.19%                    11/05/2026             68  %             3
Ames, IA                             Multifamily                 11/15/2021                    18,000             17,680                   L + 3.80%           L + 4.13%                    11/15/2026             71  %             2
Downers Grove, IL                      Office                    12/09/2021                 23,530             23,530                      L + 4.25%           L + 4.57%                    12/09/2026             72  %             3
West Bloomfield, MI                    Retail                    12/16/2021                 42,500             37,388                      L + 3.85%           L + 4.66%                    12/16/2024             59  %             3
Summerville, SC                      Industrial                  12/20/2021                 35,000             35,000                      L + 3.50%           L + 3.82%                    12/20/2026             70  %             2
Delray Beach, FL                       Retail                    03/18/2022                 16,000             13,947                      S + 4.25%           S + 4.96%                    03/18/2026             56  %             3
Starkville, MS                       Multifamily                 03/22/2022                 37,250             36,396                      S + 4.00%           S + 4.33%                    03/22/2027             70  %             3
Brandywine, MD                         Retail                    03/29/2022                 42,500             42,200                      S + 3.85%           S + 4.25%                    03/29/2027             62  %             3
Farmington Hills, MI                 Multifamily                 05/24/2022                 31,520             28,520                      S + 3.15%           S + 3.50%                    05/24/2027             75  %             3
Las Vegas, NV                        Multifamily                 06/10/2022                 28,950             23,100                      S + 3.30%           S + 4.08%                    06/10/2027             60  %             3

Total/weighted average                                                                 $   734,883          $ 682,285                        + 3.82%             + 4.33%                                           68  %            2.7


(1)All in yield represents the yield on a loan, including amortization of
deferred fees over the initial term of the loan and excluding any purchase
discount accretion.
(2)Maximum maturity assumes all borrower loan extension options have been
exercised, which options are subject to the borrower meeting certain conditions.
(3)  LTV represents the initial loan amount divided by the underwritten in-place
value of the underlying collateral at closing.

As of June 30, 2022, we had $734,883 in aggregate loan commitments, consisting
of a diverse portfolio, geographically and by property type, of 28 first
mortgage loans. The impact from the COVID-19 pandemic has negatively impacted
some of our borrowers' business operations or tenants, particularly in the cases
of certain of our office and retail collateral, which are some of the types of
properties that have been most negatively impacted by the pandemic. We expect
that those negative impacts may continue and may apply to other borrowers and/or
their tenants. Further, although economic activity in the U.S. has improved
significantly from the low points during the pandemic to date, certain
industries have not recovered to their pre-pandemic positions, certain
industries have not recovered to their pre-pandemic positions, and current
inflationary pressures and the possibility that the U.S. economy may now be in,
or will soon enter into, a recession or downturn may amplify those, or introduce
additional, negative impacts. Therefore, certain of our borrowers' business
plans will likely take longer to execute than initially expected and certain of
our borrowers may be unable to pay their debt service obligation owed and due to
us as currently scheduled. As of June 30, 2022, we had two loan representing
approximately 4% of the carrying value of our loan portfolio with a loan risk
rating of "4" or "higher risk". For further information and risks relating to
the COVID-19 pandemic and current economic conditions on us and our business,
see "-Factors Affecting our Operating Results" below and "Warning
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Concerning Forward-Looking Statements" elsewhere in this Quarterly Report on
Form 10-Q and Part I, Item 1A, "Risk Factors", of our 2021 Annual Report.

All of the loans in our portfolio are structured with risk mitigation
mechanisms, such as cash flow sweeps or interest reserves, to help protect us
against investment losses. In addition, we continue to actively engage with our
borrowers regarding their execution of the business plans for the underlying
collateral, among other things.

As of June 30, 2022 and July 25, 2022, all of our borrowers had paid all of their debt service obligations owed and due to us and none of the loans included in our investment portfolio were in default.



We did not have any impaired loans, non-accrual loans or loans in default as of
June 30, 2022; thus, we did not record a reserve for loan loss as of that date.
However, depending on the duration and severity of the COVID-19 pandemic and any
resulting economic downturn, our borrowers' businesses, operations and liquidity
may be materially adversely impacted. As a result, they may become unable to pay
their debt service obligations owed and due to us, which may result in the
impairment of those loans, and our recording loan loss reserves with respect to
those loans and recording of any income with respect to those loans on a
nonaccrual basis. For further information regarding our loan portfolio and the
risks associated with it, see Note 3 to our Unaudited Condensed Consolidated
Financial Statements included in Part I, Item 1 of this Quarterly Report on Form
10-Q and the risk factors identified in Part I, Item 1A, "Risk Factors", of our
2021 Annual Report.

Financing Activities

On March 11, 2022, one of our wholly owned subsidiaries entered into our Wells
Fargo Master Repurchase Agreement for the Wells Fargo Master Repurchase
Facility. The Wells Fargo Master Repurchase Facility provides up to $125,000 in
advances, with an option to increase the maximum facility to $250,000, subject
to certain terms and conditions. We expect to use the Wells Fargo Master
Repurchase Facility to finance the acquisition or origination of floating rate
commercial mortgage loans. The expiration date of the Wells Fargo Master
Repurchase Agreement is March 11, 2025, unless extended or earlier terminated in
accordance with the terms of the Wells Fargo Master Repurchase Agreement.

On March 15, 2022, we amended and restated our Citibank Master Repurchase
Agreement, which governs the Citibank Master Repurchase Facility. The amended
and restated Citibank Master Repurchase Agreement extended the stated maturity
date of the Citibank Master Repurchase Facility to March 15, 2025, and made
certain other changes to the agreement and related fee letter, including
replacing LIBOR with SOFR for interest rate calculations on advancements under
the Citibank Master Repurchase Facility and modifying certain pricing terms.

On April 25, 2022, we amended and restated our BMO Loan Program Agreement, which increased the maximum facility amount from $100,000 to $150,000.



On May 4, 2022, we amended and restated our UBS Master Repurchase Agreement. The
amended and restated UBS Master Repurchase Agreement, which was effective
March 9, 2022, made certain changes to the agreement and related fee letter,
including replacing LIBOR with SOFR for interest rate calculations on
advancements under the UBS Master Repurchase Facility and modifying certain
pricing terms.

For further information regarding our Secured Financing Facilities, see Note 4
to our Unaudited Condensed Consolidated Financial Statements included in Part I,
Item 1 of this Quarterly Report on Form 10-Q.

The table below is an overview of our Secured Financing Facilities as of
June 30, 2022:

                                                                                                                                Collateral
                                                                   Principal            Unused              Maximum              Principal
Secured Financing Facility                Maturity Date             Balance            Capacity          Facility Size            Balance

Citibank Master Repurchase
Facility                                        03/15/2025       $  170,338

$ 44,662 $ 215,000 $ 237,917 UBS Master Repurchase Facility

                  02/18/2024          135,003              56,997              192,000               182,198
Wells Fargo Master Repurchase
Facility                                        03/11/2025           67,427              57,573              125,000                88,446

BMO Facility                                       Various           82,276              67,724              150,000               109,897
Total                                                            $  455,044          $  226,956          $   682,000          $    618,458


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The table below details our Secured Financing Facilities activities during the
three months ended June 30, 2022:

                                 Carrying Value
Balance at March 31, 2022       $       367,679
Borrowings                               93,788
Repayments                               (8,176)
Deferred fees                              (851)
Amortization of deferred fees               265

Balance at June 30, 2022        $       452,705

The table below details our Secured Financing Facilities activities during the six months ended June 30, 2022:



                                  Carrying Value
Balance at December 31, 2021     $       339,627
Borrowings                               223,948
Repayments                              (109,773)
Deferred fees                             (1,571)
Amortization of deferred fees                474

Balance at June 30, 2022         $       452,705


As of June 30, 2022, outstanding advancements under our Secured Financing
Facilities had a weighted average interest rate of 3.36% per annum, excluding
associated fees and expenses. As of June 30, 2022 and July 25, 2022, we had a
$455,044 and a $469,810, respectively, aggregate outstanding principal balance
under our Secured Financing Facilities.

As of June 30, 2022, we were in compliance with all covenants and other terms under our Secured Financing Facilities.


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RESULTS OF OPERATIONS (amounts in thousands, except per share data)

Three Months Ended June 30, 2022 Compared to Three Months Ended March 31, 2022:

                                                                                 Three Months Ended
                                                  June 30, 2022           March 31, 2022           Change               % Change
INCOME FROM INVESTMENTS:
Interest income from investments                $        8,869          $         9,579          $   (710)                   (7.4  %)
Purchase discount accretion                              1,636                    5,935            (4,299)                  (72.4  %)
Less: interest and related expenses                     (3,007)                  (1,737)           (1,270)                   73.1  %
Income from investments, net                             7,498                   13,777            (6,279)                  (45.6  %)

OTHER EXPENSES:
Base management fees                                     1,063                    1,063                 -                       -  %
General and administrative expenses                      1,378                      946               432                    45.7  %
Reimbursement of shared services expenses                  440                      560              (120)                  (21.4  %)
Other transaction related costs                              -                       37               (37)                 (100.0  %)
Total expenses                                           2,881                    2,606               275                    10.6  %

Income before income taxes                               4,617                   11,171            (6,554)                  (58.7  %)
Income tax expense                                         (39)                     (45)                6                   (13.3  %)
Net income                                      $        4,578          $        11,126          $ (6,548)                  (58.9  %)

Weighted average common shares outstanding -
basic                                                   14,521                   14,505                16                     0.1  %
Weighted average common shares outstanding -
diluted                                                 14,521                   14,519                 2                       -  %

Net income per common share - basic and
diluted                                         $         0.31          $          0.76          $  (0.45)                  (59.2  %)



Interest income from investments. The decrease in interest income from
investments was primarily the result of prepayment premiums and accelerated
amortization of deferred fees on two loans repaid during the three months ended
March 31, 2022 of $2,402, partially offset by the impact of three loan
investments originated during the first quarter of 2022, two loan investments
originated during the second quarter of 2022 and higher interest rates since
April 1, 2022.

Purchase discount accretion. The fair value of the loans acquired in the Merger
exceeded the purchase price of the loans. In accordance with GAAP, a purchase
discount was recorded for the difference between the fair value and purchase
price of the loans acquired. The purchase discount was allocated to each
acquired TRMT loan and is being accreted into income over the remaining term of
the respective loan. Two loans were fully amortized during the three months
ended March 31, 2022 as a result of their repayment; therefore, purchase
discount accretion decreased quarter over quarter.

Interest and related expenses. The increase in interest and related expenses was
primarily the result of an increase in advances made to us under our Secured
Financing Facilities and higher interest rates during the three months ended
June 30, 2022 as compared to the three months ended March 31, 2022.

General and administrative expenses. The increase in general and administrative
expenses was primarily due to an increase in share based compensation of $448
resulting from common shares awarded to our Trustees during the second quarter
of 2022, partially offset by a reduction in professional fees during the three
months ended June 30, 2022 as compared to the three months ended March 31, 2022.

Reimbursement of shared services expenses. Reimbursement of shared services
expenses represents reimbursement of the costs for the services that Tremont
arranges on our behalf from RMR. The decrease in reimbursement of shared
services expenses was primarily the result of an adjustment to our estimate of
costs for the usage of shared services from RMR.

Other transaction related costs. Other transaction related costs incurred during
the three months ended March 31, 2022 primarily consisted of audit fees relate
to the Merger.

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Income tax expense. Income tax expense represents income taxes paid or payable
by us in certain jurisdictions where we are subject to state income taxes.

Net income. The decrease in net income was due to the changes noted above.

Six Months Ended June 30, 2022 Compared to Six Months Ended June 30, 2021:



                                                                        Six Months Ended June 30,
                                                    2022                2021             Change              % Change
INCOME FROM INVESTMENTS:
Interest income from investments                $   18,448          $   5,056          $ 13,392                   264.9  %
Purchase discount accretion                          7,571                  -             7,571                        n/m
Less: interest and related expenses                 (4,744)              (192)           (4,552)                       n/m
Income from investments, net                        21,275              4,864            16,411                   337.4  %

OTHER EXPENSES:
Base management fees                                 2,126              1,436               690                    48.1  %
General and administrative expenses                  2,324              1,306             1,018                    77.9  %
Reimbursement of shared services expenses            1,000                601               399                    66.4  %
Other transaction related costs                         37                  -                37                        n/m
Total expenses                                       5,487              3,343             2,144                    64.1  %

Income before income taxes                          15,788              1,521            14,267                   938.0  %
Income tax expense                                     (84)               (11)              (73)                  663.6  %
Net income                                      $   15,704          $   1,510          $ 14,194                   940.0  %

Weighted average common shares outstanding -
basic and diluted                                   14,514             10,205             4,309                    42.2  %

Net income per common share - basic and
diluted                                         $     1.08          $    0.15          $   0.93                   620.0  %


n/m - not meaningful

Interest income from investments. The increase in interest income from
investments was primarily the result of interest income generated from the 17
loans originated or acquired since July 1, 2021 and prepayment premiums and
accelerated amortization of deferred fees on two loans repaid during the six
months ended June 30, 2022 of $2,402.

Purchase discount accretion. The fair value of the loans acquired in the Merger
on September 30, 2021 exceeded the purchase price of the loans. In accordance
with GAAP, a purchase discount was recorded for the difference between the fair
value and purchase price of the loans acquired. The purchase discount was
allocated to each acquired TRMT loan and is being accreted into income over the
remaining term of the respective loan.

Interest and related expenses. The increase in interest and related expenses was
primarily the result of an increase in advances made to us under our Secured
Financing Facilities and higher interest rates during the six months ended
June 30, 2022 as compared to the six months ended June 30, 2021.

Base management fees. The increase in base management fees was primarily due to
the Merger. As a result of the Merger, the net book value of TRMT, as of
September 30, 2021, was included as "Equity" for purposes of determining the
base management fee and incentive fee, if any, under the management agreement.

General and administrative expenses. The increase in general and administrative
expenses was primarily due to increases in share based compensation, insurance,
professional fees and fees paid to our Trustees for their services during the
six months ended June 30, 2022 as compared to the six months ended June 30,
2021.

Reimbursement of shared services expenses. Reimbursement of shared services
expenses represents reimbursement of the costs for the services that Tremont
arranges on our behalf from RMR. The increase in reimbursement of shared
services expenses was primarily the result of increased usage of shared services
after the Merger on September 30, 2021.

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Table of Contents Other transaction related costs. Other transaction related costs primarily consisted of audit fees related to the Merger during the six months ended June 30, 2022.

Income tax expense. Income tax expense represents income taxes paid or payable by us in certain jurisdictions where we are subject to state income taxes.

Net income. The increase in net income was due to the changes noted above.

Reconciliation of Net Income to Distributable Earnings and Adjusted Distributable Earnings



The table below demonstrates how we calculate Distributable Earnings,
Distributable Earnings per common share, Adjusted Distributable Earnings and
Adjusted Distributable Earnings per common share, which are non-GAAP measures,
and provides a reconciliation of these non-GAAP measures to net income:
                                                              Three Months Ended                               Six Months Ended
                                                    June 30, 2022           March 31, 2022           June 30, 2022           June 30, 2021

Reconciliation of net income to
Distributable Earnings and Adjusted
Distributable Earnings:
Net income                                        $        4,578          $ 

11,126 $ 15,704 $ 1,510



Non-cash equity compensation expense                         548                       82                     630                     182
Non-cash accretion of purchase discount                   (1,636)                  (5,935)                 (7,571)                      -

Distributable Earnings                                     3,490                    5,273                   8,763                   1,692
Other transaction related costs (1)                            -                       37                      37                       -

Adjusted Distributable Earnings                   $        3,490          $ 

5,310 $ 8,800 $ 1,692



Weighted average common shares outstanding
- basic                                                   14,521                   14,505                  14,514                  10,205
Weighted average common shares outstanding
- diluted                                                 14,521                   14,519                  14,514                  10,205

Net income per common share - basic and
diluted                                           $         0.31          $ 

0.76 $ 1.08 $ 0.15 Distributable Earnings per common share - basic and diluted

                                 $         0.24          $          0.36          $         0.60          $         0.17
Adjusted Distributable Earnings per common
share - basic and diluted                         $         0.24          $          0.37          $         0.61          $         0.17


(1)Other transaction related costs for the three months ended March 31, 2022 and six months ended June 30, 2022 include expenses related to the Merger.

Factors Affecting Operating Results



Our results of operations are impacted by a number of factors and primarily
depend on the interest income from our investments and the financing and other
costs associated with our business. Our operating results are also impacted by
general CRE market conditions and unanticipated defaults by our borrowers. For
further information regarding the risks associated with our loan portfolio, see
the risk factors identified in Part I, Item 1A, "Risk Factors", of our 2021
Annual Report.

Credit Risk. We are subject to the credit risk of our borrowers in connection
with our investments. We seek to mitigate this risk by utilizing a comprehensive
underwriting, diligence and investment selection process and by ongoing
monitoring of our investments. Nevertheless, unanticipated credit losses could
occur that could adversely impact our operating results.

Changes in Fair Value of our Assets. We generally intend to hold our investments
for their contractual terms, unless repaid earlier by the borrowers. We evaluate
our investments for impairment at least quarterly. Impairments occur when it is
probable that we will not be able to collect all amounts due according to the
applicable contractual terms. If we determine that a loan is impaired, we will
record a reserve to reduce the carrying value of the loan to an amount that
takes into account both the present value of expected future cash flows
discounted at the loan's contractual effective interest rate and the fair value
of any available collateral, net of any costs we expect to incur to realize that
value.

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Although we intend to generally hold our investments for their contractual terms
or until repaid earlier by the borrowers, we may occasionally classify some of
our investments as held for sale. Investments held for sale will be carried at
the lower of their amortized cost or fair value less costs to sell within loans
held for sale on our condensed consolidated balance sheets, with changes in fair
value recorded through earnings. Fees received from our borrowers on any loans
held for sale will be recognized as part of the gain or loss on sale. Currently,
we do not expect to hold any of our investments for trading purposes.

Availability of Leverage and Equity. We use leverage to make additional
investments that may increase our returns. We may not be able to obtain the
expected amount of leverage we desire or its cost may exceed our expectation
and, consequently, the returns generated from our investments may be reduced.
Our ability to further grow our loan portfolio over time will depend, to a
significant degree, upon our ability to obtain additional capital. However, our
access to additional capital depends on many factors including the price at
which our common shares trade relative to their book value and market lending
conditions. See "-Market Conditions" below.

Market Conditions. CRE transactions for 2021 exceeded the previous annual high
watermark of 2019. Investor demand for CRE assets, historically low interest
rates and strong property fundamentals resulted in increased CRE valuations.
Record transaction volumes and increasing CRE valuations continued into 2022;
however, inflationary pressures and geopolitical concerns caused widespread
macroeconomic uncertainty and volatility. In response to inflationary pressures,
the U.S. Federal Reserve increased the federal funds rate by 25 basis points in
March 2022, 50 basis points in May 2022 and 75 basis points in June 2022, the
largest single increase in nearly 30 years, and has signaled that further large
increases are likely to occur. The U.S. Federal Reserve's actions have caused
increased borrowing costs and volatility in the CRE debt markets, while concerns
of a possible recession have caused increased credit spreads. Combined, these
factors are resulting in increased conservatism in underwriting standards in the
CRE debt markets. Tighter underwriting standards, which are resulting in lower
leveraged loans, have caused some buyers to seek to reprice, or in some
circumstances, cancel pending transactions entirely. As a result, CRE
transaction total volume for the second quarter of 2022 has slowed but is still
expected to meet or exceed transaction volumes for the same period of each of
the five years prior to the COVID-19 pandemic.

The CRE industry is traditionally a lagging indicator of economic conditions and
CRE assets have historically tended to perform well in periods of inflation.
Despite the recent increase in borrowing costs and macroeconomic and
geopolitical uncertainties, CRE investors continue to see strength in the
fundamentals of the U.S. CRE markets. We believe that we are in a period of
price resetting, as buyers and sellers of CRE assets recalibrate their
expectations and CRE investors and lenders reprice and reconsider risk in the
current higher interest rate environment. Some investors have in the past viewed
CRE as a hedge against inflation, with long term earnings potential from rent
growth resulting from continued demand for certain CRE asset classes, such as
affordable rental housing and industrial space, and acquisition and financing
opportunities may continue to exist for borrowers able to accept higher
borrowing costs in the short term.

Recovery from the impact of the COVID-19 pandemic continues to vary among
different market sectors. Hotels located in destinations that can be driven to,
select service hotels that offer services and amenities in moderation and
extended stay hotels continue to see improvements in performance, along with
increased investor and lender demand. Additionally, hotel assets are uniquely
positioned to reprice daily and take advantage of inflationary pressures,
provided demand remains strong and challenges related to increased labor costs
can be managed effectively. Retail has performed better than many expected thus
far, but recession concerns and reductions in discretionary spending in response
to inflation may have a negative impact on certain retailers. Investors have
continued to favor grocery anchored, service oriented and neighborhood shopping
centers over larger shopping centers anchored by big box retailers, regional
malls or lifestyle centers. The office sector continues to pose underwriting
challenges, especially for older urban assets, and there continues to be
uncertainty surrounding the long term impacts of work-from-home and flexible
work schedules on demand for office space.

The debt capital markets experienced strong performance in 2021 and into the
first quarter of 2022. CRE debt providers continue to be willing and able to
extend credit to borrowers, albeit at lower leverage levels and with higher
credit spreads. Market volatility and the increase in interest rates has not
affected all lenders equally. Banks and life insurance companies have reduced
their leverage ratios and increased credit spreads, but continue to originate
new loans, while lenders that rely on secondary markets to finance their lending
activities have experienced other challenges. Credit spreads in the secondary
market for commercial mortgage-backed securities, or CMBS, and CRE
collateralized loan obligations, or CLO, bonds have widened substantially due to
competing demand for alternative fixed income investments. As a result, some
lenders who originate and sell loans into the CRE CLO market as a means of
financing have been forced to sell their loans at a discount or have chosen to
wait until market volatility subsides and credit spreads stabilize, causing a
slowdown in loan originations.

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In addition to increased overall borrowing costs, lenders may experience
challenges due to increasing interest rates on floating rate loan portfolios.
Floating rate loans are often used to finance transitional properties with a
business plan to increase cash flows, allowing for increasing debt costs to be
serviced. Lenders are impacted by the ability of their borrowers to service
their debt while implementing their business plans and, as a result, lenders'
underwriting criteria may become more conservative. Additionally, floating rate
lenders typically limit interest rate risk by requiring borrowers to obtain
interest rate caps or swaps to limit the impact of rising rates on a property's
ability to service its debt. While interest rate caps and swaps on existing
loans protect lenders in periods of rising interest rates, the cost to the
borrower to obtain interest rate caps or swaps on new loans may result in
decreased loan amounts.

We believe the CRE lending industry is well positioned to face these challenges.
Unlike in the years leading up to the financial crisis of 2008, underwriting
standards have remained consistent and there continues to be significant sources
of liquidity, both in the form of debt and equity capital, for the CRE sector.
We believe there will continue to be significant opportunities for alternative
lenders like us to provide creative, flexible debt capital for a wide array of
circumstances and business plans.

Changes in Market Interest Rates. With respect to our business operations,
increases in interest rates, in general, may cause: (a) the interest expense
associated with our variable rate borrowings, to increase; (b) the value of our
fixed rate investments, if any, to decline; (c) the coupon rates on our variable
rate investments to reset, perhaps on a delayed basis, to higher rates; and (d)
it to become more difficult and costly for our borrowers, which may negatively
impact their ability to repay our investments. See "-Market Conditions" above
for a discussion of the current market including interest rates.

Conversely, decreases in interest rates, in general, may cause: (a) the interest
expense associated with our variable rate borrowings, to decrease; (b) the value
of our fixed rate investments, if any, to increase; (c) the coupon rates on our
variable rate investments to reset, perhaps on a delayed basis, to lower rates;
and (d) it to become easier and more affordable for our borrowers to refinance,
and as a result, repay our loans, but may negatively impact our future returns
if any such repayment proceeds were to be reinvested in lower yielding
investments.

The interest income on our loans and interest expense on our borrowings float
with benchmark rates, such as LIBOR and SOFR. Because we generally intend to
leverage approximately 75% of our investments, as benchmark rates increase above
the floors of our loans, our income from investments, net of interest and
related expenses, will increase. Decreases in benchmark rates are mitigated by
interest rate floor provisions in all but one of our loan agreements with
borrowers; therefore, changes to income from investments, net, may not move
proportionately with the increase or decrease in benchmark rates. As of June 30,
2022, LIBOR and SOFR were 1.79% and 1.69%, respectively, and would have to
exceed the floor established by any of our loans, which currently range from
0.10% to 2.32%, for us to realize an increase in interest income.

Interest rates under our loan agreements with borrowers entered into prior to
January 1, 2022 have been or are expected to be amended to replace LIBOR with
SOFR prior to June 30, 2023, the date LIBOR is expected to no longer be
available. Since January 1, 2022, interest rates under our new loan agreements
with borrowers are based on SOFR. Our Citibank Master Repurchase Agreement and
UBS Master Repurchase Agreement were amended and restated effective March 2022
to, among other things, replace LIBOR with SOFR for interest rate calculations
on advances. Interest rates on advances under our BMO Facility and Wells Fargo
Master Repurchase Facility have been based on SOFR since we entered into the
agreements governing these facilities.

Size of Portfolio. The size of our loan portfolio, as measured both by the
aggregate principal balance and the number of our CRE loans and our other
investments, is also an important factor in determining our operating results.
Generally, if the size of our loan portfolio grows, the amount of interest
income we receive would increase and we may achieve certain economies of scale
and diversify risk within our loan portfolio. A larger portfolio, however, may
result in increased expenses; for example, we may incur additional interest
expense or other costs to finance our investments. Also, if the aggregate
principal balance of our loan portfolio grows but the number of our loans or the
number of our borrowers does not grow, we could face increased risk by reason of
the concentration of our investments.

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Table of Contents LIQUIDITY AND CAPITAL RESOURCES (dollars in thousands, except per share data)



Liquidity is a measure of our ability to meet potential cash requirements,
including ongoing commitments to fund our lending commitments, repay or meet
margin calls resulting from our borrowings, if any, fund and maintain our assets
and operations, make distributions to our shareholders and fund other business
operating requirements. Our sources of cash flows include cash on hand, payments
of principal, interest and fees we receive on our investments, other cash we may
generate from our business and operations and any unused borrowing capacity,
including under our Secured Financing Facilities or other repurchase agreements
or financing arrangements we may obtain, which may also include bank loans or
public or private issuances of debt or equity securities. We believe that these
sources of funds will be sufficient to meet our operating and capital expenses,
pay our debt service obligations owed and make any distributions to our
shareholders for the next 12 months and for the foreseeable future. For further
information regarding the risks associated with our loan portfolio, see Part I,
Item 1A, "Risk Factors" of our 2021 Annual Report and elsewhere in this
Management Discussion and Analysis of Financial Condition and Operating Results.

Pursuant to the terms of our UBS Master Repurchase Facility and our Citibank
Master Repurchase Facility, we may sell to, and later repurchase from, UBS and
Citibank, the purchased assets related to the applicable facility. The initial
purchase price paid by UBS or Citibank of each purchased asset is up to 75% of
the lesser of the market value of the purchased asset or the unpaid principal
balance of such purchased asset, subject to UBS's or Citibank's approval. Upon
the repurchase of a purchased asset, we are required to pay UBS or Citibank, as
applicable, the outstanding purchase price of the purchased asset, accrued
interest and all accrued and unpaid expenses of UBS or Citibank, as applicable,
relating to such purchased asset. The interest rate relating to an existing UBS
purchased asset is equal to one month LIBOR plus a premium within a fixed range,
determined by the debt yield and property type of the purchased asset's real
estate collateral. The interest rates related to our Citibank and UBS purchased
assets were amended earlier this year as part of the amendments to the Citibank
Master Repurchase Agreement and UBS Master Repurchase Agreement to replace one
month LIBOR with one month SOFR plus a premium within a fixed range, determined
by the debt yield and property type of the purchased asset's real estate
collateral. UBS and Citibank each has the discretion to make advancements at
margins higher than 75%.

Loans issued under the BMO Facility are coterminous with the corresponding
pledged mortgage loan investments, are not subject to margin calls and allow for
up to an 80% advance rate, subject to certain loan to cost and LTV limits.
Interest on advancements under the BMO Facility are calculated at SOFR plus a
premium. Loans issued under the BMO Facility are secured by a security interest
and collateral assignment of the underlying loans to our borrowers which are
secured by real property underlying such loans. We are required to pay an
upfront fee equal to a percentage of the aggregate amount of the facility loan,
such percentage to be determined at the time of approval of the separate
facility loan agreements with BMO, or the BMO Facility Loan Agreements.

On March 11, 2022, one of our wholly owned subsidiaries entered into the Wells
Fargo Master Repurchase Agreement for the Wells Fargo Master Repurchase
Facility, pursuant to which we may sell to, and later repurchase from Wells
Fargo, the purchased assets related to the facility. The initial purchase price
paid by Wells Fargo for each purchased asset is up to 75% or 80%, depending on
the property type of the purchased asset's real estate collateral, of the lesser
of the market value of the purchased asset or the unpaid principal balance of
such purchased asset, and subject to Wells Fargo's approval. Upon the repurchase
of a purchased asset, we are required to pay Wells Fargo the outstanding
purchase price of the purchased asset, accrued interest and all accrued and
unpaid expenses of Wells Fargo relating to such purchased asset. Interest on
advancements under the Wells Fargo Master Repurchase Facility is calculated at
SOFR plus a premium.

For further information regarding our Secured Financing Facilities, see Note 4
to the Unaudited Condensed Consolidated Financial Statements included in Part I
Item 1, of this Quarterly Report on Form 10-Q and "-Overview-Financing
Activities" above.

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The following is a summary of our sources and uses of cash flows for the periods
presented:

                                                                     Six Months Ended June 30,
                                                                    2022                    2021

Cash, cash equivalents and restricted cash at beginning of period

$       26,295          $     103,564
Net cash provided by (used in):
Operating activities                                                   6,307                 (2,093)
Investing activities                                                 (89,512)              (118,075)
Financing activities                                                 105,306                 47,211
Cash, cash equivalents and restricted cash at end of
period                                                        $       48,396          $      30,607



The increase in cash provided by operating activities for the 2022 period
compared to the 2021 period was primarily the result of our origination
activities. As of June 30, 2022, we have increased the size of our loan
portfolio from 9 loans to 28 loans since July 1, 2021. The decrease in cash used
in investing activities is primarily due to the repayment of loans in the 2022
period, partially offset by an increase in origination activity in the 2022
period. The increase in cash used in financing activities is primarily due to
increased proceeds received from our Secured Financing Facilities during the
2022 period, partially offset by repayments on our Secured Financing Facilities
and an increase in distributions to our common shareholders for the 2022 period.

Distributions

During the six months ended June 30, 2022, we paid distributions to our common shareholders totaling $7,298, or $0.50 per common share, using cash on hand.



On July 14, 2022, we declared a quarterly distribution of $0.25 per common
share, or $3,660, to shareholders of record on July 25, 2022. We expect to pay
this distribution to our common shareholders on August 18, 2022 using cash on
hand.

For further information regarding distributions, see Note 6 to the Unaudited
Condensed Consolidated Financial Statements included in Part I, Item 1 of this
Quarterly Report on Form 10-Q.

Contractual Obligations and Commitments

Our contractual obligations and commitments as of June 30, 2022 were as follows:



                                                                                      Payment Due by Period
                                                                   Less than 1                                                      More than 5
                                                   Total               Year             1 - 3 Years           3 - 5 Years              years
Unfunded loan commitments (1)                   $  52,694          $   

4,551 $ 48,143 $ - $ - Principal payments on Secured Financing Facilities (2)

                                    455,044             55,512               399,532                     -                     -
Interest payments (3)                              29,061             14,547                14,514                     -                     -
                                                $ 536,799          $  74,610          $    462,189          $          -          $          -

(1)The allocation of our unfunded loan commitments is based on the current loan maturity date to which the individual commitments relate.

(2)The allocation of outstanding advancements under our Secured Financing Facilities is based on the earlier of the current maturity date of each loan investment with respect to which the individual borrowing relates or the maturity date of the respective Secured Financing Facilities.

(3)Projected interest payments are attributable only to our debt service obligations at existing rates as of June 30, 2022 and are not intended to estimate future interest costs which may result from debt prepayments, additional borrowings, new debt issuances or changes in interest rates.

Debt Covenants



Our principal debt obligations as of June 30, 2022 were the outstanding balances
under our Secured Financing Facilities. The agreements governing our Master
Repurchase Facilities, or our Master Repurchase Agreements, provide for
acceleration of the date of repurchase of any then purchased assets and the
liquidation of the purchased assets by UBS, Citibank or Wells Fargo, as
applicable, upon the occurrence and continuation of certain events of default,
including a change of control of us, which includes Tremont ceasing to act as
our sole manager or to be a wholly owned subsidiary of RMR. Our Master
Repurchase Agreements also provide that upon the repurchase of any then
purchased asset, we are required to pay UBS,

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Citibank or Wells Fargo the outstanding purchase price of such purchased asset
and accrued interest and any and all accrued and unpaid expenses of UBS,
Citibank or Wells Fargo, as applicable, relating to such purchased asset.

In connection with our Master Repurchase Agreements, we entered into our
guarantees, or the Master Repurchase Guarantees, which require us to guarantee
25% of the aggregate repurchase price and 100% of losses in the event of certain
bad acts, as well as any costs and expenses of UBS, Citibank and Wells Fargo, as
applicable, related to our Master Repurchase Agreements. The Master Repurchase
Guarantees contain financial covenants, which require us to maintain a minimum
tangible net worth, a minimum liquidity and a minimum interest coverage ratio
and to satisfy a total indebtedness to stockholders' equity ratio.

In connection with the BMO Loan Program Agreement, we have agreed to guarantee
certain of the obligations under the BMO Loan Program Agreement and the BMO
Facility Loan Agreements pursuant to a limited guaranty from us to and for the
benefit of the administrative agent for itself and such other lenders, or the
BMO Guaranty. Specifically, the BMO Guaranty requires us to guarantee 25% of the
then current outstanding principal balance of the facility loans and 100% of
losses or the entire indebtedness in the event of certain bad acts as well as
any costs and expenses of the administrative agent or lenders related to the BMO
Loan Program Agreement. In addition, the BMO Guaranty contains financial
covenants that require us to maintain a minimum tangible net worth and a minimum
liquidity and to satisfy a total indebtedness to stockholders' equity ratio. The
BMO Loan Program Agreement and the BMO Guaranty contain representations,
warranties, covenants, conditions precedent to funding, events of default and
indemnities that are customary for agreements of these types.

As of June 30, 2022, we had a $372,768 aggregate outstanding principal balance
under our Master Repurchase Facilities. Our Master Repurchase Agreements are
structured with risk mitigation mechanisms, including a cash flow sweep, which
would allow UBS, Citibank and Wells Fargo, as applicable, to control interest
payments from our borrowers under our loans that are financed under our
respective Master Repurchase Facilities, and the ability to accelerate dates of
repurchase and institute margin calls, which may require us to pay down balances
associated with one or more of our loans that are financed under our Master
Repurchase Facilities.

As of June 30, 2022, we had a $82,276 aggregate outstanding principal balance under the BMO Facility.

As of June 30, 2022, we were in compliance with all covenants and other terms under our Secured Financing Facilities.

Related Person Transactions



We have relationships and historical and continuing transactions with Tremont,
RMR, RMR Inc. and others related to them. For further information about these
and other such relationships and related person transactions, see Notes 7 and 8
to the Unaudited Condensed Consolidated Financial Statements included in Part I,
Item 1 of this Quarterly Report on Form 10-Q, our 2021 Annual Report, our
definitive Proxy Statement for our 2022 Annual Meeting of Shareholders and our
other filings with the SEC. In addition, see the section captioned "Risk
Factors" of our 2021 Annual Report for a description of risks that may arise as
a result of these and other related person transactions and relationships. We
may engage in additional transactions with related persons, including businesses
to which RMR, Tremont or their respective subsidiaries provide management
services.


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