Commitments and Contingencies

3 Months Ended

Mar. 31, 2024

Commitments and Contingencies Disclosure [Abstract]

(a) Lease Commitments

The Company’s primary lease commitment relates to its corporate headquarters. For the three months ended March 31, 2024, the Company recorded an expense of approximately $1.3 million in connection with this lease. The original term specified in this lease is approximately fifteen years with a termination date of December 2036 and an option to renew for an additional five years.

At March 31, 2024, the contractual minimum rental payments (exclusive of possible rent escalation charges and normal recurring charges for maintenance, insurance and taxes) regarding the Company’s lease commitments were as follows:


Year Ending December 31,	Minimum Rental Payments
(In Thousands)
2024 (1)	$	4,553
2025	5,212
2026	4,839
2027	5,119
2028	5,055
Thereafter	41,944
Total	$	66,722
Present Value Discount	(23,849)
Total Lease Liability (Note 7)	$	42,873

(1) Reflects contractual minimum rental payments due for the period from April 1, 2024 through December 31, 2024.

Additionally, in June 2023, Lima One executed a lease agreement on new office space in Greenville, South Carolina for a thirteen-year term. The Company expects the average annual lease rental expense to be approximately $3.0 million. Lima One currently expects to relocate to the space in the latter half of 2025. The agreement can be terminated by the Company until May 31, 2024.

(b) Representations and Warranties in Connection with Loan Securitization and Other Loan Sale Transactions

In connection with the loan securitization and sale transactions entered into by the Company, the Company has the obligation under certain circumstances to repurchase assets previously transferred to securitization vehicles, or otherwise sold, upon breach of certain representations and warranties. As of March 31, 2024, the Company was not aware of any material unsettled repurchase claims that would require a reserve (see Note 14).

At March 31, 2024, the Company had unfunded commitments of $527.0 million in connection with its Transitional loans (see Note 3). From time to time, Lima One makes short-term commitments to originate mortgage loans; such commitments were not significant at March 31, 2024.

(d) Guarantee

In connection with one of its investments in a loan origination partner, the Company has guaranteed up to $42.5 million of such investee’s warehouse financing. As of March 31, 2024, the Company has not recorded a liability in connection with this guarantee.