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Investment Strategy

RMR Mortgage Trust (Nasdaq: RMRM), formerly known as RMR Real Estate Income Fund, has historically operated as closed end investment company advised by RMR Advisors LLC. On April 16, 2020, shareholders approved a change in RMRM’s business from a registered investment company to a commercial mortgage REIT and amended RMRM’s fundamental investment policies and restrictions to permit RMRM to pursue its new business. Among other investment policy changes, RMRM’s fundamental investment objectives of earning and paying a high level of current income to common shareholders, with capital appreciation as a secondary objective, have been replaced with a non-fundamental primary objective to balance capital preservation with generating attractive risk adjusted returns. RMRM has begun the process of realigning its portfolio so that it is no longer an “investment company” under the Investment Company Act of 1940 and has filed an application with the Securities and Exchange Commission for a Deregistration Order. RMRM intends to sell its existing investments and transition its portfolio into commercial mortgages as opportunities within its new business mandate arise and subject to applicable compliance requirements and other business considerations. After deregistration, the Board of Trustees anticipates RMRM will terminate its existing investment advisory agreement and enter into a new management agreement with its investment adviser or an affiliate of its investment adviser to provide day-to-day management.

Operation as a Mortgage REIT

As a mortgage REIT, RMRM’s primary investment objective will be to balance capital preservation with generating attractive risk adjusted returns. RMRM will seek to achieve this objective by primarily investing in first mortgage whole loans secured by middle market CRE and transitional CRE.

The first mortgage loans in which RMRM plans to invest will generally have the following characteristics:

  • Principal balances of less than $50.0 million.
  • Stabilized LTV ratios of 75% or less.
  • Terms of five years or less.
  • Floating interest rates based on LIBOR (or other applicable benchmark interest rate index) plus spreads of 275 to 400 basis points
  • Non-recourse to sponsors (subject to customary non-recourse carve-out guarantees) and secured by middle market and transitional CRE across the United States.
  • Equity owned by well capitalized sponsors with experience investing in the relevant real estate property type.

The RMR Advantage

RMR Advisors LLC is a wholly owned subsidiary of The RMR Group LLC.  RMR Advisors benefits from The RMR Group’s resource rich platform, leveraging its deep industry expertise, “boots on the ground” knowledge and real-time fundamental market data.

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Experience

Over 30 years of experience in the commercial real estate industry supported by a network of over 30 offices nationwide.

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Real-time Market Data

Access to real estate market and property level information on a real-time basis.

Economic And
Demographic Trends

In depth perspective into economic and demographic trends in targeted markets.

Portfolio*

Top Ten Holdings

As of June 30, 2020

Prologis, Inc. 5.8%
Sun Communities, Inc. 3.2%
Medical Properties Trust, Inc. 2.8%
STAG Industrial, Inc. 2.5%
American Tower Corp. 2.4%
Alexandria Real Estate Equities 2.3%
Global Medical REIT, Inc. 2.2%
Independence Realty Trust Inc. 2.0%
Lexington Realty Trust 2.0%
Avalon Bay Communities Inc. 1.9%

Sub-Sector Allocation

As of June 30, 2020

Residential 14.4%
Industrial 13.2%
Health Care 13.0%
Office 8.8%
Diversified 7.0%
Specialty 6.1%
Lodging/Resorts 6.1%
Manufactured Homes 5.4%
Data Centers 5.1%
Other 17.1%

This data is subject to change on a daily basis. RMRM's portfolio is actively managed and the foregoing presents only a “snapshot” as of June 30, 2020. There is no assurance that the composition of RMRM's portfolio, either currently or in the future, will resemble the composition of RMRM's portfolio as of June 30, 2020. RMRM's current or future portfolio may contain some, all or none of the referenced sectors or holdings in allocations that may be the same, similar or different from those reflected as of June 30, 2020.

* On April 16, 2020, shareholders approved a change in RMRM’s business from a registered investment company to a commercial mortgage REIT and amended RMRM’s fundamental investment policies and restrictions to permit RMRM to pursue its new business. RMRM has begun the process of realigning its portfolio so that it is no longer an “investment company” under the Investment Company Act of 1940 and intends to sell its existing investments and transition its portfolio into commercial mortgages as opportunities within its new business mandate arise and subject to applicable compliance requirements and other business considerations.

Portfolio Management Team

RMR Mortgage Trust's portfolio is lead by a team of seasoned executives with over 30 years of commercial real estate and securities experience between them.

RMR Advisors LLC and its affiliates have significant experience and expertise in managing REITs and in investing in commercial properties that have values up to $75.0 million. An affiliate of the investment adviser currently manages a mortgage REIT, and RMRM expects that the same personnel that conduct the business of that mortgage REIT would conduct RMRM’s business as a commercial mortgage REIT.

RMR Advisors has established an investment committee ("Investment Committee") responsible for evaluating mortgage loan origination opportunities and making determinations as to whether or not to fund such loan opportunities, in each case, taking into account respective clients' investment guidelines and considerations, subject to any required approvals by such client. Adam D. Portnoy, David M. Blackman, G. Douglas Lanois and Jennifer B. Clark serve as members of the Investment Committee.

Carefully consider RMRM’s investment objectives, risk factors and expenses. This and other information can be found in RMRM’s SEC filings which may be obtained by visiting the SEC Edgar database or the “SEC Filings” section of this website. Read these filings carefully before investing.

On April 16, 2020, shareholders approved a change in RMRM’s business from a registered investment company to a commercial mortgage REIT and amended RMRM’s fundamental investment policies and restrictions to permit RMRM to pursue its new business. For further details please click here. For a discussion of the risks associated with RMRM's operation as a commercial mortgage REIT, please click here. For a discussion of the risks associated with RMRM’s legacy assets that it is beginning to transition into commercial mortgages consistent with its new business strategy, please click here.

RMRM is subject to numerous risks, including investment risks. Shares of closed-end funds often trade at a discount from their net asset value. RMRM is not a complete investment program and you may lose money investing in RMRM. An investment in RMRM may not be appropriate for all investors.

RMRM is a closed-end fund and its common shares are only available for purchase and sale at current market price on the The Nasdaq Stock Market LLC. A closed-end fund’s dividend yield, market price and net asset value will fluctuate with market conditions. Closed-end funds may trade at a premium to NAV, but often trade at a discount, and RMRM has historically traded at a discount to NAV. Information for RMRM is provided for informational purposes only and does not constitute a solicitation of an offer to buy or sell RMRM shares.

There can be no assurance that RMRM’s investment objectives will be achieved or that the RMRM's investment program will be successful.