Sachem Capital Stock Price, News & Analysis

Sachem Capital Corp. (SACH) is a mortgage real estate investment trust (REIT) and real estate lender whose business centers on originating, underwriting, funding, servicing, and managing a portfolio of loans secured by first mortgages on real property. According to the company’s public disclosures, these are short-term, secured, nonbanking loans made to real estate investors, and the properties securing the loans are generally classified as residential or commercial real estate. The company states that these properties are typically held for resale or investment.

Core business and lending focus

Sachem Capital describes itself as a mortgage REIT that offers short-term (generally one to three years or three years or less) loans to real estate investors. These loans are secured by first mortgage liens on real estate and are usually, or in some descriptions personally, guaranteed by the principal or principals of the borrower. The company emphasizes that its primary underwriting criterion is a conservative loan-to-value ratio, reflecting a focus on collateral coverage in its lending decisions.

The loans are described as funding the acquisition, renovation, development, rehabilitation, or improvement of properties. In its public materials, Sachem Capital notes that the properties securing its loans are generally residential or commercial and are typically held either for resale or for investment purposes by its borrowing clients.

Mortgage REIT structure and income sources

Sachem Capital states that it operates and qualifies as a REIT for federal income tax purposes. As disclosed in its financial reports, under federal income tax rules a REIT is required to distribute a minimum of 90% of taxable income each year to shareholders, and the company has indicated its intention to comply with this requirement. In its financial statements, the company identifies interest income from loans as a major component of total revenues, alongside fee income from loans, income from limited liability company investments, and other investment and other income.

The company’s condensed consolidated statements of operations categorize revenues into interest income from loans, fee income from loans, income from limited liability company investments, other investment income, and other income. Operating expenses include interest and amortization of deferred financing costs, compensation and employee benefits, general and administrative expenses, provision for credit losses related to loans held for investment, changes in valuation allowance related to loans held for sale, impairment losses on real estate owned, gains or losses on sale of real estate owned and property and equipment, and other expenses.

Collateral, guarantees, and real estate activities

Across its news releases and filings, Sachem Capital consistently highlights that every loan is secured by a first mortgage lien on real estate. The company also states that these loans are usually or personally guaranteed by the principal or principals of the borrower. This structure places first-lien claims on the underlying properties and adds a layer of personal guarantee support, according to the company’s descriptions.

In addition to its lending activities, Sachem Capital reports that it also makes opportunistic real estate purchases apart from its lending business. Its balance sheets include categories such as real estate owned (net of impairment) and investments in developmental real estate, indicating that the company may hold and manage certain properties directly, including those that may have come through foreclosure or other processes associated with its lending portfolio.

Capital structure, notes, and preferred stock

Sachem Capital’s public filings describe a capital structure that includes unsecured notes payable, senior secured notes payable, repurchase agreements, a revolving credit facility, mortgage debt on its office building, and equity in the form of common shares and 7.75% Series A Cumulative Redeemable Preferred Stock. The company has disclosed multiple note issuances and redemptions, including unsecured notes and senior secured notes, as well as an investment-grade rating for certain senior secured notes from a rating agency.

The company has also entered into an At Market Issuance Sales Agreement covering its 7.75% Series A Cumulative Redeemable Preferred Stock, under which it may offer and sell preferred shares from time to time through sales agents, as described in its Form 8-K. An amendment to its Certificate of Incorporation increased the number of authorized preferred shares and fixed the number of common shares reserved upon conversion of the preferred shares, while leaving other terms of the preferred unchanged, according to that filing.

Dividends and REIT distribution policy

In multiple press releases and a related Form 8-K, Sachem Capital reports that its board of directors has declared quarterly dividends on both its common shares and its 7.75% Series A Cumulative Redeemable Preferred Stock. The company notes that it operates as a REIT and refers to the requirement to distribute at least 90% of taxable income to shareholders each year under federal income tax rules. The declared dividends on the preferred stock have been described as representing the full amount of the dividend accruing over specified quarterly periods.

These dividend announcements illustrate how Sachem Capital uses its REIT structure to return capital to shareholders, consistent with its stated objective of distributing taxable income as required for REIT status. The company’s financial statements also show cumulative dividends paid as a separate component of shareholders’ equity.

Financial reporting and loan portfolio characteristics

In its quarterly financial reports, Sachem Capital provides detail on its loans held for investment, loans held for sale, allowance for credit losses, interest and fees receivable, due from borrowers, real estate owned, investments in limited liability companies, investments in developmental real estate, and other assets. The company discloses the net carrying amounts of loans after deferred loan fees and allowance for credit losses, as well as valuation allowances related to loans held for sale.

The company’s management commentary in its earnings releases discusses factors such as net new loan origination levels, the unpaid principal balance of loans held for investment, the presence of nonperforming loans and real estate owned, and changes in provisions for credit losses. These factors are presented as key drivers of revenue trends and credit loss allowances. The company also notes the use of returns of capital from investments in limited liability companies to fund additional loans held for investment.

Exchange listing and debt security delisting

Sachem Capital’s common stock is identified in company news and filings as trading on the NYSE American under the ticker symbol SACH. A Form 25 filing describes the removal from listing and registration on NYSE American of a specific class of securities: the company’s 7.75% Notes due 2025. That filing indicates that NYSE American filed the Form 25 in connection with the notes, and the company has separately announced the full repayment and delisting of those maturing unsecured unsubordinated notes. This Form 25 pertains to the notes, not to the company’s common equity.

Geographic and regulatory context

Public filings identify Sachem Capital Corp. as a New York corporation with a Commission File Number of 001-37997 and an employer identification number as disclosed in its Form 8-K filings. The company’s principal executive offices are located in Branford, Connecticut, as indicated in those filings. As a public company with securities registered under the Securities Exchange Act of 1934, Sachem Capital files periodic reports, current reports on Form 8-K, and registration statements with the U.S. Securities and Exchange Commission.

How Sachem Capital fits within the finance and real estate sector

Within the broader finance and insurance sector, Sachem Capital is categorized as a mortgage REIT and real estate lender. Its business model, as described in its disclosures, centers on short-term, first-lien lending to real estate investors, with an emphasis on conservative loan-to-value underwriting and collateralized structures. The company’s financial statements and public commentary highlight its focus on portfolio management, credit loss provisioning, capital structure management, and compliance with REIT distribution requirements.

Key characteristics summarized

• Mortgage REIT and real estate lender focused on short-term, secured, nonbanking loans to real estate investors.
• Loans are secured by first mortgage liens on residential or commercial real estate, typically held for resale or investment.
• Primary underwriting criterion is a conservative loan-to-value ratio, according to company descriptions.
• Operates and qualifies as a REIT for federal income tax purposes and references the 90% taxable income distribution requirement.
• Generates revenue from interest income on loans, loan fees, income from limited liability company investments, and other income sources disclosed in its financial statements.
• Capital structure includes unsecured notes, senior secured notes, repurchase agreements, a revolving credit facility, and 7.75% Series A Cumulative Redeemable Preferred Stock.
• Also engages in opportunistic real estate purchases and holds real estate owned and developmental real estate on its balance sheet.
• Common stock trades on NYSE American under the symbol SACH; a separate class of 7.75% notes due 2025 has been fully repaid and delisted, as reflected in a Form 25 filing.