Sachem Capital has stopped being a conventional small mortgage REIT in any sense that still drives the equity. The May contribution agreement with Industrial Realty Group Global recasts the Branford lender as a thin public stub inside a much larger industrial landlord. Existing common holders keep only a mid single digit economic claim after close. The agreement prices that claim at $2 a share. The listed stock still trades well below that reference, and that gap is now the entire debate.
The standalone franchise is shrinking even as the combination is being marketed. Performing loans ended the June quarter near $254 million. Nonaccrual principal is still close to $96 million after the Naples conversion. Net interest margin compressed toward two percent as funding costs stayed sticky and earning assets shrank. Book value per common share now sits just above $2. Credit provisions and combination fees consumed the quarter and left the penny common dividend uncovered by earnings.
The proxy that would put the contribution in front of holders is still unfiled. Industrial Realty Group signed more than nine million square feet of new and renewal leases through late July, which is the only operating proof that the contributed parks are leasing rather than sitting idle. Close is targeted by year end, with a contractual drop-dead the following April. The listed price under $1 is paying less than half the contract value. The next several months resolve whether holders collect an industrial stub or inherit a standalone workout.