Terra Property Trust in 2026: A Going-Concern Warning, No Dividend Since March, and Noteholders Paid Three Different Ways

What Terra Property Trust is, and who holds it

Terra Property Trust lends on commercial real estate: first mortgages, mezzanine loans and preferred equity in the roughly $10 million to $50 million range, plus some property it owns outright and stakes in joint ventures. It is externally managed. The manager, Terra REIT Advisors, is a subsidiary of Terra Capital Partners, whose sole member is Mavik, an entity controlled by the chief executive, Vikram S. Uppal.

Most of its common holders never bought it directly. The Class B shares "were issued to former Terra BDC stockholders" when Terra Income Fund 6 (Terra BDC) merged into one of its subsidiaries in October 2022, and at the end of 2023 Terra Secured Income Fund 5 wound up and handed its shares to its members, 2,252.02 shares for each unit. At March 19, 2026 there were 5,413 holders of 24,340,069 shares. Two affiliated vehicles still hold blocks: Terra Secured Income Fund 7 with 8.7% and Terra Offshore Funds REIT with 10.1% at June 30, 2026.

What a holder cannot do is sell on an exchange or back to the company. The 10-K says plainly: "There is no established trading market for our Class B Common Stock", and "There were no issuer purchases of equity securities during the year ended December 31, 2025." The only exchange-listed Terra securities are notes.

The going-concern paragraph

This is the sentence that matters, from the "Liquidity" section of the notes to the June 2026 financial statements:

"The Company has debt obligations of approximately $57.9 million coming due in the next twelve months following the issuance of the consolidated financial statements. As of June 30, 2026, the Company had cash and cash equivalents of $9.7 million and did not have sufficient liquidity to satisfy these obligations."

The company says it intends to pay through "asset realizations such as loan repayments", property sales, refinancings and "debt or equity capital raises", and then concludes: "However, there can be no assurance that the Company will be able to obtain the additional liquidity needed to repay the maturing debt obligations. Therefore, substantial doubt about the Company's ability to continue as a going concern exists." The risk factors spell out what that means for owners: if it cannot continue, it "may have to liquidate our assets and may receive less than the value at which those assets are carried", and "it is likely that our investors will lose all or a part of their investment."

This is a statement about the next twelve months, not a default. The first report to carry the going-concern conclusion was the 10-Q for the quarter ended March 31, 2026 (filed May 14, 2026); the 2025 Form 10-K (filed March 19, 2026) did not use the phrase, but already said the company "does not have sufficient liquidity to satisfy these obligations" for the notes maturing June 30, 2026. Terra has so far met every note maturity: $118.8 million of unsecured notes were outstanding at the end of 2025 and all of it was exchanged or repaid by June 30, 2026. But the notes were handled by exchanging most of them for secured debt, and secured debt comes first if the assets have to be sold. And the company has been preparing for the other outcome: in a press release filed on March 12, 2026 it said there "may not be sufficient liquidity" to repay the notes while remaining a going concern and that it had "engaged Portage Point Partners, LLC as restructuring banker and Alston & Bird LLP as restructuring counsel", an engagement that "could include evaluating various strategic alternatives, including restructuring options" (Form 8-K, Exhibit 99.1, accession 0001104659-26-027112).

Source: consolidated balance sheet and MD&A, Form 10-Q for the quarter ended June 30, 2026 (accession 0001674356-26-000020). The loan line is the net loan portfolio table (total gross loans at carrying value).

Where the money went: the loan book and a $70 million write-off

At June 30, 2026 Terra had five loans with $87.9 million of principal, down from nine and $210.4 million at the end of 2025. The weighted-average coupon was 11.93% and the weighted-average remaining term 0.52 years. Three loans were not paying as agreed: the company "suspended interest income accrual of $9.3 million" on three loans in the first half because "recovery of such income was not probable".

The allowance for credit losses fell from $59.1 million to $0.9 million in six months, and not because things got better. The first-half provision was $11.8 million, "primarily due to a decline in our estimated recoverable amount on a non-performing subordinated loan". In the second quarter Terra restructured that loan; the note to the allowance table says the $69,976,793 write-off "was primarily related to the derecognition of one non-performing loan in connection with a restructuring transaction in which the Company surrendered its prior investment and received a contingent promote interest." In plain terms, and this identification is our reading (the 10-Q does not name the loan; the write-off matches, within $1, the principal of one loan in the 2025 Form 10-K, Schedule IV): a loan with $69,976,792 of principal, which the company already carried at $11,818,556 at December 31, 2025 after its credit-loss allowance, was surrendered for a share of any future upside, which may be worth nothing. The 10-Q does not name the borrower.

On January 22, 2026 Terra also took a multifamily property back from a borrower, foreclosing on a $31.4 million first mortgage, and its lender converted the related $13.2 million of borrowings into a property mortgage at SOFR plus 5% (floor 9.85%) due January 2027.

What the income statement says about the dividend

Source: consolidated statements of operations, Form 10-Q (accession 0001674356-26-000020). The fee and interest-expense totals add the line items shown in the statement; the additions are ours.

In the first half of 2026 the manager's fees and reimbursed expenses came to $3.3 million, 61% of interest income (our arithmetic). The dividend has followed the earnings down: $0.76 a share in 2024, $0.48 in 2025 (10-K), $0.04 in the first quarter of 2026 and nothing declared for the second (10-Q). Terra lost money in each of those years: $1.53 a share in 2024, $1.14 in 2025.

The notes: three outcomes for the same bond

Terra's 6.00% Senior Notes due June 30, 2026 traded on the NYSE as TPTA. There were about $85 million of them at issue in 2021 and $80.4 million at the end of 2025. How a holder ended up depended on what they did:

Sources: Note 8 of the June 2026 10-Q; the June 2026 exchange-offer prospectus (Form S-4/A, accession 0001104659-26-076137); Form 8-K of July 2, 2026 (accession 0001104659-26-080408).

The people who kept their bonds and waited were paid in full, in cash, on the maturity date. The people who accepted the June offer took a quarter in cash and three quarters in a one-year note that pays 11% and is secured, but that matures inside the same window the going-concern paragraph is about. The new notes must be redeemed at 102% of principal when Terra sells certain assets, collects certain receipts or has "Excess Cash Flow", so holders are paid down as the book is sold. The prospectus said Terra would apply to list them on the NYSE as "TPTX" if they met the listing standards; the cover of the August 10-Q lists only the 7% notes (TPTS) as registered on an exchange.

Both new issues are secured, pari passu, by pledges of the equity of certain Terra subsidiaries, which the company valued at about $158.8 million of book value at June 30, 2026; the 11% notes also have $64.7 million of specific asset collateral. Ahead of or beside them sit a $25.0 million term loan at 11% (December 2027), a $17.5 million secured borrowing at a 9.32% floor (June 2027), a $10.0 million term loan at 9% on the VS1 joint-venture stake, and the $13.25 million mortgage on the foreclosed apartment property (a $20.7 million fixed-rate property mortgage on the books in December was gone by June). Total secured principal: $118.5 million. The common stock is behind all of it.

One more thing the filings show: between October 2025 and February 2026 Terra filed a registration statement (Form S-11, four amendments) for a $60.0 million cash offering of senior secured notes due 2029, in which funds managed by Axar Capital Management and by Mavik, the sponsor's owner, intended to buy up to $16.0 million at $1.25 below the public price. We found no notice of effectiveness or final prospectus for that offering on EDGAR; the company refinanced through the two exchange offers instead.

Update: the quarter ended September 30, 2026

Terra filed its 10-Q for the third quarter on November 6, 2026 (accession 0001674356-26-000029). Nothing in it lifts the going-concern warning. The liquidity note repeats the June wording: the company has "debt obligations of approximately $57.9 million coming due in the next twelve months following the issuance of the consolidated financial statements", had "cash and cash equivalents of $1.4 million" at September 30, 2026, "did not have sufficient liquidity to satisfy these obligations", and "substantial doubt about the Company's ability to continue as a going concern exists." The 10-Q adds that net proceeds from asset sales used for mandatory redemptions under the 11% notes' indenture "will not be available to fund the Company's operations or other cash requirements". Note 11 reports no subsequent events that require disclosure.

Source: consolidated balance sheet, Note 2, Note 3 and Note 8, Form 10-Q for the quarter ended September 30, 2026 (accession 0001674356-26-000029); June column from the June 10-Q cited above.

For the nine months ended September 30, 2026 Terra reported a net loss of $29,040,181 ($1.19 a share), of which $10,049,791 fell in the third quarter, against a nine-month loss of $17,196,019 ($0.71) a year earlier. Interest income was $7,267,527 for the nine months (third quarter: $1,889,845, against $5,569,747 a year earlier). The provision for credit losses was $11,854,155 for the nine months, almost all booked in the first half, and the company suspended interest accrual of $10.6 million on three loans. In the third quarter it also booked an impairment of about $3.3 million on an industrial building, after agreeing in October 2026 to sell it for $12.0 million. Distributions declared were $0.04 a share for the nine months, all in the first quarter, and none in the third quarter. The principal of the 11% notes due July 1, 2027, the 7% notes due 2029 and the other secured debt is unchanged since June 30, and unsecured notes remain at zero. Class B shares outstanding were 24,340,114 on November 6, 2026.

The cash drop is the number to watch: at September 30 Terra held $1.4 million against $57.9 million of obligations that include the January 2027 mortgage, the June 2027 secured borrowing and the July 2027 notes. The company points to loan repayments, property sales, refinancings and capital raises, and says there is no assurance it can obtain the liquidity.

If you hold the common stock

• Read the June 10-Q's liquidity note before anything else. The 2026 maturities were met by adding secured debt. The next test is the $57.9 million due within twelve months of August 2026, including the January 2027 mortgage and the June and July 2027 facilities.
• There is no exit from the company. No listing, no repurchase plan, no tender offer on EDGAR. The 10-K lists a listing, a repurchase plan or a business combination only as possibilities among its forward-looking statements. If you receive an unsolicited offer for your shares, compare it with the $5.20 book value and with what a liquidation would pay after $123 million of liabilities, and read our guide to tender offers for non-traded REIT shares.
• Book value is not a price. $5.20 is equity divided by shares. The company itself warns that forced sales "may receive less than the value at which those assets are carried".
• Taxes: if the shares were inherited or you are an estate, the value you use should be documented; this is a situation for an advisor who works with illiquid securities.

If you hold TPTS or the 11% notes

The 7% notes due March 2029 share their collateral, equally, with the 11% notes due July 1, 2027, and the 11% notes come due first. Ask what the collateral pool is worth after the first-half write-off, and watch the 10-Q for asset sales that trigger the 102% mandatory redemptions of the 11% notes. For the wider picture of CRE loans coming due, see our debt maturity wall tracker.

FAQ

All figures are from the filings cited, read on EDGAR on September 28, 2026. The fee share of interest income, the totals of fees and interest expense, and the amount of 6% notes repaid in cash are our arithmetic. This is analysis of public documents, not investment, legal or tax advice.