Q4 2021 Arbor Realty Trust Inc Earnings Call
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Good morning, ladies and gentlemen, and welcome to the fourth quarter 2021 Arbor Realty Trust earnings Conference call. At this time, all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question during that period, you will need to press star one on your telephone.
If you want to remove yourself from the queue. Please press the pound key please be advised that today's conference call is being recorded if you should need operator assistance. Please press star Zero I would now like to turn the call over to your speaker today Polo Mineo Chief Financial Officer. Please go ahead.
Okay. Thank you Ashley and good morning, everyone and welcome to the quarterly earnings call for Arbor Realty Trust. This morning, we'll discuss the results for the fourth quarter and year ended December 31, 2021 with me on the call today is Ivan Kaufman, our President and Chief Executive Officer before we begin I need to inform you that statements made in this earnings call maybe deemed forward looking.
That are subject to risks and uncertainties, including information about possible or assumed future results of our business financial condition liquidity results of operations plans and objectives. These statements are based on our beliefs assumptions and expectations of our future performance taking into account. The information currently available to us factors that could cause.
<unk> actual results to differ materially from Arbor's expectations. In these forward looking statements are detailed in our SEC reports listeners are cautioned not to place undue reliance on these forward looking statements, which speak only as of today all of our undertakes no obligation to publicly update or revise these forward looking statements to reflect events or circumstances after today.
Or the occurrences of unanticipated events I'll now turn the call over to <unk>, President and CEO Ivan Kaufman.
Thank you Paul and thanks to everyone for joining us on today's call. We are very excited today to discuss the significant significant success.
I'm closing out what was an exceptional 2021.
As well as our plans and outlook for 2022, which we're confident will be another outstanding year.
As you can see from this morning's press release, we had another record quarter and 2021 's results reflect one of our best years as a public company.
It is very important to continue to emphasize the value of having multiple products with diverse income streams, which has allowed us to consistently grow earnings and dividends and all cycles, while maintaining a very low dividend payout ratio, we strategically built an annuity based business model, creating multiple inc.
Shamed from a single investment.
As a result, not only do we generate strong risk adjusted returns on our capital, which positively affect our car earnings more importantly, we are also building a much higher quality of future earnings and dividend growth story by ensuring that our assets will provide us with multiple other products in the future.
And this is one of the major differentiators of our business platform, which is why we strongly believe we should consistently trade at a substantial premium and much lower dividend yield than anyone in our peer group.
In fact with the recent pullback in the market. We are now trading at a dividend yield of approximately 18, 888, 8%, which is actually higher than the yield of our peer group for the first time in several years. This is despite the significant advantages of our business model and a long track record of consistent divot.
An increase as compared to our peers most of which have been unable to grow their dividends. We strongly we feel strongly that our current stock price in no way reflects the true value of our franchise presenting investors with an unparalleled buying opportunity is there.
Described in this morning's press release, a record fourth quarter results combined with a very positive outlook on the long term growth of our platform has allowed us to once again increase our dividend to 37 cents a share. This is our seventh consecutive quarterly dividend increase and our 10th consecutive year.
With consistent dividend growth, putting us in a very elite class of companies all while continuing to maintain the lowest dividend payout ratio in the industry.
We've built a premium operating platform that is focused on the right asset classes and a very stable liability structures, we have a thriving balance sheet.
Jesse Agency private label single family rental as well as the industry leader securitization platform allowed us to produce a long track record of exceptional performance with consistent earnings and dividend growth.
As a result, we've been the top performing REIT in our space for five consecutive years, now and all of them major performance metrics, including earnings and dividend growth.
And total shareholder return and again, we are very well positioned to succeed in every market cycle, which gives us great confidence in our ability to continue to have tremendous success going forward.
Before we discuss the details of our quarterly results I want to highlight some of our more notable 2021 accomplishments, which include generating substantial growth in our earnings, allowing us to increase our dividend four times or 12% to an annual run rate of $1.48 a share.
Delivering total shareholder return of 39% in 2021, and 221% cumulatively for the last five years with an annualized return of 26%.
Achieving industry, leading always of 19% for each of the last two years producing record originations of 16 billion, a 76% increase over last year originating 10 billion of new balance sheet business, increasing our portfolio of 122% in 2021 to 12 point too.
2 billion, producing private label originations, a 1.4 billion a 276% increase over last year growing our servicing portfolio to 27 billion, a 10% increase from 2020 and a 34% increase over the last three years closing four.
Nonrecourse CLO securitization totaling $5 2 billion and two private label securitization for 1 billion for our industry, leading securitization platform and raising $1 7 billion of accretive capital to fund our balance sheet growth and increase our market cap to over 3 billion.
Turning now to our fourth quarter performance as Paul will discuss in more detail our quarterly financial results were once again remarkable we produced distributable earnings of 62 cents per share per share, which is well in excess of our current dividend representing a payout ratio of around 60% for the fourth.
Corridor and 70% for the full year 2021 .
And our balance sheet lending business, we had another outstanding quarter producing record volumes of 4.3 billion, we've got top balance sheet lender in industry, and they're seeing tremendous growth and efficiencies as we continue to scale our platform. As a result, we grew our balance sheet book, 122% in 2021.
The 12.2 billion on record originations of $9 7 billion and we have a very large pipeline, which gives us great confidence in our ability to continue to meaningfully grow our loan book in 2022, and again these balance sheet loans creates significant value for our platform are there not only with.
Creative cloud car to earnings and dividends, but also allow us to build a pipeline for two to three years of new GSE agency and private label loans that produce additional long dated income streams, ensuring our long term growth of our platform and create a high quality earnings and dividends for the future.
We have consistently been a leader in the CLO securitization market, that's financed for a high quality balance sheet portfolio with the appropriate liability structures continues to be one of our key business strategies. We are very successful in continuing to access the CLO securitization market in 2020 one.
In closing our largest CLO to date totaling $2 1 billion in the fourth quarter as well as closing another 2 billion CLO.
Just last week.
Utilization of these vehicles. This change contributed greatly to our success by allowing us to appropriately match fund our assets with nonrecourse non mark to market long dated debt and generate attractive levered returns on our capital.
We continue to experience strong growth in our GSE agency and private label business programs as well we originated approximately $1 6 billion in agency loans in the fourth quarter and $1 9 billion, including our private label business equally as important we have a robust pipeline, giving us confidence in our ability to continue to produce consist.
And agency volume in 2022.
Oh GSE agency platform continues to offer a premium value as it requires limited capital and generate significant long dated predictable income streams and produces significant annual cash flow. Additionally, a 27 billion GSE agency servicing portfolio, which has grown 10% in the last year.
<unk> is mostly prepayment protected and generates approximately $121 million, a year and growing and reoccurring cash flow, which is up 8% from $112 million annually last year. This is in addition to the strong gain on sale margins, we continue to generate from our origination.
[noise] platform, which combined with new and increasing servicing revenues will continue to contribute greatly to our earnings and dividends.
Early this week, we were pleased to have closed our fourth private label securitization totaling $490 million, which kit, which continues to demonstrate the strength and diversity of our versatile lending platform and tremendous securitization expertise.
We also had a great year in our single family rental platform, we produced approximately $900 million a vial volume in 2021 , including approximately $400 million in the fourth quarter. Additionally, we currently have over $1 billion of additional deals in our pipeline, making us optimistic about the growth opportunity.
In this segment of our business going forward, we are a leader in the build to rent space, which provides us with the opportunity to originate construction bridge and permanent loans on a same transactions and again similar type of balance sheet business. This platform provides us yet with a path to future transactions that will produce additional.
<unk> long dated income streams.
And reflecting on 2021, we had an exceptional year and clear clearly outperformed our peer group. We are the best performing REIT five years in a row delivering a 26% annualized return over the same time period. We're also well positioned for continued success in 2020.
To through our unique multi tiered annuity based operating platform that provides us with a future annuity of high quality long dated income streams, making us confident in our ability to continue to grow earnings and dividends and significantly outperform our peers.
I will now turn the call over to Paul to take you through the financial results.
Okay. Thank you Ivan as Ivan mentioned, we had another exceptional quarter, producing distributable earnings of 94 million or <unk> 57 per share and 62 per share excluding a onetime realized loss of $8 million on a non multifamily asset that would be taken a reserve on during the height of the pandemic. We also had a record year with distributable.
Earnings of $2 <unk> per share in 2021, a 15% increase over our 2020 results and these results translated into industry high <unk> again of approximately 19% in 2021, allowing us to increase our dividend to an annual run rate of $1 48 a share.
<unk> for increases in 2021, and seven consecutive quarterly increases representing a 23% increase over that time span.
Our financial results continue to benefit greatly from many aspects of our diverse annuity based business model, including significant growth in our agency private label and balance sheet business platforms that produce substantial gain on sale margins long dated servicing income and strong levered returns on our capital.
Additionally, as we've mentioned in the past the credit quality of our portfolio has been outstanding we have very few specific reserves left in a handful of non multifamily assets that we took in the beginning of the pandemic and.
And we also made significant progress over the last few quarters and our nonperforming loans as trends continue to improve we received another 32 million in payoffs and paydowns in the fourth quarter related to three loans, leaving us would effectively only one remaining nonperforming loan for $20 million, we have always prided ourselves on investing heavily in our asset management.
<unk> and the success, we're having in working out these assets further demonstrates the value of our unique franchise looking.
Looking at the results from our GSE agency business, we originated $1 6 billion and GSE loans and recorded $1 5 billion of GSE loan sales in the fourth quarter. We also continued to produce consistently strong margins in our GSE loan sales generating a margin of 115, 2% in the fourth quarter compared to $1, 600%.
The third quarter.
Additionally, as Ivan mentioned, we remained very active in our private label program originating $282 million of new loans in the fourth quarter as well as completing our third private label securitization totaling $535 million of October and our fourth securitization totaling $490 million earlier this week and.
And in the fourth quarter. We also recorded $35 million of mortgage servicing rights income related to $1 8 billion of committed loans, representing an average MSR rate of around 188% compared to 175% last quarter, mainly due to a greater mix of Fannie Mae loans in the fourth quarter that contained higher servicing fees.
Our servicing portfolio also grew nine 5% in 2021 to 27 billion with a weighted average servicing fee of 45 basis points and an estimated remaining life of nine years. This portfolio will continue to generate a predictable annuity of income going forward of around $121 million gross annually, which is up approximately.
$9 million or 8% on an annual basis from the same time last year. Additionally, prepayment fees related to certain loans that have yield maintenance protection increased again substantially in the fourth quarter to $20 million compared to $11 million in the third quarter, mainly due to significantly more runoff this quarter as the.
Result of the continued increase in real estate values.
And our balance sheet lending operation, we grew our portfolio another 33% this quarter to $12 2 billion.
On record quarterly volume of $4 3 billion.
Our $12 2 billion investment portfolio had an all in yield of 462% at December 31, compared to $4, 97% at September 30, mainly due to higher rates on runoff as compared to new originations during the quarter.
The average balance in our core investments increased substantially to $10 5 billion. This quarter from $8 2 billion last quarter, mainly due to the significant growth we experienced in both the third and fourth quarters.
The average yield on these investments was five 3% for the fourth quarter compared to 555% for the third quarter, mainly due to higher interest rates on runoff as compared to originations in the third and fourth quarters combined with $3 million in back interest collected in the third quarter from the payoff of a nonperforming loan.
Total debt on our core assets was approximately $11 2 billion at December 31, with an all in debt cost of approximately $2 six 1%, which was down slightly from a debt cost of around 264% at September 30th mainly due to a reduction in the cost of funds from our new CLO vehicles and reduce rates on warehouse and repurchase agreements.
During the fourth quarter.
The average balance in our debt facilities was up to approximately $9 4 billion for the fourth quarter from $7 3 billion for the third quarter, mostly due to financing the growth in our portfolio and issuing $180 million of new unsecured notes during the fourth quarter.
And the average cost of funds in our debt facilities also decreased to $2 six 5% for the fourth quarter from $2, 76% for the third quarter again, mainly due to reduced pricing in our CLO vehicles and warehouse facilities.
Our overall net interest spreads on our core assets decreased to 238% this quarter compared to $2, 79% last quarter and our overall spot net interest spreads were also down to two 1% at December 31 from 233% at September 30, due to yield compression on new originations as compared to runoff.
That completes our prepared remarks for this morning, and I'll now turn it back to the operator to take any questions you may have Ashley.
Thank you and as a reminder to ask a question. Please press star one on your telephone keypad to withdraw your question. Please press the pound key.
Sandy you duplicate excuse me, we ask that you do please pickup your handset to allow optimal sound quality, we will take our first question from Steve Delaney with JMP Securities. Please go ahead.
Well, Hello, Ivan and Paul Congratulations on an excellent close to last year.
I think the thing that jumped off the page.
To me, it's a lot of good things in the report and in the year, but the dramatic.
Our gross and your structured business in terms of origination volume you did nine 7 billion, but six eight or 70% of that came in the second half of the year. So my question is this the strong demand that youre seeing for multifamily bridge loans in the market do you expect that to carry over into 2022.
And is it possible that 2022 could could set a new record for origination volume in the structured business. Thank you.
Okay clear.
Yeah. Thanks, Steve clearly clearly there was a little bit of a shift in the environment and I'll give you some of the reasons for it and why we're so well positioned so dominant in that space.
And if we had more personnel and more ability we could probably have done more with limited what we could do and we're still limiting what we could do.
I think with the huge jump in rates of rental rates and is between 10% to 25%.
Increase in rents from people buying properties and not calling for permanent financing so they've gone from more transitional financing before they get into permanent financing. So it was a very very big shift.
Through the Covid period rents were fairly flat and then right after.
The initial periods of Covid rent.
Rents really accelerated so people are buying multifamily properties, taking a year to two years to turn those rents and then getting the benefit of an increased NOI and in Gulf of permanent so that's been the shift in the market.
We are the best balance sheet lender in the business when it comes to multifamily we do a great job.
That business has grown just dramatically, we probably turned away just a huge amount of business.
In terms of the outlook for 2022, we are running at about a $1 billion a month.
And on our books for closings for the first quarter.
Were still turning down a significant amount of business.
We have restrictions human capital is a very very big restriction today.
As we all know hiring people and retaining people is a big task, we're doing a good job with retention, but hiring new people is very difficult. So right now the outlook on the balance sheet is still very strong and we still are a market leader in that.
Place in the market.
That's very helpful and thanks for the color on the sort of the mindset of these borrowers state. It's it's not by it take three or four years renovated completely I mean, theyre seeing a near term opportunity and I can understand how that is boosting.
Demand for bridge so thank you for that.
And then one follow up follow on question. Your <unk> business is still relatively small but strategic for sure. So 57 million in originations in the fourth quarter and I see youre servicing about 190, <unk>, what I was trying to reconcile because the <unk>.
<unk> weren't weren't really adding up you're showing that you have 729 million and total commitments and I'm just trying to understand what kind of.
Rationalized slight where where do we see the or have we seen the origination volume that would have contributed to the 700 million of total commitments.
The various segments of that business, one is providing fixed rate.
Production.
Which is a part of what we're doing and I think we're running that side of the business ramping it up to about $20 million a month, which is all go well.
Where we originate fixed rate product and we sell them as fixed rate loans, we don't hold them for securitization.
But we do sell them into the market and we do very well with those okay. The second element of our business providing floating rate.
Product for people buying scattered site single family rentals, either from builders were scattered sites developing them in that part of our balance sheet is growing Paul could tell you how much is on that balance sheet and how much is in the pipeline.
And the third piece of the business, which we love.
We are the market leader and I believe we are as in the build to rent communities where people are building.
Building build to rent communities.
Provided them a construction loan.
It stabilizes, we provided them a bridge loan and then we do a take out a loan that's where we've put a lot of work put a lot of energy spent a lot of money and that's where there's going to be an exponential amount of return on that capital in 2022, 2023, and 2020 for Paul you want to give some color on the numbers.
I think items laid out the different components of the business, Steve It's a little complicated from a financial modeling perspective, I get what we're trying to do for you guys is give you a sense of the breadth of the platform when we disclose the committed volumes that we've committed to during the year. So you know the transactions we've committed to the <unk>.
But as Ivan said, there's different components and some of those build to rent and scattered site commitments are in funded right upfront right theyre funded over time, so the commitments could be large and the fundings could be small over a period of time. So the first thing. We did was try to disclose to you in the press release, what we've committed to to give you a sense of where that business is going.
When you look at the numbers that hit the balance sheet, you're right $57 million was what we funded in permanent fixed rate loans that hit the agency side and we're selling those in the market at pretty pretty high margin without retaining any risk and then we've got the build to rent fundings and then we've got the bridge loans fundings, so when I look at the quarter.
We probably funded $115 million of prior commitments on build to rent commitments we funded.
Maybe even more than that probably $150 million and then we had about $60 million of as you said permanent loans, but to date year to date through December December 2021, we originated about $170 million of permanent product 136 of that was fixed rate that we're selling through the through the market and <unk>.
Our profit on not retaining any risk there.
35 is sitting on our balance sheet total on our balance sheet right now is about $450 million and that consist of the balance sheet part of the small amount of fixed rate loans, we have in our balance sheet and then all the fundings we've done on between bridge loans and fundings, we've done on commitments for scatter side and build to rent products.
So we're just trying to give you it's a little complicated, but we're trying to give you a sense of where the business is going with committed volume, but the funded volumes trail as Ivan said those are the numbers that are in the balance sheet.
Got it.
That's very helpful color.
I do want to reiterate.
As I did before that we are resource constrained, we could be doing significantly more.
But we just don't have the bodies.
Process the business and.
We're at a capacity, which is the first time that's ever happened in my career, where you can hire people to manage.
New business and you're turning away business.
Crazy well and then the high quality problem I think yeah. The last thing I just wanted to add to ivens commentary before about a bridge run rate just to give you. Some some some numbers. We did originate I think just about $850 million in January had a $150 million of auto so as Ivan said, we're running in that 800 to a $1 billion.
And we've got some constraints, but obviously that businesses, we have a large pipeline in that business still still very active.
Thank you both for the comments helpful.
And we will take our next question from Rick Shane with Jpmorgan. Please go ahead. Your line is open.
Hey, guys. Thanks for taking my questions. This morning can you hear me.
Yes, Rick how are you.
I'm doing well thanks.
A couple of things.
So I think it was it in the comments about labor markets and growth opportunity.
That's a signal to all of us to think about expense structure going forward what type of expense growth do you think we should anticipate in 2022, just so we can sort of level set there given the.
The language around employees.
Before I won't get into.
Into that detail.
You know, we deal with retention and things of that nature consistently over over the course of different cycles.
And we have a lot of flexibility.
And the way, we do compensate people and even having to pay up for people. We do it on a long term basis with a lot of retention aspects to it. So we have the benefit of people who've been with US for 510, 15, 20 years, who are loyal to the company.
We do have to recognize that they do have to be adjusted to where the market. Currently is but we're able to do that with long term incentives rather than annual payouts and.
Get the benefit of having long term retention, but with that I'll turn it over to you Paul.
Sure. So it's a very good question Rick.
And when I look at our numbers for 'twenty, one versus 'twenty 'twenty was a COVID-19 year, so less travel less conferences and things of that nature. So it's a hard comparison, but when I look at 'twenty, one versus 'twenty were up about I'd say, 20% year over year and comp and G&A, that's without commissions, which as you know are variable based on our.
Margins and I would say when I look at the model I think of it similarly, 15% to 20% growth in that number is probably reasonable given the cap the human capital constraints, we have in the way we have to retain people, it's hard to totally protect the number but I would say consistent with last year's growth is probably similar the way I look at the future model.
Yes.
Great.
I know no one has got a crystal ball and I appreciate your.
Both of you your willingness to embrace the question in and think forward on it. So thank you.
Second thing is that.
When we think about the structured business I kind of think of that as.
Potential energy ultimately for the agency business.
And when we look at the.
Terms of those loans, that's clearly the business model.
I'm curious when you underwrite loans and think about business plans are you starting to contemplate higher interest rates for exits.
You're taking on those loans within the structured product business with the idea then it may be more expensive for.
Managers owners to get financing.
We're constantly readjusting our model is based on different economics, and we always underwrite at bridge loans to where the take outs going to be and we use a certain constant.
So that's something that's different about the way we do our business.
Back in November we actually took a look at where the market is we took a look at where.
Rents have increased two readjusted, our forecast on rent growth a little bit while we have exorbitant rent growth, we readjusted our rent growth because people are starting to think that 10, and 20% rent growth is going to last forever.
We think that level of rent growth is going to subside. This year as they turn their units in the market adjust and then we readjust that I'll rent growth back to a 3% normalized rate. So that's a very big adjustment.
In terms of increasing the constant that we're using.
We're constantly adjusting to where the market is that something that we do traditionally.
We have also reallocated out pricing to be more aggressive on lower loan to value in primary markets. Starting in November . So we've adjusted our portfolio lending programs as well on a credit basis. So we're sensitized to all of those different factors in our underwriting.
Great and again I appreciate the specificity of the answered. Thank you guys much faster.
Sure.
And we will take our next question from Stephen laws with Raymond James. Please go ahead. Your line is open.
Good morning.
I haven't talked to your thoughts around the repayment outlook, obviously, some significant benefits and recent results from the early repayments kind of how does how do you see that playing out.
Over over the 'twenty, two and kind of the levels, we should expect contribution from that.
Sure. So I think we've had this conversation a few times Steve ended up continues to blow me away how much prepayment income we've been able to receive I think on the outlook I think when I look at the numbers. We do have januarys numbers I think we've got $3 million already in the door in January and while I do expect it to slow over time it may be slightly elevated.
In the first and second quarter, but certainly as you know when rates rise the yield maintenance protection change. It. So we are we are modeling ourselves to a much more normalized number we did $38 million in prepayment penalties in 'twenty one comparatively in 'twenty, we had $13 million were modeling somewhere in between that.
Given where we think rates could go and what that will do to the yield maintenance provisions. However, having said that intuitively if rates rise then we should see less runoff and although you won't get the onetime fees like you did last year youll retain the servicing strip, which is more long dated and you have that annuity. So I guess, that's the kind of the way we look at.
Where where prepayments could go based on where we think rates could go and what that does to the yield maintenance portion of your portfolio.
Great. Thanks for the detail there.
Paul.
Gain on sale outlook, as we think about that kind of.
No range as we think about moving to the year I know you mentioned in your prepared remarks, you know benefited this quarter from a higher mix of Fannie.
Can you give us some some commentary around that as we think about our model for the next couple.
Next year, yes.
Yes, so I think what I, what I've said many times on calls as we tried to guide to anywhere between 101 in 100 150, clearly in 2021, we had some tailwind and we were able to get a significant margin above that I think we came in at 100 190. Some of that has to do with high margin business, We did more FHA business, which was <unk>.
Up substantially which was great I do think we still have a strong pipeline of FHA business and I think we'll be able to even beat our number last year, which will help that margin because thats 104 business.
The APL business I think Ivan can comment, but I think the way we look at that in the agency business as we look at modeling between 101, one on one and a half if you go back and look at 2020, we came in at $101 40. This year, we came in at $101 90, but I'm comfortable even with rates rising that we'll be between that 101, and one and one five.
Keith and Thats kind of how we put our models together going forward.
Great that's helpful. Thanks, Paul.
Well take our next question from Jade Rahmani with <unk>. Please go ahead.
Hey, guys. This is actually Mike Smith on for Jade, just a couple around rates.
Are you seeing any changes in sentiment behavior or our underwriting on the part of investors.
I don't think we've seen.
Much of a change I mean, clearly loan proceeds are going to be cut.
With rates going up there's been a very significant rise in the 10 years from now.
A range of $1 50, now a range of 190 to two and a quarter in my book, then that's definitely affecting loan.
Loan proceeds for people.
And.
No it's pretty consistent underwriting guidelines haven't changed that much I think just the amount of proceeds people are taking out or the amount of equity that has to go and it's going to be changing on a go forward basis.
I think youll see a little bit of a shift.
Maybe at a five and seven year product so people can get a little more proceeds.
So there may be a shift a little bit from a 10 year product down to a five and seven.
We'll have to see a little bit more equities Asian.
And transactions today, and all of it or not.
To qualify for long term fixed rate financing.
Okay. That's helpful color and then just as a follow up do you have any idea of what level of rate increases would you kind of start to impact the market. Both in terms of investment trends in credit performance.
So.
You know right now there's been no adjustment and cap rates on multifamily properties. Despite the fact that.
You know rates are up 50 basis points.
My feeling is cap rate should mathematically adjust but the multifamily asset class is still so attractive.
And there is some rent growth left in there.
I do believe that there has to be a catch up along the way.
And that will come if this continues and if the 10 year continues to widen out.
We haven't seen an adjustment yet, but I believe it's.
It's a little bit of a lag, but we'll see what happens people looking at the multifamily asset classes that attractive.
And they're willing to get a low return on their money.
At the current time, so either it's lagging or there's an adjustment in investor sentiment returns.
Great. Thanks, a lot for taking the questions and congrats on a strong quarter.
Thanks, Ashley I believe Lee Cooper minutes in the Q I'm trying to get his questions.
But can you hold them through.
And Lee if you are connected if you would please press star one on your Touchtone phone.
Again, Thats Star one fair question.
Okay.
And unfortunately at this time I do not.
Has anyone in queue at the moment.
Okay.
Alright, well. Thank you everybody for your participation and throughout the year. It was a phenomenal year. Our outlook is for the first quarter is very strong and up.
Pipeline is very significant and we look forward to our continued participation have a great day, everybody and a good weekend take care. Thanks, everyone.
Thank you and this does conclude today's program. Thank you for your participation you may disconnect at any time.
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