Q2 2025 Millrose Properties Inc Earnings Call

Speaker #1: Ladies and gentlemen, thank you for standing by. At this time, I would like to welcome everyone to the Millrose Properties, second quarter 2025 earnings results conference call.

Operator: Ladies and gentlemen, thank you for standing by. At this time, I would like to welcome everyone to the Millrose Properties' second quarter 2025 earnings results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. I will now turn the call over to Jesse Ross, Millrose's Head of Financial Planning and Analysis. Jesse, you may begin your conference.

Speaker #1: All If you would like to withdraw your question, press star one again. I will now turn the call over to Jesse Ross, Millrose Head of Financial Planning and Analysis.

Speaker #1: lines have been placed on mute to vent any background noise. After the speakers' remarks, there will be a question and answer session. If you like to ask a question during this time, simply press star, followed by the number one on your telephone keypad.

Speaker #1: Jesse, you may begin your conference.

Speaker #2: Good morning. Thank you for joining us. With us today to uss our second quarter 2025 results are Darren Richman, our Chief Executive Officer, and President.

Jesse Ross: Good morning. Thank you for joining us. With us today to discuss our second quarter 2025 results are Darren Richman, our Chief Executive Officer and President; Robert Nitkin, our Chief Operating Officer; Garett Rosenblum, our Chief Financial Officer; and Stephen Hensley, Senior Market Risk Analyst. Before we begin, I'd like to remind everyone that this call may include forward-looking statements and discuss non-GAAP financial measures. Please refer to our second quarter 2025 financial and operational results announcement, as well as the second quarter investor presentation we are released and posted on our website under the investor relations heading for a discussion of these matters. With that, I'll turn the call over to Darren.

Speaker #2: Robert Nitkin, our Chief Operating Officer. Garett Rosenblum, our Chief Financial Officer. And Steven Hensley, Senior Market Risk Analyst. Before we begin, I'd like to remind everyone that this call may include forward-looking statements and discuss non-GAAP financial measures.

Speaker #2: Please refer to our second quarter 2025 financial and operational results announcement, as well as the second quarter investor presentation we will release and post on our website under the Investor Relations heading for a ussion of these matters.

Darren Richman: Thank you, Jesse, and good morning, everyone. I am pleased to discuss our second quarter results, marking our first full quarter as a public company and a period of significant growth in execution for Millrose. We continue to deliver on our strategy to redefine how home builders and land developers access land capital. As a pioneer in the institutionalization of land banking services, Millrose offers home builders a unique permanent capital solution for the acquisition and development of residential home sites. Our innovative business model enables us to efficiently enter into option contracts with our home builder partners that facilitate just-in-time delivery of finished home sites for builders and predictable cash income yield for Millrose shareholders. Our financial performance in the second quarter underscores our dedication to disciplined capital investment and reflects strong demand for our scaled solutions-based approach.

Speaker #3: Jesse. And good morning, everyone. I am pleased to discuss our second quarter results. Marking ur first full quarter as a public company, and a period of significant growth and execution for Millrose.

Speaker #3: We continue to deliver on our strategy to redefine how homebuilders and land developers access land capital. As a pioneer in the institutionalization of land banking services, Millrose offers homebuilders a unique permanent capital solution for the acquisition and development of residential home sites.

Speaker #3: Our innovative business model enables us to efficiently enter into option contracts with our homebuilder partners that facilitate just-in-time delivery of finished home sites for builders and predictable cash income yield for Millrose shareholders.

Speaker #3: Our financial performance in the second quarter underscores our dedication to disciplined capital investment, and reflects strong demand for our scaled solutions-based approach. The payment of our first quarterly dividend reflects the visibility and consistency that our platform was purpose-built to offer.

Darren Richman: The payment of our first quarterly dividend reflects the visibility and consistency that our platform was purpose-built to offer. This illustrates the reliability of our economic model, in which cash flows from contractual monthly option payments and ongoing capital redeployment deliver attractive recurring revenues that convert into the payment of timely and predictable dividends. Following the spin-off, Lennar continues to serve as our principal client, providing stable cash flows that support our financial performance. This quarter, we effectively demonstrated the value of our operational flywheel, recycling substantial proceeds from Lennar home sites' sales into new land acquisitions and development funding under the Lennar Master Program Agreement. This capital deployment is central to our strategy, enabling us to consistently generate returns on invested capital.

Speaker #3: This illustrates the reliability of our economic model in which cash flows from contractual monthly option payments and ongoing capital redeployment deliver attractive recurring revenues that convert into the payment of timely and predictable dividends.

Speaker #3: Following the spin-off, Lennar continues to serve as our principal client. Providing stable cash flows that support our financial performance. Quarter, this quarter, we effectively demonstrated the value of our operational flywheel.

Speaker #3: Recycling substantial proceeds from Lennar home sites, sales into new land acquisitions, and development funding under the Lennar Master Program Agreement. This capital deployment is central to our strategy.

Speaker #3: Enabling us to consistently generate returns on invested capital. We also extended our nerships with third parties, with invested capital away from the Lennar Master Program Agreement, increasing to approximately $1.1 billion as of June 30th, demonstrating our value proposition to third-party homebuilders.

Darren Richman: We also expanded our partnerships with third parties, with invested capital away from the Lennar Master Program Agreement increasing to approximately $1.1 billion as of June 30th, demonstrating our value proposition to third-party home builders. During the quarter, we continued to pioneer new use cases for Millrose as a solution provider, facilitating the first-of-its-kind capital backstop in the take-private of Lansing Home Corporation by New Home Co. Through this transaction, Millrose acquired a diversified portfolio of home sites under the option with New Home, with net cash funding of approximately $500 million. More recently, affiliates of Millrose's manager announced a significant capital partnership with Taylor Morrison to enable the growth of its industry-leading build-to-rent brand, Yardly. This is yet another important use case for home site option arrangements as a scalable capital solution. We expect most of this opportunity will be allocated to the Millrose platform.

Speaker #3: During the quarter, we continued to pioneer new use cases for Millrose as a solution provider. Facilitating the first-of-its-kind capital backstop in the Take Private of Landscape Home Corporation by New Home Co.

Speaker #3: Through this transaction, Millrose acquired a diversified portfolio of home sites under the option under option with New Home, with net cash funding of approximately $500 million.

Speaker #3: More recently, affiliates of Millrose's manager announced a significant capital partnership with Taylor Morrison, to enable the growth of its industry-leading build-to-rent brand, Yardley. This is yet another important use case for a home site option arrangements as a scalable capital solution.

Speaker #3: We expect most of this opportunity will be allocated to the Millrose platform. This partnership, like most of our forward-flow relationships, provides for exclusivity to provide capital at agreed terms over a defined period of time.

Darren Richman: This partnership, like most of our forward flow relationships, provides for exclusivity to provide capital at agreed terms over a defined period of time. In the case of Yardly, affiliates of our manager have agreed to provide $3 billion of land banking capital for Yardly during the two-and-a-half-year term of the exclusivity agreement. With closings under the facility expected for Millrose starting in the third quarter, the partnership is anticipated to further accelerate Millrose's creative growth and provide an important use case for diversification of our end markets into rental housing. As you can see, the market demand for our capital solution across the home building industry continues to be incredibly robust. We're seeing an environment where demand for Millrose's platform continues to support growing our capital base increasingly. With our strong backlog pipeline and growing opportunities, we are increasingly confident in scaling Millrose and maintaining high returns.

Speaker #3: In the case of Yardley, affiliates of our manager have agreed to provide $3 billion of land banking capital for Yardley during the two and a half-year term, of the exclusivity agreement.

Speaker #3: With closings under the facility expected for Millrose starting in the third quarter, the partnership is anticipated to further accelerate Millrose's accretive growth and provide an important use case diversification of our end markets into rental housing.

Speaker #3: As you can see, the market demand for our capital solution across the homebuilding industry continues to be incredibly robust. We are seeing an environment where demand for Millrose's platform continues to support growing our capital-based accretively.

Speaker #3: With our strong backlog, pipeline, and growing opportunities, we are increasingly confident in scaling Millrose and maintaining high returns. I had previously noted a $2 billion stretch target for year-end investment balance outside of the Lennar Master Program Agreement.

Darren Richman: I had previously noted a $2 billion stretch target for year-end investment balance outside of the Lennar Master Program Agreement. This quarter's momentum has now shifted that stretch target to our base case, and we are accordingly raising guidance, as you'll hear from Garrett. Let me now take a moment to comment on recent market conditions. Stephen will have more to say in a few minutes. Our strategy is built for long-term success. While the broader underlying demand for home sites remains robust, we can't overlook the impact that affordability and waning consumer confidence has had and continues to have on certain end markets. As we mentioned last quarter, if we look at the longer term, strong structural tailwinds persist. We believe that there continues to be a significant shortfall in housing supply.

Speaker #3: This quarter's momentum has now shifted that stretch target to our base case, and we are accordingly raising guidance, as you'll ar from Garett. Let me now take a moment to comment on recent market conditions.

Speaker #3: Steven will have more to say in a ew minutes. Our strategy is built for long-term success. While the broader underlying demand for home sites remains robust, we can overlook the impact that affordability and waning consumer confidence has had and continues to have on certain end markets.

Speaker #3: As we mentioned last quarter, if we look at the longer-term strong structural tailwinds persist, we believe that their continues to be a significant shortfall on housing supply.

Speaker #3: Additionally, many of our builder clients are operating with historically high margins and strong balance sheets. Highlighted by low leverage levels, positioning them and the industry for resilience and for future growth.

Darren Richman: Additionally, many of our builder clients are operating with historically high margins and strong balance sheets, highlighted by low leverage levels, positioning them and the industry for resilience and for future growth. Our collateral continues to hold up very well, benefiting from prime locations and pooling agreements. In summary, the second quarter highlighted the power of our platform, our team's execution, and the significant demand for the unique capital solution that we offer. We are excited about the opportunities ahead, and we remain committed to delivering value for our shareholders, home builder partners, and the communities we serve. With that, I will hand the call over to Rob for an operational update.

Speaker #3: Our collateral continues to hold up very well, benefited from prime locations and polling agreements. In summary, the second quarter highlighted the power of our platform, our team's execution, and the significant demand for the unique capital solution that we offer.

Speaker #3: We are excited about the opportunities ahead, and we remain committed to delivering value for our shareholders, homebuilder partners, and the communities we serve. With that, I will hand the call over to Rob for an operational update.

Speaker #4: Thanks, Darren. Good morning, everyone. Core of our business is a national platform that acquires, manages, and monetizes entitled residential home sites. A key distinction of our business versus our competitors is the investments we have made in infrastructure in terms of system, technology, and human capital built through years of development.

Robert Nitkin: Thanks, Darren. Good morning, everyone. The core of our business is a national platform that acquires, manages, and monetizes entitled residential home sites. A key distinction of our business versus our competitors is the investments we have made in infrastructure in terms of systems, technology, and human capital built through years of development. Today, we employ over 40 professionals dedicated to the platform. These professionals are responsible for market surveillance, rigorous due diligence, asset onboarding, asset management, and asset disposition, choreographed into the production schedule of our clients in order to deliver home sites on a just-in-time basis. Their hard work and local market expertise, overlaid on a philosophy of data-driven insights and process optimization, enables us to execute and scale with speed and precision. In today's more dynamic housing environment, we've deliberately focused on maintaining high underwriting standards.

Speaker #4: Today, we employ over 40 professionals dedicated to the platform. These professionals are responsible for market surveillance, rigorous due diligence, asset onboarding, asset management, and asset disposition, choreographed into the production schedule of our clients, in order to deliver home sites on a just-in-time basis.

Speaker #4: Their hard work and local market expertise overlaid on a philosophy of data-driven insights and process optimization enables us to execute and scale with speed and precision.

Speaker #4: In today's more dynamic housing environment, we've deliberately focused on maintaining high underwriting standards, our investment committee has enhanced its discipline around asset selection with particular scrutiny on projected gross margins, pace assumptions, and the trajectory of local housing fundamentals.

Robert Nitkin: Our investment committee has enhanced its discipline around asset selection, with particular scrutiny on projected gross margins, pace assumptions, and the trajectory of local housing fundamentals. We've applied a more stringent lens in certain markets where moderating absorption has driven increased unsold inventory, ensuring our capital is positioned in the most compelling risk-adjusted opportunities. While market headlines tend to generalize, housing is inherently local. Accordingly, as a key data-driven filter in our underwriting process, we employ an internal MSA risk rating model to track in real time the evolving supply and demand dynamics of local housing markets. We've also continued to focus on transaction structure and terms to further mitigate risk. As you've heard, demand for our capital has accelerated. This has allowed us to maintain discipline on key contract protections on the transactions we execute, including meaningful deposits and cross-termination pooling mechanisms, which further mitigate market risk.

Speaker #4: We've applied a more stringent lens in certain markets where moderating absorption has driven increased unsold inventory, ensuring our capital is positioned in the most compelling risk-adjusted opportunities.

Speaker #4: While market headlines tend to generalize, housing is inherently local. Accordingly, as a key data-driven filter in our underwriting process, we employ an internal MSA risk rating model to track in real time the evolving supply and demand dynamics of local housing markets.

Speaker #4: We've also continued to focus on transaction structure and terms to further mitigate risk. As you've heard, demand for our capital has accelerated. This has allowed us to maintain discipline on key contract protections on the transactions we execute, including meaningful deposits and cross-termination pooling mechanisms, which further mitigate market risk.

Speaker #4: As of today, we have seen no indication of any option terminations in the portfolio. At the same time, we've continued to earn compelling income, our weighted average option rate outside of the Lennar Master Program Agreement stood at 11.4% as of quarter-end, while our blended option rate, including Lennar, was 8.9%.

Robert Nitkin: As of today, we have seen no indication of any option terminations in the portfolio. At the same time, we've continued to earn compelling income. Our weighted average option rate outside of the Lennar Master Program Agreement stood at 11.4% as of quarter end, while our blended option rate, including Lennar, was 8.9%. Our discipline amidst continued rising demand for the platform is reflected in our performance this quarter. We expanded our partnerships with third parties, investing $813 million in acquisitions and development outside of the Lennar Master Program Agreement and reaching a corresponding investment balance of approximately $1.1 billion as of June 30th. The progress has continued subsequent to the end of the quarter, with the investment balance in this category at approximately $1.3 billion as of today, including the initial closings under the Taylor Morrison Yardly partnership.

Speaker #4: Our discipline amidst continued rising demand for the platform is reflected in our performance this quarter. We expanded our partnerships with third parties, investing $813 million in acquisitions and development outside of the Lennar Master Program Agreement, and reaching a corresponding investment balance of approximately $1.1 billion as of June 30th.

Speaker #4: The progress has continued subsequent to the end of the quarter. With the investment balance in category at approximately $1.3 billion as of today, including the initial closing under the Taylor Morrison Yardley partnership.

Speaker #4: We deepened ur network of builder relationships and were pleased to now have 11 distinct counterparties with six ranked in the top 25 of the Zonda Builder 100, a ranking of the largest homebuilders by closings.

Robert Nitkin: We deepened our network of builder relationships and were pleased to now have 11 distinct counterparties, with six ranked in the top 25 of the Zonda Builder 100, a ranking of the largest home builders by closings. These builders represent some of the most sophisticated and well-capitalized home builders in the country, and our ability to serve as a capital partner in their growth is a testament to our model. Our team has shown a unique capability to execute innovative strategic transactions, including those Darren mentioned: the closing of an approximately $500 million home site portfolio to support New Home Company's acquisition of Lansing Homes Corporation and the execution of the Taylor Morrison build-to-rent partnership, an application of an existing transaction structure into the rental housing end market. These transactions underscore our ability to move quickly, underwrite at scale, and solve complex land needs of sophisticated counterparties.

Speaker #4: These builders represent some of the most sophisticated and well-capitalized homebuilders in the country, and our ability to serve as a capital partner in their growth is a testament to our model.

Speaker #4: Our team has shown a unique capability to execute innovative strategic transactions, including those Darren mentioned. The closing of an approximately $500 million home site portfolio to support new home companies' acquisition of landscape homes corporations and the execution of the Taylor Morrison build-to-rent partnership, an application of an existing transaction structure into the rental housing end market.

Speaker #4: These transactions underscore our ability to move quickly, underwrite at scale, and solve complex land needs of sophisticated counterparties. Lastly, our partnership with Lennar continues to be a cornerstone of our platform.

Robert Nitkin: Lastly, our partnership with Lennar continues to be a cornerstone of our platform. Joint investments in technology and systems have meaningfully enhanced transaction execution and operational efficiency. Of the $768 million in net cash proceeds received from home site sales to Lennar in the quarter, $718 million was redeployed into new Lennar land acquisitions and development funding, demonstrating a flywheel effect that comes with scale, partnership, and process excellence. It was a quarter marked by disciplined execution, strategic expansion, and continued alignment with leading industry partners, and we look forward to continuing that momentum in the quarters ahead. With that, I'll hand it over to Millrose's Senior Market Risk Analyst, Stephen Hensley, who will share some detail on our view of today's market.

Speaker #4: Joint investments in technology and systems have meaningfully enhanced transaction execution and operational efficiency. Of the $768 million in net cash proceeds received from home site sales to Lennar in the quarter, $718 million was redeployed into new Lennar land acquisitions and development funding.

Speaker #4: Demonstrating the flywheel effect that comes with scale, partnership, and process excellence. It was a quarter marked by disciplined execution, strategic expansion, and continued alignment with leading industry partners, and we look forward to continuing that momentum in the quarters ahead.

Speaker #4: With that, I'll hand it over to Millrose's Senior Market Risk Analyst, Steven Hensley, who will share some detail on our view of today's market.

Speaker #2: Thanks, Rob. At Millrose, we know that disciplined underwriting requires effective market surveillance, particularly in today's dynamic US housing market, in which affordability constraints and consumer confidence challenges are driving historically low housing turnover.

Stephen Hensley: Thanks, Rob. At Millrose, we know that disciplined underwriting requires effective market surveillance, particularly in today's dynamic US housing market, in which affordability constraints and consumer confidence challenges are driving historically low housing turnover. Elevated mortgage rates have made it difficult for many prospective buyers to afford a home that meets their needs, while macroeconomic uncertainty has dampened consumer sentiment, limiting transaction activity as many wait for greater clarity before making long-term financial decisions. In this context, I'd like to share some additional insights into our proprietary MSA risk rating model, which Rob alluded to. The model utilizes monthly data points that are pertinent to the health of individual housing markets, including new home sales, new and resale prices, employment growth, and resale months of supply.

Speaker #2: Elevated mortgage rates have made it difficult for many prospective buyers to afford a home that meets their needs. While macroeconomic uncertainty has dampened consumer sentiment, limiting transaction activity as many wait for greater clarity before making long-term financial decisions, in this context, I'd like to share some additional insights into our proprietary MSA risk rating model, which Rob alluded to.

Speaker #2: The model utilizes monthly data points that are pertinent to the health of individual housing markets, including new home sales, new and resale prices, employment growth, and resale months of supply.

Speaker #2: Changes to these higher frequency data points help us understand directional trends at an MSA level that contribute to underwriting hurdles at a portfolio level.

Stephen Hensley: Changes to these higher frequency data points help us understand directional trends at an MSA level that contribute to underwriting hurdles at a portfolio level. Over the past 12 months, our proprietary model has picked up softening market conditions across parts of Florida and Texas, and more recently to other regions of the country. While the discussion of Florida remains present in the media, we've identified the softness is most pronounced in what we would consider coastal secondary markets rather than larger core metropolitan areas. Our model has recently flagged Fort Myers, Naples, and Daytona Beach as markets to monitor. While fundamentals are evolving in these markets, our current option exposure is minimal at roughly 1% of remaining portfolio takedown proceeds. Additionally, 100% of properties in these three markets are included in geographically diversified cross-termination pooling agreements. Austin, Texas, is another market where we are seeing evolving market conditions.

Speaker #2: Over the past 12 months, our proprietary model has picked up softening market conditions across parts of Florida and Texas. And more recently, to other regions of the country.

Speaker #2: While the discussion of Florida remains present in the media, we've ified the softness as most pronounced in what we would consider coastal secondary markets rather than larger core metropolitan areas.

Speaker #2: Our model has recently flagged Fort Myers, Naples, and Daytona Beach as markets to monitor. While fundamentals are evolving in these markets, our current option exposure is minimal at roughly 1% of remaining portfolio takedown proceeds.

Speaker #2: Additionally, 100% of properties in these three markets are included in geographically diversified cross-termination pooling agreements. Austin, Texas, is another market where we are seeing evolving market conditions.

Speaker #2: And again, 100% of our Austin assets are pooled in cross-termination agreements. I'd like to touch briefly on affordability. While it's true that affordability remains a headwind for the industry today, there are mitigants that are acting as stabilizers.

Stephen Hensley: And again, 100% of our Austin assets are pooled in cross-termination agreements. I'd like to touch briefly on affordability. While it is true that affordability remains a headwind for the industry today, there are mitigants that are acting as stabilizers. Credit quality of home buyers remains healthy, likely due in part to a more financially mature profile of today's consumers, with first-time home buyers deferring purchases until their late 30s and the typical buyer in their mid-50s. Additionally, prospective buyers are more often receiving support from older family members to make homeownership attainable. According to a survey conducted by Redfin in May, roughly 21% of Gen Z and Millennial home buyers use the cash gift from family to help fund their down payment. Despite the near-term uncertainty, we maintain a long-term constructive view on the housing market, which remains structurally undersupplied.

Speaker #2: Credit quality of homebuyers remains healthy, likely due in part to more financially mature profile of today's consumers. With first-time homebuyers deferring purchases until the late 30s and the typical buyer in their mid-50s.

Speaker #2: Additionally, prospective buyers are more often receiving support from older family members to make homeownership attainable. According to a survey conducted by Redfin in May, roughly 21% of Gen Z and Millennial homebuyers use the cash gift from family to help fund their down payments.

Speaker #2: Despite the near-term uncertainty, we maintain a long-term constructive view on the ing market, which remains structurally undersupplied. Additionally, the supply of finished developed lots remains constrained nationwide, exacerbated by the complex, lengthy process of land entitlement.

Stephen Hensley: Additionally, the supply of finished developed lots remains constrained nationwide, exacerbated by the complex, lengthy process of land entitlement, which supports continued stability in land values. Over time, we believe macroeconomic uncertainty will ease as domestic policy becomes more defined, helping to restore consumer confidence. On the affordability front, muted home price appreciation, combined with ongoing wage growth, should gradually close the affordability gap. With that, I'll hand it to Garrett.

Speaker #2: Which supports continued stability and land values. Over time, we believe macroeconomic uncertainty will ease as domestic policy becomes more defined, helping to restore consumer confidence.

Speaker #2: On the affordability front, muted home price appreciation combined with ongoing wage growth should gradually close affordability gaps. With that, I'll hand it to Garett.

Speaker #3: Thank you, Steven, and good morning, everyone. I'm pleased to walk you through Millrose Properties' financial performance for the second quarter of 2025. This first full quarter posts from Lennar marks an important milestone as we continue to leverage our robust platform, significant liquidity, and disciplined capital allocation strategy to drive attractive returns for our investors.

Garett Rosenblum: Thank you, Stephen, and good morning, everyone. I'm pleased to walk you through Millrose Properties' financial performance for the second quarter of 2025. This first full quarter post-spin from Lennar marks an important milestone as we continue to leverage our robust platform, significant liquidity, and disciplined capital allocation strategy to drive attractive returns for our investors. For the quarter, we reported net income attributable to Millrose common shareholders of $112.8 million or 68 cents per share, driven by $149 million in option fees and other related income. Our annualized return on equity increased to 7.8%, a 20 basis point increase compared to the first quarter on a normalized basis, driven by continued growth of our partnerships outside of the Lennar Master Program Agreement. Our book value per share at the end of the quarter stood at $35.39.

Speaker #3: For the quarter, we reported net income attributable to Millrose common shareholders of $112.8 million, or $0.68 per share, driven by a 149 million in option fees and other related income.

Speaker #3: Our annualized return on equity increased to 7.8%, a 20 basis point increase compared the first quarter on a normalized basis, driven by continued growth of our partnerships outside of the Lennar Master Program Agreement.

Speaker #3: Our book value per share at the end of the quarter stood at $35 and 39 cents. Our management fee expense was $22 million, which is calculated transparently at one and a quarter percent of gross tangible assets.

Garett Rosenblum: Our management fee expense was $22 million, which is calculated transparently at 1.25% of gross tangible assets. Interest expense was $10.3 million, and income tax expense was $4.8 million. To further enhance transparency and better reflect the recurring earnings power of our business, we are introducing adjusted funds from operations, or AFFO, as a supplemental performance metric this quarter. AFFO adjusts for non-cash and non-recurring items, providing a clearer view of the cash-generating capacity of our platform. We believe this metric will offer investors a more accurate measure of our sustainable distributable earnings. This quarter, AFFO was $115 million or 69 cents per share. Further details and a full reconciliation of any non-GAAP measures to the most directly comparable GAAP measures are available in our earnings release and supplemental materials.

Speaker #3: Interest expense was 10.3 million, and income tax expense was 4.8 million. To further enhance transparency and better reflect the recurring earnings power of our business, we are introducing adjusted funds from operations, or AFFO, as a supplemental performance metric this quarter.

Speaker #3: AFFO adjusts for non-cash and non-recurring items providing a clearer view of the cash-generating capacity of our platform. We believe this metric will offer investors a more accurate measure of our sustainable distributable earnings.

Speaker #3: This quarter, AFFO was 115 million, or $0.69 per share. Further details and a full reconciliation of any non-GAAP measures to the most directly comparable GAAP measures are available in our earnings release and supplemental materials.

Speaker #3: We paid our first full quarter dividend of $114.5 million, or $0.69 per share, demonstrating the attractive recurring yields our model generates. As we have said, we are committed to distributing our earnings back to shareholders in the form of cash dividends.

Garett Rosenblum: We paid our first full quarter dividend of $114.5 million or 69 cents per share, demonstrating the attractive recurring yields our model generates. As we have said, we are committed to distributing our earnings back to shareholders in the form of cash dividends. Turning to our balance sheet and capitalization, Millrose maintains a conservative leverage profile, significant asset base, and ample liquidity. As of June 30th, we reported total assets of approximately $8 billion, with a debt-to-capitalization ratio of approximately 15%. Total debt was $1 billion. A significant highlight this quarter was the successful closing of our $1 billion delayed term loan from Goldman Sachs and JP Morgan. This new facility materially enhances our already robust capital structure, providing ample financial flexibility to support our strong investment pace and execute on our growing range of opportunities.

Speaker #3: Turning to our balance sheet and capitalization, Millrose maintains a conservative leverage profile, significant asset base, and ample liquidity. As of June 30th, we reported total assets of approximately $8 billion, with a debt-to-capitalization ratio of approximately 15%.

Speaker #3: Total debt was $1 billion. A significant highlight this quarter was the successful closing of our $1 billion delayed draw term loan from Goldman Sachs and JP Morgan.

Speaker #3: This new facility materially enhances our already robust capital structure, providing ample financial flexibility to support our strong investment pace and execute on our growing range of opportunities.

Speaker #3: This facility was fully drawn as of June 30th, 2025, and was used to fund the new home transaction and pay down the revolving credit facility.

Garett Rosenblum: This facility was fully drawn as of June 30th, 2025, and was used to fund the new home transaction and pay down the revolving credit facility. As a reminder, we expect to adhere to a conservative maximum leverage level of 33% net debt to capitalization, underscoring our disciplined approach to capital management. Our attractive credit profile and substantial capital capacity support our efficient investment pace through the prudent utilization of all available funding resources. Finally, we are raising guidance for our year-end quarterly AFFO per share run rate of $0.70 to $0.73, consistent with expectations for higher transaction funding outside of the Lennar Master Program Agreement. We remain focused on delivering value to our shareholders through consistent earnings, prudent capital allocation, and a conservative balance sheet. With that, I'll turn the call back to Darren.

Speaker #3: As a reminder, we expect to adhere to a conservative maximum leverage level of 33% net debt-to-capitalization, underscoring our disciplined approach to capital management. Our attractive credit profile and substantial capital capacity support our efficient investment pace through the prudent utilization of all available funding resources.

Speaker #3: Finally, we are raising guidance for our year-end quarterly AFFO per share run rate of 70 cents to 73 cents, consistent with expectations for higher transaction funding outside of the Lennar Master Program Agreement.

Speaker #3: We remain focused on delivering value to our shareholders through consistent earnings, prudent capital allocation, and a conservative balance sheet. With that, I'll turn the call back to Darren.

Speaker #3: To close, let me reiterate our immense confidence in Millrose and the pivotal role we are playing in the homebuilding ecosystem. Our innovative home site option purchase platform isn't just a solution.

Darren Richman: To close, let me reiterate our immense confidence in Millrose and the pivotal role we are playing in the home building ecosystem. Our innovative home site option purchase platform isn't just a solution. It's a fundamental shift in how capital flows to meet robust housing demand. We look forward to continuing on our mission to deliver value to the home builder and investor stakeholders we serve and build upon the strong foundations we have established. Thank you for your continued support, and we look forward to sharing our further progress next quarter. With that, operator, let's open the call up to Q&A.

Speaker #3: It's a fundamental shift in how capital flows to meet robust housing demand. We look forward to continuing on our mission to deliver value to the homebuilder and investor stakeholders we serve.

Speaker #3: And build upon the strong foundations we've established. Thank you for your continued support, and we look forward to sharing our further progress next quarter.

Speaker #3: With that, operator, let's open the call up to Q&A.

Speaker #1: All right. At this time, I would like to remind everyone in order to ask a estion, press star, then the number one on your telephone keypad.

Operator: All right. At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. Our first question comes from Julian Bluein with Goldman Sachs. Please go ahead.

Speaker #1: Our first question comes from Julian Bluen with Goldman Sachs. Please go head.

Speaker #2: Julian?

Garett Rosenblum: Julian?

Speaker #1: Julian, are you there?

Operator: Julian, are you there?

Speaker #4: Yes, can you hear me?

Julian Bluein: Hi. Yes. Can you hear me?

Speaker #1: Yes.

Operator: Yes.

Julian Bluein: Good to know. Yes. So there's been a lot of talk recently about home builders potentially starting to put pressure on land banking partners, to write down land values and restructure their agreements. Do you see this as a risk for you? And I guess more generally, what are you hearing from your land banking partners about how they view Millrose as a partner, amidst this more sort of challenging environment?

Speaker #2: Go ahead.

Speaker #4: Yeah, yes. So there's been a lot of talk recently about homebuilders potentially starting to put pressure on land banking partners to write down land values and restructure their agreements.

Speaker #4: Do you see this as a risk for you? And I guess more generally, what are you hearing from your land banking partners about how they view Millrose as a partner amidst this more sort of challenging environment?

Garett Rosenblum: Hey, Julian. This is Darren. So if there are two reasons why a home builder would use a land banking counterpart, one is for capital efficiency, and the other is for risk mitigation. And for, and I think, as you know, and we've been very clear, our role in providing capital is really for capital efficiency, working with our home builder clients to buy land on their behalf so they can get the benefits of, that efficiency increasing their asset returns. There are still home builders out there, though, that are using intermediaries for risk mitigation, where they're leveraging the balance sheet of third parties to kind of offload risk. And it's really in those situations that, we're hearing the same thing. And we know we know which builders are looking for capital efficiency because those are the builders that are willing to give us additional credit enhancements.

Speaker #2: Julian, this is Darren. Look, there are two reasons why a homebuilder would use a land banking counterpart. One is for a capital efficiency. And the other is for risk mitigation.

Speaker #2: And for, and I think, as you know, and we've been very clear, our role in providing capital is really for capital efficiency. Working with our homebuilder clients to buy land on their behalf so they can get the benefits of that efficiency increasing their asset returns there are still homebuilders out there, though, that are using intermediaries for risk mitigation.

Speaker #2: Where they're eraging the balance sheet of third parties to kind of offload risk. And it's really in those ations that we're hearing the same thing.

Speaker #2: And we know which builders are looking for capital efficiency because those are the builders that are willing to give us additional credit enhancements. And so that's really the role that's more a modernization of land banking is to be one of capital efficiency.

Garett Rosenblum: And so that's that's really the role. That's more of a modernization of land banking, is to be one of capital efficiency. And because of the credit enhancements that we benefit from, we haven't seen any slippage in our portfolio, nor do we expect to see any slippage. I don't know, Rob, if there's anything you'd like you'd add.

Speaker #2: And because of the credit enhancements that we benefit from, we haven't seen any slippage in our portfolio. Nor do we ect to see any slippage.

Speaker #2: I don't know, Rob, if there's anything you'd add.

Speaker #4: No, I think 's right.

Julian Bluein: No. That's right. Great. And maybe as a follow-up on those sort of credit enhancements, I appreciate the additional color in in this quarter's presentation around, cross-asset pooling. Can you sort of walk us through the success you're seeing, on being able to pool properties on the non-Lennar deals you've been closing? And are there still some partners, that you're working with that are maybe still hesitant around around pooling?

Speaker #3: Great. And maybe as a follow-up, on those sort of credit enhancements, I appreciate the additional color in this quarter's presentation around cross-asset pooling. Can ou sort of walk us through the success you're seeing on being able to pool properties on the non-Lennar deals you've been closing?

Speaker #3: And are there still some partners that you're working with that are maybe still hesitant around pooling?

Speaker #2: Yeah, Julian, I'd say, again, it's more of a modernization that folks are willing to entertain pooling. And it really does speak to how hard it is to get land approved for development.

Garett Rosenblum: Yeah, Julian, I'd say, again, it's more of a modernization that, folks are willing to entertain pooling. And it really does speak to how hard it is to get land approved for development in grade A locations that we are helping to finance. And so we are, we are, it really started with our relationship with Lennar. They really helped to pioneer the pooling concept. We are seeing more widespread adoption of other builders, joining that. right now, we we we did the math overnight. About 97% of our portfolio is pooled. so that gives you some sense for the adoption, not just from, you know, our primary client, Lennar, but the other builders that have, have chosen to do business with us. It's something we're very proud of, that not only are we growing accretively, but we're actually benefiting from strong credit enhancements as we're, constructing the portfolio.

Speaker #2: A grade A locations that we are helping to finance. And so we are it really started with our relationship with Lennar. They really helped to pioneer the pooling concept.

Speaker #2: We are seeing more widespread adoption of other builders joining that. Right now, we did the math overnight. About 97% of our portfolio is pooled.

Speaker #2: So that gives you some sense for the adoption, not just from our primary client, Lennar, but the other builders that have have chosen to do business with us.

Speaker #2: It's something we're very proud of that not only are we growing accretively, but we're actually benefiting from strong credit enhancements as we're constructing the portfolio.

Speaker #3: Great. And maybe if I can sneak in the last one, how should we think about the yields on an agreement like the Taylor Morrison Yardley deal?

Julian Bluein: Great. And and maybe if I can sneak in the last one, how should we think about the yields on an agreement like the, Taylor Morrison Yardly deal? Is it more similar to the sort of Apollo New Home Co. yields, i.e., a little bit lower than what we saw, you do on a smaller sort of one-off basis in the first quarter? And it, and I assume, based on on on what you've sort of just walked us through, that these Yardly agreements do include cross-asset pooling on those properties?

Speaker #3: Is it more similar to the sort of Apollo New Home Co yields, i.e., a little bit lower than what we saw you do on a smaller sort of one-off basis in first quarter?

Speaker #3: And I assume, based on what you've sort of just walked us through, that these Yardley agreements do include cross-asset pooling on those properties.

Speaker #2: I don't want to I don't want to talk about specific transactions. Really, you know, with our counterparts, what I will say is we do expect the our average yield to compress maybe closer to 11%.

Garett Rosenblum: I don't want to I don't want to talk about specific transactions, really, you know, with our with our counterparts. But what I will say is we do expect the, our average yield to compress maybe closer to 11%. that's kind of what we've guided to, as we as we grow our portfolio. And really, the trade-off is we're willing to give some, rate relief to get the the credit enhancements. And and as we drive more adoption in the portfolio, we do see that blended rate coming down, probably closer to 11. But I'd I'd rather not specifically talk to any of any of our clients.

Speaker #2: That's kind of what we've got it to. As we grow our portfolio, really the trade-off is we're willing to give some weight relief to get the credit enhancements.

Speaker #2: And as we drive more adoption in the portfolio, we do see that blended rate coming down, probably closer to 11. But I'd rather not specifically talk to any of our clients enjoying it.

Julian Bluein: Yeah. And Julian, it's Rob. I mean, I I would just note, you know, it's worth reiterating, given the dynamics you mentioned, and, you know, inadmittedly, you know, it it is, a notable home builder environment right now where we're focused every day on downside protection, just as much or even more so if we're focused on yield. So just as Darren said, you know, our incremental yield on the non-Lennar transactions was lower, and that is directly related to a focus on, A, doing business with the right builders, like Darren mentioned, as well as cross-termination pooling everywhere we can get it, and, being focused on downside protection. Our yields probably would be higher, if we didn't have those structural risk mitigants. but, it's a balance that we're focused on.

Speaker #3: It's Rob. I an, I would just note, you ow, it's worth reiterating, given the dynamics you mentioned and, you know, admittedly, you know, it is a notable home builder environment right now where we're focused every day on downside protection, just as much or even more so as we're focused on yields.

Speaker #3: So just as Darren said, you know, ur incremental yield on the non-Lennar transactions was lower and that is directly related to a focus on, A, doing business with the right builders like Darren mentioned, as well as cross-termination pooling everywhere we can get it.

Speaker #3: And being focused on downside protection, our yields probably would be higher if we didn't have those structural risk mitigants. But it's a balance that we're focused .

Speaker #4: Okay, great. Thank you much, team.

Darren Richman: Okay. Great. Thank you so much, team.

Speaker #3: Thanks, Julian.

Garett Rosenblum: Thanks, Julian.

Speaker #1: All right. Our next question comes from the line of Eric Wolf with Citi. Please go head.

Operator: All right. Our next question comes from the line of Eric Wolf with CITI. Please go ahead.

Speaker #5: Hey, thanks for taking my questions. Maybe to follow up on Taylor Morrison, can you just talk about how you and Kenny Lewis will decide how the $3 billion gets split up and whether there's a different underwriting process that you go through and evaluating the build-to-rent communities versus for sale?

Eric Wolf: Hey, thanks for taking my questions. maybe to follow up on Taylor Morrison, could you just talk about how you and Kenny Lewis will decide how the 3 billion gets split up and whether there's a different underwriting process that you go through when evaluating build-to-rent communities versus purchase for sale?

Speaker #2: Well, I'll start with the second part, which is evaluating build-to-rent. Ultimately, we're relying on a lot of the same basic data around the strength of the housing market, employment trends, migration, and the overall, you know, economic strength of the tenant/homebuyer in that market.

Julian Bluein: I'll start with the second part, which is evaluating build-to-rent. Ultimately, we're relying on a lot of the same basic data around the strength of the housing market, employment trends, migration, and the overall, you know, economic strength of, of, you know, the the tenant/home buyer in that market. But there is definitely a specific overlay as it relates to our, you know, our our build-to-rent evaluation on on yields and expenses and, you know, much more of an operating income relative to basis analysis typical of of rental real estate as opposed to for sale. So it's very similar, but certainly nuanced. maybe I'll just touch on the allocation of Kenny Lewis versus Millrose. So, you know, obviously, it's the same people, like Kenny Lewis and Millrose. Kenny Lewis, we are the external manager of Millrose.

Speaker #2: But there is definitely a specific overlay as it relates to our build-to-rent evaluation on yields and expenses and, you know, much more of an operating income relative to basis analysis, typical of rental real estate, as opposed to for sale.

Speaker #2: So it's very similar. But certainly nuanced. Maybe I'll just touch on the allocation of Kenny Lewis versus Millrose. So obviously, it's the same people, like Kenny Lewis and Millrose, Kenny Lewis, we are the external manager of Millrose.

Speaker #2: And so, while the agreement is with Kenny Lewis, subject to the publicly available allocation policy and the management agreement, there is an allocation that goes between both vehicles for a period of time.

Julian Bluein: And so while the agreement is with Kenny Lewis, subject to the publicly available allocation policy in the management agreement, there is an allocation that goes between both vehicles for a period of time. However, as we've noted, that, available capital for this business at the Kenny Lewis fund is finite and will burn off over time. And so longer term, we expect the majority of this product to be in Millrose.

Speaker #2: However, as we've noted, that available capital for this business at the Kenny is fund is finite and will burn off over time. And so longer term, we expect the majority of this product to be in Millrose.

Speaker #4: Yeah, and one thing I'd add, on the Taylor Morrison, is look, we really appreciate ur relationship with Taylor Morrison. It's really an amazing use case for Millrose to be providing capital to their build-to-rent product.

Garett Rosenblum: Yeah. And one thing I'd add, on the Taylor Morrison is, look, we really appreciate our relationship with Taylor Morrison. it's really, an amazing use case for Millrose to be providing capital to their build-to-rent, product. Their product really speaks to the affordability gap. Usually, this product lives on the edge of a master plan community that Taylor Morrison is already associated with. And what I really like about it is it not only is it a new use case, but because we're not just financing the land, but we're financing the vertical construction, this is more of a de-risked portfolio opportunity for us.

Speaker #4: Their product really speaks to the affordability gap. Usually, this product lives on the edge of a master plan community. That Taylor Morrison is already associated with.

Speaker #4: And what I really like about it is it not only is it a new use case, but because we're not just financing the land, but we're financing the vertical construction, this is more of a de-risked portfolio opportunity for us.

Speaker #4: Not that we don't like land and all the cross-colonization that we get, but this is yet another use case which I think is yet an evolution and where the de-risked use case because it's not just the land that we're financing, but we're financing the vertical as well.

Garett Rosenblum: Not that we don't like land and all the cross-collateralization that we get, but this is yet another use case, which I think is is yet an evolution and more of a de-risk use case because it's not just the land that we're financing, but we're financing the vertical as well.

Speaker #5: Yeah, makes sense. And understand, on the opportunity there, I guess, you ow, and you look at your underwriting, I guess, are you assuming that the builder or the developer eventually just pays you with borrowing on the community?

Eric Wolf: Yeah. Makes sense. And understand, on the opportunity there, I guess, you know, and you look at your underwriting, I guess, are you assuming that the that the builder or the developer, eventually just pays you back with borrowing on the community? Because obviously, there's no sell-out, of the community. And assuming that's the case, I guess, are these agreements structured in such a way that it would be a little bit longer than than a normal, you know, agreement with a for-sale builder? as I would assume it takes, you know, one to two years to kind of stabilize that that community.

Speaker #5: Because obviously, there's no sell-out of the community. And assuming that's case, I ess, are these agreements structured in such a way that it'd be little bit longer than a normal agreement with a for sale builder?

Speaker #5: As I would assume it takes, you ow, one to two years to kind of stabilize that community.

Speaker #2: No, it's ally, you know, I would say a similar 10 or even shorter, but then the typical for sale community. It's ructured in exactly the same way.

Julian Bluein: No. It's actually, you know, I would say a similar tenor or even shorter, but, than than the typical for-sale communities. It's structured in exactly the same way as our normal course agreements. The only difference is there is, you know, one tax slot as opposed to multiple plants or tax slots, in a rental community. And so there is one take, if you will, at the end of the contract. And that take is generally, you know, sooner than the last take of our other contracts. But, we're just relying on the builder, in this case, Taylor Morrison, to use it to capital, you know, to repurchase, as you said, the asset from us, just like we do, you know, in the for-sale scenario.

Speaker #2: It's our normal course agreements. The only difference is there is, you know, one tax slot as opposed to multiple plots or tax slots. In a rental community.

Speaker #2: And so there is one take, if you , at the end of the contract. And that take is generally, you know, sooner than the last take of our other contracts.

Speaker #2: But we're just relying on the builder in this case, Taylor Morrison, to use its capital to repurchase, as you said, the asset from us, just like we do, you know, in the for-sale scenario.

Speaker #2: And, you know, again, in Taylor Morrison's case, the strength and credit quality of that organization, we have no concerns with its ability to do that, obviously.

Julian Bluein: And, you know, again, in Taylor Morrison's case, the strength and credit quality of that organization, we have no concerns with its ability to do that, obviously. And this is a really meaningful, important business line to Taylor Morrison, that they're putting a lot of effort and capital behind. so it functions exactly the same way. We have, just as much, if not more so, confidence in the counterparty to to buy back, you know, the asset here. and we feel really good, as Darren said, about the yield that our shareholders are getting relative to a really high-quality counterparty and asset.

Speaker #2: And this is a really meaningful, important business line to Taylor Morrison. That they're putting a lot of effort and capital behind. So it functions exactly the same way.

Speaker #2: We have, just as much, if not more so, confidence in the counterparty to buy back, you know, the asset here. And we feel really good as Darren said about the yield that our shareholders are getting relative to a really high-quality counterparty and asset.

Speaker #5: Got it. Makes sense. And then I guess last thing, Taylor Morrison, if you get the majority of that, Millrose gets the ity of that, I think it'll be close to your sort of total leverage and investment capacity.

Eric Wolf: Got it. Makes sense. And then, I guess, last, last one, Taylor Morrison. if you get the majority of that, Millrose gets the majority of that, I think it'll be close to your sort of total leverage and investment capacity based on that sort of leverage constraint. And do you feel like the stock is at a spot now where it maybe makes sense to issue equity, or do you think it needs to be closer to book value? I think even at today's level, you know, the the investment spreads versus your cost of capital is pretty accretive. Obviously, it'd be a little bit of dilution to book value. So just curious how you're thinking about the trade-off there.

Speaker #5: Based on that sort of leverage constraint, do you feel like the stock is at a spot now where it maybe makes sense to issue equity, or do you think it needs to be closer to book value?

Speaker #5: I think even at today's level, you ow, the investment spreads versus your cost of capital is pretty accretive. Obviously, be a little bit of pollution to book value.

Speaker #5: So just curious how you're thinking about the trade-off there.

Speaker #2: Yeah, our priority right now is optimizing the balance sheet with debt. And we'll see where we end up as we put those debt structures in place.

Garett Rosenblum: Yeah. Our our our priority right now is optimizing the balance sheet with, debt. And we'll see where we end up as we put those debt structures in place with the equity. We've been very consistent. We have we have no plans of issuing dilutive equity. and the we're we're we're reasonably pleased that the story has gained traction. and and so let us let us kind of continue to execute on our strategy, prioritize the debt part of the capital structure, and then we'll pick our heads up and see where we're at.

Speaker #2: With the equity, we've very consistent. We have no plans of issuing dilutive equity. And the reasonably pleased that the story has gained traction and so let us kind of execute, continue to execute on our strategy.

Speaker #2: Prioritize the debt part of the capital structure and then we'll pick our heads up and see where we're .

Speaker #5: Makes sense. And then just last question, promise. On the deals that you close in the second quarter, sort of a follow-up to Julian's question, can ou just talk a bit about the credit enhancement that you got with those?

Eric Wolf: Makes sense. And then just the last question, promise. on, the deals that you closed in the second quarter, sort of a follow-up to Julian's question, can you just talk a bit about the credit enhancement that you got with those? because I think one of the most frequent questions I get is sort of what does the credit enhancement look like, on those deals outside of a Lennar Master Program Agreement? So what's the level of option deposit, option termination? effectively just trying to understand the potential downside risk on these deals, which, you know, in turn requires an understanding of how much equity is invested or credit enhancement you have.

Speaker #5: Because I think one of the frequent questions I get is sort of what is the credit enhancement look like? On those deals outside of the Lennar Master Program Agreement, so what's the level of option deposit?

Speaker #5: Option termination? Effectively just ying to understand the potential downside risk on these deals, which, ou know, in turn requires an understanding of how much equity is invested or credit enhancement you have.

Speaker #2: Yeah, I mean, I'll start. I really hesitate to provide kind of contract-level information on our counterparties to the market. You know, we've been very clear that we're not going to talk counterparties.

Garett Rosenblum: Yeah. I I mean, I'll start. I I really hesitate to provide, kind of contract-level information on our counterparties to the market. You know, we've been very clear that we're not going to talk about counterparties. More of the specific terms. The reason why we're comfortable talking about New Home and Taylor Morrison is because they've, revealed themselves to be clients of ours. But suffice it to say that there are cross-termination provisions with, New Home, and by extension, the assets that we purchased, from Lansing. And the contracts look very similar in structure and form overall to the other to every other contract that we have. so we feel very, very good about the portfolio and the protections that we've put in place and the high barriers for a home builder to just walk away.

Speaker #2: More of the specific terms the reason why we're fortable talking about new home and Taylor Morrison is because they've revealed selves to be clients of ours.

Speaker #2: But suffice it to say that there are cross-termination provisions with new home. And by extension, the assets that we purchased from landscape. And the contracts look very similar in structure and form overall.

Speaker #2: To the other to every other contract that we have, so we feel very, very good about the portfolio. And the protections that we put in place and the high barriers for a homebuilder to just walk away.

Speaker #2: And even, you know, it's not just it's not just those credit protections, but the reason why brought Steven on is because we wanted to really provide comfort that there's a real discipline approach to our underwriting.

Garett Rosenblum: And even, you know, it's not just it's not just those credit protections, but the reason why we brought Stephen on is because we wanted to really provide, comfort that there's a real disciplined approach to our underwriting and to, the geographies that we'll go into and the home builders that we'll serve and product types. And even as Stephen said, in the kind of hot button, communities, MSAs that are out there, we have very minimal exposures. Any exposures we do have are are cross-pooled. And I will say overall, maybe as as a data point, no one MSA represents more than 6% of our portfolio. And so that should give, you know, the market a good sense for how diversified this, portfolio is, in addition to the credit enhancements that sit on top of it.

Speaker #2: And to the geographic geographies that we'll go into. And the homebuilders that we'll serve and product types. And even as Steven said, in the kind of hot-button communities, MSAs that are out there, we have very minimal exposures.

Speaker #2: Any exposures we do have are cross-pooled. And I will say overall, maybe as a data point, no one MSA represents more than 6% of our portfolio.

Speaker #2: And so that actually did, you know, the market a good sense for how diversified this portfolio is. In addition to the credit enhancements that sit on top of them.

Speaker #5: Got it. Thanks for the time.

Eric Wolf: Got it. Thanks for the time.

Speaker #2: Thank you.

Garett Rosenblum: Thank you.

Speaker #1: All right. At this time, I do want to remind you all, please press star, followed by the number one on your telephone keypad to ask a question during today's call.

Operator: All right. At this time, I do want to remind you all, please press star, followed by the number one on your telephone keypad to ask a question during today's call. I'm going to take a brief pause to see if there are any additional questions. All right. It looks like I'm going to turn it back over to you, Darren Richman, for closing remarks.

Speaker #1: I'm going to take brief pause to see if there are any additional questions. All right. It looks like 'm going to turn it back over to you, Darren Richman, for closing remarks.

Speaker #4: Yeah, thank you. And thanks to everybody for joining us this quarter. We're very, very pleased with our results. We're very pleased with the quality of the portfolio.

Garett Rosenblum: Yeah. Thank you. And and thanks to everybody for joining us this quarter. We're we're we're very, very pleased with our results. We're very pleased with the quality of the portfolio, that we're putting together, even in the face of what we think is a recalibration in the housing market back to pre-COVID levels. As the market recalibrates, we're still building our portfolio through any of those headwinds. And we do think, there are real entrenched tailwinds to, to our product adoption. And we look forward to speaking with all of you on our next quarter conference call. Thank you.

Speaker #4: That we're putting ether. Even in the face of what we think is a recalibration in the housing market back to pre-COVID levels. As the market recalibrates, we're still building our portfolio.

Speaker #4: Through any of those headwinds, and we do think there are real entrenched tailwinds to our product adoption. And we look forward to speaking with all of you on our next quarter conference call.

Speaker #4: Thank ou.

Operator: Thank you all for joining. That concludes today's call. You may now disconnect.