Q2 2026 TPG RE Finance Trust Inc Earnings Call

July 29, 2026

Speaker #1: Welcome to the TPG Real Estate Finance Trust, second quarter 2026 earnings conference call. At this time, all participants will be in a listen-only mode.

Operator: Welcome to the TPG Real Estate Finance Trust Q2 2026 Earnings Conference Call. At this time, all participants will be in a listen-only mode. A question and answer session will follow the formal presentation. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue.

Speaker #1: A question-and-answer session will follow the formal presentation. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue.

Speaker #1: You may press star 2 to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys.

Operator: You may press star two to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. Please note this conference is being recorded. I will now turn the conference over to Ashvin Rao. You may begin. Thank you.

Speaker #1: Please note, this conference is being recorded. I will now turn the conference over to Ashen Ashben Reo. You may begin. Thank you.

Speaker #2: Good morning, and welcome to the TPG Real Estate Finance Trust earnings call for the second quarter of 2026. Today, I'm joined by Doug Boucard, our Chief Executive Officer, Brandon Fox, our Interim Chief Financial Officer, and Ryan Roberto, our Head of Portfolio Management and Capital Markets.

Ashvin Rao: Good morning. Welcome to the TPG Real Estate Finance Trust earnings call for Q2 2026. Today, I am joined by Doug Bouquard, our Chief Executive Officer, Brandon Fox, our Interim Chief Financial Officer, and Ryan Roberto, our Head of Portfolio Management and Capital Markets. Doug, Brandon, and Ryan will provide commentary regarding the company, its performance, and the general economy and will answer questions from call participants. Yesterday afternoon, we filed our Form 10-Q, issued a press release, and shared an earnings supplemental, all of which are available on the company's website in the investor relations section. This morning's call and webcast are being recorded. Information regarding the replay of this call is available in our earnings release and on the TRTX website. Recordings are the property of TRTX, and any unauthorized broadcast or reproduction in any form is strictly prohibited.

Dan Kasell: Good morning. Welcome to the TPG Real Estate Finance Trust earnings call for Q2 2026. Today, I am joined by Doug Bouquard, our Chief Executive Officer, Brandon Fox, our Interim Chief Financial Officer, and Ryan Roberto, our Head of Portfolio Management and Capital Markets. Doug, Brandon, and Ryan will provide commentary regarding the company, its performance, and the general economy and will answer questions from call participants.

Speaker #2: Doug, Brandon, and Ryan will provide commentary regarding the company, its performance, and the general economy, and will answer questions from call participants. Yesterday afternoon, we filed our Form 10-Q, issued a press release, and shared an earnings supplemental.

Dan Kasell: Yesterday afternoon, we filed our Form 10-Q, issued a press release, and shared an earnings supplemental, all of which are available on the company's website in the investor relations section.

Speaker #2: All of which are available on the company's website and the investor relations section. This morning's call and webcast are being recorded. Information regarding the replay of this call is available in our earnings release and on the PRTX website.

Dan Kasell: This morning's call and webcast are being recorded. Information regarding the replay of this call is available in our earnings release and on the TRTX website. Recordings are the property of TRTX, and any unauthorized broadcast or reproduction in any form is strictly prohibited.

Speaker #2: Recordings are the property of PRTX, and any unauthorized broadcast or reproduction is in any form strictly prohibited. This morning's call will include forward-looking statements, which are uncertain and outside of the company's control.

Ashvin Rao: This morning's call will include forward-looking statements which are uncertain and outside of the company's control. Actual results may differ materially from those set forth in or implied by these forward-looking statements. For a discussion of risks that could affect results, please see the Risk Factors section of the company's latest Form 10-K and Form 10-Q. The company does not undertake any duty to update our forward-looking statements unless required to do so by law. We will refer during today's call to certain non-GAAP financial measures, which are reconciled to GAAP amounts in our Form 10-Q, our earnings release, and in our earnings supplemental, all of which are available in the investor relations section of our website. Now I'll turn the call over to Doug.

Dan Kasell: This morning's call will include forward-looking statements which are uncertain and outside of the company's control. Actual results may differ materially from those set forth in or implied by these forward-looking statements. For a discussion of risks that could affect results, please see the Risk Factors section of the company's latest Form 10-K and Form 10-Q.

Speaker #2: Actual results may differ materially from those set forth in or implied by these forward-looking statements. For discussion of risks that could affect results, please see the risk factors section of the company's latest Form 10-K and Form 10-Q.

Speaker #2: The company does not undertake any duty to update our forward-looking statements unless required to do so by law. We will refer during today's call to certain non-GAAP financial measures, which are reconciled to GAAP amounts in our Form 10-Q, our earnings release, and in our earnings supplemental.

Dan Kasell: The company does not undertake any duty to update our forward-looking statements unless required to do so by law. We will refer during today's call to certain non-GAAP financial measures, which are reconciled to GAAP amounts in our Form 10-Q, our earnings release, and in our earnings supplemental, all of which are available in the investor relations section of our website. Now I'll turn the call over to Doug.

Speaker #2: All of which are available in the investor relations section of our website. Now, I'll turn the call over to Doug.

Speaker #3: Good morning, and thank you for joining the call.

Doug Bouquard: Good morning, and thank you for joining the call. Over the past quarter, market activity was shaped by several competing forces, including heightened geopolitical tensions and continued debate around the path of inflation and interest rates. Despite this uncertainty, both equity and credit markets have remained broadly resilient. In real estate, the environment has remained largely consistent with prior quarters. Elevated interest rates and ongoing rate volatility continue to suppress transaction activity, while the gap between buyer and seller expectations remains wide. Lending demand continues to be driven primarily by refinancing activity, particularly within the multifamily and industrial sectors, two of the most liquid areas of the real estate market. This activity continues to be supported by both bank balance sheets and CRE CLO bond buyers, where credit spreads tightened further during the quarter.

Speaker #2: Over the past quarter, market activity was shaped by several competing forces, including heightened geopolitical tensions and continued debate around the path of inflation and interest rates.

Speaker #2: Despite this uncertainty, both equity and credit markets have remained broadly resilient. In real estate, the environment has remained largely consistent with prior quarters. Elevated interest rates and ongoing rate volatility continue to suppress transaction activity, while the gap between buyer and seller expectations remains wide.

Doug Bouquard: Elevated interest rates and ongoing rate volatility continue to suppress transaction activity, while the gap between buyer and seller expectations remains wide. Lending demand continues to be driven primarily by refinancing activity, particularly within the multifamily and industrial sectors, two of the most liquid areas of the real estate market.

Speaker #2: As a result, lending demand continues to be driven primarily by refinancing activity, particularly within the multifamily and industrial sectors, two of the most liquid areas of the real estate market.

Speaker #2: Importantly, this activity continues to be supported by both bank balance sheets and CRECLO bond buyers, where credit spreads tightened further during the quarter. Against this market backdrop, PRTX continues to differentiate itself through disciplined growth, improved risk management.

Doug Bouquard: This activity continues to be supported by both bank balance sheets and CRE CLO bond buyers, where credit spreads tightened further during the quarter.

Doug Bouquard: Against this market backdrop, TRTX continues to differentiate itself through disciplined growth and prudent risk management. Over the past year, we have closed $1.7 billion of new loan investments, driving $551 million or 15% net asset growth. During Q2, we closed $466 million of new loan investments and an additional $72 million subsequent to quarter end, continuing the steady growth of our earning asset base. Looking ahead, we have approximately $380 million of executed term sheets, providing good visibility into future deployment opportunities. We remain focused on prudently growing the portfolio while maintaining the disciplined underwriting and risk management approach that has differentiated TRTX throughout the cycle. From a credit perspective, portfolio performance remains stable, with CECL reserves and risk ratings largely unchanged quarter over quarter. The balance sheet transformation we have discussed over the past several years continues to advance.

Speaker #2: Over the past year, we have closed $1.7 billion of new loan investments, driving $551 million, or 15%, net asset growth. During the second quarter, we closed $466 million of new loan investments and an additional $72 million subsequent to quarter end.

Speaker #2: Continuing the steady growth of our earning asset base. Looking ahead, we have approximately $380 million of executed term sheets, providing good visibility into future deployment opportunities.

Doug Bouquard: Looking ahead, we have approximately $380 million of executed term sheets, providing good visibility into future deployment opportunities. We remain focused on prudently growing the portfolio while maintaining the disciplined underwriting and risk management approach that has differentiated TRTX throughout the cycle.

Speaker #2: We remain focused on prudently growing the portfolio while maintaining the discipline underwriting and risk management approach that is differentiated TRTX throughout the cycle. From a credit perspective, portfolio performance remains stable, with CISO reserves and risk ratings largely unchanged quarter over quarter.

Doug Bouquard: From a credit perspective, portfolio performance remains stable, with CECL reserves and risk ratings largely unchanged quarter-over quarter. The balance sheet transformation we have discussed over the past several years continues to advance.

Speaker #2: Meanwhile, the balance sheet transformation we have discussed over the past several years continues to advance. As of June 30th, 69% of our portfolio is comprised of loans originated in 2023 or later.

Doug Bouquard: As of 30 June, 69% of our portfolio is comprised of loans originated in 2023 or later. This continued reinvestment into newer vintage assets enhances the overall credit profile of the portfolio and further differentiates TRTX relative to many of our peers. Q2 also marked an important milestone in the continued evolution of our liability structure. During the quarter, we issued a $400 million Term Loan B with a seven-year maturity, added a new $100 million corporate revolving credit facility, upsized two existing secured financing arrangements by a combined $600 million, and entered into a new $500 million secured financing arrangement. These actions were effectively leverage and cost of funds neutral, allowing us to significantly strengthen and diversify our liability structure without sacrificing current earnings power.

Speaker #2: This continued reinvestment into newer vintage assets enhances the overall credit profile of the portfolio, and further differentiates TRTX relative to many of our peers.

Speaker #2: The second quarter also marked an important milestone in the continued evolution of our liability structure. During the quarter, loan B, with a 7-year maturity, added a new $100 million corporate revolving credit facility, upsized two existing secured financing arrangements by a combined $600 million, and entered into a new $500 million secured financing arrangement.

Doug Bouquard: During the quarter, we issued a $400 million Term Loan B with a seven-year maturity, added a new $100 million corporate revolving credit facility, upsized two existing secured financing arrangements by a combined $600 million, and entered into a new $500 million secured financing arrangement.

Speaker #2: Importantly, these actions were effectively leverage and cost of funds neutral, allowing us to significantly strengthen and diversify our liability structure without sacrificing current earnings power.

Doug Bouquard: These actions were effectively leverage and cost of funds neutral, allowing us to significantly strengthen and diversify our liability structure without sacrificing current earnings power.

Speaker #2: Beyond enhancing liquidity and financial flexibility, these transactions introduced a new source of long-duration, covenant-like corporate capital and further broadened our funding base. The expanding financing toolkit positions us to continue growing earning assets while maintaining our target leverage profile, particularly as we execute on our REO monetization strategy, and recycle capital into new investment opportunities.

Doug Bouquard: Beyond enhancing liquidity and financial flexibility, these transactions introduced a new source of long-duration covenant-like corporate capital and further broadened our funding base. The expanding financing toolkit positions us to continue growing earning assets while maintaining our target leverage profile, particularly as we execute on our REO monetization strategy and recycle capital into new investment opportunities. Collectively, these transactions demonstrate the strength of the TRTX platform and our ability to access multiple forms of capital, including bank, syndicated loan, and public bond markets, representing another important step in TRTX's evolution as a corporate borrower. Finally, we continue to view share repurchases as an attractive tool for creating shareholder value. During the quarter, we repurchased 1.3 million shares of common stock for a total consideration of $10.8 million at an average share price of $8.26 per share.

Speaker #2: Collectively, these transactions demonstrate the strength of the TRTX platform and our ability to access multiple forms of capital, including bank, syndicated loan, and public bond markets, representing another important step in TRTX's evolution as a corporate borrower.

Doug Bouquard: Collectively, these transactions demonstrate the strength of the TRTX platform and our ability to access multiple forms of capital, including bank, syndicated loan, and public bond markets, representing another important step in TRTX's evolution as a corporate borrower.

Speaker #2: Finally, we continue to view share repurchases as an attractive tool for creating shareholder value. During the quarter, we repurchased $1.3 million shares of common stock for a total consideration of $10.8 million.

Doug Bouquard: Finally, we continue to view share repurchases as an attractive tool for creating shareholder value. During the quarter, we repurchased 1.3 million shares of common stock for a total consideration of $10.8 million at an average share price of $8.26 per share.

Speaker #2: At an average share price of $8.26 per share, which allows us to invest additional capital into our business at what we believe is a meaningful discount to intrinsic value.

Doug Bouquard: Which allows us to invest additional capital into our business at what we believe is a meaningful discount to intrinsic value. As we enter H2 2026, we are operating from a position of strength. We have continued to grow the portfolio, maintained stable credit performance, enhanced our financing profile, and increased our financial flexibility. At the same time, we continue to see attractive investment opportunities and believe our competitive position has never been stronger. While market conditions remain dynamic, our strategy remains clear and consistent. Responsibly grow earning assets, maintain disciplined risk management, strengthen our balance sheet, and allocate capital in a manner that maximizes long-term shareholder value.

Speaker #2: As we enter the second half of 2026, we are operating from a position of strength. We have continued to grow the portfolio, maintained stable credit performance, enhanced our financing profile, and increased our financial flexibility.

Speaker #2: At the same time, we continue to see attractive investment opportunities and believe our competitive position has never been stronger. While market conditions remain dynamic, our strategy remains clear and consistent.

Doug Bouquard: At the same time, we continue to see attractive investment opportunities and believe our competitive position has never been stronger. While market conditions remain dynamic, our strategy remains clear and consistent. Responsibly grow earning assets, maintain disciplined risk management, strengthen our balance sheet, and allocate capital in a manner that maximizes long-term shareholder value.

Speaker #2: Responsibly grow earning assets, maintain disciplined risk management, strengthen our balance sheet, and allocate capital in a manner that maximizes long-term shareholder value. We continue to believe the market is not fully recognizing the earnings power of our platform, including the strength of our balance sheet, the breadth of TPG's integrated real estate debt and equity investment platform, and our unique ability to take advantage of the current opportunities set relative to competitors.

Doug Bouquard: We continue to believe the market is not fully recognizing the earnings power of our platform, including the strength of our balance sheet, the breadth of TPG's integrated real estate debt and equity investment platform, and our unique ability to take advantage of the current opportunity set relative to competitors. We believe the foundation we have built and the strategy we have executed over the past several years leaves us well positioned for continued success over the long term. With that, I will turn the call over to Brandon to discuss our financial results in more detail.

Speaker #2: We believe the foundation we have built and the strategy we have executed over the past several years leaves us well-positioned for continued success over the long term.

Doug Bouquard: We believe the foundation we have built and the strategy we have executed over the past several years leaves us well positioned for continued success over the long term. With that, I will turn the call over to Brandon to discuss our financial results in more detail.

Speaker #2: With that, I will turn the call over to Brandon to discuss our financial results in more detail.

Speaker #3: Thank you, Doug, and good morning. For the second quarter of 2026, TRTX reported gap net income of $9.4 million. Distributable earnings for the quarter was $17.6 million, or 23 cents per common share.

Brandon Fox: Thank you, Doug, and good morning. For Q2 2026, TRTX reported GAAP net income of $9.4 million. Distributable earnings for the quarter was $17.6 million, or $0.23 per common share. For the full year 2026, distributable earnings was $37.1 million, or $0.48 per common share, covering our common stock dividend of $0.48 per common share through 30 June. As Doug mentioned, we repurchased 1.3 million shares of common stock during the quarter and have $9.3 million remaining on the company's share repurchase plan at 30 June. Book value per common share was $10.95 at quarter-end.

Speaker #3: For the full year, 2026, distributable earnings was $37.1 million, or 48 cents per common share. Covering our common stock dividend of 48 cents per common share through June 30th.

Speaker #3: As Doug mentioned, we repurchased 1.3 million shares of common stock during the quarter and have $9.3 million remaining on the company's share repurchase plan as of June 30th.

Brandon Fox: As Doug mentioned, we repurchased 1.3 million shares of common stock during the quarter and have $9.3 million remaining on the company's share repurchase plan at 30 June. Book value per common share was $10.95 at quarter-end.

Speaker #3: Book value per common share was $10.95 at quarter end. During the second quarter, we, originated three first mortgage loans with total commitments of $466 million.

Brandon Fox: During Q2, we originated three first mortgage loans with total commitments of $466 million at a weighted average credit spread of 2.79%, and received loan repayments of $274.4 million, including one full office loan repayment of $227.1 million, which reduced our office exposure to 4.3% of total loan commitments as of 30 June. Quarter-over-quarter, net assets increased $190.4 million, or 5%, to $4.3 billion. Year-over-year, our net assets have grown 15%, or $551.4 million. At quarter end, our loan portfolio was 100% performing. During the quarter, we did not have any credit migration in our loan portfolio. Our weighted average risk rating for the loan portfolio is unchanged at 3.0. Our CECL reserve was flat quarter-over-quarter at 179 basis points. In total, our CECL reserve increased $3.5 million to $80.7 million, primarily due to net asset growth quarter-over-quarter.

Speaker #3: At a weighted average credit spread of 2.79%, we received loan repayments of $274.4 million, including one full office loan repayment of $227.1 million, which reduced our office exposure to 4.3% of total loan commitments as of June 30th.

Speaker #3: Quarter over quarter, net assets increased $190.4 million, or 5%, to $4.3 billion. Year over year, our net assets have grown 15%, or $551.4 million.

Brandon Fox: Quarter-over-quarter, net assets increased $190.4 million, or 5%, to $4.3 billion. Year-over-year, our net assets have grown 15%, or $551.4 million.

Speaker #3: At quarter end, our loan portfolio was 100% performing. During the quarter, we did not have any credit migration in our loan portfolio. Our weighted average risk rating for the loan portfolio is unchanged at 3.0.

Brandon Fox: At quarter end, our loan portfolio was 100% performing. During the quarter, we did not have any credit migration in our loan portfolio. Our weighted average risk rating for the loan portfolio is unchanged at 3.0. Our CECL reserve was flat quarter-over-quarter at 179 basis points. In total, our CECL reserve increased $3.5 million to $80.7 million, primarily due to net asset growth quarter-over-quarter.

Speaker #3: Our CISO reserve was flat quarter over quarter at $179 basis points. In total, our CISO reserve increased 3.5 million dollars to $80.7 million primarily due to net asset growth quarter over quarter.

Speaker #3: As of June 30th, 2026, our loan portfolio was $76.4% multifamily and industrial collateralized assets. Office now only makes up 4.3% of our loan portfolio at quarter end, down from 52.9% in June of 2021.

Brandon Fox: As of 30 June 2026, our loan portfolio was 76.4% multifamily and industrial collateralized assets. Office now only makes up 4.3% of our loan portfolio at quarter end, down from 52.9% in June 2021. From a capital markets perspective, this was an active and transformational quarter. During the quarter, we closed 1, a $400 million Term Loan B due in 2033, priced at 99.75%, carrying a 2.75% credit spread. 2, a $100 million corporate revolver due in 2031 with a 2.00% credit spread. 3, an upsize of 2 existing secured financing arrangements by a total of $600 million. 4, a new $500 million secured financing arrangement.

Speaker #3: From a capital markets perspective, this was an active and transformational quarter. During the quarter, we closed one a $400 million term loan B due in 2033, priced at $99.75%, carrying a 2.75% credit spread.

Brandon Fox: During the quarter, we closed 1, a $400 million Term Loan B due in 2033, priced at 99.75%, carrying a 2.75% credit spread. 2, a $100 million corporate revolver due in 2031 with a 2.00% credit spread. 3, an upsize of 2 existing secured financing arrangements by a total of $600 million. 4, a new $500 million secured financing arrangement.

Speaker #3: Two, a $100 million corporate revolver due in 2031 with a 2.00% credit spread. Three, an upsize of two existing secured financing arrangements by a total of $600 million; and four, a new $500 million secured financing arrangement.

Speaker #3: As part of these capital markets transactions, we were able to amend and align our financial covenants across our capital structure to industry-leading terms, including a maximum total debt-to-total assets ratio of 83.33% and an interest coverage ratio of not less than 1.3 times.

Brandon Fox: As part of these capital markets transactions, we were able to amend and align our financial covenants across our capital structure to industry-leading terms, including maximum total debt to total assets ratio of 83.33%, and an interest coverage ratio of not less than 1.3 times. We accomplished this capital structure transformation while remaining leverage and cost of funds neutral. We ended the quarter with near-term liquidity of $488.2 million, consisting of $65.6 million of cash on hand, including amounts held to satisfy liquidity covenants, undrawn capacity under secured financing arrangements of $317.4 million, $100 million of undrawn capacity on the corporate revolver, and CRE CLO reinvestment proceeds of $5.2 million. Additionally, we held unencumbered loan investments with an unpaid principal balance of $186 million that are eligible to be pledged under our existing financing arrangements.

Speaker #3: We accomplished this capital structure transformation while remaining leveraged and cost-of-funds neutral. We ended the quarter with near-term liquidity of $488.2 million, consisting of $65.6 million of cash on hand, including amounts held to satisfy liquidity covenants, and undrawn capacity under secured financing arrangements of $317.4 million.

Brandon Fox: We ended the quarter with near-term liquidity of $488.2 million, consisting of $65.6 million of cash on hand, including amounts held to satisfy liquidity covenants, undrawn capacity under secured financing arrangements of $317.4 million, $100 million of undrawn capacity on the corporate revolver, and CRE CLO reinvestment proceeds of $5.2 million. Additionally, we held unencumbered loan investments with an unpaid principal balance of $186 million that are eligible to be pledged under our existing financing arrangements.

Speaker #3: We had $100 million of undrawn capacity on the corporate revolver and CRE CLO reinvestment proceeds of $5.2 million. Additionally, we held unencumbered loan investments with an unpaid principal balance of $186 million that are eligible to be pledged under our existing financing arrangements.

Speaker #3: The company's liability structure is now 85.2% non-mark-to-market across 11 financing sources, and carries a weighted average cost of funds of 1.83%. Total leverage increased to 3.32 times from 3.1 times at March 31, 2026, as a result of our investment activity during the quarter.

Brandon Fox: The company's liability structure is now 85.2% non-mark-to-market across 11 financing sources and carries a weighted average cost of funds of 1.83%. Total leverage increased to 3.32 times from 3.1 times at 31 March 2026, as a result of our investment activity during the quarter. At quarter end, we had $1.8 billion of financing capacity available to support loan investment activity and were in compliance with all of our financial covenants. With that, we welcome your questions. Operator?

Speaker #3: At quarter end, we had $1.8 billion of financing capacity available to support loan investment activity and were in compliance with all of our financial covenants.

Brandon Fox: At quarter end, we had $1.8 billion of financing capacity available to support loan investment activity and were in compliance with all of our financial covenants. With that, we welcome your questions. Operator?

Speaker #3: With that, we welcome your questions. Operator.

Speaker #1: Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star 1 on your telephone keypad.

Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. One moment while we poll for questions. Our first question today will come from Gabe Pogor with Raymond James.

Speaker #1: A confirmation tone will indicate your line is in the question queue. You may press star 2 to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys.

Operator: You may press star two to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. One moment while we poll for questions. Our first question today will come from Gabe Pogor with Raymond James.

Speaker #1: One moment while we pull for questions. And our first question today will come from Gabe Pogi with Raymond James.

Speaker #4: Hey, good morning, guys. Thanks for taking the question. Can you talk about loan origination repayment timing in the quarter? It looks like the large New York office loan was repaid early in the quarter and you had a couple loans close very late.

Gabe Pogor: Hey, good morning, guys. Thanks for taking the question. Can you talk about loan origination repayment timing in the quarter? It looks like the large New York office loan was repaid early in the quarter, and you had a couple loans close very late. Just help us kind of reconcile timing as it pertains to Q1 run rate to Q2 run rate and how you think about that in the back H2 of the year. Thanks.

Gabe Poggi: Hey, good morning, guys. Thanks for taking the question. Can you talk about loan origination repayment timing in the quarter? It looks like the large New York office loan was repaid early in the quarter, and you had a couple loans close very late. Just help us kind of reconcile timing as it pertains to Q1 run rate to Q2 run rate and how you think about that in the back H2 of the year. Thanks.

Speaker #4: Just help us kind of reconcile timing as it pertains to one queue run rate to two queue run rate and how you think about that in the back half of the year.

Speaker #4: Thanks.

Speaker #3: Yes, sure. So I think as always, Gabe, you're sort of spot on in from a timing perspective, it was a pretty chunky group of repayments that all happened within the first three weeks of the month.

Doug Bouquard: Yeah, sure. I think as always, Gabe, you're sort of spot on. From a timing perspective, it was a pretty chunky group of repayments that all happened within the first three weeks of the month. The largest of which was that New York City office deal that paid off. Then as we saw that repayment coming, we began to sign deals up. Really about 70% of our new originations closed in the last three days of the quarter. That really is the kind of short version for what drove that drop in sort of DE quarter-over-quarter is just largely due to timing. Which, as we've said in the past, is just going to be the nature of the beast as we scale and grow our balance sheet.

Speaker #3: The largest of which was that New York City office deal that paid off. And then as we sort of saw that repayment coming, we began to sign deals up, but really about 70% of our new originations closed in the last three days of the quarter.

Doug Bouquard: Really about 70% of our new originations closed in the last three days of the quarter. That really is the kind of short version for what drove that drop in sort of DE quarter-over-quarter is just largely due to timing. Which, as we've said in the past, is just going to be the nature of the beast as we scale and grow our balance sheet.

Speaker #3: So that really is the kind of short version for what drove that drop in sort of DE quarter over quarter is just largely due to timing, which, as you said in the past, is just going to be the nature of the beast as we scale and grow our balance sheet.

Speaker #3: We're going to be making investments and risk decisions based on high-quality credits and our kind of sort of push the envelope. So for us, this is sort of a unique moment where we had, again, a sort of chunky flow of repayments the first few weeks of the quarter and then the loans that closed all closed or largely all closed at the end of the quarter.

Doug Bouquard: We're going to be making investments and risk decisions based on high-quality credits and are going to push the envelope. For us, this is sort of a unique moment where we had, again, a sort of chunky flow of repayments the first few weeks of the quarter and then the loans that closed all closed or largely all closed at the end of the quarter. The only thing I'll add to that is with investment activity and kind of as we look through to the rest of the year, it's very clear to us, as we've mentioned in prior calls, that a lot of the activity in our market remains refinancings. As those that have lived and breathed the lending business know, when it's a refinancing, sometimes the pressure for the borrower to close can be eased.

Speaker #3: The only I'll add to that is with investment activity and kind of as we look through to the rest of the year, it's very clear to us, as we've mentioned in prior calls, that a lot of the activity in our market remains refinancings.

Doug Bouquard: The only thing I'll add to that is with investment activity and kind of as we look through to the rest of the year, it's very clear to us, as we've mentioned in prior calls, that a lot of the activity in our market remains refinancings. As those that have lived and breathed the lending business know, when it's a refinancing, sometimes the pressure for the borrower to close can be eased.

Speaker #3: And as those that have lived and breathed the lending business know, when it's a refinancing, sometimes the pressure for the borrower to close can be eased.

Speaker #3: So what we've seen is just longer times from when we execute term sheets to closing, which can sometimes expose us to maybe a small amount of difference relative to our expected run rate.

Doug Bouquard: What we've seen is just longer times from when we execute term sheets to closing, which can sometimes expose us to maybe a small amount of difference relative to our expected run rate. I think when you kind of get to maybe your final question around the next few quarters, I mean, look, I think looking at our sort of aggregate net asset growth combined with our aggregate debt-to-equity ratio is sort of a better sign for where we're headed in terms of our expected DE. Again, we're going to be growing prudently and carefully, and there can be times where there are these sort of gaps between, again, when we receive repayments and when we make new investments.

Speaker #3: But I think when you kind of get to maybe your final question around the next few quarters, I mean, look, I think looking at our sort of aggregate net asset growth combined with our sort of aggregate debt-to-equity ratio is sort of a better sort of sign for where we're headed in terms of our expected DE and, again, we're going to be growing prudently and carefully and there can be times where there are these sort of gaps between, again, when we receive repayments and when we make new investments.

Doug Bouquard: I think looking at our sort of aggregate net asset growth combined with our aggregate debt-to-equity ratio is sort of a better sign for where we're headed in terms of our expected DE. Again, we're going to be growing prudently and carefully, and there can be times where there are these sort of gaps between, again, when we receive repayments and when we make new investments.

Speaker #4: Thanks, Doug. That's helpful. And a follow-up to what you just said: total leverage is 3.3x. Considering the macro, I know you guys have talked about 3.5x to 3.75x.

Gabe Pogor: Thanks, Doug. That's helpful. A follow-up to what you kind of just said is total leverage is 3.3x. Considering the macro, I know you guys have talked about 3.5x to 3.75x. Is that still the zone for the kind of the here and now with rate vol and what you just talked about with the refinancing environment, et cetera? Are we still on target for that target leverage ratio?

Gabe Poggi: Thanks, Doug. That's helpful. A follow-up to what you kind of just said is total leverage is 3.3x. Considering the macro, I know you guys have talked about 3.5x to 3.75x. Is that still the zone for the kind of the here and now with rate vol and what you just talked about with the refinancing environment, et cetera? Are we still on target for that target leverage ratio?

Speaker #4: Is that still the zone for kind of the here and now with rate vol and what you just talked about with the refinancing environment, etc.?

Speaker #4: Are we still on target for that target leverage ratio?

Speaker #3: Yeah, I'd say the short answer is yes. And where we've been really consistent and I would say that there's really no change at all to kind of how we're thinking about our strategy.

Doug Bouquard: Yeah. I'd say the short answer is yes. Where we've been really consistent, I would say that there's really no change at all to kind of how we're thinking about our strategy. I would say that first and foremost, our sort of investment paradigm is centered on making great credit investments, and that will continue to kind of drive both the sort of growth in our balance sheet and also the timing of our DE growth over time.

Speaker #3: I would say that, first and foremost, our sort of investment paradigm is centered on making great credit investments, and that will continue to drive both the growth in our balance sheet and also the timing of our DE growth over time.

Speaker #4: Thanks, guys. Appreciate it.

Gabe Pogor: Thanks, guys, appreciate it.

Gabe Poggi: Thanks, guys, appreciate it.

Speaker #3: Thanks, Gabe.

Doug Bouquard: Thanks, Gabe.

Speaker #1: Next, we'll hear from Zhang Hongzheng with JP Morgan. Chase and Company.

Operator: Next, we'll hear from Zhong Hong Zheng with JPMorgan Chase & Co.

Speaker #5: Yeah, hey. This is Hong on for Rick Shane. I guess could you provide an update on your REO portfolio? I think last quarter you talked about potentially looking forward to selling a couple of assets by the end of the year.

Hong Zhang: Yeah. Hey, this is Hong on for Richard Shane. I guess could you provide an update on your REO portfolio? I think last quarter you talked about potentially looking forward to selling a couple of assets by the end of the year. I'm just wondering if that's still the expectation.

Hong Zheng: Yeah. Hey, this is Hong on for Richard Shane. I guess could you provide an update on your REO portfolio? I think last quarter you talked about potentially looking forward to selling a couple of assets by the end of the year. I'm just wondering if that's still the expectation.

Speaker #5: I'm just wondering if that's still the expectation.

Speaker #3: Yeah, thanks. This is Ryan. As we communicated last quarter, you were correct. We continue to make good progress on the REO front. We still continue to expect to monetize and recycle a portion of that portfolio this year.

Doug Bouquard: Yeah. Thanks. This is Ryan. As we communicated last quarter, you are correct. We continue to make good progress on the REO front. We still continue to expect to monetize and recycle a portion of that portfolio this year. In the interim, operating fundamentals continue to improve. We hope to share an update in the coming months on that.

Ryan Roberto: Yeah. Thanks. This is Ryan. As we communicated last quarter, you are correct. We continue to make good progress on the REO front. We still continue to expect to monetize and recycle a portion of that portfolio this year. In the interim, operating fundamentals continue to improve. We hope to share an update in the coming months on that.

Speaker #3: So in the interim operating fundamentals continue to improve. We hope to share an update in the coming months on that.

Speaker #5: Got it. If I could sneak one other question in. I mean, your office loan exposure shrunk dramatically with the repayments. I guess looking forward, do you expect to just reduce your office exposure further, potentially to zero, or are you okay with that level going forward?

Hong Zhang: Got it. If I could sneak one other question in. Your office loan exposure shrunk dramatically with the repayments. I guess looking forward, do you expect to just reduce your office exposure further, potentially to zero, or are you okay with that level going forward?

Hong Zheng: Got it. If I could sneak one other question in. Your office loan exposure shrunk dramatically with the repayments. I guess looking forward, do you expect to just reduce your office exposure further, potentially to zero, or are you okay with that level going forward?

Speaker #3: That's a great question. Yeah. I mean, look, I think that really the substantial reduction in office has been primarily, or I'd say exclusively, related to—kind of driven by—I'll call it legacy office deals that we had originated many years ago.

Doug Bouquard: It's a great question. Yeah, I mean, look, I think that really the substantial reduction in office has been primarily, and I'd say exclusively really kind of driven by what I'll call kind of legacy office deals that we had originated many years ago. When we think about new investments, although we do not have any office deals currently signed up, there are office deals in our pipeline more broadly that we are evaluating. I wouldn't say that we are a no to office. I'd say that simply put, we're just being very selective. Frankly, it wouldn't surprise me if we did an office deal or two between now and year-end. Again, nothing's signed up, and just being very selective in that sector.

Speaker #3: When we think about new investments, although we do not have any office deals currently signed up, there are office deals in our pipeline more broadly that we are evaluating.

Speaker #3: So I wouldn't say that we are a "no" to office. I'd say that, simply put, we're just being very selective. Frankly, it wouldn't surprise me if we did an office deal or two between now and year-end.

Doug Bouquard: I wouldn't say that we are a no to office. I'd say that simply put, we're just being very selective. Frankly, it wouldn't surprise me if we did an office deal or two between now and year-end. Again, nothing's signed up, and just being very selective in that sector.

Speaker #3: But again, nothing signed up and just being very, very selective in that sector.

Speaker #5: Got it. Thanks.

Hong Zhang: Got it. Thanks.

Hong Zheng: Got it. Thanks.

Speaker #3: Thank you.

Doug Bouquard: Thank you.

Speaker #1: And next, we'll move to Tom Catherwood with BTIG.

Operator: Next, we'll move to Thomas Catherwood with BTIG.

Speaker #6: Thanks. And good morning, everybody. Maybe building on Gabe's first question, how did the balance sheet optimization all the work you did there impact Q2 results?

Thomas Catherwood: Thanks, and good morning, everybody. Maybe building on Gabe's first question, how did the balance sheet optimization, all the work you did there, impact Q2 results? What else needs to happen to get the balance sheet to where you kind of are in a perfectly optimized state?

Speaker #6: And what else needs to happen to get the balance sheet to where you kind of are in a perfectly optimized state?

Speaker #3: Yeah, thanks. This is Ryan. I'll answer the first part of this question and maybe Doug or Brandon will help us add on. But this quarter, as you kind of noted, we opportunistically kind of accessed the corporate loan market and what we believe are historically attractive terms.

Ryan Roberto: Yeah, thanks. This is Ryan. I'll answer the first part of this question, and maybe Doug or Brandon will have an add-on. This quarter, as you kind of noted, we opportunistically kind of accessed the corporate loan market at what we believe are historically attractive terms. I think as to why now, why did we do it this quarter, it was a unique period of time where we could immediately deploy the $400 million that we raised without really creating any earnings drag or increasing our cost of capital. What we were able to do is on a leverage-neutral basis and really a cost-to-funds basis, deploy $400 million to retire a legacy liability structure that was just in amortization mode and getting more expensive via each repayment. If you think long term, there'll be a lot of accretion to the balance sheet over time.

Speaker #3: I think as to why now, why did we do it this quarter? It was a unique period of time where we could immediately deploy the $400 million that we raised without really creating any earnings drag or increasing our cost of capital.

Ryan Roberto: I think as to why now, why did we do it this quarter, it was a unique period of time where we could immediately deploy the $400 million that we raised without really creating any earnings drag or increasing our cost of capital.

Speaker #3: So what we were able to do is on a leverage-neutral basis and really a cost of funds basis, deploy $400 million to retire a legacy liability structure that was just an amortization mode and getting more expensive via each repayment.

Ryan Roberto: What we were able to do is on a leverage-neutral basis and really a cost-to-funds basis, deploy $400 million to retire a legacy liability structure that was just in amortization mode and getting more expensive via each repayment. If you think long term, there'll be a lot of accretion to the balance sheet over time.

Speaker #3: So we think long-term, there'll be a lot of there'll be a lot of accretion to the balance sheet over time. So that's kind of the rationale and again, there wasn't much of an impact from the P&L standpoint.

Ryan Roberto: That's kind of the rationale, and again, there wasn't much of an impact from a P&L standpoint.

Speaker #6: Got it. And that accretion to sorry, go ahead, Doug.

Thomas Catherwood: Got it. That accretion.

Doug Bouquard: Yeah, look.

Doug Bouquard: Sorry, go ahead, Doug.

Thomas Catherwood: Sorry, go ahead, Doug.

Speaker #3: I'm sorry. Go ahead. No, no, please go ahead.

Doug Bouquard: Oh, sorry. Go ahead. No, please go ahead.

Speaker #6: No, I was just going to ask if that accretion to the balance sheet was from the structure of the way it is today, or was that retiring that older CLO and then kind of getting a new CLO out the door just to make the cost of capital more efficient?

Thomas Catherwood: No, I was just going to ask if that accretion to the balance sheet was from the structure the way it is today, or was that retiring that older CLO and then kind of getting a new CLO out the door just to make the cost of capital more efficient? What drives that accretion?

Speaker #6: What drives that accretion?

Speaker #3: Well, I think just having a piece of our liability structure that is long dated, low cost, non-mark to market, we know that over the next seven years, spreads are going to move and probably both directions.

Ryan Roberto: Well, I think just having a piece of our liability structure that is long-dated, low cost, non-mark-to-market. We know that over the next seven years, spreads are going to move in probably both directions. Just having a very stable part of our liability structure that'll allow us to be offensively oriented, I think is just a good thing to have long term. We think just, again, as we try to position the company for earnings growth and kind of an all-weather balance sheet, we think it's just the right thing to do. That's at least how we thought about it.

Speaker #3: So just having a very stable part of our liability structure that'll allow us to be offensively oriented, I think is just a good thing to have long-term.

Ryan Roberto: Just having a very stable part of our liability structure that'll allow us to be offensively oriented, I think is just a good thing to have long term. We think just, again, as we try to position the company for earnings growth and kind of an all-weather balance sheet, we think it's just the right thing to do. That's at least how we thought about it.

Speaker #3: So we think just again, as we try to position the company for earnings growth and kind of an all-weather balance sheet, we think it's just the right thing to do.

Speaker #3: So that's at least how we thought about it. Yeah. And look, I was going to add one other thing is huge credit to Ryan, who leads our capital markets team and frankly, our whole franchise on just what we were able to do on the liability side of our balance sheet.

Doug Bouquard: Yeah, look, I was going to add one other thing is huge credit to Ryan, who leads our capital markets team and frankly, our whole franchise on just what we were able to do on the liability side of our balance sheet. I think on page 12 of our supplemental, there's a sort of updated, pretty thoughtful summary. When you look at sort of all corners of it in terms of the really high percentage of non-mark-to-market, the long duration of the liability set, we really have built, I'd say, a sort of fortress liability structure. I think a lot of that is a credit to, A, the sort of de-risked balance sheet that we have relative to competitors. Also, I think it was great to get the acknowledgement from the corporate loan market that in fact we have a clear strategy.

Speaker #3: I think on page 12 of our supplemental, there's a sort of updated pretty thoughtful summary. But when you look at sort of all corners of it in terms of the really high percentage of non-mark to market, the long duration of the liability set, we really have built, I'd say, a sort of fortress liability structure.

Doug Bouquard: When you look at sort of all corners of it in terms of the really high percentage of non-mark-to-market, the long duration of the liability set, we really have built, I'd say, a sort of fortress liability structure. I think a lot of that is a credit to, A, the sort of de-risked balance sheet that we have relative to competitors. Also, I think it was great to get the acknowledgement from the corporate loan market that in fact we have a clear strategy.

Speaker #3: And I think a lot of that is a credit to A, the sort of de-risked balance sheet that we have relatively competitors. But then also, I think it was great to get the acknowledgment from the corporate loan market that in fact, we have that clear strategy.

Speaker #3: We have a very low-risk balance sheet. And again, I think we've been kind of rewarded by what I'll call the sort of debt side of our balance sheet very resoundingly.

Doug Bouquard: We have a very low-risk balance sheet. Again, I think we've been kind of rewarded by what I'll call the sort of debt side of our balance sheet very resoundingly. Big congrats to Ryan and the team.

Speaker #3: So big credit to Ryan and the team.

Speaker #6: Got it. Appreciate that color. And then last one for me, maybe Doug, a bit of a broader question on rates and the impact on CRE.

Thomas Catherwood: Got it. Appreciate that color. Last one for me, maybe Doug, a bit of a broader question on rates and the impact on CRE. You mentioned that almost 70% of your portfolio is newer vintage post-2023 loans. As the 10-year stays 4, 6, and above, how does that increase the potential for some of those legacy loans to just not be able to refinance? There's no equity left, and we end up getting more watch list migration. On the flip side, are you seeing kind of new origination opportunities where buyers would normally be going to agency financing and they're choosing bridge loans just because the rates are more attractive than what they would get in a longer-term fixed rate? How is it impacting both sides of the equation right now?

Speaker #6: You mentioned that almost 70% of your portfolio is newer vintage post-2023 loans. But as the 10-year stays 4.6 and above, how does that increase the potential for some of those legacy loans to just not be able to refinance?

Speaker #6: There's no equity left, and we end up getting more watch-list migration. Or on the flip side, are you seeing kind of new origination opportunities where buyers would normally be going to agency financing, and they're choosing bridge loans just because the rates are more attractive than what they would be getting on longer-term fixed-rate?

Thomas Catherwood: There's no equity left, and we end up getting more watch list migration. On the flip side, are you seeing kind of new origination opportunities where buyers would normally be going to agency financing and they're choosing bridge loans just because the rates are more attractive than what they would get in a longer-term fixed rate? How is it impacting both sides of the equation right now?

Speaker #6: How is it impacting both sides of the equation right now?

Speaker #3: Sure. Yeah. I mean, I'll say first, if again, I guess we'll find out later today exactly the sort of path of the Fed. But I'd say first and foremost, I think the current rate complex is definitely driving two very clear trends in our market.

Doug Bouquard: Sure, yeah. I mean, I'll say first, if again, I guess we'll find out later today exactly the sort of path of the Federal Reserve, so it'll be interesting. I think first and foremost, I think the current rate complex is definitely driving two very clear trends in our market. I think one is both marginally elevated rates, but more particularly, actually rate volatility tends to reduce transaction activity. I think that that reduced transaction activity, I think, has led to two things. One is I'd say we are on the margin seeing slower repayments. Two, I think what you're seeing is just frankly a new origination market where we're still seeing primarily refinancing. Those are kind of the two kind of first-order effects.

Speaker #3: I think one is both marginally elevated rates, but more particularly actually rate volatility tends to reduce transaction activity. And I think that that reduced transaction activity, I think, has led to two things.

Doug Bouquard: I think that that reduced transaction activity, I think, has led to two things. One is I'd say we are on the margin seeing slower repayments. Two, I think what you're seeing is just frankly a new origination market where we're still seeing primarily refinancing. Those are kind of the two kind of first-order effects.

Speaker #3: One is, I'd say we are on the margin seeing slower I think what you're seeing is just frankly, a new origination market where we're still seeing primarily refinancing.

Speaker #3: So this is kind of the two kind of first-order effects. When I think about our balance sheet, versus the is if we had a portfolio of, let's just say, 100% loans that were originated, let's say, pre-Fed hike, I think a move higher in rates could really kind of exacerbate the sort of breaking of those capital structures and potentially some further credit stress.

Doug Bouquard: When I think about our balance sheet versus the market, probably where we're different is if we had a portfolio of, let's just say, 100% loans that were originated, let's say, pre-Federal Reserve hike, I think a move higher in rates could really kind of exacerbate the sort of breaking of those capital structures and potentially some further credit stress. Whereas our balance sheet is generally different from the rest of the market in that close to about 70% of it is originated post-Federal Reserve hike. In some ways, we view a higher rate complex as on the margin a positive for us because that ultimately, I think that's on page 14 of the supplemental, you can look at sort of moves in the index rate and how that affects our earnings. Simply put, as SOFR goes higher, that's going to be a net positive for our platform.

Speaker #3: Whereas our balance sheet is generally different from the rest of the market in that close to about 70% of it is originated post-Fed hike.

Doug Bouquard: Whereas our balance sheet is generally different from the rest of the market in that close to about 70% of it is originated post-Federal Reserve hike. In some ways, we view a higher rate complex as on the margin a positive for us because that ultimately, I think that's on page 14 of the supplemental, you can look at sort of moves in the index rate and how that affects our earnings. Simply put, as SOFR goes higher, that's going to be a net positive for our platform.

Speaker #3: So, in some ways, we view a higher rate complex as on the margin of positive for us because ultimately—I think that's on page 14 of the supplemental.

Speaker #3: You can look at sort of moves in the index rate and how that affects our earnings. And simply put, as as SOFR goes high, that's going to be a net positive for our platform.

Speaker #3: So again, we're somewhat unique in that, I think, because we have newer vintage collateral—$1.7 billion of new loans over the past year—we're going to have, I think, probably a more positive earnings outcome if rates do either stay or, frankly, rise from here.

Doug Bouquard: Again, we're somewhat unique in that I think because we have newer vintage collateral, we've done $1.7 billion of new loans over the past year. We're going to have, I think, probably a more positive earnings outcome if rates do either stay or frankly rise from here.

Speaker #5: Got it. That's it for me. Thanks, everyone.

Thomas Catherwood: Got it. That's it for me. Thanks, everyone.

Speaker #3: Appreciate it. Thanks, Tom.

Doug Bouquard: Appreciate it. Thanks, Tom.

Speaker #1: And next, we'll hear from Chris Moeller with Citizens Capital Markets.

Operator: Next we'll hear from Chris Muller with Citizens Capital Markets.

Speaker #6: Hey, guys. Thanks for taking the question. And congrats on all the progress on the balance sheet. So I guess following up on a prior question on the new financings, I hear you guys on the cost of funds and leverage neutral.

Chris Muller: Hey, guys. Thanks for taking the question and congrats on all the progress on the balance sheet. I guess following up on a prior question on the new financings, I hear you guys on the cost of funds and leverage neutral, but were there fees or any drag on earnings that hit in the quarter? I'm just trying to think through the earnings run rate and if there was an impact from that in the quarter or not.

Speaker #6: But were there fees or any drag on earnings that hit in the quarter? I'm just trying to think through the earnings run rate and if there was an impact from that in the quarter or not.

Speaker #5: Yeah. No, that's a very good question. And obviously, there were fees associated with the transaction. The transaction closed mid-quarter. So middle of May. And you will have some amortization of the fees in the quarter for the quarter.

Brandon Fox: Yeah, no, that's a very good question. Obviously, there were fees associated with the transaction. The transaction closed mid-quarter, so middle of May, and you will have some amortization of the fees in the quarter for the quarter. Within our debt footnote, you can see the components of it, but there were about $8 million or so of fees that got partially amortized in, and it is over the life of the instrument itself, so between five and seven years, given the Term Loan B and the corporate revolver maturity dates.

Speaker #5: And within our debt footnote, you can see the components of it. But there were about $8 million or so of fees that got partially amortized in.

Brandon Fox: Within our debt footnote, you can see the components of it, but there were about $8 million or so of fees that got partially amortized in, and it is over the life of the instrument itself, so between five and seven years, given the Term Loan B and the corporate revolver maturity dates.

Speaker #5: And it's over the life of the instrument itself—so between five and seven years, given the term loan and the corporate revolver maturity dates.

Speaker #6: Got it. That's helpful. And then I guess changing gears a little bit to repayment. So repayments excluding the large office loan, we're pretty low.

Chris Muller: Got it. That is helpful. I guess changing gears a little bit to repayments. Repayments, excluding a large office loan, were pretty low. I guess, what are you guys expecting in terms of repayments in the back half of the year? Is the slower pace of repayments just due to a slower lending pace you guys did back in 2023 and 2024?

Speaker #6: So, I guess what are you guys expecting in terms of repayments in the back half of the year? And is the slower pace of repayments just due to a slower lending pace?

Speaker #6: You guys did back in '23 and '24?

Speaker #3: I think there's a few things. I think one does dovetail with what I'd mentioned earlier as your list of Tom's question. From a balance sheet perspective, because we have again, largely kind of post-Fed hike collateral, what we're seeing is that those loans are more recently originated and in many cases have call protection.

Doug Bouquard: I think there is a few things. I think one does dovetail with what I mentioned earlier as it relates to Tom's question. From a balance sheet perspective, because we have, again, largely post-Fed hike collateral, what we are seeing is that those loans are more recently originated and in many cases have call protection. We are just going to see from an organic perspective, I think a lower level of repayments versus competitors that probably have more pre-Fed hike exposure. That is one. Two, look, I think that it can be idiosyncratic, as I have shared. I mean, even that New York City office deal that I had mentioned paid off early in the quarter. The sort of timing on that was definitely moving around.

Speaker #3: So we're just going to see, just from an organic perspective, I think a lower level of repayments versus competitors that probably have more pre-Fed hike exposure.

Doug Bouquard: We are just going to see from an organic perspective, I think a lower level of repayments versus competitors that probably have more pre-Fed hike exposure. That is one. Two, look, I think that it can be idiosyncratic, as I have shared. I mean, even that New York City office deal that I had mentioned paid off early in the quarter. The sort of timing on that was definitely moving around.

Speaker #3: That's one. And then, two, look, I think that it can be idiosyncratic, as I've shared. I mean, even that New York City office deal that I mentioned paid off early in the quarter.

Speaker #3: I mean, the sort of timing on that was definitely moving around. We sort of knew it was going to happen. But at the same time, sometimes as you know, kind of getting a buyer and a seller and a new lender all in the same room to close on the same day can be challenging.

Doug Bouquard: We sort of knew it was going to happen. At the same time, sometimes as you know, kind of getting a buyer, a seller, and a new lender all in the same room to close on the same day can be challenging. That is kind of what we are seeing. I think it is that dynamic, I think combined with, look, I think that conviction level, I think across our borrower base is not incredibly high right now. We are obviously both a debt and equity platform, so we are seeing kind of both sides of the coin. I think that if you are on the real estate equity side of the coin right now, it is a tricky market to really want to deploy capital just sort of in the face of a lot of the different kind of trends that are happening.

Speaker #3: And that's kind of what we're seeing. So I think if that dynamic I think combined with look, I think that conviction level I think across our borrower base is not incredibly high right now.

Speaker #3: I mean, we're obviously both the debt and equity platform. So we're seeing kind of both sides of the coin. I think that if you're on the real estate equity side of the coin right now, I mean, it's a tricky market to really want to deploy capital just sort of in the face of a lot of the different kind of trends that are happening.

Doug Bouquard: We are obviously both a debt and equity platform, so we are seeing kind of both sides of the coin. I think that if you are on the real estate equity side of the coin right now, it is a tricky market to really want to deploy capital just sort of in the face of a lot of the different kind of trends that are happening.

Speaker #3: So I think those are the two factors that I'd probably highlight as it relates to repayments. I think, again, the last thing I'll add, perhaps, is when you look at our repayments going forward, again, I think that we have also primarily multifamily and industrial collateral.

Doug Bouquard: I think those are the two factors that I'd probably highlight as it relates to repayments. I think, again, the last thing I'll add perhaps is when we look at our repayments going forward, again, I think that we have also primarily multifamily and industrial collateral, and the business plans there are relatively straightforward and sort of allow for us to have perhaps a better window into what that repayment profile is going to look like over the next coming quarters.

Speaker #3: And the business plans there are relatively straightforward and sort of allow for us to have perhaps a better window into what that repayment profile is going to look like over the next coming quarters.

Speaker #6: Got it. That's all very helpful. Appreciate you guys taking the questions today.

Chris Muller: Got it. That's all very helpful. Appreciate you guys taking the questions today.

Speaker #3: Yeah. No problem. Thanks a lot.

Doug Bouquard: Yep, no problem. Thanks a lot.

Speaker #1: There are no further questions at this time. I would like to turn the floor back to management for closing remarks.

Operator: There are no further questions at this time. I would like to turn the floor back to management for closing remarks.

Speaker #4: Yeah, this is Doug Bouquard. And again, just wanted to thank everyone for taking the time this morning on the call. And we look forward to updating you on further progress.

Doug Bouquard: This is Doug Bouquard. Again, just wanted to thank everyone for taking the time this morning on the call. We look forward to updating you on further progress. Thank you very much.

Speaker #4: Thank you very much.

Operator: Thank you. This does conclude today's teleconference. We thank you for your participation. You may disconnect your lines at this time.

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