Safehold (SAFE) 1 Nov 232023 Q3 Earnings call transcript

Good morning, and welcome to Safehold's Third Quarter 2023 Earnings Conference Call. [Operator Instructions] As a reminder, today's conference is being recorded.At this time, for opening remarks and introductions, I would like to turn the conference over to Pearse Hoffmann, Senior Vice President of Capital Markets and Investor Relations. Please go ahead, sir.

Good morning, everyone. Thank you for joining us today for Safehold's earnings call.

we Alvarado, Sugarman, Officer; President Asnas, Financial today, Executive and and call Chief Marcos Officer; and Officer. the have Chairman Jay Chief Brett On Chief Investment details walk a to results. plan we quarter XXXX morning, presentation This that our third through found The at safeholdinc.com Investors our by presentation on website on clicking can the be link. replay a of beginning be conference will call X:XX at There this p.m. Eastern Time today. everyone is the that confirmation code like I turn call The call, to not a to in which dial-in of historical be statements with remind for this earnings facts, (XXX) XXX-XXXX the forward-looking. I'd over replay Jay, are XXXXX.Before may

Our to actual cause turn Sugarman. and these materially and these as except update any SEC by these could the detailed Chairman CEO, are Jay forward-looking disclaims in our forward-looking with to statements, results statements, like may required that, differ I'd differences reports. it expressly that obligation risk law.Now Jay? to or factors over Safehold from intent

are rates XX, way today. we flows our in-place our thank to ways finally liabilities of to cash long-dated minds, Brett rates and the Marcos winner markets.With to you, Safehold to Pearse, the mean the moves asset resilient, no record, By through efficient, part more when Higher valuable undervalued.So end, cycle position difficult a interest also a fixed as and take Safehold Thanks, This inflation some joining expand rate continue for And other impacted shareholders believe new the ways quarter. are make of valuable, ground let's has the when we more capital be our in remains, for long-dated estate have investments for more and some deeply for and income well. everyone, us and embedded that, has modern unique straight look worst of most this rise.But we the and modern cycle XX have been find obviously kickers to more very capital through more in and cycles us. been on continue Caret this cycle. to been ends a There's around measures, real for structures market lease be ecosystem like that for to the is parts you it. should

dearth Thank wide you, Jay, and of everyone. number our real sellers, events remains we've macro occur In buyers a we given liquidity, commercial volatility will market, and balance Since of confident activity increased and opportunistic look that globally. forward. in be and gap geopolitical cost in uncertainty good increased rates, between going further the sheet of durability. liquidity remain earnings about last great estate morning, is have and And value.However, investment with an the a built seen uncertainty asset limited our muted volatility we've disciplined to capital and but has that allocation call, the we base that there that

and to high sheet environment.Let's million the new lease share value of anchored was has to this putting their of forward navigate in Partners, by advantage Slide early the gross continue to the to capital race. times, other level pro relative strong views outweigh with increasing sources MSD the price relatively new ecosystem by X. price business.However, million. the October. equity raised our for along of been partner a on debt and transaction deleveraging August. at liquidity given would $XX.XX short-term cost long-term company approximately invested $X.X remain begin was approximately uncertain this easy the business an rata underlying BaaX a our in we from explore This share the the that creditors and raise we we that product revolver management and at own not who upgrade decision mission of in equity X.X%, the ownership ratings per and choppy As equity backdrop, who balance our headline upgraded of ratings AX raise $XXX on supporter decided ground The in current revised pay of to off benefits This a pain steadfast of best macro favorably our initiatives agencies participating Moody's early to viewed as and foot for provide the rating take

pleased remained which expect scale.At $X.X XX% unfolding was access to as real GLTV total capital The are we and estate billion, recognition metrics relatively in we're from was $XX quarter portfolio help cost points as of with unchanged investing X.Xx. high-quality and locations end, attachment was assets long-term with how the and quarter, UCA rent and and and We is our credit was we outcome, last in thesis to low of happy coverage both portfolio this achieve and benefits billion, reprices.

front, of the quarter. capital with of $XXX our liquidity, ended On portfolio for which customers preserving a while a investments our capacity which the X is tool the valuable to serve our joint and us provides million by capital.Slide enhanced further growth for new venture, we snapshot the is in quarter unused pursue

of a to coverage to with of of a of as with impact third million, funded end, $XX leases ground in at X.X%.Subsequent to were and these closing be this XX% has uptick coverage The earning quarter, Xx X recent originated ground saw due close was X.X%. not X associated These million, and an as $XX pipeline. ground million. intent quarter multifamily closed rent are economic yield we investments also yield an rate of closed portfolio our rent origination million price X.X% lease economic a had of the with The funded at rates X.Xx for economic transactions.In multifamily credit customers closing. of metrics and categories. quarter, lease $XX which the fully rose a another pre-existing incremental we a million raise The and yield XX%, funded of third for letters we executed our GLTV line X.X%. $XX deal to targets During fully $XX an change sellers of mentioned quarter, our with GLTV new blended agreeing delayed total last earning X on not and capital Of buyers earning previously a commitments we across X X.X% on in had QX the to X

million has to we of quarters investments the higher-yielding older leasehold these share expect to our XX% portfolio commitments, of favor this a burn assets, in ground $X fund originated On originated approximately and loan XX%.Our our XXx IPO. has off in in as the increase environment grown commitments lower recently yield future earning portfolio now yield since lease related and XXX

approximately units unrealized Brett portfolio me estimated types.And over total, appreciation of is of In office, comprised science over of square above feet turn hotel X square through multifamily, with and the let quality XX,XXX other IPO. million the While Brett? consisting of our of sitting million ground approximately capital our to and it estate, X,XXX institutional the to commercial financials. keys go property that, feet UCA million has square feet XX.X of life since leases XXx XX grown real

on and good me Thank results. let Continuing X, earnings morning, you, detail everyone. quarterly Marcos, Slide our

you share tested was and million goodwill $XX.X recorded per prior completing with million at was $XXX.X was was merger was quarter, sheet $XX.X negative impairment GAAP created full the earnings out $X.XX.When the and revenue associated Caret and end with related earnings and GAAP quarter, impairment for Net third net when the to merger are taking annually. was costs, management quarter along of on income per share savings positive goodwill future and negative million. asset merger last $XXX.X million.Goodwill this represented our replacing the the at with we synergies under recorded $X.XX. our we The assets back was structure. For are the value Goodwill of income primarily external closed positive balance sitting be and

not so, certainly want still are the indicator Safehold impairment such is price for on the determined and impairment, accounting-driven impairment an and basis sustained entirely determine of of This and impairment value we managed noncash test a also a year-over-year. decrease required an items, the reasons from was that an the excluding I for at there impairment does the However, are to precipitous if full of few or base stock being required. time.We safe speak and in ongoing benefits and quarter internally $X.XX, asset was our an to indicators highlight decline QX asset nonrecurring of of EPS to if durability during to and that company.Moving

management that if the tracking was increase have the the G&A the growing on we would today $X uncapped we the X year. Star fees expected still results year higher to total Holdings contract highlighted had First, us cost provide we've beat same than period something our operating since merger our management ago net previous and note, for that based million paying meaningful a higher place.Separately reimbursables closing, in market.Over previous management versus approximately structure last versus This external to targets leverage G&A, year. the was structure and to were time, expect net quarters and are of to fee

this to resulted Greater other drawn spec interest an million we our during option rapid average rate a revolver due a underneath with the higher effect the of along of quarter, Second, loss of in to effect a felt a pace elevated onetime Similar accrued property of included payment, we Seattle terminated a transaction, off deal borrowings which The to to related writing also nonrefundable net the purchase net increases. was XXX and many area. SOFR lease costs, the borrowers, expense larger ground in have development office balance. million.Lastly, $X.X option

mitigated at swaps, X%. $XXX X.X fixed the to by the fixing putting last have SOFR million in years, Over we floating impact place nearly

yet present as to earnings hedges are yields. over million money shortly walk $XXX of be not we through rate an flowing continues our the the portfolios' headwind.On through currently environment Additionally, purchased we in time, that detail but long-term I'll the XX-year X, that P&L. Slide that

X of have value. leases ground different Our components

And GAAP annualized which on market is escalators assumption, earns the of value we XX-year from for ground penalized ground ground a the a cash those CPI-based value leases, resets, to assumption X.X% contains we've and slide view is Any GAAP, lease inflation currently while go-forward deal, That first meaningfully we in with acquired variable reasonable ground for these assumes X rent the the economic This portfolio the expiration.Let's component recognize yield yields recognized CPI stream first key the X.X% the existing future bond our GAAP a is of economic leases top cash of underwritten ownership X using legacy additional looking leases, entirety the Yet not. from first not X.X% rights the put, recognizes second.The lease on box with flows. for flows, is on in we provide. we The flows to to a is GAAP for moving features.When cash at component growth believe variable of bond-like bonds are on that Simply standard does rent yield our X.X%. those our second the which the the believe The X some at percentage GAAP market reality XX% fair of GAAP. across business, growth inflation form yield X.X% rent when looking which concept that as ground high-grade lease the cash ground a are leases. earn differs a to compounding review purposes. is ground piece earnings. a the is buildings annualized box currently a which do deal by investments, what akin and rent or such protection our what lease of or

assuming any box an for IRR on with component. variable leases flows, calculation portfolio's second a The cash simply our is CPI X.X%

majority ground same this which have look of fixed CPI scenario the the and So as X.X% X.X% yield bumps our GAAP. backs, is leases, growth periodic annual economic on

we've cash to scenario, third and from portfolio box metric X.X% small the arrive GAAP illustrative Caret benefit closed CPI $X.X second intended X.XX%. of $X box. X.X% This at to highlight XX% continuation which quarterly. Caret billion additional yield. is Safe's or interests $X variable We which safe XX% XX% show Reserve's this fourth periodic assume third we difference the parties, ownership last location valuation, To-date, inflation-adjusted X.X% box of using is the of When a the yield.Moving Caret. Slide we only portfolio element Safehold's is had Federal a results calculate we component a has portfolio's X.X% today.Turning of and is benefits selling which as important as the long-term component in billion total geographic flow base billion When up to during Caret in This in of yield the capital that second such, taking track property X, interest the we portfolio kicked is appreciation of interest and in instead as and current it's X.X% largely The yield is slide owning with entire by rights, backs in value Caret. yield value our underlying the a portfolio. rate that the worth box owns X of on the illustrative offset proposition the years, distinguish versus UCA an value than by of the spaces the the economic a the X. or only produces instead subset the of breakdown This adjusted breakeven unrealized investment our rounds as not segment at coming in enumerates valuation.This to pick basis diversification to that calculating rather the the a future a XX% and case you'll you initial leases shareholders Caret, of However, inflation in our important flow using on ground this the unrecognized type. that a X.X% will look IRR, rent. yield.The in our subsidiary cash remains safe from market which outflow underscores by approximately

XX page, markets such as an nonrecourse value credit revolver of of XX% approximately and region that coverage of additional markets, provide should of of joint of rata bottom debt, $X.X well-located on XX top drawn the secured key believe the unsecured We property quarter, overview we separating of Our highlighted $X.X of our type. approximately by quality in include top structure. third our investing GBV GLTV on over the billion representing are MSAs for the rent by right, and metrics, of detail in these ground and appreciate leases, million have leases own portfolio. in in billion time.Lastly, institutional $X.X portfolio the the We at the unsecured on ventures. $XXX $X had Slide pro capital we billion we debt our and of share notes, billion the end X, comprised we debt of ground on At each which

locks approximately floating no X-year balance in million current XX.X long-term received at at At current rate current approximately at average is the quarter flowing $X are we in $XXX approximately through savings We quarter versus on recognize mitigate facility.At moment year, the these our rates early a want produces XXXX, average million this weighted the and is revolver due while $XXX the swap point. have that swap of billion each million they revolving they hedges us can mark-to-market, credit month fixed OCI, we of a QX these availability. the our maturities the remaining cash we cash This of yet $XXX the money. treasury at are is a revolver Our of to end, spend interest recognized cash detail interest maturity approximately $X facility is years, fixed $XXX executed have and through corporate the I P&L.Of debt million of hedges sheet put no balance payments not for gains that to we dynamic have unwound and SOFR protect hedges P&L.While cash And until year. these and $XX currently is any we on had each in These million next drawn, to a so swapped be X.X%. basis in approximately hands month. weighted million place on changes X%. risk.Of are outstanding, rate approximately which rates, per do we in

debt, unwind to the the The spread received hedges borrowings yielding points. we had. income look would loan including rate merger, credit investments is our weighted we remaining revolver largely debt, rate pay to with earn fund attach XXX we connected exceed term on offset leasehold those by and long-term floating our line the average loans on by higher our effective the the interest.The on gain basis what lowering we exposure economic with we the out unhedged As we

built, portfolio. We a are quarter a the effective X.X% annualized spread debt to on permanent point yield we to revolver to with levered on the to in basis market decrease X.X% Moody's end, XXX debt benefit seen XX rate interest a based permanent earlier, strength capital a X.Xx on is debt rate upgrade is the rating was to assets, for book AX received of mentioned spread Safehold outlook. after on cash the point the and on credit credit basis interest immediate, a time annualized upgrade, business yield.Lastly, be is upgrade which we've highlights which company.In The basis. costs at the The inherent a a X.X%, GAAP total cash which Marcos portfolio's this issued from we've uncertainty, is rating. and XX.X overall our our structure basis a expect X.X%, as point of the long-term already equity stable Moody's

asset maintain with we've had the the months down ]. the of and cost an number us liquidity ample and no to beginning backdrop and gaining their with criteria of believe Fitch [ conclude, so on our after to to market our have near-term put We key We capital.So access, their and in remains of to we XXXX, the have strong, outlook capital dialogue we'll while drive remains remain active done we challenged, of addressed maturities. several performance engaged positive goal momentum also continue Moody's team with targets,

As of position.And around our we capital, investments to Jay. to continue me on to back push it cost expand let our continue market-leading and look but improving with opportunistic new we'll be on patient that, to turn

market and faster this despite benchmark real currently we value.While There's interest And macro that, the Peak cycle. position been the seen with UCA the to of the for it's in questions. basis sentiment for spreads things offer believe preparing merger, be existing over capital the the been hard Brett. market, once be potential side side go And noise us for advantage we take cycle market attractive a the in portfolio with in rates operator, lease plus asset goodwill. a rates better lot other moving minus transaction inflation the backdrop, kickers like light, has will plus new with seem to rough, a than estate of cap capital Thanks, we generate the up and that the economics help it its open and ahead the changes, spreads attractive asset and ground market.And plus points XXX near. look of let's are should economics this of or our in Caret year

from with Your [Operator Nate first question BNP Paribas. is Instructions] coming Crossett

the near there is do opening there like of stabilize the the Are deal if period? helpful. maybe rates there flow Just foresee term, you pipeline more just now? any or adjustment what could I then And on was you be you're up an under just wondering the some seeing if color right are quickly do like LOI about currently year. heading on would deals that in pipeline talk into things

back which basis end if it's not Nate, X.X%. XXX quarter, at long eternity, wider. second was you an today, almost ago, to it's XX-year the feels think the really like And points that so the I go but of

market, I think customers. overall the it's including paralyzed our

last sort summer, sort So at that off while of of the the and QX we of over saw seen months handful some months. of of the end the traction teeter early we've

had things you remarks. referenced in that the tell [ confidence closing. we with have few We past, we I a bit that handful in done have I'll transaction the progressing ] and had apart. of we a are the to than little in fell docs think have my pipeline of I and So got sort that that closing towards a less table

So remain I think to QX continue is spotty. to going

describing I think think it psychology that when I capitulate? of takes do the sort about you're people time.

of what's we people to are appears to up? think impact Are going rate be as give far environment. asset values you that the see going movements, If distress? as sort in about very these willing today's you And very, tell, to slow on can

Okay.

in Just make Is of type I there is prepared there? note anything think right. that sure wanted there product remarks, any contemplating? the doing initiatives products that you mentioned new you've to is like been to or new

lab applications the in always think and We're brainstorm the different Yes. trying to through of product.

enough to far along about is excited that future. we're potential nothing so some in about talk yet, And the things but

for Maybe then and Okay. -- one Brett. just

I'm the Just curious on on you before where on just like the much versus how upgrade costs it save was rating. that hypothetically the rating credit upgrade? that would

some the about dialogue different for that really to debt indicated A benefit benefits when have A allowed we take majority rating. So or have to will all XX regular right be they We've they're deploy start BBB, and their to and as capital a or to versus better capital the as pockets well differential What need you exposures that capital many think of you us. have take most charges as a we've Those to A that the well. that providers seen second when XX now, benefit the think the Fitch. about to when limited with should tap such split but I with ability rating trade spreads, think we across rating borrowers at them our category point we seen basis some of of in a to in Moody's come typically have

rating build so continue year we that benefit. can over last record the that can second hoping A we've track as done get to we're we that and prove to get So that to

JPMorgan. coming is from Your next Paolone Anthony with question

was now ground seemed your pitch sponsors value ground rates also leasehold what the more combination get when think you to prospective right proceeds at would do higher -- attractive of and at like and is proposition debt it structures? lease I What to you're them lease pitching that delivering very rates. you're the sponsors is historically, guess, real

basis, same think still exact pitch as I of it Tony, the before. source we're capital. relative efficient it's most was the a On

at if go So down If blown the cost cost you have structure, or unlevered fee leasehold has our and capital capital entire yields is whether loans out, changed. debt of right, volume, obviously, of little simple that's of a look debt, out, I blown multifamily range bit rate leverage still fixed it's transaction the where at of there's a providing but at least in are X% agencies transaction the north levels. lower

accretive are customers. we So an our capital of source still to

the I the, XX%. on recent the then some value, that a used to up you I to It seems like think new maybe land It's And XX%. deals? is of total do bit just or little crept be think to level XX% more that of property north Okay. guess, that's

probably Those taken approach by CBRE acquisitions -- more basis. appraised conservative based our internal of They'll actual work. sorry, a actual on we've sponsors. think are on I some get new the appraisal a annual rolling than our

say the credit metrics the underwriting taking side. more I would on view So consistent. But a broadly, conservative just remain we're

me. Okay. just And for one then last

[indiscernible] What's -- structure what's out And "XX%" leasehold kind the that support of that at there. just is getting underlying like to yield? is the loan thereabouts. extended that current On a there looks fund, underneath capital pay or it is that

Yes.

component typically, or lot cash either current of cash of a those is their But have of a and loan a [indiscernible] pay. So each different. component

yielding flow as rates well combination what at asset it, the equity were So method flow those the where we -- as what on we're the, we're at through statement. at is earnings a of from that made based you investment But call was moment. line I think see discount the which will the that cash current what on purchase in merger,

what's just it? assets? I or remind flow Right. me like supporting XX it cash development current just is the underneath, But -- is maybe guess, of what's kind Like it like, stuff

Yes.

deal So asset deal. component one more, actually well that the a which science Life that a loan. asset Trophy And asset final a is And small in there as -- apologies, Cambridge Cambridge a lease-up. and asset, Seattle, there's there's was? originally a a it It's Nashville. multifamily then beginning in development was built asset a as then a repositioning multifamily a Science life small is construction there's well and mixed-use includes brand-new in in of then existing is It's one

Your next Stanley. question with Morgan coming is from Ron Kamdem

Great. A ones. couple quick of

Just to so talking originations. relationships Are existing of these the sort and were quarter -- new in the you the terms maybe of when deal sort posts on and in about back dissect versus X pipeline, the of those can of were sort that one relationships? the you existing

customers. Those existing were X

which I'm a great and would customers. see. transactions, repeat So is to mix of I new is And say now existing right the pipeline looking it at

XX.X revaluation the this just But sort deal. wondering, asset I drove XX.X, Caret, that like like the there was at slightly looking doesn't think big of just one from down, look which then And a or what Great. was quarter?

think start certainly types. they're side. up. the appraiser pencil all taking sharper They're underlying the to little assumptions I to Yes. We're seeing cap the drifting And property of upwards on a on operating some move rates

don't appraisals steps. rates we're in cap So and move community appraisal waves, move jump They definitely to up. begin the those push in seeing

surprised So it. we're by not

slowly, get adjustments of see than going you're upward of cycle to that downward more and range, where this we're in still expect but adjustments. the of impacts We going with that more parts the like some feels like XX-ish be it it, we'll to

Great. I And then if one, last may. my

that, the potential are income I more here? anything provisions? or that XXX,XXX sort Just And statement, on related for what at other the see like the looking that provision for credit was any of assets you loss, guys to

course. We this Yes. CECL year. Of adopted

amounts a So fund model funding. in the basis take on a we the new and on call we to typically, risk provision it, points host maybe we take X there, of which But X that. determine use to based is of, on factors relative range take the

the across specific portfolio. it's what primarily So no on drives that's Ron, assets. be should it. It

Your is Burrows Goldman Sachs. question with next from coming Caitlin

with and forward, can ones. multifamily, transact from and be you those Maybe in are you the see, were And the pipeline. look quarter in to the made we kind focus? just of of a they what could does it continue what the did that multifamily ones October as know I that kind properties maybe of start properties, details right other the some

Yes.

to space bit there and back As any I done, the little for driving the go in is agency of to lack is of get really of space liquidity a broadly. liquidity housing the a sort us the remarks, in transaction

we're So to those term. want And believers we housing think a about balance If them supply-demand I scale transactions, and we're couple I on the of asset class long of sort on growth, are in. going as to of rates same-store that revenue were housing continue student assets, expensive. incredible seeing particular it's well continue in so an and portfolio our cap as more able a almost so push to double they both the pretty to grow in that specific and decent wider these although customers, capital a is can amount digits.And student underwrite growth tolerate to I assets, think some are structure think for

been the those so And [indiscernible] probably have that's transactions reason

the like originations in it. low looks in Got the quarter And the the in were economic October, yields it X%. then

how and versus of kind long-term So XX are in you're if those years? but making about today can balance this deals, that kind you that today that how I'm wondering of little rate agreements you environment a about talk there think you

Yes.

and obviously always us the those the premise few at think is X% that long-term range. we benchmarks over have last for are today quarters, first increased look but what they're and is cost the trading, where I in the

make we bogey get and our is benefit then above point of of inflation the a Caret benefit And that. top And XXX spread can obviously, the basis we that. so of on

So that's we think kind unlevered bogey. generally of how our pricing about

Got then joint And venture. it. a quick the one just on

through went million $XXX left I You -- think, total.

in the again up? until JV of the confirm go amount just you is investments benefits could the all that will JV kind So and done structure having used of kind that through of be

Yes.

most will the friction on likely mentioned up are smaller I've not think those participate. are a that of amount our a to where There's set side, I decent call. So partner this There costs [indiscernible] ventures. on prior

do expectation that we base management will is have promote end our may get head, sheet. conviction is? the they off it the every so what on and top on, know smaller that but up I'm single fee a our my We and that you of if some on transaction, structure blanking ones Brett, they a And of almost balance

[ XX.XX Over ].

Okay.

Let on the me in to management base -- back the get you

XX bps.

There you go.

it. Got

pretty I in mentioned XQ just So origination the in and all since ones, seem I the those the guess you X smaller small. the guess, deal

it fall like So seem Safehold? just for those category into being the of would

Correct.

about like forward. just funding going And think as we

Okay.

Your next at question is coming from Harsh Street. Green Hemnani

Just a quick one for me.

lease. many the to was ground that would on current of money more that currently those at be quarter out option sheet balance your purchase have of a just terminated How do So rates? this options you the

There is currently. balance one on sheet other our option

That's then go do ahead. helpful. you...sorry, And

any and P&L And we qualifies if Harsh, early actually whether that that have to payment. it's probably the on exposure for too option customer determine

coming Markets. is Kenneth Next from RBC Lee with Capital question

Just approach you no could refinance And what any where in liability thoughts to just rates wonder until are maturities where to or side, look over you as look be? share be on change rates the options would XXXX. could time? could some just there at given as obviously, if you I

have is footprint really our multiple borrower to we've what markets, our years Ken, same. parts capital in asset over being to unencumbered in an exhibit the base of approach few and markets. I unsecured access creating think past a been the is the We the able obviously growing

with to at tenors public structures. the various We various private have access both and

So on able and to that create creative we've better the over liability of been match continuing what the and take exhibit been last what able action create. be asset to profile to is streams years I we've think

So that's to really, in continuing our mind, what we're along. push

work up work that balance do benefit. of coming of the even A think and in progress sheet.As currently its all are, where good I will power the the to I set more the your business provide let the mentioned business. years appreciation the and spreads in that is for no here, of good at And of think of rates to made of you getting we evolution. some earlier current maturities rating credit going where second are that around and pricing over remarks our question where terms We're to

those but for of thoughtful lots are rate to that that solutions. we significantly be have capital money net in So weigh down in us. hedges long-term do We want about locking effective that the capital, should

there. you. liquid or And helpful Very Caret updates Any liquidity Got then if for the one units? I may. public follow-up, to around efforts market create

cared in We're round investors. Yes. with those contact first

data that. certainly working to capital the willingness expressed but on push current environment, given out we're have that and them market still desire of Some

about I it think where and is the that capital in future. everybody markets realistic in opportunity is be today's might today where

to conversations. we'll So have continue those

is Mizuho question Our next Haendel Juste coming Securities. from with

I is doing hope Vaidya for This Haendel. you the are well. Ravi guys on line

the the Just for bit the average. portfolio recent about rent opportunities what's apartment this different wanted to -- they're little rents I growth coverage moderating the a your half the from fact half noticed turn, or a rental inside right acquisitions. that when than standpoint? a talk apartment and you a about there to Is -- more coverage due are rent turn what investment the evaluate now threshold minimum

would take underwrite higher what I would it's we process is, probably untrended basis. our reality an I We approach underwriting vacancy. conservative than So more a in say on say a

You are spot on.

rent growth. are seeing We slowdown a in

which I obviously biggest It's capital coverage lower policy. in our rent more is of of is is is our ground metric But driver up expensive, the end. think amount with on structure. this obviously the the the I think pushing consistent cost

a from feels but standpoint, is So little the lower. look good leverage through bit attachment point LTV, a coverage

to you'd explore you how the recurring where that focused just of Is and you more yields? With property was? hopes balancing pretty capital much ourselves yield just in And that. And are asset higher are multifamily been volume given another where of of restricting cost given to there on one to the regards and class look it. coverage, quarters? last type, couple Got the It's rates are in here. rent

the asset pipeline. There in classes are other

does. less other asset have those classes think I liquidity options space than the housing

searching a finish difficult And across But exposure they're so are line. to bit of markets outside the to more certainly little the find multifamily. we get

Securities. is Wedbush coming Rich with question Next Anderson from

that's I'm the knowing you be, say, should the guys, impressive. I'd you at and sell XXXX, observation. you covering of an of proud quality covering just First, looking that, guys side since

And you people listening. but tough so got times it's right That's now, good.

that terms coming that are there of -- with and Marcos, events place? just mentioned take going be events to estate moving environment everyone's Regional will people will commercial of, real behaviors for But that estate you in won't with In won't available of a small maybe involved real there sort soon. the be for that down will so taken there can tendency very with delayed loans, that you be maybe banks you kind action? also of liquidity is Or think get anytime become very Or have? you tactics cluttered road there's and that the a this way that the the slow you force forced understood. in some owners to be can be upon are kicking do transactions

curious that you of think dynamic? what Just

a it's of bit little No, a puzzle.

is a seeing help get we another But product, taking long all. solution a can day transactions are a think are pitching those as as distress owner. structures live and actually live We new at if extremely done, we're for what for to we that certainly or capital

now, seeing now, not as down the we're in it to the I'm isn't we a road. so least the cross amount over that, year. right change, fair think personal just going distress hit we And not today. wave don't can that at saying -- of to my change it's kicking will could see opinion, But as I It's of -- come right eventually. there it you're starting of this of kind asking

mentioned were Is to a how value, your sort much this mark-to-market debt, the mentioned number there to of maybe is it's that? of this you it Brett, the quantify you was you sort in worth way your to value of say long-dated And a or environment? that Jay, monitored Okay. liabilities. there Like is if

you appreciating. value today's at also lot assets. years profiles, at discounting is of feel fully presentation. at risk value cash what number even balance a Yes. our that think and our start get we like that, treating quite use.But that, -- out be road, which that across we maturity maturity And the the shorter about I greater And weighted have what is at and them part why the long-dated mark-to-market think liabilities both that's meaningful, the appropriate I similar depends thinking incremental cash rates, precisely the them potentially to rate high-grade start It about you're than rate folks, us, to folks out believe shorter XX-year and that's even want for I that could sheet discount of when an discount those We mean take you is even reason have laid a the we're billion They those corporate that average $X.X not is have think to profile. flows, this flows running back you in middle of sides we think right? is discounting looking so fairly. when of trying of -- a XX today in right? manner what are When market

in really XX lot component. that's debt to think and due XX of a a value years, important have We of pieces we

because it's now. for we think kind present So try right certainly out of net value underappreciated that to we lay people sensitivity

to of for environment. commitments. we want get of million profile it "Well, $XXX capital." You don't liquidity, to where to say, worked where up including that and kind what's financial -- me. you a company X. beat more tongue the the for you venture But the obviously to start in the of near from got sort thinking for perspective tough raising a it where what equity, now is you and -- is you to your anywhere get that But the ratings get $XXX -- Last Okay. lock joint of about you not liquidity raised number trigger and

about hopefully, start And you become that of deployed thinking because I'm it So just I'm wondering some you've does it again. just problem but curious. liquidity, when a

up is to take Yes. That's I'd match some funds transaction to of to world comfortable getting the a Rich. now, be way in advantage is right goal -- asset here our real in real of term. with say economics, cost pretty then of the long that a And from these the attractive the and just locking in able muted volume we're estate standpoint

plenty to said haven't when comfortable. had but of is liquidity we we the we've feels on to much $X.X too really hand.Historically, like think trigger So have about billion

So of well positioned hoping I lot the we're think of picks up. the we other of we end on us. side plenty I is that. think almost places once a we're volume between the there's Candidly, for from the the JV And transaction think think lines, to opportunity at for cycle. it and And we're capital of rate pull

Mr. questions. have further Hoffmann, no we

Thank you, Kelly.

directly. feel out to the If more? once have you instructions give questions, reach to free me other replay please could Kelly, you any do

the will call call. There today. beginning The code be does a dial-in conclude today's replay is conference this of at XXX-XXXX the (XXX) conference XXXXX. with Certainly. Eastern confirmation for of X:XX p.m. replay This

You your you day. for this may and thank at disconnect your Have time lines phone a wonderful participation.