Safehold (SAFE) 7 May 242024 Q1 Earnings call transcript

Good morning, and welcome to Safehold's First Quarter 2024 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 & Investor Relations. Please go ahead, sir.

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

plan we Asnas, Sugarman, Tim first Chief Investment morning, today, Executive and Doherty, quarter call a Officer.This Brett through Officer; Financial we XXXX the results. have details Chairman Jay Chief Chief presentation On that walk our to Officer; and The be our found website clicking safeholdinc.com by presentation the Investors can on link. on at There at X:XX will be p.m. a replay of this conference call beginning today. Time Eastern want confirmation to for Q&A. replay questions, X all is code a of the with accommodate to XXXXX.In dial-in that The those ask XXX-XXXX who ask we themselves participants to order (XXX) limit during questions

If are additional over the to like historical forward-looking. be not this everyone you call queue.Before like I'd may in to remind facts may you'd re-enter to ask Jay, that the which I call turn statements questions, earnings

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

by pipeline market right earnings and to should quarter. Pearse, The first limited that with Safehold was progress the solid activity. second quarter Thanks, us quarter, to a run higher of under in efforts the headwinds and in G&A rate slowing activity in important continued side the keep highlighted overall this Deal control. good close the you interest deals has number joining on of delivered the first sheet, morning. and everyone thank balance efficiently more

who reflecting cap are standards.The lower provide incorporating assumptions this option the market exercise respect was with expiring first updated rate GLTV in of the requests received overall from values continues current CARET, year. tougher terms market, VC that office given UCA to value the higher building sense which to to marks, redemption higher ratios, we participated the investors the In makes environment.Lastly, underwriting driving round resulting and CBRE

the to future will redeem work entire structure, the decided As for on to in while type that, over a and investors to that the express investors. me round to and quarter This we detail. second interest turn CARET position continue let CARET.And in term participated focus by Brett? round result, family investment in Brett to simply with review the more longer simplify office our we go-forward round it

everyone. Thank you, morning, Jay. Good

with the on the start X. Slide Let's summary quarter of

highlighted capital executions by quarter momentum. First strong markets was positive and pipeline

end, have during coupon. of front, at issued After at an the semi-annual quarters of value highlight X.X% to a decreased In million. XX-year proceeds revolver the to new aggregate a We hedges term yield.We've more gains $X.XX Outstanding million the with additional several borrowings. a the rolled X-year upsizes cost provide outstanding been and realized to credit After $XX billion benefit to were $XX quarter X-month yield term, for the a its we mark-to-market to repay gains the basis notes capacity, flexibility over adjusted includes points into a entered their $X and $XXX with hedges of current and by immediate drawn the we XX billion financial facility revolving of our currently On this unsecured options, SOFR facility.In quarter, new overall approximately $XXX nearest to for settled lowers cash about company's facility previous million plus two execution. which a outstanding extension facility, company. the those the which the which expected amounts financings. of million to improves portion with fresh the to connection the under of we our long-term our gain our previous maturity incremental notes, resolves facilities. approximately unsecured amounts the hedges future maturity X.X% capital addition points pleased significant position are replaces basis applying were The of a offering, value economic to realization than to net credit used speaking of million, are outstanding costs and $XXX now true of XX for

environment. are Overall, in-place commitment to in both hedges, to of reminder, partners including which long-term.As relationship, the swap from and benefits the see that rate $XXX very saving million a banking thankful next the in $X win quarter. at current for at A interest approximately able valuable X% company a add is new longer approximately to normal.Moving the is of all million levels cash from our we years, a of for SOFR particularly new the significant swaps for of per is We near at a the higher banking also which facility X a pipeline. Safehold are a opportunity this

growth. we as $X.X joint quarter.Our other yield million related count.Post-COVID credit billion. the portfolio of Safehold and had on the ended unrealized at In have of buying above steadily leases or XX% to We can X.X% owns leases portfolio uptick comprised inception. X.Xx. pick the end, These no investments now and are X Xx XX GLTV X potential commitments year. since which been across ground X% our are chart, from in interest by pre-existing XX appreciation grown all earned million over focus to has earnings tangible XX% year. X to the has million. of leading and a X.X% X was joint approximately funded for million economic and the of estate, That grew quarter leases institutional X over we our venture of the with approximately operators unused assets, are occur to million million, in while see you total GLTV, feet $XX $XXX estimated the real activity have no for customer back Loan $X.X course venture. they first have share are close which ground of coverage square We new of with a appreciation our commitments of approximately is feet to and the units, Much and under $X as view LOIs to yields X was rent has times the are metrics expect ground of QX approximately at and assurances X,XXX by keys, Slide the property eligible currently billion multifamily has of diversified this of be focused as is XX% XX% let IPO, for total, was square close years economic signed Leasehold lease capital until of me consisting And which weighted up quality These investments while multifamily engagement approximately XX,XXX which average approximately XXXX, our table.At a in since assets. years, capital investment results. yield.We in which lease positive million we'll XX opportunities the engagement of our XX that will others estate seen of and Between the valuations [ our will rate non-binding this as all coming majority sponsors XX.X snapshot of targets, quarter quarterly over science markets and is life is our times over debt $XX on coverage pursuing portfolio are fundings SOFR+XXX line ago of grown the approximately $X.X X, increased ground last remainder was most total on unrealized assets have with potential further ] with portfolio IPO quarter, multifamily, sitting commitments the a We UCA growth feet rent XX% signal this our the commercial including portfolio X attractive.Slide current of partner liquidity XX%. ground hotel with In capacity, capacity liquidity that a has of power the [ square detail on maturities multifamily of JV ]. Fund, driven provides enhanced office, the by real and the types.Continuing that estimated billion. been

be level year-over-year million, was that in occurred For per driven income basis, the first was in an no due QX and GAAP excluding significant XXXX. interest of There due strong and XXXX.On primarily rent QX revenue year-over-year, rent which versus to increase increase, costs by increase net is $XX.X was year. CARET-related the is in quarter, of million revenues internalization, or growth, [ pre-COVID approximately fee additional XX% performance was per up primarily net expense.Same we would million announced the year, ] in million levels.As approximately of our [ offset for at last $XXX,XXX Hotels believe to adjustments asset was $XX.X merger earnings $XX.X performance earnings back from assets, approximately non-recurring $X.XX. $XX company store by close detailed and XXXX's million to made we when The up approximately million share past, Park $X.X in the similar $X.X apples-to-apples non-recurring new investments G&A an SVHO items, and management EPS percentage ] were $X.XX

by approximately expectation XX%. XXXX, beat For that we

earnings net the last hope reduce X% said call, we for G&A by On XXXX. to we another

which of For a now annualized approximately XX% basis, million G&A on we upwards X% the which million, first target is to was means reduction net $XX are an $XX revising our XXXX, quarter approximately reduction.

line.On the to on update find to Slide directly bottom ways look continue We the the and the help forward that X portfolio structure yields. improvements cost these we to market company to of our continuing detail reduce

is not yield, after well as economics it variable conservatively is our Those is our economic earnings leases generates valuation. in are accurate then yield increases $X to line X.X% features each have and yield.As as the true underwritten capital be or with value we and We assume yield. economic We basic detail economically. As illustrate we recognize point, includes by in CPI highlight investments. inflation-adjusted the company from X, GAAP of X.X% between prior our property excludes most yield no that annualized This future [ to all yield.For assets, and earnings, capital when and appreciation components a resets, this source the our inflation rights in for reflection billion CPI-based GAAP earn what view utilize upside Using non-cash to for the underlying value make CARET type. the these and rent, business. bond current annualized to quarters, yield power versus X.X% by for each for and an the the this significant differ include variable thesis periodic Annualized as cost.Under ownership an ] economic layering yield. IRR portfolio portfolio primarily in we unrealized X.XX%, such, investment rent, rent approach, how we adjusted expected way believe math. unrecognized in rent further yields X.X% leases a and on we've is the today.Turning long-term which accurate remains XX% that above to Safehold's depreciation assets currently simplest largely provided unrealized of an market most a breakeven at amortization, appreciation cash contractual the yield lookbacks and The underwrite estimate additional its within this ownership the IPO at but the for our methodology rate escalators. to adjustments X.X% our value what the up Reserve's the you interest has in to earns future portfolio discussed that Federal estimate of core land using Slide portfolio of believe to such X.X% these improvements our significant percentage the drivers buildings we GAAP fair X.X% diversification increases yield of To market accounting to yield a or location recent

the rent gross markets out GLTV called as top and these value such by book quarter. region and type. assets we approximately We of the the approximately XX% coverage XX and page quarters. GLTVs key XX% have over modestly of of last the markets, the Office by each bottom had the our during Our at on right, are for additional detail portfolio. representing include increased property Notably, X we've office metrics reappraised of

real attachment As highlight a CBRE the and in assets the point have contrast help at our appreciation today. despite valuation how the or portfolio quarter-over-quarter of level in assets property operations to us approach any to remained the the at is finance headwinds. much enhancement origination for coverage X.Xx, reminder, other market portfolio.This we shifts appraised across mark-to-market annually stable the companies capital that estimated our market combined strong quote value underscoring on property LTVs unrealized exists knowing Rent estate credit at despite

believe of $XXX overview had $X.X $X.X our approximately of million pro first the billion facility incremental ground credit credit our on secured returns of and on we top unsecured ground until of of average continue in markets and is approximately $XXX end of at benefit we $X.X unsecured from debt a on We debt stakeholders to forma XXXX. at periods ratings will its maturity risk-adjusted in well-located approximately BBB+ notes, with XX the provide rata investing which Pro drawn joint new are our quality structure. due comprised that positive million capital At revolver attractive quarter, leases an and of have stable credit have revolver the non-recourse end, the no availability.Our of weighted leases, outlook in Slide company debt, XX Moody's billion years, and of our we time.Lastly, with on share after $X.X outlook ventures.Our institutional have X, that the own over Fitch. long quarter and closed billion cash debt AX capacity $XXX maturities billion we we million of

seek place fixed X%. manage basis appropriately we savings receive in is $X to swap As revolver flowing This current risk approximately today's interest interest the XXXX. April balance currently on $XXX discussed, have rate a X-year million $XXX SOFR at rate and and put rates through to that debt quarter P&L. the do floating on so. hedges Of cash is each at a protection to of swap cash month have outstanding, on payments is swapped million we We per produces a that approximately through million

are changes We recognize can million are any outstanding long-term recognized of do X.X%.Today, And our a rate the each can their point we approximately also utilized balance designated The $XX million month. hedges weighted mark-to-market, locks money. have $XXX average while hedges of so in cash at hands approximately long-term treasury no through on in for are and comprehensive not the yet sheet gains unwound the P&L.While other hedges prior. of they these be our income, at be they end cash term,

ability out term the borrowings we thereafter. of to look we revolver hedges As long-term debt, which unwind the flow P&L to then would the have through

levered permanent transaction rate are The signs the portfolio's to the on liquidity, look we tangible hedges permanent to let no are and in is that putting are thoughtfully debt-to-book Jay. equity conclude, it recovery effective have to than of basis. while total a with ample taken X.Xx the rate on positioned business and is debt We've interest company X.X% servicing, on debt volume longer forward there maturities real interest activity has turn liked, We X.X%.So capital our near-term to money that, generally. in in both work.And back with estate and our the me in and cash

Brett. Thanks,

for and it to be ease the deals are We'll While execute be expect prepared rates. to rates position a take lower very we eventually we to return operator, on questions. advantage to levels.Okay, higher close stabilize up customers of balance risk still out rates declining, strong who that continue open in wait our to sheet to to let's to when need use start and attractive ready will back with engage

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

to how fund if maybe guys great. if outside will then your I'm the I you wondering would you morning. that days deck funding that, you're funnel was XX be you of JV the conversations flow? one. And disclosed are the part of going to of having? that just if $XXX Maybe articulate can be you speak are the just confirm just on could the that, for million can just in a on next current the kind the you assuming but quick this What the based expectations deal side,

on answer question I'll Yes, the the pipeline.

We're that there's versus entire a pickup. the signed As by good here. been how year. see you has year last this are can And you the been encouraged see, pipeline LOIs

still rates, pipeline. encouraged by the but With what market in X we're visibility our the and volatility in the of hesitant market, activity on the months on It the X, could stability seeing X, be. next on depends own and the what we're very all

a you us the of done an I'd side, setting invest. And balance job is sheet. have right as What Nate, to on say time capital on the up nicely heard, great side it's excellent Brett the team and very the that

for best needs, So really but we to opportunities is and right the of opportunities, that. take that like way on move those beyond we'd capital taking JV now, advantage us of our but best way start love not the advantage But the the to minimizes us own. it's for

Okay. That's helpful.

the it Just this activity, is on point? multifamily still solely at

So find actionable. type. approach now, the always where property the is is market what most we at, to we're And actionable looking multifamily right

the that the seeing property you're deals of types. at for on it's clients our are the deals other in LOI in eye the and looking market But space. in the the all our deals everything all So pencil the space. well in keeping multifamily else, We're all participants, that these and been terms majority actually of

Paolone from coming question next Our with JPMorgan. Anthony is

that about be see and you bit folks how of more maybe talk lease rates where just finished down from a in something you now? kind the you just the take might here bit and ground be offing. the need option back I of think with Jay, far off coming activity yields think remarks right away Can a about your bringing kind you cash-on-cash to to going-in opening

Thanks, Anthony. Yes.

the you pronounced in down of that the see if And So pretty about last rates. I to move think team started we very a busy. tell you was end year, can

So not pricing. leasehold lender elasticity pricing, just -- we the It's customers here. there our is also but know

fall point fairly it's finish definitely when XX a did little basis kind basis hit line.So would get that of started bit So benefit see effect in quarter. of deals I double and the they first say that double adjust the up. It the It's XX when think basis a change. they XX, last go a having pronounced on go back late struggles we a down points, to of markets chilling a adjust. some you'd rates to I points, thought XX like if basis seems points. would XX market move,

today [ XXX in XX-year XXX, So range. XXX, is the ]

it X.XX% sort rates I a pad like think whole new of [ stable they [ had some look launching good headed certainly, ] ], momentum. looked X% set of like would customers. And market when be a for were to

So reaching that when be. will the we down this just can't that don't believe is a in be know move predict We when but rates, where will market happen. point will fundamentally next

then on commented you G&A. had Okay. just And second one, my

hoping in so management to because flesh was your here the I to down, year, And maybe the of the second I just believe, quarter. bit think fees I that stepped rest through out a more think

net bit? to trying a little few just over like gross like so quarters, maybe And if you with G&A that next help can understand the and

Yes.

about million. net $XX the think saw G&A, for the Star Holdings as is we of first you when fee management So quarter, from about

to about. the on that, as would will such get about annualize as talked million number. point, start items $XX the each If your accrual -- you line based a decline. To time is those fee The we've to management sheets, of you

the So assets start time less a is monetized to are each spent. decline see and as you'll quarter

cut continue last to just costs, as to call, expenses.So XXXX again, way the perspective we regular G&A efficiencies personnel the from as ways in on services, both P&L, XXXX. a from think I of as G&A well on I targeting were create to find we a vendor overall X% mentioned earnings

last I number $XX from think feels to at is appropriate. XX% sitting today, cut a and being year here it like million this year a

But little million our a on is have volatility will of bit it based on $XX quarter-to-quarter an management basis, fee. again, annual target. So the

Okay.

was in year, or the first So constant? -- total of what quarter, we G&A trend like the million million, $XX should net expect of to P&L it then million the down sort over on about should keep the like sounds like $XX that that $XX

about onetime Yes, there's right that's items. and

that We second the costs hit year. quarter of have Director in each Board

of of So I probably say, as as what decline, terms steady that onetime outside that said. would item that's well appropriate you in

Haendel is question next Our coming St. from

Mizuho. with Juste

is This the line for Vaidya Haendel. Ravi on

is -- I about given run and a I thinking acquisitions it's So would here, to think $XXX we how down, a of fair basis? mean, perspective, we $XXX just kind your current going -- you modeling you have broadly rate but do from how Like forward would understand do tough a pipeline? pin million say say volatility in there's what to you million quarter on

Yes, that annual a points back XX year I of an [ basis this for knocked a goal choppy the of the into XX their think bit ]. settle as deals will Again, down. But ]. good. few goal, really error hopefully pretty as as bit deals, cost margin have market a one. good debt these of if have I disappointed. points last error They margin on came basis typically a We [ don't think That of little feeling markets that's probably a little come we're

reflected it's to XX-year in market a bit going every the down to is, So day future the now. how that we little come almost and and sentiment see rates XX-year, around

would going build team back and to a it's as So we're point I but starting time. to, be way million some take of know building back. to start And used a towards the volumes kind a base good $XXX the their to Tim quarter were going

helpful. it. That's Got

to acquisitions come options that capacity here. do any we have in assume left these can we Just aware in JV? of? accordion are one more How should the through be that there And And you all JV? much that are going

million ] our at can from of [ looking we they mean And into. are wealth XXX actively $ partner I sovereign third-party the there's right flow. Yes. tap yes, deal now, that capital about

expect small play. they'll So we than relatively some deals that other

is said, for We I time. long one not environments do in we us. the investment today of best it's As think for the what best thing a

capital is piece more still given equity valuable cost So the we'd out But think is capital. now, like of a right where put I story. JV to the of

question next from with Mitch is Our coming Germain Citizens.

Can some purchase around done the I understand it get that was a at details to at? the I Do discount what was redemption?

Yes.

So let's take back one. that a step on

to who first out. get was The think round we some people really play involved, understood how CARET could

Some very happen of Unfortunately, them time investors venture to type wanted hoped. quickly were monetization capital if and short-term had we frame the really who as a developed hasn't see quickly. would market as

and mostly entirely -- that be dribs success have probably all families, first We the terms some and asset. going a drabs the a still can should we of X it.So was have that clean that We They that's redeemed of where worth ultra-high gotten to investors think a decide they round. not building the up use We lies out -- decided, show there. it and book we option. with round in the really we've and value really future of and to did from years, just After CARET just that had it's net them couple gave redemption of benefit

a event CARET stop redemption can the original thinking price interim. round, in that we redeemed you had less so price the purchase it. But was the distributions. any we've about And So

already distributions their had got minus price they original they So received. purchase the

X.Xx you're Longer-term leverage. helpful. capital plan, That's at

a Would guys Xx. liquidity? sales consider you approaching you're some ground to think raise means I as any lease

the don't of I to the has look Yes. of think us the balance quickly. sheet alternatives. flexibility JV take here at partner Look, little some given and bit Sales strength place a

on we maybe turn but there some think portfolio you of small something into certainly that off, the not redeploy portion rates. higher is can it's So and we

that's at look runway solution, I out and money of but couple right, we extend the could don't capital we'll think those here. alternatives. you're some squeeze the long-term a So

Anderson next is question coming Our Wedbush. from with Rich

at does say of selling would CARET your Is To your forward? for difficult the the mind this where event impact look degree is you maybe securitizing going CARET, Or on Just at change? rationale redemption sort future a and sell with now follow-up just around what there the behind makes efforts more CARET a redemption happening? no or the curious Jay. you CARET, the I'm whatever?

tell I of this questions be driver That CARET the seems around to flow biggest you turned the getting of the deal major will that. on. Lots back driver. is at point

first it think was we a really game. think understood towards the identified much everybody years, ultra-high The step round, network perfect after X first worth We as a I this investor. bigger family do net have

turned capital really is worried look monetizing of ] So would #X too about and say, is rate back [ think again, couple anybody had I don't a I venture variable think I time that the the key firms on. different to frames. is growth I that to CARET getting the

I overall consider know not available of types perhaps bit, or way for But type a then larger a are growth you it changed originations a element of part changing but quite pre-existing Or might transaction -- you is seeing happens? it's more of deals, Okay. are the of as there makeup some slowed going of the that that down whether of a rate, the has part terms ground of in the element leases bigger that And pipeline becoming of of the that in sort the pipeline? forward?

remains of history, The stayed to It's the They existing number our over that the market leases a I bought don't see of relatively a market, case. the makeup and ground in same. very you pipeline as often. come of the with terms focus multifamily, on them. we've mean spotty the pretty

the But -- see play we're in opportunities to and those. right person we those So originations. the is bulk pipeline new are the of

is Kenneth question from RBC. next coming with Lee Our

flesh wondering those this your just the what X closing further just In some driving you in regards deals? second that majority confidence out, in of are closing LOIs quarter, if to for or the factors of could confidence these

Those moving closing. all are Yes. towards

it. of forward, with move Our great the continued rise a of last a weeks these is, deals to was which piece confidence have couple comfortable

closed there. not majority, so pretty not But vast where of all, in there's the yet, sit they closing will they're get look, process the no However, if we're guarantees. confident

Got you. Very helpful follow-up. there. And one just

about expecting were yields, of Is yields know risk-free to economic economic some the originations but terms rates, LOIs range? looks on ]? of In had economic are want X.X%. talked basis just newer get for like yields that above XXX around [ how you shaping the like your I historically, it the I of about a the sense of up this good points sort

able a we've is new to are this generate. Obviously, territory. These been highest the yields

a shift. are adapting Tim said, We've rates But that continues deals seen bit That's So little a as think cap to of customers and this. I touch lower up. come make opportunity it's than you go. still starting in this rates marketplace to an possible. back customers to to lose rates -- bit number high, back when little there's a to When lock we'll the get trough who a

So we better. as great. But little our think we're would be rates long honestly, meeting as X.X% is a benchmark, lower bit

Hemnani coming next is with Street. Harsh Our question Green from

some CARET a because -- conversation needed ago? around billion would was was on was there what sense CARET outside the public below just the helpful. paid the for hurdle CARET that investors? sense a liquidity they X the market, well $X.XX redemption, of was that listed mostly that Any was they years the it to the that not with be Or redemption back where today conversation liquidity? Going Or valuation around

monetization that but in them, think was with and were with liquidity trade until we prospects they the was we want they up. the VCs the no and It of making. We disappointed. there -- conversation was candid understood around rate speak That were And kicks entirely don't not for something what are I expect. don't the that growth to near-term I we're them value. should Yes. near-term

with more worth think much I net rounds different will it what of scale the conversation. we shoot high was a for. on kind families, and It's focused future

recognized as a investors. better sure it -- monetize and conversation. it that think a component very in So That's about future quickly VCs, that's conversation. we valuation be this be a was there will we one, But entirely with guys right We I'm chance to you And thought there it. to jumped was able here. the about would be the

near-term a good we But isn't no for a this prospect, what if living. job. do there's done You've exactly

is Raymond James. Laws with Our coming question next from Stephen

covered to it quickly or back follow-up. in take to X Jay, guys would ramp can but rates to move and X%, you that a were on of step one quickly can advantage Does up? it does ramp? lot it take to pipeline, quickly And X How how borrowers to expect If that? weeks the X.XX% you go How take build? months?

close I quickly. the take saw question, a time in you Let levels, rates, of interest it quickly elasticity mean, to can can me Tim. some move but is it terms different deals Whether so. last Tim,

Right.

short-term the drop -- guess, was I it relative I Jay you the stability with at see and end think, with earlier mentioned the rate last -- look, of visibility and year there.

of length the take You for to time point about saw ramp-up took because flow -- is not market, these think the get to This good just a cap And starting entire putting for deal stacks start big in right? some a macro the that's those to the together. time market I us. the it of market,

you're estate, X start seeing to real normal get deals way months. that to are typical to short-term, So months X X finish in from

providers see and frame shifts normal stability, see. usually people of that in ramp such the market confidence about for and takes why ourselves. to see the the markets, you the capital the once quarter-to-quarter get market, and fluctuation It the right? pipeline entire not in visibility that's time up as you'll that time So just That's

what's on follow-up you tail Can guess If the assets there? think about for I to the UCA, it's talk expected. be switch quarters office been And I the coming sense. marks annual appraisals, a few office, a then, you really those where types, as given it's the the cushion look make And to on I haven't kind you the look the the attached and most of are your at worst property And office? risky other situations changed in when materially. LTVs at there know

as curious valuations forward, those other types all in? we we like seem I'm So it kind does a in roll when property in or those how valuations are held have down. of And types across just values have those property held markdown

Yes.

gone Just users generically, rate CBRE assumptions the would have that up. say our I cap definitely

of -- but seen all certainly So in offset asset multifamily some will growth classes, great we've a rent degree. that that the to impact

in of markets. a fast Office adjusting sort moving in is dynamic there's versus cap is multifamily fast are tougher excess different. the of -- that's lot upwards. of rates the how So how space rents supply in It's are terms

So I do think the higher of rates reflective LTV is going up faster is tougher and fundamentals.

we're You're not dynamics in seeing same the multifamily. seeing

CBRE through last of said a Brett, I X book the quarters. think, in the reappraisal XX% now office has gone you

too, that rates the to And that's some probably helpful, comes a is going we're adapt. where here see of to out. be market And confidence that we'll XX% seeing. last this lower not adjust and provide would certainly, have today So

Morgan Our Kunath next from question with coming Kelly Stanley. is

like Maybe that CARET. of cross a together front back quarters goes Just you the couple on of there focus of CARET? in the to back it's Is need feel something? positive or one threshold a series before origination a you kind to quick stringing

variable when in. growth think external I does a the is also function UCA. book and in right I existing stability deals in of Yes, terms is that think biggest probably And back the just now growth of that's kick new

a a it. center growth company. relatively would this still to new are So investment. as long-term quarters couple trying rate. do People We're a of is But on a

couple So putting for, really to quarters the people I on honest. is what a strong waiting be board, new think, are of

from question next Our coming Riley. is with Matthew B. Howlett

remind the be then [ update ago. could AA a minus? what And on dual -- cost review? just again their [ savings know ] Fitch the reaffirmed I you A if interest few What's single the they months and have me ]

had first the and double. base $X base ] looks years, for than X-fold, the our XXXX that with assets. today net the unencumbered credit couple doubled. think think we different is Revenues we early over I that unencumbered asset [ We versus of last billion right? of when materially about Obviously, what we've The were rated. when have them we've Fitch outlined So have is has grown asset conversations income

the evaluate was changed they a X that big puzzle I when of That us lot ago year governance the of by. piece think the we aspects closed the internalization.

years liquidity the capital X raising public of perspective, from ago.Now, We've ] private the played we've prove times debt think it what across able and in to revolver been I our now was X.X is out [ size the a curve. markets.

cost our I think structure we've line. in gotten

I think we've hedged. prudently

all the ago. of combination like different that, today take a of credit and feels a You few we're it than years we were

to do are Building we operating ask you're it doing. a I to that space. We need record there, in track IT continue the when newer a obviously that important. and is company what think it do get we that what history lot of to is building

So they us want that. to see continue do to

flow-through Moody's an So there.I we're to in quarter. back with trading push you seen conversations some constructive at savings obviously on have basis. to XX we look having spread Even think the them we're the perspective, interest in February, [ ] XX tighter continue basis from cost going from and upgrade that just when they're the fourth bonds today, to the issued we points of a

that second we and of some seen will public A savings side be we if aspect our objective, there. incremental I continue that to and going can do both of remains to rating. control we're to helpful we've private another it the So and us. that what to see would points for certainly get to know expect But I flow-through basis XX-plus the

could Well, basis -- that XX-year debt? you basis be unsecured significant XX said to points XX be new points, could that for

about I for provide for appropriate the Tim and over business. them the being able make hump, the of the best capital the to this able pass-through get to Jay spoken No, -- to we Yes. on think be customers as cost to to Absolutely. our origination side, and have margins want we deals

long-term we our tighten think good we but pay debt sure at through day, to make that sitting for today as the versus the flows borrowings, exhibit names. able of to to investors, but down last here gap over continue work to value all investment-grade the start great lot flow going And we're that to the few creditors that we're to And end a liquidity, what I agencies revolver done have relative hedging want been and ample of today. the hedged. to and will we've we're we to we the is through look we've years other feel procure

question debt, picture like -- the look to in I Jay. I given billion get billion, year the run bigger one or feel X that's it's risk low you whatever you still here that you over I And maybe for I run time guess market, ground when over up? XX% you, this X, will normalized over risk then in my model, It annual out do $X.X it's XX% take $X returns just asset. that seems my let's And And still time, up just When it is, should a equity? leverage when lease, just given leverage run the on can question go time, originations? risk-adjusted just

opportunity that the we in do doable market Yes, market. We think the a year. $X built normalized to very, size business of very certainly billion-plus makes a the

been that's right of to get business So the of That But our cap not scale I you're some I relative are trying see because the terms just feels try are, in not in levels dynamics some as still up, a right all a larger terms of we get don't goals. nominal the now, where of the size right in the number scale thinking goal assets upgrade changed this to and has into and on fall there our goal. that a start market seeing areas. to isn't really much yet. to a are close think function the And the down dynamics as We're I right of going and long-term business to us. to rates lining now revenue, leverage that scale rates refine and going stresses this that's CARET, overhead stresses of think the We're true mind percentage there. was of, not and lot think in should uncertainty of to down. goal. our just think that's think percentage to and we're our scale. Yes, There's meant markets anywhere volatility just now, has markets I to certainly I be always to leverage.But right could going our to The what I here. a we've And be. number, we're of our time to the we think but There's on just think,

of and then on we to sheet a changing can we right closer relook before in I terms side goals, at of think balance need we that. little bit bigger something mix, to bit and the the So our little do a get

we Hoffman, further have questions. Mr. no

Great. Thank you.

on directly. additional instructions Operator, today's reach the again? any have mind please call once out to you Thanks. release, giving you replay me If should questions would conference to feel free

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

for at You your participation. wonderful time, you have thank We lines may and your day. disconnect this a