Granite Point Mortgage Trust (GPMT) 10 May 232023 Q1 Earnings call transcript

Good morning. My name is Kevin, and I will be your conference facilitator. At this time, I would like to welcome everyone to Granite Point Mortgage Trust’s First Quarter 2023 Financial Results Conference Call. All participants will be in listen-only mode. After the speakers’ remarks, there will be a question and answer period. is call today’s note being recorded. Please

now Chris Petta will please ahead. like Granite to to over go conference the with Chris, turn Point. I Investor for Relations

our morning XXXX quarter results. you Thank Point’s financial everyone. And discuss Granite good for you. joining call to first Thank

Development and Financial and on me Chief Officer; Plust, Originations; Morral, our Investment Officer President Steve of of this Officer; Originations; Marcin our Jack Taylor, morning Officer. Alpart, and With Executive are Urbaszek, Co-Head and Peter Chief call our our the Co-Head Chief Officer our Chief Chief Steve Operating

After provide business our market activities; of comments, highlight portfolio; my current will financial conditions results. Alpart will introductory from our discuss Jack a brief items Steve our and will and review Marcin recap key

with XX-Q. financial our call the Investor and yesterday with in associated Form are of Relations section release our filed tables SEC with were available the along today’s website, Press

to call and by the remind are made uncertain control. you outside remarks supporting I forward-looking which include the would may company’s and like statements that this of during management slides

views SEC future of of Forward-looking expectations. any our We results. differ any our to see statement. that undertake from obligations to with actual results regarding could update discussion forward-looking reflect events to materially subject and Please filings could affect our uncertainties for statements a that the are cause risks some do not

in financial release is the not accordance substitute which of be available earnings comparable We also measures non-GAAP to for information in information refer to be on measures intended financial on can most A with slides presented This certain non-GAAP in to reconciliation website. found GAAP call. as the our isolation measures these are and considered our GAAP. or a this

turn now to the will call Jack. I over

like you thank call. you, us welcome Chris to everyone. for quarter first earnings you good to all And our XXXX We would joining and morning Thank today.

negative sentiment the quarter, estate. around delivered and macro in commercial the challenging operating backdrop results Our first real strong despite business

conservatively interest underwritten share granular our dividend. rate and stock $X.XX distributable senior higher continues and floating as short-term loan first rates to well-diversified, quarter portfolio from basic common increased Our our per covered to benefit earnings

highly the funding that below is liquidity and from a leverage positioned, our benefiting our uncertain balance Given market position. well-diversified sheet mix target defensively meaningfully a remains range environment, strong

We and emphasize our continue managing stockholders’ support our our while portfolio liabilities. of asset relationships lender to of balance The strength and rationalizing protecting our of our sheet the our diversity and execution actively the our objectives. funding capital

signs our liquidity standing emerging substantial delivered CLO originations. dislocations. estate capital further one we amount some loans During our refinanced approach and conservative large strengthening on highlighting major with even during facilities, our of loan main a legacy lenders our our underlying refinance CLO good capital, the signs successfully our to ability market quarter, and more periods markets, released were first of of some in credit continue FLX our to following we position. liquidity Despite and bank The of recently the new of assets the real to

our into capital created securities we believe what back unwarranted versus market attractive stock by value. bought an a deploying value. to relative book own discount on We’ve respect opportunity with common to value they opportunistic been capitalizing have deep when we be However, present our our

our four an have position. used largely shareholders, repurchasing and one generating time liquidity accretion meaningful These million about have repurchases as we accretively authorization over the up participant book buyback returns attractive market to years, our shares. common been common strong while maintaining last from shares time prior stock our our couple active repurchased We value of million almost of for

almost additional to our with over our our shares authorization time Board us provide XX% by actively to an or and result has buyback manage outstanding increased million capital a more As of shares. flexibility our common five

have we our as to multiple our repurchases, the we into factors business. taking in will As consideration respect we manage with past, opportunistic remain done

their support their borrowers stance and collaboratively In continue conservative and returning more value as properties they successful on for volumes assets our and markets to and our loan recognize ensure proactive normalized we protect loan stabilize Given borrowers wait to investments and resolutions. transaction those originations, in asset embedded general, the the to to have levels. our begin been repayments to with working emphasizing management

in regional the presence near commercial further bank’s In for recent impact regional believe market delay market. recovery given historical to banking sector we likely the the developments the significant are liquidity real term, that this in and assets, estate

improve when we commercial interest Accordingly, further portfolio stabilizes the remains the increased our long how unclear on market and the of Fed commitments. environment about reserves the CECL rates first our our X.X% to elevated. markets It for short-term real total quarter estate in loan keeps

create certain disruptions, the located for uncertainty. in to the As likely are cities especially market to properties ongoing more of continue challenging some

market We in the individual office office loans. macro trends our and remain of the on the focused performance

We performance the and in particular on are not assets. specific market. the But the depends market monolithic office fundamentals the market aware keenly is office of headwinds the the and

pandemic been portfolio as Properties of returning continue office markets and the where is such as Miami challenges. our markets other having greater In delayed, favorable that were have impacted located there fundamentals. more and by to the Minneapolis, such demand in characteristics more the trend

granular have we portfolio very XX MSAs. diversified and a office Fortunately, across

in office Seattle. San markets D.C., as have We and Washington, exposure little Portland, impacted such some Francisco, to the of most no

As by either our for approximately A renovated. characteristics, Class are of XX% UPB or recently specific office asset assets

we our loans, working in on resolutions, where the we borrowers we portfolio. of the some are balance while our for stress not these and indicative situations are and So, of with are witnessing reserves challenges which have established greater of

this of during period loans, properties office the generally and In supporting are addition, in to we take these strong properties dislocation. our the of invested of date, that sponsorship cash these profile to comfort the properties securing substantial equity the in committed sponsors their owners

balance additional of their borrowers protecting last over and leverage, million portfolio sheet, the properties. managing borrowers. year, working maintaining lower of our emphasizing in near actively support the In and conservative our with maintain of we Over collaboratively will our liquidity our $XXX term, our equity have contributed while business, stance

As amount we a commercial sector. deployed we and the have capital, attractive, market U.S. be which is the for provides of stability significant believe that long-term on the for sidelines opportunities estate real past, more will in said ultimately waiting market providing support currently the

are stabilizes increased of opportunities. non-bank on allow attractive and for once us As lender the likely other as to the disruptions, the banks this a environment current advantage investment occur, of side take we regulations will

to in more detail. portfolio over like activities Alpart discuss our to not would I to the turn call Steve

you you, morning. call And for our thank all Thank joining this Jack.

billion, We only ended commitments, balance balance $XXX funding billion and total for of future of the than an million first quarter with commitments. an principle about less X% our aggregate $X.X outstanding of accounting committed of with $X.X

well across XX with includes types property size is investments diversified an loan and million. portfolio of and regions approximately $XX Our average

a loans Our income LTV X% XX%. generating continue to deliver with of of credit realized at origination favorable attractive a yield overall portfolio about with an a weighted stream profile average stabilized

during to $XX Given we our commitments. the originations on funded million the market quarter first stance existing cautious about environment on due

in first the and loan our balance totaled in and the resulted a portfolio quarter. $XX repayments which slight in pay million loan over out-pays decline quarter, downs Our approximately funding’s

As which X.X. of X.X, the from of was prior largely risk quarter unchanged March XXst our was portfolio weighted rating average

and well-regarded the senior a hotel It’s collateralized quality property. to Downtown then reflected. ranking full an renovated quarter was property renovate institutional downgraded and who purchase significant to The property in of $XX.X During cash loan a by million owned located a invested by Minneapolis the first risk institutional we substantially X. service recently sponsor equity

Although ongoing business operating the Minneapolis trends has the impact impact recent of of affected delayed the general travel social performance in of continued signs the the in performance be and unrest. property’s to have by negatively and CBD market from shown lingering improvement,

property who working year sale. actively property the lifted are to market property elected this soon timing hopeful anticipate has resolution are the predict. of We for exact with is for a owner be although to hard the will We the and the

$XXX on non-accrual loans in status totaling rated As UPB. of we are risk that five March X have XXst, million and

which CECL of of rate XX%. those million, we average about estimated about implies loss reserves For $XX.X an established specific on which loans

we and all of of the a borrowers mentioned in five course resolution these year. and evaluating of in have past the will variety provide with develop are alternatives over information these more we As active potential discussions are situations the as

Four backed and of are characteristics by its our non-accrual loans office each own properties, attributes. with

use. As we evaluate to these a variety some assets, may of a options for include alternative an resolution conversion office

such all building. While San best and amenable out highest other and are like the point where are Diego to office office to use than outcomes we loans be two office that not could Phoenix the properties an would

oriented pedestrian the So Phoenix recently transit. benefits nearby and rail loan downtown to with from convenient securing light access property mass office location extensively a renovated

a well in quite The a property’s is property or out lend the of a borrower hotel, to fell contract physical to Silicon it out use demand mixed for Similarly, has of renovated conversion. San fact Diego the for building’s to convert attributes was and to market. office failure use. but Bank. and extensively property residential recently locational in the conversion The can to which location, an configuration the excellent shortly converted well itself and under after be hotel, to contract the residential buyer there lays And planned Valley who is

possession assets we of with the properties are and multiple Phoenix of have to the Diego For indications the purchase both interest borrowers take and had working for conversion. for San

deed alternatives, of evaluating of a resolution a lieu are include range property. by could the which a We followed in sale foreclosure or

more now will a our I detailed financial the Marcin of turn to for review over call results.

thank Good Thank morning Steve. you, us for you today. everyone, joining and

of credit an $X.XX $XX.X due GAAP quarter afternoon, reserves basic in a of net first CECL GAAP market loss $X.XX unsettled which the driven our or reported period, by Yesterday our per per widened provision or conditions. share. to $XX.X prior million Compared basic includes our to the for share, loss million net losses increase we

$XX.X by in quarter-over-quarter share, QX. which non-accrual in improved by were driven per Distributable rate interest higher the as rates. floating resolution compared earnings short-term or On to to a quarter share was quarter, from increases benefit our basic impacted of distributor first last mainly our loss for as earnings distributable our one per by $X.XX portfolio net about $X.XX million a income the pre-loss basic loans interest basis, continues of

the despite million $XXX first dividend covered our cash, of XX% quarter, earnings in us distributor over equity. in over carrying which our common represents Our

income and five in non-accrual Our which estimate target leverage meaningfully balance our $X.XX sheet interest the or share. we impacted below about levels our million per by $X over loans, QX

value which $X.XX increase book offset by partially in estimated our about from $X.XX our was and share was an about by share, by reserves, $XX.XX, first affected Our share mainly benefit buybacks. per to declined or quarter X% the common CECL per

we were shares of believe about what quarter, is first mentioned we currently price the Jack purchased X deep As stock, given stock earlier, value during a represents. our common million our opportunity

Our the focused additional ability Board’s our flexible furthers increase over shares in and allocation the an X market in opportunistic authorization our buyback to shareholder given million time our strategy. of capital

share, at uncertain collateral per at portfolio of reserve used in about CECL assumptions million million representing quarter analysis to CECL Our The higher market in more $X.XX was about our and or $XX related increase X.X% reflecting $XX mainly our on reserve dependent ends loans environment. stood the recessionary commitments. a our quarter-over-quarter allowance our

than $XX allocated five As supplemental, more allowance in the of disclosed or half about earning to CECL our loans. slightly non-accrual is million our

with funded legacy capital XXXX which released second $XX we efficiency loan believe similar last and level lending us. to strong our the our capitalization of as to our in our with during portfolio, successfully improved with the $XXX This our type, this FLX general of more ability FLX further strength relationships second our We of liquidity, financing this look million liquidity challenging is our our year do facility. XXXX refinancing the our in position. our the our Turning announced of of of longstanding bank about million of quarter as finance and following the assets facilities, our loan our legacy March to quality market they related and conditions, to loans of term strengthening and refinanced CLO one partners business highlights borrowings transaction we CLO a and

our J.P. In to connection million. $XXX refinancing, we upsized facility with financing Morgan this

Stanley post June we Additionally, to end Morgan maturity extended quarter our of XXXX. the also facility

environment. over the our of refinancing, X.X We $XXX quarter our on and X.X times total ticked with QX. the and liquidity, at focusing sheet to protecting our end result in ended market a cash from actively the in to capital the continue balance times up investors’ quarter manage leverage given As million CLO

like would open and to Thank us call for you now questions. again today, joining we the for

you. JMP today from [Operator question Instructions] first Securities. from Thank coming DeLaney Our is Steve

Your now live. is live

the for we taking and really everyone, Well, starters look for buyback. morning applaud my question. thanks Good share

it’s that what shareholders other if think your your I’m and convertible also Both a done reward you through of times. to I you’ve notes or buy plan. wondering to these considered nice trying during way difficult you’ve back method. the increase reverse inquiry some

We reads in opportunities this couple earnings debt. have a and some of mortgage bought noticed call some have had commercial back

thoughts there? thanks. I’d appreciate, any So

Steve, Good it’s Sure. Thank joining morning, us. for Marcin. you

Hi, Marcin.

in our of internally, maturity Thanks obviously for had nice it We’ve considered we’ve valuation. a fourth capital good the is of yes, consider. so buybacks. thought the table the on the the and question. to continue will given – of We To a around something discussions upcoming point we’ve the some on was use your this it Appreciate the words as quarter. depress converts, for is use some liquidity, this it potential had

it yes, debated that’s is something So internally. been

good Okay, old, of so mean, million to Minneapolis loan million what at other six a loan, want know. It’s hotel years up. that obviously the The are loans smaller office are loan, noticed, your details XXXX kind of fourth that. really I you loan. larger. out. that the L plus much I which new But But high pricing thing to million, apologize this don’t one’s $XX like It’s I you it’s feet, loan loans whiffed one. to But balance. the XXX, a pop is great. ever the to That’s things of asked or said, here’s I in quarter. compared $XX Minne XXX a for square couple jumps I similar to thank million. and the million into couple it’s I And San in $XX other but almost dug Dallas loan this $XX new on $XX is think Diego, was those office you would on the I

a just as I’m me in understand between an picture older that’s or to and watch is differences older just just what not as those an Dallas area. So other Dallas in you. loans unique attractive that your Why help here, the whether two an and is list? – Thank property curious office

Hey Alpart. morning. Steve you your Thank its for Steve Good question.

Sure.

Yes.

it. about all other of earlier recently submarket So an has by in assets sluggish. has And the heard We’ve in in are the building prepared look, they XX% remarks leasing not It’s been Class Dallas portfolio loans submarket of underperformed. so market. We asset I say our think obviously that building, market his you have this renovated, is some good and that that’s think had trends in category. Jack the office A by are

a these point that different the been and to back is This has a story. one it not of underperformer is just an for So monolithic of every years. number

few on about one same we the of This in strategies category. the falls general resolution of kind talked And assets.

that. extrapolate can You

the deed a sale by typical on the foreclosure borrower. on, this the actively here. on the are like of borrower but possibly it’s lieu working with I menu. the And kind a options All directly table or all can’t at or or think is our that options by discussions something and in looking anything sale followed imminent a of call. We’re property of We’ve collaborative as we’re

is this there’s I And that status. with loan. to helpful assume the there be? what That’s share specific amount a me reserve understand would on Okay. a you – Can

Yes.

– five are loans X. we’ve So that rated the so

Yes.

that’s about about of Have specific reserve an $XX.X XX%. aggregate asset million,

Okay.

is. maybe different, the all on of but based aggregate you estimate can They’re what bit they’re little a kind

put et Got not a you’re understand negotiating your it’s I reserve when idea specific great et to there probably why buyers, with And cetera. out cetera, also understand. it.

very So you it. much – thank the thank you for comments. Appreciate

Steve. you, Thank

you. Thank

Next question Laws Stephen Raymond coming from from is James.

Your line now live. is

morning. good Hi,

so these What second. I buybacks, stock support One especially concerns a sign market, in about valuations Yes. the to that good think where the said your Steve given that’s accretive.

back question many rated Were three and of hotel four to were portfolio, like five four know First it from feel five on portfolio and and – loans we the there maybe changes can nine of that are there into the Kind separate nine these good of them more little four you seeing are I and forth, bit? about from about talk everything you kind loans five. moved that or to total and else? four seems in really the a

Sure. It’s Alpart morning. again. Steve Hey, Steve, good

or in talked no that but Minneapolis in same. rating X.X. as we X.X total a the we four to the loan So quarter far was rest we four hotel those portfolio risk as loans five, downgrades. did There was of the our about other relatively group, stable as of from couple the fours a the of and movement move did aggregate a a the is then fives except five And have to booking

They good to track, a move given two say from movement just but those moved prudent not was market that it’s we thought maybe along on to generally like at notch, fall it nothing more performers everything’s in we lines, of think environment three concerned the we’re this four the category moment where it they But obviously, that to fine. about. as were but one

Great.

like discussion discussions you cap have about maybe new going? to instead those can extensions the modifications; Any date? inability are of an talk there maturity to with of see Kind in on how are pushback or point? this caps? borrowers or buy those other As borrowers you discussions Are at a going extension around protections original or how modification you’d at –

conversations tone in The still we’ve is talked prior constructive. of the quarters this about Yes.

extension for work fees, an or economics, have those coming pay everything playbook who spread, additional we doing are borrower even a exchange right. will with in final recently good borrowers a a more maturity downs, structure on We where maybe is up if

conversations Some you All to cap. of being new like involve equal have things new imagine getting those that we a a can cap.

has majority other or place active our either structure in around cap The the portfolio an of cap.

So wants we – a to certainly service so is important, that’s getting we’re money cap or would almost in structure some other the borrower we the one consider. something But reserve account reserve into look account debt if cases, put a always at that or other.

comments you. the morning. Thank Appreciate this Great.

Our from Suisse. Thank you. coming [Operator from question Credit is next Douglas Instructions] Harter

live. Your now is line

loans against Can Thanks. much – about you loans? you or have debt X non-accrual of how talk how risk the current rated the much and/or

Doug. your Thanks Good for for question. Sure. Thanks joining us. morning,

say So two loans – on the the are those we most of I place of of most facilities terms of in UPB would that put in financed and new QX. QX in sort

So There’s there’s over those bit million them. a the of is on loans. see borrowings the of two, more but other against that’s assets. this three against $XXX say of the would those the I majority leverage majority leverage you the against of little

that Great. new Steve clarity any use And of getting the as update could authorization just that or back you as But timing the to as capital for I buyback gave. properties you far loans? either the that some for appreciate when new more on be then on that might

Yes.

it’s So Steve again.

these couple So resolve of or we different all a are actively as like loans. all of path. some to five you we quarters. can in on the on all next They’re of Ideally working imagine these

a the seller. not going hard want we’re is market and be the to we be, timing to don’t forced but predict, high level, to Just look certainly given

of about resolving start but can. over trying We’re of as be these objective it, quarters couple many the the as certainly next we to thoughtful to is

Great. Thank you.

Thank you.

Jade is today Rahmani from coming KBW. from question Next

Your now live. line is

very much. you Thank

going? for have origination slated loans, is of rated which the this office, risk bucket amount probably given You of the year, five maturity substantial office how a some date. Beyond else everything of are

give So wondering there? update an can if you

the of give relates is more this with say I’ll the and more having not pretty a if to dynamics has you the Fed we’re Jack. to something has office home want it’s but Steve I borrowers update, Jade, general – But that, conversation – majority imposed lot. would specific. the nowadays. in level the rates cost about headwinds through of that work absolute quite say they this. things the like it are a Yes, Hi, the of intense and really to that carry dominate and the which on press market from seems the moved and

in in believe driver I is which and So the for commercial estate, main office. real stress estate

So for of the rest portfolios. our

risk So our we’ve and reserves. through gone rankings CECL our

substantial option, larger the opposed some to not fund funds, operators their scramble the mega have in support by meaningful thing high will, we’ve some eyes It’s it’s our who our maybe more too an as and middle support said, There money properties significant point another and the putting looking And which of supported borrowers for are a because assets are exercise time observed the view their I’ll on But their for that them institutional as them. just fund But what we conversations. to in it. already will, next you rates out of to portfolio with having move some put that lender. if value are embedded they much market is to they difficult you more to as owners, more opportunity so we are at to that is lot on are but they navigate when so the it is will in more to raised. if have over the

And that operators bigger so be would that their might in those would dynamic seeing you funny we’re of stand that think the it’s that more. properties kind behind fund a

say the that seeing property million $XX loan, We’re really it with they market to a plate. loan our bit. up actually million And stepping are a $XX the middle bifurcate

the effect just sought stress things broader on I value say not that dependent, of And and it’s the swaths and guaranteeing economy but I’m effect the on municipalities. also much the this about of really on there’s they putting lot is not the think rates major any on that centers of that we’re dynamics of destruction see like that the largely to not city intentional going a more migration I credit want path Fed. inter I downward. – believe, though, It’s to not

deep uncertain daily And in with basis. still. those closely watching weekly borrowers it are we very very our and are So, discussion or on paths a

How asset loans the of don’t What’s you your are know, now it’s loans within four in Fed level right management? these on of office I portfolio. dialogue? mean, I there is that’s think, affecting top the terms of beyond I office.

is et multifamily, in I we’ve the cetera, seen the other distress industrial, affecting not sectors, where playing property cap widen, think Fed office. the rates of but that out level

it’s the to inability Office, demand. a complete and of rent underwrite lack

I renovated also think, yes, conversions, seeing And those projects. the I surprising, are most renovated are somewhat think buildings activity. leasing best, you two are given some about seeing is the demand, which comments freshly your

level currently in you the facing there’s about But with also I the quarters? next amount office years Can are having what borrowers? of originated dialogue that you dollar you talk magnitude; loans ago. maturities be were three of these will many the mean,

what thought So we’re misheard Jade, with conversations I asking the of seeing and if me, nature you, the heard them. it. let me thought about I’m I you address I sorry you. I were

the repeat many in dialogue are asset that are quite in management borrowers. that are and is well. we there’s some we is so there doing our And that And cited. frequent ones with between, There

do I all commercial real rates so, And that with agree affecting are estate. of you

and and were that example, cap compared of or to originated under coming bought they the rates. are stress rate at bought last originated, CLOs put into level levels that For significant were year at multifamilies the

not did the this, in factor. you But that this I on did work-from-home to mean dynamic touch intense say these not took with I mean in say, sticking if was And to we’re way, and side. a not demand the it reduction the with borrowers office

I think quite it’s significant factor. a

I was about markets next, the borrowers generally. us the liquidity. are. have believe it, that. outer you favor the in their near where right. will term when I see we’ll first in the affects well, reflecting demand stresses liquidity from ranges and the is think though, healing what factor in an there reflecting office The bigger that category, personally are But asset it main goes a back and our I liquidity, market where be liquidity to capital

the in across speaking, touch of, portfolio, just dialogue? say practically are terms and borrowers office of frequency And you let’s with the what’s of the all in

The right Well, Steve, you it and is address yes, maybe the that. varies can situation. answer by

a you it’s weekly be more to it’s much of some to others, and and want about when them not concerned intense. discussion Steve, And not do frequent there’s elaborate? that

Yes.

So closes that to responsible up and originations that the a the is loan way team sources repayment. a we’re set loan loan, underwrites for

approach there’s real to of nuts So kind here. soup a

so – bit So, really so we’re having originating our a not up, of is intense. pretty point right touch There have is be little deal The if it’ll a our amount we’re conversations now, there focus a we this coming mod significant. team. about is for is more

We’re looking tours, budgets at plans, some there there’s business CapEx, business leases, going we’re for reviewing reviewing there’s plans, leasing. leases, is draws site still on

we’re touch amount not of it’s the So having, certainly daily.

all be Although it can – these daily but at certain in with touch points, we’re very borrowers. much

more touch ongoing would say have or our a lenders borrowers, than But one imagine, and of can weekly, us four- a and constructive. or is of dialogue level both loan kind a the our five-rated of a you might two. I us and As with daily,

running repayments the had on little XX% the run see a of including just in decrease included to as I all through want expect We by was to this during a rate And that XXXX, the paid going course a of of point in office. And through that year market said, to half prepayments while over we’re Jade, I blocked back financed year And parties, system shocks raising rates, environment, end last continued because or and December. loans the of we to that were in over office those we bit. December. of fully the the of the amount by

pace and borrowers them robust on to That’s and on. anywhere that site with the near evidence And don’t the significant we including depending working of a say or now. in repayments being but situation we accommodating in in touch seeing demanding as we’re a, loans office our go I for want with last as are year, now, needs pace the their

cetera, et them, of proven so, us. that think where has we renegotiating And out, something working is plan rates, with higher extending for it fruitful for

I been And you. than on Generally, office. better focus know has on say expected. first multi-family side, would Thank Probably quarter is everyone’s I multi-family summarizing good. earnings the pretty

there been areas. problem However, few have a

GSE competitors, One Freddie and And the a about is has today of portfolio. performance talking just deteriorating. Journal servicing Mac your CLOs business, Street quite notably Wall which delinquencies within spiked the

Right.

seeing How are multi-family you the performance?

Maybe want make talk another about and performance comment. you I’ll to

Sure.

the portfolio It’s The notwithstanding good and the we them. portfolio our So, economic is properties As in diverse. generally multi-family exhibiting are rates fairly and feel healthy Bs. the rising environment, fundamentals and about mainly

in southwest. are and Our largest southeast the concentrations

just in southeast door. business as market if much of rent as growing getting so the renovation, door looking get renovation plan, We’re next more guys and but far typically Those this the at work, pushing rent rent to we are saying, property growth, and amount can involve do we the plans next not not southwest. rent, CapEx

are we quarterly, So we seeing borrowers rent still as are turn monthly, seeing getting rent still those bumps. rolls underwritten

is Obviously rates expensive high. the and are market housing

So, that’s helping the multifamily market.

XXXX. rent seeing late when a early I XXXX certainly We’re think, say of not into some flowing. business, We ton did the but

about five back yields. of So, did we exit had The average ton had vintage. have time pushed And we up we don’t that points. probably at do leverage that a what on we dialed vintage period debt

in one turn extra And plus plus they pay that would expect the is an near the on that, that But Maybe peak the some to they rent it agency another markets get some multifamily need in we are general CapEx, to but way, that off one deal. we need higher right in now, exit. roll the three the of are did of the might or fully good in everything down taking year. and they be these saying we ended going and saw we multifamily. not there or putting of years. obviously one, I the general an got to are going So two have I’m look bumps, will by two good that kind in like less loans to up three rent about say, feel market I headlines,

hear. great That’s Thanks so to much.

you, Jade. Thank

Thank you.

closing of comments. to our like I any session. for the turn reached back or over end have the question-and-answer Jack to floor further We would

like And thank in want all us to maintain thank everybody And to and investors thank to team the I have for our your putting to of I hard especially would to for really would and showing you’ve you today. the for quality support portfolio that I our the time appreciate attention. us. work our like for joining it. been We

does That you. Thank and conclude webcast. today’s teleconference

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