BrightSpire Capital (BRSP) 6 Nov 202020 Q3 Earnings call transcript

Thank you for standing by, this is the conference operator. Welcome to Colony Credit Real Estate, Inc's Third Quarter 2020 Earnings Conference Call.

As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. [Operator Instructions] I’d now like to turn the conference over to David Palame, General Counsel. ahead. go Please

welcome quarter and Credit Estate, Real Good earnings to conference third XXXX call. Inc's afternoon, Colony

We will the refer CLNC, to Colony Credit Real Real call. Colony this Colony Estate, Estate, Credit throughout or company Credit Inc. as

Speaking on company's Chief Financial Andy Officer, on Executive Saracino Officer, Officer, line are Neale Mazzei; answer Operating Accounting and the President is Officer, Chief Frank and Mike Witt; call the today the Chief questions. Redington. to Chief also

this risks cause call, on including the current uncertainties information pandemic please and associated over risks could call, hand on the and or materially, These business of the based to certain Potential contains the novel and that are are I uncertainties management's statements. forward-looking effect Before and financial assumptions. coronavirus, risks, presented adverse differ note heightened with expectations results subject statements potential COVID-XX. the company's to and of current

of and factors reports to from company forward-looking and please or All the time risks factors results, and current that statements affect our For and with risk XX-Q periodic and of a recent to company's XXXX, on section discussion other not could discussed risk filed call in does circumstances. as update the duty for SEC of future November undertakes see X, information no is intend today, the this time. the most events

company's like earnings Mike is President supplemental Estate. measures company's Officer Colony financial on to and are non-GAAP non-GAAP to such call presents and Chief believes over investors. Real to the the company and measures Mazzei, the presented this why of measures. the certain explanation release information Credit website, And I'd appropriate The now, turn addition, which an represents useful this Executive Mike? on In was of to and call presentation, available afternoon released GAAP reconciliations financial financial

the well quarter like to for and Thank start repayment have by our sheet, you, this succeeded behalf from thus like revolving we dedication considerable everyone full would to balance effort employees difficult I CLNC’s credit in third wishing to including their this past during the for joining. period. our CLNC our After these accomplishments quarters, and earnings team team, On Welcome solidifying thanking call. far facility. David. over I thank of would of you

Of still risks course, the of and uncertainties COVID-XX exist.

while and liability we've also the focused organization asset to of offense plan. business However, begun execution pivot continues to team on and on remain toward the the our management,

some like the I'd key third of to First, cover quarter takeaways.

$X.XX total this $X.XX core For respectively. and and of share earnings we had quarter, per GAAP

quarter Currently per book and Our unrestricted undepreciated and approximately value $X.XX increased third GAAP book share CLNC’s this both These have $XXX is quarter. million or position $XX.XX $XX.XX a share. cash of values respectively.

earning You into cash to over time this seek new assets. will redeploy

sale the in $X.X we sales, of asset core last the Regarding an closed third million. operating realized on of property and quarter, gain the

loan the you more status our to this through. complex terminated efforts that filing this seeing We combined team Last time, I have $XXX we a borrower, the and a to mezzanine I on held industrial XX-Q loan and was to mixed you additional also refer lender and on the a portfolio. and This closely CLNC a have were details. Form with counterparties no transaction contract thank senior assets successfully changes their outside our the we an quarter. project for would for quarter, recapitalization like have third closed no million. for core pleased for for for third-party There write-down would quarter in am for at project this net owned sale. took required use capital. while other Therefore, we L.A. inform I lease stated the working the sale

anticipate collapsing XXXX, financial will as been We a on non-strategic resolved, simplify segment reporting, the progress quarter this also make portfolio in to have continue a reporting substantially of will in our of We bifurcated it assets. XXXX. legacy this resolution first our in

As the our our of we earnings. plan the cash towards build entails reinvestment to newly of we first begin implementation loans. This offense, business have balances pivot originated started to into mortgage

Our strategy focus loans making on floating as assets, will rate be well loan. rate CMBS to as fixed to transitional conduit

we interim utilize lines will of for warehouse available capacity. billion We our where financing, have $X.X

We will into loans securitization. later or CMBS contribute CLO these

also George and markets of the further as business builder. those XX has is improve years a He commercial proven to a Kok new as lines, team. like expect our XXXX. would Chief CLNC George real we welcome those in Along Officer. joined Credit As spent in leader us we member credit to has estate and

CLNC’s with relationships In investors. addition, banking enhance will counterparties and our further George

the in XXXX, assuming macroeconomic made re-institute of deteriorate. stabilizing Lastly, position in of progress to to not dividend the underscore in we've light plan COVID-XX. company the a financial We do quarterly conditions

aim be to CLNC far been reinstatement both will board the had with quarter. at financed dividend this. of NAV build exited note the reduction in beginning We said, balance to the protect will in our announce therefore this thus the of important CLNC and to policy the a the cash reflect thus actions income during That it assets sheet initial and decisive is impacted We and came to a and addressing producing the in and earnings form in of directors certain revenues. liquidity, first to cost with company dividend that COVID-XX order

and In effectively challenges feel the our they're market not earnings, share we building billion the This is to potential losses. are that $X.X this disconnect momentum implies We the The We best of balance the also out also quarterly woods. our current than focus we’re and close continuing of approximately shifting deploying team to is value. to book price our this GAAP, by a fully while of is toward future discount the recognize instituting to discount we In dividend. a greater new effort we all playing and address the way beyond CLNC to committed of into current of deep protect sheet that group. COVID-XX that our capital valuation peer offense. investments, summary,

We have challenging this accomplished time. many our goals during of

business are We focused on executing our grow plan to earnings. now

We have new and to to continued vigilant loans, management. asset, by while no of The remain originate liability can be COVID-XX risks already cash continuing on begun means dismissed.

turn However, time, through support this efforts Witt. team of Officer, CLNC and would in counterparties, over the Operating now Andy? the is forward. like Andy the call the lean of a to to CLNC our At position Chief I to our

cash More our begun attention to and been lines past this focus consists earnings. Thank paid. and to originations Outstanding toward million of you, been CLNC’s whole on $XXX stand portfolio of and this good quarter, securities turn the payments Currently, to LNS reduced expected during segment has on loan the highlights at $XXX Company warehouse portfolio $XX repo include we we for new corporate this CLNC of million credit. are currently hand company quarter past liquidity one closed resolve total Efforts quoting and building loans X% the line continue. to subsequent borrowings deal the liability has million, under quarter-end, pleased lastly, availability subsequently have recently, XX% report approximately new Mike, of cash of actively value. And which quarter have committed $XX position in is GAAP our and of includes million. revolving is management. book afternoon, The continued everyone. core and interest new to be capital. and current net our asset portfolio to

cash during million some performance committed pocket where have is third the to Additionally, form approximately October of well a totaling, capital. payments interest and support required out of collection and modification There PIK Loan we of portfolio loan XX% portfolio their $XX received. as have loans. expected three which their equity. reserves, some were in loans partial remain cash come figure were as strong. loans excludes under borrowers core application existing quarter loans of This

sales Our own Core portfolio million higher loans equity Core or in on $XXX will estate sales core XX% real gross portfolio in quarter of level were reporting non-strategic $XXX inclusive of for the resolve the legacy last Since the portfolio investment a We included portfolio all properties remains third own current portfolio. and in our assets selections CLNC performed XX%. real October. resulting segment proceeds. collected borrowing estate paid-off well. on million proceeds. asset gross of industrial investment an of of

address a for on executed end relatively the and prepared payoff disposition Neale CMBS performance in including has and more low. certain remarks. for on the million proceeds. on Underlying liabilities, advance the repo of CLNC holdings. Currently, or repo and sale on securities million XX% rates rebuilt. there solid discounted and will been investments at also portfolio quarter securities his portfolio hold specifically loan CMBS resulting for are portfolio respectively. portfolio million Following $XX no core except Core targeted in repo $XX XX% $XXX stand are

to the portfolio, the managed level. Lastly, perform continues the as core it CLO floors benefit LIBOR loan and from underlying at relates to

of continue and reporting were manage of last the It and noting, events. million. related introduce We trust course loan total as Since worth the period, the mortgage $XX first XX for two trust address thereafter. portfolio. as is the the managed shortly course loans. loan of portfolio loan replacement the provides a to trust The to the payoffs or performance was within the payoffs collateral the payoffs payoffs of the ordinary developments, monitor COVID-XX well our replaced consists flexibility collateral to for with underlying underlying within collateral aspect CLO concurrently Currently there ordinary other

monetized or XX% focus resolving Turning of to remainder portfolio, a to LNS the Today, LNS million have continues of $XXX be company. the the we the portfolio.

quarter the the assets of $X gross resolved portfolio the X% today, carrying or third LNS million GAAP for and or price the of $XX LNS book $XX less of accounts XXXX value. million aggregate for sales value the above net total than an sold million through company a During after costs. net present At of sales price transaction premium company and XX

currently with resolution million. expect of assets We meaningful of an execution the in $XX book with value between approximately end XXXX net aggregate nine now activity and

in As CLNC new closing, in quarters the relative playing size further to as loans. Mike is reduced offense originating LNS reporting noted, portfolio. the collapsing the we now In segments the coming anticipate portfolio total the is

new quality our total on in cash sponsors. in focus for We subsequent began company capital. and earnings flows approximately to build is investment quoting with simple, a one closed objective new a loans quarter and high committed $XX estate current As generated we end September through real million predictable

$XX have We approximately loans Neale on million under the Officer, turn Financial third quarter to call Redington three that, elaborate Chief in our totaling also to commitments. With the total application results. will over I

and good Thank you, afternoon, Andy everyone.

supplemental I'd XX-Q holdings like available financial report, included in We'd be report, core results, $X million $X.XX XXXX will Form to and further quarter total reported turn quarter third Form net as for finally, to all to to our share per million continue With our discussing third portfolio also attention share. like draw stockholders XX-Q. our And our company GAAP your our and let’s we website. information of financial tomorrow. everyone is supplemental to that that LNS our results. as which in our common Before details provide $X.XX to or on attributable quarter our CLNC remind earnings and filing income core well third or per total $XX.X asset-by-asset

per for Excluding adjustments were realized LNS share. total $XX adjusted a $X.XX gains and loan losses provisions million or benefit, securities, on debt the value tax fair earnings losses mark-to-market on and core one-time and CRE

net to beginning increased conditions the market During from the it the XX, interest the book XXXX. volatility company concluded suspended $XX.XX $XX.XX pandemic. total and in the increased company's book with this share. best liquidity company a per period $XX.XX We GAAP arising to Earlier to that was unprecedented an value we ending to cash dividends the monthly third $XX.XX value undepreciated share, quarter due per conserve year, of monthly from from April available

since Given that improved our outlook the financial of business and position, onset pandemic. performance have operational significantly COVID-XX

being That our continues for ensure a with of for to Mike distribution status the stockholders income the the dividend QX to Board company of requirements dividend policy the as Directors will intent we resuming minimum and mentioned, reviewing year-end REIT XXXX. will said, at As taxable company monitor meets to maintain its the that be XXXX. payments its

backed to progress commercial exposure. We mortgage continue our in make good reducing securities

subsequent to third CMBS a of generated realized in quarter gains. proceeds $XX million the end million and net $X quarter During gross sales

on of million down sales balance these of repo just leaving a paid With million. facility, we a $XX total our $XX current CMBS

quarter. Turning the now second approximately value, $XX.XX to portfolio stands value book from unchanged billion book our core per share undepreciated at or $X.X

value collateral carrying an multifamily. $XX unlevered blended in approximately quarter a million the of portfolio lease continues on loan of segment of portfolio our office net quarter, of of our net capital with appreciation. potential The assets our are of largest book real size, they term $XXX of in The the of geography Our core end stable approximately loan be and million. and book and of X.X% loan the long-term type average loan this office portfolio at lease consists core to third Furthermore, carrying flows the end. weighted is due average for within the value $X.X the of focus lease diversified estate, Also size billion properties at terms to the with remains provide, industrial addition to years. X.X investment cash to strategy yield our

all composed loans certain operationally to this value formation the segment estate, portfolio This is retail net Turning prior and intensive $XX Total originated million approximately book or to and GAAP for non-strategic portfolio. our of $X.XX legacy stands at share. real predominantly per other legacy of CLNC.

our sheet. to Moving balance

at-share at stood total as Our approximately September assets XX, XXXX. of billion $X.X

our the of quarter, million third the our Our revolving was first and down quarter, was second from recourse X.X $XXX credit at current approximately and debt-to-assets net XX% liquidity ratio ratio exposure at the X.X substantially and the end quarter. $XXX reduced between facility. million times debt-to-equity times Since availability the we have $XXX million our to end at of XX% hand under stands on cash from and debt

for risk the a ratings risk those payment from our given reducing third of assets ratings, in XXXX ratings in of our quarter, increased to good and of we we’re because number earlier concerns, COVID-XX some Turning the borrowers. history continued

of the X.X quarter was As third end to quarter. last such, at X.X our end at rating at overall of risk the the compared

fair provision up the That approximately end is our represents at call concludes X.X% the for lines. remarks. Operator? open questions. that, million and our of against And quarter, with seasonal prepared Finally, the third $XX reserve let's

Thank you.

question-and-answer We [Operator is begin Raymond ahead. Laws the will James. Stephen now from question go first The Instructions] session. Please from

Mike picking you're But Mike. afternoon. months time six good offense your join been gear job then I about now you’ve to starting and that to lot know months, an nice pivot good that to Hi, and interesting eight done, team, to getting shifting a in there and direction. see

look Can if estate is you all months, loans, already loan theory and or it's on forward investments, out closed are pipeline mez? side at the you maybe portfolio six a to talk be origination look little on looking would a look will at like? other type one mentioned you going about think you a focus XX building. what Is bit You real or I you exclusively basis? it or the go talk Can the first about new

the joining for the and question. Thank thanks you, for Steve, call

Going much we as of forward how cash, deploy. the part on the be short-term to first is of deploy cash we can going the that

leg watching protecting needs business billion one as more get is $X.X terms one sheet, more cash the able visibility and we deploy be so on the we'll to in watching new COVID. And that cash. And in portfolio of of almost the really in there balance leg and

much So deploying more and and it of let's couple take we'll at we're of months $XXX deploy. log looks point, say look first cash and how and the what down that us the looking can million like a at see of that'll we

gotten transactions can at categories at we're multifamily, in to right the we assets some retail low In XX% a XX% segments probably multifamily of terms we're are contribution. we've probably rate, now, and on the hotel And leverage, office some And of rate pricing X% on but XX% probably into, hotel and there CLO are are that pricing is loans and under consists what application selectively, by a we're look office. we're looking that right avoiding, rate you're maybe the And seeing – to probably high focusing other fours would suburban floating fours, ROEs levered. for retail. and is basis going and well, do what that that's definition highly now definitely we there

in exceptional. market really out we've going some look we or it $XX sure loans, loan we we're can if that really currently And terms that want improves, through if done. the as put loan sizes that portfolio. lines, cure exit keeping quite have, to to as don't so it, the line. that loans of we CLO to the be placed it, to million there's things would CLO these our already of but to come take million we and $XX The could to make of that a any that mix going We are on financing frankly, we in much into trying of we'll we We're probably lever do those change go above avoiding that want which off size, and the we to problem, also

existing So to avoid big we're or And loan with continue that some begun, new the really step we're at going out tendencies maybe to is construction. developer lease least could and The construction risk. to the a ground one. taking pre-development, in up to avoid with we're or where figure going an existing we're loans, taking with pass nine be transitional going that we're the doing avoid up new and acquisitions going

slowed are right folks think price of because many given the we're just considerably, market investment COVID-XX. to acquisition. don't I has The assets loans how looking down at know now,

not demand seeing. now about super excited the we're is what right for credit we're So high, but

involved focused going XXXX on and team, to the as be when doing think they CLO on a transitioning and assets, forward been Andy we're to were what be that. the it'll where close was move lot the with I in answer firm that, we Andy So doing has

that think higher us for take augment Kok, I addition of the plumbing to business ROE With XXX to well. securitized try also a place days But do the have as in do we'll which in to a major that. XX George in is the the with to market loans ability firm, the we'll coo CMBS to the get that may

And Great. let's to I outlook? little visibility quarters Appreciate to two how a talk portfolio. expected the on to outlook three the color existing unfunded month a any we Do commitment as towards repayment are maybe have near-term, here Can shift so six loans on an you looking say that'll guess then to about – from commitments and next and in maturing that front? be one the on you need standpoint, funded repayments are that that. on

In terms say to XXXX of something million fundings, the can future probably past you, it's number we way that fact. give going is out total that I'm $XXX under – the all in

So not XXXX. a you in want in number for for big cut to fundings. number future might of half It's us terms that

and We is we loans loans of if have in go loans sheet, payoff do of those continue the we’ll that the replaced there originating some great are and we're seen loans have CLO, structure to balance a that, terms the CLO away CLO some loans current with in costs. in to where from the continue liability

got plus XXX LIBOR one think like basis. I a it's cost

CLO new to that as So maturity we'll comes guidelines as that. originations out of long in put meet weighted average terms and in of they anything the and things like a that look

mean that is point as that to slug doesn't necessarily in asset property is but described at the nonaccrual, see have put the you'll the XX-Q, underperforming a monetize time. in try to tomorrow it them, mixed-use, of filings, we think means low the form not this those. on assets, repatriate And sell we previous waterfront we trying the is accruing which in really focus the whether which LA yielding and are going thing that is I do to it's

So that, on an CMBS, and turned writing the the and off we we we're taking down have – the interest carry basis.

that So capital we put needle it we've can market. if would that of that back really are the us and move got out assets in repatriate and slug for a the underperforming,

Appreciate sense. that makes It Yes. color.

here, But the positive that you size set but a on straightforward you're guess little reporting dividend that Mike, next EPS of look a little yield shareholders adjusted the core more to forward? kind this pay to we I'll a capital if requirement, probably of you to about three up, we wrap think can to two two something talk framing – On part talk and return gets Are losses at distribution as REIT or how you it then times it I the But you you're dividend? S&P? is the could about about up. basis know question dividend. framing LNS, year. of about should thinking a opposed and going Should the bit carry looking how have where Or I

we're that I on think yield a not looking one. at day

deploy looking sheet, assets in of we capital day terms and think We to looking to out are when will at one, think – some on we're balance where earnings figure of repatriate we the that pay trying that on the fully we I a But dividend. bring yield.

– when see, fact, to we you'll So we've down their and had we're just at took through we shooting impact had that And see little on things recently, way mentioned know drift on further those that we've effective continue an you some financing of given in bit the core not to and that earnings, done looked earnings. metric. financials. earnings for sales the prepared at remarks, discounts a were the work hit just NAV, assets, a as those the look closed, a not they they've looking I we've you sold When our sold or

– dividend is continue I be much year, Board started. the talk point I what will less could than potentially to I up of about but think the little we'll increase earnings the to in the a get what our the course to nominal down it to a earnings trend be build And past. we'll is, had we over not going it think us now starting we will as redeploy think obviously back and to dividend, bit capital. come is and But So start

and a from say that So we rely think quarterly build dividend have on that can we we there. we can

value quarter. around stock Great. is the look And guess at? shareholders you I ask considerations Do new every feel repurchase, I are investments I this or you something lastly, dividends think But better that for good that to do to of and that nice the more some slight I attractive it's I ticked think slightly, than see see, up note repurchasing which actually stability is stock? increase think there. book a

with repurchase trading to discount just attractive on at a general dividend here? the stock why than So stock book a XX% your maybe more thoughts reinstating

Right.

at GAAP So and price is the book value $XX.XX $XX.XX undepreciated, a compelling. sub $X

let's very of we words regarding course it's as during required beyond So a status. for mince our Having not leakage dividends ROE. were around of what's first REIT restriction that that, we the gate – year, huge compelling, and buybacks had a that, is said the the of out amended line

do, are the at to the we buyback have in is than increases, the you so short-term have what shares. move at want of that confidence by could which be to So really date. shareholders, if in while do stock. needle Colony a a the in from – very they that, right But shrinking you is that note of buybacks, moving with the to the it's have have nominal also ownership been in buybacks overhang of percentage a a we we’re we I I ROE which we giving effect have – we've lot other there. discussion firm, Capital really the the And terms where sector, a compelling, a And on noticed you capital that restriction think all more size lenders gone. later And to now

taken effect pop EPS don't you've necessarily the we market, the out Now, obviously but that. on long-term because it has of a shares in see

shares specifically why the effect going discount, market a the on the to get the out the and stock, plan use but a having one-time in that's we plan. stated I capital remarks, think effectuate to two the discounted was not the one closed the there buying and GAAP effectuate day is plan that of but prepared recognize So to and rather or we

focused now, the point even I we're are that But right sense doing we're And would probably firm a think are that restriction, scale, remedied. business. we to if I we'd don't on. know have are didn't with So reinvest highly I economies this to we equity. where something we the buybacks on restricted of Certainly I terms think rather think the so into it, where the the of be have the in makes of firm, shrink terms in size given the if at equity of of shareholder that size not

I those good a put thought Great. comments you've Obviously, very, that. there. made clearly you points some of into very appreciate and lot

So thanks taking a for good this lot my questions have evening. afternoon a and

Thank you.

ahead. question Randy is from from go Binner B. next The Riley. Please

Hi, thanks.

mention So and dividend of to ask I'm kind a I the going to try couple the best can.

$XX identified was Page So sub does that X? or when yes, million $XX I in map on that million, guess, the and $XXX to first million Mike, you deploying said were generic, you the

Right.

That's would that that very not. does – question. a So good

you loans. like So, and look probably XXX something could around XX%, at of be, XX%, leverage in if that million something

we're deploying that needs $XXX get into elsewhere we to no closely more that more of loan. million the make cash, we're XX of is slug are make and as on any there way So we're We're also we first we're may monitoring And its have XXX deploying million the deploying that cash. around XX And XXX. saying that confidence be the as doing portfolio. basically cut. the sure will right don't we're clear to out $XXX on the now gradually that that What portfolio de-levering

million, So if multiply you that got by could took loan $XXX amount. just, you over four. your And you

every you're business, in that CMBS capital million into and getting because back that Randy, uses probably get the Now, if XX a conduit recycling it. three we over and two, XXX months to capital turning loans

early probably a to that's of quarter, fourth we there that until the XXXX. $XXX So but be may that not conduit business, portion allocate late

Okay.

though, top So new way is there, and back, going XXXX, you to you've versus there size legacy is done the statement, property, able think think think a little a about would I is were put the down accomplish on, what but year you to Yes. to, much and a to can if income, do what that you there just year-to-date income the XXXX took roughly or what plan, of interest it's turn other from perspective and lower you this is income you'll come XXXX? be comes you off you stuff out and can in been had size stuff running. how have line –

that So on Randy, jump maybe in one it's helpful. if I can

reduced the described we've adjusted per how think I So earnings right. share,

that $X.XX. you partial cheering think recognized some QX was have And QX that as well, in, will come that to number we to had What there will So then during adjustments are a I the right, $X.XX, – that we're that will the during transactions was out, have period, the that because that primarily come And tells further build needs of that we sales which down happened income. the is and reduce LNS during is there taking out. place on that book period. income

Mike QX. So the But up. sort through dividend. a pick said, sort we to year we'll And give or that of year. later $X.XX those set QX baseline in did through at downwards for deals our would base commitments through then an during existing a a grow us opportunity And newer to that where or form the would that think as of components I have driving deploying to think either a keep you be to we we

generally? All of makes to you're payout mean, that then XX% said, Mike, a is ratio, is right. and of I it just no metrics, wanted it thinking like I there's not you of think XXX% but to And think it reasonable That being if – whatever base or sense.

I COVID be by we is goal any the off and pay. we other that I we're we but think the we to persist. it as end ultimately, are balance mean, if know year, get And around, don't there if our of issues then capital start sheet, there something confident the redeploy around with will if can

that open up. to up do, don't the opening going base, is, to start fourth So To initial this it's obviously really be. I – know what start And only we're elsewhere to there. we're go to dividend, a a They we're – dividends where will not that's where – comment the confidence we're and have up. Randy grow we with have going the backward, saying going so redeploying we trying we We dividend but think have want have if that will needed. we'll starting again, come the have And is is we're our Then two, it board. of capital to quarter, to of that confidence kind this a want that or quarter backwards. off resolved that discussion a from use I level, with is that our after reinstate that This in have is here. not we point to that capital

helpful. is This

and that's you then in $X.XX so Is And kind some easy of the about what it? book say to to next non-core collapsed there book what and that to happens value? the collapsed, of now Is still how non-core value, way that being between we year? of portion monetized whenever $X.XX? that think to that happens right remained. of basically of think way I guess, collapsed When other disposed to that is should Or it and is think

interim asset. in into in will transitioned the period, time, total it Over be cash. But with it grouped will be

we to want So separately. out call just it

goes catch, I commentary I’m the the ultimately sort assets LNS from a as So value conversion value jumped balance on included to It's entire we together of book sheet of all reduction to assets it. back I’d like it's and away. sorry, not total Andy, the to book in within as in, just that share collect

it. that think I No, covers

story… I the think

made I got just – Andy. I go ahead, sorry, it.

the the think we'll you the underlying that see X% to expect value at could to a manage assets is about what which stands continue net of I collapse reporting, book book and reduction portion to over coming but At maximize of of story No, time that. today the is the quarters meaningful value.

it. Got

there. take for offline. Okay. I'll leave it other Thanks can much. I details of some so the

Delaney JMP Please go from Steven from Securities. ahead. Next question is

on plan. Hey that guys have it's and exciting with you you. new the congrats into Thank with XXXX Andy made to and and to Mike, game on you the to you Neale be and go good progress

you. us, Steve, a you pleasure have to thank joining it’s for

I or find last all he's is couldn't five familiar, name my you but mine. apologize. more, the but very just – him. pleasure, Kok’s Googled George I XX It’s him, years? just like been I where us Can tell

that It's years. actually you XX asked he'd be flattered to five

like to paint going not I'm old an guy him me. as

period I And major the his time. and worked I crisis, worked Lynch, went Capital Merrill And George he off to he then the spent rejoined firm. And after there, also financial Then at together at him ran was to back he we the years him Morgan unfortunately where recently. prior and bench Ladder at a financial the has George financial for institutions, BFA, we George when then of Morgan initially then Stanley, to debt And crisis. together the lost Stanley. there. got securitization I to platforms

that’s Well, fast.

major institution this Decades in of business.

Well I shouldn't between with wouldn't conduit much relationships. have the yourself, getting back George think guys your you club. and trouble into

great a that's that. congrats So development and on

one have thing. other just I So quick

few of $XX first I I what always mean, question feels property multifamily, about we real loans talk types, call historically the your it middle industrial. described kind type like You million is, million, market, loans. $XX but

a or your So how – years COVID the just thoughts social they combination your flight, with to. much are these things urban been three which than And might've everything I'm expose unrest, about we've you to and geography two you've with like controls, days? choice And what to curious that rent just about today, been through ago. want capital geographies different of where got are you thinking

I Thank that think plays you. Well, in. that

the as First on a the and change affected effect come in is travel Those – back. retail people lodging retail longer and have a go and actually that will asset a I to given on, how that be that's in of will The property will the that focused get of reason. that And all, idea for have want for better market assets, we certainly. exists hopefully everywhere. going think what's the business. narrowed being, lodging an than types business theme time impact the we're

changes You telecommunicate back. But that, ability may and eventually because the think the that and working of come business some whatever. get hotel will to remote we

seeing states, that on. So you're flight growth love we going the they're all and states

on the in concerns are screen. Southwest, loan an – look states and that We'll Southeast, positive that state it's for. there location we our where radar going there any whether and are are are the business do up are metrics. states is those shrinking concern we population. on all overriding So taxes based in Texas, some there But And is a any that

– play. transactions been know equal. say all being where be the a some at could going have We of state looked that that's that's an things city we've taxes there so up a We we've that's And area, state, where don't dramatically.

terms In short-term we I of unrest, of think think, a phenomenon. piece this is social

Right, hopefully that passes.

transactions. to in so something where we going they're stay trying not major from a probably market, you're us Right, to middle avoid. doing were bigger deter generally, MSAs, loans, we doing But deal doing

something to I as middle $XX more sizes, So focus. initial loan more probably doing, is said, where the $XX we're secondary million million market, cities

with great. sounds Listen, for the time thanks on That great be you. to and

joining us. Thank you for Thank you.

Steve. Thanks

over would to I remarks. like This conference session. concludes Mike to the the question-and-answer for closing turn Mazzei any back

in much. updating you for call the quarter you to in results Stay Well, very our today. thank forward fourth well. joining Thank looked And February. you we

call. conference today's concludes This

for and You may have participating a you Thank disconnect your lines. pleasant day.