Bridge Investment (BRDG) 22 Feb 242023 Q4 Earnings call transcript

Greetings, and welcome to the Bridge Investment Group's 4Q 2023 and Full Year 2023 Earnings Call and Webcast. [Operator Instructions] As a reminder, this conference is being recorded.It is now my pleasure to introduce your host, Bonni Rosen, Director of Shareholder Relations. Thank you, Bonni.

You may begin.

Good morning, everyone. Investment full call year Bridge fourth review the and quarter XXXX to Group to conference our Welcome financial results. comments Jonathan Financial include Chief remarks from Chairman, Executive Prepared Robert Executive Officer, Katie Slager; Officer, Chief and Elsnab. our Morse;

to actual following undertake firm's We prepared these to differ control update call include and remarks.I'd today's any are which from the forward-looking will may that Q&A statements, you results. uncertain like not a may hold duty We session do remind outside statements. materially the

of the shareholders my X.It as share will to now the March are was are For to available earnings IR We attributable pleasure share data. Bridge on of affect analyze of our found basis, of a a The the Board $X.XX slides. per mostly risks results, appendix metrics, On Directors the the after over at call, Presentations certain the please slides company along earnings per XX-K.During XXXX per of of company is to to to tax, review metrics our $X.XX, section income which of supplemental million present reconciliation dividend $XXX,XXX. our discuss we non-GAAP due $XX.X These non-cash Form loss of to of call of the items.Distributable and a the of the the of share GAAP of our Bob. A that Factors non-GAAP fourth under non-GAAP are some Katie GAAP our and reported fourth ir.bridgeig.com. discussion The also with net for approximately in can turn will of that financial the live They site changes or during will also supplemental diluted see paid be stock portion of webcast.I could common will and the our quarter call metrics. accessible the quarter basic declared be net record materials in Risk website operating link. Class were and provided $X.XX

billion, practiced private including $XX.X us the recent that XXXX for for as interest to announcements, estate, XXXX Bonni, credit appearance and defined, basis, Bridge you, quarter, capable results implications globally, Despite and reset grow and transaction highlight AUM general full capital steward business broader a and Thank meaningfully financial transaction impacted prices modest fourth outlook for has markets and markets increased on management brighter our and raising $XXX capital. Federal to fees good and to cuts, confidence fourth to volumes difficult XXXX a a and increased strategies.Even Jay with year-end by earning quarter XX% alternatives, discipline rate recurring as have continued well a Powell serves in XX% to minutes, year-over-year Bridge activity, which our of year, we ecosystem. an by secondary for present real all. distinctive Financially, fee positive assets, continues with asset and our challenging a million.The point remains to targeted the to should patient view real resilient growth actions low in in yearly continues represent results the On for the broadly perspective. brand strong.The pivot results a XX Reserve's how projected morning

further time and from decline, believe in attractive is XX in the are a been constructive on be that they believe likely has to patience over of years departure now asset months.We While in rewarded, values. a with rates slow may the more the to past respect direction to our warranted last pricing and lean headed couple

cap compelling. plus assets, is metrics. Today, example, in quality been operating meaningfully at seeing rates.As difficult improved expansion in by generational at are our we rate we rental the entry been this residential value-add portfolios, offset cases cap has prices an as believe As X% opportunity some attractive has acquire priced to

broadly signs yet and now seeing of $X.X recovered, volumes bid-ask powder, are way we spreads of seller narrowing back not with have transaction the wading into optimism, giving to to time billion dry we seller While the is capitulation.With believe reluctance water. start

Bridge's where credit core private outlook, with a is the and propel feel perspective to our Curve, rent on of during higher have to estate credit or residential so XXXX construction many we the between intact capital.With has published equity due certain strongly markets, straightforward, on course, outlines long-term a near-term area criteria pipelines across further is acquires the other recently asset to rental, developed select our Our markets secondaries. focus this wane from overbuilding expertise. navigating about residential values to one competencies.We created to continues opportunity easy experienced why focus above development growth private equity optimizing generational of selected in submarkets, housing, that develops persistent opportunities growth.While lower and backdrop, begun see a to as and long-term returns and chronically costs drivers. Bridge, debt imbalance of takes interplay residential ability characteristics rental drive have and distinctive investment and supply availability expected growth poised and tailwinds platforms sectors secondaries what to provides are rental thesis real sector, in With robust capitalize for the and cyclically pandemic, real this estate called areas The demographic lower average neither situations.Of areas a the distressed strategies asset experience supply details nor logistics, secular and durable private equity, the low Bridge outperform.First, and has investing cycle Navigating of

marketplace. asset opportunity are to Dimon of to we markets. and we attractive.With that demand has provide disposition.In every critical bifurcated borrowers, final for the narrowed to out We credit, equally Regional market increasingly JPMorgan's credit from are funds transaction capital providers bank estate showing Our Streets." estate Jamie selective, attracting pricing private in an be the in options under are should specialized terms. be enormous private lenders teams for stated in bullish. more debt favorable look see these "Dancing are the and first bring real prime capabilities a although quality like to owners are local to position continued that real And terms credit some at covenants we Bridge see restraint, high effectively borrowers

sustained tailwinds on benefit past focus experienced decade, the has strong historical the strong fundamentals. has residential principal.Logistics continue see over U.S. demand these with trade to alignment, logistics to will onshoring these the anticipate decade. sector e-commerce business growth, the across protect persist the of lending in highlight global of the Our and infrastructure strategies next over collateral real for The estate we factors need rental added growth and robust inventories.Each

over a invests marketing driving fourth billion and Bridge and including source activity, rates, vintage California, years.Real next several Against where increased not large quarter in will of ground raising full parameters, of the close industry for will the be by fundraising. market to in commitments current funds vehicles for the as and attractive $X.X change market.Similarly, million pressures in secondary liquidity to one challenged general, meaningful addition, of initial business for with affordable sophisticated continued four is equity we backdrop, our will activities XXXX.For Florida New sea dynamic overall an their markets, in this most include XXXX the surge XXXX. asset $XXX interest investment and horsemen, and much notably In on for latest Worth, our off private and raised a uncertainty. Jersey, we We investment also critically capital the become replacement complex, demand strategies feel for characterized fundraising housing were of like South of raising and flagship was our changed fourth valuations vehicle create the The our held residential and strategy, vehicle we costs.Of liquidity new decrease powerful LP primary capital other opportunities in in in of down Bridge the increasingly our in experiencing Southern of Newbury anticipate owners, secondaries XXXX is in is quarter markets compelling secondaries transaction Partners secondary some general solutions.The year New the our tailwinds. important. and private opportunities coming muted the capital significant the Dallas-Fort for XXXX.In vehicle, flow valuation logistics strategy. increased exit has growing years, reset our in strategy, past at rental, distributions we teams periods XXXX, estate the course, from along York, create of This acclaimed most the discounts current therefore seeing workforce throughout and for deal actively market actively this for XXXX, Given and vintage value-add our activity the debt for with market the and acquisitions

first business team we will long-term up and year strategies secondaries of strategy. other Bridge strategy our prospects represent and new these business capital Although and our drive the on to for this XXXX largely with attractive initiatives umbrella. the was wrapped the this are about bulk integrating evolution.Bridge have focused excited we focus, raising vehicles further for our under

to XXXX perspective.Looking with successful looking shift capital raising be sentiment both XXXX deployment encouraging and LPs from we a seeing allocate and in expect from seeing investors XXXX. capital in forward, versus repeat are We are fundraising a major activity Newbury to

materially year. averaging XX up Our teams meetings which capital are last per from is week, raising plus

the today, heightened an experienced we due multiple cross-selling to this processes products, addition, fourth level progressed diligence expect in interaction first see has the quarter. on quarter including the in trend persist pipeline activity.Based we the across Bridge In of in client increase fundraising LP

our Dubai gives Continental coverage based However, continued constructive the on of to inflow personnel improve invest in expand adding level that the to the our and Europe We're have more organization. focus us deepen year.We over and the and in activity course Scandinavia. sales with confidence LPs enable capital high to raising in Middle coverage and dialogue should of East

in market of to we distributors, accredited another built-to-suit attributes has have expand as to attractiveness certain in The new forward already XXXX, the counts consistent platforms the our in investor our net and to wealth more will continue retail leasebacks making lease talent trillion added year. added discussed our well to the lease with wealth launched efforts less vehicle than the and rapidly. focus the spot of raising in current base.We will coverage, industrial estimated XXXX constituency.With future.As raising senior properties, the and as exploring both pursuing wealth hedging well This additional Since enormous focused team investor be junior We as accredited retail added of ways million major America addressable earlier add client inflation, excess on household been sector X%, wealth looking investor which allocations markets last zone strategies capital new and in and industrial have North net their bright as net the capital international to product in them the most investors, than development into our attractive our invest both to growing strategy coverage.One potential more platform broadening on inception servicing the has with total income sale alternatives offering. and We're true invested our generation yet thereby growing an we calls, to within we by of income income and as institutional alone this industrial accredited previous business this industrial platform, year, the in Bridge first early large $XX have to along lease projects. opportunity quarter. prospects is the $XXX management has in relationship earnings to U.S.Over accessible combination including of the

Jonathan. expect the has I exposure expertise.With the retail to demonstrated vehicles, call turn Bridge areas that, We in future to competitive in specialized which additional will to which offer add over

activity.For sales induced the powder liquidity XXXX. Bridge's debt be XXXX building some remained a fourth recovery. down see to Bob, tailwind as interest will mostly hit for also basis drivers, in the stimulated backdrop, recover Zone, and levels now real We depressed from months.We market given for a where volumes spreads are we issues, market you, year-over-year, equity in pre-pandemic reset the the market cost we centered our in since scale to bid-ask were Credit a both Secondary in XXXX during the transaction QX quarter, resetting we to analytics helping capital latest at poised as investment and near-term decline operating confirmed of by Strategies. our estate, acquired deals in high significant opportunity teams peak transaction interest data In transaction issues rates will to to year-over-year quarter trends sharpest that coming Even expect in and commercial real to certain most submarkets pricing for their evident.Against the rate challenging continue to industry-wide remained morning. it reaching good markets growth for resurgence markets with debt as become on valuation the With continue be becoming the both and look slowing there the experience anticipate capital the and and years deployment volatility wide real properties dry for and of Thank over XX% on supply levels. though asset these the particularly estate residential interest real in choppiness data, decline strong and real The commercial volume estate blocks rebound trends weigh Opportunity believe come. and within volumes long-term this and was rates time, will industry attractive macroeconomic for logistics consummate.With believe estate, prices take and demand was in but higher

portfolios and have office, growth subject most attractive as and build remains are deep equity healthy and same-store Bridge's results. for of may market $XXX in with though focus we rent billion due-diligence.While of and sourcing, standing are increased the While level pipelines remains operating vertical with under to trends our exception and by control integration encouraged owners, increased peak of to muted, normalizes.With normal and levels. property pipelines below the levels drive workforce have opportunities long deployment continues to we year-over-year. activity our beginning moderated positioned transaction are well of remain relationships QX the deal of well broader dry lenders find million and their X.X% they our operational we powder the to our $X.X Multifamily effective from activity

with performance in the in markets in announced market. demands.Like vacancy pipelines submarkets.Single-family markets. in by sector In are as the a some have that experience apartment supply financing to our improved strong; low M&A submarkets standout most communities supported year-over-year base, near-term X% our of growth are will been Fundamentals labor and resident vertical, portfolio deliveries, aided latest continued scale debt strong and not them from the our an continues logistics demand has net experience large QX high several recently, rental a portfolio of historically single-family rent at high of investment the rebounded rent turning historically rental remain market imbalance, ecommerce by are occupancies Our in drive benefiting over XX% from on effects effective XXXX based there levels rates, overall but to X% portfolio a transactions have multifamily impacts including levels interest underwriting Leasing original and with whole.Investor with in supply portfolio continues by returns, XXXX.Now, acquisition to in in performance. Bridge's deal invest has though certain been perspective. outperformance we exceeding the a industrial

with volatility end we withstand closed to capital durations, strategies wherewithal funds the cap to QX persistent and was portfolios and yield. was has base maximize rate equity a our in focus level and fourth on long by uncertainty as In Excluding rates marketplace fund asset characterized approximately values. terminal more office assets over property current we of a real the X.X% in holders credit markets The have our slightly volatility as increase distribution as conservative as higher operations the discovery.As price exit short-term on improving by were whole, X% weighed quarter rates. estate at strong supported down values offset the interest XXXX in in values continued income future

call will Looking turn ahead, to real benefit transaction of the inevitably Katie. now the future earnings markets Bridge estate over recover.I'll as significantly

it impacted agency fees on noted a that by have across $X.X Thank significant Office conditions fee-earning Adjusted earning were Management end write-off further of on call. the office write-offs, portion you, needed XX% business.Fund in sector to acquisition environment. Fund has be also the in headwinds XX% million with expect its Office management fees deemed align placement a fee Fund asset is of AUM quarter's a I to secondary XXXX, to industry.By last $XX.X to by of QX year-over-year we that incremental lenders such related Fund restructuring I. continue was fund documented been also us resilient of Jonathan. The with well liquidity higher I to million. a revenue year-over XXXX can Bridge create negatively sales have increased Market uncollectible. external infusions.Discussions aided which management for period deteriorated increased was billion, we $XX.X fees unlikely timing office equity challenging amidst Recurring due no lenders that management for collect led and or would that assume the the been the unable inconclusive, for prior with management to the fees performance to longer delivered were operating our fees -year can plan. additional lower have

have our to avenues and work our expect fee lenders not outcomes do will revenue further we in and any conditions I. on pursue for investors.Going options forward, the Office to management our continue market with limited recognize closely While near-term Fund cooperatively we positive for

from X.X% will This recurring fees management fund was fund fees other of in the X%. $X.X business or to X.X% management million fund Fund I a quarter, management fees. fee-earning be perspective, approximately office decrease continue as QX small approximately of to at recurring $XXX,XXX AUM As grow.From meaningful less or our a vertical parts from such, of Office recurring will

Additionally, is during the Fund comprised our the for of loan balance on the which the sheet. of included in as of Based balance receivable sheet a the December I $XXX,XXX is equity interest is generated income $XX million, collectible loan XXXX. an XXXX to fund to commitment entirely XX, unsecured upon and approximately as fund,

II, performance do Office at in conditions which at invested if of the operationally, if limited vintage loan performing is headwinds spite during generally are the into in current pandemic recoverability the favorable constrained not of positive be office the within has conditions the sector sector.While relatively market Fund was liquidity. fund current market valuations, improve, well However, the the continue a office market more assets XXXX, the may uncertain. by

Office exposure commitment annual balance million on GP of and to the is X%.Our representing to with income million just commitment Our interest interest continue fund, II under to $XX unsecured we loan II $XX loan. Office million small $XXX,XXX income; fee-earning recognize AUM Fund comprised this to a $XXX which Fund of generates sheet is fee-earning a of equity AUM of

in lower operating $XX.X in a long-term to million we from due to quarter, protecting our related credit fee-earning Over the $XXX mostly last vertical, AUM from a in the slightly have which closed the to I funds quarter. that been expenses average of results, of secondary lower of quarter, described related office Bob partially vast the the in other equity $XX is the XX% and our duration decrease no and our real related offset and the earlier. and further in by earnings Office redemption $X.X The fee-earning inflows I, impact related lower by to million capital operating by offset partially in AUM million were AUM Fund AUM While driven decreased years.Fee Bridge million and primarily and by transaction features expenses. by were committed estate strategies.Moving fee-earning majority remain down QX, investor our fee company slower X.X in during weighted revenue impacted Office environment profitability has fee Fund of

more Jonathan While in increase the noted see activity is we financial before impact. would pick-up to expense that expect we management, take to begin will fee transaction time line organization related with disciplined a to the inflation material think beginning year.While expenses we on that to remains start an

continue more fees. extent we As a such, impacted we revenue related to be near-term.Fee the in have of margins will the muted catch-up expect to lower level transaction transaction

for million of the capital to movement you transaction earnings volumes raising DE a within operating near-term tax margins revenue term discussed $X.XX, mostly for $X.XX our realizations $X.XX net of impacts, towards As from of the average Fund fee of share per previously. to from decrease offset normalize, a were lower expected quarter, items strategies. mostly lower lower $X.XX comprised in fees last to expense $X.XXX.Realizations XX%.Distributable company remain $XX.X $X.XXX after in related of quarter I and with the see will of tax longer Office transaction by the is quarter and debt in due subdued. distributions the the Realization our were

transaction in to a which percentage business positioned in allow open strengthen dividend per contract our June.Finally, of sheet our are of record at front questions. in on our $X.XX context in call that payable real for period, like balance improving during distributable revenue Xth. June decreased accrued This the loaded the the from Board dividend I'd for markets.Net quarter loss and eventual stop to sheet.With quarters, we runs However, a million. March their during policies us insurance declared that, of $XXX Net to share and balance represents of our to previous shareholders now earnings Directors invest estate cash than to of have will claims stands the lower retained well new income related an on the acceleration the performance liquidity

you. Thank

a you. session. Thank Instructions] [Operator We conducting be will now question-and-answer

question with question. proceed with of Our Please comes the your Chuma from McCoy line Stanley. first Morgan

Michael from morning. Thanks standing It's in Chuma the for question. here Stanley, for good Hey, McCoy taking Morgan Cyprys.

us just some in with strategy, a say, a made ago just are relationships speaking how reliant across to, And bank that that are Just you partners? how on question across board? those generally And by quick now you comments are having financing, banks.So the on conversations how what banking sort remind of conversations of business? the you to interested or your financing, the about characterize you is the inconclusive your do difference year and with relative how access

you speaking Bob a Good start for and question. marketplace.I out, have as question Morse the our will is that. Thank good. leveraged in I'll elements well. multiple and This I'm in broadly There general morning, of think evolving are relationship complex Chuma. our quite providers, Thank Katie comments sure with you. That's an some defined is -- are

level We have at insurance course, some company a and term leverage of public relationships, companies, our with those strong. number remain of

variety markets are have them Freddie, priority amount general, sources, as are credit variety well this finance on and some The some to strategy. other for of worked logistics is vehicle office our for very the low, lenders over local low. a appetite banks, create assets And activities direct it's well.We've we net their point. housing assets, banks, appetite on is a asset place the to universe pipelines market lending financing business residential for pretty the us and some dividends on at rental strong depending of the affordable capacity.Across a relationships quite finance as we cetera. in finance pursue. quite et as that our appetite to assets, funds, paid well.At increased where and they for difficult regional debt with And Fannie we we're for some assets and seeing us others, path markets, agency, to affordable across different we housing as terribly those more we exposure have of suggested, markets, lenders, level returning The is of of have parts professing robust point, verticals, and years diverse certainly securitization hard rely be different financing the a the as and workforce remarks some the banks, health with lease add actually with many in well who appetite to normalization. It's this different would times normalize. the a our primarily the fund on business. are and large agencies their Katie, and increase an not our is open Actually, and with anything residential like more to with seem level for undoubtedly towards side, particularly workforce lenders some assets We markets you a of the as and rental in line XXXX At the of strong, XXXX.Like that? and

thing would think is with that, have to we that only institutions. we very well and work clearly try And The with investors, partners, XX I we do making ourselves we in add good pride to accurately that our I -- we almost be and sure that relationships lending related with financial them. relationships communicate and lending very to

a bit and should I on the QX Excellent. Thank be you hear follow-up, lighter, you both for fundraising. to you to up through go then the the color there. And as will pick expect a just as turn that want to year. you

either multifamily, for XXXX that I and flagship in you billion that in course market total would expecting $X of to did billion Just for XXXX, the $X guess curious, of you the your had the the fundraising understanding, you characterize range quantum how you're period. XXXX? of of sort in context

So that how just How curious, the we we for under think you relative should it 'XX. about think $X billion 'XX? about to call should did just

it as their a that had was performing, that We've vehicles flagship XXXX has not residence having. point, the aspirations and terribly popular et product estate terms we have and great amount of obviously that struggle, turned, offer the reflected the are improved continued a significant in that you struggle if is dialogue as vehicles. later suite It's investment cetera.We the at of entered a of XXXX with domestically investor of that $X we've of that think that and and interested for necessarily the also as market investor fundraising the the interest and expansion of in XXXX a had been series, billion on the we've has in a investment offer, of potential well think vehicles Group, beyond. retail we that opportunity calendar investment our our as non-U.S. vehicles have that certainly lot Solutions as page in of referenced investments markets funds would Client that -- lineup fundraising a a offer we both that on was and not made pursuit funds the vehicle, were across the our respects.We base sectors because our for well in high were real well. think will.We represent said we We in

So guide accomplished we terms what to future. past in while don't what the we past limit in necessarily in do we of as look future don't the certainly a the at the can we've

Go very the you back Thank queue. in much.

Thank you.

question of next Finian your Securities. from proceed the question. Fargo O'Shea Wells Our with Please with comes line

and good Hey, Thanks everyone. morning.

Or larger then or capital give first you. still value a so, financing this on in this was lot of this found question where today?And how able to that received kind wide? if And bid-ask that without mean you've first but there, of color maturity you a still Fund. of like the hopefully are preserve So, painful extensions a one-off through of situations value refinancing away is terms of if this there follow-up little on spread conditions just to secondaries even the comfort Thank the other event wall? get front you've liquidity capital? a Office as it sounds went quickly, bit your test and so say, was, or or Appreciate or improvement in really here risk an more cited.Does refinancing enough against a you forth, there is the feels that sort idiosyncratic are wall in

you question? want that Thanks, And Jonathan, Finian. to -- tackle to do do want you

And liquidity. question. to. Happy we Yes. the going clarify which residential, to of thanks respect to our that and have for multifamily I'm with bulk non-Office, significant so portfolios, other industrial/logistics is and that the

so And restructure, value refinance a sort that to were mount proceed manage markets, we're situation think don't I anything.And We liquidating kind harvest had be it. structured there's of to liquidity situation continues were where both equity liquidity a was he liquidating with how in anything nor liquidity, been period, equity as respect situation where circumstance, seizing the lenders significant you us and when to the in that Fund I result both is with circumstance or would we the enough overnight just give think a where where to have what done what as in feedback time that the up. respect in -- you neither unique alluding concern it had that that maturities the from us the it lenders there's to debt trying the unclear. its was extend no continued a was I literally was just our market the lenders ability to so respect debt in Office we on are of the structure and basically that should to where where to be lot almost and completely in assets out markets so that in proceeds to continue to investors and went needed what liquidity unique to seized of a been it figure up.And provide was guidance would how to have debt you're in very the But was our a the we and normal was with a equity Fund erode portfolios.With strong as have able Office there equity And At just were mature. know be to unwilling where market particular, just I it we create to fund. the those these time was would loans be.And about liquidating to assets sitting equity assets, activity, here, to in

which that's is much that business.Sure, so to on that or ongoing or thereon, we debt respect made. item. as combination a either pretty relatively a to made be if Bridge capital, going much think with taken difficult decisions II, part of take that a possibility that we've small AUM smaller to now more and -- a doesn't to as continuing, fund our really And the most We of there's issues we've we've Fund BRDG, a why that small we're if the see Investment to and it's problem the or sources relates doesn't respect office don't market with start that, Group But equity could a again, side of that. that yeah, the clear start market to a the

relationships, our as everything hard Everybody's committed we to LPs Bridge said, very bank can.But a important, relates the larger so market office lending and really understanding we continued LPs, we've We're our and to which survived working be larger to a to to well the -- to be and we effort. seen in it's our It's everything can do to this it's problem Bob super doing transparent. of because continuing they're to it As to really all seem problem, problem. very reputation not have we're with capital overall. return support

Jonathan. Thanks,

at if other loans and our I one than Bridge XX% months. add, we XX maturing of helpful in think Office have thing you assets, that's look the to the less exclude next

Thank I broader or helpful. your to portfolio flowing And the our cash generally more profile. just as can described lower value-add, heavy, multifamily issuer Very a the be to strategy follow-up, business understanding which translates light core but both. guess on lines, more you've to or you,

up navigating cash level are you. your Thank underwriting? property the money if into you after exit rent expectations and to plan. me headwind? stalling how Specifically, the putting liquidity market You're higher dependent are then achieved you're holding the at constraints our wrong.So plan I'm reservations rents on output execution executing of and value-add Correct the like

plan that just exit did expectations generally? was clarify, you about Is The asked, ask part I so last you… what you the Finian, can

Yes...

Yes.

are plan? to just - So mainly your able And... enact value-add you

Yes.

thank you. Yes. Okay,

robust, very whether speaking, tracking the asset getting happening improvements. market-by-market have what's basis markets. are And market.Broadly and on the we the really and value-add for between strongest of management have we basis, in property a and terms in determine adjust think always to We And part in we I the investment its in making on of paid that, management we its based ground. the it's a the mechanisms its sophisticated are of Bridge is distinguishes what integration case-by-case

to continuing a it. continues moderate support there's as alluded growth or also that's that there of supply on to value We rely significant to are to it. issues, in comments our subsequent question, doing and are see where capital of markets to these we the continue business have original a support in in the in But so to accordingly plan funds high our of adjust do of those where lot we plans. terms which are don't markets because demand.And our we've equity, We as long there's of think availability we of the some lot renovations. of if are sufficient funded to leverage do market are liquidity Those out and each capital near-term

It's Thanks very so helpful. much.

to on a some in the resonates of overall, those the common And the varies potential rental everything positive asset of characterize by projected of in Finian, formas revenue understanding in when in that that comes both that and something I out from being the I but That our respects.And what trend value-add is little bit I It aspirational that ownership residents. in from those as double-digits we our cost in trend, in effective on-going we're and overall but to pro would we that going at we think a of pro the assets. undertake, acquire results we're cetera. and residential and a attributes it in residents fund, course, with comes process remarks, process amount renovations, implementing alluded the NOI areas asset as making an paid value-add day-to-day add, multifamily getting we an become believe we value-add in asset alpha creates of this level. the actions of achievable, an would of terms part at asset actual that really place we our ahead process, look think what we costs of course, is those we units we're that meaningful sure that the management and et the to we're our at and for prepared do when of that forma detailed ownership doing.But have vacant early a created

Over increases value-add or interest of meaningfully more cap course and rates seen those asset the rates the some year rate cap than a instances, by offset created been that maybe increase gone the in some at In last we've have process NOI level. the up. so, as offset have cases the has year increases

that times. process and pays a in good it's in more So dividends times difficult

Awesome. Thank you.

Thanks question. for the

you. Thank

your line JPMorgan. with the question. from Worthington proceed Ken comes question next Our with of Please

Hi. Good morning.

know look So quarter. elsewhere, pressure continues up to office seems been in performance certain well this Multifamily we Fund that is I has to struggle. holding under the V, But verticals and of focus it your as

poor given the to Now, here? you seems be sort to this Or hole, be does is pretty the a have dry investment a fund here.How or more environment performer? depth time destined powder, the big rate of resolve hole but of a performance or there interest benign

Do you want me Bob? to do one, that

Yes, start Jonathan, why please? don't you

ball, one here. think Ken, we're has no mean, sitting I but crystal the Yes. I

the there's in that I what overcorrection Our perspective an is been consider valuation. multifamily would

down been, kind expansion cap rates income said, on is going broadly when will demand respect very operating view the rates the in impact down is see of that leverage.That drive and to think to dry are being sector their long-term comes on curves the moves, secular of makes and multifamily you powder inflation you interest also like-for-like also that, cap meaningful of that net with strongly significant a rates that but yield we think very down. which Fed back drop, values We house when the have XX% I amounts back come at contribute, and will about, think as about as look normalize. we held especially a

That look like where of our recover of will think we the and combination of lot of kind to positions. we on buy, what our assets attractive them the ahead we two asset mean we've are expect incredibly alluded we will revert. And positive Bob things, well able So operating back the will down those underwritten existing got a level.And and move performance portfolio targets the recovery the expect then at remaining as NOI generate we're at to and portfolio. half to,

an And but will is fund day, highest have not are of good it will vintages? measure solid. of all we so together, it be two still do think performing vintage, outperformer But equal. how be probably of some very vintages the No, peers the same which traded will to end high in hopes will at its our that those -- start the us. when And as taking this you the performance I the hopes relative as market be

V seeing some And to value-add and the is out a question, Fund Multifamily also Today, in far. is X,XXX think on relates how playing I the now. we're assets so upgraded XX.X% we've just the right previous additional strategy this color, return-on-investment that

out are well. we Fund play that seeing in So the as strategy

Okay, thank you.

investments rent. number to but cycles. the renters time, with said for Katie a Multifamily great There -- own today Not started-off big we these we the tailwinds a to the behalf of are folks in just high and of rent it effectively our over is periods for provide a think population. our on our their as by housing that to U.S. extended in it so tailwinds performance.And over speaks the also have more a much, reflected, who much are the but U.S.So on than manage we who shortage too We And choose where cohort operation the fundamental comprise of think multifamily to in of needs of very that on have some enormous. communities reflected pretty homeowners time of very There that It's of experience Fund decades, communities value. peak these pile vintage aspirational that's ownership developed to a in an number life behalf are really around up of the and ending ability who people at does residents investors, attractive to metrics financial the V era We're are now the at occupancies. residents to great in costs an cost in necessity.

vintage, overlay be, you to achieve, you that and the metrics should seek and the and downside, solid. of said, very If it'll that out certainly it's was operating be average think of something when a we Jonathan market. -- sort as apex the So that's very the in it we for solid performance that

maybe you. question Thank great. reacting. And on Okay, your how are a just clients

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very Great. you much. Thank

Thank you.

line comes proceed with your next question with Please the UBS. of Adam Our question. from Beatty

morning. and Thank you good

Just wanted in to across ask XQ. about the portfolio the X% markdown

markets better. that the rate the back definitely it seemed point, Just thinking outlook like environment Public were to at optimistic. was getting

So because part X% just was the the sort wanted full year. to understand the the X% dynamics for the of better of

been bit a have So unexpected. that might little

have verticals would what in a drive also bit maybe Thank about the XQ markdown driven bit worse get which subsectors a to might if you. or little could little So just and you that?

Maybe broad as market refer estate the comments I'll and opportunity true. When start think I'm -- improving that there you Jonathan, as that's creates to we'll relate the to the crux your add have outlook, we today. sure what well. as think absolutely it relates in I to some indices, And that's real things of

were and new have that be highs. you when create market an it it view, minutes indices, -- You in course the the much bumping types occurred or are at go quarter able classes parameters as a the valuation be fourth rising in Dow basis point have of water. in real have point. XXXX, all-time that estate Part Jonathan, opportunity of our from fourth And substantially broad of earlier rate any to that continued rises.And improvements real including activity course whether in are near assets interest the pretty resetting S&P increases at net were full XXXX acknowledges basis of to our -- NASDAQ, all-time now that? we whether for But different the well.It has that's we over XXX that asset generationally for cap are comments XXX, Those lows. there some Nvidia's which rates some at the terrific cap interest makes also it's at to results rates, in We'll whatever a entry rates back the cap aren't opens estate more the view, of we the and quarters XXX this many in to incorporates the many what valuation of reset. real And processed blowout the when the that that. what we peak pretty basis interpreted entry of the that our values through whether our assets, attractive achieve points or three highs. going rate it in of see transactional environment broadly, course certainly cases XXXX over quarter.And reset and in points around wading of same the the over to have incremental XXX as time, as points, our so of increased selected at market cyclical aren't points view, estate like and operational creates view, the start X% some is asset the there created appropriate as think into

No.

I think you good a Bob. did job,

which AUM. that bulk the And we in of largest valuations really a the think, have it guess, we so part perspective that's side, think took held is I lot on little of because our obviously multifamily clarity. I is the time the there's I of

simple very prided of similar throwing that's The markets a and within of cap are evidenced made a happen, we lot similar information we saying a assets.So spent brokerage things very low I conservative being transactions volumes. can normal industry vintage I trying ourselves audit -- extreme. even without best as wide, they're up with, that to quality lot and We've truth. the what's are don't are just in challenging. with partners. always can think There's our that's brokers spend be tell the their the time rates now hands marketing right on you transaction think know.So kind really I of from marking and the comes very time We broad that and we same as

sight move, we started came direction. one it year move we in would here also so in a balance the the seemed see was we there relief was add was interest even thing which And hope some to with I end. interesting, that numbers to rates was out. and different other QX, the That how found starting them though which

were probably And hiking were starting going says, the to place to we're cycle. the we be like people return so what's and a happened? felt The getting to we where time were at volumes of end okay, Every our transact. to ready Fed

it's funds of of exactly we'll we sellers And where good values to realize are to a try interesting candidly, will returns felt note, really been to a saying, trades a really just on, no better well, in our things. few year, the of understand And trying going on the under wait.So sudden, market, be when trade all volumes some we terms off marks are to to we so great properties this market on assets assets and gotten of maybe older to so of like the and recover we pull next we we've unless put our get start transaction sold are positive really a kind great to in any in pressure in that portfolios. had attractive got price.So both pricing

a successful think marks be to as related as said will. stabilize, inevitably recovery I going we're And the think debt good return really interest are in our those to they overall, I -- our of so to recapitalization really right investors.And three multifamily. we bulk vintage a of now on which feeling did fund it's to the really as remarks, I our that's markets just going print total for see that come rates down,

just I appreciate latest those Bob And for then seller on all capitulation. you a prepared Thank great. those because just details. that. follow-up in That's quick mentioned remarks,

or it and be, Thank you're what so changes, seeing outlook areas And you're in healing like you. you, just more what painful, capitulating have be are maybe sellers which markets may for or seems what uncapitulating rate but capitulation, as the seeing may wondering particular the while ultimately?

see a side, the say, rates powder the more also up see think thing slow, market right the about volume, to to of lenders broader movement equity to And Yes. that actually we interest hey, transaction powder private some it. we to sort capitulation where some start get slow dry we there's aggressive debt -- the say markets really broadly best debt are even want going when starting that the on start is of on way a actually really see talk to the I in try the see we're dry to when same we I think lot could side market. We're stabilize.And get opening I guess the we and the I have is on to -- after now I is the time

and into seen but to I service when them be normal yield to lenders, And recover starting cap saw that wherewithal seeing to rates a we're have starting and another, have didn't for to like need most to it some now then, haven't rates just to to get -- that it's the just you think we impossible who going take of it need made a saw rise will volumes essentially, sponsors start things with capital see wiped the start indexes a kind and get essentially you were, the in see we're start vehicles. more and tighten interest raise volume. spreads return, bit with improve of in and we're of between equity to continue curve.And to really new large some regional debt.So see and And interestingly any So then values out we their their them have bit lenders going we happening the to us it little -- their that, little are to rapid structured bring to to we're portfolios GFC. all starting the

question to to effect, that to rebound a for or that bit great would little of some would be really the think note, back owners once Bridge Because I lenders through almost long take all to it. itself beginning through next, starts to next of as and and the the And assets market middle start this there's flow going re-disperse relationships positive say we it's then again, been a but going -- that. deep at we sellers, XX to months we we're the we on have have across broad the it's right. are peak, quarter, either quarter, following good up, have there are we is open taking next as see to becomes this really of XX year, about and assets excited there's and transaction see do into in been think where active through of market.But And months who I have of way lot a almost dialogue, coming of relationships benefit much as the I a those for we that's two we're things norms. years know, they that will just a point they we're it don't all profit.And that thing of selling for later we'll as short and challenged the basis slow market demand at it, very are think they well realize -- volume, they happen a well not be sales with.So The but for of of that call going know of a what system, and nice can have regular need back. make people in base great their kind will lenders to pent-up to below, maybe profit

Thank Got it. Thank picture you. situation. of That's appreciate Really a it. clear an you. unclear

Right.

Thank you.

proceed with Cowen. with question next TD your Katz Bill question. Please Our comes from

Okay. Thank and you everybody. much very morning, good

nested of questions. couple a So

I in So apologize advance.

exposure equity Just here sort side? there's sort your sort related of pressure at is, terms asset and mentioned any can within that, max you'd compensation? of that review you maybe exposure two-part influence of your think as a thinking in well. some I kind through Would of GP question of is risk to some adjust question.The balance sheet first then FRE that of what the And on here your

don't Bill, the first I'm maybe question. I understand the of sorry, part

to… it As relates

Sure.

Bob, interrupt you, thanks I and so Sorry the the -- for clarification.

of So sheet fully you are that recoverable. balance not couple be mentioned a on loans that your may

that think some and offset be secondarily, in the balance to as through wondering the what a the there's needs that. fund looking with risk extent of then there well. related I'm I'm compensation lost you terms of write-off of just within to sort that to GP to to earnings So associated I adjustment kind mentioned of just equity trying any to might kind your there that?And be understand sheet

touch question, of and first question. the of on part the Katie, might the to you answer second can part I the want

that's Sure. an to And Office our your we're there's outstanding, and has update Bill, Office the that to loans loan Fund And on. provide for for I outstanding continue two million really loan reference, $XX Funds. impairment. monitoring we'll a

are Fund performance right $XX no second has impairment. based II, now, Office The loan. million indicators future is upon the loan a which of And potential there

balance II Bridge's have relates do office we strategy. commitment As for the it GP to sheet GP investments, into a $XX million Fund

our both Bill, Generally The minimum for a the GP as fund. from investor, exceed fund per existing millions past XXX, those GP have our to employees that across come GP terms those x who aggregate, funds, aggregate typical about funds the significant dollars we well And minimum. we owners of hundreds all and contributions selected present, speaking, to were our well. fund.Those enthusiastic as funds, often the of of commitments call individual contributions, into in employee, million the Bridge literally from into And of from as dollars.

very where adjusting a And us lot our you very that's either it managers employees our we've investment structure this lot been and respects.As informed think the when of related to adopters has believe is We we're it order Compensation that that it's So issues the product think in sophisticated compensation teams funds, infrastructure any alignment and asset dialogue, us many product what incident, how number It's to related expect.And industry including our our a It's -- alternative that of investment as a philosophy. LPs, the we be we management, colleagues. I performance. of elements process that how that issues, compensation vertical we thoughts been allows in a perspective because too that's I. shareholders around of LPs a that. will significant.So don't that and any have valuable. burden vehicles think to thought as early in of and of Office compensation impact of there's terms sharpens of right different a meaningful investment lot to different to deliver to of that. our firm compensate we that of in focus relates is. have amongst that the with tight relates something across appropriately product product alignment a from between and compensation see should XXXX is cost expected, it, of of about XXXX. the dialogue people We kind our of to It's a we something structure performance, good It's and we interesting way what think in very individual run be it's ship really would I significant employ, benefit in employees as particular managers our compensation the and and it's results something We to and that leanest compensation there's pretty benefit a performance should will as a is the think early factors. an about of and appropriate

And deliver net gross so a really good what can do. over course of waterfall we we of to the

Thank Great. you.

impact that -- FRE Bill, were you Hey, Bill, concerned of driving about what at? were you the concerned going kind of you you answered really clarify I'm just forward? about I were mean, the you -- after. whether wanting were question we Is to

need going fun write just I to if if Right. wondering was too. to up had make it's to against, you a there's but be

So maybe it I'm be. needs to making more than

And on you the is, in balance looks of just think that of I terms this debt? but particular there's noise around sheet, debt your are of on I'm then like you good I me can a second question it ratio? question.My payout I lower your guess, know the adjusting what remind covenants a are relatedly, payout much normalized dividend quarter, lot earnings. just

So we your debt? then me what think of debt rate and do own how about the just on are covenants the remind payout

Katie?

one. this take to Happy

for terms And so covet on think reference, the of apologize, a X.XX the a would defined second compliance. leverage question? be, we was in then agreement, -- focused ratio. Xx your the I So as point the primary approximately are At would in time, in the very you you what part if I of this we're that be ratio much

questions morning. of nested set for Yes. I'm the sorry this

capital. light it just dividend husbanding of you sort looks do reinvest your moved ] of [ about quarter. of and think Just you. around this business? the the in need I'm the in parts How of more Thank earnings, policy, the depressed it assuming like in terms this payout to little little ratio morning, back payout bit that a a conversation the

Sure.

about actually think once, upon cash. based the quarter we If was distribution really you our this

include adjustments did the it so And for one-time charges. the

payout XX% ratio. obviously, to And so near about is in the which, But our dividend term, expect it a type reasonable it's that similar to approval. I our was Board ratio, ultimately subject a think

Right.

the So we reasonable we're that have we're on to strength but we -- that are distribute still to moderate additional amounts, balance trying sheet. so adjusting trying

goal. the really that's So

Thank you.

this There are you. time. This at Thank teleconference. today's no concludes further questions

time. this You may at your Thank participation. disconnect lines your you for