Financial Data and Key Metrics Changes - The company reported Distributable Earnings of $0.47 per share, Adjusted Net Income of $0.20 per share, and Adjusted EBITDA of $19.5 million, all exceeding or at the high end of expectations [4][17] - Recurring service revenues were approximately $43 million, a sequential quarter decrease of approximately $2.5 million [17] - Interest expense increased to $2.6 million due to a full quarter of interest on two leveraged residential properties acquired last quarter [20] Business Line Data and Key Metrics Changes - DHC sold 69 properties for approximately $605 million in 2025, with a focus on improving SHOP NOI margins and selling non-core assets [6][7] - SVC completed the sale of 112 hotels for $859 million in 2025 and announced the early redemption of $300 million of senior unsecured notes [8] - ILPT successfully refinanced over $1.2 billion of debt in 2025 and materially increased its dividend [9] Market Data and Key Metrics Changes - RMR arranged nearly 10 million sq ft of leasing at rental rates approximately 13% higher than previous rents for the same space [12] - The managed residential portfolio ended the year with approximately 93% occupancy and a resident retention rate of over 70% [14] Company Strategy and Development Direction - The company is focused on private capital growth initiatives and has hired experienced personnel to lead international capital formation [12][13] - RMR aims to raise approximately $250 million for its enhanced growth venture fundraising, targeting residential and select development opportunities [15] - The company is actively exploring refinancing options for its remaining $1.4 billion of floating rate debt [9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strategic actions taken over the past two years, which have driven significant positive returns for shareholders [4][5] - The economic environment remains uncertain, but the company is committed to supporting its clients' financial and strategic objectives [11] - Management expects recurring service revenues to decrease to approximately $41 million in the next quarter due to lower construction supervision fees [18] Other Important Information - The company ended the quarter with nearly $150 million of total liquidity, including nearly $50 million in cash [22] - The bankruptcy process for OPI remains ongoing, with updates to be provided as new information becomes available [10] Q&A Session Summary Question: Clarification on Peter's addition and fundraising efforts - Management clarified that the addition of Peter is to bolster existing fundraising efforts, not a change in strategy [24][25] Question: Investment products for capital raising - Management indicated a focus on multifamily, loans, and retail investments for capital raising in 2026 [27][30] Question: Performance of multifamily assets - Management noted strong operational results and tenant retention in multifamily assets, with rent growth approaching 5% [38][39] Question: Adjusted net income guidance - Management explained the expected decrease in adjusted net income due to various factors including lower construction management fees and the impact of asset sales [41][42] Question: Outlook for loan investments - Management views lending as a growth engine and expects an active year for new loans, primarily through Seven Hills [44][46] Question: Timeline for multifamily fund capital raising - Management aims to raise capital for the multifamily fund as soon as possible, with expectations for completion within fiscal year 2026 [47][48]

Core Insights - Matt Ferrari has launched PXV Multifamily after nearly a decade at TruAmerica Multifamily, where he significantly contributed to the firm's growth, increasing its assets under management (AUM) from $6.2 billion to $15.2 billion [3] - PXV Multifamily will target a wide range of assets, including middle-market value-add properties and institutional quality opportunities, with a goal to build over $2 billion in AUM within the next 36 months [6] Company Background - Ferrari previously served as investments director for AvalonBay Communities and began his career at Archstone as operations director, managing multifamily and retail assets in New York City [4] - BroadVail Capital Partners is funding PXV Multifamily, marking its entry into the conventional multifamily sector after closing $4 billion in other real estate sectors [6] Market Outlook - Ferrari believes the multifamily investment market is poised for a turnaround, with resetting values, increased transaction activity, and improved operating fundamentals [6] - He noted that the influx of new entrants during the past cycle, many of whom are not operators and took on excessive leverage, has led to mismanagement in the market, creating investment opportunities [7]

Financial Data and Key Metrics Changes - For Q1 2025, the company reported a GAAP net loss of approximately $1.7 million or $0.03 per share, and distributable earnings of approximately $4 million or $0.08 per share [4][16] - Interest income decreased to $7.7 million from $9.4 million in Q4 2024, primarily due to declines in the SOFR benchmark rate and deleveraging of secured financings [16] - Total operating expenses were largely flat at $2.6 million in Q1 compared to $2.8 million in Q4 [17] - The total equity at the end of the quarter was approximately $232 million, with a book value of common stock at approximately $172 million or $3.29 per share, down from $3.40 [20] Business Line Data and Key Metrics Changes - The portfolio consisted of 61 floating rate note loans with an aggregate unpaid principal balance of approximately $1 billion, with 92% collateralized by multifamily properties [20] - The weighted average note floating rate was SOFR plus 355 basis points, with a weighted average remaining term of approximately 40 months [21] - The number of loans risk rated at three or better decreased to 60% from 64% in the prior quarter, while the weighted average risk rating remained flat at 3.5 [21] Market Data and Key Metrics Changes - The multifamily sector showed resilience despite low rent growth, with robust occupancy rates and a deceleration in multifamily construction starts due to financing scarcity and increased costs [9][10] - The company noted a favorable environment for multifamily investments due to steady demand and limited new supply, despite challenges faced by potential homebuyers [10] Company Strategy and Development Direction - The company is focused on active asset management, monitoring borrower performance, and market trends to maximize recovery values [11] - A proactive approach is taken to manage liquidity, with a considerable amount of unrestricted cash held on the balance sheet [12] - The company is exploring options for new secured financing to enhance flexibility and access the CRE CLO market [13] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about investment opportunities in 2025, despite ongoing economic uncertainties [9] - The company anticipates potential resolutions for problem loans in the next three to six months, depending on market conditions and sponsor relationships [41][43] - Management acknowledged the challenges faced by sponsors and the importance of reinvestment in assets to prevent deterioration [47] Other Important Information - The company executed several successful loan modifications and extensions to preserve value and enhance downside protection [11] - Specific reserves for credit losses increased to $11.1 million, reflecting a net increase of $7.3 million from the prior quarter [18] Q&A Session Summary Question: Can you characterize the pipeline today and the level of net originations needed to maintain current dividend capacity? - Management indicated confidence in origination levels, stating that there are assets available for deployment when capacity allows, despite recent market volatility [30][31] Question: Are there alternative financing options being considered before the next CLO? - Management confirmed that opportunities exist in both bank and private credit markets, which may provide more flexible interim financing options [36][38] Question: What is the outlook for problem loans under asset management? - Management sees potential for resolutions in the near term, emphasizing the importance of sponsor relationships and the need for reinvestment in assets [40][41] Question: Is the rise in nonaccruals primarily a cash flow issue for sponsors? - Management acknowledged that cash flow issues are prevalent, affecting both asset performance and sponsor investment in properties [47] Question: How do current market conditions compare to previous assessments of strong fundamentals? - Management maintained that while overall market conditions remain strong, specific assets have faced challenges due to sponsor performance and investment decisions [49][50]