Financial Data and Key Metrics Changes - The company reported a fourth quarter GAAP net loss attributable to common stockholders of $14.4 million, or $0.12 per share [3] - Distributable earnings loss was $35.5 million or $0.28 per share, with adjusted distributable earnings of $19.3 million or $0.15 per share [4] - Current liquidity stands at $168 million, including $98 million in unrestricted cash [4] - GAAP net book value decreased to $7.30 per share from $7.53 in the previous quarter, while undepreciated book value decreased to $8.44 from $8.68 [18] Business Line Data and Key Metrics Changes - The loan portfolio increased by $315 million to $2.7 billion, representing a 13% increase from the third quarter [7] - The company closed 32 new loans for $941 million in total commitments since the end of 2024, with 13 loans of $416 million closed in the fourth quarter [7] - The average loan balance in the portfolio is $27 million, with a risk ranking of 3.1, consistent with the previous quarter [12] Market Data and Key Metrics Changes - The commercial real estate debt capital markets are experiencing a surge in new issuance, particularly for CRE CLOs, driven by strong historical credit performance [10] - There is significant demand for loan originations, particularly in the multifamily sector, as property equity investors seek to monetize legacy assets [49] Company Strategy and Development Direction - The company aims to grow the loan book to approximately $3.5 billion by year-end 2026 [11] - Key strategies include resolving remaining watchlist loans and monetizing REO assets, with a focus on the San Jose Hotel [11] - The company plans to execute a fifth CLO in the second half of the year to enhance capital deployment efficiency [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the demand for loan originations in 2026, anticipating a solid demand as more assets change hands [11] - The company is focused on improving portfolio quality by addressing challenged investments and increasing new loan originations [5] - Management noted that the current economic environment is favorable for commercial real estate, with strong investor demand [10] Other Important Information - The company repurchased approximately 1.1 million shares of stock at an average price of $5.39, resulting in approximately $0.03 of book value accretion [18] - Specific reserves of approximately $54.9 million were recorded during the fourth quarter [17] Q&A Session Summary Question: What is the amount of leverageable capital tied up in resolved or in-process assets? - Management indicated that approximately $200 million of equity is tied up in REO assets, which are currently a drag on the portfolio [26] Question: Can you provide an update on the San Jose property? - Management reported that the San Jose property performed well during the Super Bowl and is undergoing upgrades, with expectations of reaching approximately $9 million in NOI [33] Question: How is the pace of originations expected to trend in 2026? - Management anticipates a pace of originations between $300 million and $400 million per quarter moving forward [41] Question: What sectors are seeing demand for loan originations? - Management noted strong demand in the multifamily sector, driven by the need for property equity investors to monetize legacy assets [48] Question: How are spreads and competition affecting the market? - Management acknowledged ongoing competition but highlighted strong demand in the CRE market, with spreads remaining stable [54]