Financial Data and Key Metrics Changes - For Q4 2025, the company reported a GAAP net loss of $32 million or $0.49 per share, with a book value of $13.04 as of December 31 [3] - Distributable earnings were $14 million or $0.22 per share, and a cash dividend of $0.25 was paid for Q4 [3] Business Line Data and Key Metrics Changes - New originations in Q4 totaled $424 million, surpassing repayments of $380 million, indicating a positive trend in loan origination [8] - Over 75% of new originations during the year were concentrated in multifamily and industrial loans, sectors with resilient fundamentals [5] Market Data and Key Metrics Changes - The company ended the year with over $880 million in liquidity, including $85 million in cash and $700 million in undrawn capacity on the corporate revolver [9] - Total financing capacity was $8.2 billion, with a debt-to-equity ratio of 2.2 times and a total leverage ratio of 3.9 times, consistent with target ranges [9] Company Strategy and Development Direction - The company aims to strengthen its liquidity position and has closed a $650 million Term Loan B, reducing the coupon to SOFR plus 250 basis points [4] - A focus on geographic diversification was highlighted, with the first loan in Europe closed, positioning the company to capitalize on relative value across the U.S. and Europe [5] - The company plans to implement an aggressive resolution strategy for watchlist assets and select office assets to compress the discount of stock price to book value [6] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the market improving and highlighted the importance of executing business plans to unlock value in the REO portfolio [6][7] - The dividend policy is under active evaluation as part of broader capital allocation discussions, balancing near-term earnings visibility with long-term shareholder value [7] Other Important Information - The company downgraded certain loans to risk rating 5, resulting in total incremental CECL provisions of $44 million during the quarter [8] - The weighted average risk rating on the portfolio is 3.2, indicating a moderate level of risk across the loan portfolio [9] Q&A Session All Questions and Answers Question: Discussion on accelerating resolutions on watchlist and REO assets - Management acknowledged progress on REO and emphasized the goal of liquidating assets to create a cleaner portfolio, which could lead to better market recognition [12][14] Question: What does success look like by the end of 2026? - Success is defined as monetizing or liquidating the majority of the watchlist and addressing office portfolio issues, with a focus on clarity and resolution [16][18] Question: Concerns about loans that are under-earning in 2026 - Management indicated that while some assets are underperforming, contractual payments are being made, and there is potential upside from resolving REO assets [25][27] Question: Dividend policy and financial analysis - Management confirmed that dividend decisions will be based on empirical financial analysis rather than market sentiment [28][29] Question: Insights on commercial real estate credit demand - Management noted increased allocations to real estate credit and equity, with a shift towards opportunistic and value-add investments [48][50] Question: Impact of rate cuts on REO assets - Management observed that rate cuts are helping liquidity in the market, although the overall sentiment for real estate remains positive [54][55] Question: View on the office sector and attractive loan characteristics - Management emphasized a high bar for office loans, focusing on newer, high-quality assets with stable cash flows [58][59] Question: Expectations for originations and repayments - Management indicated that originations will align with repayments as they execute their resolution strategy, with REO sales potentially increasing portfolio size [60][61]

Financial Data and Key Metrics Changes - Adjusted EBITDA nearly tripled from $190 million in 2023 to $540 million in 2024 [6] - GAAP EPS totaled $0.24 per share for Q4, compared to a loss of $1.78 in Q4 2023 [18] - Investment management revenue grew by 83% to $30 million in Q4 [19] Business Line Data and Key Metrics Changes - Investment management fees grew by 60% year-over-year to approximately $100 million in 2024 [8] - The credit platform completed a record $1.4 billion of new loan originations in Q4 and $3.5 billion for the year [9] - Same-property NOI grew by 5.6% in Q4 [15] Market Data and Key Metrics Changes - The overall market environment is showing steady improvement with strengthening debt markets and rebounding transaction volume [7] - The apartment portfolio ended the quarter with 95% occupancy, with demand driven by high homeownership costs [28] - The Irish apartment portfolio ended the quarter at a strong 97% occupancy [34] Company Strategy and Development Direction - The company focuses on increasing baseline EBITDA, growing the investment management business, and reducing unsecured debt [6] - Capital recycling through non-core asset sales is a core focus, with an expected generation of over $400 million in 2025 [13] - The company aims to deploy capital into higher return opportunities, particularly within investment management platforms [13] Management's Comments on Operating Environment and Future Outlook - Management anticipates a very active year in 2025, committed to executing key initiatives while strengthening the balance sheet [17] - The company is well-positioned to capitalize on new opportunities in rental housing and industrial assets as market conditions recover [16] - Management expressed confidence in the business environment in the U.S. and the attractiveness of investing in U.S. real estate [95] Other Important Information - The company successfully closed fundraising on its seventh discretionary commingled fund, securing $400 million for U.S. investments [11] - The company has a total of $28 billion in assets under management, producing an estimated annual NOI of $467 million [14] Q&A Session Summary Question: Clarification on $400 million of incremental proceeds from dispositions in 2025 - Yes, the company plans to focus on non-core assets, particularly in housing-related investments [44][46] Question: Construction lending environment and commitments - The company believes the construction lending space remains compelling and expects to have a successful year [50] Question: Importance of adding more equity capital - The company has significant institutional partners interested in investing in the U.S. and U.K. markets, with expectations to deploy more equity opportunities [54][56] Question: Refinancing debt in Ireland - The company is refinancing at mid-4s, replacing an in-place rate just under 3% [66] Question: Expected yields and margins on the SFR platform - The company anticipates stabilizing yields in the high 5s towards 6% [72] Question: Future funding for the debt platform - The company aims to exceed $3.5 billion in originations this year, with strong demand from investors [78] Question: Rent caps in Ireland and implications for U.K. office demand - The company is monitoring the rent regime in Ireland and sees strong demand for quality offices in the U.K. [83][101] Question: Positive fair value marks on the co-investment portfolio - The company hopes for continued positive fair value marks if rates stabilize and operational improvements continue [86][88]