Financial Data and Key Metrics Changes - For Q4 2025, the company reported GAAP net income of $0.24 per share, while distributable earnings were -$2.07 per share, with distributable earnings prior to charge-offs at -$0.51 per share [4][20] - The distributable earnings prior to charge-offs increased over 20% from Q1, covering the dividend for the second consecutive quarter [5] - The book value ended the year at $20.75 per share, which includes $0.47 per share of accumulated depreciation and amortization [23] Business Line Data and Key Metrics Changes - The loan portfolio is now 99% performing, with $575 million of impaired loans resolved during the quarter, reducing the impaired loan balance to just under $90 million [5][14] - The investment portfolio stands at $20 billion, up from $19.5 billion last quarter, with the loan portfolio at $18 billion and net lease assets now representing 5% of the portfolio [13] - In Q4, the company closed $1.5 billion of investments, including $1.4 billion of new loan originations, all secured by multifamily and industrial assets [11] Market Data and Key Metrics Changes - The real estate credit market is highly liquid, with CMBS issuance accelerating to its highest level since the GFC, up 40% year-over-year [6] - New loan requests in January were up 50% from the prior year, indicating increased enthusiasm from investors [7] - Nearly half of the loans are located in international markets, with almost 40% in Europe, where strong demand is driven by limited new supply [16] Company Strategy and Development Direction - The company has strategically broadened its scope to target complementary investment channels, focusing on multifamily and industrial loans [5] - The strategy remains focused on essential-use retail with attractive credit characteristics, with a net lease portfolio scaling to over $300 million [17] - The company aims to maximize long-term shareholder value while remaining patient and disciplined in capital deployment [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong investment and asset management results achieved in 2025, with a positive outlook for the coming year [19] - The company anticipates cash flows from owned real estate to decline in Q1 but expects consistent positive distributable earnings over time [22] - Management noted that the current dividend yield of 9.5% implies a compelling relative value proposition for the stock [10] Other Important Information - The company executed over $5 billion of corporate and securitized debt transactions in the past 12 months, reducing the weighted average borrowing spread by nearly 90 basis points [8] - The total CECL reserve declined nearly 60% quarter-over-quarter due to reserve charge-offs, which had a minimal impact on book value [23][24] - The company has been active in share repurchases, with approximately $140 million since the program's inception in July 2024 [10] Q&A Session Summary Question: Thoughts on supporting the value of loans in the portfolio - Management is exploring all opportunities to maximize shareholder value and feels good about the stock's direction given 2025's performance [29][30] Question: Views on the REO portfolio and specific assets - Management sees improved fundamentals and investor demand in key markets like New York and is strategically considering exits for several assets [33][35] Question: Investment in the Blackstone BREDS Fund - The fund will focus on high-quality core-plus real estate in the U.S. and Canada, with no fees for the fund commitment [39][40] Question: Future portfolio outlook and diversification strategy - The company intends to continue diversifying its portfolio while maintaining its core lending strategy [41][42] Question: Multifamily lending opportunities - The company views multifamily as a structurally undersupplied market and is actively lending in this space [46] Question: Initial general reserve on new loans - The current general reserve is a good proxy for the majority of the portfolio, and as the portfolio grows or shrinks, this will be a reference point [53] Question: Impaired loan resolutions and market conditions - The resolution of impaired loans was aided by the strength of the asset management team and improved market liquidity [56][58] Question: Target allocation for multifamily and industrial properties - The company prioritizes finding the right investments with the best risk-adjusted returns, focusing on diversifying across sectors and geographies [59][60] Question: Cost of capital between CLOs and bank facilities - The company aims for a well-structured, diversified balance sheet and has reduced corporate term loan borrowing spreads significantly [67][68]

Financial Data and Key Metrics Changes - For Q4 2025, the company reported GAAP net income of $0.24 per share, while distributable earnings were -$2.07 per share, with distributable earnings prior to charge-offs at $0.51 per share, marking an increase of over 20% from Q1 [4][20] - The book value ended the year at $20.75 per share, which includes $0.47 per share of accumulated depreciation and amortization [23] Business Line Data and Key Metrics Changes - The loan portfolio is now 99% performing, with $575 million of impaired loans resolved during the quarter, reducing the impaired loan balance to just under $90 million [5][14] - The investment portfolio stands at $20 billion, up from $19.5 billion last quarter, with the loan portfolio at $18 billion and net lease assets now representing 5% of the portfolio, up from 0 at the beginning of 2025 [13][14] Market Data and Key Metrics Changes - The real estate credit market is highly liquid, with CMBS issuance accelerating to its highest level since the GFC, up 40% year-over-year [6] - New loan requests in January were up 50% from the prior year, indicating increased enthusiasm from investors to transact [7] Company Strategy and Development Direction - The company has strategically broadened its scope to target complementary investment channels, focusing on multifamily and industrial loans, which accounted for nearly 85% of the $7 billion in investments closed in 2025 [5] - The company aims to maximize long-term shareholder value while remaining patient and disciplined in its approach [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong investment and asset management results achieved in 2025 and sees a ripe environment for bank consolidation, which may bring additional opportunities [18][19] - The company anticipates cash flows from owned real estate to decline in Q1 but expects consistent positive distributable earnings over time as assets are exited and capital is redeployed [22] Other Important Information - The company executed over $5 billion of corporate and securitized debt transactions in the past 12 months, reducing the weighted average borrowing spread by nearly 90 basis points year-over-year [8][9] - The company has been active in share repurchases, with approximately $140 million since the program's inception in July 2024 [10] Q&A Session Summary Question: Thoughts on supporting the value of loans in the portfolio - Management is exploring all opportunities to maximize shareholder value and feels good about the stock's direction given the performance in 2025 [29][30] Question: Views on the REO portfolio and specific assets - Management sees improved fundamentals and investor demand in key markets like New York and is strategically considering exits for several assets [33][35] Question: Investment in the Blackstone BREDS Fund - The fund will focus on high-quality core-plus real estate in the U.S. and Canada, with no fees for the fund commitment [39][40] Question: Future portfolio outlook and focus areas - The company intends to diversify its portfolio while maintaining its core lending strategy, with a focus on risk-adjusted returns [41][42] Question: Multifamily lending opportunities - The company views multifamily as a structurally undersupplied market and is actively lending in this space [46] Question: Initial general reserve on new loans - The current general reserve is a good proxy for the majority of the portfolio, and as the portfolio grows or shrinks, this will be a reference point [53]

Financial Data and Key Metrics Changes - For Q3 2025, the company reported GAAP net income of $0.37 per share and distributable earnings (DE) of $0.24 per share, with DE prior to charge-offs at $0.48 per share, an increase of $0.03 from the prior quarter [4][15] - The book value remained stable at $20.99 per share, reflecting strong credit performance and loan resolutions executed above carrying values [16][17] - The company repurchased $16 million of common stock in Q3 at an average price of $18.69, and an additional $61 million in Q4, totaling nearly $140 million since the buyback program began in 2024 [16][18] Business Line Data and Key Metrics Changes - The company closed $1 billion in total investments during Q3, with 75% concentrated in multifamily and diversified industrial portfolios, and over 60% in international markets [9][10] - The loan portfolio is now 96% performing, with the impaired loan balance down 71% from last year's peak [13] - The company expects to close over $7 billion in new investments this year, diversifying the portfolio and enhancing credit composition [12] Market Data and Key Metrics Changes - Real estate fundamentals remain strong, with stable or improving demand and constrained new supply [6] - The company collected $1.6 billion in repayments during Q3, including significant repayments from large loans [12] - The San Francisco market is showing signs of recovery, with multifamily rents up 10% and office demand growing [13][14] Company Strategy and Development Direction - The company is focused on optimizing its balance sheet and enhancing competitiveness through improved cost of capital [5][7] - The strategy includes a deliberate rotation into sectors and markets best positioned in the current environment, leveraging a robust investment pipeline [12] - The company aims to capitalize on the recovery in market conditions and the return of liquidity to the CRE markets [6][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing recovery of the real estate credit market, noting improved credit quality and a robust pipeline of opportunities [36][42] - The company is not seeing spillover effects from broader economic weaknesses into the CRE market, indicating a more battle-tested environment [36] - Management remains optimistic about the potential for earnings uplift from the REO and impaired loan portfolios [47] Other Important Information - The company has a strong liquidity position of $1.3 billion and over $7 billion of available financing capacity [17] - The company has been active in refinancing and extending corporate debt, taking advantage of favorable capital market conditions [14][18] Q&A Session Summary Question: Can you provide more color on the recovery in transaction activity and liquidity in the CRE markets? - Management noted that liquidity has returned to both the U.S. and Europe, with a stronger recovery in the U.S. driven by a more established CMBS market [24] Question: What is the potential earnings uplift from the REO portfolio? - Management indicated that while specific numbers were not provided, there is significant opportunity to drive additional earnings as the portfolio is turned over [26] Question: How do you see the balance between originating new loans versus share buybacks? - Management stated that they continuously evaluate both options and have been active in buybacks when stock is trading at attractive levels [30] Question: What are the current fundamentals in the office market? - Management reported stability and improvement in the office market, with several upgrades in their office loans driven by increased leasing activity [54]

Financial Data and Key Metrics Changes - The company reported GAAP net income of $0.37 per share and distributable earnings (DE) of $0.24 per share for Q3 2025, with DE prior to charge-offs at $0.48 per share, an increase of $0.03 from the prior quarter [4][15][16] - Book value remained stable at $20.99 per share, reflecting strong credit performance and loan resolutions executed above carrying values [16][17] - The company repurchased $16 million of common stock in Q3 at an average price of $18.69, with an additional $61 million repurchased in Q4 [16][17] Business Line Data and Key Metrics Changes - Total investments in Q3 amounted to $1 billion, with loan originations concentrated in multifamily and diversified industrial portfolios, making up 75% of the total [9][10] - The net lease portfolio grew to $222 million, with $90 million invested across 60 properties in Q3 [10] - The loan portfolio is now 96% performing, with impaired loan balance down 71% from last year's peak [13] Market Data and Key Metrics Changes - The company collected $1.6 billion in repayments during Q3, including significant loans secured by multifamily assets and international properties [12] - Real estate fundamentals remain strong, with stable or improving demand and constrained new supply [6] - The company expects to close over $7 billion in new investments this year, diversifying its portfolio and enhancing credit composition [12] Company Strategy and Development Direction - The company is focused on capitalizing on the recovery in market conditions and optimizing its balance sheet [5][6] - There is a strong emphasis on maintaining a competitive cost of capital and enhancing investment activity across various channels and geographies [5][6] - The leadership transition is expected to continue the momentum of the business, with a focus on capturing opportunities in the current investment environment [21][22] Management's Comments on Operating Environment and Future Outlook - Management noted that the real estate credit market is in recovery mode, with improved credit quality and no new impairments [38] - The company is optimistic about the ongoing recovery in the office market, with stability and improvement observed [55] - Management expressed confidence in the ability to unlock earnings potential from the REO and impaired loan portfolios [49][51] Other Important Information - The company has a strong liquidity position of $1.3 billion and over $7 billion in available financing capacity [17] - The company has been actively optimizing its cost of capital, reducing spreads on corporate term loans and taking advantage of favorable market conditions [19] Q&A Session Summary Question: Can you provide more color on the recovery in transaction activity and liquidity in the CRE markets? - Management indicated that liquidity has returned to both the U.S. and Europe, with a stronger recovery observed in the U.S. due to a more established CMBS market [25][26] Question: What is the potential earnings uplift from the REO portfolio? - Management stated that while specific numbers were not provided, there is significant potential to drive additional earnings as the REO assets are turned over [27] Question: How do you see the balance between originating new loans versus share buybacks? - Management emphasized a dynamic analysis of capital deployment, considering both new loans and share buybacks based on market conditions [30][31] Question: Are there any spillover effects into the CRE market from broader economic weaknesses? - Management noted that the real estate credit market has already been tested and is currently in recovery, with no significant deterioration observed [38] Question: How do you view the pace of net deployment and target leverage levels? - Management expressed confidence in maintaining a healthy pace of repayments and new investments, with current leverage at 3.5 times, which is within their target range [44][46] Question: What are the key levers to cover the dividend? - Management highlighted the importance of unlocking earnings from the REO and impaired loan portfolios as a key driver for covering the dividend [49][51]