Financial Data and Key Metrics Changes - For Q3 2025, the company reported GAAP net income of $8 million or $0.12 per share, with a book value of $13.78 per share as of September 30, 2025 [3] - The company reported a distributable loss of $2 million, primarily due to taking ownership of the Raleigh Multifamily property, with distributable earnings (DE) of $12 million or $0.18 per share before net realized losses [3][7] - The dividend paid for the third quarter was $0.25 per share, with distributable earnings of negative $0.03 per share [7][8] - Book value per share decreased by 0.4% quarter-over-quarter, remaining mostly unchanged at $13.78 [8] Business Line Data and Key Metrics Changes - The company has been actively lending, expecting over $400 million in originations for Q4 2025, having already closed $110 million across the U.S. and Europe [5] - The company’s portfolio currently stands at $5.9 billion, with repayments of $480 million received in the quarter [9] - Year-to-date, the company has received $1.1 billion in repayments and originated $719 million, with expectations of over $1.5 billion in repayments in 2026 [9][12] Market Data and Key Metrics Changes - The commercial real estate lending market remains robust, with a $1.5 trillion wall of maturities expected over the next 18 months [4] - The debt markets are liquid, with banks returning to the market and increasing back leverage lending [4] - The company has established a dedicated European real estate credit platform, originating over $2.5 billion to date [5][6] Company Strategy and Development Direction - The company is focused on optimizing its REO portfolio and redeploying capital efficiently for growth [14] - The company aims to match repayments with originations, maintaining a disciplined approach to capital deployment [39] - The company is exploring opportunities for consolidation in the industry to enhance liquidity and attract more shareholders [62] Management's Comments on Operating Environment and Future Outlook - Management expressed a positive sentiment towards the real estate market, noting strengthening fundamentals and lagging values [4] - The company is optimistic about the recovery in the life sciences sector, seeing early signs of demand from sponsors [26] - Management indicated that they are continuously evaluating the timing of repayments and originations, expecting to optimize returns to shareholders [39][42] Other Important Information - The company has a total CECL reserve of $160 million, representing around 3% of the loan portfolio, with 85% of the loan portfolio rated 3 or better [12] - The company has no final facility maturities until 2027 and no corporate debt due until 2030, providing a strong liquidity position of $933 million [10][11] Q&A Session Summary Question: Clarification on lower leverage and higher liquidity - Management indicated that the lower leverage and higher liquidity were primarily due to timing issues related to repayments and originations, rather than a defensive positioning [21][22] Question: Impact of repayments on future earnings - Management noted that while there may be a lag in earnings due to the timing of repayments and originations, they do not expect to always be behind and anticipate some quarters will be ahead [24] Question: Update on life science loan portfolio - Management reported a mix of leasing updates and noted that they are seeing early signs of recovery in tenant demand within the life sciences sector [26] Question: NPV analysis on sub-performing deals - Management stated that they continuously evaluate the trade-offs between holding assets for potential appreciation versus selling and redeploying capital [32][33] Question: Timeline for improving ROE - Management provided a timeline for recovering REO, estimating that half of the impacted assets could be stabilized in the near term, with others taking longer [43][44] Question: Comparison of EU loans versus U.S. loans - Management highlighted that while the quality of real estate and sponsorship is similar, the European market is heavily banked, and loan sizes tend to be larger [51][52]