Bridge Investment (US:BRDG)2023-05-13 07:13Financial Data and Key Metrics Changes - The company reported a GAAP net loss of $67 million for Q1 2023, primarily due to an unrealized loss of $107 million related to performance allocation from valuation reductions in real estate assets [5] - Basic GAAP income per share was $0.03, with a diluted loss of $0.13 [5] - Distributable earnings for the operating company were $33.4 million, with after-tax DE per share of $0.19 [62] - Unrealized carry decreased to $447.7 million, reflecting a 19% decline after adjusting for realizations [63] Business Line Data and Key Metrics Changes - Fee-earning AUM increased by 51% year-over-year to $22.2 billion, including the acquisition of Newbury Partners [22][92] - Recurring management fee revenue rose by 15% year-over-year [22] - Multifamily and Workforce assets, representing 39% of real estate fee-earning AUM, maintained a 93% occupancy rate with same-store effective rent growth of 7.4% [44] - The Single-Family Rental portfolio showed a year-over-year rent growth of 10.25% and a Q1 occupancy rate of 95% [45] Market Data and Key Metrics Changes - Q1 2023 industry transaction volume was down 56% year-over-year, with the Multifamily sector experiencing a 64% drop [28] - The company noted a wide dispersion of cap rates and values due to low transaction activity, indicating a dislocation in capital markets rather than a fundamental shift in asset values [40] Company Strategy and Development Direction - The company emphasizes specialization in investment strategies to navigate current market volatility and capitalize on tactical opportunities [12] - The acquisition of Newbury Partners is expected to diversify the investment platform and enhance revenue stability [36] - The company is focused on high conviction themes, including residential rental and private credit strategies, which are expected to perform well in the current environment [94] Management's Comments on Operating Environment and Future Outlook - Management highlighted the resilience of the U.S. economy, with strong labor markets and wage growth benefiting lower-income households [14] - The company anticipates that the current market dislocation will create attractive investment opportunities [9] - Management expressed confidence in the long-term growth potential of sectors like logistics and residential rental, driven by demographic trends and supply constraints [87] Other Important Information - The company declared a dividend of $0.15 per share, based on distributable earnings adjusted for transaction and non-recurring costs [64] - The company maintains a prudent risk management process with low leverage and an investment-grade rating [65] Q&A Session Summary Question: What is the impact of banks pulling back from financing the real estate market? - Management acknowledged that banks have become more conservative, particularly in commercial real estate, but noted opportunities in sectors like residential rental and logistics where banks are still willing to lend [72][73] Question: Can you elaborate on the slight pickup in equity transactions? - Management indicated that while there are signs of increased activity, the market remains choppy, and stability in debt markets is needed for a full recovery [78][81] Question: What funds are currently in the market for raising capital? - Management mentioned that themes include residential rental and credit products, with expectations for continued demand for new vehicles in these areas [130]