Ares Commercial Real Estate Corp (ACRE) 2024 Q1 法說會逐字稿

Good morning, and welcome to the Ares Commercial Real Estate Corporation's first quarter earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded on Thursday, May 9, 2024. I will now turn the call over to Mr. John Stilmar, partner of public markets, Investor Relations. Please go ahead.

早安，歡迎參加阿瑞斯商業房地產公司第一季財報電話會議。（操作員說明）謹此提醒，本次會議將於 2024 年 5 月 9 日星期四錄製。我現在將把電話轉給約翰·斯蒂爾馬先生，他是投資者關係公開市場合夥人。請繼續。

Good morning, and thank you for joining us on today's conference call. I'm joined today by our CEO, Bryan Donohoe; our CFO, Tae-Sik Yoon, and other members of the management team. In addition to our press release in the 10-Q that we filed with the SEC, we've posted an earnings presentation under the Investor Resources section of our website at www.arescre.com.

早安，感謝您參加今天的電話會議。今天我們的執行長布萊恩多諾霍 (Bryan Donohoe) 也加入了我的行列。我們的財務長 Tae-Sik Yoon 和管理團隊的其他成員。除了向 SEC 提交的 10-Q 新聞稿中，我們還在我們網站 www.arescre.com 的投資者資源部分發布了收益報告。

Before we begin, I want to remind everyone that comments made during the course of this conference call and webcast as well as the accompanying documents contain forward-looking statements that are subject to risks and uncertainties. Many of these forward-looking statements can be identified by the use of words such as anticipates, believes, expects, intends, will, should, may and similar such expressions.

在開始之前，我想提醒大家，在本次電話會議和網路直播期間發表的評論以及隨附文件包含前瞻性陳述，這些陳述存在風險和不確定性。許多前瞻性陳述可以透過使用「預期」、「相信」、「期望」、「打算」、「將」、「應該」、「可能」等類似表達方式來識別。

These forward-looking statements are based on management's current expectation of market conditions and management's judgment. Statements are not guarantees of future performance, condition or results and involve a number of risks and uncertainties.

這些前瞻性陳述是基於管理階層目前對市場狀況的預期和判斷。聲明不是對未來業績、狀況或結果的保證，並且涉及許多風險和不確定性。

The company's actual results could differ materially from those expressed in the forward-looking statements as result of a number of factors, including those listed in its SEC filings. as commercial real estate assumes no obligation to update any such forward-looking statements.

由於多種因素（包括其向美國證券交易委員會提交的文件中列出的因素），該公司的實際結果可能與前瞻性陳述中表達的結果有重大差異。因為商業房地產不承擔更新任何此類前瞻性聲明的義務。

During this call, we will refer to certain non-GAAP financial measures. We use these as a measure of operating performance. These measures should not be considered in isolation from or as a substitute for measures prepared in accordance with generally accepted accounting principles. These measures may not be comparable to like titled measures used by other companies.

在本次電話會議中，我們將提及某些非公認會計準則財務指標。我們使用這些作為營運績效的衡量標準。這些措施不應孤立地考慮或取代根據公認會計原則制定的措施。這些措施可能無法與其他公司使用的類似措施進行比較。

Now I'd like to turn the call over to our CEO, Bryan Donohoe. Brian?

現在我想將電話轉給我們的執行長布萊恩·多諾霍 (Bryan Donohoe)。布萊恩？

Thank you, John. During the first quarter, we made meaningful progress towards our goal of resolving underperforming loans, reducing the outstanding principal balance of nonaccrual loans by $133 million, as well as reducing our exposure to the commercial office property sector by $70 million or 8% of our total loans backed by office properties.

謝謝你，約翰。第一季度，我們在解決不良貸款的目標方面取得了有意義的進展，將非應計貸款的未償本金餘額減少了1.33 億美元，並將我們對商業辦公地產行業的敞口減少了7000萬美元，佔總貸款的8%以辦公物業為抵押的貸款。

By addressing a total of four nonaccrual loans during the first quarter, we increased our distributable earnings excluding losses compared to the prior quarter by approximately $0.02 per common share and further delevered our balance sheet by $138 million to an outstanding balance of less than $1.5 billion at the end of the first quarter.

透過在第一季總共解決了四筆非應計貸款，與上一季相比，我們的可分配收益（扣除虧損）每股普通股增加了約0.02 美元，並進一步將我們的資產負債表去槓桿化了1.38 億美元，使未償餘額低於15 億美元。

Our focus remains on returning ACRE to its core business of originating loans and managing a portfolio of loans backed by commercial real estate properties in order to earn consistent income to support an attractive level of dividends for our shareholders.

我們的重點仍然是讓 ACRE 回歸其核心業務，即發放貸款和管理由商業房地產支持的貸款組合，以賺取穩定的收入，為我們的股東提供有吸引力的股息水平。

Let me now provide more details on the loans that were resolved during the first quarter. First, we sold a $38 million loan that we held for sale at year end 2023. That was backed by a mixed-use property located in California that was on nonaccrual.

現在讓我提供有關第一季解決的貸款的更多詳細資訊。首先，我們出售了 2023 年底待售的 3,800 萬美元貸款。這是由位於加利福尼亞州的非應計混合用途物業支持的。

Second, we agreed to a discounted loan payoff of a $19 million loan backed by a multifamily property located in the state of Washington that was on nonaccrual, the end of 2023. As a result of these initiatives, we realized a loss consistent with the fair value mark and loss reserves held on our balance sheet at year end 2023, and paid down $54 million of debt in our FL forward securitization.

其次，我們同意在 2023 年底之前以折扣貸款方式償還一筆 1,900 萬美元的貸款，該貸款由位於華盛頓州的一處多戶型房產支持，該房產為非應計利息。由於這些舉措，我們實現了與 2023 年底資產負債表上的公允價值標記和損失準備金一致的損失，並償還了 FL 遠期證券化中的 5,400 萬美元債務。

Third, we exited a $57 million, Chicago risk-rated five loan collateralized by a commercial office property that was also on non-accrual at year end 2023. As a result of this disposition, we realized a loss that was $3 million higher than the loss reserve held against this loan at year end 2023.

第三，我們退出了一筆價值 5,700 萬美元、芝加哥風險評級為 5 期的貸款，該貸款由商業辦公物業抵押，該物業在 2023 年底也為非應計利息。由於這項處置，我們在 2023 年底實現的損失比針對該貸款持有的損失準備金高出 300 萬美元。

And finally, we restructured a $74 million loan backed by a class-A, newly rebuilt office building located in New York City. At closing of this restructure, the borrower paid down $5 million of principal, reducing the balance to $69 million, which was split between a $59 million A-note and a $10 million B-note.

最後，我們重組了一筆 7,400 萬美元的貸款，由紐約市一座新建的 A 級辦公大樓提供支援。在此次重組結束時，借款人償還了 500 萬美元的本金，餘額降至 6,900 萬美元，其中 5,900 萬美元的 A 票據和 1,000 萬美元的 B 票據分攤。

In addition, it is anticipated that the borrower will contribute additional capital into the building for additional lease new leasing costs, including tenant improvement allowances. To incentivize the contribution of additional capital, including the initial $5 million repayment of the loan, we have agreed to subordinate our $10 million B-note to new equity contributed by the sponsor.

此外，預計借款人將向建築物投入額外資本，用於額外的租賃新租賃成本，包括租戶改善津貼。為了激勵額外資本的貢獻，包括最初的 500 萬美元貸款償還，我們同意將我們的 1000 萬美元 B 票據從屬於發起人貢獻的新股本。

This restructuring resulted in returning the $59 million A-note to interest earning status while the B-note remains on nonaccrual. As a result of addressing these four loans, the outstanding principal balance of loans on nonaccrual was reduced by 31%, and our distributable earnings, excluding losses increased by $0.02 per common share for the first quarter of 2024.

此次重組使 5,900 萬美元的 A 票據恢復生息狀態，而 B 票據仍為非應計利息。由於解決了這四筆貸款，非應計貸款的未償本金餘額減少了 31%，2024 年第一季我們的可分配收益（不包括損失）每股普通股增加了 0.02 美元。

Shifting now to our overall portfolio, we ended the quarter with $2 billion of outstanding principal balance across 44 loans. 36 loans totaling $1.5 billion or 75% of our loan portfolio had a risk rating of three or better. The majority of these loans are collateralized by multifamily, industrial, self-storage and hospitality property.

現在轉向我們的整體投資組合，本季結束時，我們的 44 筆貸款的未償本金餘額為 20 億美元。總計 15 億美元的 36 筆貸款（占我們貸款組合的 75%）的風險評級為 3 或更高。這些貸款大部分由多戶住宅、工業、自助倉儲和酒店物業抵押。

As a reflection of the quality are risk-rated three or better loans, borrowers continue to be committed to these underlying properties. Over the past 12 months, borrowers have contributed more than $130 million in additional capital relating to loans, risk-rated three or better. And during the same time period, all interest rate caps have been renewed at their prior strike or economically equivalent amounts have been deposited into reserves.

作為風險評級為三級或更好的貸款品質的反映，借款人繼續致力於這些基礎財產。在過去 12 個月中，借款人已貢獻了超過 1.3 億美元的額外資本，這些資本與風險評級為 3 級或更高的貸款有關。在同一時期內，所有利率上限均以先前的執行情況更新，或經濟上等值的金額已存入準備金。

Going forward, we will continue to focus on resolving our remaining four and five risk-rated loans and to reduce our office exposure. During the second quarter, we expect to take a $33 million risk-rated five loan backed by an office building in California as REO that is currently on nonaccrual. At this time, we believe that our loss reserve on this loan is substantially in line with our current estimate of a potential realized loss.

展望未來，我們將繼續專注於解決剩餘的四筆和五筆風險評級貸款，並減少我們的辦公室風險敞口。在第二季度，我們預計將獲得一筆 3,300 萬美元的風險評級為 REO 的五級貸款，該貸款由加州的一棟辦公大樓提供支持，目前該貸款為非應計利息。目前，我們認為這筆貸款的損失準備金與我們目前對潛在已實現損失的估計基本一致。

Additionally, despite ongoing negotiations with the borrower, a $69 million loan to an office property located in North Carolina currently on non-accrual, defaulted after quarter end. We have begun the process of taking title of the office property and importantly, this property is cash flowing such that if and when the property becomes REO, property level earnings will be recognized. With that, let me turn the call over to Tae-Sik to provide more details on our financial results and balance sheet position.

此外，儘管與借款人正在進行談判，位於北卡羅來納州辦公物業的 6,900 萬美元貸款目前為非應計貸款，但在季度末後出現違約。我們已經開始取得辦公物業所有權的過程，重要的是，該物業是現金流的，因此，如果該物業成為 REO，物業水平收入將得到確認。接下來，讓我將電話轉給 Tae-Sik，以提供有關我們的財務表現和資產負債表狀況的更多詳細資訊。

Thank you, Bryan, and good morning, everyone. For the first quarter of 2024, we reported a GAAP net loss of $12.3 million or $0.23 per common share. Our distributable earnings loss for the first quarter of 2024 was $33.5 million or $0.62 per common share and was driven by a realized loss of $45.7 million or $0.84 per common share due to exiting the three loans that Brian mentioned earlier.

謝謝布萊恩，大家早安。2024 年第一季度，我們報告的 GAAP 淨虧損為 1,230 萬美元，即每股普通股 0.23 美元。我們2024 年第一季的可分配收益損失為3,350 萬美元或每股普通股0.62 美元，這是由於退出布萊恩之前提到的三筆貸款而實現的4,570 萬美元或每股普通股0.84 美元的損失所致。

Distributable Earnings, excluding these realized losses were $12.2 million or $0.22 per common share for the first quarter. Our overall CECL reserve now stands at $141 million, which declined by $22 million versus the $163 million CECL reserve we held as of December 31, 2023. This reduction was driven by a $42 million reversal of existing reserves associated with the realization of losses. Partially offset by approximately $20 million of additional reserves on existing loans in the portfolio.

第一季的可分配收益（不包括這些已實現虧損）為 1,220 萬美元，即每股普通股 0.22 美元。我們的 CECL 儲備金總額目前為 1.41 億美元，與截至 2023 年 12 月 31 日持有的 1.63 億美元 CECL 儲備金相比，減少了 2,200 萬美元。這一減少是由於與實現損失相關的現有準備金逆轉了 4,200 萬美元。投資組合中現有貸款的約 2000 萬美元額外準備金部分抵消了這一影響。

The overall CECL reserve of $141 million at quarter end represents 6.9% of the outstanding principal balance of our loans held for investment, which is down from 7.6% as of the prior quarter. 89% of our total CECL reserve or $125 million relates to our risk rated four or five loans, including $31 million of loss reserves on our two risk-rated five loans and $94 million of loss reserves on our six risk-rated four loans.

截至季末，CECL 準備金總額為 1.41 億美元，占我們投資貸款未償還本金餘額的 6.9%，低於上一季的 7.6%。我們的CECL 準備金總額的89%（即1.25 億美元）與我們的風險評級為4 級或5 級的貸款有關，包括我們的兩筆風險評級為5 級的貸款的3,100 萬美元的損失準備金和我們的6 筆風險評級為4 級的貸款的9,400 萬美元的損失準備金。

Overall, the $125 million of reserves on our risk rated four or five loans represents 25% of the outstanding principal balance of such loans. Further, with respect to our loans that are risk rated four or five at quarter end, there were eight loans totaling $503 million in outstanding principal balance. 77% of the outstanding principal balance of our risk rated four or five loans are collateralized by office and one residential condominium property.

總體而言，我們風險評級為四級或五級的貸款的 1.25 億美元準備金佔此類貸款未償本金餘額的 25%。此外，對於季度末風險評級為 4 或 5 級的貸款，有 8 筆貸款的未償本金餘額總計 5.03 億美元。我們的風險評級為四級或五級的貸款中，77% 的未償本金餘額由辦公室和一處住宅公寓物業作為抵押。

We did downgrade $197.5 million Texas multifamily loan to a risk rating of four from three during the first quarter as a time line and process of the sale of the underlying property by the borrower it has been extended.

我們確實將第一季 1.975 億美元的德州多戶家庭貸款的風險評級從 3 級下調至 4 級，因為借款人出售標的房產的時間線和流程已經延長。

Before concluding, I want to provide more background on managing our balance sheet. Consistent with our goals, we continue to maintain significant liquidity and further reduced our third-party debt. Driven by the loan exit activities during the first quarter, we reduced our outstanding borrowings by $138 million, resulting in total third-party debt of less than $1.5 billion at March 31, 2024.

在結束之前，我想提供更多有關管理資產負債表的背景資訊。與我們的目標一致，我們繼續保持大量流動性，並進一步減少第三方債務。在第一季貸款退出活動的推動下，我們的未償借款減少了 1.38 億美元，截至 2024 年 3 月 31 日，第三方債務總額低於 15 億美元。

And finally, we declared a regular cash dividend of $0.25 per common share for the second quarter of 2024. The second quarter dividend will be payable on July 16, 2024, to common stockholders of record as of June 28, 2024.

最後，我們宣布 2024 年第二季定期現金股利為每股普通股 0.25 美元。第二季股利將於2024年7月16日支付給截至2024年6月28日登記在冊的普通股股東。

With that, I will turn the call back over to Bryan for some closing remarks.

至此，我將把電話轉回給 Bryan，讓其作總結發言。

Thank you, Tae-Sik. We are cautiously optimistic that the modest recovery we are seeing in the commercial real estate markets and tightening spreads in the CMBS capital markets will be supportive in the execution of our near term goals.

謝謝你，泰植。我們謹慎樂觀地認為，商業房地產市場的溫和復甦和 CMBS 資本市場利差的收緊將有助於我們實現近期目標。

We are firmly focused on addressing our underperforming loans and further building liquidity in order to maximize outcomes as we seek to shift our focus from asset management to investors. The timing and path to resolving some of our current four and five risk-rated loans may make our quarterly earnings trajectory uneven this year, including in the second quarter due to loan resolutions.

當我們尋求將重點從資產管理轉向投資者時，我們堅定地致力於解決表現不佳的貸款問題並進一步建立流動性，以實現最大成果。解決我們目前的四項和五項風險評級貸款中的一些的時機和路徑可能會使我們今年的季度盈利軌跡不平衡，包括由於貸款解決而導致的第二季度。

We remain focused on resolving a number of the identified risk-rated four and five loans in 2024, which we believe will enable us to achieve higher distributable earnings. As always, we appreciate you joining our call today, and we'd be happy to open the line for questions. Operator?

我們仍然致力於在 2024 年解決一些已確定的風險評級為 4 級和 5 級的貸款，我們相信這將使我們能夠實現更高的可分配收益。一如既往，我們感謝您今天加入我們的電話會議，我們很樂意開通提問熱線。操作員？

(Operator Instructions)

（操作員說明）

Doug Harter, UBS.

道格·哈特，瑞銀集團。

Thanks, and good morning. You talked about using the potentially move going back to investing, this quarter we use the resolution proceeds to pay down debt. Just, how should we think about when you might pivot to investing versus continuing to delever the balance sheet?

謝謝，早安。您談到了利用可能的舉措返回投資，本季我們使用決議收益來償還債務。只是，我們應該如何考慮何時轉向投資而不是繼續去槓桿化資產負債表？

Yeah, appreciate the question, Doug. Good to hear from you. I think the playbook remains fairly similar to what we've said in prior quarters, which is a multi-pronged path towards resolution where we're considering a lot of options with the pursuit of generating more liquidity, which would give us -- then the optionality as to when we see the opportunities which have started to present themselves beginning in Q4 with some of the rate stability we saw, a bit of a pause with the rate movement of the past six or eight weeks. But ultimately, we are seeing more liquidity, more acceptance of revised asset values.

是的，感謝這個問題，道格。很高興聽到你的消息。我認為這個策略與我們在前幾個季度所說的非常相似，這是一條多管齊下的解決方案，我們正在考慮很多選擇，以追求產生更多的流動性，這將使我們——然後當我們看到從第四季度開始出現的機會時，我們看到了一些利率穩定性，過去六到八週的利率變動略有暫停。但最終，我們看到流動性增加，對修改後的資產價值的接受度更高。

And ultimately, as we work through the coming quarters, we would intend to get back to that offense of side of the ledger once we've crystallized some more liquidity on the balance sheet. So the primary goal is to continue to resolve those risk-rated four and five and the liquidity that should come where those types of resolutions will allow us that flexibility.

最終，當我們在未來幾季開展工作時，一旦我們在資產負債表上明確了更多流動性，我們將打算回到分類帳方面的進攻。因此，主要目標是繼續解決那些風險評級為四級和五級的問題，以及這些類型的解決方案將為我們帶來靈活性的流動性。

Appreciate that, Bryan. And Tae-Sik, can you give us some sense on what sort of drag the four resolve loans, excluding the losses had on earnings during the first quarter and kind of how to think about the path back towards the dividend?

很欣賞這一點，布萊恩。Tae-Sik，您能否讓我們了解這四筆解決貸款帶來了什麼樣的拖累（不包括第一季收益損失），以及如何思考回歸股息的路徑？

Sure. Thanks for your question, Doug. As we mentioned, the four loans that were either exited or restructured this quarter. So really the resolution of those four loans, either through, for example, the restructure loan having then A-note come back on earnings and then the three exit loans really paying down debt.

當然。謝謝你的提問，道格。正如我們所提到的，本季退出或重組的四筆貸款。因此，這四筆貸款的解決方案實際上是透過重組貸款，然後 A 票據收回收益，然後三筆退出貸款真正償還債務。

The combination of that really added around $0.02 of distribal earnings during the first quarter. That run rate, if you want to call us at the end of full quarter impact of that will be higher than the $0.02, but for the first quarter, I think it was roughly $0.02 positive impact that it had on our first quarter earnings.

這些因素加起來，第一季的分配收益確實增加了約 0.02 美元。如果你想在整個季度末打電話給我們，那麼運行率將高於 0.02 美元，但對於第一季度，我認為它對我們第一季收益的積極影響約為 0.02 美元。

Great. Thank you, [team].

偉大的。謝謝你，[團隊]。

Thank you, Doug.

謝謝你，道格。

Jade Rahmani, KBW.

傑德·拉赫馬尼，KBW。

Hi, excuse me, this is actually Jason Sabshon for Jade Rahmani. It would be helpful to hear an update on how things are going with your repo lenders and on the term loan.

大家好，請問，我是傑德·拉赫馬尼 (Jade Rahmani) 的傑森·薩布松 (Jason Sabshon)。了解有關回購貸款人和定期貸款進度的最新資訊將會很有幫助。

Sure. Good morning. Tae, you want to kick off?

當然。早安.泰，你想開始嗎？

Yeah, no, thank you. Thanks for the question. I think we've had and always maintain what we think is a very strong relationship with all of our lenders, warehouse lenders, term loan lenders, revolving credit facility lenders.

是的，不，謝謝。謝謝你的提問。我認為我們與所有貸款人、倉庫貸款人、定期貸款貸款人、循環信貸便利貸款人已經建立並始終保持我們認為非常牢固的關係。

And in fact, as you'll notice in our filing this morning, we have continued to work with them and we greatly appreciate the partnership we have with all of our lenders. But you can see that we continue to -- for example, amend our credit facility so that we can, again as part of our overall goal to resolve underperforming loans, optimize the balance sheet with flexibility.

事實上，正如您在今天早上的文件中註意到的那樣，我們繼續與他們合作，我們非常感謝我們與所有貸方的合作夥伴關係。但你可以看到，我們繼續——例如，修改我們的信貸安排，以便我們能夠再次靈活地優化資產負債表，作為解決不良貸款問題的總體目標的一部分。

So flexibility is very important to us. And again, we appreciate all the partnership, we've at our lenders who have been willing to work with us. It create that additional flexibility on our balance sheet.

所以靈活性對我們來說非常重要。再次，我們感謝所有的合作夥伴，我們的貸方一直願意與我們合作。它為我們的資產負債表創造了額外的靈活性。

Great. Thank you. Also on the North Carolina office loan default, it would be helpful to hear more color on how you see that playing out?

偉大的。謝謝。另外，關於北卡羅來納州辦公室貸款違約問題，如果能聽到更多關於您如何看待這種情況的看法，將會有所幫助？

Yeah, I'll give that a shot. I think look, we obviously were attempting to work with the borrower. However, the capital necessary for us to restructure that loan in keeping with what we accomplished on the New York loan that we covered in the prepared remarks, didn't necessarily make it rational. It's also an asset, as we mentioned that, has positive cash flow, probably has some occupancy upside in a market that has seen some positive flows of corporate tenancy.

是的，我會嘗試一下。我想，我們顯然是在嘗試與借款人合作。然而，我們根據我們在準備好的評論中所涵蓋的紐約貸款所取得的成就來重組該貸款所需的資本並不一定使其合理。正如我們所提到的，它也是一種資產，具有正現金流，在企業租賃出現一些正流量的市場中可能具有一定的入住率上升空間。

So we think there's some value to be added with a functional ownership group. So I think that the time line for resolution there will be what it will be. I don't think it's a one to two quarter resolution necessarily. But when we look at situations like this, clearly, we want to see both expertise and capital come to bear on those assets.

因此，我們認為職能所有權團隊可以增加一些價值。所以我認為解決問題的時間表將會是這樣。我認為這不一定是一到兩個季度的決議。但當我們考慮這樣的情況時，顯然，我們希望看到專業知識和資本對這些資產產生影響。

And as you see in our earnings deck, we feel that we're in a position to bring both of those as a fallback position to having attempted to work with the borrower. So the time line will be determined over the next 60 days to 90 days. And I think when we chat with you all in 90 days, we'll have a more concrete plan there.

正如您在我們的損益表中看到的那樣，我們認為我們能夠將這兩者作為嘗試與借款人合作的後備位置。所以時間軸會在接下來的60天到90天內確定。我想當我們在 90 天內與大家交談時，我們將會有一個更具體的計劃。

Great. Thank you. And as a final question, understanding that each asset is unique, but generally in your book, how have lost severities compared to your expectations, specifically for office and multifamily loans and general commentary on what you're seeing in the market with respect to loss severities would be helpful as well?

偉大的。謝謝。作為最後一個問題，了解每項資產都是獨一無二的，但一般來說，在您的書中，與您的預期相比，損失的嚴重程度如何，特別是對於辦公室和多戶家庭貸款，以及您在市場上看到的有關損失的一般評論嚴重程度也會有幫助嗎？

I'll start it. Look, I think what we've attempted to do over the past prior quarters has been to give our best estimate of where we expect to resolve assets and really limit surprises on these calls or dramatic changes in our outlook. And I think we've had some success doing that.

我來開始吧。聽著，我認為我們在過去幾個季度中試圖做的就是對我們期望解決資產的問題做出最好的估計，並真正限制這些電話的意外或我們前景的巨大變化。我認為我們在這方面已經取得了一些成功。

As an industry, I would put forth that at what's gone on in the office sector has surprised many to the downside in terms of resolutions. That said, we've been as transparent as possible as we've worked through those. I think the lack of transparency generally in the market has probably delayed some resolutions throughout the broader space and I think as I said earlier, we're starting to see that crystallize to some degree with stability in rates. So I think over the coming quarters, you'll see more resolutions in keeping with expectations.

作為一個行業，我想說的是，辦公行業所發生的事情在分辨率方面的下降讓許多人感到驚訝。也就是說，我們在處理這些問題時一直盡可能保持透明。我認為市場普遍缺乏透明度可能推遲了整個更廣泛領域的一些解決方案，我認為正如我之前所說，我們開始看到這種情況在某種程度上隨著利率的穩定而具體化。因此，我認為在接下來的幾個季度中，您將看到更多符合預期的決議。

Great. Thank you.

偉大的。謝謝。

Stephen Laws, Raymond James.

史蒂芬勞斯，雷蒙德詹姆斯。

Hi, good morning. -- at the risk of asking something you already mentioned, Bryan, was a few minutes late, but can you talk about the nonaccruals, I think it was I believe it's 292 remaining. I know you guys made a lot of progress, but is there a goal on a summer near term resolution, some are longer term, but maybe if you look to year end, do you have say an idea of where you'd like to exit the year at that on that number?

早安. ——布萊恩，冒著問你已經提到過的問題的風險，遲到了幾分鐘，但你能談談非應計費用嗎？我知道你們取得了很大進展，但是夏季近期決議是否有目標，有些是長期目標，但也許如果你們展望年底，你們是否有一個關於退出的想法那個數字是哪一年的？

Yeah. Thanks for the question, Stephen, and I'll start and I'll let Tae-Sik chime in as well. I think, well, part of the challenge of the industry is measuring a lot of what we do by quarter, but certainly year end. That's a good hallmark day to turn the page, so to speak, philosophically and financially.

是的。謝謝你的提問，史蒂芬，我要開始了，我也會讓泰植插話。我認為，該行業面臨的部分挑戰是衡量我們按季度（當然是年底）所做的許多事情。可以說，無論是在哲學上還是在財務上，這都是一個標誌性的好日子。

I think what we see is -- especially with the offense of side of the market being so compelling that while managing resolution price, we're going to balance that with resolution timing. So our conversations with borrowers if you were to go back what feels like a long time ago, three plus years where extending duration of assets on the book was really the primary playbook as we sit here today, we'd like to resolve assets and crystallize a lot of those resolutions and get back to the offensive side as soon as possible.

我認為我們看到的是——尤其是市場方面的進攻如此引人注目，以至於在管理決議價格的同時，我們將在決議時間之間取得平衡。因此，我們與借款人的對話，如果你回到很久以前，三年多前，延長帳上資產的期限實際上是我們今天坐在這裡的主要策略，我們希望解決資產問題並具體化很多這樣的決議並儘快回到進攻方。

So tough to put demarcation lines in terms of the calendar. However, certainly when we look forward into three quarters to year end, that's a pretty good place to plant a flag. But Tae-Sik feel free to add some color there.

很難在日曆上劃定界線。然而，當然，當我們展望年底的三個季度時，這是一個插旗的好地方。但泰植可以隨意添加一些顏色。

Yeah, Brian, I think you covered it well. Stephen, I mean, I think you probably heard from our opening remarks that resolving our underperforming loans, certainly including the nonaccrual loans is really one of our top, top, top priorities. We're hyper focused on that effort. We think that will bring a lot better clarity to our balance sheet as well as the accretive to our earnings, as we mentioned. But as Brian said, I think it's very difficult to provide precise numbers.

是的，布萊恩，我認為你講得很好。史蒂芬，我的意思是，我想你可能從我們的開場白中聽到，解決我們表現不佳的貸款，當然包括非應計貸款，確實是我們的首要任務之一。我們非常專注於這項工作。正如我們所提到的，我們認為這將使我們的資產負債表更加清晰，並增加我們的收益。但正如布萊恩所說，我認為很難提供精確的數字。

We did resolve, as we mentioned about four loans this past quarter and we hope to continue to report some news on further resolutions in the quarters coming ahead.

我們確實做出了解決方案，正如我們在上個季度提到的四筆貸款一樣，我們希望繼續報告有關未來幾季進一步解決方案的一些消息。

Right. That was the main one to add today, so appreciate your comments this morning.

正確的。這是今天要添加的主要內容，所以感謝您今天早上的評論。

Right. Thank you so much, Stephen.

正確的。非常感謝你，史蒂芬。

Steve Delaney, Citizen's JMP.

Steve Delaney，公民 JMP。

Good morning, Bryan, it's ectic, busy quarter for you and it sounds like it's continuing. With the four loans, nonaccrual loans that you reworked, resolved in the first quarter and then the two office REOs in the second quarter having a little trouble. I've had no chance to go to the deck and just roll all this through. But as we -- after these second quarter REOs, can you tell us what is left at this point in five rated loans after the REO, the two REOs?

早上好，布萊恩，這對你來說是一個忙碌而忙碌的季度，而且聽起來這種情況還在繼續。您重新處理的四筆貸款、非應計貸款在第一季得到了解決，然後第二季的兩個辦公室 REO 遇到了一些麻煩。我沒有機會走到甲板上把這一切都經歷一遍。但是，在第二季度 REO 之後，您能否告訴我們，在 REO（兩個 REO）之後，目前五項評級貸款還剩下什麼？

Sure. I can -- see if I can take a shot at that. Yeah. So as we mentioned, there are eight loans that are risk rated four and five as of quarter end.

當然。我可以——看看我是否可以嘗試一下。是的。正如我們所提到的，截至季末，有八筆貸款的風險評級為四級和五級。

Okay.

好的。

And certainly it includes the two office properties that you mentioned, that we anticipate ongoing REO in the future. We also mentioned a new four rated loan, $97.5 million multifamily loan. And as we mentioned in our closing remarks, the reason it was downgraded from three to four, is that the sale process of the underlying property, this multifamily property in Texas.

當然，它包括您提到的兩個辦公物業，我們預計未來將持續進行 REO。我們還提到了一項新的四級貸款，即 9,750 萬美元的多戶貸款。正如我們在結論中提到的，其評級從三級降為四級的原因是基礎房產（德克薩斯州的多戶住宅）的銷售過程。

It's just taking a bit longer than we had originally anticipated and so because of that, it was downgraded. So that's really call it three of the eight loans, again, the two REO plus the one multifamily loan. And then when you really look at the remainder of the portfolio, what you have is you have some loans that have been kind of on our balance sheet profile.

只是比我們最初預期的時間要長一點，因此，它被降級了。所以這實際上是八筆貸款中的三筆，兩筆 REO 加上一筆多戶貸款。然後，當你真正查看投資組合的其餘部分時，你所擁有的是一些貸款，這些貸款已經出現在我們的資產負債表上。

We mentioned, for example, one of the mezzanine loans, that we put on nonaccrual. And I'm just -- and then really it is the condominium development that we have in New York. And then it's the large office loan out in Illinois, and it is an industrial asset out in California, so the $20 million loan out in California. So I think that covers just trying to recollect others. I think that makes up the remaining five loans that are in the four and five rated loan category.

例如，我們提到了其中一筆夾層貸款，我們將其設為非應計利息。我只是——這實際上是我們在紐約的公寓開發項目。然後是在伊利諾伊州發放的大型辦公大樓貸款，在加州發放的工業資產，因此在加州發放了 2000 萬美元的貸款。所以我認為這涵蓋了試圖回憶其他人的情況。我認為這構成了四級和五級貸款類別中剩餘的五筆貸款。

[Bob] ones, as we sit today, less than four and five. And I understand this is fluid and things are going to be coming and going. But nice to see some resolutions and some progress there.

[鮑伯]，我們今天坐的，不到四個和五個。我知道這是不穩定的，事情會來來去去。但很高興看到一些決議和一些進展。

Bryan, I know this is a decision the Board goes through probably every month or every -- certainly, every quarter. But the issue of your current $0.25 dividend and working to maintain that and the opportunity for share buybacks, I would guess, even with the loss of book value, still probably a little below 70% of book.

布萊恩，我知道董事會可能每個月或每季都會做出這個決定。但我猜想，您目前發放的 0.25 美元股息、努力維持股息以及股票回購的機會，即使帳面價值有所損失，也可能略低於帳面價值的 70%。

How are you thinking about that in this market where everybody having problems and you're looking at your stock with a mid-10s dividend yield just your thoughts, please, on how the company, your shareholders are best served between paying out that cash or buying back your shares here.

您如何看待這個市場，在這個每個人都有問題的市場上，您正在以10 年代中期的股息收益率來看待您的股票，請您考慮如何在支付現金或支付現金之間為公司、您的股東提供最好的服務在這裡回購你的股票。

I didn't notice that you bought in shares in the first quarter, if I overlooked that, please let me know. Thank you.

我沒有註意到你在第一季買入了股票，如果我忽略了這一點，請告訴我。謝謝。

Now that. I appreciate the question, Steven. As you said in your prior comments, the market is fairly fluid and it is something that the Board and management considers each quarter as we characterize when we chatted 60 days, 90 days ago, what we established when with the dividend at 25 was what we felt was attainable over the near to medium to long term, right? And I think that's something that we will continue to evaluate.

現在。我很欣賞這個問題，史蒂文。正如您在先前的評論中所說，市場相當流動，這是董事會和管理層每季都會考慮的事情，正如我們在60 天、90 天前聊天時所描述的那樣，我們在股息為25 時確定的是我們感覺在近、中、長期內是可以實現的，對嗎？我認為我們將繼續評估這一點。

And over the past 18 months. I think we, as an industry have contemplated the best way to serve our shareholders and that is a combination of dividend, which is the core charge, I think of the mortgage rate business as well as the relative value of buying back shares, which we've done previously.

在過去的18個月裡。我認為，作為一個行業，我們已經考慮了服務股東的最佳方式，那就是股息的組合，這是核心費用，我認為抵押貸款利率業務以及回購股票的相對價值，我們以前做過。

So it's a balanced approach alongside managing liquidity and ultimately crystallizing the best returns possible for our investors. So I wouldn't put forth, I think we'll continue to evaluate that in the coming quarters based on the results of that fluid market, you mentioned.

因此，這是一種平衡的方法，同時管理流動性並最終為我們的投資者帶來最佳回報。所以我不會提出，我認為我們將在未來幾季繼續根據您提到的流動市場的結果進行評估。

Got it. Glad to hear that it's going to remain on the table regardless of your -- I know you bought to make the right decision quarter by quarter. Thank you both for your comments.

知道了。很高興聽到無論您如何，它都會保留在桌面上 - 我知道您購買是為了每個季度做出正確的決定。謝謝兩位的評論。

Thanks, Steve.

謝謝，史蒂夫。

Rick Shane, JPMorgan.

里克·肖恩，摩根大通。

Hey, guys, thanks for taking my questions this morning, and I apologize if some of this has been covered. First as you sort of move from paying down the -- shrinking the balance sheet to moving back to offense. I'm curious if there are any covenants that you need to be aware of or any limitations related to your debt that could make that more challenging?

嘿，夥計們，感謝您今天早上提出問題，如果其中一些內容已被涵蓋，我深表歉意。首先，當你從償還債務——縮小資產負債表轉向進攻。我很好奇是否有任何您需要了解的契約或與您的債務相關的任何限制可能會使這變得更具挑戰性？

Yeah, Rick, thanks very much for your question and good morning. As we mentioned in our response to some of the prior questions, we have been actively in dialogue with our lenders. And as you'll notice in our filing this morning in the Q that we are starting to make some amendments to those facilities to make sure that we have the flexibility to implement the strategy that we talked about, right?

是的，瑞克，非常感謝你的提問，早安。正如我們在回答之前的一些問題時提到的，我們一直在積極與貸方對話。正如您在今天早上的問題報告中註意到的那樣，我們開始對這些設施進行一些修改，以確保我們能夠靈活地實施我們談到的策略，對嗎？

So far, our strategy, as Bryan mentioned, is to focus on resolving our underperforming loans. And in order to do that we want to make sure we optimize the balance sheet to provide that flexibility. Deleveraging has been certainly a big part of that strategy as well as maintaining good levels of liquidity and so we continue to focus on those two elements.

到目前為止，正如布萊恩所提到的，我們的策略是專注於解決表現不佳的貸款。為了做到這一點，我們希望確保優化資產負債表以提供這種靈活性。去槓桿化無疑是該策略的重要組成部分，也是保持良好流動性水準的一部分，因此我們將繼續關注這兩個要素。

And then again, we're proactively working with our lenders to make sure that the covenants and the loan facilities provide us that flexibility to attain the overall objective of resolving underperforming loans. So the answer to your question is yes. We are we are definitely proactively working with our lenders on this.

再說一次，我們正在積極與貸方合作，以確保契約和貸款便利為我們提供靈活性，以實現解決表現不佳貸款的總體目標。所以你的問題的答案是肯定的。我們肯定會積極與貸方合作解決這個問題。

Got it. Yeah, I did a search of the queue for covenant amendment and I got 150 of each. So I didn't -- I wasn't able to find the answer, I'm sure it's in there. Second question, look, if we look at the forward curve and compare one month forward, so for 25 today versus where it was in January, expectations are -- rates are up 100 basis points to 125 basis points from where expectations were in January. I am curious in your conversations with borrowers or what you're seeing if that expectation that rates are going to be so much higher for longer. And again, it's the forward curve.

知道了。是的，我搜尋了公約修正案的隊列，每條都有 150 個。所以我沒有——我無法找到答案，我確信它就在那裡。第二個問題，如果我們看一下遠期曲線並比較一個月後的情況，那麼今天的 25 個月與 1 月份的預期相比，預期利率比 1 月份的預期上升 100 個基點至 125 個基點。我很好奇您與借款人的對話，或者您所看到的情況，即利率是否會在更長時間內保持如此高的預期。再說一遍，這是前向曲線。

So we have to take it with a grain of [salt], but is that driving capitulation is driving people's behaviors to change in a material way from what our sentiment was even at the beginning of this year?

因此，我們必須持保留態度，但是，推動投降是否正在推動人們的行為從我們今年年初的情緒發生實質性改變？

Yeah, good question, Rick and I have a few questions in there and I'd say summarily, yes. I think that the stability in the rates in Q4 was catalytic in terms of causing some transactions to be consummated. And I think we saw a good pop of activity in Q1, much of which was in the headlines in terms of apartment industrial trades and fairly sizable ones.

是的，好問題，里克和我有幾個問題，我總結地說，是的。我認為第四季利率的穩定性對於促成一些交易的完成起到了催化作用。我認為我們在第一季看到了良好的活動，其中大部分是公寓工業貿易和相當規模的工業貿易的頭條新聞。

I think that started the process and maybe capitulation is in a perfect word, but for the real estate market, to get back to forward looking into consummate transactions and so while the rise in rates since that period of time has not been accretive to values, right? It's clearly in the public and private markets, you'll see a strong correlation to rates in terms of the prints.

我認為這開始了這個過程，也許投降是一個完美的詞，但對於房地產市場來說，要回過頭來研究完美的交易，因此，儘管自那段時間以來利率的上升並沒有增加價值，正確的？顯然，在公共和私人市場中，您會發現印刷品與價格之間有強烈的相關性。

I do think that the trend started to leave the station to some degree and therefore, we expect people to either realize that their assets are worth what they are worth and therefore move on. So there's a financial capitulation, but also the time allocation for legacy holders of assets is may no longer be worthwhile.

我確實認為這種趨勢開始在某種程度上離開車站，因此，我們希望人們要么意識到他們的資產物有所值，然後繼續前進。因此，存在財務上的投降，但對於遺留資產持有者來說，時間分配可能不再值得。

And on the other side of that, more positive tone would be that higher for longer means the yields available as a lender continue to be high and it widely publicized when there is this level of duress in the market, it can be a generational opportunity to invest in equities and structured debt, things like that.

另一方面，更積極的基調是，長期較高意味著作為貸方的收益率繼續保持高位，並且當市場存在這種程度的壓力時，這可能是一個世代相傳的機會投資股票和結構性債務等。

So I think that the stability in rates and then the backing up is kind of either way going to lead to more resolutions, whether it's characterizes capitulation or great opportunities.

因此，我認為利率的穩定和支持都將導致更多的解決方案，無論它是投降還是巨大的機會。

I appreciate that, Bryan. Thank you so much, guys.

我很感激，布萊恩。十分感謝大家。

Appreciate it, Rick

欣賞它，瑞克

And there are no further questions, I would like to turn the conference back to Bryan Donohoe for any additional or closing remarks.

沒有其他問題了，我想將會議轉回布萊恩·多諾霍（Bryan Donohoe）進行補充或結束語。

Appreciate that, operator. Yeah, I just want to thank everyone for their time today. We appreciate the continued support of Ares Commercial Real Estate, and we look forward to speaking to you again on our next earnings call. Thank you.

感謝您，操作員。是的，我只是想感謝大家今天抽出時間。我們感謝阿瑞斯商業房地產的持續支持，我們期待在下一次財報電話會議上再次與您交談。謝謝。

And ladies and gentlemen, this concludes our conference for today. If you miss missed any portion of today's call, an archived replay of this conference will be available approximately one hour after the end of this call through June 9, 2024, to domestic callers by dialing 181007590728 and to international callers by dialing 14022207229. An archived replay will also be available on a webcast link located on the home page of the Investor Resources section of our website. Goodbye.

女士們、先生們，我們今天的會議到此結束。如果您錯過了今天電話會議的任何部分，則在本次電話會議結束後大約一小時至2024 年6 月9 日期間，國內來電者可透過撥打181007590728 觀看本次會議的存檔重播，國際來電者可撥打14022207229 觀看。我們網站投資者資源部分主頁上的網路廣播連結也提供了存檔的重播。再見。