Apollo Commercial Real Estate Finance Inc (ARI) 2023 Q4 法說會逐字稿

I'd like to remind everyone that today's call and webcast are being recorded. Please note that they are the property of Apollo Commercial Real Estate Finance Inc., and that any unauthorized broadcast in any form is strictly prohibited. Information about the audio replay of this call is available in our earnings press release.

我想提醒大家，今天的電話和網路直播都是錄音的。請注意，它們是 Apollo Commercial Real Estate Finance Inc. 的財產，嚴禁以任何形式進行未經授權的傳播。有關本次電話會議音訊重播的信息，請參閱我們的收益新聞稿。

I'd also like to call your attention to the customary safe harbor disclosure in our press release regarding forward-looking statements. Today's conference call and webcast may include forward-looking statements and projections, and we ask that you refer to our most recent filings with the SEC, important factors that could cause actual results to differ materially from these statements and projections. In addition, we will be discussing certain non-GAAP measures on this call, which management believes are relevant to assessing the company's financial performance. These measures are reconciled to GAAP figures in our earnings presentation, which is available in the stockholders section of our website. We do not undertake any obligation to update our forward-looking statements or projections unless required by law to obtain copies of our latest SEC filings, visit our website at w. w. w. dot Apollo Crest.com or call us at two one two five one five three two zero zero.

我還想提請您注意我們新聞稿中有關前瞻性陳述的慣例安全港披露。今天的電話會議和網路廣播可能包括前瞻性陳述和預測，我們要求您參考我們向 SEC 提交的最新文件，這些重要因素可能導致實際結果與這些陳述和預測有重大差異。此外，我們將在本次電話會議上討論某些非公認會計原則措施，管理階層認為這些措施與評估公司的財務表現有關。這些指標與我們收益報告中的 GAAP 數據進行了核對，收益報告可在我們網站的股東部分查看。我們不承擔任何更新前瞻性聲明或預測的義務，除非法律要求取得我們最新的 SEC 文件副本，請造訪我們的網站：w. w。 w。請造訪 Apollo Crest.com 或撥打二一二五一五三二零與我們聯絡。

At this time, I'd like to turn the call over to the Company's Chief Executive Officer Stuart Rothstein.

現在，我想將電話轉給公司執行長 Stuart Rothstein。

Thank you, operator. Good morning, and thank you to those of you joining us on the Apollo Commercial Real Estate Finance Fourth Quarter 2023 earnings call. I am joined as usual today by Scott Weiner, our Chief Investment Officer, and Anastasia Meron over our Chief Financial Officer.

謝謝你，接線生。早安，感謝各位參加 Apollo Commercial Real Estate Finance 2023 年第四季財報電話會議。今天像往常一樣，我們的首席投資官斯科特·韋納 (Scott Weiner) 和首席財務官阿納斯塔西婭·梅隆 (Anastasia Meron) 也加入了我的行列。

In many ways, the start of 2024, it feels very much like where we were at the start of 2023 for the commercial real estate sector. If you recall, entering 2023, there was significant negative sentiment concerning commercial real estate fueled by concerns over the impact of elevated interest rates on valuations and pending debt maturities, uncertainty on the long term use case for office properties and a lack of consensus with respect to both the path of the economy and the future trajectory of interest rates, the Fed continuing to raise rates in the first half of 2023 and the notable volatility in the 10-year treasury rates further added to the concern and uncertainty in the market. In addition, the failure of several notable regional banks, coupled with increased reserves and negative commentary from money center banks regarding their real estate portfolios, further added to the generally pessimistic perspective, while there were some notable transactions throughout 2023, which started the process of revaluing real estate in a higher interest rate environment. But overall transaction volume was significantly lower than recent years as market participants, including owners, lenders, potential buyers and sellers all chose to play for time and remain cautious in the face of an uncertain economic and interest rate environment. As we enter 2020 for their seat, there is increasing confidence in the Fed's ability to engineer some type of soft landing and expectations of 100 to 100, 50 bps of Fed rate cuts throughout the year. On the long end, the 10-year is essentially exactly where it was at the beginning of 2023. And at present fears of that rate moving higher as it quickly did last year are muted. However, while there may be more optimism with respect to the economy and rates. The narrative around commercial real estate continues to focus on further asset value degradation. There is still much to be done to address loan maturities and asset-level capital structures in a higher rate environment. In addition to the lingering uncertainty over the long term use case for certain assets, pivoting away from the value debate. Operating performance across much of commercial real estate has remained stable to positive. Notable exceptions includes certain office markets as well as pockets of the multifamily sector that have begun to experience declining rent growth in the face of elevated supply over the long term, we expect that property level operating performance will be closely aligned with the broader macro economic climate and many property sectors will benefit from a notable decrease in new supply over the last few years.

從很多方面來說，2024 年初，商業房地產行業的情況與 2023 年初非常相似。如果您還記得，進入 2023 年，由於擔心利率上升對估值和未決債務到期的影響、辦公物業長期用例的不確定性以及在尊重方面缺乏共識，商業地產出現了嚴重的負面情緒無論是經濟走勢還是未來利率走勢，聯準會在2023年上半年持續升息以及10年期公債利率的大幅波動進一步加劇了市場的擔憂和不確定性。此外，幾家著名地區銀行的倒閉，加上準備金增加以及貨幣中心銀行對其房地產投資組合的負面評論，進一步加劇了普遍悲觀的觀點，而2023 年全年出現了一些值得注意的交易，從而啟動了在高利率環境下重估房地產。但整體交易量明顯低於近年來，因為市場參與者，包括業主、貸款人、潛在買家和賣家，在不確定的經濟和利率環境下都選擇觀望並保持謹慎。隨著我們進入 2020 年，人們對聯準會實現某種類型的軟著陸的能力越來越有信心，並預期聯準會全年降息 100 到 100、50 個基點。從長遠來看，這 10 年基本上與 2023 年初的情況完全相同。目前，人們對這一利率會像去年那樣迅速走高的擔憂已經減弱。然而，儘管人們對經濟和利率可能更加樂觀。圍繞商業房地產的敘述繼續關注資產價值的進一步下降。在高利率環境下，要解決貸款期限和資產層面的資本結構問題，仍有許多工作要做。除了某些資產的長期用例揮之不去的不確定性之外，還擺脫了價值爭論。大部分商業不動產的經營績效維持穩定至積極。值得注意的例外包括某些辦公室市場以及部分多戶住宅市場，由於長期供應增加，這些市場的租金增長已開始下降，我們預計房地產層面的經營業績將與更廣泛的宏觀經濟環境密切相關許多房地產行業將受益於過去幾年新增供應量的顯著減少。

With respect to ARI, 2023 was a year focused on proactive asset management and maintaining excess liquidity while expanding and diversifying financing sources. Given the tailwinds from higher base rates, ARI achieved strong distributable earnings, which comfortably covered the dividend and demonstrated the earnings power of the Company's floating rate loan portfolio during the fourth quarter, ARI strategically pivoted and deployed $536 million into two new loan transactions and the upsizing of an existing loan because we identified compelling opportunities to originate loans at attractive pricing with reset valuation, strong credit structures and lower LTVs. All three of these loans secured properties in Europe.

對ARI來說，2023年是積極主動的資產管理、維持流動性過剩、擴大融資來源、多元化融資的一年。考慮到基本利率上升的推動力，ARI 實現了強勁的可分配收益，輕鬆支付了股息，並展示了公司第四季度浮動利率貸款組合的盈利能力。ARI 戰略性地調整方向，將5.36 億美元部署到兩項新貸款交易和擴大現有貸款規模，因為我們發現了以具有吸引力的定價、重置估值、強大的信貸結構和較低的貸款價值比發放貸款的絕佳機會。這三筆貸款都以歐洲的財產為擔保。

Shifting to the portfolio. At year end, ARI had 50 loans totaling $8.4 billion. Ari received $1.2 billion in loan repayments and sales during 2023 including $270 million from office loans throughout the year. Our team remains actively engaged with ARI's borrowers, negotiating and completing paydowns and extensions where appropriate for ARI's focus assets the two REO hotels produced stable cash flows throughout the year with the Washington DC asset generating NOI from hotel operations above pre-pandemic levels.

轉向投資組合。截至年底，ARI 擁有 50 筆貸款，總額達 84 億美元。2023 年，Ari 獲得了 12 億美元的貸款償還和銷售額，其中全年來自辦公室貸款 2.7 億美元。我們的團隊仍然積極與ARI 的借款人接觸，在適合ARI 重點資產的情況下談判並完成還款和延期。兩家REO 酒店全年產生了穩定的現金流，華盛頓特區的資產從酒店運營中產生的NOI 高於大流行前的水平。

With respect to Steinway, we closed on the sale of one unit in the fourth quarter and there are two more units under contract. There are also active negotiations on a handful of additional units. However, nothing is done until it is done based on recent activity at the building. Our views have not changed with respect to the nominal achievable value on sellout. But as a reminder, accounting does require a present value assessment of achievable value. Recent activity was generally consistent with previous estimates and as such, no additional reserve was recorded during the fourth quarter. Any future change to the reserve level will be based upon assessment of both the potential nominal value of remaining units as well as the expected timing of realization.

至於施坦威，我們在第四季完成了一台設備的銷售，還有兩台設備正在簽訂合約。關於一些額外單位的談判也正在進行中。然而，在根據大樓最近的活動完成之前，不會採取任何行動。我們對售空名目可實現價值的看法並沒有改變。但提醒一下，會計確實需要對可實現價值進行現值評估。最近的活動與先前的估計基本一致，因此第四季度沒有記錄額外的準備金。未來儲備水準的任何變化都將基於對剩餘單位的潛在名目價值以及預期實現時間的評估。

Before I turn the call over to Anastasia, let me make a few comments on ARI's quarterly dividend. As a reminder, our quarterly dividend run rate is $0.35 per share, and it has been at that level since we proactively reduced the dividend right at the beginning of the pandemic in 2020. As I have stated many times previously, the dividend is ultimately dependent on board action, and it is reviewed and discussed and ultimately declared by the Board on a quarterly basis. While it is subject to that board approval at present, our current modeling for the future indicates that we remain comfortable with the current dividend level of $0.35 per share. We will obviously review with the Board on a go-forward basis, but in light of questions that we anticipated I wanted to provide that context at this time.

在我把電話轉給阿納斯塔西婭之前，讓我對 ARI 的季度股息發表一些評論。提醒一下，我們的季度股息率為每股 0.35 美元，自從我們在 2020 年疫情爆發之初主動減少股息以來，一直處於這個水平。正如我之前多次說過的，股息最終取決於董事會的行動，並且由董事會每季進行審查和討論並最終宣布。雖然目前尚需董事會批准，但我們目前的未來模型表明，我們對目前每股 0.35 美元的股息水準仍然滿意。顯然，我們將在未來的基礎上與董事會進行審查，但鑑於我們預期的問題，我想此時提供相關背景資訊。

With that, I will turn the question over to Anastasia.

說到這裡，我將把問題交給阿納斯塔西婭。

Thank you, Stuart, and good morning, everyone. ARI had a strong year of operating results in 2023 reported distributable earnings of $244 million, or $1.69 per share, which resulted in dividend coverage of 1.21 times. GAAP net income available to common stockholders was $46 million, or $0.29 per diluted share of common stock. The right portfolio ended the year with a carrying value of $8.4 billion with a weighted average unlevered yield of 8.7%, 110 basis points higher than at the end of 2022 and notably 380 basis points higher than at the end of 2021.

謝謝斯圖爾特，大家早安。ARI 2023 年的經營業績表現強勁，報告可分配收益為 2.44 億美元，即每股 1.69 美元，股利覆蓋率為 1.21 倍。普通股股東可獲得的 GAAP 淨利潤為 4,600 萬美元，即稀釋後每股普通股 0.29 美元。正確的投資組合到年底帳面價值為 84 億美元，加權平均無槓桿收益率為 8.7%，比 2022 年底高 110 個基點，尤其比 2021 年底高 380 個基點。

As Stuart mentioned, during the quarter, we closed $536 million of new commitments across three deals, $275 million of these commitments was funded during the quarter, $212 million was funded subsequent to quarter end, and the rest will be funded in the future. We also completed $131 million of add-on fundings from previously closed loans and received $205 million in loan repayments. As of year-end, approximately 81% of the principal balance of our portfolio was covered by interest rate caps. Important to note that most capital explorations are tied to either initial or final maturity of loans. We're part of the extension conditions for the loans include putting a new cap in place. We closely monitor a pending expirations and engage with our borrowers to ensure new caps are put in place upon expiration. Currently, there are not any loans in our portfolio in which we are concerned with the borrower's ability to replace an expiring cap in addition to interest rate caps are the structural protections for the loans in our portfolio include interest reserves and interest and carry guarantees as of year end, the weighted average risk rating of the portfolio was a 3.0. There was no incremental specific CECL allowance taken during the quarter. The general CECL allowance stood at 38 basis points of the loan portfolio's amortized cost basis at December 31st, a two basis points increase as compared to a year ago. The increase in general CECL allowance was primarily attributable to a more adverse macroeconomic outlook, particularly in relation to certain asset classes. The negative impact from the macroeconomic outlook was partially offset by overall portfolio seasoning and loan repayment activity outpacing loan funding. Notably, the outstanding principal balance of the loan portfolio decreased from $8.9 billion to $8.6 billion over the course of the year. As of December 31st, our total CECL allowance was 261 basis points of the loan portfolio at amortized cost, yes, ARI book value per share, excluding general CECL reserves and depreciation was $14.73, relatively flat to last quarter. With respect to our borrowings, we are in compliance with all covenants and continue to maintain strong liquidity air, I repeat $176 million of the remaining outstanding principal balance of convertible notes that came due in October with cash on hand. With this repayment. Our next corporate debt maturity is not until 2026.

正如史都華所提到的，在本季度，我們在三筆交易中完成了5.36 億美元的新承諾，其中2.75 億美元的承諾在本季度提供了資金，2.12 億美元在季度末後提供了資金，其餘的將在未來提供資金。我們也從先前已結清的貸款中完成了 1.31 億美元的追加資金，並收到了 2.05 億美元的貸款償還。截至年底，我們投資組合本金餘額的約 81% 受到利率上限的覆蓋。值得注意的是，大多數資本探索都與貸款的初始或最終到期日有關。我們的貸款延期條件包括設定新的上限。我們密切注意即將到期的情況，並與借款人合作，以確保在到期時實施新的上限。目前，我們的投資組合中沒有任何貸款我們擔心借款人除了利率上限之外是否有能力更換即將到期的上限，因為我們投資組合中的貸款的結構性保護包括利息準備金和利息並持有擔保年末，該投資組合的加權平均風險評級為3.0。本季沒有增加特定的 CECL 津貼。截至 12 月 31 日，一般 CECL 準備金佔貸款組合攤餘成本基礎的 38 個基點，比一年前增加了 2 個基點。一般CECL準備金的增加主要是由於宏觀經濟前景更加不利，特別是與某些資產類別相關的前景。宏觀經濟前景的負面影響被整體投資組合老化和貸款償還活動超過貸款融資所部分抵消。值得注意的是，貸款組合的未償本金餘額在這一年中從 89 億美元減少至 86 億美元。截至12 月31 日，我們的CECL 準備金總額為按攤餘成本計算的貸款組合的261 個基點，是的，ARI 每股賬面價值（不包括一般CECL 準備金）和折舊為14.73 美元，與上季度持平。關於我們的借款，我們遵守所有契約，並繼續保持強勁的流動性空氣，我重複一遍，10月份到期的可轉換票據的剩餘未償還本金餘額為1.76億美元，手頭有現金。以此還款。我們的下一次企業債務到期要到 2026 年。

Picking up on Stuart's remarks with regards to our Washington DC hotel, as we continue to monitor the market to determine the optimal time to sell the asset. The hotel was recently pledged to our revolving credit facility generated an incremental levered return for ARI. We ended the quarter with $278 million of total liquidity comprised of cash on hand undrawn credit capacity on existing facilities and loan proceeds held by the servicer, a rise debt to equity ratio at quarter end was at 3.0 times.

我們繼續關注斯圖爾特關於我們華盛頓特區酒店的言論，以確定出售資產的最佳時間。該酒店最近承諾使用我們的循環信貸額度，為 ARI 帶來增量槓桿回報。本季結束時，我們的總流動性為 2.78 億美元，其中包括現有設施上未提取的信貸能力以及服務商持有的貸款收益，季度末債務股本比率上升了 3.0 倍。

And with that, I would like to open the line for questions. Operator, please go ahead.

說到這裡，我想開通提問專線。接線員，請繼續。

(Operator Instructions)

（操作員說明）

Doug Harter, UBS.

道格·哈特，瑞銀集團。

Thanks and good morning. Hoping you could talk a little bit about the potential timing of resolution of your are your existing problem assets?

謝謝，早安。希望您能談談解決現有問題資產的潛在時機？

Yes, I think in no particular order, Doug, I think as we've indicated previously, with respect to the Atlanta hotel, there has been some dialogue with potential buyers. I don't know that we'll get to the finish line or not, but I think it's possible that it gets resolved in the first half of this year from in terms of there being a sale. I would say the dialogues we're in now don't result in a sale. We will probably sort of reassess and whether it makes sense to we continue to create more value through operations before bringing it back to market or sort of thinking about relaunching a more formal sales effort. What we're working on now has been sort of shorter some dialogues with local players who knew we might be interested in selling a home with respect to the Mayflower hotel in DC that's actually generating a pretty attractive levered return as Anastasia mentioned in her comments. And I would say at this point, probably want to see where rates and the overall financing market goes before we do anything formal in terms of trying to sell that asset. But from a return perspective, selling that asset is really about just removing ROE. from our our balance sheet. It doesn't change the nature of what we could earn on that capital by a large amount of a pivoting to the retail asset in Ohio. We've made a lot of progress from a leasing perspective. We are in the low 90s from an overall occupancy percentage. And the asset management team has also done some interesting things to lower our bases a little bit or create more value through some outparcel ideas and getting entitlements for some additional density at the site. We've got a little bit of work to be done with some significant tenants from a renewal perspective over the next and I'll say six to 12 months, but is successful on that front. And again, not knowing where the world will be, but assuming a good environment overall, I think we would look to exit it possible sometime in the early part of next year.

是的，我認為沒有特定的順序，道格，我認為正如我們之前所指出的，關於亞特蘭大酒店，我們已經與潛在買家進行了一些對話。我不知道我們是否會到達終點線，但我認為今年上半年有可能從銷售方面解決。我想說的是，我們現在正在進行的對話不會導致銷售。我們可能會重新評估在將其帶回市場之前繼續透過營運創造更多價值是否有意義，或者考慮重新啟動更正式的銷售工作。我們現在正在做的事情是與當地參與者進行一些簡短的對話，他們知道我們可能有興趣出售華盛頓五月花酒店的房屋，正如阿納斯塔西婭在她的評論中提到的那樣，這實際上產生了相當有吸引力的槓桿回報。我想說，在這一點上，在我們嘗試出售該資產之前，可能想看看利率和整體融資市場的方向。但從回報的角度來看，出售該資產實際上只是去除股本回報率。從我們的資產負債表來看。它不會改變我們透過大量轉向俄亥俄州零售資產而可以從該資本中賺取收入的性質。從租賃的角度來看，我們已經取得了許多進展。從整體入住率來看，我們處於 90 多歲的低點。資產管理團隊也做了一些有趣的事情，以稍微降低我們的基礎或透過一些超凡的想法創造更多價值，並獲得現場一些額外密度的權利。從續約的角度來看，我們需要與一些重要租戶一起完成一些工作，我會說未來六到十二個月，但在這方面是成功的。再說一次，不知道世界會在哪裡，但假設整體環境良好，我認為我們可能會在明年初的某個時候退出它。

And then on the on this time, we are building, it's really unit by unit. There's no there's no way to force anything in terms of anything from a bulk perspective. So it is literally just trying to grind through it over unit unit by unit over unit coming quarters. And several years. And then obviously the breadth, which is an excuse me, the I hope the multifamily development in Brooklyn, yes, that will be built through '24, '25, Lisa we don't call it late '25, '26, and that's when we would envision a chance to exit that asset. We have explored some JV ideas along the way as a way to potentially lower some of our equity commitment. But I would not plan on anything at that time.

然後這一次，我們正在建造，它真的是一個單元一個單元地建造。從整體的角度來看，沒有辦法強迫任何事。因此，它實際上只是試圖在接下來的幾個季度中一個單位一個單位地磨礪它。又好幾年了。然後顯然是廣度，這是一個對不起，我希望布魯克林的多戶住宅開發，是的，這將在“24”、“25”之前建成，麗莎我們不稱其為“25”、“26”後期，那就是當我們設想有機會退出該資產時。在這個過程中，我們探索了一些合資想法，作為可能降低我們部分股權承諾的一種方式。但當時我不會計劃任何事。

Great. Thank you, sir.

偉大的。謝謝你，先生。

Sure.

當然。

Stephen Laws, Raymond James.

史蒂芬勞斯，雷蒙德詹姆斯。

Hi. Good morning. Appreciate the comments on around Doug's question, Stuart, and certainly helpful. As I think about those different assets. I think there's also a Chicago office loan. Maybe you've talked about in the past any update on that?

你好。早安.感謝斯圖爾特對道格問題的評論，這當然很有幫助。當我思考這些不同的資產。我想還有芝加哥辦公室貸款。也許您過去曾談論過這方面的任何更新？

We have two office loans in Chicago. So both are well supported by their sponsors. One was a complete, call it redo and Lisa and I would say at this point, we are pretty encouraged by the amount of leasing activity and taking place at the asset. That's $100 million commitments that we've got outstanding. We originated late in 2022, and I would say and based on our basis and based on what we're seeing from initial indication of lease activity. We feel pretty good about that. And then we've got another asset in Chicago that's an older asset that we've had. It in our portfolio since of 2018, I believe we recently received a modest paydown from the sponsorship. We negotiated additional pay down plus additional guarantees. I would expect the sponsor to continue to support the asset based on dialogue. Right now, the building itself is about I'm plus or minus 75% occupied at this point. But sponsorship is given in every indication. They continue and they will continue to support the assets.

我們在芝加哥有兩筆辦公室貸款。因此兩者都得到了贊助商的大力支持。其中一個是完整的，稱之為重做，麗莎和我想說，在這一點上，我們對該資產的租賃活動和發生的數量感到非常鼓舞。這是我們尚未兌現的 1 億美元承諾。我們起源於 2022 年末，我想說的是，基於我們的基礎以及我們從租賃活動的初步跡像中看到的情況。我們對此感覺很好。然後我們在芝加哥擁有另一項資產，這是我們擁有的一項較舊的資產。自 2018 年以來，它一直在我們的投資組合中，我相信我們最近從贊助中獲得了適度的回報。我們協商了額外的首付款和額外的擔保。我希望贊助商能夠繼續支持基於對話的資產。目前，建築物本身的佔用率約為正負 75%。但贊助是在各方面都給予的。他們將繼續並將繼續支持這些資產。

Thanks. And a couple of questions around originations. Certainly 4Q new investments were above what I was expecting. I think you mentioned that and of the pivot in your prepared remarks as far as deploying that capital kind of on the whole, can you talk about your expectations around new originations and repayments this year, do you expect the portfolio to net grow and increase over '24? Or do you think kind of over or not looking at an isolated one quarter, maybe over the year, you're going to see originations and repayments more in line with each other firm?

謝謝。還有一些關於起源的問題。當然，第四季的新投資超出了我的預期。我認為您在準備好的發言中提到了這一點，就總體上部署該資本而言，您能否談談您對今年新的發起和還款的期望，您是否預計投資組合將淨增長並增加超過'24？或者您認為過度或不考慮某個單獨的季度，也許在一年中，您會看到彼此公司的資金來源和還款更加一致？

Look, I think we're trying to match them up.

聽著，我想我們正在努力將它們匹配起來。

I think what you saw at the end of last year was the fact that we had taken a fairly cautious approach through much of 2023 and had built up some liquidity and sort of felt like we had the opportunity to deploy it into transactions. We felt good about I think for the rest of this year, I certainly wouldn't in any way be assuming we multiply our deployment by four. If anything, I think we got ahead of our deployment needs by doing some things at the end of the year, early in this year.

我認為你在去年年底看到的事實是，我們在 2023 年的大部分時間裡都採取了相當謹慎的態度，並建立了一些流動性，感覺我們有機會將其部署到交易中。我們感覺很好，我認為在今年剩餘的時間裡，我當然不會以任何方式假設我們將部署數量增加四倍。如果有什麼不同的話，我認為我們透過在今年年底、今年年初做了一些事情來滿足了我們的部署需求。

Is it pacing for the rest of the year is really sort of dependent and in some way, tied to it's the question Doug asked, which is when do we free up capital from, you know, some of the underperforming assets per se. And I think with respect to expected repayments there, we're still going to be a little bit cautious, making sure that repayments actually happen before we get too far out over our skis.

今年剩下的時間裡它的節奏是否真的有點依賴，並且在某種程度上與道格提出的問題有關，即我們什麼時候從一些表現不佳的資產中釋放資本。我認為，對於那裡的預期還款，我們仍然會有點謹慎，確保在我們超出滑雪範圍之前真正進行還款。

Great.

偉大的。

And then lastly, you know, it looks like a little over half of the portfolio is now in Europe and again, trying not to read too much into one quarter, but that's where the new investment activity occurred that.

最後，你知道，看起來投資組合的一半多一點現在在歐洲，並且再次嘗試不要對一個季度進行太多解讀，但這就是新投資活動發生的地方。

Can you talk about what you like in the European market versus opportunities you're seeing in the US on Rudi's just kind of unique deals that presented themselves that have that were attractive.

您能否談談您在歐洲市場上喜歡什麼以及您在美國市場上看到的機會，魯迪的獨特交易本身就很有吸引力。

I mean, certainly, if you look at the asset types, right, which in one was a hostile transaction, i.e., as in hospitals, vacation, not hostile. And then one was a portfolio of pubs, obviously, a little bit off the run in terms of traditional asset classes on larger deals where ARI was able to participate with other parts of Apollo broadly where we had knowledge of the sectors from a business perspective, not just a real estate perspective and I also think the size of the transaction, it afforded us the ability to create some structure and economics that were interesting. We are still active in the US as a business. Overall, the real estate credit team and I again at Apollo, did over $10 billion worth of transactions in 2023. And much of that was in the US So the US continues to be on the radar screen for the business. And overall, we continue to think about it for from ARI's perspective. But in this particular case, as we made the decision to put some of our capital to work. I would say the two things. The two new transactions in Europe certainly were two of the more interesting things we were seeing as we thought about achievable risk-adjusted returns. And then obviously, the upsizing was just on an existing transaction in Europe where and that sponsorship had succeeded from a lease-up perspective.

我的意思是，當然，如果你看看資產類型，對吧，其中一種是敵意交易，即醫院、度假，而不是敵意交易。然後一個是酒吧投資組合，顯然，就大型交易的傳統資產類別而言，ARI 能夠廣泛參與阿波羅的其他部分，我們從商業角度了解這些行業，不僅僅是房地產的角度，我還認為交易的規模，它使我們有能力創造一些有趣的結構和經濟學。我們的業務仍然活躍在美國。整體而言，2023 年，我和 Apollo 的房地產信貸團隊完成了價值超過 100 億美元的交易。其中大部分是在美國，因此美國繼續成為該業務的焦點。總的來說，我們繼續從 ARI 的角度來思考這個問題。但在這種特殊情況下，我們決定投入部分資金。我想說兩件事。當我們考慮可實現的風險調整回報時，歐洲的兩筆新交易無疑是我們看到的兩件更有趣的事情。顯然，擴大規模只是在歐洲的一項現有交易中進行的，從租賃的角度來看，贊助已經取得了成功。

Great. Thanks for the comments on this one, Stuart.

偉大的。感謝斯圖爾特對此的評論。

Jade Rahmani, KBW.

傑德·拉赫馬尼，KBW。

Thank you very much. And just a follow-up to Steve's question around Chicago. On the other office, could you comment on Manhattan and Long Island City since Manhattan?

非常感謝。這只是史蒂夫在芝加哥提出的問題的後續行動。在另一個辦公室，您能評論一下曼哈頓和長島市嗎？

Clearly bifurcated market, but loan City market where we've seen some pressure there?

市場明顯分叉，但是貸市市場我們在哪裡看到了一些壓力呢？

Yes.

是的。

On the I think with we did a restructuring on the Long Island City asset in 2023. Significant capital came in behind us. It came in from and someone that was already junior to us in the capital structure and certainly is a strong institution in the space.

我認為我們在 2023 年對長島市資產進行了重組。大量資本來到我們身後。它來自於在資本結構上已經比我們初級的人，並且肯定是該領域的強大機構。

Overall, I would say since that is I've been there's been some leasing that's taken place today. I would say there continues to be interest from tenants who look at Long Island City as a lower cost option to Manhattan. I would say now that the transaction that was done last year from a restructuring perspective was certainly from our perspective, set us up to have have several years of runway and capital available for lease up and TI. expenses as they occur, but so generally moving in the right direction --

總的來說，我想說，自從我去過以來，今天已經發生了一些租賃。我想說的是，租戶仍然有興趣，他們將長島市視為比曼哈頓成本更低的選擇。我現在要說的是，去年從重組角度完成的交易肯定是從我們的角度來看的，它使我們擁有數年的跑道和資本可用於租賃和 TI。費用發生時，但總體上朝著正確的方向發展--

Stuart, I would add and it's right above the subway stop.

斯圖爾特，我想補充一下，它就在地鐵站的上方。

So it's really centrally located in terms of access all over the city. And historically, the city has a whole bunch of incentives on the tax side for people to relocate there. So in addition to being kind of centrally located, it's a low cost alternative, and we're really benefiting from a very long lease term. We have like 15, 20 year leases on the three major tenants as well as 100% retail and which is anchored by Target if you're familiar with the center. So as Stuart mentioned, I think us and the sponsorship group is very pleased on a lot of touring, a lot of activities, both by government tenants, which was actually the most recent lease with a large government, New York City tenant obviously have credit there. And then a lot of other folks are looking for that's really a Class A. building on the long term.

所以它確實位於城市的中心位置。從歷史上看，這座城市在稅收方面有很多激勵措施，鼓勵人們搬到那裡。因此，除了位於中心位置之外，它還是一種低成本的選擇，而且我們確實受益於很長的租賃期限。我們對三個主要租戶有大約 15 年、20 年的租約，以及 100% 的零售業，如果您熟悉該中心，則以塔吉特 (Target) 為主導。正如史都華所提到的，我認為我們和贊助集團對政府租戶的大量巡迴和活動感到非常高興，這實際上是最近與大型政府的租約，紐約市的租戶顯然有信用在那裡。然後很多其他人都在尋找真正的 A 級。從長遠來看。

And then in Manhattan, Jade, we've got one exposure with a loan we put in place in the first half of 2022, where the senior mortgage, our last dollar of basis is sub $400 a square foot. There are three levels of mez beneath us more sub debt beneath us. And I would say at this point, we're sort of at a stage in that transaction where I think sponsorship on the equity side is running out of appetite, and we are already in dialogue with and those subordinate ties in the capital structure around and some sort of restructure injection of capital, et cetera, to give at least some maybe not all of the sub-debt a chance to play for time. So seems like a productive dialogue, we should have more than, yes, probably the next time around the phone in terms of specifically what's likely to happen.

然後在曼哈頓的 Jade，我們在 2022 年上半年發放的貸款中獲得了一筆風險敞口，其中高級抵押貸款，我們最後一美元的基礎價格是每平方英尺不到 400 美元。我們下面有三個等級的中間層，我們下面有更多的次級債務。我想說，在這一點上，我們正​​處於交易的一個階段，我認為股權方面的贊助已經沒有胃口了，我們已經在與資本結構中的那些從屬關係進行對話，某種重組注入資本等等，以便至少給部分（也許不是全部）次級債務一個爭取時間的機會。因此，這似乎是一次富有成效的對話，我們不應該只是下一次透過電話討論可能發生的具體情況。

So a challenging asset, but there's enough subordination where you feel adequately covered sitting here today.

這是一項具有挑戰性的資產，但有足夠的從屬關係，讓你今天坐在這裡感覺得到了充分的保護。

Okay.

好的。

And then just a bigger picture question, but if you can give a sense, we get tons of questions about credit performance and people look, for example, CLOs and they see delinquency issues, they see a lot of modifications. But ultimately, in your mind, what is the driver of whether a loan stays current or goes into the fall? In other words, what percentage of interest is funded out of a reserve VERSUS property level cash flows, as most of it come from an interest reserve that is initially established and later replenished it depends, right.

然後是一個更大的問題，但如果你能給出一個感覺，我們會收到大量有關信用表現的問題，人們會看到，例如，CLO，他們會看到拖欠問題，他們會看到很多修改。但最終，在您看來，決定貸款維持不變還是進入秋季的因素是什麼？換句話說，多少百分比的利息是從儲備金與財產水平現金流中提供資金的，因為大部分利息儲備來自最初建立並隨後補充的利息儲備，這取決於，對吧。

So to be clear, right, if you look at our portfolio and you look at our interest, but you also factor in the fact that a lot of what we do on our assets in transitions, whether it is ground-up development or heavy redevelopment?

因此，要明確的是，如果你看看我們的投資組合，你看看我們的興趣，但你也考慮到這樣一個事實，即我們在轉型過程中對資產所做的很多事情，無論是從頭開始的開發還是大規模的重建？

Yes, I think when last we looked and Hilary could probably give you a more current number after the fact, I think I think approximately 20% of our interest income maybe slightly higher is it paid out of reserves, but it's ordinary way structuring when you're doing a construction deal or a predevelopment loan or a significant redevelopment loan that you are baking in the interest cost into the loan I make I think it's as expected for lack of a better phrase. And obviously, particularly when you're doing things that are development or redevelopment in nature, there are no cash flows to cover interest. So you're effectively baking it into the line Thanks very much, sir.

是的，我想當我們上次查看時，希拉里可能會在事後給你一個更新的數字，我想我認為我們的利息收入的大約20% 可能會稍高一些，它是從準備金中支付的，但這是通常的結構方式，當你正在進行一項建築交易或預開發貸款或重大再開發貸款，您將這些貸款的利息成本計入貸款中，我認為這符合預期，因為缺乏更好的措詞。顯然，特別是當您從事開發或重建性質的事情時，沒有現金流來支付利息。所以你可以有效地將其烘焙到生產線中，非常感謝，先生。

Thank you. One moment for questions. Our next question comes from Rick Shane with JP Morgan. You may proceed.

謝謝。請稍等一下提問。我們的下一個問題來自摩根大通的 Rick Shane。您可以繼續。

Thanks for taking my questions this morning, everybody, Anastasia Thank you for the additional detail on CAPS, et cetera. I'd love to talk a little bit about the dynamics in terms of your borrowers hedging. Now given we are seemingly approaching an inflection in rates? Is the cost of hedging actually starting to come down as the price of caps coming down. And the second part of this is and does it do borrowers have the alternative instead of buying caps of building up the interest reserve instead our sort of self insurance. So that way, if rates come down, they haven't paid away on the they haven't sort of wasted the payment and they can recapture it through the reserve.

感謝大家今天早上回答我的問題，Anastasia，感謝您提供有關 CAPS 等的更多詳細資訊。我很想談談借款人對沖的動態。現在考慮到我們似乎正在接近利率轉折點？隨著上限價格的下降，對沖成本是否實際上開始下降？第二部分是藉款人是否有其他選擇，而不是購買建立利息儲備的上限，而不是我們的自我保險。這樣，如果利率下降，他們就沒有還清，也沒有浪費這筆錢，他們可以透過準備金重新收回這筆錢。

Scott, do you want to just sort of maybe give like unless you have sort of the dialogue with borrowers?

史考特，除非你與借款人進行某種對話，否則你是否願意提供類似的幫助？

Yes, I do think your cap costs have come down, like I think everybody has a different philosophy. We have general and I'm seeing across the broader real estate platform on. Obviously, as we mentioned, we haven't done many new originations. But across our platform, we have borrowers, you're actually buying in the money caps. So effectively pre-pay interest because they want to have more coverage and willing to pay. And we have other borrowers who really want to buy our way out of the money cap and it's time insurance and requiring. And again, part of it also depends on what the coverages and what type of leverage that we're doing. And from our underwriting perspective, what kind of interest rate would we have some. But I would say generally, it's not so much building up an interest reserve. I would say from a credit perspective, if someone wants to buy or spend less money on a cap generally that would be on a deal where you feel very comfortable with the cash flows and the coverage and or you might have some sort of guarantee. So for example, like on construction loans where you're by definition, funding that and you kind of look to the forward and you have, I guess, carry guarantee oftentimes a borrower we'll want to buy a less expensive cap out of the money or somebody with a shorter term. Clearly, if you're financing an asset that is a cash flowing asset and has a lower a lower coverage, if you will, on multi-family, you're going to be very focused on what that cap is because you want to make sure that you that you cover.

是的，我確實認為你的上限成本已經下降，就像我認為每個人都有不同的理念一樣。我們有一般性的，我正在更廣泛的房地產平台上看到。顯然，正如我們所提到的，我們還沒有做很多新的創作。但在我們的平台上，我們有借款人，你實際上是在資金上限內購買的。之所以有效地提前支付利息，是因為他們希望獲得更多的保險並願意支付。我們還有其他借款人真的想透過購買我們的資金來擺脫資金上限，這是時間保險和要求。同樣，部分也取決於我們正在做的覆蓋範圍和槓桿類型。從我們承保的角度來看，我們會有什麼樣的利率。但我想說的是，一般來說，這並不是建立利息儲備。我想說，從信貸的角度來看，如果有人想購買或花更少的錢購買上限，那麼一般來說，這將是一項您對現金流和覆蓋範圍感到非常滿意的交易，或者您可能有某種保證。例如，就像在建築貸款中，根據定義，您可以為該貸款提供資金，並且您會著眼於未來，並且我想，您通常會提供擔保，借款人我們會希望從借款人中購買較便宜的上限金錢或短期的人。顯然，如果您為一項現金流資產且覆蓋範圍較低的資產融資，如果您願意的話，對於多戶家庭，您將非常關注該上限，因為您想要確保您涵蓋了。

Got it.

知道了。

Okay.

好的。

Then I've got some longer borrowing fixed out, right? I mean that's obviously that's the other thing. If borrowers can confidently in the market borrow fixed rate loans, the rebate That's helpful.

那我就解決了一些長期借款，對嗎？我的意思是，這顯然是另一回事。如果借款人能夠放心地在市場上借到固定利率貸款，那麼回扣是有幫助的。

And then the follow-up to that is on it in stage, I apologize. I think you've said that 83% of loans have caps at this point, and I don't recall hearing that metric in the past on where is that in historical context, you ended with 81% of the principal balance?

然後後續的內容就在舞台上，我很抱歉。我想你說過 83% 的貸款目前有上限，我不記得過去聽說過這個指標，在歷史背景下，你以 81% 的本金餘額結束？

Yes, I think that Australia, again, if we have a strong sponsor, right? And they're willing to in some ways, we're better off having them guarantee interest rate. That's because the capital and gets you there where if someone is willing to give us a full carry guarantee that's only a trade that we can make. So so I would say on the deals where we don't have a cap, it's because we have some form of other supplemental credit enhancement.

是的，我認為澳大利亞，如果我們有一個強大的贊助商，對吧？他們在某些方面願意這樣做，我們最好讓他們保證利率。這是因為如果有人願意為我們提供全額套利保證，那麼資本就能讓你到達那裡，這只是我們可以進行的交易。因此，我想說的是，對於我們沒有上限的交易，這是因為我們有某種形式的其他補充信用增級。

So thank you, guys.

謝謝你們，夥計們。

Thank you. And as a reminder, to ask a question, please press star one one on your telephone. One moment for questions.

謝謝。提醒一下，要提問，請按電話上的星號一一。請稍等一下提問。

Our next question comes from Steve Delaney with Citizens Jempy. You may proceed.

我們的下一個問題來自公民 Jempy 的 Steve Delaney。您可以繼續。

Thanks.

謝謝。

Good morning, everyone. I'd like to go back to Stephen Laws. Comment about your on your farm market investments. Clearly, that's the most distinctive feature of Apollo IR. I I'm just noting in your in your deck here, you have 32% of the portfolio in the UK and just 21% in New York City. I'm just a couple of questions around that.

大家，早安。我想回到史蒂芬·勞斯。評論一下您對農產品市場的投資。顯然，這是 Apollo IR 最顯著的特徵。我只是在你的牌組中指出，你有 32% 的投資組合在英國，只有 21% 在紐約。我只是想問幾個問題。

I'm just curious.

我只是好奇。

I know generally you've had a good performance. Have you had any NPLs are foreclosures in the UK or any of the European markets based on your active lending activity there, but I appreciate you asking that quite you're like an announcer where guys like made 20 facts that we know to date.

我知道總的來說你的表現很好。根據您在英國或任何歐洲市場的活躍貸款活動，您是否曾在英國或任何歐洲市場發生過取消抵押品贖回權的不良貸款，但我很感謝您提出這樣的問題，您就像一位播音員，其中的人提出了我們迄今為止所知的20 個事實。

We've had very strong performance in Europe, and you've heard me talk multiple times about why we like Europe because in many ways. We think about Europe, the way we do the US in terms of quality of assets, quality of sponsorship, ability to protect ourselves through the legal system. It's not to say we haven't had assets where sponsorship did not achieve business plan, but in those cases, the the value of the underlying real estate relative to our loan was sufficient to make sure we were made whole on our transaction.

我們在歐洲的表現非常強勁，你已經聽我多次談論我們為什麼喜歡歐洲，因為在很多方面。我們在資產品質、贊助品質、透過法律體系保護自己的能力等方面考慮歐洲，就像我們對待美國一樣。這並不是說我們沒有贊助未實現業務計劃的資產，但在這些情況下，基礎房地產相對於我們貸款的價值足以確保我們在交易中獲得完整。

What's that?

那是什麼？

Gosh, everything is every loan's unique, everything's story, right? Every borrower has a person different personality, but is there is there one more principle of doing business or custom bet in the UK to give lenders more control over borrowers. Is there anything just technical like that that help make that aim?

天哪，每筆貸款都是獨一無二的，都是故事，對吧？每個借款人都有不同的個性，但在英國做生意或客製化賭注是否還有一項原則，可以讓貸款人對借款人有更多的控制權。有什麼類似的技術可以幫助實現這一目標嗎？

Maybe I'll use the word safer lending market than the US?

也許我會用比美國更安全的貸款市場這個詞？

I wouldn't say this is Scott. I wouldn't say Cai, just because obviously people can lose money on loans in Ukraine, London hub just as much as they can here. I would say there are some norms over there around kind of ongoing covenants that you don't really see here. So whereas in the U. S you generally obviously, we've always structure our deals with ongoing cash triggers and maybe extension test in Europe in the UK. What you would often see is in addition to those type of triggers. We actually have financial covenants that if they are breached, bring everyone to the table, I would say rule of law enforcement is obviously very strong there. And I would just say London historically has just been a center of attracting capital. So even even office right now, I think I read somewhere there's a GBP2 billion of office under offer across our portfolio. We recently got refinanced and some office buildings that were outside the ARI portfolio in London. So I just think it's a liquid market that is attracting people from Asia or other parts of Europe, the U.S. and yes, we have a large team there, so somebody like it. But again, also we look across Europe as well.

我不會說這是斯科特。我不會說蔡，因為顯然人們在烏克蘭和倫敦中心的貸款上可能會像在這裡一樣賠錢。我想說的是，那裡有一些關於持續契約的規範，但你在這裡看不到。因此，在美國，你通常很明顯，我們總是透過持續的現金觸發來建立我們的交易，也許還可以在歐洲和英國進行擴展測試。除了這些類型的觸發器之外，您還經常會看到其他類型的觸發器。我們實際上有財務契約，如果違反了這些契約，就讓每個人都坐到談判桌前，我想說那裡的執法規則顯然非常強大。我只想說，倫敦歷史上一直是吸引資本的中心。因此，即使是現在的辦公大樓，我想我在某處讀到過，我們的投資組合中正在提供 20 億英鎊的辦公室。我們最近獲得了再融資，並獲得了倫敦 ARI 投資組合之外的一些辦公大樓。所以我認為這是一個流動性市場，吸引來自亞洲或歐洲其他地區、美國的人們，是的，我們在那裡有一個龐大的團隊，所以有人喜歡它。但同樣，我們也放眼整個歐洲。

It's really that for us, the power of the platform, it's really how we look at it while congrats on how you've taken advantage of that and was a solid close to 2023.

對我們來說，平台的力量確實如此，這就是我們看待它的方式，同時祝賀你們如何利用這一點，並在 2023 年取得了堅實的進展。

Thank you.

謝謝。

Thanks for that.

感謝那。

Thank you. I would now like to turn the call back over to Mr. Rossi for any closing remarks.

謝謝。我現在想將電話轉回給羅西先生，請他發表結束語。

So thank you all who participated on the call this morning.

感謝今天早上參加電話會議的所有人。

And obviously to the extent there are follow-up questions, myself, Hilary Anastasia are always available to talk.

顯然，如果有後續問題，我本人、希拉里·阿納斯塔西婭 (Hilary Anastasia) 隨時可以與我們交談。

Thanks, everybody.

謝謝大家。

Thank you.

謝謝。

Thank you for your participation. You may now disconnect.

感謝您的參與。您現在可以斷開連線。