TPG RE Finance Trust Inc (TRTX) 2020 Q4 法說會逐字稿

Greetings, and welcome to the TPG Real Estate Finance Trust's Fourth Quarter 2020 Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Deborah Ginsberg, Vice President and General Counsel. Thank you. You may begin.

Good morning, and welcome to TPG Real Estate Finance Trust's Conference Call for the Fourth Quarter of 2020. I'm joined today by Greta Guggenheim, Chief Executive Officer; Matt Coleman, President; Bob Foley, Chief Financial Officer; and Peter Smith, Chief Investment Officer. Greta, Matt and Bob will share some comments about the quarter and the year, and then we'll open up the call for some questions. Yesterday evening, we filed our Form 10-K and issued a press release with a presentation of our operating results, all of which are available on our website in the Investor Relations section.

I'd like to remind everyone that today's call may include forward-looking statements, which are uncertain and outside of the company's control. Actual results may differ materially. For a discussion of some of the risks that could affect results, please see the Risk Factors section of our 10-K. We do not undertake any duty to update these statements, and we will also refer to certain non-GAAP measures on this call. And for reconciliations, you should refer to the press release and our 10-K.

With that, I turn the call over to Greta Guggenheim, Chief Executive Officer of TPG Real Estate Finance Trust.

Good morning. And welcome to our fourth quarter conference call. As I suspect you may have read, I announced I will be retiring from my position as CEO and resigning from the Board as of the end of this quarter. I've been thinking about my retirement for some time, actually since late 2019 after having helped build the company and with the intention of leaving it well positioned for future growth. This was delayed a bit. But with the strength of our balance sheet restored, our strong liquidity position and with our experienced management and origination teams, I feel now is a good time to move on. The firm has asked and I have gladly accepted to stay on as an adviser to the business through this transition period. I want to thank TPG and the TRTX team for their commitment and support. I'm incredibly proud of what we've accomplished over these last 5 years and know the company is well positioned for continued success.

With that, it's my pleasure to turn the call over to our President, Matt Coleman. Matt has assumed responsibility for the day-to-day management of the company, and TPG and the Board will jointly conduct a search for a new CEO. Matt and Bob will now provide the earnings readout and share some comments about 2020 and the past quarter. Thank you.

Thank you, Greta. On behalf of TPG and everyone at TRTX, I want to think Greta for her contributions to the company over the last 5 years. During her tenure with the firm, Greta led the successful IPO of TRTX, built a world-class team that's originated $9.1 billion of loans under her watch, and helped establish the company as a leading real estate debt franchise. Greta, we all wish you well in retirement, and I thank you again for your many contributions to TRTX. While Greta will soon be retiring, we're confident that the in-place management team is up to the tasks ahead of us, this year and beyond. And I personally couldn't be more proud to partner with this group of people. The professionals who work on behalf of the TRTX manager are immensely smart, talented and dedicated, and I'm excited about what we can achieve together in the quarters and years ahead.

I'd like to share a brief summary of my background and my experience with TRTX and TPG. I've worked in and around credit and private equity markets for more than 20 years. In 2012 I joined TPG, where I'm a partner in the firm and the Chief Operating Officer of the firm's real estate business, a $10.6 billion AUM vertical, encompassing both TRTX and TPG's real estate private equity business. Across the firm's real estate businesses, I'm deeply involved in strategy, business development and other leadership initiatives, and I serve as a member of the investment committees of both TRTX and our equity business. I also serve as a director on several portfolio company boards in the United States and Europe. My role affords me an expansive view of the U.S. real estate markets and provides me with deep connectivity within TPG, all of which will be valuable to TRTX as we navigate this transition.

I've been involved with TRTX since inception in late 2014, and this past July, I was named President and joined the Investment Committee. Prior to TPG, I spent 7 years at D.E. Shaw in its real estate equity and credit business.

With that introduction, I'll recap 2020 and look ahead to the rest of 2021. 2020 was a tough year. There's no way around that. We ended the year with a GAAP net loss attributable to common shareholders of $155.5 million or $2.03 per share, and distributable earnings of negative $106.6 million or negative $1.39 per share. Prior to the onset of COVID-19, we originated 5 loans representing approximately $437 million of aggregate commitment. Although 2020 was a turbulent year, we took quick and decisive steps to stabilize the company. We completely exited $969.8 million of CRE securities and terminated $722.7 million of associated debt. We raised capital as needed, including $225 million of Series B preferred stock from affiliates of Starwood Capital Group. We took steps to shore up the right side of our balance sheet, increasing our percentage of non-mark-to-market liabilities from 43.4% at March 31, 2020, to 63.5% as of December 31, 2020. And we ended the year in a healthy liquidity position with a stable balance sheet. We also positioned ourselves to reenter the lending market, which is now our primary focus.

As we reported last night, we increased our CECL reserve in Q4 2020 to 127 basis points of total loan commitments versus 109 basis points in Q3 2020. The increased reserves reflect our macro view of a longer recovery than was initially expected and an increase in our specific loan loss reserve for a defaulted retail loan. While we're optimistic about the rollout of vaccinations across the country, there remains considerable uncertainty with different COVID strains emerging and the pace of economic recovery unclear. Accordingly, we've maintained a conservative stance with respect to our reserves to allow us to focus our attention on the path forward.

At the asset level, we continue to address challenges with respect to 2 specific loans, the land loan in Las Vegas that we discussed last quarter, where we took title through a deed-in-lieu of foreclosure on December 31, and a $31.2 million loan on a retail property in Los Angeles which defaulted in December. Neither of these situations came as a surprise to us. We've acted quickly, and we're working to maximize the value of each of these investments. Across our portfolio, we remain positive about the quality of our assets and the strength and motivation of our borrowers.

Interest collections in Q4 were 96.7%, including 1.7% of PIK interest, the Las Vegas land and the Los Angeles retail loan the only nonpaying loans. Repayments in 2020 totaled $885.6 million, which was in line with expectations and contributed to our strong liquidity position. Liquidity at year-end was $342.6 million, comprised primarily of $319.7 million in cash and $22.8 million in available undrawn capacity. Accordingly, late in the fourth quarter, we restarted our origination efforts. We're actively reviewing nearly $3.5 billion of new opportunities, and we're optimistic about transaction volume in 2021. We recently signed a term sheet for a $50.2 million multifamily loan on an asset in Durham, North Carolina, a market with exceedingly strong demographic trends.

Competition among private debt funds and public commercial mortgage REITs for high-quality loans remains strong, particularly in multifamily, industrial and life science. And we've seen spread compression, primarily due to an abundance of liquidity in the market and the extraordinarily low interest rate environment. But while we may have experienced some changes in our business and in the markets, one thing remains steadfast and that's our disciplined view on credit. Our focus is on quality assets, markets and sponsors, and we will not compromise on these core principles.

To support our originations activity, we continue to work to optimize our capital structure. As I mentioned earlier, in 2020 we increased our proportion of non-mark-to-market liabilities by more than 20 points to 60.4 -- sorry, to 64% through a combination of deleveraging, a new secured financing facility collateralized by our hotel assets, and by contributing additional collateral to our 2 CLOs. Just as we're seeing tightening spreads in our lending markets, we're also seeing historically advantageous debt capital markets available to us. As we've done in the past, we expect to access these markets to further reduce our use of mark-to-market financing, extend the duration of our liabilities and maintain a low cost of debt capital. Our strategic plan for 2021 is at the intersection of these activities: active asset management of the loans in our portfolio, robust originations focused on compelling underlying credit, and optimizing our capital structure. We expect our 2021 achievements in these areas will drive TRTX profitability and maximize value for our shareholders.

With that, I'll turn the call over to Bob to discuss our fourth quarter and year-end results in more detail.

Thank you, Matt. And good morning, everyone. First, I want to extend my warmest wishes to Greta upon her retirement from TRTX. Many of you know that for decades, Greta and I were competitors and friends before we became colleagues in early 2016. Her retirement marks the end of one chapter and the beginning of another. Greta, thank you for your leadership, competitive fire, integrity and wise counsel. The accomplishments of TRTX and this team are the direct result of your forceful leadership. I will miss you as a boss, a partner and a friend. Thank you.

Now on to the business at hand. We reported yesterday afternoon for the quarter ending December 31, GAAP net income for TRTX of $14.6 million; GAAP net income allocable to shareholders of $6.6 million or $0.09 per share, and distributable earnings of $11.7 million or $0.15 per diluted share. Book value declined to $16.50 per share, a decline of $0.28 for 2 reasons. First, we declared on December 15 and paid on January 22, a special dividend of $0.18 per share attributable to the buildup of undistributed taxable income in earlier quarters of 2020 that exceeded our stated dividend rate of $0.20 per share; and two, we recorded credit loss expense of $16.3 million or $0.21 per share due to a specific reserve of $10 million on the defaulted retail loan in Metro Los Angeles and an incremental $6.3 million to our general CECL reserve due to the cautious stance we have on the economic reopening due to the slow rollout of the COVID-19 vaccine.

Net interest margin declined by $7.8 million or $0.10 per share due to loan repayments, the full earn-in of $199.6 million received late in the third quarter and $365 million of loan repayments received very early in the fourth quarter. We collected 96.7% of interest due, which includes PIK interest of $0.9 million, which is only 1.7% of total interest collections. Six of our 57 loans were subject to modification at year-end, representing $548.4 million of UPB and 12.1% of our loan portfolio. Operating expenses have returned to pre-COVID levels, and we continue to see process improvements and operating efficiencies.

Cash on hand at quarter end was $319.7 million or 6.5% of our total assets -- that's about twice its historical level -- due to our concern during 2020 regarding the markets, the economy, public health concerns and political uncertainties. The gradual growth of commercial real estate investment activity and the remarkable return of liquidity to the equity and debt capital markets positions us well to realize the earnings power of this liquidity via new loan originations and the selective repayment of higher cost borrowings.

At quarter end, 64% of our loan-related liabilities were not subject to mark-to-market provisions. That's up from 54% at September 30 and 52% at December of the prior year. And based on our review of SEC filings at year-end, we believe we rank second among our publicly traded peers in terms of the least reliance on mark-to-market liabilities. Hotel loans represented 15% of our loan portfolio at quarter end. All are financed on a non-mark-to-market basis via our 2 CLOs or the unique $250 million secured credit arrangement we closed in October 2020. These financings help insulate us from the ill effects of a slow vaccine rollout on the economy generally and on hospitality in particular. We do agree with observers who believe hospitality performance will snap back once the economy reopens and leisure travel, in particular, resumes. As loans financed in our CLOs repay, those CLOs can absorb more loans from our term secured credit facilities, further reducing our use of non-mark-to-market financing. In the fourth quarter alone, we recycled $163.1 million across our 2 CLOs. For the year, that figure was $619 million.

In mid-February, we extended through May 2022, our credit facility with Morgan Stanley. Only 2 of our 7 secured credit facilities mature in 2021, involving borrowings at year-end of only $138 million. The weighted average maturity of our secured credit facilities is now through July 2023 or roughly 2.6 years. We downsized in mid-2020 several of our secured credit facilities, to avoid unused costs during a period of low utilization. We negotiated accordion features totaling $550 million to provide us additional warehouse capacity as our origination activity reramps this year. Fixed income markets have recovered with remarkable speed, especially CRE CLOs. As one of the more active issuers of CLOs over time, we've done $2.6 billion in 2018 and 2019. We are again focused on our proven ability to raise nonrecourse, long-term, low-cost liabilities. We estimate the current fully loaded borrowing cost of today's CRE CLO market is approximately 40 basis points less than for secured credit facilities provided by banks and life companies. And that's without the recourse and mark-to-market requirements of those arrangements.

Our leverage remains low. At September 30, it was 2.54:1 net of cash and 2.79:1 gross of cash, well below our standing long-term target of 3.5:1. Of equal importance to the quantum of leverage is its composition. All else equal, greater degrees of leverage can be prudently employed if longer term, nonrecourse and free of mark-to-market risk. As you know, 64% of our liabilities are non-mark-to-market at this time. You should expect that proportion to grow during this year. Like our peers who have already reported, we have adopted distributable earnings as a direct replacement for core earnings as the key non-GAAP measure in the commercial mortgage REIT industry. There's really no substantive difference between the 2.

Noncash loan loss reserves will remain a component of distributable earnings. Realized losses will be treated as a reduction in distributable earnings. Although not a perfect substitute for taxable income, we do expect that over time, distributable earnings and taxable income will closely track each other. Finally, a few comments about the Series B preferred stock we issued to Starwood Capital in May of last year. Due to our strong liquidity position at year-end, we allowed our option to issue up to an additional $100 million of preferred stock to expire unused at year-end. The 12 million warrants issued in conjunction with that preferred stock must be net settled if and when they are exercised. For purposes of determining dilution in earnings and book value, that means no cash will change hands, and the amount of new common shares issue will equal the net gain on the warrants at the time of exercise divided by the then current TRTX share price.

Currently, that dilutive effect is about approximately 3.25% or 2.5 million shares. And with that, we'd be pleased to take your questions. Operator?

(Operator Instructions) Our first question comes from the line of Stephen Laws with Raymond James.

First, Greta, congratulations on retirement. It's been a pleasure working with you and wish you well in the future. As I think about portfolio growth, Bob, and modeling for the year, can you talk about -- if I look at the maturity schedule, it's -- for next maturity is a lot this year and next year, but extended maturity is a couple of years out. So can you talk about the repayment expectations as an offset to origination outlook and how we should think about leverage trending over the course of '21?

Yes. Stephen, let me take the repayment and leverage, and then I may ask Peter to make some comments with respect to originations. Historically, our repayments have ranged annually between $1.3 billion and about $2 billion. That dynamic has not really changed in COVID. There has not been as much extension as one might think. For the year that just ended, our repayments were in the range of $1 billion. And our expectations for the current year are roughly the same. That clearly means that some of the loans that have current scheduled maturities in 2021 are likely to extend, and we're managing that very carefully, and that will just play out during the course of the year. So I think that's a pretty reasonable expectation.

In terms of leverage assumptions, we have reduced our leverage, as have most of our competitors, with respect to bank-oriented borrowings. But on the term side, which in our instance is primarily the 2 CLOs that we have outstanding, our advance rates there are slightly above 80%, which, as I said in my comments, we believe is prudent given the nonrecourse, non-mark-to-market nature of those financings. So I think you'll expect to see leverage largely unchanged. If we're more active in the capital markets, it might creep up a little bit. I don't think you'll see us do that much more leverage on the bank financing side. That is a healthy market. The bank and insurance companies are anxious to add assets, and we're receiving very strong quotes from them with respect to our origination pipeline. But I think you'll see those advance rates range in the 75% against loan balance rather than 80%. And I think you'll see the higher advance rates only in our term funding arrangements. Peter?

Sure. Thanks, Bob. Actually, the pipeline looks pretty good right now. We really maintained a lot of the relationships and contact with the borrowers and brokers that we had historically done a lot of business with in 2020. And so we kept the communication lines open, so when we started to really originate again, it was relatively seamless. And we've been reaching out to brokers that necessarily we don't have daily or weekly contact with and borrowers. So we feel pretty good. So overall, the pipeline looks pretty decent, albeit the strike zone for, I think for us, has gotten a little bit smaller. We're going to look to be more heavily in multifamily this year, similar to a lot of people, I think you're hearing that across the board. And we feel pretty good. We have a decent pipeline for the rest of the year.

So to put that in numerical context, Stephen and others, I think that in prior years, we typically originated between $2 billion and $3 billion on a, measured by commitment. We are currently a recycler of capital as is everyone in our space. And so we would expect that current year originations would probably be the low end of that range as opposed to the high. But market conditions will largely determine how that plays out.

Great. Yes, as a follow-up, can you talk about the Series B preferreds for a second? When are those -- when can that be -- refinance that to a lower cost of capital? Is that a '22 event? Or when can you reevaluate that?

Well, as Ford used to say, that's job one, along with maintaining the credit discipline that Matt mentioned earlier. So retiring the Series B preferred stock is truly the most important corporate finance objective that we have and our capital markets team has for 2021. The specific answer to your question is that there is a yield maintenance on the Series B. It's effectively the present value of the dividend stream, the dividend rate is 11% through the second anniversary date of the deal, which is May 28, 2022. And after that, the premium is $105 million, then it steps down to $102.5 million for the third year.

So we're looking very closely at that. Starwood has been a great partner of ours thus far, but it is expensive capital. And so the positive momentum and lower funding costs that we're seeing across the fixed income and hybrid debt equity spectrum is obviously very interesting to us, and we're pretty focused on refunding the Series B as quickly as is practicable. So we'll be weighing the cost of new funds and the accretive use of that capital with the May call that's due.

Our next question comes from the line of Charlie Arestia with JPMorgan.

I actually have a follow-up on sort of the maturities question from earlier. Looking at that chart on Slide 4, I'm wondering if you have disclosed kind of what the asset type or property type mix is on those 21 maturities, if it's pretty representative of the existing portfolio or if there's any real weightings by property type there? And then just sort of at the high level what milestones really have to be met for those expansion options to be realized? And then lastly, I realize this is a bunch of questions, I apologize. But if you expect any additional credit reserves on those near-term maturities?

Sure. Well, let's take those questions, Charlie, in the order in which you asked them. First, the repayment behavior thus far, as you've seen in what we've reported, has been heavily weighted on multifamily, which should not be a surprise given the strength of the multifamily financing market and the presence of the GSEs in particular. And we expect that trend to continue during 2021. Our multifamily portfolio was paid down from roughly 23% of the total book to about 15% or 16%. We think that pace will continue. So much of the repayment activity that we forecast and that you see in 2021 is multifamily related, not all, but much. And a quick way to get at that is you can download the loans -- the mortgage loan schedule in Excel and sort by property type and maturity date.

Your next question is which loans that have a scheduled maturity in 2021 do we expect will extend, and what test do borrowers need to achieve in order to exercise those extensions. Our loan documents typically involve extension tests that include a minimum debt yield requirement and/or a minimum LTV requirement, sometimes both. And so we're able to predict with some accuracy, and by staying in tight contact with our borrowers, we're able to see where we think borrowers will be able to achieve those hurdles and where they won't. If they can't, and we feel comfortable with our asset coverage and the business plan then an extension modification might be in order. It's difficult to predict exactly on which loans and when. And if we can't, then the borrower is going to need to raise capital either conventionally through the mortgage market or mortgage perhaps plus mezz in order to pay us back. But we do expect that there will be some extensions during 2021. And so for all of you, if you look at Page 4 in the schedule at the bottom, reality is likely to be somewhere between the blue bars and the gray bars.

And then finally your third question, Charlie, was with respect to loan loss reserves and further reserves. And the answer is we do our very best job every quarter through our portfolio reviews and the CECL loan loss reserve process, to be prudent to apply the accounting pronouncements and to come up with our best estimates of what the expected losses across our portfolio will be over the life of the loans in that portfolio. And so our reserve at quarter end reflects that. There are sometimes events, and we've experienced them and so have others in the industry, that are pretty sudden that crop up, and a loan that was humming along all of a sudden isn't, but we're comfortable with our level of reserves right now. And are probably conservative, at least based on what we've seen from our competitors' reporting.

Okay. I appreciate all the color on that. I got one more question. On the Las Vegas land loan, I understand it's really early in the process, but I would love to get your thoughts on longer-term plans for the asset. If it's a potential sale candidate or if development is maybe on the table as well?

Well, let me take a crack at that, and Peter and Matt may have some follow-ons. That's an asset. It's 2 parcels on the Strip, 27 acres, big loan exposure and a high-earning loan. We've been very attentive to that loan from the beginning since it was land. Both are developable sites. We're not developers. I think our business plan right now heavily trends toward sale to the right party or parties at attractive pricing. It is a little bit early in the process, but we've already done a significant amount of work to help us define a path toward monetization. Matt or Peter?

No, I think you said it well, Bob. No, we don't intend to be long-term holders of this. I think it is too early to lay out a time line, but we're actively working with people in the local market.

Yes. Charlie, the last thing I'd point to is if you look in the loan footnote under cap, we're obligated to describe how we estimate the value of loans that have a specific reserve identified against them. So if you go back and look at the third Q footnote, you'll see both a range of discount rates and a sort of an estimated range of hold period for that asset. And while there are no assurances that, that will play out exactly the way that we've modeled it, our expectation, as Matt said, is that this will be a relatively short-term hold, but in a controlled way. We financed it. We're well capitalized. We know that market pretty well. And so we'll be looking to maximize our value, as we should be for shareholders.

(Operator Instructions) Our next question comes from the line of Tim Hayes with BTIG.

Greta, best of luck to you on your next steps. Just on the pipeline, again, I think you might have sized it earlier in the call, but I missed it. Can you -- I just want to get a little bit more color on the pipeline. How many opportunities you're evaluating right now? What type of assets they largely consist of? And then you mentioned just the impact of competition potentially on spreads. And so what do all-in coupons look like on loans in the pipeline versus the portfolio average?

I'll let Peter provide color. The number that I referenced in my earlier comments was $3.5 billion currently under evaluation. But let me turn it over to Peter to give some color on asset classes and pricing that we're seeing in the market.

Sure, sure. The $3.5 billion really is the snapshot that we have right now, and that generally remains pretty consistent throughout. I think the vast majority of the stuff that we find sort of actionable and interesting right now is in the multifamily space. We have a pretty good reach into that market. And so that's where we're spending the vast majority of our time. And we feel we have, we probably have 3 more deals that we're going to be signing up in the next week or so on the multifamily side. So that's really where we're going to probably be focused over the next 12 months or so. We think that's the best area where we can actually have good impact, and also is a good risk/reward scenario.

With respect to coupons and really interest rates and things like that, I think we should really talk about coupons here versus spread, primarily because there has been just such an unprecedented slide in LIBOR. So LIBOR is at 14, 15 basis points or something like that right now. So we're really talking all-in coupons these days. And just to give a little context on that. Pre-COVID the sort of the all-in coupon that we were generally in the strike zone, it was about 4.25% to 4.5%. And right now, on the multifamily side of the world, it's really 3 50 to, say, 3 75, sometimes a little bit tighter. So that's quite a bit inside. So we're spending time there. And so LIBOR floors used to be 1 50 to 1 75. Now we're really running with a LIBOR floor of 25. The good thing about that is that as -- and we're not holding our breath, but as rates on the short-term -- short end of the scale increase, we'll be picking up a little more yield on that. So we feel pretty good. We're priced accordingly. And also not to be overlooked is our liabilities have gone down in rate quite a bit.

Right. That's really helpful. And that was going to be kind of part B of that question is, you talked about just the capital market side of things. But on your repo lines, have you seen funding costs come down there? Just as banks are, from what we heard, chomping at the bit to do business and have to compete with some attractive capital markets conditions?

We have. I would say that advance rates have returned to pre-COVID levels, which means for well-sponsored transactions in the right property types -- multifamily, industrial, I'd say stronger office business plans, you can finance up to 80%, and that's consistent with the pre-COVID environment. Spreads are a little wider. Depending again on sponsorship and everything else, spreads are sort of 175-ish to low 200s. For multifamily, you can probably do a little better.

From our perspective and my perspective, the really interesting thing about this market is that financing markets have inverted and structured finance is now materially less costly than borrowing from banks or life insurance companies on a credit facility base. As I mentioned earlier, that spread, that favorable spread in favor of CRE CLOs is probably between 35 and 45 basis points -- fully loaded, including transaction costs. And so that's a pretty important inversion and one that we and others are very focused on, and I think you're likely to see quite a bit of issuance volume in that market this year. So the financing markets are strong across the board, the banks are very active. They have a strike zone that mirrors ours. Cost of funds are a little higher, advance rates are roughly consistent. That would be our summary report card. Most other participants -- yes, they have a lot of capital to put to work.

Right. Right. And then just one more quick one, if I can. Just on liquidity and in your cash position, just curious, it seems like you're playing a little bit more offense these days than you were a few months ago. So has your view on minimum cash level changed at all? And if you can just give us an idea of how much you'd feel comfortable deploying at this time?

Sure. We do have a very strong cash position. We expect that to go down. Peter and the originations team are doing a great job of sourcing the kinds of business we want to do. There are also some opportunities in our liability portfolio to prune some, selectively some of our higher cost borrowings, independent of what we might do in the structured finance markets. Typically, in our industry, folks have held cash that's roughly 2% to 3% of their total assets. That's, our history supports that as well. That would be a reasonable target for us. There are some variables that influence that: the more revolving capacity you have on your credit facilities, whether they're secured or unsecured, the lower cash balances one can hold. And so as we continue to optimize our capital structure, I think you'll see our cash levels diminish even further, but they'll still be healthy, and they always have been. One wants to be prepared for the unexpected.

We have reached the end of our question-and-answer session. I'd like to turn the call back over to Mr. Coleman for any closing remarks.

Thank you. To conclude, I'm excited about our progress and our path forward and look forward to getting to know those of you I have not already met. We thank you again for your interest in TRTX, and we'll speak to you next quarter. Thank you.

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.