RMRM - Earnings call transcript Q1 2021 | Seven Hills Realty Trust

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Operator

Good morning and welcome to RMR Mortgage Trust First Quarter 2021 Financial Results Conference Call. All participants will be in listen only mode. [Operator Instructions] Please note, this conference is being recorded. I would now like to turn the conference over to Kevin Barry, Manager of Investor Relations. Please go ahead.

Kevin Barry

morning, good and you, everyone. Thank us Thanks for joining today. President, me Doug Chief and the Lanois. are on call Tom Financial Lorenzini; With Officer and Treasurer, business Trust. well as In details about our the they moment, with details quarter and Tremont merger our Mortgage first as just for our XXXX, will of proposed performance a about provide but to do so Please note be not hope will taking questions future we calls. that we on this call, on side does research to transitioned a mortgage not recently have currently sell Trust Mortgage RMR coverage. REIT, commercial and But do firms up we a hope pick the coverage few in company future. of the I retransmission would prohibited call like without to today's strictly note that the recording is consent. of and RMRM's written prior conference and today's the other the conference that forward-looking contains meaning note, Private statements Reform of Litigation within XXXX securities Also Securities laws. call of Act RMRM's are from and Wednesday, results statements of today, and on X, materially may differ forward-looking project. as based May we expectations XXXX, actual that beliefs those These publicly made to undertakes conference of statements forward-looking or no any obligation the release RMRM in the to results revise call. today's revision A implied. risks differ expressed actual those RMRM's materially from that results or exist number could and to of cause uncertainties

Additional with information the Exchange are Securities any forward-looking not that concerning or differences accessed Commission the be which to SEC, can and undue SEC's in our website. cause reliance upon is from those contained factors Investors place filings cautioned could statements.

connection with proxy Investors proxy RMRM respect respect joint are containing other to TRMT. offer to documents joint the both not In to any addition, the statement/prospectus an expects our participants any SEC important don't file or with the statement an the documents proxy to other merger. buy and they offer constitute read urged and the transactions in any RMRM's does a or the reference on sell, and about of registration in discussion the available if regarding with merger contain all amendments to the SEC incorporated file S-X supplements by information become in and we joint the vote because otherwise Information joint with potential TRMT a shareholders when the they proposed RMRM statement/prospectus, or contained merger, including Form connection proxy direct description solicitation by regarding of will the to in the holdings of and the TRMT and merger. RMRM securities, and statement approval. or solicitation with and of merger in with of be or and indirect statement/prospectus prospectus security filed the of any proposed proxy interests the in their solicitation

during adjustments quarterly Please numbers call, now were will earnings note income Finally, and call first no distributable Please earnings is Tom. XXXX. the I on earnings. accordance which release see determined our with our there we website. non-GAAP available be including distributable the over GAAP will during that of this to non-GAAP discussing turn between quarter net in

Tom Lorenzini

under REIT. investment deregister as we Mortgage quarter you, RMRM's us Thank milestone XXXX, Act our the Morgan's Good to call. the us the over to I'll some during to investment of request activity the and call merger to Doug issued earnings new first January, which Kevin. activity of key in for quarter RMRM's Company early full The overview financial of granting business mandate. transitioning Tremont Commercial a provide In enabled everyone, Investment then order and I'll discuss RMR's business reached with for a proposed Trusts Trust. first RMRM an a proceed Mortgage with morning, an thank begin and an implementation recent about results. joining with commentary you we'll to first turn company SEC

million generally adjusted with secured between we by generating first shareholders. will and market primarily balance that To is returns objective to originate loans transitional capital $XX commercial end for real investment estate. preservation middle attractive mortgage Our risk $XX and our million

executing we million in closed of We of X%, to and our plan. At yield then strong weighted average aggregate the of first the all loan generating business already a of end commitment start seven had $XXX on loans coupon are a quarter, off with an X.X%.

continued subsequent of two Our capital to quarter end than momentum more closing to the in increased the our with loans additional million. portfolio of committed $XXX

and average value collateral. is average of maximum [ph] XX% portfolio with maturity loans And and of and has retail when a office, X.X aggregate extension whole investments weighted in options. classes Our the nine including lab loan geographically diversified to across industrial, multifamily, portfolio weighted of years asset a

master permits building advancements a to whole on closed facility increased further facility XX% our investment our forward year plan on up of to The our has UBS. During portfolio. We expanding We look loan a leverage quarter, amount. three the this investment and of drive investments to repurchase agreement our to with to shareholders. and returns we use term momentum a

name prospective loan and win aggregate accorded convert amount an terms a investment stages effort in Realty an opportunities with is includes than Tremont approximately market them loan Our business more active opportunities term diligence. of with pipeline various million We LLC have in to Advisors trade five their review, transactions applications. underwriting of This of robust $XXX the financing million. manager are Capital the to currently that Tremont $XXX Realty of potential opportunities. under sheets financing outstanding for These with and

million and office, to XX asset perspective, multifamily possible the an addition in stages of term Tremont transactions for From [ph] Capital $XXX over Realty review PAP potential than pipeline more product currently outstanding class industrial office. investment. include the in medical In totaling various types sheets, our has

Based and $X.XX we are shareholders of manufactured pipeline active strong and our our properties, self-storage science on declare momentum in on and flow May seeing housing. to distribution payable April, deal size per our the life XX. share We a also at

back look we XXXX. half the As of to ahead

more than our distribution a portfolio, sufficient be basis. additional will and we to loans current close on Assuming quarterly expect up support earnings execute on distributable RMRM's we generate plans that ramp to to rate the

announcement into thrilled have dramatic entered week last with we that our definitive Additionally, we about to agreement a merge mortgage trust. were

review in the copy referenced A RMRM's of our on merger be may call as you We the a momentum to hosted merger, As about the can found we looking regarding disclaimers. a including growth of discuss detail. information encourage benefits we shareholders. warnings provides know, presentation the website. and you it to statements opportunity to replay important conference call contains the compelling to a tremendous combination forward on our presentation and our other and provides This build

position to to in approach mortgage together, to coming assets fully rate. presents invested. combined $X opportunity First, diversified the commercial quickly a the merger the when more company achieve billion scale By is a expected immediately create unique and needed transaction

be we to and Second, expect us financial will earnings this accretive transaction our grow distributable to help strength.

company with the public as operating further redundant we eliminating by savings generate efficiencies potential scale the business. drive will costs to We

from Third, will common investor trading expanded following the we with liquidity float. increase share public diversity believe base close benefit and an of in shareholders the transaction, an

proposed lending, ultimately bridge focus We further company this strong will including capital the merged main the classes. have capacity. term property be and And commercial The flow also efficient increased challenge greater relatively and to opportunity types that debt fund for long driving combined market. pandemic nationwide with it across only to access Doug. enhance and a financing to investment more anticipate sources will to company's will and years compelling through cost demand several additional merger positions shareholders. amongst of evenly company market ability the This secured performed represents deal loans over we to also expect industrial, broader our turn in expanded return improve loans, over that, capital believe liquidity our real greater for that commercial opportunity well across address but become We and of this have markets base the leverage on to earnings growth a mortgage and this merger visibility and investments properties. With value the I'll as believe The scale, office potentially its asset we we commercial a as to more next player our provide not our significant by maximizing life company diversity our of lower science, pursue on multifamily, balanced more capital estate equity. the and finally, combined geographies and growth the mortgage

Doug Lanois

Thank then discuss everyone. and loan and I'll financial morning, our good our on you, begin investments Tom recent with an results. update

During loans quarter, close the with million. of first $XX approximately two we an capital commitment aggregate

containing The square XX,XXX acquisition nine first Miami, building, Florida. in to is feet finance loan bridge multi-tenant a $XX.X storey office of the million a

allowance of of largest million communities. improvements We these also is of approximately comprised $XX two includes for to refinance an and million home This funding closed in further to initial loan manufactured loan located housing $XX.X $XX.X to date, funding and Ohio. future XXXX a communities approximately our sites capital million approximately a enhance

RMRM closed advances ninth building. New An new the of closed We closing improvement, we and million up Springs, cold $XX two increasing of investment continued XXX,XXX X of an we loans. tenant closing, our of approximately a closing capital to of than foot a advances quarter, of committed available A Located expenditures. XX,XXX industrial to additional marked square our leasing up to buildings the in to Colorado are $XX.X advance $X.X $XX.X $XX.X to future storage end Class located Most in with square Hampshire. more in initial was a funded building, loan advance million $XXX comprised loan future foot property million of acquisition Following initial Londonderry, the recently, This approximately million was million. industrial for at office financing a capital million. funded million Colorado, refinance commissions with activity with two

of for of the transition Turning earnings January, in XX, focus quarter the year on March be results business now our XXXX. to period we RMR prior our would quarter early our Due Mortgage results to not quarter. Trust meaningful. a ended first to Today, comparison will financial the first

operations. the with of Let's begin statement

average financial in of $X.XXper Interest as points, in average Our $X investments our earnings package, all plus March earnings earned our supplemental a the basis on fees. weighted average XXX LIBOR amortization weighted as XX, share. of GAAP common on of This first adjustments up net were distributable spread yield and loan to and X.X%. includes quarter. our basis our XX our income was our the points, income distributable floor net non weighted came investments no There at in between in quarter million presented amounted

totaled Our Services fees of million. reimbursement expense Shared expenses in the $XXX,XXX This $XXX,XXX. and administrative General quarter of of expenses management includes $X.X and first $XXX,XXX.

our Tom a As amount. facility we no and leverage mentioned, we which facility repurchase has maximum term master entered use The to year investments. a UBS, three will recently into facility with

XX to of had drew XXXX. In million at quarter. $XXX the approximately which expect facility end with no exceed We recent March under We as not outstanding connection the balance the in was first equity we two amount, million April, advancements loan of $XX our the closings.

$XX.XX. total end million Turning to had At first the unfunded. approximately in for for the net We on million. updating of future The value of to our quarter sheet. our you which joining had of held end on you loan cash, book Thank calls. $XX look total for million, $XX We shares at $XXX investment common our we all million progress $XXX forward our commitments today. loans of balance concludes quarter, was presentation was us. This our

Operator

The conference has thank presentation. today's you attending concluded now for

disconnect. now may You

Seven Hills Realty Trust (SEVN) 9 May 212021 Q1 Earnings call transcript