STWD - Earnings call transcript Q1 2020 | Starwood Property Trust, Inc.

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Operator

Greetings. Welcome to Starwood Property Trust First Quarter 2020 Earnings Call. At this time, all participants are in listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded.

turn Relations. over I'll Director Zach time, Investor of this the to conference Tanenbaum, At

begin. may You

Zachary Tanenbaum

the Thank Relations you, released its supplement morning, XXXX, and call. available for operator. Exchange Good are quarter website. filed This section Trust Starwood the www.starwoodpropertytrust.com. the Company's posted with in morning, These earnings its Property Commission Form website documents the the March and at to Company ended its of XX-Q results and financial Investor XX, welcome Securities to earnings its

those the begins, of beliefs to that statements risks These not may expressed actual SEC the to differ those the are Company's or and and this filings from cause today. made Before refer call to and trends materially any statements I results detailed remind implied actual of a that made statements. materially could and uncertainties statements. are certain more you the course described are could subject forward-looking results would from to everyone based cause I factors a call based like information forward-looking that discussion in on the on historical in with statements management's to number made differ in forward-looking constitute expectations and of current for the

update The call. forward-looking Company made statements no course duty of this any during undertakes to that the may be

of with SEC this with through as comparable of the GAAP not at measures the measures financial or accordance www.sec.gov. these in presented non-GAAP non-GAAP information for is the in filings financial most will be A Reconciliations discussed accessed information accordance certain financial can our be to with presentation prepared conference to GAAP. Additionally, in substitute measures this be in intended a isolation considered call.

Chief Chief Officer. Company's Joining DiModica, Officer; Andrew Officer; Jeff Company's the Paniry, today Company's the Executive call the Chief are the me Operating President; the Financial Sternlicht, Rina and Company's Barry on Sossen,

to over the am to I going now Rina. With turn call that,

Rina Paniry

Thank market liquidity, everyone. the Despite a the once were morning, volatile COVID-XX, lines. you, our earnings demonstrating Zach, multiple core portfolio quarter, clearly our with from performance resulting again of of this benefits backdrop and and diverse platform good business impacts strong

share. million Core earnings or per the was quarter $XXX $X.XX for

However, discuss impacted were are not GAAP do our environment by GAAP of as current We the credit the standard credit against later, this CECL. our characteristics the I quarter we will results of known charges of our assets and these the new took loss accounting implementation as believe reflective economic assets.

into will three I morning main my comments divide parts. this

quarterly will and facilities items on CECL results will and with across segment. our liquidity. I mark-to-market, finally, GAAP highlight each conclude discuss our then First, several our capitalization, comments including I will that I impacted and results, financing

earnings quarter. performance which Residential core the by segment Our our and contributed Commercial $XXX was to Lending, million this largest quarter led of

On with LTV resulting the the the of our remains of portfolio no lending credit strong implementation our side, and commercial increase quality from CECL, despite in loan losses of the a loss experienced impairments or XX%. weighted-average allowance we

which quarter, quarter of the risk off million we In rated last a five loss carried this paid allowance, fact, one loans par. $X a loan at

the quarter, million. under the $XXX billion We of funded totaling originated loan average million $XXX loans size of loan commitments. During million preexisting with seven an we in $X.X including loans quarter, $XXX

to portfolio loan in million $XXX received repayments, our a billion. record, also $X.X bringing We commercial lending

LIBOR of had XX% quarter, rate over our floating domestic floors. this loans Also

the one borrower over For with making all, interest April, required the our XX% on received we due month payments. but of total loans of

and completing totaling our side, $XXX million. On continued non-QM the residential business lending securitization $XXX our expansion million of of purchasing we this by sixth loans

$X.X a with XXX. and XX%, an of of quarter the billion, ended portfolio an average FICO LTV loan residential balance Our of average

on securities million $XXX to of retained sixth our Our grew retained RMBS portfolio quarter, securitization. this entirely consisting

well I which discuss of continue our cash-on-cash of assets segment, perform the in this will very for core segment blended quarter. to occupancy The and $XX Next, XX%. weighted-average of million with contributed earnings Property yield XX.X%

of in performance April, released. of due this over vastly of levels, in from total month received. the for recently continues affordable rents The tenants portfolio, exceed expectations. was the Area XX% portfolio rent our portfolio units govern housing this our which XX,XXX median the were income For to Florida the

just was under median resulted Higher Central and rent increase portfolio for decrease blended rents which where this a forward. going a new cannot create concentrated, floor, X%. income Florida, Northern These in of

to assessed. While the COVID-XX until increases we the be our released were on impacts can them April will of defer tenants likely X,

carried As of we million per share. $X.XX the or properties $XXX owned quarter-end, accumulated of depreciation

have have and we assets said to believe reflected these appreciation them in we GAAP since appreciated book that continue acquired in value. As the the our is meaningfully we not past,

we a an believe be would value At book to exist arrive undepreciated portfolio price GAAP minimum, this million book $X.XX share or that would gains in back incremental for The value. a adding per our to these assets. $XXX increase at purchase

Next is which the Servicing core we In CMBS million opportunistically of $XX our quarter. and continue to contributed our portfolio, to Investing segment, earnings sell assets.

quarter, million gain a net for we security $XX of sold $X gain net $XX million a GAAP million. During of of core and the

loans our obtained with business, of In in servicing our assignments consistent we special securitized portfolio with $XX.X new $X.X balance total conduit, profitability billion. historical five our two named we And bringing at servicing our $XXX billion a unpaid to of transactions in levels quarter performance. principal servicing special million this

will end, reflect COVID-related we any discuss. in which Our seen quarter increase not have but fees modifications, after a meaningful do impacts this Jeff from activity quarter

is our acquired my funded preexisting commitments. We $XX of discussion $XX million under of quarter. Concluding loan loans the earnings to million Infrastructure $X core million and contributed which Lending segment, segment

$XX received also We repayments. from sales million and

loans amount $XXX at decrease total the acquired this end $X.X of stands from GE, acquisition. the XX% Our the representing we portfolio billion of quarter million is with since at

billion to which $XXX from billion $X.X bringing million, total segment in drawn. million was increased capacity financing our $XXX to We our financing borrowing also up-sizing capacity of one by our of $X.X facilities this

April, month in the For due interest of on all loans segment. the collected we this

a items two this like Next, impacted would are walk and GAAP quarter. which I to both in that for $X.XX our larger decrease mark-to-market these to and value an adjustments, per $X.XX share, mark-to-market. book CECL to you results $X.XX mark-to-market increase the CECL for combined GAAP $X.XX per of non-cash $X.XX and earnings, for our and unrealized, resulted and of $X.XX through CECL

January loss, we portfolios CECL estimate to component assets costs. required requires adopt the discussed and new for Because that resulting CECL standard estimate. at X As and our CECL adopted different to accounting change the commercial the The critical an amortized January within very a on real increase we you at is existed when infrastructure XX, that estate last environment recorded reserve than quarter, on which are which the environment March of macroeconomic to a life-of-loan existed reserve. forecasted was we drove X a one

Our CECL new in a general reversal reserve January million adoption impact and million. reserve of prior on of X against of $XX reserve $X year this resulted of our was general equity. directly The net recorded

of lending. went the change our to macroeconomic changed to through changed, establishment reserve On credit increase the at of in Unlike the of GAAP That resulted not the related P&L. assets these $XX our commercial had characteristics the which an environment million drastically. by had changes reserves March XX million January $XX while X,

these mark-to-market, most businesses at by at quarter. of end CMBS on assets. the widening significant consider that Lending the a on impacted of There looking our the important mark-to-market items spread effect topic and the the to are were Next occurred Residential few when

the said have ours an indicator we to investments hold a business before, long-term contrary, As the model. these over short-term is majority of recovery spread and are unrealized vast To of we value marks intend not time. not

these during not to of realize sellers any in with in practice, the quarter core not any from of non-cash the Consistent mark-to-market were unrealized took we losses spread both not this CECL and were widening, they and instruments charges past March. due which earnings. included of Second, the and forced the nature quarter, we occurred did

facilities with comments our will conclude morning financing I this liquidity, capitalization. few a and about

undepreciated our lines. across ended have and credit to capacity debt billion the to We $X.X ratio X.Xx. continue quarter business of an equity adjusted undrawn with We ample debt capacity of

undrawn we dividend lenders. deleveraging warehouse after across and paydowns payment of where on modifications our quarter our approved contain of million includes these had secured The have warehouse XX% facilities. our This $XXX facilities, of collateral, first capacity. after amount hotel with $XXX of million is As cash voluntary of and Friday, which debt deleveraging we

months margin assets for warehouse voluntary after debt provided on hotel The paydowns, billion with on $X billion for a of have six financed and call exchange we In relate of our of warehouse $X.X the that in minimum balance a total cover sheet. we these been loan moratorium modifications any to hotel billion have $X.X modification. lines

we our warehouse of hotel with have a for to that we afforded been enter flexibility loans discussions our into underlying addition, can the make suite In to modifications going us back without borrowers to provides constructive going pre-approved forward. with This maximum approval. lender

commitment I manager to about and the And comment of alignment shareholders. our finally, to our wanted

price amount Also million, base $XXX approved with of share weighted-average quarter for in has agreed to our the fee, of purchased common X.X $XX a with of total manager shares program, During which to a billion. million stock regards million repurchase this totaled take $XX cost first management our stock. repurchase to quarter, per Board Pursuant this in a our we program. $XX.XX March,

With the over comments. call turn I'll that, his for Jeff to

Jeffrey DiModica

We Rina, good since alongside you and of been in we families then, safe. and March much Thanks, house morning, weeks XX, than and are we Barry's ago XX that and last other Starwood and out Miami. feels executives offices your like spoke everyone. more on hope healthy our closed It I've working

proud optimize we connected, circumstances, Despite and entire period importantly, out in our and this liquidity strength. organization been of never management in senior hours balance a our of team I has sheet, the ensure the put to and has am position the position, work more of protect come the

begun position extremely to to and did provide earnings earlier enough market level. gone think selectively to quickly to our we so the days and raise this We to That market liquidity us not plan. three that on heard are people recently allow week confident our in the we our come We that offensive at is excess capital up more have moved in to attractive capital. call investing information fact

equity or plans absent debt an to capital or our unforeseen liquidity in need no have raise opportunity. future, We near the excess given

seven have in strategy normal that of periods more never outperformed We over for been The markets our has both. our apparent. us gave strength QX perform quality portfolio well to of been direct. was in investment multi-cylinder diversified years and saying built and

of liquidity. loans sheet, and other various have We our balance of on which securities, unencumbered $X.X and include unlevered billion assets sources

undrawn and million capacity. financing dividends, down we after over our paying $XXX and of by Rina lines our paying said, As $XXX cash have since million COVID-XX

the in sheet. needed, position to are unlevered create our property levers we $X and strong already strength plus balance billion assets equity adding having substantial pull We and liquidity other over unique can of of to assets, if well potential

Our have return cash lines our and paid assets loans would again, be unlevered warehouse with. LTVs lower or lender's our and property delever pledged bank assets line. Sledging to can sold borrowed down we previously

Simply of every question. REIT our was while from lines point liquidity hours peers were in any faced defaulting selling many mortgage of solvency and a sub-sector that our put, there was or away crisis they a could, never on days assets bank where or

in go crisis in are Although, take our to given our are Regardless quickly, invest to we losses, distress did recover our any of this of mispriced pace liquidity who prepared in crisis of in make position to to believe that the to sales our with have few sector, any offense which market. liquidity, us to offense. peers market that. can there leave credit on say are we we not be begun the we more go capital not improvements, on during We did stock down position due the and loans went very will

to With loan we wider credit slow expensive, significantly. expect spread capital perhaps do and more repayments

liquidity. to Fortunately, our balance sheet create loan repayments on solely reliant is not

returned of portfolio the million $X quarters. is this billion portion less comfortable $XXX of cash Even conservative three lending quarters, next $X.X of out over assumptions, XXXX to we In last of equity billion which are equity only moved deploy forecast, us than being our in our returned for leaving our from the to with opportunities to million we or testing, three net of looking net conservatively XX% excess today. these of $XXX repayment stress a us the

QX, below for the in segment Lending of loans that XX% today, bank calls. CECL adopted Pro of a construction book recent pleased are our credit lowest LTV have significantly our the with We in XX% LTV methodology attachment lessening LTV we margin third-party the our they XX% over six XX% book. lending lenders of and been are appraisal At paydowns, forma confirmed points are after likelihood years. less than assets, our

on million peak. mortgage executed our funding we end, reduce quarter XXXX off of needs quarter $XXX future XX% sales, Note almost Since by third senior balance helping sheet from A their

talked warehouse over lines our CRE to Note Less less have reduce line recent warehouse leaving We how exposure us of sales and CLO. our financed on exposure A half are than quarters through about we credit mark. our loans

loans are Hotel assets total XX% of today less is X%. retail our only and than

uncertainty To while with moratorium needs. warehouse cash exposure our to date, our and exchange lines of lenders, to the in incremental on plans, confidence forbearance by down strong nine already work of first our our six those proactively been liquidity proactively loan Given of giving position, XX% voluntary being around allowing have have paydown, us with hotel address made. our the we to us month borrowers future for pay agreements, agreement XX% paydowns we in reached select the on

We have news good to share you. with some

If leases coming XX in located properties Montgomery, ago, we Alabama of Winn-Dixie bankruptcy. about by their two loans you Florida secured Orlando, out recall took after industrial rejected months back and will

confident At assets. on breakeven we would we the were make those an time, or that told money ultimately impairment taking you the that site we

quality the another are quality and XXX% tenant. executed to high report We signed moved we very facility long-term facility the a happy into Montgomery that and high to a tenants lease lease of have on long-term Orlando a

but of decide to whether We million in hold to sell sell approximately cash or million, and choose $XX properties those we them. on gain be yields, are if very properties high would expect soon $XX will which a those

managers We highlights servicer, made the the together special one Starwood example estate believe country working Group, with in possible. large largest with the who real Capital the of manager, of this this value outcome our alignment together our

gains our our as We on foreign have LIBOR floors appreciated, international and over hedges the has dollar have approximately million in $XX book. in embedded gains the in $XX million U.S. today, exchange loan loans we our on of

exchange we We on today, could take or call liquidity to not with increase or liquidity making no rates foreign gains not your direction floors future currencies, but have selling those gains is what which needs, is of do. a we

assets cash would uncertainty likely today future raise lower on earnings. by the and more would future gains those than liquidity returns more those around Taking for they create

assets about We earn spoke to cash the our leverage call massive on our buy employing amounts Senior strategy on November in management higher to somewhere earnings their sector with CLO or yields cash. of CMBS

can not We significantly up. dries the spreads lowest were the offer treasury said over spreads assets we and near historic would that the do that, widen liquidity bid bonds as that

book. line markets In reducing our loan CMBS being capital significantly February CRE call, significantly our we about earnings books prepared talked for and the reducing warehouse in event, our exposure

if the one. have. when deteriorate. we We outperform finished to have believe we credit for that manage saying said set the We sides and company to we and clearly were if we up sheet markets event by left the potential and credit balance of the a They right we get

our property to On book.

book continues with to million Our over perform gains market property in invested value and capital. our increasing well of cash fair returns mid-teens on $XXX

rates loan will the additional We of of first are liquidity while points today. raise lowering Florida basis process by refinancing multifamily which portfolio, $XX our million in our XXX

that while named we X% reduce from our sold grade assets In have special to REIT, our of told CMBS of portfolio you securities servicing we last increasing quarter non-investment CMBS our our to XX.X% assets, mandates. heavy retail under

plus have been LNR. owned not in has the servicer we special years seven busier Our

assets. XXX over loans over $XX onboarded COVID-XX representing billion have in since We

assets multiple have amount work working the repurposed are professionals help we expect we this through to on, coming backlog and doubled years. the servicer in of revenue the increase Having to

our our QX similar and sixth securitizations In in in expect to completed Residential expected execute Lending we to business, return. multiple QX pre-COVID with securitization return

to banks LTV creating of a April, potential the of XX% crisis March and Originated created loan losses in loans attractive for add financing the whole portfolio XXXX, aggressively term X%. and loans exceptionally FICO, had with sold residential less us we than market back and financial great to to similar have Looking XXX opportunity returns. REITs

commonly want talk Infrastructure cash contracted bulk of flows prices. our contribute The debt about can based to to have spread. in the given that referred the repayments spark between is our of Energy plants is and the book sell and profitability Lending commodity as difference electricity, the the they our Finally, on segment plants gas I buy where to on drop that loan power

significantly is remained price spreads gas breakeven. spark natural With above debt our lower,

maintenance strong structural covenants is benefits debt to and/or adequately. All protection from serviced our loans financial of being our ensure

not Margin acceleration event a specific based margin of price calls do to loan. leading the an the credit would at project loans. market have typically these calls We on level, require

facilities We billion of have $X.X billion roughly four $X.X utilization. with financing capacity and of current

facilities of million driven notch price rating downgrades investment. in a a requiring in of ratings-based non-market credit our two or our deterioration margin $XXX commensurate subject Only calls, the are to loan

had have loans a rest the of one we very of event require service acquisition an not to notch experienced lender the or return of those about have loans by breach. The our date, unanimously originated forgiveness is agreed profile downgrade. we the coverage good of that To even debt book, of the group our We default any a the feel of financing. and quality ratio the stability payment since

that, the Barry. will turn With I call to

Barry Sternlicht

with in strange I a thank locations. odd all in colleagues your is morning. Rina. Zach, from to doing for the Thanks, you're and is their strange and and be enjoying earnings Thanks, you It this Thanks, your dialing time. know own This Jeff. all home process home call

comments. start to my like I'd

the plumbing said predictable, heard we'd about built be to all, multiple that try We credit detail exhausted of to the characteristics with to start, From be the and lines business different with we the company. that. somewhat we just We the transparent. times. First of built react differently do different company company know I you would consistent,

of valuable can tide And really strength property company sheet, the the cash other this book it incredibly of And and simply when some balance the the owns. platform. there was you you at that goes see out the the the look assets on

commercial and in I to because started all them, up was and which iStar time of I became Financial XXXX them blew of disappeared. most XXXX, wanted fact what REITs the of compare that one saw, you many of this XXXX, but them today, up back XXXX, I the that which comparison to the saw Starwood actually crisis mortgage survives, actually

If you to alive, of even go yields were you lending people X%. time and weren't back period, X%, those there leverage, or X%, who to was X% negative X% that analysts property for who at

also an lending You undisciplined had market.

typically totally XXX%, XXX% from which mortgage commercial XX%, the the a XX%, balance It residential was different we LTV. make had totally constructed time differently. REIT separate different want and loans because You different of mortgage profiles. XX%, commercial I was REITs, they sheets, that sure to period mortgage totally primarily risk totally totally they have REITs have they different, were mortgage today look the a REITs

they're ETFs. the included Sadly, in same both

up like money extent, the in the of Dangerfield when To some get ETFs mortgage no REITs, commercial feel the stocks go and swings mortgage of and so And all to we respect. REITs, beginning I'm Rodney out down. and

with should like was our Today, world start you the what to back Going LTV. before.

time when had you actually our third-party the fell in was and the a rankings Our appraiser came look It CECL at come first loans. LTV in.

that’s scenario marks similar I around as XX%. have. industry the the to XX years recession and marked mark, though, XX%, and think company you Rina saw was the quality and still XX% – there the back you ever of it general went the was our in what they the best-in-class company, attributed books, to shift since take. said, our was In year, in low quarter last of been commercial and created paper back what happened that as they've these was third-party of month to to the in started a go book banks as last and we the this them They're a that like CECL If the losses third to

the say XX% maybe So what which lend marks, we did, XX% well one than XX%, XX%, they and us should money I exposure, something thing. more are The less average, XX% exposure there like in XX% against LTV. banks

safe. the So banks are super

us they particular call need them no loans or really and any for that facilities breakdown they there's to So their on haven't. could

have very We've interrupted worked their with really they supportive. a our loans, it's appreciate know hotel We banks issues. their super cash have And not partnership. which restructure we’re, them and flow, we're conversation. to to proactively The good obviously been been going

to So them interested company liquidity, of our not the company strength might remains showing some the sharing of strong, are this need entice the and banks of and is our one in actually don't to. for which quandaries ask we with

So the a thing situation in this, you do is obviously like which first unprecedented.

scenarios what the multiple There repayments. nothing in management future have loans, were of this As the you on extremely the end we and year we a pushed run many repayment estimated forecast and so we on company almost year our of like, strong. early all now had our back look lot maturing might of

halted We although our obviously our of had future to fund we commitments. of se, per investments some all

facilities, we liquidity funded still paying have company. in of partners over lending theirs. securities, down mostly debt after $XXX million our the underlying million on of Our And $XXX

does capital have necessarily happen or The facing. in anything downturn good liquidity will news. Cash I investing this sure we're should war think earn we going on it environment, another and that tug be market forward. what but will making That's of in is is something hand not not the there between

is the of to housing affordable exposure the see have extremely sector are the property to particularly also It's the multifamily in loans in conditions market, the this fantastic. company all market, and The sectors has okay. the performing exciting most underlying the

streams there went medical the of Everybody where doctors the impairment unpaid forward. going will flow but paid, the those of business see future we you portfolio, think simply is to cash be actually and where office out temporarily, no

can test hatches, So you you we the everything down today. batten

these with run and to and all had, not then going scenarios billion $X you sitting the look this we what run in nearly company way. earn, in cash this you're is model You I've never

that unencumbered we creates easily giving that the that in assets. future issue we of to not is, We It's just So The be with have billion up $X liquidity. about. can creating are do scenario careful earning what of And we're the company? going here you. forward. the risk a not for here. that We're are our excellent and produce haul. for long impress We're here consistent We're shareholders to quarter to an reward earnings for not built

I want to solid. stress our incredibly business lines are

As has decreases Jeff the said, no a infrastructure no had has the no business markdowns, it almost quarter. – portfolio. great It credit in rating

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year. the company, a Our deal to a big it's business, securitizes is it but XXx conduit no solid business

We We have done. got balances. $XXX always bunch million, a around run of million $XXX loan

We of small They're have our books. some loans. these loans on

for Rina, the hotel we in pointed the side with the that forbearance, now servicers downturn, interestingly The has as a while out business Jeff against requests always it mentioned of the to reversed. hedge shrunk been the CMBS assets is would servicer. be enough, particularly always business capital the we business. overwhelmed been into downturn. We've comes insight over and The provides this servicer shifted markets. extraordinary because bunch us and We It with have space. And a the in

business. The earnings the Residential We a one the and But is Lending securitization, up the loans hope to both solid conduit in accretive. business We've is loans held year. later very get resi holding done actually it securitization. the

hold have these would don't to rush We We complete have the don't We to We securitizations. we that to liquidity in need market. place can facilities. loans. like these

that's large then well. is speaks performed exceedingly has loan the lending of the well, surprisingly company, I that And mean, itself. books core it and a business for the

the So have. between I and it’s our see situation split the a you haves now industry, they been with wish think

out because can value book who quarter, up go they put on book extraordinary not always of that protect we below issuing immediately people want dilutive you value deploy the we're company. they're every getting and we the those to and We to have to assets The massively opportunity for been in fair to accretive the do offense value, to limited to to to our our not equity our unless deals. have trying reach have something do fact, know or, dedicated including that's we've liquidity capital an

So our what is in to fact job and to that now invest. of out capital is excess out much right want how we figure figure

mentioned, opportunities several investment call, are in opportunity or to looking an an Jeff As committee at we afternoon have following this situation.

business in compelling so The lines put many opportunity situation, There right transactions, not are historically their that we wider we're are out, aren't there's than evident put out. businesses, is have of a these finding capital it because many to multiple opportunities spreads is obviously now. flooded to there but – several

for our on turned back we've So example. conduit

securitization given portfolio some we've yields capital additional them and the eventual or and loans, improve Now ahead the make of to assets. which will those entice go the

general quite at book. we're in expertise in payments payments. about the excited situation given also forbearance few We're country, also whole is that in our the looking home area residential opportunities loans on distress obviously, despite, And our rolling mortgage of lending mortgage through the through a the the

for So talk And the feeling a the I is safe. should second book very about I think we're dividends.

as future We're of out? policy for decide Yes. going Should Our we dividend? safety pay the to earn philosophy the will company. the unfolds. our dividend it we Can follow

see the borrowers will wait are June how to to looks. our we fairing? How the till return What's year So happened economy? of the

this and – Signs bit are know. good, a be to don't we going I It's mean, know, can little really cash. sent nobody we all

can, thing, we a So us sure long be we're major prudent obviously we that going and dividend run to the for I the pay Board make maximum shareholder, do will myself, but to here would like and are that the as a decision.

every So your look hatches I hard. been of this for corner remotely fascinating. loan even in have people challenge to company, mean, a fascinating down every want doing of are batten in working all producing credibly to you through and who has the the financials company, remotely the I country the has company been thank every the

Board And thank our also to them the on Board us It's I hard updates how gave advice want giving this. really has of the navigate weekly and worked calls been exceptional. situation, because to as with we

So going I'm stop. think a to quarter. with It was that, good I

tenant will done books our is earnings tenant their hope because obviously almost to We at signed pleased the you always side. said in the play earnings produce of from in I tech and that. out just really but goes name with warehouse. on equity you us, platform also want. and the can we that think the the I And we've see can again this strength harvest I anytime the we less gains the lease was major

take back gain, was one So with million a produce to we this in $X the loan, didn't in largest just should the company reserve was an and signed world. $XX took this two United the we And one week want against centers, of million it on reversing States, distribution assets. the

very with that business, it's $XX swing but to million in the million, an basis $XX asset, the now and our attractive asset anything million at So plus and at rates. doesn't long-term have least the $XX to do really you're cash talking core

It's we you'll Rodney Dangerfield, the tricky it's as see platform investment of power trade to stock when we the us. back think hope to and forward. opportunities. work, we We'd like love So put we're everyone back but finding of offense, excited your go great on kind exciting for get

questions, take operator. We'll

Operator

with Credit Thank first And questions. [Operator line from you. Harter the of with question proceed Suisse. Doug is Instructions] your Please our

Douglas Harter

you how opportunities Thanks. and you in in did the buyback Can March? you're over those of mentioned above that what talk context you viewing about

Barry Sternlicht

falling the these just smartest And it it seems of together. not and recover fight and capital. suspended the is and its all wait Obviously, We the and fits the liquidity simply stock to It a own. on hopefully to world we buyback in early apart levels ETFs, stock like mid-March, It's million. We're a buyback. as again, waste keeping $XXX thing to puzzle. energy for can't to of it’s

from We're back value That's bought that's done only commercial the maybe because sure stock the protect REIT so. others going have some going enticing, I'm for that to are the outstanding we're there's we that – now somewhat we we're think – on but and come going we to think, cheap. not of repurchase have also trading right that. I sit maybe company, of I that to mortgage not now, book any bonds do stock

we rather, now like close so doesn't of and And do debt grade so, the could company, trade to much. was repurchase if which investment we’d the

focus So that that's first. probably on something we

on first, focusing are should We I say.

Douglas Harter

that? looking about. guess loans I I around thoughts side, then, of be secondary just that And the of kind be opportunities kind newly on the loans talked that given are originated that guess you’d of would the in you at kind loan or solely Great. kind the market of there dislocations,

Barry Sternlicht

they'll refi probably Securities, are the is stated we're maturities, There spread loans, buying you widening one at some. people and fairly be we and will. at that security of things are looking pre-securitization, some take if but to looking securitization need there whole significant – some will

I the but by grade CMBS. XXXX, markets they investment to we not they're in are the securities urged did investment do mean the XXXX great. of Congress what grade, all better, have of And

So not high-yield they far, did some AAAs. CMBS. grade put for put but debt non-government they've They’ve the put reason, investment an in

As believe facilities you know, actually repurchased yet. don't even I are that activated

classes help did chaos they XXXX, think did which include, the they I if it markets that commercial in property whenever would of or was, the XXXX, XXXX mortgage-backs. But rated

as the problem guys in lot lines. the and approving see on the I who their you facilities go are than saw quite different So think credit individually are a the repo in that loans repo stability. was you banks And the more market March

love us were one situations. we'll at to months ago. deliver of United we – would what where them at you them all. XX% they what States we find bonds the of not at, said, six all And the And was security in And worth. million assets bonds when mentioned I do. more were course, in mechanical the looking They're $X marking they firms buy one the can't largest our that for then told what the PE I paid price us they of of

guy computer. assets, the driven marks, nation of any They're were out love buy us. that to they just And artificial including in and would price, the some property

of as a you And security said, the we almost million have don't on have debt are and know, $XXX we we issues than position million suite $XXX a tricky as – just so less time it's we believe left over that of like in and any real forward. going

of out. So situation it fully had same the gain a have I the paper. financial and couple was a years the and if is ago again. CMBS down We we went believe we actually where that money, good to strength, book recovered these are marked weighted mean which

So be to slower. different. This to be going look, this going is is

assets resorts convention Orleans Manhattan. the And that better think urban locations. open hotel quality in Vegas, or do will space, we in either or good New than be Atlanta boxes and the hotels will cash So do big big will the country restored to and flow the the of and

So little. very frankly I very to exposure the little Manhattan think exposure, our in aggregate,

Jeffrey DiModica

at deal, can. will would guide Doug, what different. There say to extent successful example, And bit avoid for as on with towards that. repo future little are certainly LNR, in that and Jeff. we've know you and has I it's probably it loan CMBS, underwrite BBB very XXX that Barry And We'll at our mark securities a every in we Board XX%. and the leverage. been every opportunities people doing can help traded look we look like spread the us and

mark take we spread taking opportunities in will an but than leverage are the – more as So without there in we securities spread past. leverage, industry less have

so not place worried. decent As a Barry there, size left we're very where book against particularly said, we a little have

more warehouse look an lending when to aggressive selling the you think we as less and us get industry. will CRE Notes side, A on see using I

you done below Our of that XX% last book. exposure our already we've that two significantly has calls, company warehouse had our earnings told our brought we down and

we to world. marks and A potential credit have I I others think see and Notes an in that you'll unknown others try where all more sell less joined think did before

the will playbook a to it things our So we've change long have a resources little are do and that doing bit, but time. these for been we

Operator

Thank you.

with question. Our next Rick your the is line from JPMorgan. proceed of question with Please Shane

Richard Shane

Thanks questions for my morning. this guys. taking Hi

assets I'm to right does facing multi-pronged nine got curious environment we’re in somewhere long-lived a sense now you? approach, ownership to opposed that there months make that there think And in are opportunities six for where it will between of given three you've being be compression. situation I and as revenue to a lender? your towards move more

Barry Sternlicht

question. the for Thanks

apartments. or units apartment about, overall started XX,XXX owns think, I You and XX,XXX so REIT the within it’s

I So think our – portfolio. been in collections XX% our have

going I'm our object to we first own because in are we tenure in geographies So compressed to that the the revenues what own.

the don't We our City. REIT We – West almost rent. the their California, desire where Florida, and the in anything in, don't to own so exclusively, in And is anything in is it's of Florida York own populism in pay infected Northern fact. in not portfolio Coast New

They the the And XX% of our couldn't one. that On our word lot. the think. that's not every of XX%. I weakness other in words, want the but I largest as The the negotiating but side is quite, paid office one the think or experience, – notorious. side, guys and in think what’s not shared real word from one tenants word, paid is That's a office in either talked have would location, That's I of we're it. XX% office you the about not the

So office has held up pretty well.

we're And you're the seeing And your XX% take guys But can. if like our core try have any business. airlines in that. tenants. who to again, and don't they depends going obviously when are. are to We any issue, if you LTV, not pay of it tenants Again, that's would And don't, you they Rina back. our we not property to companies the portfolio, mentioned probably

zero The end and markets, Actually fine. flow, are of the in very uncertainty market the it's all given quite true. is they think actually low cash hotels doing not the don't shut. I

end a is market, chain low the suites. of XX% in-town It's occupancy. called hotels have We running at that the of

That's that the ramp for our lenders quasi us part, be the kind closed. the and apartments. of hotels of with working the are That's portfolio, like trades it's fault. underlying sure closed, And interesting. will borrowers working most most hotels think, are I with I'm But are nobody's that. us because pretty collaboratively that why it are All

hotels. these them. I give to keys, be what own to we're not really trying do. that's the We're like If be they trying it'd would our own But to vultures not to okay We taking us suppose borrowers.

minefield. will It exposure Industrial, a It much asset will interesting to. a we don't an of be be have class. bit

a Penneys file Crew always had I companies hell a file. but of or it’s like – run, think it's its

the like Street the their You mall we're imagine in down If nothing centers negotiate can going retail. High distribution will just to else, or might. they rents

So States. I’m industrial single doesn't foot square I sure Amazon, of United of think Amazon industrial, with the in pretty every explosion lease the

So wonder there. what might I the like future look

but of more solid. fairly home on in and we're obviously stable family part points we're purchasing, markets markets, a I careful other the sure that and on where to And make single huge now in from then trying trying we're drop the and the pretty about this where homes, are saw you price buying loans are resi think, we're or to taking the oil the hand, Right resi patch avoid.

back. know come going want to incomes fast they and how across forward what's they to fall going how to all much will and happen country We will the

be not average really Obviously, balance market, more middle end So but very that the higher the not what of usually loans. higher, will the at than we're why investing non-QM take. low than that's the reason qualified market, only non-QM, loans larger to Fannie is they're or at often than but Freddie loan tend

buy assets on side cheaply. really we market. We're because our The long and perspective So equity think our I really we can on replacement asset of and should give value I when cost. did way thought relevant the making it cost has on it's it buy I focused I the sure real answering, replacement the

been and I've been cycles. We've through through, sadly old four been I'm I've through,

a I ever back in had started I And our coming best the lot a think IRRs, the cycle. We of XXXX, of out company we So XXXX returns first we the money. made then, fortune and XX fund. days, made RTC in

bust Starwood dot.com Hotels and through then I was X/XX. running the

good a just antibody this fast? recover. linear before. It's half exposed the and question when no it's that know question now to will this There's if and line of Roche So to can the U.S. excited a morning test And I've won't are go all and vaccine hear been between get back and to the countries we about it. work and how the movie we

I'm So optimistic.

think invest. – obviously but War seen it's time CNBC a XX TV, we're World said to days, III when it's really XX been ugly, really I about and on I on It's March as you've good I've halfway. for ugly,

ring to bell, make approval two – don't and ago. to So they we've a I Board an investment, guess we're days going got

where money on seen put and returns the probably say what deal the higher, So the work – we same have it significantly would X.Xx Xx are I would we gotten awhile will to credits back. have

we're we’re So to interesting, as still out earn our put much money, preserve we twice how much as do our going half if thinking and about can capital, want liquidity make our is – we half to liquidity as much on it. of

you what money sure money out. no on Make you put you The invest downside. there's be is So put very choosy the could only out in.

attractive ever. your any rate in of on have return fall equity you're nature investment. You of a capital And very won't a

and not doing think in prices deals the you've I you Right don't buy market equity business the we're seen. So is frozen. to I transaction would selling REIT. at not Buyers in them. now the want of are assets

forget zero. You go are the back, rates

even can these mature. you the in and the just original loan let But would bank that X% the distressed costs I retail, can't will even markets a most X.X%. like malls, debt you of you service. in cover, in assets if Nobody at. So lend cover was proceeds most all produce mean, can They

XXXX. of XXXX. you lot a kinds service became of cover But extend cover we to the same debt the And The mantra in spread. that's prior get and can into XXXX, crashes. that And can right you like capital saw to blend can what can fire opportunities forever. have and saw better borrowers would in You XXXX, now sales happened new you or the we never outcome redeploy sins, really and of

at to this it's think where to you we're really sitting got where we So time. we're got – interesting really actually time like

good a need capital. one are even of were go we're of want And company. really raise we money, good how release to did We we our set. restructuring had. was not done a because And the tell one to reason it. was you we we entire and that just we it We on the We don't wish We the going don't needed rumor. to want accelerated outside that sit We've rationale. never We and the we raise money. earnings earnings accelerated halves. before We're not news, heard to the that

Jeffrey DiModica

about very specifically here. Rick, think and asked properties and you partially would whether excited I we be adding

I just our those. probably versus would The add and XX the available that us I mid cap little quality high rates to property the sector cap got low for to a LTV segment near on relatively our teens think be fact up double-digit and dividend on at still add transparency today where yields. are lending think go with in you property financing yields can assets to don't low hard to that were we we place costs future. rates to very buy in return the that plus would if

Operator

question Instructions] Fandetti line Wells the [Operator with The Fargo. from of comes you. Thank next Don

Donald Fandetti

portfolio. sense a proprietary pockets Is a And prepared the Wanted good dig talk hotel little Hi, side. just made a the about having sense that? of few of but on Are good to to loans majority to owners us to guys you can can morning. sort degree, could you Obviously the moves some definitely a the playing like into of the It's see, have see other Jeff, modified? just many how the it of that's right out to you months? to of been you for kind get bit if give give us you loan thought? their

Jeffrey DiModica

Great.

Mark condition some into the one we the have their of Cagley who our that and sides we Chief I Credit we at think, have sponsor would I business. sponsors on that, side, well a loan other heeled Officer. main both our financial very things I is look go line, say of when capability on is and the the hotel

a higher other much at forbearance special to expect We avoid avoid and to them and things. and servicing pay rate

to to And with open cut be on and a we have got that. you come our where able us repo out we've hotel out their try the together And with all come ourselves forbearance, to about could where certainly that who you call figure work six borrowers and to very partner need fairly needed the a allow side. put been help then people. some into months we to plan to up as deals lenders were properties other way nine to quick We

amount night to us did to that, our this but to we the it opportunity loans very we of way work – by borrowers paid And to. get of gave that. a months lot money it well do into sleep decent to ability the We So at a out. they that have nine the that fact gave wanted

our hotel. to moved downgrades this We amount loans… significant sort of fairly of loans downgraded. look it million You had and quarter $XXX happened speaks what to of in We worth

Donald Fandetti

Downgraded by us.

Jeffrey DiModica

they our one through rating there. three generally five On start stay where scale, Barry. and apologies I we a tend at to alone

XX% way rating We that's to internally and thinking of them sponsor, the a because there we moved little have We have of very there risk in five ourselves. four quantitative we capability the between give about moved buckets. it structure, we and very about out loan

cash the that pieces and have not hotels, going they're those open. loan because ratings underwriting those and pieces COVID, two quality of in on on to about and two fact, they of flows, the had revenue other relative are to the just of performance and collateral clearly XX% But project what's change don't in stability

ratings we So move use few it opportunity an a to as worse.

make side. the Cagley turn we we with to We think guidelines we've consistent when move I'm talk… the that's that up moved are these on to for that we what other set open ratings ourselves, did that hotel the the hotels being sure we up of way will again or back it going that and to wanted vast was Mark majority to these

Barry Sternlicht

better, Mark say does got can't right. a it, you hotel Yes, before loan

moved the we think them. loan It where payoff. as had a had so So doesn't comments, mean we Rina couldn't we in hey, five started say, I her – they

really doesn't much. it So for mean just management. our own It's

Jeffrey DiModica

that and Mark, here? just do borrowers we're done talking of you want loans in of about to hotel some we've that about specifically talk the dealing about with speak things how we're percentages

Mark Cagley

Hello This half payments have relief, and means of of that that Sure. payment everybody. asked numbers half is Well, not I'd half the for asked sort to in some that our speaking them sort love and on borrowers full, portfolio loan. have – portfolio the of about planning of loan Yes, glass loan continue Mark to. full make terms for are to of interest in hotel Cagley. of

So that on. interest have waive whatsoever no borrowers we to plan payments we all completely

until working there we're partial repaid defer make sweep with but market. partial payments, plans on borrowers flow into be those payments cash So things our to then the and rebounded will potentially it's as

support we've months the assets funds six to and So and assets. happen to figure these as equity their our next borrowers and have for use to to been in to support going resources three the committed universally to put tried to with out use PPPs properties what's

Donald Fandetti

Okay. Thank you.

Barry Sternlicht

debt one note loans in service CRE that. their but in the know payments and in soon April, all we'll I'll that or book lending XXX so paid of our

Donald Fandetti

Great.

Operator

Rahmani Our is next of with question. Please question proceed line your from Jade the KBW. with

Jade Rahmani

between a going for and just was wondering through Good and you from all unencumbered Thanks gotten the liquidity questions last month, and provide very unencumbered on how that much the to you the How on assets. I've tapped And necessary? consist unencumbered hope cited. you of well. imagine, I the company's does of about details assets, does actually can color lot position unlevered over that be of could additional liquidity if What that the if the can hear positions I billion assets out example, all doing much. you of you're subordinate break as senior positions? of?

Barry Sternlicht

property Thanks felt Appreciate the it. Jade. number a $X that, decent over at a billion our we property liquidate portfolio, portfolio create and to its the use if you, our we of we on little like We have billion over amount $X our own. more mark, which were current Thank alone than question. bit because for

of my hedges. about ability LIBOR FX I could floors In addition Those million. sell that, create to scripts north $XXX talked our to well to to unwind

other million. unencumbered We that $XXX create have of north could assets another

industrial about We we some talked properties. have two assets could the We sell.

we We could property that have sell. another industrial

portfolio all billion today. to above else in, That's equivalents or property So and million everything $X you $XXX the cash undrawn. with and approved, above just balance cash and is still sheet of over over get the the on cash but that, and

make the So that are moves. we could really had comfortable that if Those jumping not moves felt we’re we into to, making. we

We certainly assets some in have the last any few and there. the to looked instances, sold we said, haven't are we we've And Rina a because at we're half. made haven't like and felt create unencumbered month lost any that an as moves, that emergency try haven't in of levering liquidity over panic assets course we done a to but

Jade Rahmani

Okay.

Barry Sternlicht

sale an Every has right. earnings impact,

We're So pile up sale cash. we're not liquidation not trying to here. just a having

Jade Rahmani

real have you have Do tell? expectations commercial would to or then how view values secondly, terms on, And your say maybe space. it's to on broader hotel can declined touch specific you great. of a much just the estate you Okay, early in prices, too

Barry Sternlicht

could Jade. it's big you happening that What's that and for recover, like think can't Las early it the in to I hardest call. depends be likely And book just way I right to just going be the those in cycle. now. tell Well, while. see to casino That's Vegas worth slowest a where groups too are aren't the – to it's primarily again, Vegas

think it's particularly if and a I hand, quickly, other smaller resort the probably end. higher pretty hotel, On back comes

I run So you asked you're it’s that XX% asked if XX% down value. to the math, if – in probably

of XX precious One and put a going like never That held in points. out that in lower, are it's years you are and a three should of you've had today. and they and and just incredibly scratching place the investor up market as supports like there's LIBOR your I property be by, sort scenario the be markets – up held or go slow gets is XX growth head world rates to no by a think to longer yield, which basis even as pre-COVID than above a curve produce see you're about, curve you're fact you things cash. The being property rare that the property to else this equity going

rent personally So recover. they underwriter think their how to going I then of for the change In the habits don't hotels, will going. question Americans forever. equity, are direction is it's the of the

started I flu. all is over XX, place if data think as about measurable. to a is the bad this out the you're death flu. your a rate not today is the It's flu. It Even zero

they get flu, the this themselves. is obviously you'll you an disease the have to affecting You'll more have the and flu awful is presuming home preconditions. really don't stay that and to take at some recover of care aged, serious stay from But and of these

we'll And thing and unfold. I this our procedures think everyone to and else can recognize as and kind policies of go have back change add it moderate

it's – values a some value. tell you look. why to sell so doing And there, and but cap of We have me, hotel when sort embarrassing. in buy Nobody's silly. I'll try pricing hotels to tell they're or securities buy So are their yet. going of I you, nobody's trailing that, they're these the frankly, me the Like, can't of not here these decline and going on XX we tell earnings. to believe cure. hotels, That's some on XXXX is But these nobody, selling not and markdowns what of or

Jeffrey DiModica

the help CARES that have storm. They reserves. had act the And the hotel them interest borrowers weather

them… of Some

Barry Sternlicht

public not ones. are They

Jeffrey DiModica

with storm. to help the opportunities up had come ways they’ve So weather to

Barry Sternlicht

insurance estate estate companies’ these the to assets out real haven't dropped properties doesn't the on the taxes If run you be in have open, to Sadly, the let's themselves. even But the dropped real then The support exactly though not candid. of operating. value. taxes waivers keep country ability costs actually and giving box municipalities will are and

out figure to don't less not room try restaurants. allow and lower we will be all York fill There make heads with The money not beds to will they're a may cities with think with like to in that to. work I but hotels occupancy. the they I be staff and hotel unions. demand. get, operate profitable service, or fewer, will if breakevens how parts to won't trying They'll New know structure union at XX% XX% So

So change hotels will either go the all in will union its union or these cities. structure never open bankrupt the they or major

to So won't make assets Jeff on management the teams to workers money actually their But the breadth I'm these and and the will the in and non-union breakevens of owners get these unions open think. be looking back to much country the lower we be you at markets, surprised how help payroll. than

the happen their or the the there'll gets which Full which and just awhile these in to not the margin P&L, limited stabilized. for the of exist hotels don't have hotel weddings be banquets, open other like are and of in cease as outside, until part other parts They lower have will service rooms. hotels probably service margins will box, hotels same that simply

Operator

proceed The James. question with the Stephen of Raymond is Laws next you. your Please line question. Thank from with

Stephen Laws

morning. good Hi,

Barry Sternlicht

Good Steve. morning,

Stephen Laws

the that may obviously that all about The dislocation LNR. seeing, present can acquired that's there and you've out to, everything any you talk past, opportunities in we're

single-family to moved number non-QM CreXus. You've things acquire you've tried rental, of into resi,

on or that given lines that attractive cheaper that stock anything maybe think the now more to there there that out simply due higher going Is you multiple attractive and relative to add either business Starwood you're just the revisiting fit to what's platform?

Barry Sternlicht

I'll take We're that. Sure. all the time. looking

a do to have relative value We trade.

So X.Xx book. can't we're for than We pay them. at book more X.Xx

to like, We IRR that that has XX issue combination. down be So unless stock can kind or here it was something. of

a something know what the made number is, like there's might that book. but number up. discount So up be make you that. the I to we willing do don't I that to

with $XXX to - bunch excess at We up what of And call in have would a million fact, like liquidity. $XXX of million I looked say cash. of I situations, ran always the but company million $XXX we million, let's use reserve $XXX

if to it opening So to be second this nobody excess. would to of really all work it imprudent how We'd the put of is to put a be there'll given it will rest but it work, work. love downturn, knows sort

So we two. the balance have to

there looking are ability love and not at, to XX% XX attractive. for going our there willing put product simply people or this business to transaction yes, And companies and But to in the but the prosper up our I preserve next situations yet. we like we think are grow player our we have give I volumes like to here, companies We're red we're property, are to again, all but before, down at. dominant and years. lines preserve not in are that to in want would And look that business But many are in be to continue ability. said

that's our goal. So

Stephen Laws

Yes. think in the guys any to are mentioned that And those? give able your list already okay think you're quick have had addressed of hotel of gotten, the that they're of then by that offer remarks, a as a prepared I in of follow-up, some I pre-approved discussions modifications on what financing with. you examples some counterparties Can the kind you really examples been modifications just those and

Barry Sternlicht

line is with through today Sure. on been because one go to these each maybe front modification. Officer He been dealing with Mark to our be individually, he's loans types I'll he the on hand twice things of as dealing Chief he's of to that Credit Mark get and on Cagley, spoke earlier. the going the

Mark Cagley

kinds is contributions reserves we we Steve, If to of as the do FF&E Sure. long dear of some we defer frame the near-term, those is that, decision the for about, of reserves in But talking most. have allowing doesn't the and the and newer well. them people future approval FF&E renovated reserves. do talked a approval the modification as period to were High them in newly we those general, level, to approval the time need been a have or things have to about is as flag forbearance or of to our then where the making to obviously heart property use payments property the we're if as near

floors. not interest. LIBOR any forgiving We're not eliminating We're

would for them hotels occupancy of to levels be is or there closed workers said. closed. that close are kind half So are or transient it at really of our as of Barry for Most operating need approval to XX% I hotels probably say others.

that accruals FF&E, So closure how we're for, than trying rather keep we're them of use hotels, longer. long shorter doing to payment we’re forgiveness, dealing the with how

Barry keep like, world looks and XXX also window shorter, lines can see we so the what the asked days just that XX to them out. within us stay to within our

basics. we're of really for extension are some to qualify their So Those them period. the that modifying – tests the loan are those give additional within time room the

Jeffrey DiModica

just whether to and stand question. money first we’ll this basis, be period that quarter on and being which loans be our we'll in XX have going do lose We money or less to who state we'll do. back of banks able back think they think direct pull do be to a every months their our competition, say lost less we'll or on able aggressive into I unlevered it's in your when and I'd And investment find an own tier

the And can think space we decent amount of the it. few levering said. I months, next be we those if in there, as back later a liquidity coming through in Barry always there'll we lending needed But if opportunities liquidity get spend by

Operator

JMP with line with Our of Delaney from your Steve question next coming is question. the proceed Securities. Please

Steven Delaney

given this RMBS in environment. bit congrats remarks Good a Fed and surprised opportunity in has seen morning, put yet, on in of a by warehouse we've lot the your about The residential. problems [indiscernible] report not and strong AAA financing. A

see getting just next three four in you a can that curious, Jeff, if could think the securitization months? for I'm and what's you you. So Thank you working comment done on to do you

Jeffrey DiModica

I Appreciate it. do. Steve. Yes, Thanks

You're deal going to CMBS week. later this a have

week probably have week, couple in more a half. a and You'll a

coming we that back. So market think is

talking done very we month to And buyers, directly securitization our good the the in bankers there's to could chance a who next that a get talking we are non-QM so. that or bond think

We don't need to.

that lines or actually much we leaving as financing on. terrific have more, earn We them

the to a think goal be we're in a market reduce in those month always able been Our to from away and way. pretty being accretive we has

with Notes. more the I earlier, vanilla we're we’re spread to warehouse, think A about a going go to plain We're going we're We're marks. only going potential do going things pretty way here. do less to avoid, to on talking playbook like to less

securitization, I can non-mark-to-market sort I look get term So financing, and of add, that, and to if that, interesting. as we until super think mentioned non-recourse, we mentioned Barry a that's

loans, if is, it's holder offer the willing who whole who loans us. out whole to to loans, depending the want And I bank and something to interesting that's that's a the get owns that, it's of the super

see the So book months couple here. spread we've way our given potential mark I the what don't in think us you'll in in risk last any seen of increasing

things the this. or will where been took non-mark-to-market that terrific dollar like terrific on there be assets at there financial losses of great non-recourse, some financing crisis to and that opportunities some frankly do get have opportunities X% on the assets trading less $X.XX think dollar are than you on on I But $X.XX going term through the low

duress and side. you think So And that of the places mortgage commercial and it's than space on originators the just have I dislocated. from probably an are REITs example more in specifically, banks that

we So brought that up.

Steven Delaney

That's No comments. Yes. the for me. question. for it Thanks

Jeffrey DiModica

Steve. Thanks

Operator

Riley with line next of Hayes Tim FBR. The Please question from comes proceed questions. with the B. your

Timothy Hayes

my morning, Good for Hey. guys. Thanks taking question.

there just you you of Can still at you're where were I equipment question and remind type under that's on close? acquire in what kind track an the contract Just know to that a process that there. quick follow-up on entail Steve's of originator. could us and to capital

Barry Sternlicht

Thanks for Sure. the question.

now the great rush For over and capital them going been this small with with seller It's we've change not continue get how a no plays amount working for relatively perspective, time. We're to But to through going out. the we'll work really a And see quarter anything. there's it's line. to good it one. of to finish

we major things We have us. for it capital that to when need a in through. any will work But not way we be do, difference some

over it, given that to forward the line. our we've been time getting with looking we're But So taking market conditions. the

Timothy Hayes

more And for Okay. Got quick, one me. That's helpful. it. one just then

given next then to near-term, on the to… need right You we'd noted LNR Jeff we see maybe what quarter how now, earnings those of and the kind is level that just busy in delinquencies should platform or fees at staffing just power, wondering resources increased of if really the there see for added two weigh

Jeffrey DiModica

Yes.

decrease staffing I increased power. think the earnings

up mentioned I XX next a over We happen fees large a revenue them of billion number side of pick the will power loans XX few don't in will $XX earning on will get years. we loans have quarter. quarter. won't get XXX the Those next next over bespoke increased to over that months. The –

We're two some that. It's that our who ago. have why up harvesting CMBS, years have yourself we have setting with to than special important start thought We something fortunately less gone to less we've It's we so of our have a firm. was lot more to many but on a employees You're the did to into really long partnerships slack. run. more now CMBS, for servicing people own in today own retail position servicing servicing, particularly significantly had XXX oriented

side. that we're the amount loans. having of help people on or to company significant through of less who with CMBS up There loans, executives been of doing the where less kind new less are repurpose areas to the a so conduit investing so to estate able we're different areas short we're we've But of We're it's of or real this a – company. service doing doing period bridge many onboarding grown time large very beauty have writing

or grabbed been – we mostly work them XX servicers. rotated they've they when people, the full understand through there and XX the or So time needed we through, business in

able to we're repurpose that the make optimally. being is within sure company So people used to everybody

Barry Sternlicht

be service, Most paid. So has the about add, people get asks I'd just one approved you think are anyone servicers forbearance, the by thing how it for special. – just to

transaction. the So loans asset. work and the the resolve loan it the loan and make a they comes have in and Where default, forbearance sell have of they servicer them these when a to out, are forbearance. begins back We ton don't to or ultimately get money paid a take the approving of lot is for money to

of of servicer lifecycle. hundreds the in dollars. early company it's once millions So The made

some more our the be mean other side faced house. would it’s of we've exciting, While it that hotels probably the on on of issues

we do. where everything see massive as and nice it's are, that else hedge don't It's we it a a So of we're revenue but just happy yet. think against stream windfall to here increase,

Jeffrey DiModica

the lot throw out few of been I'll months there's over about that last And advances. discussion servicing a

deal. a We advances. We special servicer special make the liquidity a to impact around in It's servicing not service people. but potential that. confusing not CMBS no gets for at does any CMBS deals that confusing to topic, responsible know that are There's of fall that

Timothy Hayes

Appreciate the comments.

Operator

Thank you.

line with Our is question Bank. with from your George the Please question. Bahamondes of Deutsche proceed final

George Bahamondes

just or the team. able morning. or for forbearance had guys to I interest the Good asked you loan Hi. for other disclose of in have anyone follow-up who Mark the number deferral, on borrowers Are modifications? portfolio

Barry Sternlicht

Are you’re we weightings in going interest deferral, want probably it? I answered we and do modification, between this it? where to seeing don't partially disclose I think briefly speak forbearance most you of to think will. earlier. you percentages, Mark,

Mark Cagley

other they've Yes. inclined that in we're hotel quite that. points is category do Barry It frankly, a asked book There's the for not but out. accruals, the as to interest in couple where

stand significant their ability to the approach them to our to transaction, borrowers levels the the Our they which if to most do equity and property. for resources has pay of is we pay, in of protect, the with borrower a expect this up have

at accruals had it giving – comments, And so We're would all that Jeff said asks earlier We're say accruals. we've numbers for that, round and giving this or the full cases probably in anybody I not that to XX% the accruals. book in point. partial not of

And say I round that have book say have loan ones numbers would for I some So would of the total for half of it. sort modification. asked asked of the XX%

of some math XX% doing there, those, you're XX% of the those, rate it's of deferral. of are book So the total getting interest sort and half

portfolio, in period for time. you sort of XX.X%, look monetary So deferral get would it a of XX%, it's the when total loan some XX%,

George Bahamondes

Thanks color Mark. the there Great. for

Operator

you. Thank

Barry Sternlicht

book that comment a hotel something mostly company XX, book. the loan total billion that, as [rough] and base is $X loan is [indiscernible]. of the the asset is our Just Remember, the like book of

hotel. that it’s is XX% of the So out And of guessing XX, XX. X of I'm it's

Operator

turn At Mr. Sternlicht to I'll for the floor Thank you. back this closing remarks. time,

Barry Sternlicht

thank at interest you you support in some clarity people Hope today. to again, want appreciate Well, to provide I we I'm join we us and company. the could everyone. together. Starwood We've a you done thank glad Property thank the stock And in your you and and being getting forward strange hours, Trust. through very cocktail look way, for better to with us. virtual $XX this, and I we're Again, much We're a price. all

Operator

you. conclude today's will conference. Thank This

your participation. disconnect at your may lines time. for this you Thank You

Starwood Property Trust (STWD) 4 May 202020 Q1 Earnings call transcript