Earnings call transcript Q1 2023

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Operator

Good morning, and welcome to the Franklin BSP Realty Trust First Quarter 2023 Earnings Conference Call. [Operator Instructions]. Please note, this event is being recorded. I would now like to turn the conference over to Lindsey Crabbe, Director of Investor Relations. Please go ahead.

Lindsey Crabbe

morning. Good for today. Gary, our hosting you, call Thank Welcome SBRT First Conference Call. Quarter Earnings to the

mentioned, Crabbe. CEO I'm the operator Comparato, Operating the As Lindsey and SBRG; are Baglien, and Mike Byrne, Officer Jerry of call of With Richard Chairman FBRT, and SBRT. of President CFO Chief today on me

and company information date from to as on conversation, forward-looking statements are to events as future update risks today's start assumes mention certain as we on as our conveyed team Those this want or is to call described any of subject and statements The made may except law. that of results current most SEC including are the whether May based the call, assumptions information, some statements, and during uncertainties any forward-looking Before recently only new differ future I otherwise, The by actual no materially. this call, of inherent periodic a assumptions. comments obligation today's are comments in this XXXX. and of reports result required X, filed

earnings we each and Additionally, to financial our non-GAAP which supplementary reconciled website refer to available in figures slide certain are deck, on are of GAAP www.fbrtreit.com. which measures, our will release at

to Byrne. refer on today's the Richard to call. slide will the We deck turn supplementary over With that, call I'll

Richard Byrne

Byrne, as of everyone, morning, Good heard, and thank I'm you you Lindsey. Rich us and Thanks, FBRT. joining CEO for Chairman of today.

quarter results and guess first of will our yesterday. I website earnings the we As to Lindsey financial This our mentioned, supplemental deck XXXX. release published were our cover morning, for

us our just pleased our on with earnings and Slide I'm that initial in in The highlights first off improvements increase So kick quarter. with the we for portfolio. biggest the were two to #X our and were comments start maybe very performance going

the prior net diluted our compared quarter. increased in income by per $X.XX per share this to quarter first, to $X.XX share GAAP So XX%

distributable FBRT $X.XX our XX increase earnings by fully value XX% reflected The this common comfortably will on our again, Our with of compared represents benefit increased to the this our well earnings $X.XXX rates, in other on $XX.XX. in financial higher quarter. earnings positive of Jerry quarter which rate base at per portfolio Once the $X.XX course, book in March portfolio X% of covered sharp developments yield share as approximately overview. a dividend, provide of the distributable stock floating generating several prior share remained unchanged quarter. detail more his on per and converted our as

The second we biggest that Despite the the of from been list, highlight in down market unpredictable, improvement list. removed portfolio. ended our in first the the And prior quarter. of end quarter the the assets after three loans two has the on for end watch with us were from quarter, five quarter loans a at was our watch additional

list Our CBD of small loan one relatively a in asset, watch consists Portland, Oregon. only now office

that our after Hotel our quarter the One list came end of loan. was assets the Brooklyn off watch

of of positive completion for now were We additional will the $XX recovered happy the on protracted redeploy. We sale million. free the have very successful asset to In the capital reached to XXX% in which on proceeds. up process and mid-April, loan we announced million $XX the a us process, this of approximately principal for resolution considerable

in additional to several note quarter. developments the There were

opportunities. sheet. new finding the balance our We in patience of quarter, loans million First, our right closed maintaining the in $XXX

flat on quarter. book prior slightly from decreased to versus -- value multifamily our a quarter me, last over $X.X size billion, loans was excuse the with spread portfolio focus spread XXX Our over heavy and

was origination While opportunities. volume attractive investment found lighter, we

portfolio. of originated limited a was loans largest one hotel example, service we the For

points. Mike and into of in basis new on commentary. spread this more on average recent on all detail weighted pipeline Our will in his our and investments was go XXX course, loans quarter our the

with We of advantage is of to in any and as a order common discounts and flow now back deal the cash liquidity were unforeseen take protect prudent our to value. ended We both we the credit this in seeing book quite at also the accretive as buy having our were portfolio deploy and liquidity capital $XXX respectively. total quarter debt well meaningful which are robust million able to position quarter, attractive We our $X market. to stock believe against billion, events to

its details debt As a for value. unsecured the this debt, provide XX% moment. Jerry his million of face our of in in at on repurchased we will $XX.X and retired commentary

$XX for quarter. programs, exact Subsequent of repurchased to once million, first In common shares $X.X repurchased common we stock, the in also million million we $X.X to XXXX buyback the our of be in stock. XXXX, FBRT million just stock. additional the our purchased As under we end, total, adviser and $XX.X an has and started its quarter of company

So $XX our still for million, authorized additional that approximately leaves amount remains repurchases. which as

over Lastly, turn before thoughts to a it concluding comments few Jerry. I and

in of and assets. office to exposure of given Office We X% the quality portfolio, limited the sector. our are represent our loans our confident focused its only multifamily

stack. We Our light relatively leverage. top rate are the loans at employ floating of the external capital

that we continue origination stockholder opportunities And defensively to will levels our positioned, while are will are take liquidity advantage Our returns. enhance of we robust.

you walk Jerry let through our I'll performance for the Now quarter.

Jerome Baglien

today. Jerry Operating being This FBRT. everyone Thanks, Rich. Chief Hello, Baglien, to Officer everyone. Chief I call and results. the Officer appreciate moving the on of on Financial And is

share, per which Let's Slide start $XX.X generated GAAP diluted is X. on ROE. FBRT $X.XX an QX, In million, XX% common and that's of earnings

second to debt. Arms floating a and sale included related onetime CLOs was CRE and Our extinguishment was quarter this of events. GAAP of the the securities, One unsecured partial two including earnings rate

simultaneously $X.XX about shareholders, that reduced that we based and $X.X the at unsecured of like the immediate $XX.X Regarding acquire price unsecured our an current the book ongoing value for service on by gain of debt, cost able debt resulted million dollar, of the extinguish Rich it on million were and debt. a to on the mentioned, in annual

per $XX.X represents in earnings converted distributable in be distributable first to can and found an the the Our through fully share, $X.XX income walk XX.X% the quarter release. that earnings A or net of earnings GAAP ROE. million were

it the portfolio, our at sense. quarter. commercial portfolio in balance. subdued the $X.X the real billion the be earnings first can estate Transaction originations, given quarter portfolio ended the our And principal Our deliberate most volume very capability remained of in growing when makes in we

trended market in and since we Mike witnessed will have end, on we in and higher quarter, benefits are the spread detail. in into tightening quarter earnings. in go the greater That the Spreads our that said, loans the of that modestly seeing a

We securities ARM position of maintained $XXX in a real million and combined. estate securities bonds CRE-CLO

with appropriate portfolio. lower this and recourse value the range net at leverage leverage our ending trended this our ended Our is period the for flat quarter ending within feel X.Xx, we leverage position And and the at quarter quarter X.XXx, $XX.XX. book at

on to Moving X. Slide

see as of we quarter as that attributable growth. SOFR. our fourth was earnings certain You distributable our underlying growth base largely And consecutive well assets of asset fees payoffs. to rate from most this had can in That's the increases

loan for office loans X. Slide were you repayments in from our loans the the walk repayments, were multifamily in through Turning during quarter. XX% $XXX portfolio million from We'll quarter. our of activity and We received to the XX%

hold X properties, now foreclosures REO the to resulted million REO. $XX deed after the Walgreens assets in properties we the Walgreens quarter, the portfolio entirely title new of no remaining took were which While and in needs in foreclosures. or quarter, all we added lieu as took And to in to retail

represents approximately portfolio. Inclusive total of the REO X.X% foreclosure XX of our Walgreens properties, our

remaining the on We REO -- updated the first A quarter $X.X based multifamily Our an a market office multifamily an value in properties marked down information. and property two million by Class market are property tower.

We continue assets to both for market sale.

operating pricing are on comfortable and assets. owning we depending However, these levels,

overview an X, of Slide to Moving we capitalization. our have

the quarter of while available Our average of rates non-mark-to-market and drive XXXX. knocked in space. to have through XX% actively CLO XXXX, facilities July reinvest, we short-term on we X.X%. our book is continue but the market monitor taking manage borrowing have book, CLO we debt to cost advantage core -- in up to And our that of on our continue with our nonrecourse cost, financing and reinvested of was during

have our business. to leading of we and when look issue to qualitatively CLOs both been opportunities We for and doing issuer historically so will quantitatively a is accretive,

Finally, showcases our Slide XX position. liquidity

our Rich quarter hand, warehouse is mentioned, cash on ended This lines. with reinvest available As the we $X in liquidity. of billion through capacity available and CLO combination total on a

with have six funding our sources diversified separate lines. warehouse on We counterparties

will advantage to stabilizes us origination liquidity future enable balance our opportunities. sheet of Our and take

our to With over Mike you that, turn give it portfolio. I'll an update on to

Michael Comparato

going I'm I you thank Jerry. XX. Thanks, Mike us. of Slide everyone, and start Good Comparato, am President FBRT. for morning, on joining to

exposure end. rate. Our earnings It That and total is exposure only XX% our discussed this X% predominantly with at last senior over of our exposure the on mortgages floating continues of be and office great to commercial to detail our continues few sector. in represents calls. multifamily We've decrease in portfolio loan XX% XX% portfolio quarter

to best credit as the We and multifamily quality CRE view continue having risk-adjusted the space. credit returns within

heavily liquid. invested very positive to Southwest population areas continue has Southeast in and Our be favor trends. assets our multifamily made across we Geographically, the focus portfolio with and

the last international no exposure intention to As exposure near add no and we in I mentioned have international quarter, future.

quarter first today the for originated basis meaningfully X total our Deal the commitment million shows a is of flow in activity XX quarters. three quarter. points. at a spread two than Slide in weighted prior loans the to to $XXX We of XXX average specific better

metrics are in market meaningful We to credit in we and have credit weeks. spreads flow with the Interestingly, loan a whole the past X X strong attractive terms. in seeing deal seen tightening

improvements of I versus credits. of believe the to The lot is origination, good coupon. in I a credit specifically tightening is getting that due lenders looking the of attention I several product, credit are quality While being whole at a also portion new scarcity coupons tighter. of the also is bid is believe a and loan believe within components there market on multifamily

a for given coupon an the prior can very XX you have If X write is compelling coupons loan good been where years. handle with credit that

mezzanine meaningful the typical Hospitality a our strong hotels. This loan portfolio on a loan also large which lender from a at size and The in driven loan service greater flow, of $XX by in investment equity limited has significant has the loan. than was our largest averages is one XX stack. cross included size, capital cash the wrote quarter, closing million in-place $XXX million. add borrower We loan

the as to participant. market as This for the and Current an loan are in as see the is opportunities historically discussed both construction We've we right market conditions voids fit. opportunities active able large been we how are in we market most have the well where loan not fill market. are creating waiting lending obvious

for discussed we've continues that negative As leverage market itself. not be issue a one and has to several quarters, resolved

believe on We widening are floating tightening we sector, cap multifamily positive rate have severity in of as rate as negative the well coupon leverage the within seen the currently market. making and progress debt

loan which other the investment Two have Walgreens XX. watch watch penalties from We on the office Finally, one our the of on three a Hotel, list as by modification, first loans loans par complex. borrower. way and we in with with March Slide CBD pay were and of the at equity a quarter quarter, by watch removed XX, portfolio off by ended of meaningful on three list, loan loans included together list additional our Brooklyn the the

a still loan CBD only on watch the today, office is complex. list of As

up As was loan in our of A put received payoff the to can carrying April. meaningful complete sale in portfolio. our be amount of back capital value, Hotel that additional of Rich at an a with recovery said, we million top proceeds completed freed closing. $XX in work this was On Williamsburg

loan who resolution. the of mentioned, positive proud We bankruptcy Walgreens to be continues held as The REO. it is are this to to bring in litigation. portfolio And our extremely diligently today, of worked team entirely Jerry in process as a throughout now

over like and to the the the back Q&A I to operator session. turn begin would call that, With

Operator

Instructions]. [Operator

is Our Erdner from first Matthew JonesTrading. question with

Matthew Erdner

quarter. great the on congrats now, right Jason for On

that large the one got the loans similar Are loans you one So opportunities in to the large you're and seeing mentioned this quarter in construction. off Florida? that and

Michael Comparato

few my us. increase a It's from three, would Mike finger are looking put a four now Comparato, Yes, Can't it to for XX at XX day. day going now, quarters the but for on increased deal flow is they loans prior has very why say I well a tremendous to quite I'm two, right over the similar.

a So competitive we the And been deal tremendous. been some flow requests getting noticeably, bid has larger really we're haven't for. that just loan historically,

Matthew Erdner

you think been do think -- has the Yes. through? something that what have to Do banks you or do with going

Michael Comparato

Yes.

as on it's going well within think banking mortgage as in and going sector. REIT the sector fund I the of debt what's on what's combination a

to to about I probably have and whereas to of given think office, privileged profile. XX% others we're to exposed it's office, play some book X% that our harder offense have XX%

So space, I that think in not playing we're just historically seeing played today. that lenders

Matthew Erdner

when Right. expectation opportunities, early on later your And then capitalize would the there those them on this would be year, to 'XX. end? What's of of half you given expect it half

Michael Comparato

we hoping I'm them Well, capitalize now. right on

we've So end again, just that date, quarter it's strongest already the under new the been. in And million pipeline to closed is $XXX originations.

months. that hoping in uptick I'm weeks we really in coming an closed So here the and see credits

Operator

The Barcomb next question is from BTIG. Sarah with

Sarah Barcomb

quarter. great I echo on congrats the the

see that your forward you originations? and diversification some hospitality that of just QX the off about thinking is going is now previous deal investments expect are X how credit and in kind sector terms of former exposure new should that, question, given sector. that to Or Top going here from a new in non-multifamily -- So we

Michael Comparato

It's Mike for question. again. Thanks the

multifamily think our embedded is I really DNA. in

go I'll multifamily, we several expect want last next to hospitality few So We're less today. are XX% either focus be probably running today. down flow to up to where what the to fairly I've close I business-oriented specifically, ebb more to that quarters us an the and been XX we continue on in and always allocation leisure-oriented, saying could focus could or XX%, it would quarters, and to hospitality. to say want travel we on for way.

I if and entirely look and our look forward think certainly, pipeline, you at it the multifamily So at today book as is you hospitality.

We not unique except office, situations. bidding are wildly for

have keeping multi, deals been hospitality to multifamily to that we've We would for where a us several But again, quarters. have exposure a past bid interesting right for few other focused, quoting industrial now. predominantly, be actually we're asset We expect classes. the our I right, and

Sarah Barcomb

of LTV about lending Okay. multifamily, low were Sunbelt XXXX, is And higher done course, saw just rates. thinking rent given most and XXXX of rapid in that your originations just we portfolio, when growth, at those interest

their negative expectations any your You as starting maybe negative perhaps when your at ability the level, I leverage in that prepared And were of you to sponsor's were you're are if rates was result mentioned NOI signs that? back previous remarks. risk a near deals the to curious in property on penciled with X. leverage any service in seeing debt And see coming below of

Michael Comparato

the Great I is the for question. the And canary in be obviously, mine to with coal going what industry years. X for think the dealing next CRE

'XX completion originated or getting speaking, was I tail the even business say, near we're just our we what of Specifically, end rents what 'XX, borrowers business at in are underwriting the generally and would plan. at plans. or through maybe projected of kind those the above of seeing

for payments, we that. caps their debt well past perspective loans the So borrowers levels we're of service If pretty from low with And wrote fixed these a to to XX XX over out rate SOFR months. it not really XXX effectively year loan, with happy through pertains that have had ago. every those SOFR that been dealing blew as loans then XX

going to expense. to they the out. buy be these in the pretty to have -- the at by maturity caps when point or the been borrowers deal the borrower. with come provider going and SOFR be expense would why cap So everyone has for cap, borne And which different increase moment that not a And are deepen cap is to that's at to by kind again higher a a subject really of money the meaningful run then

debt terms it's of because mostly servicing born hasn't So again, today, And cap that's any been really that by been to loans mature, issues happen. start as conversations provider. then when tougher in there the

Operator

with next Raymond The Laws question is Stephen from James.

Stephen Laws

that and what think active wanted been between on with the versus on about investment that repurchase. the up to base from your you you Can attractiveness of you've see allocating about reallocation But that's investments pipeline. Williamsburg. very talk in how I kind varies freed you new touch capital of

into Or that a do the how earnings expect to you capital? is about gets as should think And think we accretion more loans, that quickly that when recycle how about capital So of impact? we event? redeployed performing XQ

Richard Byrne

Steven, Rich. it's

with Mike add overall start origination can it's me pretty liquidity. he piece, We maybe to wants and on. speak proceeds. and that, Brooklyn first Let position the if large all, of the just cash a to Well, not Hotel carried

And to as seen, cake pretty so just regular -- and the of the think I mean, of making So capital we've the kind loans eat been way. lot deploy. to circumspect we our I want items it it, a about are on have you've and too. menu have

the heard to buy as back comments, our steep You a pipeline we an buying as Mike's our had back comments bonds our at well even opportunity about pretty stock, discount.

on So I think are the all table.

our Of of course, on have obvious reasons. lot peers for I been think a focused liquidity

future One of of healthy might have problems. to to amount cash deal just even around potential those portfolio with reasons any be a

table. as world, at So an answer I on debt have opportunity our to for we is we're going can when based going to evaluate think discount, the on that's and But at discount, think best about stock to and buy what's just going going each all to the we're to it. the make the we're our a it, buy we're we question? buy shareholders. a loans, Did that If return

Stephen Laws

recycle about how a you where financials, be for in a may guess, first not at LIBOR forward look protect the as I seeing It at you I've of at X. power to has maybe for levels, new curve rates get rates floors some and floors where is X Have next Mike, this Jerry, hopefully, mean quick guess, And to does, follow-up, portfolio of think then in you handle, off, environment trip year? capital looking Rich. your these to this loans. all it as lot going we the forward think thought as you, are about a I got I LIBOR going but a buying we own short-term curve for earnings And about of the

Michael Comparato

and to and Very Officer, Dave Markets, Head of and afternoon. this sitting our Capital question, I are Credit that Jerry down Henschke, Chief Matt Steve. talk about Jacobs, timely our

hedges Obviously, had advantage but down. rates QX of actively well, are and way that looked concerned putting we in on because as rise identified vehicle on different back early felt as I obviously at probably and some that -- overall That not was a we at, benefit way point. So 'XX to on to are performance think just the of looking moving had SOFR But a take the was such SOFR looked the the protect nothing doing protect at company rising, down. we is appropriate. about the

have decisions are we at So no it. looking made. been actively Obviously,

the trying With the some respect can. that middle We're get first Borrowers the the find to place lowest they highest a the we possibly are can. floors And to to floor question, to part in trying right? possibly get usually we of market, it's as transact.

the overall I accretive of that are We have wider in And We're anywhere. kind we're overall negotiation. overall really a active of decisions just the sand draw to spread looking it's a ROE. an just good line active been tighter But and of of for originate. credits giving for in don't bit business dialogue as we borrowers menu an kind little think floor, terms

Stephen Laws

if they're pricing to do picture, buy just seen picture, markets some of seeing in see. closed, Yes. and I you're to you spreads, for mean, I CLO that been you your get given the that, those I've Mike, what mortgage need can remarkably CLO we publications but guess not especially you for larger to floors, high view attractive can talk accurate financing she uses. And and the think REIT bigger more on what color. mix there, you've then own right? lastly, guess I the appreciate I And wider volumes. ask

Michael Comparato

think I'm operated decades, Steve. concept. a this funds, on leverage market spreads CLO Yes. loans space. financing fundamental to market that the going science, the debt Again, not not for mortgage Thanks, any means our And on question, until warehouse alternative REITs, CLO just the there. is by warehouse facility, we I But vehicle financing what new is say is can facilities. the rocket cetera, in experience just the et for than are not it's and better

or to buyers I to space, buyers seeming CRE in on void the of void my can't it. finger the CLO quite As put

of is it's seeing a here, of compelling $XX capital be I is, issue and think the down $XXX But to CLO, I a today. We're on the million can't there, secondary to I that issue to at seems if tell immediately. $X enough but market. the the demand million a you credit really are that decent what think talking you change. come bids think think And out size I stack up issue to issue don't million is you're out $X action there up than it's $XX amount is an the I million. volume. And going million it soak levels, issue. change And when new or with There fairly that's more going sizes kind there that's occasional

Stephen Laws

comments, Appreciate morning. you this appreciate my taking I those questions and

Operator

from Steve with Securities. The JMP question Delaney next is

Steven Delaney

reek commercial It's don't strong of days. hear quarter. really on again a nice mortgage to We much that. a see lending Congratulations these

accounting in a just Obviously, start. benefit things couple show buyback, to value. straight when there you your will run of book Just go the up your really and

XX% buybacks like to a share. and worked it discount, debt On per it me $X.XX looks to these out

So for Jerry, and within the GAAP distributable Is accounted is that that EPS. -- case? that both is

Jerome Baglien

book right. that that's in distributable... per value we the definitely didn't in It's of share, but gain our include Half

Steven Delaney

in it's So GAAP.

you, in but by distributable? implied not So therefore, it's

Jerome Baglien

Correct.

Steven Delaney

No, sure, right? because for Okay. conservative recurring consider it's would I like I say, and you a that's not great, think Great. item

Jerome Baglien

approach We'll of the in is value. and viewed view just how of GAAP, more Distributable said, how could it margins in you in Yes. a That's conservative terms the in of out. it's it. a air. leave we your just on it's up sort It's little it, but book kind took we

Steven Delaney

of all buyback there on is remaining all but million to is $XX And Or sheet, your balance is subject redemption? debt that any...

Jerome Baglien

buy Like find open it obviously, we a it a we nice it's if But transaction yes, address was it were pay this down. rest down could wasn't could se, pay we of back open it. to wanted where secondary we price. a to we could -- per the or able so

Steven Delaney

Got it.

Okay. And then clear one on Hotel. thing the wasn't Brooklyn I

You received your your original on loan. -- principal of all the

You get $XX revenue that talk your million of was paid the impact additional money property for accounted And that did can that was -- back. how you you about proceeds, the a $XX that first for and million, when in off? whether have

Jerome Baglien

I'll take Yes, one. this

we've $XX work of So the balance million carried loan the this through out. at

recognized So proceeds that are resolution. the income effectively any above as at

the us second we the for we answer that quarter income on the short is until in show nothing along had will So as up because certainty way yes, positive accrued resolution.

be So for second that will a us. quarter item

Steven Delaney

Nice.

recovery it you will is EPS? you when the however of distributable -- want obviously, to think describe your do be that of GAAP, you And it, that in you that would impact premature be whether it will think ask or nature Okay. to

Jerome Baglien

recorded the lion's or that's represents, kind that because income kind catch-up for of full rather. of it. we happened never think on be will really all that effectively finish It about the it the interest accrual accounting what But we of should income never least it's you when interest at when or the that us on share

Richard Byrne

generated... Yes, we the return

Steven Delaney

delay, at on strong time. getting like fully in well. -- Yes. you're for mean, earned Yes. second looks and was point one back it your on will money congratulations but sure. quarter the the as be quarter I Understood.

Richard Byrne

Thanks, Steve.

Operator

next Riley. question is B. The from Howlett Matthew with

Matthew Howlett

market what the that feel answered. know be from just at do my out? recurring couple been here, the of of the -- to mean there repayments, belief But leasing sort sort are sponsors? feel hear with with have lender a will have of keep this you sort years you see are the in be hearing participants we've like the know the point at longer will to there? GSE the Or portfolio, of are what we the CRE for sponsors theme getting earnings the a get want Most dates one I will I your cycle out are that are maturity your with years conversations you your lot that the of rates questions out. exit. you but throughout multifamily look of extensions been to When hearing is season. need Just GSEs I

Michael Comparato

Matt. Mike This sponsors a surprise coupons our in is anybody. are is not with Thanks, We're Yes. dialogue again. active where of all to

comments, I experiencing the not think is the that, would market. in probably prepared today. floating the leverage that rate heard me specifically flat rate We're within that negative fixed leverage market. our in reference GSE you I say

give fixed deal. XX either Fannie points So coupon XX XX-year you or can in or rate get a basis morning, direction X% flat, X-year, this a take, a out of Freddie for

kind of leverage. today, rates necessarily where hearing but cap it's leverage positive neutral and given seeing we're not it's So

facto of everything, that our going have credits to likely that's dealt borrowers XX or And capital have as write a a a stack they question for have the your and is a check outcome big really of situation or loss, -- a looking might a to or going say specific choice hold and a value-add with It's lot So on years rightsize book, basis. case-by-case with take don't to are years, choice. they always most And just de hold the answer players. themselves. would term. to and X be some I our just I loans not be assets think longer agencies these to these they're are into them assets. did they that financing get and go a to merchant for but developers to asset value-add or go cheaper a the

it, very In again, think similar I to it's terms with to going COVID. of our dealing be

a our best for duty do We to have what's shareholders.

clients we've that. do with that and individually for staff, some These will had years. we've BSP borrowers decade from at are our origination We also good borrowers a worked for XX

But we we're walk them also then looking to thoughtful on we listening, line everything. and are be to resolution their difficult. that a of looking their a good lender, have being partner. to reminding lender, So We're not a being get positive to not

lender in to lender or foreclose no a way We are loan a or to own. predatory who's loan

to work We would problems, in for and positive have to but way. we a exists resolution a like through amicable get that remind reason these an we'll the people lender, hopefully, to just loan are documents

Matthew Howlett

That's feel always -- look impact you very there have you lending When the you larger market. to to model and take bank at to suffice come some CMBS have you on mean amount happening do your at that the And there's further, right. do what's How with feel banks? in GSEs I now? your you larger will look you do model? an banks, point going the over at the at that's the GSE what think impact when Do the the look and in differently helpful. Will banks, be you about of opportunity? think

Michael Comparato

an definitely mean our it I Yes. on impact model. has

I void the center gobbled we're banks room space. fill played mentioned that up but for the is remarks, a we previously that think opportunities large seeing I weren't banks. were the we lending the the role big because money construction some they the just prepared least biggest or in in multifamily at by probably the can most in construction

more a of maybe space million construction lot industrial versus of of about millions seeing context CBD square And XXX,XXX, -- loan just $XX middle more much million the a -- to it's think building We're but requests. you the like is hundreds call can something an market or of $XX dollars feet. middle industrial of X construction banking you if to industrial the that, is now also what get market. land, multi it, million a up

opportunities seeing can't because trying what out say industrial they're that we're first for doing and they time, can the construction is what regional would very I much to bank figure So do. and

we've seeing of So more been that.

it's to yes, want big, don't maturing role So pay the don't seeing telling lot banks a want they pay just that -- are down just a want getting us loans big They out. of are that off, a with pay they playing we're borrowers a modification. and down,

in going the able saying to next void I tremendous of can. a trillion where X think all And willing and headlines we're fill maturing are years, that we're I ready, of see $X.X mean the to loans we so opportunity.

Richard Byrne

on Rich. maybe it's just to And Matt, of additional thoughts. couple a just add

the there's short-term talked trend. a and about a think sort between buyers and of I Mike long-term gap trend sellers.

not So transactions. many there's maybe as

on money transactions, a is but naturally being the money lower. much tightening has more You put would out effect fewer market, think that

banks regulatory is flight of So a those small the banks shrink a or of away one regional increases. quality banks lending. source as obvious either example of There's are

day, also who's about, So of that's though, funds that secular I the putting are money some change, of long because have who The just Mike change the some out things knows is to is our want near-term think public REITs load they're peers what or either a liquidity whether that out how in do. they doing, just exposure been last. or this we Again, rainy for near term, talked to they've I mean a to build office capital. will put

time, you capital can vehicle, down the reasons. have. invest prepayments, other for issue only most permanent getting which And a mortgage we're The quite REIT obvious is considerably slowed the that a like have capital of

much invest. have money So just to people don't as

to reasons, think to you're you lot flow you're for litter, I getting liquidity of like a kind the these if work in in of put different right there now what all is of those that the willing all deal So pick have categories.

will and opportunity we're but maybe next sort three, and you as some quarter of last right that where or replace shift because said, a I for of some of while the enjoying or were the like banks it's in the now. So two

Operator

to question-and-answer remarks. would This closing I like Lindsey to conference concludes over for any our Crabbe back the session. turn

Lindsey Crabbe

Please joining morning. for you reach questions. us Thank any with out this

Richard Byrne

everyone. Thanks,

Operator

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

now disconnect. may You

Franklin BSP Realty Trust (FBRT) 4 May 232023 Q1 Earnings call transcript