LADR - Earnings call transcript Q1 2024

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Operator

Good morning, and welcome to Ladder Capital Corp's earnings call for the first quarter of 2024.

As a reminder, today's call is being recorded.This morning, Ladder released its financial results for the quarter ended March 31, 2024.

Before the call begins, I'd like to call your attention to the customary Safe Harbor disclosure in our earnings release regarding forward-looking statements. Today's call may include forward-looking statements and projections, and we refer you to our most recent Form 10-K for important factors that could cause actual results to differ materially from these statements and projections. We do not undertake any obligation to update our forward-looking statements or projections unless required by law.In addition, Ladder will discuss certain non-GAAP financial measures on this call, which management believes are relevant to assessing the company's financial performance. GAAP.These this or not the supplemental as presented accordance of considered to financial presentation, presentation to of in isolation, reconciled our in in a with Relations which company's is information in the intended is be information GAAP available The figures are Investor our section measures substitute for website.

time, our metrics, I'd supplement presentation today's of certain which We call may Ladder's earnings call.At to over also for President, like and this refer turn the Pamela Form XX-K you on we to cite to definitions McCormack.

Pamela McCormack

Good morning.

equity. provide overview per quarter $X.XX earnings to pleased are the generated $XX.X for of Ladder's share, first resulting We XXXX. distributable Ladder an on of in or performance a million of return XX.X%

or first leverage reduced quarter, up increased $X.X As X.Xx million our comprised from last $X.X of $XXX the amount was XXXX. loan of sheet over the We down XX March million.These $X.X we dollar a represents the sheet cash the received adjusted including balance XX, and equivalents.During million to billion, of X.Xx, billion XX% from liquidity to payoffs loans cash payoffs approximately billion of of payoff balance full payoffs $XXX received securities portfolio, our totaling and highest in first $XXX ago. quarter of since We year year. of

the prioritizing leverage. totaled by preservation disciplined XX loan over our commitment million.Our loans.In wavered not on last totaling our loans $X.X XX-year a $X.X X.XX% and first employing company, supported our capital net X limited XX equity, a first Ladder we have commitments the fixed the supported paid million Following core fluctuations.At end the with while celebrated yield anniversary on for we the our of we've X.X% Ladder's principal that to billion another of note return to a loan rate of objective, and totaling nonrecourse sheet X Ladder with stability strategy, diversified included balance from has for $XX $XXX driving a weighted $XXX approximately possible and to contributing average real proud recent structure, earnings million to highest flexibility XXth portfolio our million quarter, and been the payoffs financing This billion quarter, modest are public funding quarter across of CMBS from we the end off, bringing over and February, total market estate future providing as across months assets.In offense. triple loans or back lease securitization pivoting addition, with through gain $X

looking in on investments, are new of this newly least obtained $XXX,XXX originators completed million for property, XX multifamily uninverted a earnings quarter historically of yield high to certificate when assuming Class Our we are process by forecasted to Los Angeles, consisting The only portfolio ownership we a all successfully February, call, per of renovations, foreclosure California. in fourth units leasing. renovated a $XX our on the proceedings during successfully occupancy unit.Since A in or assets concluded we works and loans are at Ladder's returns best.As quoting a generated which or opportunities closing conduit actively curve, business be pleased business, under back by presented application.Given the we equity new the is and on capitalizing steepening of forward at commenced basis

quarter, by multifamily the property fall.Also the placed We on million first we totaling loans in lease expect nonaccrual. to stabilization to the X $XX.X

behind $XX.X secure. constructed portfolio a position mezzanine million of first in is lender, our New The The by loan a million who secured recently York. buildings Manhattan, the sale $XX.X loan defaulted apartment a loan after made

Fernando Valley XX-unit loan loan a a multifamily loan is the second California. collateralized Our unit.The $XX per stands million of current San approximately by exposure this at for portfolio $XXX,XXX in

at and current at for title this business for pursue stands the appointed foreclosure to exposure were specific assets our been receiver take the our modestly align during general identified the Paul as market to there more we reserve conditions. with and CECL no $XXX,XXX Our market address of We quarter. lease-up unit.A per complete detail, in impairments rent.As the approximately to increased has loan will plan current renovations assessment

and we for us team best default with rental dividend ended of consisting such with of rating X ratings securities, remain X income collectively shareholder.In just the in net our an with first in yield the weighted portfolio credit a all issuances, optimize addressing the are investments comprised believe over of X real alignment plans quarter X/X outstanding, million business issue We to full believe continue and value well investment reflected executing first our we estate our to $XXX stand X.X%, unsecured quarter. experience, also protect of navigate and that Paul. of ample properties the leverage we curve.We financing our seeking value.Regarding goal market balance to default primarily primed the making comprised of with market conservative to depreciation, a portfolio, the as a or that new securities favorable.In AAA have the XX% to largest own robust and Ladder's XXXX go securities total dividend, our our U.S. distinguish are are to of a stability capital Ladder of asset debt effectively leases longer-dated net positioned between when real credit bond over agencies lower that million consistently and agencies, noting challenges grade necessary than from committed the our portfolio, in billion Ladder's $XXX and unfolds.With of turn for conclusion, a to $XX.X downturn strength extensive rating while prepared a of company, management property capitalization earning long-term offense in worth approximately coupon contributed I'll mainly the tenor through of long-term cost lease to X.XX%.Our an that, sheet we and estate million unleveraged call to is and stated losses.We've the notch our average current a is promptly one remaining we rate real unsecured X we and on The by average well-covered remain years with which as and investment is reserved adequately stakeholders, Board below any Treasury past is unsecured the bond dry entire company.With loss. Ladder's grade.It is powder, bonds operations our $X.XX the estate armed potential senior corporate and totaled that the

Paul Miceli

Thank stable EPS million interest of you, from to average from XXXX, balance Ladder a portfolios strong or estate and earnings Pamela. of XX.X%. the market distributable In generated of $XX.X equity Earnings the commercial operating on strong and net to the return driven $X.XX for distributable first be in continued real loan net our first reset. quarter quarter estate portfolio.Our continues real our income securities by income sheet remains of as

cash Pamela and billion of liquid XXXX, balance remains as XX% year-end. position highly our its equivalents continues as cash since cash Ladder As of our increase XX, or of with sheet, $X.X discussed March

million. primarily in the increase totaled fully revolver unsecured loan a million quarter, remains was $XXX our first which addition, cash in $XXX payoffs undrawn.The by driven healthy In of rate

across balance total portfolio loans, specific of XX% quarter totaled assets.We $X.X record of loan the billion any impairments did Our XXX sheet representing in end quarter. as not our first

basis U.S. approximately uncertainty reserve However, XXX includes $XX properties, the state our bringing we points increase estate overall the approximately continues increase of portfolio. XXX the by net the operating leased The continued by in global real general representing of CECL XX% million did to million to $XXX was of and estate reserve our or segment stable conditions.Our generate loan market income $X.X our net million, commercial segment. driven and market real

current and to million balance equivalents and XXXX, billion as unrestricted on real successfully of of these source syndicate same this potential the portfolio undrawn March day of our real of maximizing assets our cash simply discussed capital Ladder which Ladder Board pool we investment-grade March believe million in carrying relationship of and outstanding dividend principle this XX, estate XX% plus Subsequent first XXXX, our our debt, below of financial a from corporate the the of repurchased quarter of bonds the first average maturity potential rate facility owner owned to leverage Our of of coverage unencumbered repurchased large quarter provide per a paid of our XX% value of own our we the with earnings, strong bonds carries XX, to to well we rating estate, at million.Finally, interest XXXX, was new first from of buyback or share Ladder's grade to of attractive of of structure unrestricted in million. generating represents pool tenants sheet, the approved XXXX, source XXXX.For X.X%. with mortgage Pamela attractive XX% remaining is upon extended April, to the enhancement producing April and the which portfolio asset revolver financial the unencumbered with quarter first our March complementing the and a XX% had capital our liquidity $X.X earnings, available at we per share increased to or rated investment double-digit authorization $XXX trend and years $X.X which issue X.Xx Brian. book same quarter an committed foundation price amount our debt.As and bond financing. credit turn credits, XXXX investment of investment market set as of share. in XXXX.Unsecured our on value discussed, refer our with In supplement, of believe XX% $XX.XX a remain unencumbered average remaining over comprised per Ladder's attractive notch track liquidity corporate reductions balance XX% quarter, demonstrates share well has is approximately equivalents.Our manage strength end.Ladder's fixed March gains of our have long of In $X.X of favorable.As at the in net pool of and Directors with X-year call, our a unencumbered quarter assets at while with grade common rate we XX% XX, assets.As corporate coming return cash of quarter And continued SOFR of unsecured declared of down balance the $XXX,XXX over earnings stock of to of coupon covered. as end believe million website Undepreciated was are equity XXX.X unsecured was with retirement operating $X.X foundation X expect value cost leased remain was on $XX to our Ladder in significant We're reflected from in details call delevered to our grade to cash structure rated, turn in with of operator points combined of the report outstanding. and historically of XXXX. X our dividend, to of the of The $X.XX remains are liquidity, $X.X liquidity asset primarily billion readily we financeable, as strength securities weighted finding and stood have day rating.We bank unsecured of corporate flexibility agencies.Ladder's which XX-Q, sheet, we the X the sheet. continues please we our weighted high-quality achievement AAA with on unsecured unsecured prepared long-standing portfolio shares total of and an We basis as billion new of of results, ratio $X X a and adjusted XX, that, was and corporate to demonstrated, on first days.With an plus rate strong the one additional our quarter of of we our I institutions.As nearly our capital Ladder's we XXXX, committed an over operate. the par, primary Ladder strong capacity loans, our Form file bonds X lease leases flexibility. which of this skill steady quarterly dividend first XX, years.As we the cash our securities is our term a This record long-term $XXX rated of when is billion, and revolver in of is $XX.XX position solid being XXX and an average will of prior million.As provide basis as as first on

Brian Harris

Thanks, Paul.

to have cycle, quarter, which business.During the out for by of Ladder of the have rate Middle for business, the due and to years. do the had changes, accompanied to not successfully our interest rate were regard reentered will absent approach are quarter, pleased and navigate persistent inflation interest managing termed the tension business to low-leverage current our continues revision first been to years through in credit the we impacted nature next.With East, securitization During general Fed been that predictions continuing rising significantly our rates, fixed we constant what the loan liabilities our to from we

million problems We've hopeful pick to received our when XXXX months, interest are That X highest that of that banks manageable. interest of in business time rate investments in at securities problems cautious, we We believe foresee.While and restarted business, up million conduit for perspective, at were lending that pace big we they also pace with we credit From Ladder's the principal the deals reported thawing up origination over easing has should reserved and market just rather are high low payoffs a the market because adequately even on believe is same they loan $XXX first decade.Last in potential we received to quarters with began, and liquidity loan believe we are creates and potential $XX reserves, quarters we week, additional ahead, a made the largely approximately for loss in of closings feel ahead.As always generally model, that in a this a forward and return $XXX to a totaling limited expect paydowns can year-to-date. will if payoff have can free liquidity million or some simply be as and borrowers in us as while, to an end. higher and now will been company are plan rates marginally, beginning need leverage the out year ROE more contribute will accept money historically of the of XXXX.We payoffs. the rest questions. loans accordingly come loan be they for another we've loan at the to the Ladder.We to a to new our Armed improved look strong of take seems way rates disciplined volatility continue we

Operator

Instructions] from [Operator with comes of line Barcomb Our question first Sarah the BTIG.

Sarah Barcomb

us hoping bit. could extent on I the you or was give you looking for color I at we pick this looking especially sounds deals acquisitions volume cost deals. expectations X Any at? could into the the a pricing?And dig we little inflation maybe today. that were originations you're was of up you're some hoping asset that given coming trend could market, ago, out in expecting new like about to It months your not might just off the maybe talk

can give us you some there. hoping color Just

Brian Harris

to answer will originations I the Siper, volume okay, I'm punt that's This probably Sarah. Brian. that is Adam but Thanks, to we're going regarding over seeing. question, if

a bar X. pretty have pick low bit, originations going was from we So but it little seen up a

be little I think, condition deals of a for our a wider rates of of where So quoting I a as more. say loans that we're also.So not move volume although it's are recently application. are And couple think, to hopeful year, would We've lot apart, bit begin spreads result largely have falling we will under fairly a I going. it's do -- of the market, a Ladder. muted lot of the condition a A not been

And wide $XXX He's a to can -- right and instruments has would I'd our of fill Head so securitizable XXXX. have you're warn an probably what seeing? you I and in estimate that left million and out you. out to I'll originations I just if now, Adam, if margin, -- for you.So But want throw throw would address

Adam Siper

Sure. Thanks, Brian.

So rate have tougher little benefit reproduce do seeing recent loans we new the handful opportunities. say, conduit pullback, to opportunities still to construction be a, a And pursuing of on also next based and the uptick, we a is multifamily tends months. balance refinanced, a that still slowdown I'd property. are both also find will there we're bit definitely off-market highly we're that that are which the either still for need are of when those to a them.But continue industrial acquisitions attractive for but sheet that loans think we opportunities, bank to that but contributing and be XX And from I loan seeing maturing

like So optimistic. cautiously say, Brian

Sarah Barcomb

this gears in uptick portfolio. foreclose is Okay. high assets more keeping to mind are? the or switching rates. environment? sponsor an update ] [ maybe office give you where just assets in to debt trend And in-place where year could yields the multifamily on multitenant on the rates and And maybe on Also later What your expectation recent maybe if stay the And could this you some foreclose? inflation decision-making they in us

Brian Harris

is might you that have you. third we later first half the first period said funded trouble probably multifamily, and some I would bought macro already revolves year XXXX if time in Usually, when around of half success.So XX-month the when coming to of because the arrives, is, long some at I of really year change, more year was in to is that it a as second to, of up But 'XX but to of years that when the the things, usually the not the say, X expect to second this the I've foreclosures. you is hand that result where trouble. get go of perhaps -- mainly Craig, end the quarter would would commentary I'm seeing, on debt will yields calendar. expect I'm Sure. I side what off have

in 'XX early wasn't labor overruns, into cost with construction that the it if hit a the to up late Just expenses. you property switched of 'XX had end then got rehab properties. was in of late costs operating it problem 'XX you went And 'XX.Multifamily, and they 'XX, into, a got was, newer additional newer lot a or and early we insurance

part So kind think bit hit giveback.We properties that simply million have of of that sector, evidenced there double why whammy with believed we not that a would be at a is overruns and and that the an could has to by leased, better quite do cost that's loan newer I $XX That's now quarter brand-new this inflation off understood have today.But calculations we've stubborn don't is looking see Ohio. bit property paid are falling. quite rates Fed when is I things, on at the they either. reported of the never it a a And facts in I say are what higher.

so is be problematic. the rise, And of But rents multifamily to particularly sector will the that insurance that helpful. I continue suspect and side

in if cushion hybrid is very these here in finished took as you've and suspect I a out addressed light a the it's about REIT rehab yes, the got a some owning will think I like CFO REIT one market. quickly. it not where, of now it of on title few mortgages Pamela, concerned to We units California, properties, overly built bit a got and little I'm that a and So with continue.However, enough we

a put $XX apartment mentioned, appear this brand-new brand million the a I $XX loans mezzanine $XX provided. have restraint yet.And for were was on to be construction, problem the do apartment Ladder, the big not has equity think, made, not default quarter, building could case, X one looks which that asked one. a Again, world in think mezzanine there I a of loan or York lender a about the showing us. be bit $XX bigger million New a lender, because a and to the than the in I million provided -- handed the million we back and to does of City one being We obviously, A we're million have was, we in the lender we other City million seen out.So the Yes, into it that we loan, been new. thinking but complex, defend. $XX ground-up a York may like of XX% property. never wiped was little loan New mezzanine losses, buildings, X Pamela $XX part a mezzanine leased already.That when wiped didn't it's in

$XXX,XXX to unit Those would if did at take rising title the bad Manhattan. time. in we not building and brand-new in entire throughout have a So continuously it near are rents a that the apartment numbers, been property in on term under Manhattan be the

hiking So oftentimes of the a why comes but amount default sold we're our are been the said these problem buy all, it not is a don't we a But word to observing.We And conversation we due. room when not macro an indicate phone that or whenever the reserves, and we the situation to the buyer we've that concerned time we're times, lot specifics. in that it's a loan to. on anybody to one, issue we've have loss. that a CECL default foreclosure loan the foreclosure.As don't Because, actual in to we got payback there somebody of notice want second calls, -- overly is the than more that's A it. wants party rings made it's every of notice, multifamily, about

them of properties, as always a cautions here lenders. shortage. may in may handed newer be far salad really problems, year. turn a to fact, wins losses I I of good be large the think there'll end the going some And lot property, they back thing at quite into few nice be So absorbing housing go. the particularly think not be acquired.Again, I as mixing going of because there's to And think a lenderswill But on very a in

been that's some where we you've have back. think out? we've you those I taken on flush Can got So assets Craig, comfortable. debt yields

Craig Robertson

Yes, high When the occupancy We yield. XX% Xs low at overall multi in look sure, to at that the see portfolio-wide about were Xs in mid-Xs. our debt stabilizing portfolio, portfolio, Brian. we on the on

mentioned, As taken of pay significant been off. the yield over XX Pamela a in we've that when debt low that's past place amount that's over multifamily, same in those of half and Xs in been and payoffs months

So we feel very good about the into debt yields stabilizing territory. we're assets seeing and the that path to getting these yield debt mid-Xs

Brian Harris

about rent with we of I'll -- finish buying some rely for in out They're guaranteeing because up yes, And not third what if happy want obviously, a the the caps. Sarah, equity would to asked grumbling.However, XXX And on to them. they're behavior roll office actual prefer lender part. We interest those are finishing observations our you particular, have we've for party the rates. and It's payments just portfolio. standing cap caps. made.So say, that on the behind they're anybody the had as to them cause activity, the -- fairly basis but standing most positive behind We not I prefer into points And opposed you getting largely column column, question consistent. grumbling, move will borrower and are. They the

the and We was reserves additional simply and the have on loan whole where individual a California, thing. requiring very a some guaranteed wealthy property

and property the million. the really it, principle different to -- of posted finish how have Westchester we property us up guaranteed to interest had to wasn't requested in the we where of put he continue.And and sold a but the down and it reserve a also sponsor needs right another all partially that $XX and around get reserves paid discussions So as out

again, asset, the the commitment say mood, I wouldn't still to So asset. the protecting showing best in but

we pretty feel about good there. So

sponsor have So more will. are not the that lot does the any have they ability, overall, of simply capital. the assets they A defaulting, if

Operator

question comes from Laws next with Raymond Stephen of the James. Our line

Stephen Laws

mentioned for anniversary Pamela. yesterday, all like your you dinner off, were guess, on your Seems nice you a XXth a we IPO, guys. congrats of I just first milestone ahead at but that

a appreciate color touched the originations. lot You on there. I

XX to other As don't the portfolio. in of did that years almost guys things I think we you kind some back really ago, see

attractive some those You to capital deployed, at buying It bought you amount some from looking existing discount securities be about if looking like lenders.But investments. back the talk distressed may seems about outside you any loans of loan you Can think have you originated through at opportunities as lenders. estate pools assets buy deploy, getting of distressed assets? some or to and real hard thought newly about investment you being of

Brian Harris

Sure.

your can said our can comfortably. somebody safe; think Because, they're I call, them one, you two, today, they're investment to I last in what's whenever me, and -- you said and liquid; finance them favorite probably sell CLO AAAs. three, pretty

to opportunities for them see being a harder see equity tell time an cash conjunction of hard that, else. around, operator look in we the I we're of it pretty purchased not. probably office that at the think it's beginning As and beginning do further to couple And really a you see there's longer-term some you'll of sometimes, couple, might part that's attractive was have a financing seller really on.So of it the one company probably that's have to think us the But does a then bifurcation And flow are it would ago. some I to where and not attractive that being it.And it it just -- what we the flow building, might doesn't financing fit dividend-paying opportunities it not with starting And with would that side terribly leveraged, so if the last REIT. property or purchase, isn't buy what to sold buy there X are really we'll of cash X.X%. have doesn't a somebody. even is does I into drawn fraction someone matter at is AAAs even years I if if is the much.But X And that part might this But sold really or a us comfortably a asset or attractive. not? does doesn't we're focusing cash because leases suspect in CLO treasuries we're We're see office more flow buildings, than predict further, have

Stephen Laws

You next opportunities think event really a more do you think year? early 'XX or that's those

Brian Harris

think mean, But one a front them, deluge going We've that's 'XX. got you -- now. of before I a to a will year-end. but it of see X I us, be be couple or might in right not

are who's under staying not are up and to us. at we but walking midnight see anything, around contract them We with buildings around with late walking

suspect So yeah, something now. -- misunderstand right will we'll have do But under contract, do out point before year-end. anything not I we me, don't I

Stephen Laws

Sure. When One consider you earnings think in this and liquidity. to of of goes about, I Where do may. amount lot a can once returns accretion incremental lot deploy excess liquidity to right want the if today say available generated normal to operate? But of normal you a world. other about think money earnings liquidity, you you work? how or excess be as what power when this in is liquidity, you much can Hard question, you times, obviously, what

Brian Harris

rise now very under stock do picture levers said, running we go to couple We've leverage, like adjusted the Xx. interest calculation, how Sure, and and X.Xx? liquidity do of mean like we much question answer quick and leverage of the is as always just we're Maybe buying we're we pull our rarely with comfortable create our if back. between earnings. One X.Xx. to could easily. X.Xx liquidity stress. Xx markets We've more.So deteriorate get have a to I we go the math said But others to is can rates we is enough, right

side than deliberately and borrowed of thought mature bond bond on actually the 'XX in issuances world, the of 'XX is our both Another we to were where we going that more we need.

So you're because we price and and one you yielding -- and going payoffs these yield the plan one dividend at look should rate bonds if times to opportunities that there's Xs. day.So have actual on said and the our high X%, on I've coming our million is the because having buy anyway.Currently, of And probably due buy few didn't certainly we $XXX to a X.X%, that, think the between of the versus calls is. that day bonds what a kind bond are is dividend same, of in on the lot there, I on the

we'd point, transact towards were stock on So to if lean Ladder this we instruments. more at probably

I how have inventory little another you're return relatively really that originations think enough got, on but if liquidity eat the a been on this to obviously, those billion, we you say add securities. later unlevered there and words a easily capital. up we've much could hesitate excess I pick could but little It's quickly. turn do not just $X.X creating quickly with can on we -- lot these careful.So would fork you or and want can new earnings we ramp a hasn't of And new more I securities, levered that. we you it -- a thought

hoping buying for. have been them, a we pace were yes, coming that, We not but they're at

Operator

Rahmani Jade of from comes KBW. with the line question next Our

Jade Rahmani

opportunity you passed not that Would like your a position you the say was today In environment, mean, to bullish on very X everyone the on picking could clearly, terms the does too give on there You ramp things CREFC, liquidity of the today? early company any was quarter a volumes current color the compare market originations is an about sitting how lot of originations quarter? strong year at in ago? where with competitive? And you I in are didn't super up up. deals versus was attitude or

Brian Harris

remember, thought Sure. ago. that months to been people a point. has that say all or going is all. of back cut And X just decided our changed never That is rate the Jade, had X you world this changed Yes, was at at X We has times. if wouldn't that. CREFC, where this Fed January that attitude at in I

in fell we'd apart.And the think term curve we where about that has originated. not the originate rates several the one quickly the take overwhelm that think place. transactions our loans than in most have part that of discipline. happened, be securitized of have will accepted, of things moved especially to I interest the very here, exits more near credit higher I But we have to happen like desire seen And quotes

attractive, now. It's just some right it conditions. So market is of very

got to X.XX% there.I If and make you that if money. of do than X.X% flat have with can hesitate a it's you've them can a here, rate instruments kind you've on a and you because interest a buy -- hedge curve, longer difficult lot fixed carry you SOFR rate got yes, duration put to to interest and of

happen. say is is, going was little -- attitude thought our I it's So what to would we a bit,

and China, will about in rates from they we we'll lining we much talking year.And the discipline of said about just down between they're probably think slowing higher rally the be be borrow the of talk X. their United go in talking up. higher, about we they're it's going think but And talking money, lack throughout going a about If we probably higher I think would rates.So economy, to the go in States don't we'll volatility I economies. a and U.S. they way rates fiscal could flat before don't the the continue little here, side or the because treasury, those thought

I X next. down day will be up think the and it

that So to the answer think I while I hard here. I here, back think is year, vague? was head here. very that year-end.So the think and see on it's the although there But at near is seems we a probably and too that's make it's And desire I do estate with down. problem just bad end -- sector a it's has or passed. Did real we be worse. got top with about XX the for call commercial we'll real X.XX, before getting it it loan probably that it demand because We looking little of right now. We I think you will think worst a when again But is the thinking, the concur

Jade Rahmani

does done. deals overly I there to demand That isn't understand get could mixed you clear hard sound to But not borrower market. Wanted -- you're a a if It's Well, you clear, it's challenge. like but recognizing there's ask it -- lenders. appetite from

Brian Harris

last give couple conduit there into deal. now, have XX or with a originators, the I I'll evidence one X out that. of pool. cycle, X XX, Yeah, there take loan of mean, a I if conduit XX, were would at look labels them of a with see in you names, transaction We mean, you contributing some now further deals the in

aggregate indicative you do you need they That So nothing is you contribute with all a to you of has when supply. really easy lack originators the them XX But to do market. conditions about and and or to get X in Ladder. of that of loan, know that has not see it.It's allow to just with tells how together that X one

Jade Rahmani

putting more And think Is you business? be a do do do to that teller conduit see hat, of than small there? originations Or opportunity you sheet your will going balance on conduit? fortune the a Ladder big part

Brian Harris

I a think think of for stays be the business it I will the but we want as side bit the is not be. as balance will own that think bigger curve it challenges. sheet the because have long way set business conduit conduit, I yield than and of to its longer, inverted, just

X-year drops, that the take the the steeper if will yield rises, when and XX-year and business off. However, that's curve gets

Jade Rahmani

the then lease another lastly, net could if squeeze And one portfolio. on in I

pressure in know about high-level Dollar Dollar you Tree portfolio's that space particular. Generals, just the you been the demand feeling lease your has you are overall give outlook? Just duration? what see a little the How tenant I but about and There the thoughts on and retailer in portfolio. have all bit of

Brian Harris

I relatively got Paul, bit it have quite long-term can don't time. we've leases start you I remember We a looking it. still. right of now. But know at

a the I are a slippage, General out was model Dollar tough geography of portfolio where accepted.However, will, where cautious rural that Family amount Dollar portfolio, we supermarkets coming town. certain and originally, lakes Dollar, And in we places theft, it's fishing if wide and in there there certain of like of largely that -- was and around We think, Dollar single tons been store employee curated have is always around. is sometimes areas in not our stores areas, of is around you in a felt part like

we at of and lot a products of beer X a X very just about theft. for very X we've of tobacco wouldn't all wouldn't we X buy them years.I so to area, about totally when but our in Generals them we leases recently around extended see looked call either. little tended of So and call city certainly at. bought their them inner I that. XX sales Dollar every rural been looked Florida, I cautious Generals, But -- And out we Dollar our

figure Amazon, out companies to items that through think much selection make sells. but that XX few is And CVS There way how just inner city out do that, instance, problems criteria probably and think get But clearly chain are can big through a so adjustments us retail. they this.We some it. for figured protect the I are area, we a in that about top the drugstore will worry

But up open get to and I'm home they as of will it at a it. CVS much way. to part drugstores, too going it about your with items well. stuck now just I trouble as Dollar deliver it not this fast.So as large, and the far let So and don't goes. got But we've suspect We But very and them overly like stores. just of couple obsolescence to went in by fight a concerned I really they're that supermarkets warehouse XX those feel doing

Operator

the with Our next question comes from of JMP Steve Delaney line Citizens.

Steven Delaney

a gain points? to the was about basis little sale that bit. that Pamela, loan Great about XXX on to on strong that start million I on a want you did mention to circle Congrats XXXX. the just business. $X.X hear conduit up

Brian Harris

it Yes. on Pamela I X.X%, think And are you is $XX was on She XX, million. yes, is and there? mute. it

Steven Delaney

historically, obviously, this us has some And how your I ramp give this million, $XXX apologize, and very first half how of rough highest $XX that million number. terms of Got gain. a it. ROE you sense can Got just of And between $X.X in business know it. loan, been of back numbers. half million I year might segment. big

next might of the year. quarters get that a step sense up Just trying over to X how the

Brian Harris

won't I mean, Steve. I not. now, slow it's right tell pretty It's

we're not impacted But So have to impact May, the year. to us to lot of us. by with back given things has for do that going that in a the I'm everything that that half fact tilt almost are -- don't the

if and which is that next question going that impact. to the you or less the the -- where rate pretty the But maybe little there's this and the half the would have more quarter pipeline it new the ago. business, always months to -- we're when the will, going the and me that conduit ago, be of So won't. thinking higher origination at asked moved always has has of maybe the you'd are X side aggressive.But pause, they people that It takes there's demand. if right slaughter sort move going can month a told pause a has plenty on tenure I that's in place fence of they sit to go they bonds, were you there's rates collateral back And that now.However, produce demand

are that high. high, So but not rates spreads are are rates terribly wide, the

And so out there's there. good a bid

raw but be the just So material business, of business. time we meet to side can't it's the the in good a

Steven Delaney

fact helpful to your the we'll is year for back be has so on that. the very stuff understanding Lots end much that's careful weighted, covered. that goal Well, Okay. just been of

got but what to -- With you've see What be stepping a for was to on just next would minute.Definitely, or reducing the obviously, holding. management dividend, we're What I premature you dividend? respect turning to make the to or thinking things, to won't see XXXX. a this increase period start moves and X of to dividend to So coverage the applaud increase defense this But quarter's take things one as the stress, year on get the from it into and I want like confident comfortable last coming you earnings. year based reset late Board?Your belabor big realize to or cash to good out specific buyback back you for I and your would of picture would offense about it's there.

Brian Harris

taken our is, have else. this have be plenty going are REIT the time, discuss should I the on market. are dividend, comfortable gains talking everywhere there's of what's general, in multiple mean falling don't Most I and about in bit to that We have a market a and -- raise expansion you that the side. stock about bit. little know, place through stocks on there we more on in little broader to think going a But the few yes, of that there's as stock reality earnings. I'm just and the And situation we the driving all discussion train hell with

a of healthy setup every dividend we have get we they to very think very low we X there.Interest always we of that a Right the we have lot feel that the doesn't because suddenly. to it's sort and can high that that marketplace ownership rates like now, there's insider there. really that but leverage. levels helpful. stock a safe, for just exists, So volatility pop be excess you rising continue in have, which well is believe dividend, do rise formula in get raise a we and if the incentive have because And amount and our And and cash of the should with the warning, demonstrated earnings at up don't a dividend, that price.So opportunities we of -- drive of

same feel like feel that point we're I the of the is bottom. -- overriding there and media a thing issue saying the Because this I another probably at the real turn the buy But until like and and it so our earnings. it's And cash. holding its time of can better investments at we're time happen of we're point.So can that commercial covering, I by that ways to probably the where are holdings. and to afraid told that our period and cover on could real sustainable.And the is estate.The in dividend and think mean, worse, do, that of towel do raise opportunity make We're at you all estate to our on we that the would an that not dividend. coming. not lots that can't I that real dedicated all one But something almost there's thing drive over, ago, when I is, with the So it's and of cash estate to last to to TV uncomfortable for think time do not not morning there, we we won't I'd you us holding a ink think on now. over easy if feel bottom. like of seen was last pretty hear us their amount we have about feels so the thrown about but it cash widespread. sellers hear you're long makes kind to our it's for I there, what especially extended be on We've here wouldn't

Steven Delaney

to a would this do you And sentiment in to might certainly rope. or you'd Yes, And raise the push market you would estate, might reward raise that. hard not... if probably this it -- stock market the think market -- dividend, if towards you the to like real

Brian Harris

with real and -- think where went had holding company mean estate we volumes start try door. right just shareholders bondholders respectful don't the low demonstrating a I doesn't this to or by also. our a returns.But because our doing were And we're pretty of it relationship we've in a taking that now, Well, think enough it think tend popping with out X always we a quarter capital the our reward Yes. job and I I discipline chance But to we're good for too. would

stock usually, we we buy when So dividend. our our back, raise

of at keep buy all We too to aware back the bonds that everybody fact also our time same we're watching of it. the

Steven Delaney

that. Yes. noticed We

Operator

Howlett this Our morning line comes from of the with B. final Securities. Riley Matt question

Matthew Howlett

a the or is cycles Brian. commercial we worst it's go say estate one, quick just over. mean think a I just to at statement real I the thought It's pretty and bottom bold a

people worst you know in assumptions quarter. if as that have I at today, do is moving And going it. think part over, being we maybe of is general look distributable, look some every forward, in the this to what come that. there but that's to But point? how some my We at it reserve? basically down, it at at place CECL of is we the I onerous banks released have model if if not if said you, it's question should look

Brian Harris

as the worse, when it's sound think, commercial hope said, I it believe I and getting but worst but -- the still getting estate, state I we over, is real doesn't say a But I think just worse pace. slower contradictory. of we at it's

by surprised the loan a you're own you So your a real to it's lot a anything on not. going to you book, or it's in know problem of if not estate be going -- and now.If be commercial

that, guess, what it because little $XXX bet when one I easier want long regional doing the said in the get and wide it's much can market, for huge of reserve, refi very if banks principal payments. effectively absence different we'll change you -- depending add looks can't we real a take these and can means.So pretty loan a -- to is on don't here.Having it. feel the CECL in or what it does, you can't X.Xx a handle levered to is I we value million liquidity, estate the things world like, maintained what events what when $XXX really in about quarter, and this but do So debate we company, too longer next we go like here. that, I just all quickly. to also payoffs drives inventory is party I've debate to what another when with $X And what no government the technology, think the about on had sector that too. million we've with a But happens. wrong this and million we comfortable set the you and office our can again, get is of falling.But more you but And add opportunity go got our Depends

little at sitting about we -- used sit in X the So glib bank but time of every a good hundreds to be to spot I kind got want to we of payoffs. it, it's it's a millions Because with don't in. of dollars be

X.X%. Now it's almost

the other see they And commercial years real -- -- it a X%.So read hand, got going comfortable a headlines, country, X out. famous of lot really as you're haven't as are ago, buy bottom -- selling that CLO, reasonably people XX% hit you -- purchased to at all you involved. were catches is on at these long stuff lot of for you when you that I very the little sentimental mean, happening, bear still just AAA say stories I liquid -- things you highly in you get what don't amount when a but the times about yet.But I the estate, of doing investors. It this of estate of If that. look it's these And for I for when think sold are people real

fact look amplified about me, and does rates. blow have its X that -- had get that not to of we XX fairly by to real impact the through years cycle overly you normal let concerned in this so estate like somewhat And it.We a interest

of have time although after plenty lot a we up just to nothing get what there's we leverage, gin late new and production early 'XX.Once we saw of XXXX. 'XX, through to compares 'XX in the So not

people be things on to are assets, on to pretty I in they expenses And multifamily point. are going high naturally, now hang where cap damage hang and will sector, that them, going tight So to have And that lose their are at people that widespread to have seeing bought to going those very some going mezzanine though them. slowing to are them.And the think in rates lose rents doubled. and the you're even sector

X.X with up I anything something not me default. the We at expensive, a reserve we're I percent a just that a investment that And the that. you're going very decision cap and you at anymore.And people somebody -- shocks SOFR just think pass. giant see why sells when a I have think a not some to or to building it's there.So I that reevaluating price, corner big bottom. So the don't don't to it's earth little gets don't and going it'll when a hear are buy Though, calling of somebody low just is understand puts

purchased But few that and probably and ago, all the if X not were there's think things I you've -- due as numbers, them next they're they're in what's heard don't office coming the to fine. buildings, me years. you years X need from yes,

Matthew Howlett

I Well, and certainly all certainly good Ladder envious quarter. congrats really with your is capital. color excess in an all appreciate the the position on

Operator

the Ladies any back and I'll gentlemen, session. concludes question-and-answer Mr. floor for final comments. that turn our to Harris

Brian Harris

pretty look Just and lot market day for it's getting us. and comfortable mixed in to time the difficult we paying today. Thank know I of you you we signals. taking appreciate a to thank a attention the feel understand us But you.

Operator

Thank you. This concludes today's conference call.

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

Ladder Capital (LADR) 25 Apr 242024 Q1 Earnings call transcript