LADR - Earnings call transcript Q3 2024

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Operator

Good morning, and welcome to Ladder Capital Corp.'s Earnings Call for the Third Quarter of 2024.

As a reminder, today's call is being recorded.

This morning, Ladder released its financial results for the quarter ended September 30, 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. our cause Form materially actual statements projections. to factors for from you and could that results refer most XX-K recent important these We to differ statements any update We by obligation not unless required undertake our do forward-looking or projections law. to

information discuss company's will financial non-GAAP information to presented not presentation in management of Ladder call, the company's be or accordance measures substitute to presentation, as website. the financial reconciled Investor figures intended isolation a These GAAP. are GAAP this which the are our relevant addition, our in assessing this considered measures financial section which certain In in for on believes performance. with in supplement of The Relations is is to available earnings

our and for XX-K refer We today's earnings which may to also of definitions cite you presentation call. we on metrics, certain supplement Form

time, At to to McCormack. call the Pamela this President, I'd Ladder's like over turn

Pamela McCormack

We're XXXX. pleased Ladder's morning. the for results Good quarter of with third

generated $XX.X adjusted leverage During return X.X%, modest by period, resulting million supported on X.Xx. equity earnings a share, per Ladder of in this $X.XX of or distributable of

remains Ladder with pursue value a steady sheet broader liquidity the commercial significant estate maintained market our new balance throughout investments. real to and has volatile book robust

corporate equivalents. XXXX, cash of offering We XX% $X.X in billion successfully of billion a As or bond XX, Ladder and in closed September million approximately of the comprised our $X.X had liquidity, unsecured X-year cash with third balance quarter. $XXX sheet

total of total bonds, $X.X XX% and of of our As corporate September unencumbered. were billion XX% debt consisted unsecured our of XX, assets or

about our corporate and revised broader investment-grade enhance Moody's rating range status, position we grade. Ladder our will below rate by a S&P investors. market optimistic to upgraded Fitch which attract achieving Fitch our notch and credit investment Moody's of and offering, And and outlook We're with a in conjunction bond one believe positive. latest Ladder's notch, both Both just

quarter future while and and begun CUSIP weighted of or recovery pursuits. of end of $XX totaled X.XX% continued We've of XX% to with as commitments $X stay portfolio of selective our a limited to total funding loan thought a in from Our the loans, of our remaining typical approach down, a yield transitioning million. assets, billion average

we're In lending, focused on bridge areas. X

acquisitions attractive foot resets new new basis any First, second, refinances the lease-up. per or class and recapitalizations square U.S. with across vintage for and dollars ] on [ for properties asset And

Acquisition issuing activity has significantly, and term closing are actively increased and loans. we sheets

coming to we our loans will to close pursue quarters, it these these to transactions earnings gradually new capitalized take are investments well begun. in making While time and and has new the enhance back transition

Additionally, quoting loans and we and opportunities, and including CMBS acquisitions. net special known/unknown X- XX-year financings are situation triple

Given in are middle transaction about investment the we around landscape. levels, valuation the competition market, reduced increased the and and improved underwriting clarity optimistic

third million received we Arizona. Year-to-date, by Phoenix, the loan quarterly received the the in received the $XXX in we additional enhancement representing in total quarter, our the first end, In company's and originated including second highest pay million of loan repayments, we've lending payoff XX credit downs, reflecting provided strategy. $XX of in middle After a we quarter paydowns repayment history. multifamily billion million a portfolio, and our $XX loan by loan market $X.X secured loans, property liquidity an mortgage in full level

basis institutional of property to Oakland, value in our the carrying with quarter, of per the representing square took a or $X.X million we an In sponsors. foot, XX% office California third title of $XXX

we to specific titles the assuming Before a off $X due impairment. of million wrote the asset, to balance loan loan

which reserve loan stood losses. any we remaining at $XX adequate our XXXX, is XX, potential to September of believe CECL million, As general cover

real to continue owned estate. We monetize

$XX.X property $XXX,XXX million in quarter, During sold gain our third value above multifamily of a for with a carrying the we Texas basis. a

we is sale for in basis to at addition, price a the $X.X close million above that placed our contract In expected under property fourth multifamily another quarter.

Turning to our Securities and segment. Estate Real

We million a quarter of ended securities add yield of million of quarter, with average $XXX purchasing AAA continue an continue additional $XXX with AAA further in X.X%. portfolio in AAA-rated earning of We securities an requiring weighted primarily the $XX this to quarter, We third fourth million X.X%. securities to unlevered portfolio. an yield consisting the purchase to securities. the

September of was portfolio the As XX, unlevered. entirely

rental $XX.X tenants. during net rated generated of third portfolio the estate mainly properties to real million million lease with net consisting investment-grade quarter, income $XXX leases Our in long-term

origination sheet, strong conservative that, balance conclusion, opportunities revitalized believe with ahead. the on liquidity, significant positioned call we I'll over to a the to we turn capitalize and leverage team, In Paul. a well are With

Paul Miceli

In you, of Pamela. quarter or of X.X%. average million third per distributable Ladder XXXX, generated equity the or earnings $X.XX share Thank a on of attributable $XX.X EPS return of

operating Our earnings a balance. portfolio, generating income on equity driven strong holding significant in real the a our stable to with net income interest cash from quarter while third continued by be estate return net

and total As XX% $XXX $X.X of including comprised cash was liquidity, Ladder's cash sheet September billion, our with unsecured revolver, million or undrawn. XX, remains equivalents $X.X balance fully which of XXXX, billion of

of a delevered our As down amassed over sheet months of XX position. our last liquidity September was large we X.Xx, balance X.Xx, and as leverage with which XX, has XXXX, total ratio the leverage adjusted gross trended

property. the billion a The as portfolio $XXX million, the loans. loan included received upon of of $X.X collection interest during deferred paydowns $X and portfolio quarter totaled million a end collateralized of across XX quarter sheet the totaling payoff of by meaningful Our mixed-use balance loan

quarter a value property the a to distributable title took we for million in $X loss on loan of of allowance quarter, to Separately, write-off third allocated the California, Oakland, million. during loan included of an with an $X.X office in earnings the carrying

portfolio $X loan as third our an increased XX, of the of general approximate a point we September reserve million to Additionally, $XX CECL our allowance by quarter, CECL basis reserve XXXX. in reserve million on or XXX

quarter unencumbered of XX% predominantly additional growth AAA XX% net rated. readily of The million providing third end in source was billion value quarter. with with entire The the the same-day investment-grade and was portfolio financeable, is complementing of carrying of the liquidity of end. our portfolio securities an liquidity securities $XXX quarter XX% being at $X.X potential AAA of portfolio as of rated

$XXX an properties, Our investment-grade term committed real leases, to tenants, net which estate segment portfolio of continued are the million XX% generate in X remaining XXX The stable lease years. quarter. of long-term lease rated third to with average income net operating includes over

was the corporate weighted bonds weighted X.X%. $XXX As September at And attractive of an average XXXX, total approximately of with as Pamela issued quarter. X XX, of of of our comprised million maturity unsecured of fixed a coupon discussed, rate corporate Ladder in closed debt bonds third that average unsecured years XX%

closing with prudent the BaX, our this rating exhibited credit both one rating aligning inflationary of With positive bonds bonds Moody's management as capital latter rating, Fitch upgraded [indiscernible] period. and our agencies in on on play outlook. And capital We to the our raise, unnotched the post-COVID appreciate and the notch Moody's during corporate believe grade. investment the

the will which investment-grade Ladder opportunities, of with rating, broader is achieving closer an credit these With our access long-held up along investment-grade open to to believe the to we goal market. bond actions,

capital enhance attractive cost achieving on more shareholders of time. to equity the return over With goal and a of

of of stood total comprised $X.X margin assets, of billion at or securities unencumbered XX% As this September of asset unencumbered XX% and pool cash pool unrestricted XX, loans, was first cash asset our equivalents. and

flexibility, on strong believe of grade, financial in returns. notch capital liquidity provide we within to pool to based and our with risk-adjusted the investment assets of Overall, large deployment capital Ladder significant focus position, our capital allow access and segments on a best-in-class unencumbered X high-quality structure, for best one meaningful

average of net $XX.XX, $X.XX general share weighted XX, our per third through price of As reserve share common average value per share. we repurchased our if In repurchased of $XX.XX share. quarter we is at $XX.XX $X.X of stock per Year-to-date XXXX, of September Ladder's book a stock September price of million which weighted XX, million of at XXXX, $X [indiscernible]. have undepreciated XXXX, the common a per was CECL

XX, in third $X.XX remains share covered. quarter, dividend declared our October latter And which dividend, well on XXXX. Finally, per was paid the a

which to the Form call supplement, which our XXXX file quarterly on XX-Q, in on please will Brian. Ladder's For details on report earnings website turn the our over to and results, expect refer I operating third we quarter available is that, coming our to With days.

Brian Harris

liquidity, Thanks, well and we Paul. positioned issued unsecured strong ample delivered QX having nicely towards quarter another Ladder with holding and credit for corporate another million with year-end head XXXX. now up $XXX bond,

This hit inflation. were bond our diversified a There the optimism in stocks its interest recently estate. and commercial rate-cutting with in global has all-time tightening credit rates one, environment a mix harder of the punch market noticeable the and capital began rising in spreads cycle. the sectors Fed product after of reaching bodes markets, two pandemic the highs thought been Fed well by Few to tame rapidly real as for era

certainly behind Fed albeit operating worse lower values, future now. the mostly real There to at a already well, However, significant losers costs with the us and is looking seems potential the but stabilizing estate and reserves brighter for as winners be established and prices. raised losses were rates

proactively shore issues capturing need competitors, addressing plans their to returning are Ladder's balance and well advantage lending up by many of its sheets market whom regional to previously of share credit capitalized by nonbank before highly press being their the leveraged held banks activities. to still and

we previously shifting As in first tighten. priced to deploy our by security securities, origination attractively to spreads our then beginning focus are indicated, as liquidity investing loan

acquiring executed plan the In we by third $XXX of quarter, this million approximately securities.

fourth while only acquiring uptick enter reduced an quarter, a we slightly additional are seeing applications appetite in we the As for loan maintaining securities.

pace to we of new originations as approach year-end. expect the increase loan We

securities believe with real and of competitors space distributable REIT well out estate in XXXX. regulated returns attractive the earnings banks, positions market us diminished we deliver of sideline T-bills in to our the we coupled By and reallocating to cash mortgage We the believe as add into lending recovers. can loans, capacity

not to but with and XX having origination are anything financing will may Staffing While define may Loan getting capital who paid guarantee accretively the those and up loans safely end. lead at this in likely to the the is new the does relatively less than space, lending winners what disappointment. success. enter simply par straightforward, be private capital back is

its overall the history loan despite that $XXX in of again in conditions. at million quarter, second challenging amount received reiterate market payoffs the highest Ladder I'll third

and confidence gaining We made if of to and lending the over that discerning structure, have believe our decades, credit one corporate investments approach capital unsecured a takes years, the in to bond decade Furthermore, develop in have strong the Ladder. created the culture past help time continue uniquely will not disciplined we investors. strong differentiate market

a sheet, believe future. landscape with our balance Ladder positions favorable combined fortress-like Overall, the for competitive well we

in tuning take we for Thanks today, questions. can and now some

Operator

James. Raymond with Laws Stephen from comes question first Our Instructions] [Operator

Stephen Laws

to you see maybe you constraints. anything [indiscernible] some with with on Pamela, talk want looking portfolio little on your and of construction and issues best about where are dealing in you that think Are currently? [indiscernible] pipeline banks I bit your you maybe competitors start market, Can the the target at given edge banks us I going point, color things, market originations. [ kind loans to a ], the where gave loans. about of at looking smaller the side, opportunities into Brian's the

Pamela McCormack

Yes, are more at opportunities. so we looking

products, We construction focused core our loans. which are still include does on not

attractive call, ] lot where but are of pipeline, story right on seeing dollars mostly the industrial. and And some opportunities do properties a been in foot we're We're at dollars, per just We deal. with refinances a retail as basis recapitalizing. primarily lender. looking we're a newer multifamily, stuff new We'll We our in for there's good always at acquisitions, up are mentioned reset, basis we've primarily, lease-up. signed vintage now, in [ I looking a

of lesson our to So of lending, is looking and same. market learned for like more I we think the strategy us middle are we the do

Stephen Laws

pickup system they switching driving loans? side the into side these refinancing you you other agency talk these multi? what's Pretty Can the and elsewhere? number. about to Pamela. talk some the about on refinance to that that? going Then Or borrowers enabling causing Are Wonderful. repayments, what's Can on they what's high are

Brian Harris

time. Stephen. later, in we one, order ones, go smaller on that have close to accommodate. supposed extension refinance Brian. It's short they XX take give few they're be Meaning them getting refinanced, to I'll days although application, to a especially usually apartment-related, tend The and under very to of actually

this at there's lenders. very detail also. fine, lot -- So point diligence things put side laborious apartment of seems be being a to of due doing But new for just into the warehouse

for a of The larger the and getting are loans the months have extended there been here that -- last X are couple ones some of these months.

been took would So here. basis, are lot are suddenly real couple nor cash slow build you a flow. part refinances that that the very most value loan somebody who for business have it I I last a suddenly And pattern that paid land And on It's business plan. a effort. quarter there's tell a can tell loans booming you I off, done. then $XX by little getting wants was was a wouldn't that had give just no million times site. wouldn't say it effectively we I but on you the to the of and plan, purchased it something extended else of failed

take some There $XXX also that. Rico. the in numbers bit, off or did either sizes little So that great wrong don't of bit was little that a asset, it We little did at I took on They you but will just was we Puerto an a payoff paid throw million overstated a are the -- sold because a with remember. all and with industrial nothing off, deal that's bigger.

we've So another that skewed probably mostly $XX the payoffs, the million payoffs I has mixed-use believe end. taken And the fourth stuff. as higher to quarter begun, in one

Operator

with question Catherwood comes next Tom BTIG. from Our

William Catherwood

maybe the as that year. is you extended tightened mentioned just is -- in as weighted on worried X And are accelerating. the maturity to shifting already book average over originations payments has mentioned, what investments. guess I Paul, spreads you loan your us securities

loan you a back that hit book material backfill So lending come distributable allow to what's to kind earnings? without giving enough your of to you confidence can fast

Brian Harris

want I'll to definitely is ask is although Brian. from lending Paul, The up. specifics him take This you the you're if question, welcome too. there, business picking

applications. getting more up. We are out signed sending We're more just

will on, closing what see not look different in the way the So planning look because on it's extraordinarily I'm to in like lights really are ahead widespread, those reality is materially stay wide to informing have really if loan this, happening third very all look to but now. threw you're quarter, going cheap. $XX million than the side I $XX this security sure although cheap, the we and the is fourth believe what also as higher will quarters the in originations saw we close gotten going suspect securitize were is the cheap you right you're up of picked less it million I securities. still said we product we've they've securities quarter. The it million $XXX as loans. than along, them. bought to side just of we but to another still week But And they're if much securities, loans

and So queue that exactly to more what that's slide naturally to originations, over we're seeing. us would

mill looks as all about a at the calls. what unusual nothing of looks said us. on recovery to times few I this. is is like, kind This these It of There exactly a it run like

million over believe yield unlevered XX And XX, over pretty That's purchased rather so unusual X%. securities I the we are AAA years. last $XXX of the while we'll purchase that inexpensive, always an had

buying and squarely those. lending of a lot ultimately, into find don't gets They've something but we're at. lot still the happy that lot We're And looked stuff we with side the we moving we're So of of like. gotten a it. keep kissing tighter, we'll business frogs, out a now

accommodated very a a the that's good a familiar loan is being higher we're requests. a lender a big. nearly how dealing are of name 'XX, you not too loan that sponsor we're accommodated those for with. asking a little them you're They're chance with who's from or with surprised many there's refinance by And XXXX If that always actually probably

a prior real amount too in ] worth less it of loan much it, [ most let's the because cue taking XXXX 'XX. from and So I estate, is would worth face caution than was

now, high confident that on also think and here. quite So very I picks fine. are industrial light right are apartments, but It will just think long doing and probably story very hotel short, flows be up cash other office, lending we

to off. that earnings, loans the very When now. XX% pick we're obviously, you place paying we're confident are are in as these talk X% So up, right payoffs about

So accompanied cash, you a increase if earnings, stop might on an that's by the is in in dip earnings but temporary train towards higher in dip that a earnings. have

William Catherwood

But to how those pipeline, to it. follow-up Brian. compare seen the in Got right a would typical I thoughts, that, a level origination Appreciate normally regular now you that more a does guess, quarterly period? have

Brian Harris

Adam We have here.

So Adam runs originations.

line. you go sure your want take if So right Adam, you unmute that, to Make ahead.

Adam Siper

ramping it's to to those mean materially, of we on we're from our are competing in materially It's has going slow term Brian to backdrop up new has with acquisitions that it the I And it's But comfortably build. focused I'd tell mentioned, up again volume win -- be build opportunities Yes. that picked principal always on sheets we're and the and as up. picked you very the opinion. of a volume the continue [indiscernible] get opportunities back. my will here, where to going

be our to in transactions up So XX pure fit significantly box volume last really the the but we're days. picked discerning, that continuing of has credit

Brian Harris

second moving quarter in just go I rates guess, I run it. we're of to rate, quarter. we'll we rate, We're between And probably in I at fourth first suspect in towards quarter, add going be million don't the million would run and that's odd but to to interest which, going next And the our an relative what a or assuming that that below average be be somewhere $XXX $XXX call direction. year,

William Catherwood

need seem values to use investments if another a viewing for last for lot We're answers. in shifting the just cycle? transactions seeing still this side investments. equity me, those at have somewhat of How with recapitalizations. point business obviously your of CRE improved. your market one there's not as to are appreciate Really in And more said, of potential a capital you that That assets kind the equity stabilized,

Brian Harris

right think -- higher would equity our think what I than required said guys. very now. equity when I investment, return probably institutional it's we that, We on most an pencil lot attractive Having a call it's a return out

that So or we equity, them. trying do see given orientation double trying continue to think to to or they're think, when and attractive XX% not our don't XX% them we and we're But towards I here XX%, we'll make buy money. our we're

guidepost so that's And of we the kind use.

of ever sheet part to balance their will could see I don't marking our something banks But where things you a giant due easily cleaning So during period equity up down, are think again, be any regulators, us business. in. that's

Our equity be not XXXX. going should up, in down position

Operator

next Our Steve question comes with from Citizens Delaney JMP.

Steven Delaney

Can clearly? me you hear

Brian Harris

can hear you, Steve. We

Steven Delaney

end, the Okay. my Great. in was buyback, see A on I I'm $XX I a under XQ. sure just share. was glad getting make want little that to to I and static clear. obviously,

continue stock buyback to probably the Would been be? you've fourth assume Now active about in might safe $X.XX And if quarter? remind with be is to be me authorization the remaining -- the now. could you what lower it that your here you

Brian Harris

yes. answer is The

probably continue. will We

I million. but $XX does, remaining think the it's Paul, over don't number. and probably know I the authorization, exact

that's good enough probably So for my math.

And cash pretty we're the it holding. bit and with a amount so but that of we're all off these yes, comfortable backed little has here, payoffs

the They're but holding unlevered. also of an mind, enormous in Keep liquidity, we're AAAs. securities our amount book,

we there. easily additional So find can capital

we quarter. the So augmented by as got far an embarrassment issuance right liquidity million largely did of as $XXX we've the in goes, riches now

that go will And people before lot go a we so another have like take approach we liquidity -- $XXX the we shopping. think say, We'd to I of would towards you and "Why available borrow cash cautious million?" a

stock we're But authorization. to million with on $XXX on So little into eye in, be do purchases will and continue that count have if there. will bonds. But you the and into catching it anything I July deployment, I out low think that in we there's million in ball us can and don't them going And our up see approaches acquire to any openings, think steady quickly. but early a always this gigantic our $XXX securities, we or step coming

Steven Delaney

$X.XX. over Let for me moment, the dividend a switch to

raised in of first the with And focusing quarter defense, XXX% the quarter. I -- in liquidity. been it realize in It if on EPS distributable the third playing raised covered was You you've you last 'XX. will,

that in sort rate the is obviously a You're now healing environment. of market shifting lower

the sounds loan like offense You with to portfolio. you're definitely shifting certainly

Is part with the be for in revisit I your the it mind, XXXX? are just nonsensical. Board you far coexist first in may frame where know Board -- but question. cash repurchasing scenario allocation? kind That's your dividend quarter modest time this sound the And as could those next dividend? logical a the both the of a as makes also to of like to in the Could things mind see increase of of shares, your you your capital the But

Brian Harris

didn't into I'll Okay. parts X but all that sent was I that it to unfortunately in. write down, try take

I the the my dividend was won't an our would And convey But first I've to I were I it get to towards I it. could earnings least for we been the So or that at happen Board out I or of raise suspect, recently. think open if in than second on first timing, more can CEO. question call. be front policy dividend speak quarter, or

This off to fake. we bit to Fed a has would one sincere, But more at [ But head and see consistent. the rocks have election of ] going period. with a also picking we and what couple a start be out looks thrown up this I loan we'll economy end the believe of us that this this -- happens the the little is times see portfolio point that

period. day, So election say election we no longer we say

they are in So that Keep they've gone to out with probabilities difficulties difficulty convinced until take we're of they The them a little can do will that. up. we of to, mind, in refinance. able still some being sponsors have I have discussing the having of or loans been while as it that think get we're

our damage all carry are terribly flow, especially is most think the that potentially huge. high coming way. change, is in if But not the cash And be anything I costs for So understood something part, on too. can could that

just tap would some people out at point. some So

more right So the noise bit a still that nothing we little see we but see in portfolio, now. don't may

not it. So with concerned overly we're

lending not are allocate the them, probably We look leverage to way right to securities XX% continue to opposed able we're where keep does, we're just concerned this as if XX%, our buying we'll with recovery to fact, into areas. And now, you in that as portfolio additional a works, to either point, they're ROEs. -- buying capital start know. have we're the But shareholders, suspect extent nascent at it, I

with lot purchases. attractive. to a team in the through there's stock couple One of As the That's other management here a cash and stock. a is And our mid-Xs. ways it. the dividend return like shareholders. is of But to is We dividend through

do the part we your Absolutely. time? both the could So of same at second question,

Operator

next with comes Our Rahmani from KBW. Jade question

Jade Rahmani

real wanted quarter's broker that reported CMBS noted And alternative commercial estate, a there active KKR, surge CBRE, largest brokerage, year, played XXX%. this out. debt in over pipeline. the up volumes Just real the an far in in that estate really dynamics manager, also so on surged are morning. to And asset this XX% hone commercial their volumes year-on-year. strong

were out look the some about looking do what weighed color in Just when volumes? think as Ladder's space, that active So to being on factors to the get how market. origination you you you as the think

Brian Harris

originations. again. Well, business, lagging It's a

later, days application close. and loans sometimes they later, days XX go XX then under So

show to the that or anything and see you're second what I going to up our first view probably in is So origination quarter. going as volume

ownership make [ about over us. X a widened back point loan and X.X it that. weighing all. get anyone a they they those. be really no to at that to a We by has feel to a decision of they in million, I'll on bought individual valuations. of months there's X that. really million, where $XXX there's don't ] appears ago. a sobriety If of of ago the pretty the see understanding a today's at there's evaluated a way, was do But XXX there's comes like unless on instead that from in on lender looking we're XXXX. think what's properly I terms $XXX for who I nothing expect out the it from to And stopping months when -- So most in now can Yes, that securitization cross-collateralized. But with tighter with asset taking to part, loans, loans properties what hold to in have versus were space. There's to it's and few assets up too, good People just Blackstone There was some that what's there industrial ultimately example. they -- general XXX going one than over We're

on diminishing So been hit That credit you the has again. realistically, move and in spreads dramatic just rather a It's of really rather happen quick. can't point returns.

do step extra just up, say and appropriate dealing are an wide with Even not a there. we million. reasonably somebody $X weighing all would other sudden, being nothing cap there's signed wide tend bit we rates But And than a I think on will that. leverage it So loans too be to levels with requested. that in when we we're may sometimes of getting we're

see take getting as they're low just phenomenally mentioned as what's also picking up, doing So and comfortably. But to much prices. that market the things point securitized -- we'll we'll foreclosures from place cues as a can well we names at securitization there there's keep you to taking our and how few are

as think it it's would lender banking good think. in and on but the not just business that canvas as a we but dare with New and it niche good don't never help It say, standpoint over, on. all Signature it's paint this I a and from as in either bad that when And I was can't the all that regional won't it's you so all bad. news, We've York be bad as going with probably Bank over But news. in like said think And out. not New with Community expand itself straighten York does what's Bank, regulators ours, you sector

make is pay we're volume so rules any expenses. have easily dividend But don't we to Almost we clearing we we about how our levels very optimistic that. along with that the do. And out investment about much have every

Pamela McCormack

should don't with I our picking is add, that acquisitions. would surprising I at up it new be activity uptick in just the all think loan

avoided the have bridge-to-bridge in. a was coming lot unless there of lot We of really fresh a equity

today. that for volume large our I a So is think increasing driver

Jade Rahmani

That seems comments, are from that your And actively seeing you pursuing you sales On portfolio interested banks? this. opportunities, it. in in alluded It you loan like like sounded business? are to other

Brian Harris

haven't so X, in working from in Going actively you, those out over a are we perhaps. purchase or calls X are Got general interested in optimism there's But there years. was And backwards I a I that of business. prior would that month to on that with banks, now. the so, portfolios phone right the few loans. to heard I calls question, last last pursuing nobody people us some from contacting the month think tell

So going from portfolios be of those refinanced. in underwater. door I able think some to urgency books they're are because less that going around out mark-to-market, of banks there's duration that an those but may slow the probably some of the get are them some of not to And

too to to have So time many. talk, yes, we're interested, going forecast next just purchased but we're one. We I'm don't not see that going we

Operator

from Howlett with Instructions] comes [Operator Matthew Riley. Our B. question next

Matthew Howlett

question pricing. is My on

pricing for quoting then your work? you do to hear of did CLOs, off. don't where where those sound over. CLO. went come inside mean, you love I the does where I in thoughts in me I'd mean, mean, work to quoting I but we're at? love hear did on And just quarter hearing to know the then that multifamilies and and you sort could you're general, property you're -- on things you I'd loan tell XXX You types. other the just very tight this I And

Brian Harris

second that, we if of loan part take I'll the Adam, you know first take I where don't the was. one. the closed

Adam Siper

Yes, in to really general, high spread. on real the high-quality quoting fresh we closed. acquisition the including loan We're low range estate XXXs in XXXs on

Brian Harris

AAA, we by where, you know, they of it's buying when you there's the the it lot but leverage securities And point taking -- does than us should because does a work, it work? and more Yes, risk XX say, as of been lenders are think selling we've XX. a

on point And XX, the CLO XXX AAA about holder, [ equity the tell around is to The buyers, run-of-the-mill stuff you the so then issuer I in XX%. the market. multifamilies the ] will leverage to XX, probably leverage around

way here. liquidity breakeven side in push in more the it. of still around And almost the they're security is the attractive So a

franchise that. But value building just money think to However, of And anyone selling us, dependent the you're We I going those a get to oftentimes relative AAA effort, to upon tell we're buy okay, basis. not securities paid to us. on securities. as lot people get a happen not

rather it us. is own XXX at we'd Yes, when than if and ] for XXX, a the we're does inside especially AAAs the credit loans you work XXX, little Sometimes [ write inside But dicey. say

So we're probably multis about XXX on now.

Unknown Executive

X% targeting with shorter something keep as we're term, the duration on points, shorter exit. mind origination And typically in and a fee

Matthew Howlett

talking So XX% in when you rate say you XX% events what are CLO? of type advance over the

Brian Harris

Yes, about XX%.

Matthew Howlett

Okay.

And are total as ahead. didn't leverage go So a that you're like works. CLO. realize -- just you quoting -- getting the It's I

Brian Harris

to sometimes Yes, I've said a leverage people lever always, issuing well, XX% response you're as I'm is and CLO, you and times when XX%. leverage. AAA, them say, a my And when my using writing few loans a that

the And attractive a on I AAA is much than think not about on discussion side it's the loan the leverage. So more liquidity side.

words in too, tightened, securities. leverage think just opening much the are this months but businesses both us X in interested in I've of they think people of for were got remarks, of equally principal really as lending the we're said, as is I interested as quite we're kind that's asking time in we're we in Securities got However, column first have now. it us kind -- the what as And my that in it. ago. this variety are not have Loans was in interested tightened. not What I

Matthew Howlett

pickup. you you single with sure really AA as comfortable or bit I'm mean If would moved huge I little do securities, -- the there's sort just like of get a got or a down you A deal? and

Brian Harris

yes, we but huge, would. not It's

when you a a the BBB. that. really don't jump leverage AAA I because buys. have about in credit, attractive yield The But relatively rate. lower we to good apply same like to general, also. AA think, as Securities, we on is a the levered of think we advance on a lot And are they're I right

in stay tend don't to AAA. any AAs. we that's So the have why We to allergies

Matthew Howlett

Got you.

types, you're assuming it's above like retail, retail? well And other that right? with property the quoting Okay. XXX, hotels, I'm Is then

Brian Harris

falls, of that's Once you tight okay. XXX leased get balance, continues It well because at above and Fed rates But XXX maybe relatively those like funds got the XXX, north Fed careful it's over Yes, isn't be And is if looking of anything. be XXX benefit X:X, shouldn't of to the million. XX% be up spreads for that to loan pool is cutting actually that you'll in the to the to see comfortable. you part objective think SOFR maybe you're widen. going XXX, going borrower. I of you where think the if

at out. high all get million. it However, will to around It north spreads with drops when is if $XXX the you But actually look of rate pretty in at X%, widen SOFR probably X.XX%. sulfur those will

Matthew Howlett

balance would very be to your point. se. beneficial a sheet That per It's great

morning, revalued Okay. love and to they've have things really like other are clearing saying, commercial the sense to And always heayour thoughts. further an [indiscernible] to no yet down moment are? and is, REITs obviously the knows What's or where lot of your books but probably banks article color. XX%, sort of the question Times this people love the things a stuff are things under really I macro. Financial banks down I'd hear in on one your the truth. property comments if about the marked go. that brands levels I'd made appreciate of of as to you've just And But the

go to more have here? we do . So

Brian Harris

with Valley But they're are a for indiscretions in in I except sector, of trouble. think in I the don't in problem estate, the if column. real Silicon the couple deep really banks multifamily been their the big they've banks Bank of commercial extent and really office to paying regulators the a that have the the price others. think I don't think they're

You just following and couple up after on other of Valley who've a sleep decided names. regulators wake have to Silicon

It no was banks. couple regulation wasn't was there But there inside need just -- additional of was a of done. a the normal for -- that that was in just banks really regulation for need

the other I way the lot little a there's think a towards banks in conservatism. don't So of But are of bit now trouble. over an swing

The sectors they are decided all group a little different. but I would the multifamilies. investor nothing wanted say in XXXX, when CLO

I even that's I said recipe for a think disaster.

CLOs, was they double their thought people buying everybody to a them were X so into going rents, seeking and their of their but also. they doubled were which to And lot put caps expenses properties multifamily and did,

So they didn't really catch up.

real in estate, would argue never I that when They I were And about 'XX. they no. people is answer XXXX what is, talk argue current were in the So valuation that for them worse would we levels question paid of and worth ever real that.

back a lower. chasing The the result, difficult lower rates. situation. and will of coming to SOFR tight now went a when you're normalized I do it falls, spreads XX when absolute they on points. a follow kind multifamily as they're more rate. just should basis analysis. widen Rates, that kept And So themselves But because as too they to LIBOR said, build sector just getting They didn't

trouble. are, lot a are are think So I in a trouble. couple Probably of the but always banks couple in a don't

we near end. the And so

as one those over the take I a mean smaller can in avenue. a and case losses are I time suspect kicking and towards -- bleed I at approaches and think smaller they'll out don't mean name. REITs I on And while, the one basis. that have couple regular of a ultimately, just a taken to going one case

the that we'll The look in where start $XX a the it over think you at a path, kitchen at just capital and million it. had foot. We back sink when And I cost now good is million with right dump associated other own a took we everything a instance, path for $X.X now, let's property owner Oakland doesn't lower prior property, base. on at $XXX foreclose a

don't Oakland knowing to always a bank-owned think pay I that don't a a market as you, other cities. I getting great the now and you a few it. need it's I is into dump great you're at capital. think right really it's difficult will And whatever are drilled idea by it's market idea unless place think the

I the all, So capitalized. of of think it's well experience I a think first different -- Ladder, being

believe So Oakland, money, own cheap. a it because not not we we transaction. never don't really terribly fact an do sink relatively empty would do but we in it need love the kitchen It's own that why bothered -- I that's we by either building I

get in even be talking at has something foot a situation refurbished their not politicians There It's buildings There's there lot a are $XXX a in straightened There's left. not gone big that cities crime if there. California. they lot of Crime And because just about. everyone people crime going would Oakland. new of down are to out. in

to but we stop going talking I think So because there. yes, made a want that's a to while, just I take little mistake it don't about

real our take It's think we'll I estate. time.

in no it we will long think I that's going attractive asset. Easily for problem. is Oakland to basis. How wait? don't of good stay think city a the a at the long. I And year, an condition It's own we it's in

think I yes, that's that, the So difference.

are want unless you highly throwing today levered know REITs the don't kitchen an just building why you sell to just with I Some things of to. And office out would had the sink.

Matthew Howlett

values involved? working Property very is room do a when of book And elevated lower just the still know my Right. but more for others. massive book Well, consolidation last brings are and you the rates. this yet. mean expenses I I is rates value Mortgage-rate? And get you They're to Mortgage their decimated. there's go. on not over? rates. would They've and But Property much for point. that expect sort seen Ladder, all maybe

Brian Harris

managed in will happen. involved I we don't think lack would But externally REITs will love the do really to that we it is something of don't lot get a think happen reason transparency.

they And also don't no know better steward to mind their under obligation in are their a company there. in You quite sell capital. of what's to

a traditionally you of So REITs. see in don't the consolidation lot

you've the seen In situations. The taken of have opportunity ones fact, been famous force now. is right set that in difficult some attractive by

of I newspapers in So don't all litigation and with people. to up kinds want arguing get in caught

a to "I'm would certain Sure. out." and up -- says, to So somebody calls I and would I'd do age get that. us I like love

start in a little to our desire of little a for make was wish bigger, our it most of I we I some think one some bottom so to But too way And have more afflictions that's One be small. bigger, bigger. them managers, is problems, Ladder, not. it we're the other slightly do people's company buying think I and investable headaches. believe should are there of their to don't I but gotten the bigger money think I have of that companies

Operator

like There floor over this closing the for are no comments. further to turn time. questions Brian to back now Harris would at I

Brian Harris

for comment few audit going with me quarter. Things here. Thanks be a talking us. year-end fourth because staying won't well months And again we for announcement the today. are from last and in the Just of

quarters a bright we those forward And again. ahead. here. seeing to the bit we're ahead. and that on the I ready in quarters acquisition look you'll We're very defense, little most lot happy our a it a said, have. So capital of think part, results in far. about We of we thanks for We're performance XXXX And going start as with And getting to we wanted anymore. not XXXX year, be talking think offense. we're But the to is so

Operator

concludes teleconference. This today's

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

Ladder Capital (LADR) 24 Oct 242024 Q3 Earnings call transcript