- Earnings call transcript Q3 2022

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Operator

Good morning and welcome to the KKR Real Estate Finance Trust Inc.

Third Quarter 2022 Financial Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. to conference like Switala. to now would turn over the Jack I go Please, ahead.

Jack Switala

welcome Real the earnings operator, to Thanks, and KKR the quarter call third Estate of XXXX. for Trust Finance

Today, or which call refer mentioned, like these everyone is the the by operator call measures in to are most our CEO, portion the our statements. and remind available release guarantee to Patrick Salem; certain to of XX-Q performance. and that filed to financial GAAP our and Matt which recently on events Relations also on Decious. our the As CFO, will our Jack Switala. earnings supplementary cautionary Please in Kendra certain presentation, Investor the reconciled refer statements factors This I'm non-GAAP both this which call COO, Mattson; related of not will forward-looking President we joined are I would to our for contain site. Web do on future figures

I provide our a to brief Matt, turn I'll of results. over recap the Before call

higher we share watch share. For rate served share, per as increase X.X% share. by GAAP of quarter XXth, on This times relative strong our third to as per a September coverage $XX.X quarter-over-quarter. per an driven to X.X our this supporting driven primary Distributable dividend QX XXXX, was $X.XX of per was $XX.X primarily reported negative share. CECL ratio interest in over loans. of by quarter value $X.XX negative per was $X.XX allowance by increase Book earnings net decline income This reserves $XX.XX, diluted or share $X.XX million list driver XXXX behind were our The a of million or dividend. rising the per of $X.XX the environment distributable earnings,

reflects an dividend closing in Matt. over quarter. annualized now to third to I'd call share dividend per With XX.X%. on price, And respect yesterday's based a of we paid common $X.XX that, Finally, to the September, like of the cash with the turn yield

Matt Salem

Good today. dividend quarter you, share strong $X.XX and ratio. greater everyone, times X.X you thank another of distributable generated per joining earnings us Thank than of coverage Jack. equated morning, for to KREF

with based earnings in points estate annualized rates, to macro expect XX we from corresponding This an to further negative of rates, values. Meeting. increases, Reserve the XXX have to has Real Federal than X.XX% XXX Our further per has accelerated for earnings in that basis the result to deteriorate, which the $XX of a manages date. current values the KKR's real operating the capital, potential which demand recession. market AUM, with of in cost of are over environment. us digests environment basis impact was with by commercial combined declining integrated selling estate September The as business, basis points view robust continued affords realized already caused estate a higher real-time a real billion serve and share tailwind interest rates XXXX. rising in curve is base we distributable would quarter-end, a earnings point to on To in at a benefit this continue forward heading as and being $X.XX put of fourth stated base [X-XX] increases from our KREF's [Ph] quarter, context, more our in increase in in supplement projecting equal. increase portfolio, The rate else all into

our by and is are originations XXXX another properties. our the remain of and occupancy strong, XX% industrial While or high characterized XX% are by either of segments science. of multifamily, is -- our changing, by or Nearly rent growth. fundamentals our industrial across in portfolio secured originations secured portfolio are valuations Over high-growth most and and half multifamily life of

around sector given long-term this However, by of uncertainty work-from-home office secured preferences. has added is tenant of our and demand properties, portfolio risk XX% the

to quarter, sector, have office by witnessed as five In the well our as watch total list, Over response reserve materially decrease past capitulation increased the owners. a a significant in liquidity we added loans to this, of for have in and loans. CECL three we our

we In two which have at and rated sponsors. with our risk X, dialogue increased now addition, loans are those have

positioning. our use times to will built comments extensive KKR this. discussing We our optimize resolutions. our for my experience by I'll like across these platform conclude was market KREF

Our concentrated property types and institutional by and in conservative growth is strategy lending geographies, owned investors.

the which steps unlevered common Since posture. term and of raised financings. our billion facilities. as we non-mark-to-market offerings $XXX defensive we and we a does best-in-class five with AGM revolver on equity of with increased our preferred the of over $X.X number million, approximately transitioning years, extended stand and sheet. of added of program. as balance liquidity, financed $XXX highlight its leaves today We million taken, outstanding secured is $XXX include of That million primary senior we net have these been have year, the well portfolio $XXX financing year-to-date. non-mark-to-market more Our at beginning of And To to through not million a to total nearly loans us currently XX% proceeds

and to has lending environment, only originating as match continue higher to liquidity. repayments. I'll turn a favorable we will Patrick. we market that, stated operate over with to call last KREF call, this loans And the lower on While the With leverage anticipate

Patrick Mattson

our you, on liquidity I'll and watch Matt. everyone. efforts loans. provide around focus update capital list and today front, our on the CECL Good morning, reserve an and Thank

five over since facilities, upsize $X of liability note in our financing diversified and an two term year, the bespoke financing discussed upsize corporate pleased structure capacity, past, KREF. of top last non-mark-to-market a been our secured As extension built CRE-CLOs, non-mark-to-market on revolver. B, loan including has a and creating QX to of priority beginning I'm the that, of billion an to added have we And

And financing Specifically facility upsize second our we And our note our completed nodal in $XXX match and facilities, one partners non-mark-to-market. buffers on entered the match of XX% much term developed, $XXX of into basis, we from we originations. resilient million Capital we non-recourse million million times which remained a with Subsequent of The financing fully of quarter, third with a $XXX financing existing $X closed new has to facility. one connection of importantly, of of during us term billion. financing in on a been the bespoke bespoke markets to KKR as new a help loan quarter-end, done Markets, quarter-end, capital volatility.

sourced In attractive structures, addition capital the other relative also fully achieved of be an features these means cost associated to with can we've financing today. that to to non-mark-to-market

KREF. in the financing public months our the major away has sources of sources have of CLO market nine over market past some alternative of market capital As widened, the differentiator the cooled from mix CLO the a and spreads remains for more

management terms market In flexibility in end is strategy, operating range the capital preserving lower backdrop. at of target of KREF the broader given leverage

X.X debt-to-equity was quarters. quarter to ratio total over and the the mid as leverage was times our ratio And -- times end. we expect coming Xs leverage X.X total Our of maintain total in

managing liquidity Our to fourth start a approach the in record level to $XXX allowed balance us million. of of sheet to the excess with quarter

in on KREF end, at quarter the $XXX Additionally million balance unencumbered loans sheet. senior had

reserves CECL list. Turning and to watch our

$XX loan of basis on quarter, our points This CECL funded million in based portfolio. increase to or million the we recorded $XXX XXX

distributable change not in earnings a reminder, unrealized, is the As QX. is non-cash. reserves in It reduce does

future, of our deemed if we would are such non-recoverable metric cash loss earnings. the recognize in However, a to distributable amounts

supplement. We loans five of watch have end; which in highlight are past the earnings And by loans of secured with as list our consistent those all quarter properties. on we office quarters,

in to risk downgraded were $XXX million and loans New half a nearly of rating account CECL total for reserves. of the X

disclosed and some the in X-rated details We other as market with participants; individual X-rated additional not of have not reserves the sponsors CECL us the around disadvantage order our discussions continue loans. we loans to

it First, includes relatively cities. square garage. billion pandemic by the been office has loan Philadelphia closing. from loan's however. Philadelphia May XXs But maximize to of $XXX,XXX is potential value slow KREF some in the return alternative a parking U.S. the from a COVID-XX business space initial including low at date the indicated current continue plan. down maturity approximately compared recent And property office loan of not to is sale approximately in to at a sponsor other evaluating properties. does The occupancy XX%, feet Recovery XXXX. conversations, the remains the comprised secured the XXX Current major and the and to market of The is or portfolio is $X want loan

property. Second, by loan Minneapolis foot, building million secured A Class square the two X.X is

loan. subsequent supported X%, the the on to property closing CapEx occupancy from debt the refinance the covering service our debt NOI from today. of an property loan occupancy and generates yield lease up rate current fully XX% over of remaining a at XX% Our of of

to final indicated has given inability loan date sponsor And the the However, an December refinance the upcoming in market current maturity has loan 'XX. conditions. an

with number QX remains first X under XX% which QX. are the through interest payment With $XXX grown In approximately with in million regard And for of loan the senior two on and quarter total portfolio payments our by to or million. portfolio, portfolio a We XX% a exclusivity. basis. $X.X period over total funded billion broader have considering loans loans and year-over-year And in originated of KREF are We sponsor QX across scheduled continuing better. to $XXX collected has risk-rated a portfolio in of summary, dialog finished a the XXX% we entire the in options. the

mark-to-market term, second This existing and one non quarter completed non-mark-to-market, quarter and Matt's to of facilities closed sourced and two subsequent upsize on new in financing $X end, we our billion. a facilities

stock of XXX,XXX QX, common approximately repurchased $XX at of million. for we price shares Finally, $XX.XX total a a average share of in weighted over per

utilizing the X.X our subsequent been reported quarter-end, of shares purchases of last for million we a have and program, to repurchase two total opportunistic quarters Over share XX with year-to-date million. in

joining market to ahead this liquidity in record position Thank us. for capitalize efficiently on a environment, strong us manage puts further the Our to us opportunities of today. you and in current

we're questions. Now, take happy to your

Operator

you. Thank

will line question Rahmani is with from muted. go And [Operator line begin our be will is Perhaps open. your session. ahead. KBW. Instructions] Please We your now first the Jade question-and-answer Jade,

Jade Rahmani

Yes.

Operator

Thank now. you. you hear We can

Jade Rahmani

specifically spreads going many much. with this understanding the indications you at Great, is, How thank in with credit to out? do that? interested rates credit are And There's Do very refinancing difficulty is that borrowers I'm expect today's what levels. and agree you to wide; extremely have definitely high cycle play turning. you

the million property. very modifications So, know of I the non-mark-to-market of liquidity, assessing with capital view working high percentage a has you lenders. means KREF which borrower in wherewithal, and my to important, become commitment noted $XXX financing,

remaining the approach touch spell you year, believe on out that of going about expect primary focus? all-encompassing as year? in overall part Is you your you can the which upcoming in credit And what management, that you I be maturities, for to So, next asset this also and is loan slides.

Matt Salem

question. profile. around and, thanks take Matt; Jade, you can in jump for the Great, It's want second the on repayment I to it, point Patrick, the if

First all, it's the dynamics, specific. I little think a with bit just market credit and of property-type

portfolio, But demand. we obviously, that. If the growth our you And strong most growth well. have look science and still positions it's markets there, at rental largest life seeing -- multifamily as being of of we're industrial strong tenant and, component in within strong

kind sure time, just cash part suggest be there not perspective, cycle, but modification lead not that that or you those fundamental seeing, over was there of your a markets. I'm anything to if flow so, And that with in us a agree default really could there issues would a will. big a be property point we're of I from will discussions

because those is for modifications invest well liquidity opposite potential value. certainly workout very is then going to is our own sector to there operating maximize going I be could to on as and our position. one either very have be strategies, particular of sponsor office and of uncertainty to capital, is prepared to there extensions remarks, certainly high. we highlighted the liquidity very If to as is that's fact-dependent. And lack create that then, think open-minded obviously, within and in true it's we'd If it relates a that we've the property that think different, willing more and we're a the

will we've I think kind so, it range circumstances. individual again, to available very of this on we be cycle. kind of property And go fact-dependent us got a options of through as credit But

Patrick Mattson

And a here with that reflecting have our the of the the I'll which coming that And are are Jade, final to we second supplement, question asked, regard XX, part you up. the maturities. maturities loan what details page page in maturity. take as we're

the But So, you portfolio on over $XXX lot maturities in can couple XXXX, lot are Minneapolis the remarks. of years. that million we of the can been you last loan a see backdated, is of the opening see talked the which has originated about a

And reflecting so, on chart. that's this

XXXX, light out final maturities. in XXXX we terms it's and look as upcoming into So, of relatively

Jade Rahmani

queue. Thank get you. I'll in the back

Matt Salem

you. Thank

Operator

Laws you. next Please the be James. question will Thank ahead. go from And from Stephen Raymond

Stephen Laws

to office with they morning. market, good all stuff, discussions those And of how with those on assuming you regards follow any can are financed? Are Hi, things talk are credit how CLOs? going Maybe nature? the facilities? that up Are advance latter, on counterparties the your credit rates, about in

Patrick Mattson

Good Sure. Patrick, that take It's morning, question. I'll Stephen.

So, a these loans variety are facilities. financed across our of

very I financing as structure. on focused think, diversified we're talked we've about a repeatedly,

So, really loans where loans diversified is in office in might as general, you and our assume, portfolio, our these reside.

some those financing assets the CLO, sector of facilities. our some the in particular, On non-mark-to-market in of office we're

obviously lot now, right unencumbered are of that assets there. some have also so flexibility We a

not look interest discussions, been of we've XXX% loans performing. of and payments performance, terms the the are as date, to if lot collecting, I have are at paying think -- the you a noted, so In

well-positioned get maturity kind extension As both of we liquidity we given the on those outcome is. through these the to the feel manage discussed, of to that and what we dates, But I regardless discussions increased us have closer to conversations. expect final,

Stephen Laws

per portfolio to type to interest in Matt, and, a about accretive some your still at to kind right, take you a that When be you things want Patrick. XXX on with of rates assets of are Thanks, statement portfolio NII, of that's does increase or, office it the way, basis a those CLOs XX%, an income in obviously, can concern think I take what so repayment, of $X.XX flipside, if over $X.XX And, higher any forward. point out I because on, going of shift annualized to lot that? and of reference deterioration of spreads not going offset comment replaced benefits couple XX% just wider performance over mean, share. there's oversimplified

those So, you over curious about going think performance as how forward? look opposing forces two you portfolio

Matt Salem

the be And happy strong the X-rated to it modeled of those of think that terms assets think Stephen, And a when pretty even portfolio convexity Yes, performance versus increasing as in interest be watch these factoring of scenarios, list still cover up to it X-rated to bringing relates rates. as you're we especially some the number We certainly relates what the that. that resilient have here should in loans. coverage, we existing dividend, will for quite loans. to

loan thing the in we recently. pieces that and of one I'll highlight So, still Agree very the of listen, located right office it's got market good And a smaller to And portfolio. in like again comment a we're markets, good going we just an mostly be repayment portfolio, think our watch to lot existing overall your just with that's feel now that sector, investing. to and a is that I the to is pretty this it on about on it's office despite office concentrated have growth going we But market. be overall of one had closely.

there So, in assets there's still for some liquidity the the out right right markets.

Stephen Laws

you've on our at attractive you of But new least Thanks, attractive investments, I kind you kind Patrick, with, mentioned forward, the that's Matt. how those of know which question, new versus mid-Xs returns was in been and obviously, equation. buyback, part active leverage balance of I -- but do going stock And the year-to-date? mentioned believe final investments pretty

Matt Salem

just and this, we're other, component fair from the when shareholder attractive. making think liquidity, and try think new value And very that's you've perspective precedent, look loan it's that take Overall one right, obviously, and buy to extent weighing a that the liquidity, attractive, where got will or just we've relative then but back us the liquidity right back other both both question, buying right? like precedent, seen they're Yes, to between excess where we in and to we're I here I it's they is to takes shares evaluating a think and thing it's market when stock. do the we a always do really fiduciary recently, the so think a not

component really through of have. other existing the we some financing is The that facilities

extent have the CLOs. Those are return. CRE As you spots, will, create opportunities we attractive the in if to open mentioned, you accretive to very

be it we we a we like stock do kind just the where of or may loan. So, make where liquidity? have weighing can it? back That's into whether buy And finance decision

question. at But no on fast either little We're answers bit hard IRR. and and So, the of rule a return looking terms comparing. hopefully in the there's of that

Stephen Laws

Appreciate the comments, you. Thank Matt.

Operator

Fargo, from is from question next Wells Donald go Fandetti please The ahead.

Unidentified Analyst

on is are expectations going opportunities, Good about the for with any? rates multifamily types, you attractive morning. where what And Steve macro and seeing softening? This then property and lending your Don. Thank still Can forward you up talk secondly, for performance going if you.

Matt Salem

the start on to side. just out Sure, multifamily

As very strong leasing high bit peak. really I The we're earlier, board of occupancies, growth. terms strong off seeing across in and come mentioned there a the rental the has growth environments, performance from good little still across,

of growth seeing caught high rents that's digits in and to of releasing down type some we're single growth markets. So, that's year-over-year spreads, really call double-digit now come these rising it

a whether at there adjusted strong. rate or new seasonally little But very to still values of whether all of are just issue. interest but that's new cost unclear course, adjusting of the coming estate are of real market, activity, bit that's the capital a this changing Fed like function And that growth It's values environment. let's So, out the or point. say a there's of

where markets. growth that And much it course the years, growth, areas to we're types. focused would of in some say property certainly, the XX% terms XX% are much few down on last called over growth these more at I these terms shifted focused honestly, just of these lending, of in values we're some So, hasn't of of

life see much, the to are it's think perspective, and but doing kind land strongest very of a what very continue we're landscape, competitive you'll us from which So, multifamily, just industrial, and environment today. is the we tenant market lenders the demand given and science, a much market

the loans some lending they we're leveraged, they're today less higher well. have structure are as creating on and that more at lower So, returns, transition points

occupancy You've or of flow starting got per debt. higher unit cash

market a but good us focus certainly growth to segments. these think So, continue you'll see I on

Operator

Steve next from the go And Delaney JMP Please come will you. ahead. Thank question Securities. from

Steve Delaney

Thanks everyone. the morning, Good for question.

reserve comment on quarter, specific CECL addition any the that of all can million of loans general your rated part any view in just should you $XX Thanks. at as was unallocated reserves? on Your we or

Kendra Decious

a so Hi, taking for Thanks about conservative we for how to so much Kendra. Steve, a second create question. reserve, Maybe very a step the it's approach. the CECL back take talk we

I take and losses. in based of CECL the individually, are considering when time. historical we the possible past, a and is estimate probably rates, and evaluated Others on personally loss what quarter When entire using the you've each holistically to more think basis the at on factors but losses scenarios. which vis-à-vis individual macro could currently. by and seen and it's possible into account factors as those reserve portfolio. so over future account calculated other terms do we where And in And third-party reserve are evolve into look know loans taken are circumstances most loan loan facts model the considered adjusted estimated

basis. Patrick commercial build think his on earlier of protect in And our of X-rated not we'd of with really the we to a loans to on some currently mentioned couple particular, prefer more, as comments to respect said interests. it holistic more the disclose So, in I

Steve Delaney

of say there for you of quarter, not where sponsor sense. your that obviously that exhausted? third include interest be or in On still been interest three was you're loan with may you understand does the yet an on page XXX% Totally that the That collected loans X-rated Kendra. reserve has to hand deck, to negotiating that, that, the when Thank show borrower. makes a not

Patrick Mattson

it's Steve, I'll question. Patrick. take that

Steve Delaney

Patrick. Hi,

Patrick Mattson

or to on asset rated a collected, third the that loans, right, loans in Good have require instead there, the where rated the just have the it's We've had an service of given or replenished are. cover carry in now in was allow in service. of were we regardless covering form interest there's future we those other was and some hold place risk business all to have plan. we've of And whether to loan get XXX% debt of they collected there's three five, cash morning. may Yes, And a cash is they payments, us sort XXX% doesn't reserves have interest shortfalls. structure where any we then all either loans collected, risk cases, have given those of rate October collected the Obviously, what that these so X-rated quarter, four reserve, sort shortfalls project, structure that three, as flow some to are might interest reserve, of obviously

So, that hopefully addressed your question.

Steve Delaney

construction That the on does, two lastly life focus, the were noted product that loans. thank ones new with they science obviously, and And you. you new we that made,

pretty commitments process, pre-leasing place the in find Or should as these such spec So, more normally do as buildings? that? specialized early for view these are significant you we property in the

Matt Salem

in jump on can that It's one. Matt. I

construction a the there's lending we've done On range.

lease actual up, for some tenant an in place. are Some there's

are lease-up in the strong largest Science these markets, very most located both particular within the companies two, to Life institutional strategies. And obviously really these On segment. and catering and

Steve Delaney

Thanks. comments. Appreciate Thank the you.

Operator

Hagen question Eric next The go from Please BTIG. with is ahead.

Eric Hagen

you're Hey, thanks. well. morning, Good Hope guys.

the you is can NOI thinking sponsor? during loans you're stress for a are the using about, with process refinance and you an what one and sale rate how respect like variables through discuss especially asset to underwriting that takeout risk management both just the or interest for First growth,

Matt Salem

take all, loans can obviously of in caps rate I just have that. place. Well our Matt. interest first it's Eric,

the looking view portfolio a cash rent of equity stress how at probably north of in rate because interest to the coverage. yield of terms over gravitating terms are flow on the But time our to debt occupancy this really as just stabilize the in just today's adjust that's at we're trying or new and those So, is, again market we're cap environment of underwriting current number existing current that's again one you're higher to kind rates and the well environment environment. today,

base our growth. of doesn't kind case future credit for So, really rent give

growth range the course, and of given looking that dependent on downside Of we're and and sponsors of just will we course, at certainly well, of consider underwriting we're it include multifamily typically putting growth, those occupancy values on areas a typically really the some industrial, looking go. to today. -- of and cap really put but declines leverage then you've both mean it's entire at an market of really the seen stressing where we're will this I materially rates and And we decrease in think an future but this to start as and rent could certainly but just pretty market rent in try were And year, type property over included scenarios. type course dependent,

-- -- debt of kind some a market extent decline leverage been market it's of led So, and and to debt availability.

hopefully a one all-in make sure coupons. gives about of coverage point at like debt these it look we'll certainly just underwriting we're So, we're a in north how But we market look this primarily things. stabilizing adjusted at little also bit context yield, coverage you but of on and of that

Eric Hagen

investors stabilized construction and think like in versus you very have the in you're a environment value you you do like funding one Where you at to guys do then factor that? assets. the this picking a And especially better or Thank are you other the detail. liquidity versus helpful How nearly better do relative are concentrate value? That's the if will you. level, if are option, getting where investors for assets, about shareholders towards think when it. high the up think which Got

Matt Salem

as into we just funding, and place. getting construction future not Sure, And well the put, a asset there's in nature our premium construction the small lending, you're portfolio. like put to the overall ground, an building of given all associated obviously we of want dollars risk with saying, higher they incremental a certainly is our opposed piece on are

predominantly two can we or most on opportunities. going we and nature what financing we accretive for they which loan. come of live those mostly in be just sponsors they'll funded built again really, development of small see premium, of do, we to be when that in a assets piece markets had a the case given kind this always certainly have the of say So, I'd a loans at overall very quarter, with like whole on attractive have. But And KREF built is we opportunities really be in the portfolio. strong funded, of that with that, and the But

Eric Hagen

Got you. That's guys helpful. Thank you very much.

Operator

And you. Please from the Kaili next question Citi. is Wang from Thank go ahead.

Kaili Wang

forward? terms my should Thank answered. you, in repurchases, asked that of share been most about you. just and questions going But of Thank have how we think the of pace

Matt Salem

the question. I you in. It's Thank for jump can Matt,

think is buying a market been in of our history terms really shares. back leader we've seen over what you've I really

You value highlighted of Steven to what's a relative this making it COVID, continuing year. versus course the of earlier, And share over saw we a mentioned, loan. question at we're buybacks of the evaluate what obviously, outset we've the I done as asked

opportunities but the really liquidity is financing And right have puzzle available the of going then, And loan what again, and equation returns making in where is sometimes piece again, we generate factor now we're this biggest kind to and through come able of making are in for finally environment, market to of very positioned we've be going lower defensive at leverage sure a just running this a that and volatility. to just out volatile be point one to that two, got liquidity that.

buybacks. our think but about we weigh share record track you gives to these So, we'll some of hopefully continue how indication

Kaili Wang

Thank you.

Operator

Jade And with the ahead. next Rahmani go question is KBW. a follow-up from Please

Jade Rahmani

much. very you Thank

upcoming rate the with office On was really what changed? currently and five, shock rated two, dialog Minneapolis timing it's maturity the rated what and the quarter your now it Was interest of borrower and the risk is last risk the suggest?

Patrick Mattson

them. Jade. different have Thanks, factor approach these loans that timing Each going is a question. to is real big take of a sort I'll Yes, Patrick. to here. It's of

a out in debt. bit that good in a summer. more little now, maturity for for That was this And December. an to under the at contract relative a fell date Just spring are asset contract we premium the was our context, over

I so, think reflection And near-term be just here event likely fact risk given maturity. to what a you of in that there seeing the is are the going terms here rating is that of

extending of options the are on options. not are free including table All But, there loan. the the

we path. value, like date, approach if this shareholder better get feel we we a as is so maximize And to are explore to that to maturity there going

the dialog are sponsor about how to as so, back dialog throughout with about think KREF. in maximize to think and continue financing, we do we expect And to we return process we the as this us

Jade Rahmani

Thank you much. very

growth space, to XX%. You could the office? you overall? is case that Matt, believe in also bifurcation for prices in markets be down are What Clearly you mentioned, for big And say but would office generalize? multi-family the real commercial estate values if you XX% may

Matt Salem

liquidity -- I right? the why asset. of level. about And we the Minneapolis highest challenge there and is not highest are nobody think type the potential a at asset, that right? where the of talking trophy is challenge, outside that's Well, liquidity it's just-- or of is in Where very maybe the A today And this just lot what Class right? office knows, In that's

it's down listen significantly to for going if you exactly obviously that can me hard growth guess But office office down XX%, than generally. is more the markets be that. are where So, to is say market

that U.S. be think U.S. what interest estate then tough you value say speculate but just I whole are to uncertainty figure markets the if the adjusting rate to decline like So, estate wouldn't overall out. new real want this environment. just one -- will to the on real I But given there,

Jade Rahmani

Okay.

the where does I But in questions other we Some in too? call gotten general. terms back believe on rank have issues space all of margin are risk you managing

Matt Salem

[Multiple there -- Speakers] you want. if

portfolio vast For basis. not I of a it's us, mean non-mark our for big it's financed us. not -- is factor -to-market majority on a

just we But that of portfolio, have we any, continues liquidity. a the any heard big given that ours. and And can One our any I concern margin positioning cycle. see lot market could We have you choose know not bottled. haven't -- a how don't or of imagine haven't be that we if calls. experienced finance through it's to this of our seen certainly

Jade Rahmani

of facilities, in financing do financing some that area to of And to opportunities? capital, quarter, new an things in the the could is clearly initiatives or that banks? additions stand non-U.S. terms Are they to exposure create interested positive accretive assets? And U.S.-based the help talking access where dollar-denominated asset-specific gaining terms in in

Jack Switala

ahead, Patrick. ahead, go Go

Patrick Mattson

several just I a different this I that we've there say got paths in think will is market.

that the one non-U.S. areas think institution. growth I in potentially is of of

market. growth look of think we this support where this past area. areas seen have help not could our if But one financing so from year it it's some of and we in is That's only the And the come that that. we at capacity, the

Jade Rahmani

Thanks. you anything Matt, add? do have to

Matt Salem

think that's I No, well said.

Jade Rahmani

Great, thank the you taking questions. for

Matt Salem

Thanks, Jade.

Operator

the Ladies back Jack and our like to this turn concludes remarks. gentlemen, session. to for question-and-answer closing I over would conference Switala any

Jack Switala

or care, me to have today. us Take thanks you and reach for out Operator, Please Thanks, everyone here the if team everyone. questions. any Great. joining

Operator

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

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KKR Real Estate Finance Trust (KREF) 25 Oct 222022 Q3 Earnings call transcript