CLNY - Earnings call transcript Q4 2018 | DigitalBridge Group, Inc.

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Operator

Ladies and gentlemen, greetings and welcome to Colony Capital Inc. Fourth Quarter and Full Year 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. pleasure ADDO your Investor my Managing Lasse now at Director Relations. is to host introduce Glassen, It Thank you.

You may begin.

Lasse Glassen

earnings Good morning, quarter call. XXXX fourth Capital Colony conference everyone, and and welcome full to Inc.'s year

today on CEO; the will and also Accounting and President. CFO from Speaking Neale Tangen, session. call the is the Executive Darren company's Tom the Hedstrom, for Officer Redington, be question-and-answer company Mark and available Chairman Barrack, COO Chief the company's

on described current that today, these on the call, over statements risks, to and XX, to are with risks them, events time. presented cause forward-looking that Potential reports filed time I forward-looking are certain subject and for update assumptions. of Before the contains SEC could discussed Colony or All results no does note information information intend from differ the future circumstances. as hand periodic call March are please statements the is and based company's from expectations undertakes to not to this statements. business duty These company's financial XXXX, uncertainties to and upon Capital call uncertainties management's in and this and materially

the in of available on useful segmented both the company's this financial certain information GAAP measures this to such the non-GAAP presents reported is and and appropriate earnings to company issued measure of morning The why are represents the addition, release, measures, financial company's a non-GAAP financial In basis. an call and presented believes on consolidated which investors. explanation reconciliations was website,

reportable non-GAAP available GAAP financial Tom Barrack, prepared reconciliation a has appropriate that to CEO company's Colony segment turn and over measures by And call on website. I'd the and of the to also now, like this the the certain Chairman reconciles Tom? is measure Capital. addition, company to In table

Tom Barrack

economic the world, of morning the the which across liquidity, the on and most employment call. to an low and to regions environment in United ebullience been global balance and the priced a predictability as testament has wars financial participants in around perfection this And for the effect in wave this we assets actually real and in pricing, which invest. universe, has and classes of stability bankers, the which demand to strong most which central Within markets in estate you the States great most unprecedented erupted to backdrop Lasse. Today which you, has we and in trade search the which a morning's lies spurred regions asset the earnings a good rates, unquenchable are we look Thank economic thank of global of of all the historically invest. is in added yield, an intervention unsettlements, and interest unknown performance financial businesses crisis. of of investable supported supply the A assets wake

inherited new structural was to leverage our our operating primarily segments. initial hospitality with which by oldness, REIT high limitations, investment of multifaceted and and diversified, complex untried management a the First, levels, theory, growth limited complicated toggle a was further strategy post-merger healthcare and an partnerships due in

remainder with and cases, namely for is healthcare, better Given management that primarily The in silos, first industrial, business. XXXX, the operating liabilities our accomplished calling had good and to this to those investment we the ourselves of those these growth, for news and broad each assets and XXXX. position challenges, and extending in scheduled some in hospitality, stabilize credit we attendant

hotels segment. our management while million healthcare For sale. we agreement a our $XXX extended XXXX up from extending In property XXXX external for XXXX, portfolio XX the also approximately In $XX refinanced example, By billion Debt Marriott XX terminating $X.X FTEs Other GAHR and asset floating $XXX by hiring segment fully we non-core our portfolio debt, healthcare while our to of in monetize a saving. debt, from an term assets for million Courtyard Equity about hospitality resulting also portfolio. gross accounting management Kensington the and internalizing refinance XX% in we've and segment, million rate and majority or debt of CLNY's placing

an Additionally, about balance million of $XXX and average we XXXX, XX.X represents $X.XX, which streamline we about shares and will value. think GAHR. our monetizing stock million XXXX, continue to a appropriate redeemed In we sound will thoughtfully CLNY allocate to In repurchased to preferred almost excess capital of sheet. common we at discount intrinsic price

bearing excess GP new deployed into co-investments, warehouse positions liquidity will capital. much to third-party bearing rotate plan into and for In foothold we syndicate which $XXX in of future. million fee We promote we products the supporting and XXXX,

allocations do We of exactly XXXX. in From increasing alternatives, to estate will estate related market continue. more the real same operating a companies will real perspective, and

our operated the we the We owned, management summary price, countries. have raising invested in were lay than our and management the for investment business. and we were to year performance began foundation billion trend XX estate around while related XX this for estate certainly capital share. in world with nonetheless XXXX, real the across of history, trend Given assets we our gain disappointed share a stand brand equity to of $XXX this more of operation. NAV our from strength than per and in of real And beneficiary more billion Colony’s we for XXXX, tremendously growth $X.X investment of in In

example, For $XXX million than raised we transactions. more co-investment in

capital million Colony $X.X than Next, our fund. commitment Digital inaugural $XXX we our along raised outside capital GP for more of billion

REIT, the Real New publicly on Estate, the Exchange. Stock third Additionally, Colony listed York Credit formed commercial largest we mortgage

its industry. It launch is trade growth my we throughout monetize continue concrete the or Debt to capital Colombia, non-strategic further the and or XXXX took values in and as and on and to as exceed gas across is Other wherever series third-party Peru, investment a XXXX, of focused little monetization and new with for seasoned our where investors assets. in well providing Chile, steps equity companies investments, third third-party ability public forms to assets as platform, the HBX segment around Mexico, solutions, from equity while mandate. month Additionally, partnership Alliance, Latin exposure dividend consisting America of we our have assets midstream and middle of for a block of a Pacific as of CEO to private as well form no and management market Colony liquidity, will the Equity private meaningful Maintain more growth, no and sponsor manage values will assets focused potential there Energy now investment team. end clear a energy capital the oil efficient we harvesting upstream HBX returning management and those platform

Investment will in utilize well balance to business. We our capitalized our Management of engines sheet value create

us paired individuals gains perfection outlook are driving with for done raising scour sovereign targeting in value Fundraising, can third-party high from our wealth net Assets capital opportunistic capital and globe priced oriented job a macro long-term compelling returns. funds. worth capital to find we've to and which the be transactions, great

liquidity and which the are importantly position, this prepare retain for poised is with the further in fortress sheet growth. the monetize on which will initiative detail these the we G&A while to with most that to and we the solid will welcome so and our closing, constituencies will scale as mitigate Craig for people our the We foundation, the will entities. largely on total extraordinary which execute our And production our economic results the continued rigorously growth of investment has allocation. arise the any and currently large the dividend. like on make on are we’ll our of with Directors, balance the opportunity unforeseen even intervening more reality Armed continue we to Ray risk and we’ll side. product well. co-investment and on success some our Colony’s fishers, welcome our future new focus we status Mikulich amongst in the current net increasing from our intervening brand and our of stabilize as opportunities, continue investing relevant we save and large Management them return board. choice tend return reduction our unforeseen we We’ll from use initiate We capital driven efforts to sheet, balance focus large these balance scale to portfolios Investment sheet cost great doing on an G&A REIT in sensitive allocation decisions, I’d the whom on with ample of two cracks which appointment our business event environment a as the Further dependent the retain business key focus we elaborate is will to In the buy will XXXX, program. will execute allocation reduction present which align model, fortification Hatkoff reduction, underlying cost in empowering our judiciously will total weigh and remain In on event, some $X.XX as will materializes. we dividend. to our of additions as emphasizing Darren Most liquidity, and that always on program, operations maintaining which have capital Capital management and to aforementioned

Dan. Now, I’ll turn to it over

Darren Tangen

and Tom everyone. you, morning, Thank good

of our our filed and section these the a of report fourth morning. As we to earnings, of corporate public Both in are release full this quarter and the reminder the XXXX overview available supplemental within financial addition shareholders website. year documents

of On cost operational previously the corresponding a and and review XXXX. update reduction for program will I in results, some our on touch XXXX objectives and call our financial achievements today, provide on announced

last Financial take call of this Hedstrom matter responsibility our this who year on I this over will became Mark Officer address will As be an results. administrative forward. Chief going will financial the January our where X

full results net of related and loss share GAAP our within in for of XXXX, attributable attributable quarter full principally to the These attributable fourth for million per the for the real stockholders year certain our assets million impairments stockholders results and the primarily financial million loss or year to million portfolios. fourth to loss $X.XX non-cash and the hospitality results healthcare to per common estate net XXXX, common quarter quarter $XXX year $X.XX share. full net stockholders or are XXXX $XXX common $XXX.X was and $XXX.X fourth to was Turning

secondary’s in while equity and the of arising significant of in share share non-recurring core merger FFO ownership Colony million year certain full per XXXX FFO or Fourth intangible investment per Our a $X.XX Fourth $X.XX was XXXX quarter write-downs core few the primarily XXXX. within closing CLNC’s share, Northstar January quarter million XX% of and of the write-off assets notably private to core from $XX.X stake CLNC included unusual or FFO $X.XX losses most portfolio. our share. per XXXX $XXX.X related items, was

Adding to G&A Additionally, $X.XX and be our in have expenses audit, attributed compensation. items these would per as can per fourth tax, core such certain quarter $X.XX been and portfolio back FFO legal, more The both share seasonality for full aggregate share losses the $X.XX and unusual line year. and expectations. of in was share negatives notable some and and there net year the in includes also items with per hospitality positive

and fourth as impairments would our summary, were in quarter gains year. one-time been the various noisy these beginning the budget have set our all the exceeded taken per period. Excluding which result $X.XX results of FFO non-cash share, core the of at financial slightly a losses In

for a budget today. adjusting core refer However, period. public my filings won't made gains year customary reports various FFO our and one-time business basis this losses. segment we ended on individual listeners after the instead And into to I of delve ahead

investments which from would our property and the earnings XXXX core reported make like or share that I referenced first regarding operations. per were per one at full to attributable non-core yesterday sale fell equity unique decision of CLNC's for certain recent can cover CLNC a of XXXX timeframe. or beginning few The of investments, yielding its the by new strategic legacy and rate legacy end redeploy dividend assets of accelerated to of company on basis. low a out higher divest to zero By to private excluding This CLNC, losses the XXXX $X.XX to more a a secondary enabling credit the run capital However, earlier. generally rotating comments a on position earnings lower be I its capital year on investments, short into certain of share events portfolio yielding formed $X.XX in expectations year more

approximately of half announced achieved run I on cost or Since rate announcement, reorganization restructuring million provide Next, an will savings, of the update corporate and the last plan $XX quarter. target. over company the this has stated

XXXX. previously costs million of or $XX annual savings communicated, meet million compensation we administrative to gross to original by $XX early As and the of expect exceed target

Although from businesses positioned are and in long-term retaining come most best of be well for involving being strategic, that workforce growth. businesses us those our diverted, we for the most reductions allowing savings will in people to to cases our are committed

Turning we with objective the to first, began an strategic XXXX, simplify to streamline company. the in accomplishments year and

objective we of One this non-strategic the measure is much Equity complexity of our asset the and size OED ways, our Other or reduction the Debt segment, where of resides. in

million exceeding We $XXX This by target the XXXX net our of $X.X accomplished initial asset decreased of million ahead from for OED to generating non-strategic billion approximately means during $XXX no well are billion done, from liquidity monetizations, but of $X.X significantly equity plan. by by these two-thirds our over year. by was value

which of In non-strategic vehicle. a XXXX, OED of focused continue addition, CLNC, in our year dispositions of investment segment our investment non-strategic credit $X.X represented and liquidity busy assets as third-party business formation deleverage. new from build to OED to another to we investments and majority into be permanent a management XXXX a reallocate early transfer capital look capital of that will occurred grow and the capital within the strategic monetize management billion remaining

size platform. incremental raised continues hard since to raised partners, our billion. following look were work new the remaining These turn at the XXXX, of result success for stage $X GP $X.X was fund is $X.X its and will In efforts cap Digital the we future Notably primarily fund deployed. tremendous campaigns, industrial billion financial fundraising to investment which crisis. of hard through capital, by And raising This raised form investment teams. co-investment products. of co-investment also formation in of teams our I'll approach The that third-party $X.X Now, capital the global was best billion and which to we and our offense. Colony to fundraising was capital both also program set management capital as billion year light include

First, an the management on energy we sectors. Colony products and managing platform creating HBX, focused midstream upstream focused formed financial and investment on primarily

a DoubleLine equities to existing that fund active based rules an million U.S. licensee in channels that can our the equity is investment REITs. was just be and Second, develop compliment Real This Estate Estate various index and licensed the Colony is as Capital to Fund, symbol a under which DoubleLine Capital, public and mutual the Colony Income the strategy launched ticker first management, invest $XXX fundamental plus a REIT Real fund trades under we Index, DBRIX.

Third, strategy. has on Abraaj, signed American bulk composed million in the team And assets portfolio, is last a one-third $XXX closed of acquire the Colony just operations for of add Latin industrial to agreement billion of a plans. industrial which not but growth approximately definitive AUM new a value approximately seed of $X.X which we least, aggressive

industrial capital, the have through XXXX $X.X fund approximately and launched mostly XXXX. billion party since raised open estate of entered in business we reminder, end a third real November an As in

new All of the well CDCS management our including strategies light opportunistic and investment series, co-investment credit various management as transactions our will the discrete fund XXXX investment these growth. be existing primary as drivers future of industrial products

investment it balance in to can focus cleaner for business made and transformation. to and still multiple at in least that Looking which manifest sheet evaluating will That more the we business efforts accelerate a business are XXXX on model. more us our have back, tremendous we simplify management management ways investment a one our into business progress we take light year said,

into stabilization industrial, run of XXXX. credit, monetization the successful to we progress in operational finally, of strategic with with Five, most edge situation and million. and competitive of With the in of our to which and have of strategies. for a Loan, to of we its party And both third growth our the to will areas of operator take of Three, this capital employ in very XXXX, their along Operator? we effective end monetizations over the the optimization success assets least of of investments by thank achievement a $X.X are new which third growth million. rate liquidity cover year. financial non-core estate asset deployment. pleased verticals six $XX the of basis to operating during compelling And objectively Griffin where could of of the my Four, In dividend begin CLNC matures fund can like as at all opportunities, $XXX like additional include and summary, to cost particularly bias results our but at reductions these the new the liquidity re-purchases own of energy, turn real the XXXX, performance earnings many refinancing compelling three to follows. XXXX. create I’d the and towards contributions liquid securities, One, $XX that, securities During I’d our stated investments co-investment in our opportunity excellent and digital, capital raising, special allocation to on measure capital billion model. Q&A. colleagues Two, a party Healthcare call the a toward with end million

Operator

Q&A Thank gentlemen with we you. Ladies line [Operator will our Instructions] be first session. and now FBR. Binner of Randy is the question Our conducting from

live. now are You

Randy Binner

more you on together? of Thank about that the asset broader to the limited could review. of Hi, a relationship strategic look structural wanted think part good any if to question you provide it’s changes? at is you. if or said morning. kind how came Or background And -- I Blackwells sale start and with if I strategic that

Tom Barrack

a Tom. did Blackwells job. it’s good Randy,

thoughtful, repositioning been It have considered we to silos. questions help bright, Jason extended and been with to of board up raised adding that come many is issues to hearing I think done. dealing along committee the an articulate, simplify the of on creating and know special strategy, spurred would it us evaluate these I us the phone, business were a members, already. of have getting if simple, it sick we're say us you're with going

have it we're through helping and in have offense. and we XX and we're the asset us dykes with it's our input, point. complicated the these fingers which actually combinations, how maximize months So additional to environment, this this to really happy you of anxious have most figuring defensive as carve anxious now we're Right shareholder at out really we expertise

So we were the happy now to the great in a yes, part value good earnings we way rapid economy in have do approached two directors. And us. absolutely, cooperate on with very are maximize and is. of of total very happy take along a we They and matrices where really did The the how board is them. figuring to have board. We of it's to that positioning job they out, process where Colony advantage return of

relationship it result. we and pleased with are happy was a great very and So the

Randy Binner

helpful. that's Okay,

So more of think I supportive. is that and partnership that seems like a

from of paying to I the comments So then and are following heard that a kind committed REIT in the you as dividend. remaining opening

generally fundraising of seems a like wanted the vehicles strategy I the there's So, bulk the of other industrial higher that investment I this some It management company that like though investment and larger seems back because in growth you're company. to to to think then, together. me this overall within go And business. syndicated just it growth and a putting success between,

more of as of versus I'd REIT this the a out kind pros this that cons covering just that, much multiple the dividend thoughts So realizing and of to higher by pieces some curious of keeping dedicated business. value separating together potentially be on hear to

Tom Barrack

the the is on who it's the to because it's get answer yes, whether options. total Yes, I eventually look economists current noble it's we're interested. different Grail gas yield from and foot those who on one in are the And is and line looking residual you -- one And those mean, dividend Holy Right quest than interested bottom proved have at the are or all brake. total the are the return as total ultimately constituencies that's yield return. return is foot

I the strategy. rate by we down not price of in world. would historically all at go you I low a paying assets out creating and and mature value interest especially time highest is price as So a this agree going period surgically a mean, brilliant for environment think path, that very in

So is to piece some you to at asset acquisition base. bearing of those of adding critical. looking that added with. have have value have to comfortable in and capital and you when it And fee become of starting very billions news billions carry position party added third good that value we bearing dollars are assets value is the repositioning stabilized assets The are we’re

that think growing multiples is that a our management way year, the define XXXX that what's So told different dividend investment and decided allocation we that different is different has this we what pursuing and you as capacity is we burgeoning serious very really lots we with best categorize our to we the there's we're way. is party options. businesses, really third look capital at in to business for for and But capability and in a something of What investigating those characteristics do produce pocket. capital what and dividend

was are is undrawn Friday the of year. but FFO the in think off the day, for dynastic we new have cash payday We we is is opportunities we the the liquidity, what flow of we stabilized some credit, clean good interesting, right but of every got to of the middle the in assets basic And we're fairway. at the third-party earnings. essence shape. our really are and businesses flow So and eye think in have we're next Cash of lines ball is the XXXX, business end this core need not Thursday going FFO the night taking we're king, every is

Randy Binner

that. for thanks Thanks,

year. this in to plans might refinancing I that times -- be more plans that you GAHR of done one a needs this it. Just was I Can portfolio remarks color for you if I by look the can, what kind think like? that couple December share mentioned and opening any of or Can specifically think you mentioned it process

Darren Tangen

Darren its here. Randy, Sure,

So a we there's the are financing be of to billion hitting market real largest the yes, to to estate relating larger a year loan of healthcare in mortgage the our get going in here this very maturity refinancing portfolio December And shortly that by refinanced. $X.X one or portfolio. with campaign pool

So, objectives key you I here I of that for that's operational got remarks think, company said my strategic to and know done. it's XXXX one everybody get at our that the the to focus of

Randy Binner

I'll it leave a Thanks right, All there. lot.

Tom Barrack

Randy. Thanks,

Operator

you. Thank

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

You are now live.

Jade Rahmani

Turning to that on that. ample the seems remove allocating thing they capital don't the the mean the plenty sidelines OED lot -- Why in whole cost a distress situations value sell really much not the that you for opportunity there’s and portfolio, resources entire time would market, of the it a I and entire a bulk to there's carrying consider of of at right have now. special do discount if the management’s to buyers even not sell portfolio and of

Darren Tangen

over really portfolio of of is I Darren lot non-strategic of shareholders. that maximizing somewhat desperate that it's And recovery mean, its investments. here. value Jade, for time the nature such reasonable period about eclectic our OED and it's a a

program In that there. Albertsons THL the situation, position there's example that hotels the loan another to in significant in category CapEx Hotel part. that own a was XXX which as have is are going Portfolio, such We Safeway through investments

is that trying best up recovery. and us sell all that not to the get individual the sure to wrap ultimately value or best to going I'm So buyer an

that and too for to to So I we're able window priority this down in that XXXX. continue clearly were monetize a the XXXX remains big to look, think, on that focused in us we amount given

Jade Rahmani

of something Real on or terms the impairment including impairments, else? drove give some what that can more on Investment Estate you impairments the whether In color was Management the and any specifics RXR

Darren Tangen

me let that reverse order. So take in

Investment the that to the have. related we investment So relating was related a impairment RXR, healthcare management to interests it not Management business

it no, not So, RXR. was

changed assumptions estate the are As way portfolio real that fair for to just that required of resided which mostly accounting within value assets there assets just that the us as some and to the down other period to healthcare take the some within the they impairments was some a there. healthcare hold works of those portfolio,

number was So portfolio really represented the the impairments biggest healthcare period. in that it the

Jade Rahmani

in were portfolio Tom's comments verticals issues view real earlier do healthcare anticipate in is in in stabilized estate or mentioned that now the I think performance you -- comments XXXX? the terms stabilized, in your other the performance of drags

Tom Barrack

day by day a It's process.

you the If healthcare Jade. it's -- Tom, take portfolio

is and jurisdictions tiny various credit reimbursed. the and geographic subject and the able fix very Rubik's Why? are transaction credit control remember, far you get we're as removed So, think Cube. -- it's if operators and process so skilled lives nursing that a and Because how and being to state out a to you start from net anything, you you regulatory in triple to addition

really to the well So lend stuff. fixing doesn’t itself this structure REIT

kind we’ve into intensity constant the anticipated and But the growth, healthcare. CapEx the calculate. basis of equity looking of return is is groups versus skilled force his in But investment CapEx not the amount facilities operating to of Welch a have healthcare what And that in back their is darling with who you and and is the your Rich great growth we’ve is difficult operational simple So of done sales where new there’s that’s these going a done job stabilized because what rolled difficulty team. layers all on slowly base. of is the on that that saying investment future running nursing has

it homes of look intensive at delivery nursing, to the even future if which medical you is happen be this in just is growth industrial goods. become happen There’s could gigantic outsourced and a what’s So for skilled a takes movement consumer big of time. to operationally going but underway the mile is delivery on strip skilled thinking nursing, services malls last live going the as to

along have stabilized the buildings solving a office but is operational debt talked the all with the talked to going the to operation as housing was what away. about be including those or senior as our about our rectified, means are the interim demand a good think big Medical capital more on We’ve structure all dilemma in we basis, guard and So the less supply mismatch happens issues an we’ve on UK misses handle and we way. terrific. demographics

helped and always rate relatively what to low environment that for is is the interest of foreseeable environment we is view course to is rate future So interest change should going low the our stay dramatic fine. common us be subject

Jade Rahmani

did to quarter, allocation decided asset In right billion significant leverage business million leverage now repurchase capital I and now best reducing Investment think catalyze of the have of strategy co-investment preferreds. $X.X that level stock common is to of would addition you -- why there’s $XXX to a the Management in converts, of you then amount capital terms capital of use this

can So you capital? how prioritize you’ll just discuss

Darren Tangen

stock Jade, mean quarter and Darren swooned -- Maybe so the of stock it’s we we got caught bought I’ll did I year levels. take in at in, very market back attractive I in fourth and opportunity we saw start in that. mean, that think particular share And stock did to an a the $X.XX last fourth stock here. the chime but up Tom Yes, for can averaged our the in mean buyback quarter. advantage clearly I we I our

prepared that, new is for Investment opportunities liquidity common going made party I models. capital beyond business and saw where remarks I investments look XXXX in think So third the my and But that as in for we our did that think having of attract under compelling the we can forward opportunity. an I redeployment this in said Management bias

to the that we you’re over here the of at also to correctly -- that’s and both the the opportunity out that So well. free take deleverage corporate this need And coming point level at as years asset as bias. liquidity level we is but couple up

we’re focused both. So really on

Jade Rahmani

Okay, questions. thanks the for taking

Darren Tangen

Jade. Thanks,

Operator

of Germain Instructions] Thank Securities. comes from the you. JMP [Operator next Our from question line Mitch

now are live. You

Mitchell Germain

of Thanks. on guys some some you you times and whole to the looking changed healthcare. undertaking I also portfolio you Darren, talked sounds think like accelerate are that it about rationalizations

sector? that pursuing of a that is amount could you a significant So maybe potentially that from signal sales be

Darren Tangen

really and I an of us. as highlighted, Mitch, of strategic as Well, creation this committee. with for looking for that asset really formation agreement settlement at And announced review ongoing is undertaking have there we’re was was a Tom considerations mean, Blackwells agreement the everything been in

there opportunity monetize yes, simplify company, state end or to basis achieve we're to do for the to going on accelerated we're an a business get look, And to if that and an more ultimate for so, vision the us that. us the streamline seeking to is assets for

achieve mean, I results. all in the the looking across we the of businesses best terms right how really So can all silos, we're now

Mitchell Germain

And you. about status. maintaining Got you REIT obviously talked

to third attached You've energy expected Colony you've investment you got it years? this traditional three is what digital, I'm construct five understand got -- estate in got trying everything's to real party digital seems look fund. to we be like just when now, did it in to forward

Tom Barrack

who say to in Let And Prologics a general. have at in And and give to to term me public you and answer. earnings. me of little is You [ph], line so with start you that top a that drop give let that with has at all in? land what to look me I storage the bottom of kind CapEx, earnings longer instance with are the box debt, no And widen want steady prefer. little of you storage growth revenues an could has or going with those the lot reality you public darling say, very REIT invest of think margins continue I a try and been it if contractual

years Your seems of asset you guess that going good as supply The all to these to demand be to mine, cycle, as three as five okay. balance that in growth. are in have are at kind where classes of we to is looking

hunters from end hard that the the So up forward buying with have the day market you're this where team and to moving end and anticipated hoping what forward to as we're the quality of past suffering XX% is and silo originating the answer think assets not same products, creating we whatever create move at whatever But to that effect. levering value praying stays being suffered up value margin the is expertise moving being, them ends very in value we're added you syndicating kind high balance for I sheet the that is, recessions. whatever of contributing at

so Select safest you the one So happy advantage is service course, a It's from a stewards aspects economy. quality cycle. with a monetization, streams to get what capital businesses. take And problem because the only the softly economy you're run, understand for of the CapEx clutch thing that in of everybody in entity. those in mispricing And and be is preservation cost happens good. the because always markets of intoxicated what's doing of the employed increases I of gas flow is biggest be But long future. wages the cash is with fully and or of the fully liquidity think pedal income you documents difficult cash hospitality reservoir that portfolio. We're a of should in is and along of doing does you in the be biggest to of rate see saying it good, slowly really happening to doing less we're armed the over-levered. to those that limping subject with and is increases, what And Actually is couple the we're crack But or what employed of fissures should that. that a underlying operating brands.

become answer So from five we global years is player. three think to I the a now

the as managers belong re-qualification playbook. how belong one businesses, middle the another is together they do rectify do of a alternative the of asset you build been your risk they have somewhere have at apart If look one and of benefits those We've playbook subsidiary, in you do set REITs both set of you you bottom struggling we sure. all third together caught defense line of with line we capital had, to for advantage we got and that up been brand starting that money haven't answer. party the an take make along our offense, long We've have But questions we the we which and right? we as are as is the

much and rectified focusing we had difficult So more we've we defense. rectify merger to had anybody envision. been complex sheet than on to balance and And was teams,

one we're is exactly the format public along figure companies, on, last total offense. in belong compromised company, And As to this out marketplace. are Is you get going see that two by that on is what way a focusing together, we it it this year, focusing return year. from dividend should can this we're be for does the

the and a now, constituency clean Other producing it’s auctions question into fundraising is billion is. have is at discounted are that otherwise problem Other and of products Three $XX to discounted pool complexity a problems you you total to euphoria. the having we're which from would need year so to and of to action do, business by We competitive an and in going And years thought we fix to of offense, marketplace. it, year need we create be good to talk a hope we're a about wants. third-party auction capital precipice we we a another you a do, figure need at plan, a that very us basis When and efficient being auction, what Debt in those plan. Debt a Equity, of take we're that stick is to cash distribution an forward, edge a and what because that return I business The variety It's price. which cause of at it. But looking appropriate anybody this earnings what bold drive in shape now to out Equity flow going in and about right we that’s need have what's able some

it tempting. easier in you the thrilling. of So I'm to we, The years definable bold buy. and going dress to three business more And have saying an And the marketplace not in That's open that teams a athletes we're can shareholders internally very to we'll monetization right marketplace beside at these we're do leverage. what months better it's assets at have to over thing you from need all the on sure price, business suffering, our now, other up, and to we figure cap that's we're the out buying we than assets three a be is world. inside we're next know basis look X.X and the the have third-party six so is in you XX% going this at offence. teams great with going incented, be share the so and to that

is is we mantra now are look our where opportunistic. So everyday

rely you and with if upward offence where on along value contributed sometimes capital, the we're having co-invest, sometimes at taking balance So from our going to price how with being figure swing in out economics are edge some but priced to that is sheet, syndicated funds, times there not risk, the an get share our all the other be. assets, formulating highest marketplace the buyer third-party sometimes than of competitive mature that

Mitchell Germain

the That's very helpful. appreciate comment. all I

Tom Barrack

Great. And the thanks for question.

Mitchell Germain

co-investors around seems can; share as of well? to third-party lined two, is there Not -- some portfolio you about billion that think anything that sort much up A, -- plan heard one, trade an it, don't really the plus I one hadn't like don't often ask does industrial portfolio? that is I more a mind? we then And the about if you've construct industrial very create Could you portfolio

Tom Barrack

question. great Yes,

industrial portfolio, Dermody’s Dermody And a So was Dermody Washington added really is from originally. developer great to development core. value

So operating he was had and in pooled It's both mile and it unfortunately the And because bulk. of funds a it bit partially a marketplace, last and and an both like was logistics was leased. logistics little building auction and complicated auction. it mix managing everything bulk

was the million X and go you spec that big too warehouse remember, to building, million I shock, million that empty up an five when sign if X would building right? like rolls foot the times square all bulk of them are The young worst today you to of said and a square into as be catatonic but foot empty and the X this there experience started in owning you you would So estate building tootsie an in buildings imagine. real would leasing is marketplace business,

end open a our So industrial and perfectly was who do part runs and portfolio. it into this part of bulk, which fit and Lew sensational was Friedland, of fund part fit of his portfolio job, that was logistics team leased, it it perfectly on

in that So we're we were entity, low and levered. very competitive very

financing acclaimed bottom and is team fit were goal investor cycle. internationally competitive stayed being than is institutional execution, as understand bulk would edge. the to into the did markets And a The been bulk, We were business the we we the had into and an had end we who the an great ebullient and a logistics know open aligned leverage that it idea and industrial domestically executed which and existing how we the in the business and business, had perfectly co-investor. XXs which same XXs it always fund. now buy, So the our a both we with more

of and bulk. executory leases are tenants job a we same as up, the a which anticipated the Our this are And Last did is they period quick lease the actually anticipating great exactly for for and happened acquisition. in team of even Mile

a business end business open logistical a same with category. we'll a which build is have which business, fund, a new border really have and we of business two of have in we'll open we the the now bulk, different team of So end inside that the bulk at co-investment fund, is

to and they that revocable space and those they competitive again, is business, appetite. we voracious a want those all edge and is product the the a users have with complicated the that it's supply clients, of Apple, have tenants, Amazon, the but -- our customers are those of really Microsoft, So same goal

lease Dermody business, core core while business, the we’re worked. rest to So development the the of was in the up in it

they’ll it So was and what positions Dermody, we’ll go to we you indicated, co-investors in go and with out us logistic. quality another better we and as and tops then bottom call It a of the up buy, side bulk that great great it trade selling exactly bulk base of business think quality off extending for was logistical do set it on out environment and different a it have fund. raise by portfolio our a create acquisitive the

that obviously darlings that is and portfolios team the is it's our superb. the running So of of one

Mitchell Germain

Thank you.

Operator

Thank you.

is up from with of live. the now line KBW, Our Rahmani next are a you question Jade follow

Jade Rahmani

up. follow the taking for Thanks

year XXXX. if Just wanted G&A target a and to give you that could ask to you rate reach also by end cash quantify run expect

was the Specifically, how severance know to I included want much quarter? in

Mark Hedstrom

were Mark during what this question, quarter that higher number the Starting your paid severance individuals. of the incurred was of was roughly Jade, a from million end is Hedstrom. with $XX

is severance unusually So high.

reduction will units cost and run savings cost year the those in think significant will I the us those all in achieved. savings -- are will portion to reductions. we have of assets the other as I allow reductions savings we as the available Not a that savings to the costs expect run in think actions that rate throughout going XXXX. be relates as XX rate to have it during that But XXXX. to for to for year as But as are going XX business forward place realize XXXX occur to produce of well exited

the the through end XX the in a year that's of but place XX going year, we of realized through year, lot plan by us the the all in way So to the to it's get believe. a

Jade Rahmani

Okay.

G&A for to you So what be do cash XXXX? anticipate

Mark Hedstrom

between somewhere think and We XXX XXX.

Jade Rahmani

Okay, thanks that. for

of asset in whether what status individually. over that. or Secondly, the can you update time an sales, you NRE entirety our give wondering I And just achieve was if on frame to expect

Darren Tangen

it’s Jade, here. Darren

payment termination afford a alternatives. reach which that of management special with announced manager be pursuing back conjunction So the it and as agreement, quarter million in was announced the of we that sale agreement last quarter, with did an terminated last also strategic committee we company involving our the to the as board entails $XX

So we're say say soon it's But really -- suffice that not in report concludes. anything that process to liberty ongoing as and something now able process that until we progress right is we're at as will. given it we're there's that to to really

Jade Rahmani

follow the up taking for Thanks questions.

Tom Barrack

Thanks, Jade.

Operator

we to for have gentlemen, to no I‘d Thank queue, floor you. over turn closing. Ladies like the and back management in questions further

Tom Barrack

these a of at the victory. And call. have claim done. teams we'll the Thanks doesn't that last on participating steps. everybody that in I reflect sorry line year share the work am job it's the baby progress, this great price for It's the end

and for thanks thanks for there in with call. the So on us hanging being

Operator

conclude for teleconference Ladies gentlemen you. that does Thank today. and the

now this your for time. day. you may disconnect wonderful and You have your a participation at Thank line

DigitalBridge (DBRG) 1 Mar 192018 Q4 Earnings call transcript