Industrial Logistics Properties Trust

Good morning. Welcome to Tremont Mortgage Trust's third quarter 2020 financial results conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the start key followed by zero. After today's presentation, we'll have the opportunity to ask questions. Please note that the event is being recorded. I'd like to turn the conference over to Mr. Kevin Berry, Manager, Investor Relations. Please go ahead.

Thank you, and good morning, everyone. Thanks for joining us today. With me on the call are President and Chief Executive Officer David Blackman, Chief Financial Officer and Treasurer Doug Lenoy, and Managing Director of Capital Markets Tom Lorenzini. In just a moment, they will provide details about our business and our performance for the third quarter of 2020. We will then open the call to a question and answer session with sell-side analysts. First, I would like to note that the recording and retransmission of today's conference call is strictly prohibited without the prior written consent of the company. Also note that today's conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. These forward-looking statements are based on Tremont's beliefs and expectations as of today, Tuesday, November 3, 2020, and actual results may differ materially from those that we project. The company undertakes no obligation to revise or publicly release the results of any revision to the forward-looking statements made in today's conference call. Additional information concerning factors that could cause those differences is contained in our filings with the Securities and Exchange Commission, or SEC, which can be accessed from our website, trmtreat.com, or the SEC's website. Investors are cautioned not to place undue reliance upon any forward-looking statements. In addition, we will be discussing non-GAAP numbers during this call, including core earnings, for reconciliation of net income determined in accordance with GAAP to core earnings. Please see this morning's quarterly earnings release, which is available on our website. I will now turn the call over to David. David?

Thank you, Kevin, and good morning. Welcome to the third quarter earnings call for Tremont Mortgage Trust. During the quarter, our attention focused on asset managing our loan portfolio and actively engaging with our loan sponsors. While many borrowers are under pressure in this economic environment, I am pleased to report that all of our loans are current on debt service. As we have discussed on prior earnings calls, Tramont's capital remains fully committed, which eliminated our ability to originate new loans during the quarter. Our portfolio consists of 14 whole loans with approximately $294 million in aggregate loan commitments with a weighted average maturity of 2.9 years when including extension options. As of September 30th, the portfolio had a weighted average coupon of 5.7% and an all-in yield of 6.4%. Since the end of the quarter, the sponsor of our financing secured by a retail center in Paradise Valley, Arizona, exercises extension right and has met all the conditions for a one-year loan extension to be effective later this month. Our financing secured by a multifamily community in Houston also matures in November. We are negotiating definitive documentation with a sponsor for a one-year extension that includes an increase in the loan's interest reserve. At the current cash flow run rate, the interest reserve should be more than adequate to help maintain debt service current for the next 12 months while the sponsor stabilizes occupancy and markets the property for sale. We expect documentation to be finalized and the extension to become effective later this month. As I mentioned earlier, some of our borrowers are experienced in various levels of distress from tenants that are not able to operate and require rent relief. For the trailing three months ended September 30th, we had five loans where the pandemic negatively impacted the cash flow from our collateral properties such that the income generated from the tenants was not sufficient to fully pay debt service. None of these loans have required forbearance and all remain current on debt service. As a reminder, all of our loans are structured with risk mitigation mechanisms such as cash flow sweeps or interest reserves to help protect us against investment losses. The relationship with our repurchase facility lender remains strong and we have maintained consistent dialogue regarding our liquidity and the status of our loans. During the quarter, City advanced money in normal course to fund our loan commitments to borrowers. In October, we extended this facility by one year until November 2022. We believe this reflects confidence in both the health and quality of our loan portfolio as well as our ability to originate high quality loans and to effectively asset manage. In October, we declared a one cent per share distribution. This is consistent with the distribution declared during the previous two quarters and reflects the decision announced earlier this year to reduce the dividend in light of the economic uncertainty and disruption to the U.S. capital markets brought on by the COVID-19 health crisis. Our business has continued to perform well, and the proactive measures we have taken to preserve capital have led to improved liquidity. As we look towards year-end, we need to declare a one-time distribution to shareholders in December in order to pay out at least 90% of Tramont's 2020 taxable income to maintain our REIT tax status. We expect to pay this distribution in cash and our board will determine the amount based upon Tramon's full year financial performance after considering our tax loss carry forward and distributions paid during the year. As a reminder, our manager has extended its management fee waiver through the end of 2020, which we believe highlights our manager's alignment with shareholders during this challenging time. And finally, a few weeks ago, we announced upcoming management changes at Traymont. I will be retiring in June 2021 and will be resigning from my executive position with Traymont at the end of 2020. It's my pleasure to introduce Tom Lorenzini, who has been appointed president of Traymont effective January 1, 2021. Tom is currently a managing director of capital markets for our manager. He is a founding member of Traymont's predecessor business and has more than 25 years of experience in the commercial real estate finance industry. We are thrilled to have an executive with such a strong background to lead the team forward and navigate our high-performing loan portfolio to achieve greater scale in the future. I'll now turn the call over to Tom for an update on market dynamics in the current environment. Tom?