Sunrise Realty Trust, Inc.

Good morning, and welcome to Sunrise Realty Trust's third quarter earnings call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. As a reminder, this call is being recorded. I would now like to turn the call over to Gabriel Katz, Chief Legal Officer. Please go ahead.

Good morning, and thank you all for joining Sunrise Realty Trust's earnings call for the quarter ended September 30, 2024. I'm joined this morning by Leonard Tannenbaum, our executive chairman, Brian Cedris, our chief executive officer, and Brandon Hetzel, our chief financial officer. Before we begin, I would like to note that this call is being recorded. Replay information is included in our October 8, 2024 press release and is posted on the investor relations portion of our website at sunriserealtytrust.com, along with our third quarter 2024 earnings release and investor presentation. Today's conference call includes forward-looking statements and projections that reflect the company's current views with respect to, among other things, market developments, our investment pipeline, anticipated portfolio yield, and financial performance and projections in 2024 and beyond. These statements are subject to inherent uncertainties in predicting future results. Please refer to Sunrise Realty Trust's most recent periodic filings with the SEC for certain conditions and significant factors that could cause actual results to differ materially from these forward-looking statements and projections. During today's conference call, management will refer to non-GAAP financial measures, including distributable earnings. Please see our third quarter earnings release uploaded to our website for reconciliations of the non-GAAP financial measures with the most directly comparable GAAP measures. The format for today's call is as follows. Len will provide introductory remarks, and Brian will cover our portfolio and outlook for our pipeline. Brandon will then provide an update on our financial position. After that, we'll open the lines for Q&A. With that, I will now turn the call over to Executive Chairman Leonard Tannenbaum.

Thank you, Gabe. Good morning, and welcome to our first earnings conference call as a stand-alone public entity. I am excited to share that we are continuing the strong momentum we have built since our listing as an independent public company. Suns is an important part of the TCG real estate platform. This platform consists of a number of funds focused on sourcing, underwriting, and investing in commercial real estate loans. The affiliation with this platform provides Suns with the ability to pursue larger transactions. We continue to see opportunities in the fast-growing southern United States and are benefiting from the favorable conditions in the commercial real estate market. The Federal Reserve's September interest rate cut of 50 basis points had a positive impact on buyer and borrower sentiment, with our team observing a noticeable increase in the number of sponsors seeking debt to either acquire new assets or refinance existing loans. With many providers focused on their existing portfolios and banks pulling back from the market, alternative lenders like Suns have the opportunity to invest in deals with strong risk-adjusted returns. We expect these tailwinds to persist as demand for commercial real estate debt continues to outpace its supply and interest rates come down gradually. Given these positive trends, our direct origination platform continues to source attractive deals and we have maintained an active pipeline of $1.2 billion. Year to date, the TCG real estate platform and its syndicate partners have closed approximately $461 million in deals, of which Sons committed $150 million. We also have four signed term sheets across the platform, totaling $235 million in documentation. As of November 1st, Suns had seven deals in our portfolio. To date, we have closed every transaction we have signed a term sheet for, and we look forward to announcing additional closings in the future. Currently, our target leverage ratio is 1.5 times to 1. As executive chairman and the largest shareholder of Suns, I spend a considerable amount of time thinking about our capital structure. As we grow our assets, we expect to have a balance of unsecured and secured debt. I'm thrilled to announce that just yesterday we closed a senior secured revolving credit facility with EastWest Bank as agent. With over $70 billion in assets under management, EastWest Bank has been a valued partner of mine for years. I am pleased they stepped up with an initial $50 million commitment to a credit facility that can expand up to 200 million in borrowing capacity. This facility offers favorable terms at SOFR plus 275 with an attractive floor, giving us the flexibility to strategically expand our portfolio across the southern United States. I believe that this credit facility provides us with a competitive cost of capital that should allow for enhanced shareholder returns in the future. With that, I'll turn the call over to Brian.