Claros Mortgage Trust, Inc.

good morning ladies and gentlemen thank you for standing by the call will shut start shortly in a few moments Thank you. Thank you. Thank you. Thank you. Welcome to today's Claros Mortgage Trust second quarter 2022 earnings conference call. My name is Candice and I will be operator for today's conference. All participants will be on listen-only mode. After the speaker's remarks, there will be a question and answer period. All lines will be muted during this presentation portion of the call. With an opportunity for question and answer, At the end, if you'd like to ask a question, please press start followed by one on your telephone keypad. I would now like to hand the call over to Arne Wim, Vice President of Investor Relations for the Carlos Mortgage Trust. Please proceed.

Thank you. I'm joined this morning by Richard Mack, Chief Executive Officer and Chairman of Claris Mortgage Trust. Mike McGillis. President and Director of Claris Mortgage Trust, and Jay Agarwal, CMTG's Chief Financial Officer. We also have Kevin Cullinan, Executive Vice President, who leads MREX Originations, and Priyanka Garg, Executive Vice President, who leads MREX Portfolio and Asset Management. Prior to this call, we distributed CMTG's earnings supplement. We encourage you to reference these documents in conjunction with the information presented on today's call. If you have any questions following today's call, please contact me. I'd like to remind everyone that today's call may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in our other filings with the SEC Any forward-looking statements made on this call represent our views only as of today, and we undertake no obligation to update them. We will also be referring to certain non-GAAP financial measures on today's call, such as distributable earnings, which we believe may be important to investors to assess our operating performance. For non-GAAP reconciliation, please refer to the earnings supplement. I would now like to turn the call over to Richard.

Good morning and thank you everyone for joining us for CMTG's second quarter earnings call. CMTG delivered another strong quarter as we continue to gain momentum across our strategic priorities in originations, asset management, and capital markets activity. During the second quarter, we originated approximately $1 billion of new loans, reflecting our continued focus on the residential sector and high growth markets such as Dallas and Atlanta. Our asset management team also made significant progress during the quarter. As noted on our last call, we successfully resolved our largest non-accrual loan, driving a positive outcome for our stakeholders and significantly reducing non-accrual loans to approximately 2% of the portfolio. And we continue to make progress towards future resolution of these remaining non-accruals. I'm also happy to report that despite the choppiness in the capital markets, We further enhanced our financing capabilities by securing an additional $150 million bridge acquisition facility. As I look to the broader markets, heightened market uncertainty has become the prevailing theme challenging investors across asset classes. Record inflation levels, disrupted supply chains, tightening monetary policy, and geopolitical challenges had until recently dominated headlines. But now mixed economic data is part of the analysis. Considerations include sectors of slowing economic growth, areas of rapid inflation, areas of minor inflation, higher borrowing costs, weakening corporate margins, a strengthening dollar, declining of volatile commodity prices, and inconsistent corporate commentary. These are conflicting signals. and they cloud the economic picture and further complicate the narrative for potential economic outcomes. And so it's no surprise that there's still much debate about whether the Fed can engineer a soft lending. Here at CMTG, we think a modest recession is the likely outcome, but it's far from a certain one. What is certain is that the discussion continues to evolve and broaden in scope and complexity as we further contemplate the interconnectedness of the U.S. economy and other major economies and what that means for our economic outlook here in the U.S. and in real estate more specifically. On a positive note, transitional real estate lending continues to be a bright spot in today's investing environment as the opportunity set for alternative lenders has become increasingly attractive. particularly for floating rate strategies like the one that CMTG employs. Over the past several months, we've observed credit spreads widen dramatically as banks in the securitization market reduce their appetite for risk. On top of this, interest rates are also increasing at a record pace. This has set up our new originations for potentially better total returns for the same amount or less risk than what was possible just six months earlier. Further, it seems that recent rate hikes and potential future increases will continue to provide tailwinds to our sector and greater returns. Longer term, however, we could see some credit spread tightening as absolute turns continue to climb to a place where we believe capital flows will be diverted into our sector. Amidst this positive environment for transitional real estate lending, it is important to acknowledge that rising benchmark rates and widening credit spreads are creating uncertainty surrounding equity valuations, which we believe need to adjust downward for any asset with medium to long-term leases with modest to no rent escalations or lying outside quickly inflating rental markets. Thus, it is not surprising to note that the public equity REIT markets are already reflecting a decrease in property valuations. Given this backdrop, CMTG has been focused on lending to rental housing assets with short-term leases and high growth under supplied markets where cash flows are likely to increase more rapidly. When real estate values are uncertain and assets with stable cash flow may be devaluing, we believe that CMTG's strategy of participating in the capital stack as a debt provider Specifically, at an attachment point where our position as significant subordinate capital to protect our investment is as relevant as ever. And I believe that this is one of the best times to be a lender in the property sector that I've seen in my career. But it is not just being in the right sector at the right time that allows CMTG the opportunity to succeed. It is the institutional nature of our platform. It's established investment processes and procedures combined with the multi-generational and multi-cyclical experience that the Mack Real Estate Group has as an owner, operator, manager, and developer. We believe these factors will continue to be the essential drivers of our performance. Our investment strategy focuses on transitional lending opportunities secured by high-quality assets backed by institutional-grade sponsors. We originate primarily floating rate senior loans at compelling LTVs, targeting major markets and select high growth markets. As one of the largest commercial mortgage REITs, we have the scale to provide lending solutions to some of the most well-capitalized real estate sponsors in the world. In addition, our reputation and experience have enabled us to develop trusted and durable financing relationships as we have scaled our business. We believe that the access to liquidity enabled by these relationships will become increasingly important as certain financing counterparties become more conservative or even choose to sit on the sidelines. Our recent $150 million bridge acquisition facility closing amid the capital markets turmoil demonstrates our ability to access incremental capital during a period of stress and speaks to the strength of CMTG's credit quality and our capital markets team. As we look ahead, it's the sum of these parts that we believe will drive our success. Experience, capabilities, relationships, access to capital, the strength of our balance sheet, its low leverage, and access to financing. We are fortunate that Prudence has allowed us to carry a higher cash balance at a time when spreads and rates are increasingly lender-friendly. Therefore, we believe we are well positioned right now to be highly selective and opportunistic in this dynamic market as opportunities continue to unfold. I would now like to turn the call over to Mike McGillis to discuss the portfolio.