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Operator
pack for you when that property was paid off? Thanks.
spk05
Yeah, I'll take this one. So we've carried the loan at $57 million through the balance of this workout. So any proceeds above that are effectively recognized as income at the resolution. So the short answer is yes, that'll show up as positive income for us. in the second quarter because we accrued nothing along the way until we had certainty on resolution. So that'll be a second quarter item for us.
Operator
Nice. Okay. And is it premature to ask you whether that will be, obviously it'll be in GAAP. When you think of the nature of that recovery or however you want to describe it, do you think that would impact your distributable EPS? Yes.
spk05
It will because that's effectively interest income or at least the lion's share of that should be interest income when we kind of finish the full accounting on it. But when you think about what it really represents, it's kind of the catch up on all the accrual that never happened for us or that we never recorded rather.
spk00
Yeah, it's the return we generated.
Operator
Yeah, yeah. I mean, you're getting your money back on the delayed, but it was fully earned at one point in time, for sure. Understood. Well, congratulations on the quarter, and it looks like second quarter will be strong as well. Thank you.
spk00
Thanks, Steve.
Operator
Thanks.
spk04
The next question is from Matthew Howlett with B. Reilly. Please go ahead.
Matthew Howlett
Oh, thanks. Good morning. Thanks for taking my question. Most of my questions have been answered, but one reoccurring thing we keep hearing from participants in the CRE market is sort of get to know your lender with the sort of belief that there'll be a lot of extensions for years out. When I look at your portfolio, I mean, you're getting repayments, you have the multifamily with the GSE exit. What are your conversations like with the sponsors? I know the maturity dates are a couple of years out here, but Are leasing rates to the point where you feel that the GSEs will be there, or do you feel that the sponsors will need longer to see this cycle out? Just what we've been hearing throughout the earnings season.
GSE
Thanks, Matt. This is Mike again. We're in active dialogue with all of our sponsors. Where coupons are is not a surprise to anybody. I think in our prepared comments, you heard me specifically reference the negative leverage within the floating rate market. We're not experiencing that in the fixed rate GSE market. I would say that that leverage is probably flat today. So you can get a 5% flat, give or take 10 or 20 basis points in either direction this morning, coupon out of Fannie Freddie for a five-year or 10-year fixed rate deal. So it's not necessarily positive leverage, given where we're kind of hearing and seeing cap rates today, but it's neutral leverage. So I think, as with everything, these loans and credits and assets are going to be dealt with on a case-by-case basis. I would say, specific to our book, a lot of our borrowers are merchant value-add developers or value-add players, and they did not go into these assets uh, looking to, you know, hold them for five years or 10 years. Um, but that might just be a de facto outcome of the situation is they don't really have a choice, you know, or they always have a choice. You know, it's, it's take a loss, you know, write a, write a big check, most likely to right size your capital stack or go to the agencies and get some, you know, cheaper financing and hold the asset longer term, uh, And that's just a question that they're going to have to answer for themselves. In terms of our dealing with it, again, I think it's going to be very similar to COVID. We have a duty to do what's best for our shareholders. We will do that. These borrowers are also good clients that we've had for a decade at BSP. And individually from our origination staff, some borrowers we've worked with for 20 years. So We have to walk a line of being a good lender, listening, being thoughtful, and then also reminding them that we are their lender, not their partner. But we're looking to get to positive resolution on everything. We're not looking to be difficult. We're in no way a predatory lender or a lender who's loaned to foreclose or loaned to own. um we we would like to just work through these problems uh but you know have to remind people that we we are the lender uh loan documents exist for a reason and uh you know hopefully we'll get to a positive resolution uh in an amicable way that's right i mean that's that's very helpful and it's nice to have that gse exit demand and gse's will always be there in the market when you look at you know lending going further you know when you look at the banks the larger impact of the banks what do you feel
Matthew Howlett
Do you feel you have to think about your model differently now? Do you think that's an opportunity? Will CMBS at some point come in and take over the banks? How do you look at what's happening with the bank and the larger impact of your model?
GSE
Yeah, I mean, it definitely has an impact on our model. I think the banks probably played the biggest role, or at least the void that we can fill the most, is in the construction lending space. I mentioned it in the prepared remarks, but we're seeing some large multifamily construction opportunities that we just weren't in the room for previously because they were gobbled up by the big money center banks. We're also seeing now a lot of industrial construction requests. And if you think about just the context of what an industrial building is, 200,000, maybe up to a million square feet, it's more of a middle market building. banking land, you know, call it a 25 to $75 million construction loan versus the, you know, you can get CBD multi hundreds of millions of dollars for something like that. But the industrial space is much more middle market. So I would say for the first time, we're seeing industrial construction opportunities because that regional bank is very much trying to figure out, you know, what they're doing and what they can and can't do. So we've been seeing more of that So yeah, it's playing a big, big role, and we're seeing a lot of banks with loans that are maturing that are just telling the borrowers, pay us off. They don't want a pay down, they don't want a modification, they just want out. And so I think we're going to see a tremendous opportunity. I mean, all of the headlines are saying one and a half trillion of loans maturing in the next three years. we're ready, willing, and able to fill that void where we can.
spk00
Hey, Matt, it's Rich. And just to maybe add on just a couple of additional thoughts, I think there's a long-term trend and a short-term trend. Mike talked about sort of the gap between buyers and sellers. So there's maybe not as many transactions, you would naturally think, you know, fewer transactions, more money that, you know, has a tightening effect on the market, but money being put out is much lower. So the banks is one obvious example of regional, small, you know, banks are a source of lending. You know, there's either a flight of quality away as those banks shrink or, you know, regulatory increases. So, I mean, I think that's a secular... You know, just change in who's putting out money to, you know, some of the things that we do. The near-term change, Mike also talked about, though, is what our peers are doing, you know, whether they're funds or some of the public REITs, you know, either because they have office exposure or just want to, you know, build liquidity for a rainy day. You know, they've just been loathed to put out capital. Again, this is near-term. You know, who knows how long that will last. The other issue is that, you know, a permanent capital vehicle like a mortgage rate can only invest the capital you have. And most of the time, you know, we're getting prepayments, which have slowed down quite considerably for obvious reasons. So people just don't have as much money to invest. So I think for all those reasons, like you're kind of getting the pick of the litter if you have a lot of liquidity that you're willing to put to work right now in what deal flow there is in all these different categories. So... Like I said, some of that will last for a while because as you sort of shift and replace where the banks were, and some of it's maybe in the next quarter or two or three, but we're enjoying the opportunity right now.
Matthew Howlett
Really helpful. I really appreciate it. Thank you.
spk04
This concludes our question and answer session. I would like to turn the conference back over to Lindsay Crabb for any closing remarks.
Matthew Howlett
Thank you for joining us this morning. Please reach out with any questions.
spk00
Thanks, everyone.
spk04
The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
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