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spk03: the equity pool is right now, I would point you to a transaction that we are currently selling in the Sun Belt from one of our managed equity vehicles. The property was marketed by a national brokerage firm and we received 324 executed confidentiality agreements, conducted 46 site tours, and ultimately received 47 written offers, 21 of which were inside of a five cap. That is a staggering amount of participants looking to put equity to work and reminds me of late 2009 and early 2010 in terms of demand meaningfully outweighing supply coming out of a financial shock. Let me be clear, there is no lack of demand for stabilized multifamily assets. What the market is experiencing is a lack of willing sellers. Moving on to slide 13, during the quarter we originated 18 loans at a weighted average of 318 basis points. We continue to see solid opportunities this quarter and the forward pipeline is strong. The transactions we are adding to our portfolio offer highly accretive terms with better underlying credit metrics versus loans written over the past several quarters. Our conduit platform was also active in the second quarter although it generated lower income quarter over quarter. We do expect conduit revenue to contribute to earnings in the coming quarters. We view the conduit as an excellent earnings enhancer in good times but also as a gain on sale business that can offset core balance sheet losses in more difficult market conditions. FBRT is on a very short list of mortgage rates that benefit from having this gain on sale business. Slide 14 is a summary of our watch list. We ended the quarter with seven loans on our watch list. Five loans are risk rated 4 and two loans are risk rated a 5. While neither of the five rated loans are in default nor have ever been in default, given our recent appraisals it was difficult not to downgrade these two positions from last quarter. Subsequent to quarter end we had positive updates on several of our watch list loans. The borrower sold a Dallas hospitality asset very close to our basis. We modified a 272 unit Fort Worth multifamily loan resulting in an additional principal pay down and a new rate cap being purchased and we came to a verbal agreement with the borrower on our Charlotte, North Carolina multifamily property to pay the loan down and extend the loan further. We expect that extension will be executed shortly. The remaining loans on watch list are a portfolio of multifamily assets in various locations in the Sun Belt. This was $147 million cross collateralized loan backed by 15 multifamily assets. The loan has been paid down to approximately 102 million through five asset sales and five of the remaining ten assets are currently under contract to be sold with the remaining five assets in various stages of the sale process. We are not accruing interest on a monthly basis on this loan but we are sweeping all of the loan 176 unit apartment community in Fort Worth Texas that we have commenced foreclosure proceedings but are in active dialogue with the borrower. The CBD high rise office building in Denver, Colorado. This is the loan that we took the majority of our specific Cecil provision against in the second quarter. We made a significant modification to the loan collateralized by this office building and as part of that modification we obtained a new appraisal for the collateral. The valuation difference between the appraisal and our loan balance drove the increased reserve. The loan has not been in default and has remained current on debt payments. The asset is now in our books at a substantial discount to its original principal value. I personally toured this asset just last week and am pleased to report the institutional sponsor has kept the property in very good condition and we will continue to work with them in coming quarters. The final loan on our watch list is a suburban class A office building in Alpharetta, Georgia. The loan is not in default and the borrower has contributed millions of dollars of equity to pay down the loan and keep it current. We also have this asset appraised and took a specific reserve to adjust for the value differential. With regard to the rest of our office portfolio, excluding our largest office loan, a triple net lease headquarters and distribution facility, our pre-2024 originated office exposure has been reduced to only $178 million or .3% of our core portfolio, with our second and third largest office loans having principal repayments in just the last 60 days. In addition, excluding the Denver and Alpharetta office assets, our weighted average in-place of our pre-2024 originated office portfolio is approximately 13.2%. We will continue to actively work towards zero exposure to pre-2024 originated office loans. Lastly, on office, just a quick note on the market and our 2024 originated office loan. That loan is performed exactly as expected with seven properties sold since origination and our original $55.8 million loan participation in FBRT has been paid down to $18.1 million. We could not be happier with the progress so far. Sentiment for office is clearly off the lows. While the realization of losses has likely only just begun, the CMBS market is open for stabilized office buildings with good narratives and we've begun to see bridge lenders dip their toe back into the sector. In fact, a CRE CLO was just priced last week that had an 8% office contribution. Lender appetite for office credit is opening up again, albeit very, very slowly and only for the right opportunities. Moving to slide 15, we held six foreclosure REO positions at quarter end. These positions are a Portland office property, which we continue to believe is not the right time to exit the asset. A 426 unit apartment community in Cleveland, Ohio. This asset was taken via Mez foreclosure and it was one of the resolutions to last quarter's watch list. Our asset management team is on site regularly and we have installed the largest property manager in the country to manage day to day operations. A 471 unit apartment community in Raleigh, North Carolina. This asset was also taken via foreclosure together with two other multifamily assets in Mooresville, North Carolina and Chapel Hill, North Carolina. We have installed one of the largest property managers in the country to run all three of the North Carolina assets overseen by our internal equity asset management group. Mooresville is nearing 90% occupancy and should be headed to the market for sale shortly. As for the Raleigh and Chapel Hill assets, I also visited these properties just a few weeks ago. These are very solid assets and good locations. We will take the time needed to improve the assets, stabilize the assets and look to liquidate them in the future. The Lubbock multifamily property occupancy is up 30 points in the last 90 days and our asset management team continues to meaningfully improve the asset. We expect to be in a position to liquidate the asset in the coming quarters. And our last foreclosure REO is our Walgreens portfolio which Rich and Jerry have already I want to add a note regarding our liquidation of the multifamily assets we have taken back as REO. While I previously mentioned the mountain of equity looking for multifamily acquisitions, there is a meaningful pricing gap between stabilized assets and non-stabilized assets. We firmly believe that taking over an asset, stabilizing it and liquidating it will result in higher recovery value than a loan liquidation or an as-is sale of a non-stabilized asset. In addition, we continue to be overall bullish on the next few years in the multifamily market. With rates hopefully declining and new supply burning off, owning some real estate right now isn't necessarily a bad thing. Lastly, contrary to prevailing view, not all multifamily loans originated in late 21 and early 22 are problematic. Property location, vintage and loan structure influence loan performance, asset liquidity and value. Year to date, we have been successfully repaid on approximately $521 million in multifamily loans, of which $462 million, or almost 90%, were originated in Q3 and Q4 of 2021 or Q1 of 2022. While we acknowledge challenges exist within this vintage, it is inaccurate to generalize about the entire vintage other than to collectively agree it was a recent peak valuation for the multifamily sector. As we look at the company's overall positioning, we believe FBRT will emerge as a market leader once this repricing cycle at hand plays out. Current industry challenges will likely persist for the next several quarters, and our asset management team is working to resolve loans and REO in a manner that will ultimately maximize recovery value for shareholders. To conclude, we will continue to lead with transparency and we will provide updates as we make progress on final loan and REO resolutions. The current opportunity in CRE credit has been and continues to be compelling, and we are excited by what this vintage of new loans adds to our portfolio. And with that, I would like to turn it back to the operator to begin the Q&A session.
spk01: Thank you. And we will now begin the question and answer session. If you would like to ask a question, please press star then 1 on your touchtone phone. If you are using a speaker phone, please pick up your handset before pressing the keys. To withdraw your question, please press star then 2. And at this time, we will pause momentarily for the first question. Our first question today will come from Matthew Erdner with Jones Trading. Please go ahead.
spk09: Hey, good morning, guys. Thanks for taking the question. Jerry, the first one is for you. Can you kind of repeat what happened with the Walgreens and that kind of $25 million that's going to hit next quarter?
spk02: Sure. The $25 million that I referenced is essentially the realization difference in Q3. So we sold 18 stores and most of those settle in Q3. Our distributable is meant to capture the cash effect of our earnings. And so that cash effect or the realization effect, that rolls through in Q3, not Q2. And so that's why I mentioned that in Q3, you'll have that flowing through the distributable portion of our earnings. We obviously already ran that through GAAP. So you won't have a change to the book value. But in order to kind of keep the consistency between what we show in distributable and what we show in our GAAP earnings, it's going to come through there. So it's really just a reminder in terms of how we flow through that income effect on our transactions.
spk09: Does that help clarify
spk02: it?
spk09: Yeah, that's very helpful. And then I want to touch on the Denver asset a little bit. You mentioned you're in talks with the borrower there and have had good conversations. Is there any kind of additional timeline that you guys are able to give around that asset? And then what are your thoughts on if you have to take it on? How long would you guys look to hold that? And would it be similar to the Portland one?
spk03: Hey, Matt, it's Mike. Thanks for the question. Look, I think we just entered into I think it was a quarter or two ago and we mentioned it when it happened a quarter or two ago. We just entered into this modification with them. You know, the asset continues to perform generally in the same spot. As I mentioned today, it's not in default. It's never been in default. And I think both sides are doing everything that they can to push this out and see where the market goes. Clearly, office is the worst asset class in the industry by a long shot. Liquidating assets today is not an enjoyable experience. So I think everybody is looking for time. Again, I think the fact that they've done a great job keeping the asset in the condition it's in, they have an exceptional amount of equity invested into the property. All we can do is continue having phone calls, continue having dialogue and going from there. If it ends up being REO at some time in future quarters, obviously we'll have to reassess it at that time and where the market is. But for now, not in default, continue having conversations and we'll continue to try to be as constructive as we can.
spk09: Thanks for that.
spk01: And our next question will come from Stephen Laws with Raymond James. Please go ahead.
spk08: Hi, good morning. First, Jerry, maybe if I could start, what was the NII drag this quarter from loans that you're not accruing interest or using any interest received to pay down loan balance? And then as you think about resolutions, Mike, I appreciate you running through a lot of details. It seems like a few of these assets are potentially second half resolutions. Could you maybe highlight which ones you think can potentially get resolved this year?
spk02: Yeah, I'll start. Jerry, why don't you start? Yeah, great. Yeah. In terms of the drag, it's a mix of different things kind of coming in and out in terms of non-accrual and sort of non-accrual for us also has the two different buckets, stuff that's on pure cost recovery where we're actually reducing the basis. And then the other income where, like Mike mentioned before, we're not accruing but we're recognizing the cash interest income as received. So it's roughly a $4 million difference in terms of the drag that puts on the portfolio. So even with all the portfolio growth, there is a little built-in drag there from what I would call the friction of turning over some of these assets as we kind of work through
spk08: them. Great. And on that, working through them, Mike, kind of thoughts on which ones can get resolved in the back half of this year?
spk03: Yeah. So Stephen, obviously, we're subject to market and what we can do. As I said in the prepared remarks, we think it's far more important to stabilize these assets before liquidating them. And I think the team is on-site regularly doing what needs to be done to get them in those positions. I would hope that the asset in Mooresville and Lubbock are resolved by year end. I think there's a chance that Raleigh and Chapel Hill could be resolved as well by year end. And then the watch list loans, we just continue to work through those. The large portfolio, the 102 million outstanding today, they've got five under contract. They've got the other five in various stages of LOI or contract negotiation. So hopefully that loan will be lower next quarter than it was this quarter. And we just keep chopping away kind of on all of these things. It's an active part of our every day. And as we said here, there's seven loans that we put on watch list. But just from quarter end to this call, we have resolutions on almost half the watch list. So it's just one of those things that this is going to be a very, very requires a lot of communication with everybody because it's moving and changing literally on a daily basis as we make progress through the watch list.
spk08: Thanks, Mark. I think that certainly highlights the liquidity around multifamily that you mentioned in your prepared remarks. One last question more on the offense side of new originations. Can you talk about you guys have done a ton of originations this year, continue to be active. You know, what's really separating you from winning those deals? There's not a lot of transactions out there. It's pretty competitive. So can you talk about your positioning against peers in the lending market today? And then what's your capacity for continued growth as you think about what leverage levels you'd like to operate and kind of how much more capacity do you have to bring on new originations?
spk03: Yeah, so I think, you know, the banking sector historically has provided about half of the market for credit and CRE. And the banks are largely on the sidelines. And we continue to think that they will be on the sidelines for the next 12 to 24 months. And even when they come back into the pool, it's never a cannonball for the banks, right? It's dipping a toe and getting to the ankle and then the knee. So I don't think banks are coming back as a meaningful competitor anytime soon. You know, the balance of the mortgage-rate sector is I think a few of them might start slowly originating again. But the reality, as we all know, is a lot of industry peers have, you know, 30, 40 percent exposure to legacy office loans. And that's just really difficult to originate in the face of that. And I think they're having to hold capital to solve those issues in the future. So the competitive landscape today is meaningfully less than what it was in 2021. But then again, it only takes three or four competitors to create, you know, a fairly competitive market. So I'm not going to sit here and say that, you know, it's us and nobody else. Clearly, that's not the case. Where I do think that our platform is meaningfully differentiated from others is we do everything. And I think if you look at the middle market, which clearly that's where we're looking to compete, kind of in that 25 to 100 million dollar loan range, that the middle market is generally populated with a bunch of monoline lenders, right? They do one thing. They're a Mez lender only or they're a bridge lender only or they're a construction lender only. Some of them only focus on one asset class. Yeah, we do everything. And I think that all of those products really has been driving our origination because it's a few hundred million in all of those different categories. So as I said last quarter, I believe, you know, it was the first quarter in a long time where all of the cylinders were hitting from the construction loan business, the bridge loan business to the conduit business. And I just think we're slightly differentiated given the breadth of our products and that's been driving our origination.
spk08: Great. Appreciate the comments this morning. Thank you.
spk01: And our next question will come from Tom Catherwood with BTIG. Please go ahead.
spk06: Thank you and good morning, everybody. Maybe starting with Rich, you mentioned how 25 percent of the loan portfolio has been originated within the last year. When do you think the portfolio reaches an earnings inflection point where contributions from these new originations fully offset any drag from non-accrual and REO migrations?
spk07: Thanks, Tom. Good question. Yeah, I mean, we're going to start tracking our post sort of rate increase portfolio exposure on an ongoing basis. Obviously, it's going to be a function of two ends. One is, you know, new loans that we originate as well as resolutions on the existing portfolio. Just simply put, you know, the vast majority of hours and probably most of our peers, portfolios, you know, reach final maturity over, you know, the vast majority of the loans if they haven't already over the next handful of quarters. Of course, some modifications or extensions that will, you know, have that play out over most likely over a longer period of time for all of us. But, you know, as Mike said, we just continue to chip away at the watch list and REO portfolios. You know, we sort of think of it as work in progress. You know, you have raw material, you have finished goods is what gets out the other side. And then in the middle is just the work it takes. So sort of artificially at the end of every quarter, in this case, 630, you know, we'll always have things drop into that spot. So long way of saying that it's going to take a few quarters to and you'll see meaningful improvement. But to get to the other end of getting, you know, out of all your, you know, 2021 vintage exposure, you know, might take obviously longer than that.
spk06: Understood. Thank you. Thank you for that, Rich. And then, Mike, I appreciate all the color on the watch list and REO assets and commentary about which ones we could see kind of sales activity on through the end of the year, specifically on the Wally and Chapel Hill assets. How much more needs to be done to get to stabilization there? Is it just blocking and tackling on the leasing front or is there more work to be done on the assets themselves, more capital that needs to be put to work?
spk03: We were on site yesterday. And I would say the feedback is generally blocking and tackling. I think the better question, and, Tom, I've been doing this for 30 years and I've been on the equity side of the business and the credit side of the business, I think the question that we're also asking ourselves is does it make sense to own some of these for a little bit, right? I mean, you know, going back to my prepared remarks, if Blackstone and Brookfield and KKR are backing up the truck buying multifamily, maybe these things are going to be worth meaningfully more, you And we're going to see that happen in the next 18, 24 months from now. So it's not just a matter of, you know, let's fill it and sell it as fast as humanly possible. You know, we are looking at this through a lens of opportunity. Are there chances to make money on some of these assets? And so I think we're in the process of figuring that out now. We certainly want to get the stabilization as fast as we possibly can. And then we're going to evaluate, you know, does it make sense to liquidate today? Or do we think that these could be worth meaningfully more in the future? And the reality is, while we're dealing with this wave of supply, it is not only coming to a screeching halt in the multifamily sector, it is falling off a cliff. And I think we are going to be grossly undersupplied in multifamily in 2026, 2027, and 2028. So I think there's a very reasonable chance that you could go back to very strong rent growth, see a lot of NOI growth. And so, again, we're going to always do what we think is best for shareholders. That could be fill it and sell it as fast as possible. But in certain instances, if we see a real opportunity to make dollars, we're not going to just hand those profit opportunities to other parties.
spk06: Appreciate those answers. Very much looking forward to see how that all comes together. And then maybe last one for me, Jerry, on the funding side, what are your thoughts about putting the newer G&A nations on the repo line at this point versus tapping the CLO market? And kind of how wide is the gap in the spread between the two, maybe before you would be more willing to pursue more CLOs?
spk02: Great question and something we keep a very close eye on. I'm sure you're not surprised to hear. Right now, what we're seeing in terms of pricing on bank lines is extremely accretive. I think, and I believe I've said this before, loans that are recently originated kind of on adjusted basis that we're lending on, with prices down where they are, the attachment points are pretty phenomenal. So the pricing we're getting on the bank side is really good. So I think we have the luxury of being a little patient in terms of waiting to get a deal together, looking for the right point in the market, and being particular about when we go out and getting all the structure points that we want. In terms of differential, I think it's a little hard to say. It's probably slightly wider on the CLO side than the bank side on a combined cost of funds. But the differential you have to consider is the amount of leverage you can get. Obviously, you get the -to-mark, reinvest, and some ramp. So I think you have to look through the concept in its totality. And I think it's getting closer to the point where it probably makes sense. So I would guess at some point later this year we're probably active in that market. Understood.
spk06: I appreciate those thoughts. That's it for me. Thanks, everyone.
spk01: And our next question will come from Chris Mueller with Citizens JMP. Please go ahead.
spk05: Hey, guys. Thanks for taking the questions. So I guess given the pullback in rates recently and likelihood of rate cuts starting in September, how are you thinking about volumes in the conduit business in the coming quarters? And do you have any expectations for margins that are going forward?
spk03: Thanks for the question, Chris. Look, I think conduit has become a low cost of capital option again. And so people are gravitating back to it. The reality is the volume that we're seeing today is multiples of what we saw in 2021 and 2022 and 2023. So we are going to continue to be as active and as aggressive as we can in that space. It's kind of the one business, as I said again in the prepared remarks, where we can make meaningful millions of dollars in any given quarter. That's either an earnings enhancer in the good times, but also can offset losses in the tough times as we get through kind of the rest of this repricing cycle. We historically have made anywhere from two to five points on our conduit business. I think we're clearly not a volume focused originator. We're a margin and P&L focused originator. And I would suggest that we will continue to target that kind of margin going forward. We're just not in the business of writing conduit loans to make a half a point. That's not the best use of our capital.
spk05: Got it. That's helpful. And then I guess the follow-up I have. So on the multifamily North Carolina foreclosures, were those all with the same sponsor? And if so, do you have any other exposure to that sponsor?
spk03: They all were with the same sponsor, and we do have additional exposure to that sponsor. I will say we've been in very active dialogue with them on all of the loans that we have with them. And some will be repaid in full. Some will be repaid a little bit less than full. Some will take back in an REO. It just kind of stretches across the gamut. But look, at the end of the day, I would rather have almost any multifamily asset versus an office asset today. So we continue to like where we're positioned overall compared to the balance of the industry.
spk05: That's very helpful. Thanks for taking the questions.
spk01: And once again, if you would like to ask a question, please press stars and 1. Our next question will come from Matthew Hallett with B. Riley. Please go ahead.
spk10: Thanks for taking my question. Just on pricing, you originated a little over 300 basis points. What are you seeing between
spk11: the various asset classes in terms of when we're hearing multi, new multis now is under 300. Talk a little bit about that. Talk a little bit about where the floors are that you're originating.
spk01: Hey, Matt. Good morning.
spk03: Yeah, I would say, you know, very middle of the fairway multifamily origination today is probably in the sub 300 pricing range. And I would say, you know, construction lending on multifamilies, probably 200 to 250 basis points wider than that at lower attachment points. We continue to think the construction lending business is probably the best risk return of anything out there. Unfortunately, it's just not an efficient asset, right? We don't get to put the capital to work all right away. It kind of dribs and drabs over the 18 month construction period. And then I would say hospitality is probably 150 basis points to 200 basis points wide of where multifamily is pricing, depending on the specifics. You know, industrial largely pricing very close to multifamily in terms of so for floors, I would say we're generally getting so for floors anywhere between three and 4% on new origination, you know, with the occasional outlier in either direction.
spk11: And when you see attachment points, are we talking, I mean, what were we talking 40%? I mean, on the construction side.
spk03: No, I mean, I think the generic market today again for an existing multifamily asset, you know, that's a light touch transitional or a TCO takeout just to fill it up. Generally, a senior loan today is about a 70% loan to cost. And on construction, you're seeing kind of low to mid 60s loan to cost. So maybe five to 10 points lower in loan to cost attachment, but a 250 basis point premium on pricing, which is, you know, again, when you're when you're focused on three story stick build multifamily and suburbia anywhere USA. We just believe that that pricing premium for the construction risk is outstanding, right? This isn't complicated construction. This is construction that any GC can complete. And we really like the space. But again, it's just not an efficient asset for for a mortgage rate. So we kind of limit the overall exposure that we have there. But the banks must have really
spk11: backed away from that in that construction lending set recently.
spk03: Well, they went from from, you know, probably 90 to 95% market share to completely out of the business, I would say from March or April of 23 to maybe six months ago. You know, we've we've anecdotally heard about a few of them stepping back into the market closer to like the 50% loan to cost range. And then borrowers are still going out looking for for Mez and or pref equity to kind of get the debt stack to the mid 60s. In terms of construction loans, but look, the reality is you can buy almost any asset across the country for less than what you can build it for today. So putting a shovel in the ground from an economic standpoint on building a new multifamily asset, it's really, really difficult to make those numbers work. You know, does that dynamic change over the next few years? You know, obviously remains to be seen. But when it's cheaper to buy than it is to build, you don't typically see a lot of shovels going into the ground.
spk11: Right. What's a great opportunity for you for you guys and look forward to growth in the platform. Turning to funding, I know you've addressed the bank lines and the CLOs. We keep hearing from the calls people are buying AAA, you know how great that market is and are looking at the CLO market. You know, what? 190 200 over. I don't know what the latest deal price that but I mean, you know, is that market going to tighten you look at it and say, hey, well, this is market's going to tighten significantly at some point, then we're going to do a CLO deal. We've heard maybe you could comment on you advance rates like 85% we've heard on that and we will you refinance some of your, you know, if you can get great execution, we refinance some of the CLOs are out of the reinvesting period that are deleveraging. I mean, just let me through that market because you guys have been great at it and the execution over the years have just been tremendous. Just comment on where the market is and what you'll do to tap it.
spk03: Yeah, I mean, I think we're one of the most active players in the market from all sides, right? We're active buyers of bonds and we're also a very active issuer. And, you know, while we have bought AAA in the past, you know, if you believe that values are at least troughing or close to troughing today, you know, from a relative value standpoint, I think we find more value in buying the credit bonds in the bottom part of the stack. Right. You're achieving nine handle coupons on investment grade bonds, you know, single layer or triple B bonds. And, you know, maybe so for Titans a little bit, but, you know, still an eight handle on that is a really nice investment. You know, clearly you're giving up some liquidity versus the liquidity in the AAA tranche. But, you know, we don't view them as, you know, trading instruments. Yeah, they have a QCF. Yeah, they're liquid. But when we buy these, they typically go to bond heaven and we just hold them till maturity. In terms of issuance, it's a conversation that we have with the capital markets desk and Jerry multiple times a month. And the analysis is actually very simple, right? Because the non-economic benefits of the CRE CLO just massively outweigh the non-economic benefits of warehouse financing. Right. You take a you take a non recourse, non mark to market match term funded liability, you know, that we're going to pick that every time. So then it really just comes down to economics. So if the economics are equal to a warehouse facility, you issue the CRE CLO as fast as you can. If they're better, you run even faster. Really, the only analysis is when the economics of keeping a loan on warehouse far outweigh the economics of the CRE CLO execution. That's where you have to think about, you know, the non loan specific things. Do we want extra cash? Do we want this? Do we want so, you know, it's a constant conversation that we have. I think the market is is incredibly under supplied at the moment. Almost any SASB deal CRE CLO that's coming to the market is getting gobbled up very, very quickly. So we're looking at it today. We're looking at it constantly. And we're always going to execute where we think is best for shareholders.
spk11: I mean, trying to read between the lines. So would you when you get ready, would you be running to that market today? And given, you know, what you said to me, things are getting gobbled up and maybe more supply will help tighten those spreads. But it sounds like the radiancy advance rates are just like incredibly 85 percent. And I'll see the non-request features. So why wouldn't you just tap that market, you know, whenever you can now?
spk03: Yeah, I mean, we're now we're getting into the weeds, which which I love. But look, I think while cap rates have widened and I don't want to get into the agency underwriting business, but, you know, as cap rates widen, you know, agency kind of stress cap rates have stayed constant for 30 years. So leverage available in the theory CLOs is going up. And while that's available, I'm not sure that we want to use all of that. Right. I'm not sure that we want to be, you know, five times levered on a CRE CLO. And in fact, I can tell you definitively we don't want to be five times levered on the theory CLO. So, you know, regardless of those leverage points, I think we always typically want to be holding the bottom 20 to 25 percent of any theory CLO that we issue. The market is open. The market is liquid. You know, I think we get probably today a little bit better leverage than than warehouse, a little bit lesser pricing than warehouse. But net net, the economics are probably very close to each other. So, yeah, I wouldn't. Yeah, we're we're actively looking at, you know, the opportunity to issue
spk11: today. You know, I'll just say equity investors get very excited when you start creating the CLO deals that double digit, you know, are always and you guys have done a great job track record of doing that. So look forward to continued success. And thanks for taking my question.
spk01: And this will conclude our question and answer session. I'd like to turn the conference back over to Lindsey Crabb for any closing remarks.
spk04: We really appreciate you joining us today. Please reach out if you have any further questions. We look forward to speaking with you soon. Thanks and have a great day.
spk01: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect your lines at this time.
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