KKR Real Estate Finance Trust Inc.

Good day, and welcome to the KKR Real Estate Finance Trust, Inc. Third Quarter 2025 Financial Results Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, then two. Please note that this event is being recorded. I would now like to hand the conference over to Mr. Jack Switala. Please go ahead.

Great. Thanks, operator, and welcome to the KKR Real Estate Finance Trust earnings call for the third quarter of 2025. As the operator mentioned, this is Jack Switala. This morning, I'm joined on the call by our CEO, Matt Salem, our president and COO, Patrick Mattson, and our CFO, Kendra Decius. I'd like to remind everyone that we will refer to certain non-GAAP financial measures on the call, which are reconciled to GAAP figures in our earnings release and in the supplementary presentation, both of which are available on the investor relations portion of our website. This call will also contain certain forward-looking statements, which do not guarantee future events or performance. Please refer to our most recently filed 10-Q for cautionary factors related to these statements. Before I turn the call over to Matt, I will go through our results. For the third quarter of 2025, we reported gap net income of $8 million, or $0.12 per share. Book value as of September 30, 2025, is $13.78 per share. We reported a distributable loss of $2 million due primarily to taking ownership of our Raleigh multifamily property. And prior to net realized losses, DE was $12 million, or 18 cents per share. We paid a 25-cent cash dividend with respect to the third quarter. With that, I'd now like to turn the call over to Matt.

Thank you, Jack, and thank you, everyone, for joining us today. I'll begin with a brief update on the commercial real estate lending market. The number of real estate opportunities remains robust as we enter the $1.5 trillion wall of maturities over the next 18 months. The debt markets are liquid, with banks returning to the market while increasing their back-leveraged lending. Despite a tightening of whole loan spread since the beginning of the year, with lower liability costs, we are still able to generate strong returns, and we believe that real estate credit offers attractive relative value. As lenders, we think about safety first and the ability to land on reset values well below replacement cost, combined with decreasing new supply, creates a unique credit environment with strong downside protection. Overall, sentiment for real estate is turning positive as investors recognize the lagging values and strengthening fundamentals. We've been actively lending into this opportunity. In the fourth quarter, we expect over 400 million in originations and have already closed 110 million across the United States and Europe. In October, we closed our first real estate credit loan in Europe for KREF, secured by a 92.5% occupied portfolio of 12 light industrial assets across Paris and Lyon, France. This transaction highlights the breadth of our platform and our ability to draw on KKR's global resources. Although this is KRAS' first European loan, over the last couple of years, we have been strategically building our European real estate credit platform, establishing a dedicated team, and originating over $2.5 billion to date. Through our European real estate equity business, we have strong connectivity across markets, giving us unique insight and access to opportunities that align with our disciplined approach. Within our broader real estate credit platform, we have been actively investing across the risk-reward spectrum. Our platform lends on behalf of bank, insurance, and transitional capital, targeting institutional sponsors and high-quality real estate. Our CVS team is one of the larger investors in investment grade and V pieces. Across our global team, We will invest approximately $10 billion in 2025. To support our investing activity, we built a dedicated asset management platform called KSTAR, which now has over 70 professionals across loan asset management, underwriting, special servicing, and REO. KSTAR manages a portfolio of over $37 billion in loans and is named special servicer on $45 billion of CMBS. Moving next to our third quarter results, we reported distributable earnings of negative $0.03 per share or distributable earnings excluding losses of $0.18 per share compared to our $0.25 per share dividend. We set our dividend at a level which we believe we can cover distributable earnings prior to realized losses over the long term. We continue to see upside in our REO portfolio where we are making progress. And as we stabilize and sell those assets, we can repatriate that capital and reinvest into higher-earning assets. Therefore, there's embedded earnings power of 13 cents per share per quarter that we will be able to unlock over time. Looking at risk rating, we downgraded Cambridge Life Science Loan from risk-rated 3 to 4. With increased CECL provisions due to the downgrade, book value per share remained mostly unchanged at $13.78, a decrease of 0.4 percent quarter-over-quarter. We are proactively managing our current portfolio of $5.9 billion. We received repayments of $480 million this quarter. Year-to-date, we have received $1.1 billion in repayments and have originated $719 million, with $400 million of origination circled in the fourth quarter. underlying activity level remains strong, and we continue to see robust market activity. In 2026, we expect greater than $1.5 billion of repayments and expect to continue to match repayments with originations. With that, I'll turn it over to Patrick.