TPG RE Finance Trust, Inc.

Greetings and welcome to TPT Real Estate Finance Trust third quarter 2020 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Deborah Ginsberg. Vice President, Secretary, and General Counsel. Thank you. You may begin.

Good morning, and welcome to TPG Real Estate Finance Trust's third quarter 2020 conference call. I'm joined today by Greta Guggenheim, Chief Executive Officer, Matt Coleman, President, and Bob Foley, Chief Financial Officer. Greta and Bob will share some comments about the quarter, and then we'll open up the call for questions. Yesterday evening, we filed our Form 10-Q and issued a press release with a presentation of our operating results. all of which are available on our website in the investor relations section. I'd like to remind everyone that today's call may include forward-looking statements which are uncertain and outside of the company's control. Actual results may differ materially. For a discussion of some of the risks that could affect results, please see the risk factor section of our most recent 10-K and our 10-Q. We do not undertake any duty to update these statements, and we will also refer to certain non-GAAP measures on this call. And for reconciliations, you should refer to the press release and our 10-Q. With that, it is my pleasure to turn the call over to Greta Guggenheim, Chief Executive Officer of TPG Real Estate Finance Trust.

Thank you, Debra, and good morning. We are pleased to report our third quarter performance in the progress we've made since we last spoke. We realize there are a few distractions this week, so we will be concise, stick to what really matters, and get right to your questions. Beginning with asset management, We collected 100% of interest due on our loan portfolio during the quarter. This includes PIC income of $3.3 million or 5.2% of total interest payments. At quarter end, we had eight loans with partial PIC interest with an UPB of $526 million. This compares to four loans and $254 million at the end of the last quarter. Total loans modified with deferral of interest during the quarter were four. Rent collections have declined slightly for our office loans to 91%, but remain steady at 92% for our multifamily loans. Hotel occupancy and REVPAR have steadily increased for each of our loans secured by hotel assets with the best performance from our two resort properties, one that caters to the high-end market and the other which is very much a mid-market property. As well, our select service properties have performed quite well. The office property in Brooklyn, securing our one office loan in that market, was sold to a third party, which happens to be an existing sponsor of TRT on other loans, and our loan was assumed by the borrower. The borrower capitalized that asset with $13.5 million in new cash at closing and is expected to contribute another $5.5 million over the life of the loan. The new loan was paid down by $3 million, and the borrower funded a six-month interest reserve plus guaranteed interest for nine months. We sold a $50 million mezzanine interest at no gain or loss in our largest loan on a midtown Manhattan office building. The institutional purchaser is a JV of a well-capitalized and strategic investor. The bar of the seven property select service hotel portfolio that was 90 days past due at the last quarter brought that loan current and also pre-funded additional reserves for debt service. The bar contributed $2.7 million to affect this. The underlying assets occupancy increased to 60% in October, and the property's red part is approximately 67% of its 2020 19 REVPAR. Subsequent to quarter end, one loan has defaulted. This is a loan on two land parcels on the Las Vegas Strip. The sponsor has substantial liquidity issues in its core business and defaulted on our loan and requested a deed in lieu. We have rated this loan a 5 and have taken a specific reserve of $12.8 million on this asset. We received $199 received $200 million in repayments in the third quarter. Repayments year-to-date, including repayments received after quarter-end, are $830 million. Additionally, we sold the aforementioned $50 million mezzanine loan, of which $3.6 million is a future funding obligation assumed by the purchaser. Our cash position increased to $226 million at quarter-end, and is $271 million as of yesterday's closed net of covenant cash. We have unfunded commitments related to our existing loans of $194 million and $262 million for the next six and 12 months. Our expected net cash outlay on these fundings are $62 million and $84 million, respectively. With the exception of a $77 million A note financing our Las Vegas land loan, our nearest extended maturity of a secured credit agreement is April 2022. And with no corporate or FHLB debt, our liabilities are solely secured credit facilities and CLO financings. Our weighted average fully extended final maturity on our credit facilities is September 2022. After quarter end, we refinanced seven hotel loans into a $250 million committed secured credit facility with a three-year term, with no mark-to-market for two years. As a result, 100% of our hotel loans are financed with no mark-to-market risk for two years, which brings our overall non-mark-to-market financing to 62.6% of total debt. Finally, our gap earnings per basic share was $0.40. and Ryan Roberts. Thank you for joining us. Thank you for joining us. and our focus is on weathering the pandemic storm with our high-quality borrowers so that we can realize on this value for our shareholders. We're also preparing to begin deploying cash in the new year. We're starting to see interesting lending opportunities as acquisition activity among our institutional sponsors has begun to gain momentum, albeit slowly. I will now hand the mic over to Bob Foley. Thank you.