TPG RE Finance Trust, Inc.

Greetings. Welcome to the TPG Real Estate Finance Trust fourth quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. The 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. Please note this conference is being recorded. I will now turn the conference over to your host, Deborah Ginsberg. Thank you. You may begin.

Good morning, and welcome to TPG Real Estate Finance Trust conference call for the fourth quarter of 2021. I'm joined today by Matt Coleman, President, Bob Foley, Chief Financial Officer, and Peter Smith, Chief Investment Officer. Bob and Matt will share some comments about the quarter, and then we'll open up the call for questions. Yesterday evening, we filed our Form 10-K and issued a press release for the 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 discussion of some of the risks that could affect results, please see the risk factor section of our 10-K. 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-K. With that, I will turn the call over to Matt Coleman, President of TPG Real Estate Finance Trust.

Thank you, Deborah, and thanks to everyone for joining this morning's call. I'm pleased to be covering another strong quarter for TRTX and an excellent 2021 overall. Before I dive into the specifics of our performance, I first want to address the successful conclusion of our CEO search process. As we announced in late January, we've hired Doug Bacard as a TPG partner and the CEO of TRTX. Doug has spent his entire 18-year career up to this point at Goldman Sachs, where he most recently served as a managing director and head of U.S. commercial real estate debt in the global markets division. In this role, he had oversight of the firm's commercial real estate debt origination activities, including securitized lending, balance sheet lending, and commercial real estate warehouse financing, as well as commercial real estate securities issuance. In addition to Doug's strong background in real estate credit, we've gotten to know him well over the last several months and believe that he will be a great cultural fit at TPG. Doug's appointment is an important next step for TRTX, and I look forward to welcoming him as the CEO of the company and as a TPG partner when he formally joins the firm in late April. Now, turning to 2021 and Q4 performance. Over the course of last year, TRTX made significant strides across a number of dimensions. We grew our loan portfolio by nearly 9%, realized interest collections in excess of 99%, maintained an attractive 67% weighted average LTV, and closed $1.9 billion of new originations across themes and strategies demonstrating strong secular and demographic tailwinds. We also had important achievements on the capital markets front, closing a $1.3 billion CRE, CLO in Q1 of last year, followed by the issuance of nearly $200 million of 6.25% Series C preferred stock. which we used to redeem in full our 11% Series B preferred stock. These accretive financings, together with our investing activity, drove strong earnings in 2021, allowing us to increase our quarterly dividend rate by 20% in the third quarter of last year. Looking at Q4 of last year specifically, we closed 10 new first mortgage loans with total commitments of approximately $650 million. Consistent with prior quarters in 2021, Our investing activity was concentrated in multifamily and life sciences, although we closed also one hotel loan and one traditional office loan, both in strong markets and with favorable transaction dynamics. We'll continue to focus on those themes that we've articulated while also looking for idiosyncratic deals in other sectors that present compelling risk-reward opportunities. In addition to our theme-based investing strategy, Repeat borrowers and the strength of the TPG platform were distinctive competitive advantages for us in 2021. Of our new loans, more than $785 million and an excess of 40% were to repeat borrowers. 2022 originations have also gotten off to a strong start, and our pipeline is robust. Since the beginning of the year, we've closed three loans with an additional six executed term sheets, bringing closed and in-process origination activity to more than $543 million across nine deals. Pro forma for these closings, 47.4% of our portfolio will have been originated post COVID. And as Bob will further describe, we closed a new CLO last week and a new credit facility yesterday. Turning now to the portfolio, performance continues to be strong. with fourth quarter interest collections of 99.3%, with our LA retail loan remaining our only non-payer. Also, as a reminder, the Las Vegas land that we took back at the end of 2020 was comprised of two different parcels, one towards the north end of the strip and adjacent to the McCarran Airport. In November of last year, we sold the south parcel of our Las Vegas land position to McCarran International Airport for $55 million of total consideration, or $3.15 million per acre, generating a $15.8 million gain on sale. We continue to market the north parcel and are pleased with the momentum that we're seeing in Las Vegas and the level of interest in this parcel. We expect to have an update for you in the next couple of quarters, and we'll update you when we have a definitive transaction. There are also a couple loans in the portfolio that we continue to watch. First, as we've talked about for the last few quarters, we're marketing for sale the assets securing our only retail loan. That process is ongoing and we anticipate having an update in the coming quarters. In addition, we moved two loans previously risk rated as threes to fours this quarter. Both are office deals with business plans that are behind schedule and slower than expected leasing. Neither is currently in default, but we're paying close attention to both. As we reflect on 2021, we're pleased with the progress made at TRTX across originations, capital markets, and portfolio performance. As we sit here in early 2022, we're excited about the strength of the business, our ample liquidity of more than $300 million, and welcoming a new CEO. The lending environment remains competitive, but transaction volumes are high, and we are uniquely positioned with distinct competitive advantages to continue to grow our portfolio and our earnings. I'll now hand it over to Bob to cover our 2021 and Q4 results in greater detail.