TPG RE Finance Trust, Inc.

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the TPG Real Estate Finance Trust Third Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. Please note this conference is being recorded. It is now my pleasure to turn the call over to the company. Thank you. You may begin.

Thank you. Good morning and welcome to the TPG Real Estate Finance Trust Earnings Call for the third quarter of 2024. We are joined today by Doug Bucard, Chief Executive Officer, and Bob Foley, Chief Financial Officer. Doug and Bob will share some comments about the quarter, and then we will open the call for questions. Yesterday evening, the company filed its Form 10-Q and issued a press release and earnings supplemental presentation of operating results, all of which are available on the company's website in the investor relations section. As a reminder, today's call is being recorded and may include forward-looking statements which are uncertain and outside of the company's control. Actual results may differ materially. For a discussion of risks that could affect results, please see the risk factor section of the company's most recent form 10-KET. The company does not undertake any duty to update these statements, and today's call participants will refer to certain non-GAAP measures. And for reconciliations, you should refer to the press release and the Form 10-Q. At this time, I'll turn the call over to Chief Executive Officer Doug Bucard.

Thank you. Over the past quarter, the Fed's initial rate cut and strong economic data across the board have fueled a remarkably broad rally in risk assets. For context, the forward price-to-earnings ratio of the S&P 500 is currently in the 97th percentile when compared to public market valuation multiples since the 1930s. Additionally, investment grade and high-yield corporate spreads continue to trade at the tightest spreads since the GFC. Meanwhile, real estate is beginning to find its footing amidst the sentiment shift at large. Transaction activity has ticked up, and with it, an increase in price transparency across property types. While the REIT index has rallied approximately 15% since midsummer, the aggregate real estate recovery still meaningfully lags the broader equity market rally since the Fed began its hiking cycle in 2022. Real estate values generally remain below the 2021 peak values, which continues to provide an attractive entry point for lenders with dry powder. TRTX is positioned exceptionally well to take advantage of this opportunity set. As this macro picture has evolved, we see the key elements of an attractive real estate lending market developing. First and foremost, banks continue to retreat from direct lending and instead are aggressively pursuing loan-on-loan lending. We see no sign of this capital shift slowing and continue to believe this tectonic shift will benefit the non-bank lending market for years to come. It reduces front-end competition for loan assets and improves liquidity and economic terms of backlog. Secondly, the anticipated decline in short-term rates should increase borrower appetite for floating-rate loans, and when combined with a steepening yield curve, encourage some borrowers who plan to borrow from the fixed-rate conduit or agency markets to pivot to floating-rate debt. As we assess the real estate credit landscape at large, we note four key ingredients that will drive the near-term investment opportunity set. An increase in transaction activity, which will drive further price transparency, combined with increased demand for floating rate borrowing while banks continue to retrench. Fortunately, TRTX distinguishes itself in terms of, one, an offensively postured liquidity position, two, an active new investment pipeline, and three, a high-quality credit profile as evidenced by stability in both risk ratings and CECL reserves. These attributes are further enhanced by the depth and breadth of TPG's broad and diversified investment experience combined with its best-in-class integrated real estate debt and equity investment platform. In terms of activity this past quarter, we received $149 million of repayments concentrated primarily in hotel, multifamily, and mixed-use property types and made new investments totaling $204 million in sectors where we find compelling value, multifamily and hotels, at a weighted average LTV of 63%. Given our robust liquidity position, we're actively pursuing new investments. In fact, our forward pipeline of potential new investments is at a level not seen since the Fed began its interest rate hikes in 2022. We remain very selective with our capital and acknowledge that risk premia have compressed across many asset classes. We continue to be patient investors as we thoughtfully deploy dry powder into the current market. In summary, TRTX has a market-leading position as a plays offense, generates an 11.5% dividend yield, actively manages its loan portfolio and liability structure, and thoughtfully allocates its investment capital. Furthermore, the real estate value recovery has lagged corporate value growth, which amplifies the attractiveness of investing in today's real estate credit market on both a relative and absolute basis. From an earnings perspective, TRTX possesses many levers to grow, including increased deployment using balance sheet cash, recycling of capital from REO, and utilizing untapped existing financing capacity. Our current stock price implies a 27% discount to book value and offers public equity investors a compelling entry point to take advantage of the real estate credit opportunity set, enhanced by the insights of TPG's best-in-class real estate investing platform. With that, I will turn the call over to Bob to provide a detailed overview of this quarter's financial results.