Gabe Poggi

Gabe Poggi asked for more details on the loans made during the quarter, specifically the $22.5 million loan at 11% and the SOFR plus 900 basis points loan. He also inquired about the potential size and scope of the direct lending opportunity for NexPoint Real Estate Finance in the build-to-rent (BTR) sector, considering potential D.C. regulations and NexPoint's broader involvement.

Answer

Paul Richards, Executive Vice President and Chief Financial Officer, confirmed the SOFR plus 900 basis points loan was a continued commitment to the AO Life project. He detailed other loans, including over $10 million in preferred equity for two marinas and a self-storage deal in Hialeah at 13%. Matt McGraner, Executive Vice President and Chief Investment Officer, explained that NexPoint's single-family equity business reviews approximately $550 million in BTR opportunities monthly, with NREF seeing all this deal flow. He emphasized NREF's readiness to provide capital across the cap stack for BTR new construction and CFO financing, focusing on smaller (50-150 unit) projects integrated into communities rather than greenfield developments.

Gabe Poggi asked about the residential portfolio, specifically if there's a market point (e.g., certain interest rate levels) where Starwood Property Trust would consider selling the portfolio to free up capital for infrastructure or CRE lending. He also sought clarification on the total opportunity set for the infrastructure lending business, its key competitors, and its potential growth trajectory.

Answer

Jeffrey DiModica, President and Managing Director, explained that the residential portfolio's ROE is around 11%, with significant recovery in GAAP book value due to spread tightening and increased CPRs from lower rates. He noted that while they are always looking, current rates and tight spreads make new residential originations challenging. Sean Murdock, President of Starwood Infrastructure Finance, highlighted significant tailwinds for infrastructure lending, including projected 5% annual CAGR in electricity consumption and a doubling of LNG exports over five years. He identified competitors as commercial banks and alternative debt funds, noting growing competition but a much larger opportunity set. Barry Sternlicht, Co-Founder, Chairman, and CEO, emphasized the strategic importance of diversified lending verticals like infrastructure.

Gabe Poggi from Raymond James asked about the residential loan portfolio, specifically if there's a point where Starwood Property Trust would consider selling it to redeploy capital into infrastructure or CRE loans. He also inquired about the total opportunity set for the infrastructure lending business, its key competitors, and its potential for growth over time.

Answer

President and Managing Director Jeffrey DiModica explained that the residential portfolio has significantly recovered from its 2022 markdown, currently yielding an 11% run-rate ROE. He noted that spread tightening and lower rates (increasing CPRs) are improving the book, and while they are not rushing to sell, they are actively seeking opportunities to re-enter residential origination. Chairman and CEO Barry Sternlicht affirmed their interest in increasing residential lending volume when market conditions are favorable. Sean Murdock, President of Starwood Infrastructure Finance, detailed the infrastructure lending opportunity, citing significant tailwinds from a 5% annual CAGR in electricity consumption and a projected doubling of LNG exports. He identified competitors as commercial banks and alternative debt funds, acknowledging growing competition but emphasizing the vast market opportunity.

Gabe Poggi with Raymond James inquired about the estimated amount of leverageable capital tied up in resolved or resolving assets year-to-date and BrightSpire Capital's outlook on the credit portfolio for 2026, considering the reduced watchlist and REO exposure.

Answer

Mike Mazzei, CEO of BrightSpire Capital, explained that over $200 million of latent capital is currently tied up in REO assets, which are a drag on the portfolio. He detailed plans to unwind these REO assets and redeploy the capital into higher ROE-levered assets by year-end. Mazzei expressed optimism about the credit quality of the underlying portfolio due to recent turnover and a reduced average loan size, now around $30 million.

Gabe Poggi asked about the amount of leverageable capital tied up in resolved or in-process assets and the go-forward credit perspective of the portfolio, specifically regarding watch list loans and REO assets.

Answer

CEO Michael Mazzei explained that approximately $200 million of equity is currently tied up in REO assets, acting as a drag, with the San Jose Hotel contributing significantly. He anticipates deploying this capital into 12%+ ROE levered assets by year-end. Mazzei also expressed optimism about the credit quality and diversification of the underlying portfolio, noting the average loan size is now around $30 million.

Gabe Poggi asked for details on the two sectors and any specific information regarding the loan repayments received year-to-date in Q1 2026.

Answer

Jack Taylor, President and CEO, responded that the repayments included a retail and a multifamily loan, emphasizing that these were vintage loans from the COVID and higher interest rate periods that paid off at par.

Gabe Poggi, Senior Equity Analyst at Raymond James, asked for specific details regarding the two loan repayments received year-to-date in Q1 2026, including the property sectors involved and any other relevant specifics.

Answer

Jack Taylor, President and CEO, confirmed that the two repayments were for loans collateralized by retail and multifamily properties. He highlighted that these were 'vintage loans' from the COVID and higher interest rate periods, and importantly, they paid off at par.

Gabe Poggi inquired about the timing of loan closings during the fourth quarter.

Answer

CEO Bryan Donohoe explained that the company aims to smooth out the impact of originations through co-investment structures to minimize 'dormant or dead money' in the ecosystem, rather than focusing on the exact timing of individual closings.

Gabe Poggi asked about the timing of loan closings in the fourth quarter and the ballpark ROE target for new originations, assuming low to mid-double digits.

Answer

CEO Bryan Donohoe explained that ACRE aims to smooth out the impact of originations through co-investment structures to minimize 'dormant or dead money' in the ecosystem, rather than focusing on exact timing. While not directly stating an ROE target for new originations, CFO Jeffrey Gonzales previously indicated that reaching a 3.0x debt-to-equity ratio would allow ACRE to earn its historical ROE on the portfolio.

Gabe Poggi asked about the competitive landscape for Ladder Capital, specifically regarding the return of regional banks to the fray. He inquired how Ladder views this competition, especially given their attractive Q4 loan originations at 340 basis points over SOFR.

Answer

Brian Harris, CEO of Ladder Capital Corp, acknowledged increased bank competition, particularly in construction loans, but noted that banks are not actively competing on bridge loans for stabilized cash flow. He reiterated Ladder's focus on newer properties with reset valuations and their historical avoidance of high-leverage borrowers. Mr. Harris identified an 'orphan' market segment for loans between $80M-$100M that fits Ladder well and discussed the soft conduit business, which he expects to recover.

Gabe Poggi asked about the competitive landscape for Ladder Capital in 2026, specifically regarding the return of regional banks and how this might impact Ladder's attractive loan spreads.

Answer

Brian Harris (CEO, Ladder Capital Corp) noted that banks are becoming more competitive, primarily in construction loans, while Ladder focuses on refinancing newer, recently built properties. He stated that banks are not actively competing in the bridge loan space due to regulatory scrutiny, and many former competitive bridge lenders are now 'permanently smaller.' Harris identified an 'orphan' market segment for loans between $80 million and $100 million, which fits Ladder well, and expects the conduit business to recover as cash flows stabilize.