Gaurav Mehta

Gaurav Mehta from Alliance Global Partners inquired about current market trends in loan repricings, yields, and spreads, specifically asking about the impact of increased loan supply in Q4 2025 and Q1 2026 on demand, supply, and pricing. He also asked how AI-driven disruptions are influencing Carlyle Credit Income Fund's investment thesis and approach in the CLO market.

Answer

Lauren Basmadjian, CCIF's Chair and Carlyle's Global Head of Liquid Credit, explained that loan repricings have generally stopped due to market volatility and AI fears, with about 20% of the market now trading over par. She noted a decent backlog of announced deals for Q1/Q2 but anticipated a potential slowdown in M&A due to uncertainty. Nishil Mehta, CCIF's Principal Executive Officer and President, added that AI's immediate impact is market volatility and CLO valuation fluctuations, while the longer-term impact on borrowers is still to be determined. He reiterated that loan repricings have declined, and overall portfolio fundamentals remain strong.

Gaurav Mehta asked about the current trends in loan repricings, yields, and spreads, specifically inquiring about expectations for demand and supply dynamics and the impact of AI-driven disruptions on Carlyle Credit Income Fund's investment thesis in the CLO market.

Answer

Lauren Basmadjian, CCIF's Chair and Carlyle's Global Head of Liquid Credit, noted that loan repricings have generally stopped due to market volatility and AI fears, with a decent backlog of announced deals expected in Q1/Q2 2026. Nishil Mehta, CCIF's Principal Executive Officer and President, added that AI's immediate impact is market volatility and CLO valuation fluctuations, while its longer-term effects on borrowers are still to be determined. He also highlighted that the volatility has reduced loan repricings, and overall portfolio fundamentals remain strong.

Gaurav Mehta asked about the timing of the 700-800 rental homes outlook for the year, specifically if the installations would be evenly split across quarters. He also inquired about current acquisition opportunities in the market.

Answer

Brett Taft, EVP and COO, clarified that rental home installations are seasonal, heavily weighted towards spring and summer (Q2/Q3), with Q1 facing challenges due to cold and snow, and Q4 tailing off. He noted 100 homes are ready for occupancy and 380 are being set up, expecting Q1 occupancy growth. Regarding acquisitions, Brett Taft stated the market remains competitive, with high-quality assets trading sub 5%. He mentioned looking at smaller portfolio and one-off opportunities in the 5%-6% range, expressing satisfaction with the five communities acquired last year. Samuel Landy, President and CEO, added that joint ventures with Nuveen and the Opportunity Zone Fund create significant potential for new community construction and expansion.

Gaurav Mehta with Alliance Global Partners asked about the expected timing for the installation and rental of 700-800 new homes in 2026, inquiring if the distribution would be even across quarters. He also sought an update on current acquisition opportunities in the market, including competitiveness and pricing.

Answer

Brett Taft, Executive Vice President and Chief Operating Officer, indicated that the timing for rental home installations would not be evenly spread due to seasonality and winter weather challenges, with the majority of occupancy growth expected in the second and third quarters. He noted that the acquisition market remains competitive, with high-quality, stabilized assets trading at sub-5% cap rates, but UMH is actively seeking smaller portfolio and one-off opportunities in the 5%-6% range. Samuel Landy, President and CEO, highlighted the potential of joint ventures with Nuveen and the Opportunity Zone Fund to expand new community construction beyond what the parent company can undertake.

Gaurav Mehta of Alliance Global Partners asked for clarification on UMH's 2025 guidance, questioning if it was being withdrawn and what factors were influencing management's confidence, including debt deployment and new home pricing.

Answer

President and CEO Samuel Landy affirmed confidence in achieving the low end of the existing guidance, stating it would be premature to change it given strong potential catalysts, such as improved home financing from HUD. EVP and COO Brett Taft added that new home prices are stable and demand remains robust, with a significant number of new rental homes filled year-to-date.

Gaurav Mehta inquired about UMH's confidence in achieving its 5% rent growth target for the year, the potential price impact of tariffs on new home orders, and the anticipated interest rates for upcoming mortgage refinancings with Fannie Mae.

Answer

President and CEO Samuel Landy and EVP and COO Brett Taft confirmed the 5% rent growth target is on track, noting strong demand and no issues with notices sent year-to-date. Regarding tariffs, Mr. Taft mentioned that while home prices are up 3-5%, the larger concern is potential supply chain disruption. EVP and CFO Anna Chew estimated that rates for the 10-year loan refinancing would likely be in the 5.5% to 5.75% range, based on the 10-year treasury.

Gaurav Mehta inquired about the four acquisitions currently under contract, seeking details on how they were sourced and their value-add potential. He also asked about the expected interest rates for the upcoming mortgage refinancings with Fannie Mae and whether there were any nonrecurring items in the fourth-quarter G&A expenses.

Answer

EVP & COO Brett Taft detailed the acquisitions, noting two are stabilized New Jersey properties and two are in Maryland, with one offering a significant value-add opportunity through occupancy growth. EVP & CFO Anna Chew stated that refinancing rates are expected to be in the 5.5% to 5.75% range and that the Q4 G&A increase was due to accrued performance-based bonuses, which she suggested is a reasonable run-rate for the upcoming year. President & CEO Samuel Landy added that property appraisals from refinancings consistently validate their investment strategy, showing significant value appreciation over time.

Gaurav Mehta asked for clarification on the 2024 comparable figure for the 800 new rental homes planned for 2025 and inquired whether the company's self-storage units are for exclusive use by UMH residents.

Answer

President and CEO Samuel Landy and EVP and COO Brett Taft clarified that while 800 homes were ordered for 2024, the net increase is lower due to sales of older homes. Brett Taft detailed that 443 new homes were converted to rentals year-to-date, and they expect to reach 600-650 for the full year, providing a strong inventory base to achieve the 800-home goal in 2025. Samuel Landy confirmed that almost all self-storage units are open to the public, with a minor exception of about 50 units in Vineland, NJ.

Gaurav Mehta inquired about Chiron Real Estate's target portfolio allocation between medical office and the new SHOP/active adult segments, whether future acquisitions would primarily focus on SHOP or remain open to medical office opportunities, and a comparison of cap rates between SHOP and medical office assets.

Answer

CEO Mark Decker explained that portfolio allocation would be opportunity-driven, not fixed, noting active adult is a smaller niche. He clarified that all acquisitions compete on return, with SHOP currently winning. He stated that cap rates for SHOP and medical office are similar (around ±6% going in), but the key difference is forward-looking growth: 2-3% for medical office versus 4-8% for SHOP, driven by sustainable tailwinds.

Gaurav Mehta inquired about the target portfolio allocation between medical office and the new housing segments (SHOP, active adult), whether future acquisitions would primarily focus on SHOP or still include medical office, and the comparative cap rates between SHOP and medical office properties.

Answer

CEO Mark Decker stated that there isn't a fixed pie chart for portfolio allocation; it will be dictated by opportunity, with active adult being a smaller niche within the larger seniors housing market. He clarified that while medical office is not being abandoned, SHOP is currently winning the competition on returns. Mark Decker noted that cap rates for both sectors are similar, around ±6% going in, but SHOP offers significantly higher forward-looking growth (4-8%) compared to medical office (2-3%).

Gaurav Mehta from Alliance Global Partners asked about the target size for asset dispositions and whether sales would depend on identifying acquisitions or be used for deleveraging. He also questioned if the company's acquisition focus regarding property or provider type would change.

Answer

CEO Mark Decker estimated a potential disposition target of $50 million to $100 million, noting that proceeds would likely fund a mix of debt repayment and new investments. CIO Alfonzo Leon stated that the portfolio mix, which is primarily focused on Medical Office Buildings but opportunistic in other areas like inpatient facilities, is expected to remain consistent as the team continues to seek the best value in the market.

Gaurav Mehta asked about the company's leverage, questioning how high management is willing to take it for the right acquisition opportunities. He also requested color on the current acquisition market and pipeline.

Answer

Chief Financial Officer Bob Kiernan stated that they are not looking to increase leverage significantly beyond its current level, noting it will approach 47% after the Q2 acquisitions close. He reiterated the long-term target of 40-45%. Chief Investment Officer Alfonzo Leon described the acquisition market as having increased volume and a wide cap rate spread. He noted a good supply of assets in their target high 7% cap rate range, but emphasized that pursuing them is contingent on the company's cost of capital.

Gaurav Mehta sought to clarify if the full revenue from the tenant Prospect is included in the 2025 guidance. He also asked if the company maintains a tenant watch list and if there are any other tenants of concern. Lastly, he requested confirmation on the projected 2025 CapEx and whether it includes leasing commissions.

Answer

CFO Bob Kiernan confirmed that the full ABR from Prospect, representing 0.8% of total ABR, is currently included in the 2025 guidance. He acknowledged that GMRE actively manages its portfolio and maintains a watch list but stated there are no other material tenants of concern to flag at this time. Mr. Kiernan also verified the 2025 CapEx forecast is $12 million to $14 million and does not include leasing commissions, which are expected to be significantly lower in 2025, around $1 million to $2 million.

Gaurav Mehta asked for specifics on the portfolio under contract, questioning what factors allowed Global Medical REIT to secure a 9% cap rate, which is higher than the current market average.

Answer

CIO Alfonzo Leon attributed the high 9% cap rate to a combination of factors. He explained that the on-campus properties were less attractive to short-term funds focused on flipping assets, which commanded an extra yield premium. He also emphasized that it was a relationship-driven deal with long-standing connections, which contributed to the favorable pricing.

Gaurav Mehta asked about the upside potential in the two Q4 acquisitions, Ashford Village and World Cup Plaza, regarding mark-to-market rent or occupancy, and sought color on the 30% increase in Q4 same property operations and maintenance expenses.

Answer

Christine Mastandrea, President and Chief Operating Officer, stated that Ashford Village offers upside through rising income as it's in a path of growth, while World Cup Plaza presents a remerchandising opportunity due to its high vehicle per day count and highway location. Christine Mastandrea, President and Chief Operating Officer, clarified that the increase in Q4 property operations and maintenance expenses was due to the timing of planned maintenance activities like painting and parking lot repairs, and is not indicative of a run rate, with approximately 93% of property expenses recovered.

Gaurav Mehta inquired about the upside potential, including mark-to-market rent and occupancy, for the recently acquired World Cup Plaza and Ashford Village properties. He also sought clarification on the 30% increase in same property operations and maintenance expenses reported in Q4.

Answer

Christine Mastandrea, President and Chief Operating Officer, explained that Ashford Village is in a growth path, anticipating higher renewal rates as leases turn. World Cup Plaza is targeted for a remerchandising effort to reposition the property due to its high vehicle per day (VPD) count. Regarding expenses, Christine Mastandrea attributed the Q4 increase in property operations and maintenance to the timing of planned maintenance activities like painting and parking lot repairs, emphasizing it's not indicative of a run rate and that 93% of property expenses are recovered at the portfolio level.

Gaurav Mehta inquired about the upside potential for the two Q2 acquisitions, specifically regarding lease-up opportunities and mark-to-market rent growth. He also asked if the planned $40 million in asset sales are contingent on finding suitable replacement acquisitions.

Answer

CEO Dave Holeman stated that the acquisitions in Austin and Fort Worth are in high-quality submarkets with strong growth trajectories, offering opportunities to apply Whitestone's model of upgrading the tenant mix and driving rents. He highlighted synergies with an existing property in Austin. Holeman also clarified that while they have identified properties for sale, the process is fluid and based on achieving appropriate value in current market conditions, not strictly contingent on acquisition timing.

Gaurav Mehta inquired about the reasons for the quarterly occupancy decline, the status of the $50 million acquisition pipeline, and the sequential increase in debt-to-EBITDA.

Answer

CFO J. Scott Hogan explained the occupancy dip was intentional, stemming from a re-tenanting effort at the Terravita center to bring in higher-quality tenants. CEO David Holeman clarified the $50 million acquisition figure is an estimate of expected activity for the year, consistent with prior years and funded by cash flow and dispositions. Hogan attributed the higher leverage to Q1 seasonality, noting Q4 typically has higher NOI, and reiterated the year-end target is in the low 6x range. Holeman added that year-over-year leverage has improved significantly.

Gaurav Mehta from Alliance Global Partners questioned the future of the asset recycling program and sought clarity on the factors determining the high and low ends of the full-year same-store NOI guidance.

Answer

CEO David Holeman explained that asset recycling is an ongoing part of their investment strategy to optimize shareholder value, not a one-time program to shed non-core assets, though future volumes might be lower. Regarding guidance, Holeman and CFO J. Scott Hogan attributed the range primarily to the timing of leasing activity and new lease commencements, noting that while Q4 growth will be strong, it compares against a very strong Q4 in the prior year.

Gaurav Mehta inquired about expected expense and margin pressures for Chatham Lodging Trust in 2026, specifically beyond the moderating wage increases.

Answer

Dennis M. Craven, EVP and COO, highlighted potential utility pressures in Q1 2026 due to cold weather, but stated that other operating expenses are generally stable, with the primary focus remaining on controlling labor costs and headcount.

Gaurav Mehta from Alliance Global Partners inquired about Chatham Lodging Trust's strategy for future asset dispositions in 2026, potential acquisitions given improved pricing, and expected expense pressures beyond wages for the upcoming year.

Answer

Dennis M. Craven, Executive Vice President and Chief Operating Officer, indicated that Chatham Lodging Trust might opportunistically sell one or two more assets in 2026, with proceeds earmarked for reinvestment. Jeffrey H. Fisher, Chairman, President, and Chief Executive Officer, elaborated on acquisition strategy, noting more realistic seller expectations due to flat RevPAR and the company's comfort with historical leverage levels. Mr. Craven also highlighted anticipated utility pressures in Q1 2026 due to cold weather but generally stable operating expenses, with a primary focus on controlling labor costs.

Gaurav Mehta asked about Chatham's asset recycling program, seeking details on the two additional hotels listed for sale and the strategy for deploying the resulting capital into development projects and acquisitions.

Answer

EVP & COO Dennis Craven clarified that one hotel for sale is an older, lower RevPAR asset, while the other is an opportunistic disposition to reduce future capital needs. He projected a 21-24 month timeline for the Portland development. Chairman, President & CEO Jeffrey Fisher added that due to a wide bid-ask spread in the acquisitions market, the company will likely increase its share buyback activity.

Gaurav Mehta asked for more color on the company's capital allocation strategy, specifically the trade-offs between share buybacks and acquisitions, the status of the potential development in Portland, Maine, and the key drivers behind the strong performance of the Home2 Suites Phoenix Downtown.

Answer

Executive Jeffrey Fisher explained that both share buybacks and acquisitions are viewed opportunistically. He noted that while attractive acquisition yields over 9% are difficult to find, the company's manager, Island Hospitality, provides a unique underwriting advantage. In the absence of accretive deals, the company will repurchase shares due to a perceived dislocation in its stock price. Regarding the Portland development, Fisher confirmed it's still an option but is proceeding cautiously due to extended entitlement processes and cost uncertainty. Executive Dennis Craven and Jeffrey Fisher attributed the Phoenix hotel's success to its ramp-up period, its status as a new product in a market with older inventory, and a strong operating team driving corporate business and market share gains during the peak season.

Gaurav Mehta inquired about Chatham's asset recycling strategy, specifically seeking details on the timeline and market conditions for redeploying capital from asset sales into new acquisitions. He also asked for more color on the planned Portland, Maine hotel development, including expected returns and project status.

Answer

Executive Jeffrey Fisher explained that the acquisition market for high-quality assets remains thin with a significant bid-ask spread, but he is confident in finding replacement assets for the five sold hotels within the year. Regarding the Portland development, Fisher noted they are targeting a 150-200 basis point premium over typical acquisition cap rates and that the project is grandfathered in despite a city-wide hotel moratorium. Executive Dennis Craven added that the existing Portland Hampton Inn has historically been one of the company's highest-yielding assets.

Gaurav Mehta asked for color on the near-term and long-term revenue allocation from each of Offerpad's four solutions. He also inquired about the potential impact of government restrictions on institutional investors purchasing single-family homes on Offerpad's business, directly or indirectly.

Answer

Peter Knag, CFO, explained that the business is focused on conversion across three homeowner solutions (Cash Offer, Cash Offer Marketplace, and listing), aiming to increase conversion by about 1% to reach the 1,000 transactions per quarter target. He clarified that Renovate is a separate B2B product line. Brian Bair, Chairman and CEO, stated that Offerpad's short-term homeownership model aligns with the focus on affordability. He noted that while the Cash Offer Marketplace includes long-term investors, Offerpad has diversified its network with hundreds of cash buyers, including short-term fix-and-flip operators, to mitigate risks if one segment slows down. He emphasized that the focus on affordability and homeownership is key for Offerpad.

Gaurav Mehta asked for insights into the expected revenue allocation from each of Offerpad's four solutions in the near and long term. He also inquired about the potential impact of government restrictions on institutional investors purchasing single-family homes on Offerpad's business.

Answer

CFO Peter Knag explained that three solutions (Cash Offer, Cash Offer Marketplace, brokerage listings) focus on home sellers and conversion, aiming to increase overall conversion by about 1% to reach the 1,000 transactions per quarter target. The fourth solution, Renovate, is a separate B2B service line. CEO Brian Bair clarified that Offerpad's mission aligns with homeownership, as they buy, renovate, and sell homes short-term. He noted that while they monitor potential restrictions on long-term institutional investors, their Cash Offer Marketplace has diversified cash buyers, including short-term fix-and-flip operators, providing resilience if one segment slows down.

Gaurav Mehta asked about CTO's market allocation strategy for new property acquisitions, specifically commenting on Atlanta's high exposure (36% of ABR) and future plans.

Answer

President and CEO John Albright stated that CTO is not looking to add to its Atlanta exposure, expecting it to decrease over time, and will focus future investments on other high-growth Southeast and Southwest markets to maintain a strong portfolio.

Gaurav Mehta sought clarification on the reconciliation of the Signed, Not Open (SNO) pipeline timing for 2026, noting a change from 76% to 47% recognition. He also asked about CTO Realty Growth's market allocation strategy, particularly regarding the high 36% exposure to Atlanta and future plans for allocating cash ABR across markets.

Answer

President and CEO John Albright explained that the change in SNO timing was primarily due to tenants moving off the pipeline into the current year and, most significantly, the sale of Legacy North, which had substantial lease-up completed. He stated that CTO Realty Growth is not looking to add to its Atlanta exposure, expecting its proportion to decrease over time, and will continue to focus investments on high-growth Southeast and Southwest markets like North Carolina, Florida, Texas, and Georgia.

Gaurav Mehta of Alliance Global Partners inquired about the specifics of the Fidelity office property lease amendment, including the new State of New Mexico tenancy and any associated CapEx. He also asked about the potential near-term impact on leverage from a prospective shopping center acquisition and whether any asset dispositions were factored into the current full-year guidance.

Answer

President & CEO John Albright explained that the Fidelity property was designed for such a division, and Fidelity will make a payment for the downsizing. The new lease with the State of New Mexico enhances the asset's value for a potential sale. He also noted that while an acquisition might temporarily increase leverage, planned asset recycling would neutralize the effect over time. CFO Philip Mays confirmed that no dispositions are currently included in the 2025 guidance.

Gaurav Mehta of Alliance Global Partners requested specifics on the mark-to-market upside at the newly acquired Ashley Park property and asked about the spending timeline for the previously disclosed re-leasing capital expenditures.

Answer

Executive John Albright estimated the mark-to-market rent upside at Ashley Park to be at least 10-20% but highlighted that the primary focus is on leasing up vacancy and selling outparcels. Executive Philip Mays clarified that very little of the $9 million to $12 million in re-leasing CapEx has been spent to date, as funds are typically reimbursed to tenants after their work is complete.

Gaurav Mehta of Mizuho Securities inquired about the settlement of CTO's convertible notes, asking if it would be in cash without share issuance and the source of funds. He also asked about the expected 2025 mix between acquisitions and structured investments and the anticipated quarterly trend for same-property NOI guidance.

Answer

Executive Philip Mays confirmed the company has elected to settle the convertible notes in cash, which will initially be funded by the line of credit before being termed out. Executive John Albright stated that the current investment pipeline is primarily core acquisitions, though structured investment opportunities may arise later in the year. Philip Mays added that while same-property NOI will fluctuate quarterly, the annual figure is more indicative, with performance expected to be generally even before picking up in the fourth quarter.

Gaurav Mehta inquired about the company's future asset recycling strategy and which types of properties might be considered for sale.

Answer

Executive John Albright indicated that future dispositions would focus on smaller, non-core assets to improve scale, such as the Daytona properties or a mixed-use property in Winter Park. He mentioned they are waiting for stronger market pricing for some assets and would only sell a strategic property if pricing becomes very attractive and it lacks significant growth potential, but noted nothing is on the immediate horizon.

Gaurav Mehta followed up on the strong demand for loan originations, asking for more color on which sectors are driving this demand, particularly if it's primarily multifamily or if other sectors are also contributing.

Answer

CEO Michael Mazzei emphasized that significant demand is expected in multifamily, driven by the need for equity investors to monetize legacy assets and lenders encouraging borrowers to refinance or sell. He noted a pick-up in activity in January and February, anticipating transaction volume in multifamily to exceed 2025 levels this year due to more assets changing hands.

Gaurav Mehta from Alliance Global Partners inquired about the specific sectors driving the strong demand for loan originations, asking if it's primarily multifamily or if BrightSpire Capital is open to other property types.

Answer

Mike Mazzei, CEO, highlighted significant demand in the multifamily sector, driven by maturing 2021-2022 loans, exhausted equity, and lenders encouraging asset sales or refinances. He anticipates increased multifamily transaction volume in 2026, especially post-industry conferences. Andrew Witt, President and COO, added that BrightSpire Capital's recently closed CLO provides flexibility to reinvest capital across various property types, including hospitality, industrial, and retail, beyond just multifamily.

Gaurav Mehta of Alliance Global Partners requested more details on the Q2 cross-collateralized preferred equity investment and asked about the change in carrying value for the Santa Clara multifamily asset.

Answer

President & COO Andrew Witt described the preferred equity investment as a 14% rate instrument across six Phoenix properties. CFO Frank Saracino explained that the Santa Clara asset's carrying value decreased from its watchlist value because the specific CECL reserve held against the loan was charged off upon its conversion to REO.

Gaurav Mehta from Alliance Global Partners followed up on previous comments about a potential CLO issuance in H2 2025, asking for an update on those plans. He also asked for the earnings from cash flow figure for the first quarter.

Answer

CEO Mike Mazzei confirmed that issuing a CLO in the fourth quarter of 2025 remains the goal, as it is a key part of the strategy to re-lever the portfolio and increase earnings. CFO Frank Saracino provided the earnings from cash flow figure for the quarter, stating it was $0.11 per share.

Gaurav Mehta sought clarification on whether the stated $1 billion loan origination target for 2025 was a gross or net figure.

Answer

CEO Mike Mazzei clarified that while the company has enough capital to originate well over $1 billion in gross volume, the strategic necessity is to grow the loan book by a net $1 billion. Achieving this net growth would increase the total portfolio to approximately $3.5 billion, which is the level required to sustainably cover the current dividend. He reiterated that he expects origination activity to accelerate in the second half of the year.

Gaurav Mehta inquired about Pearl Diver Credit Company's investment strategy, specifically comparing opportunities in the primary versus secondary CLO markets and whether secondary market investments are expected to increase in 2026. He also asked about expected refinancing and reset opportunities within the portfolio and provided a broader outlook on the loan market, including the anticipated supply of new loans in 2026.

Answer

CEO Indranil Basu stated that while opportunities exist in both primary and secondary markets, Pearl Diver Credit Company is currently more focused on secondary market investments. He indicated that multiple portfolio positions are exiting their non-call periods, suggesting potential upside from refinancing and reset activities in an environment of tightening CLO liability spreads over the next couple of quarters. Basu also noted that while Q4 2025 saw tightening loan spreads, he anticipates this pressure to ease, with a marginal increase in M&A activity and new loan issuance in specific sectors in 2026, contingent on central bank rate policies.

Gaurav Mehta from Alliance Global Partners inquired about Pearl Diver Credit Company's investment environment, specifically asking about opportunities in the primary versus secondary CLO markets and the expected focus for 2026. He also asked about upcoming refinancing and reset opportunities within the portfolio and provided a big-picture question on the expected supply of new loans and M&A activity in 2026.

Answer

CEO Indranil Basu stated that while opportunities exist in both primary and secondary markets, the company is currently overweighting secondary market investments. He noted multiple portfolio positions are exiting non-call periods, anticipating upside from tightening CLO liability spreads in the coming quarters. Regarding the loan market, Mr. Basu expects reduced pressure from tightening loan spreads, a marginal increase in M&A activity, and new loan issuance from specific sectors, contingent on central bank rate cutting pace.

Gaurav Mehta with Alliance Global Partners inquired about current investment opportunities in the primary and secondary CLO markets, seeking insight into the relative attractiveness and expected trends for the upcoming quarters. He also asked for clarification on the impact of Q3 portfolio resets and refinancings on expected yields and the remaining opportunities for 2026.

Answer

Indranil Basu, CEO, Founder, and Managing Partner, explained that primary CLO equity market arbitrage returns (10-12%) are currently inadequate, making secondary CLO equity markets more attractive, particularly for CLOs within their reinvestment period with imminent refinancing or reset upside. He declined to comment on intra-quarter Q4 activities but confirmed that Q3 yield improvements resulted from both portfolio rotations and resets/refinancings.

Gaurav Mehta asked for insights into the primary CLO market, specifically regarding investment opportunities and the expected balance between primary and secondary CLO market investments over the next few quarters. He also inquired about the impact of Q4 resets and refinancings on expected yields and future opportunities for 2026, and whether Q3 yield improvement was driven by portfolio rotations, resets, or both.

Answer

Indranil Basu, CEO, Founder, and Managing Partner, explained that primary CLO equity market arbitrage returns (10%-12%) are currently insufficient for large-scale participation, making secondary CLO equity markets more attractive, especially for CLOs within their reinvestment period. He deferred comments on Q4 intra-quarter activities but confirmed that Q3 yield improvement resulted from both portfolio rotations and resets/refinancings.

Gaurav Mehta from Alliance Global Partners asked about the company's leverage expectations and the available sources of capital for deployment in the current year, given the current stock price and leverage. He also followed up to confirm if the redemption of the Series F Term Preferred Stock was done using cash.

Answer

Thomas Majewski, Chief Executive Officer, stated that the portfolio generates significant cash flow (e.g., $80 million last quarter, $57 million collected so far this quarter), which should organically provide enough capital for continued investments and portfolio rotations. He is not focused on issuing new stock, preferred, or debt for new investments, except potentially for joint ventures that may use financing. Kenneth Onorio, Chief Financial Officer and Chief Operating Officer, confirmed that the redemption of the Series F Term Preferred Stock was indeed done with cash. Thomas Majewski added that the ECCF was the highest cost of financing and its redemption, combined with issuing 7% perpetuals, was a good long-term decision.

Gaurav Mehta asked about the company's leverage expectations and the available sources of capital for deploying investments in the current year, given the stock price and leverage levels. He also followed up on the redemption of the 8% Series F Term Preferred Stock, asking if it was done with cash.

Answer

CEO Thomas Majewski stated that the portfolio generates substantial cash flow ($80 million last quarter, high $50 million so far this quarter), which is expected to organically fund new investments and portfolio rotations. He is not currently focused on issuing new stock, preferred, or debt for capital, though joint ventures might use financing. CFO Kenneth Onorio confirmed that the redemption of the 8% Series F Term Preferred Stock was done with cash. Majewski added that the company aims to maintain a long balance sheet, with the nearest maturity being ECCX in 2028, and will continue to focus on lengthening tenor and potentially reducing overall financing costs.

Gaurav Mehta inquired about Alpine's leverage expectations for 2026. He also asked for comments on the acquisition opportunities the company is seeing for 2026, particularly concerning its barbell approach to investment-grade and non-investment-grade properties.

Answer

CFO Philip Mays stated that Alpine is content with its current leverage and expects it to remain at similar levels throughout 2026, depending on market opportunities. President and CEO John Albright expressed excitement about net lease opportunities, particularly the potential to acquire new investment-grade credits that could move into the top five or ten tenants, emphasizing a focus on curating a strong portfolio.

Gaurav Mehta inquired about Alpine's leverage expectations for 2026. He also asked for comments on the investment opportunities seen for 2026, particularly regarding the barbell approach for both investment-grade and non-investment-grade property acquisitions.

Answer

CFO Philip Mays stated that Alpine is content with its current leverage and debt pricing tier, expecting it to remain stable for the year, subject to market opportunities. President and CEO John Albright expressed excitement about net lease opportunities, including potentially bringing new investment-grade credits into the top tenancy, and is focused on curating a strong portfolio composition for the year.

Gaurav Mehta asked for an update on Alpine Income Property Trust's properties leased to At Home and sought clarification on why the interest rates for two loans originated after September were significantly higher than the portfolio's blended rate.

Answer

CEO John Albright stated that one At Home property in Concord, NC, might be sold soon, and for others, they are monitoring actions and seeking replacement tenants for better cap rates. He explained the higher interest rates on recent loans are due to their short duration and flexibility, attracting a different type of capital provider willing to pay more.

Gaurav Mehta asked for an update on Alpine Income Property Trust's properties leased to At Home and sought clarification on why the interest rates on two recent loans (residential and mixed-use) were significantly higher than the blended portfolio rate.

Answer

CEO John Albright reported that one At Home property in Concord, North Carolina, could be sold soon, and the company is monitoring others for potential replacement tenants to achieve better cap rates upon sale. He explained that the higher interest rates (17% and 16%) on the recent loans are due to their short duration and the flexibility offered, which appeals to sponsors seeking capital solutions that traditional opportunity or credit funds typically avoid for short-term investments.

Gaurav Mehta from Alliance Global Partners inquired about the types of properties Alpine is targeting for acquisition, the company's target leverage ratio, and the desired ABR concentration for its Walgreens exposure.

Answer

John Albright, President & CEO, reiterated the barbell strategy of seeking both investment-grade and higher-yielding assets, while managing leverage through asset sales. Philip Mays, SVP, CFO & Treasurer, added that the target for Walgreens exposure is to get it below 5% of ABR from its current level of about 6.7%.

Gaurav Mehta requested details on the Q1 impairment charge and asked about the expected timing for funding the unfunded commitments within the company's loan portfolio.

Answer

Philip Mays, an executive, explained the impairment charge was related to properties expected to be sold in the near term, such as Walgreens, to align their book basis with anticipated sale prices. Regarding loan funding, he stated it should be consistent through the first half of the year, and while a large loan matures in Q3, new fundings are expected to maintain a similar overall funding level.

Gaurav Mehta from Alliance Global Partners inquired about the expectations for four commercial loans maturing in 2025 and the anticipated timing of acquisitions and dispositions throughout the year.

Answer

Philip Mays, CFO, stated that of the four maturing loans, one is expected to pay off mid-year while three will likely extend, and the company is confident it can replace the paid-off loan. John Albright, CEO, added that the current investment pipeline is the strongest it has been in five years for this time of year, with significant activity expected toward the end of the first quarter.

Asked about the variance between actual and forecasted revenues, details on the pre-leasing pilot program, and the rationale and structure of the new bank debt facility.

Answer

Revenues are exceeding original forecasts, driven by high rents, fuel margins, and second-turn lease step-ups, with Miami being a strong market. The pre-leasing pilot is successful and may become a core strategy. The bank facility was chosen for its flexibility, favorable terms like being tax-exempt and floating rate, and its ability to de-risk the permanent bond program.

Gaurav Mehta of Alliance Global Partners inquired about the variance between actual and forecasted revenues and sought details on the pre-leasing pilot program at Bradley and Dulles airports.

Answer

CFO Francisco Gonzalez stated that actual revenues are tracking to exceed original CBRE projections, with the Miami campus showing particularly strong performance. CEO Tal Keinan added that the largest revenue variance occurs between first and second-round leases due to improved negotiating leverage. Regarding pre-leasing, Keinan explained it's a successful pilot with signed leases at attractive, albeit introductory, pricing that is still above their targets, potentially becoming a core strategy.

Gaurav Mehta of Alliance Global Partners inquired about the timing of the expected $17 million in participation rents, the renewal structure of these leases, the company's strategy for the upcoming Series D redemption, and which crop types might be experiencing price softness.

Answer

CFO Lewis Parrish explained that roughly 60-65% of the participation rent is expected in the current fiscal year, with the remainder next year. CEO David Gladstone and CFO Lewis Parrish clarified that leases must be renegotiated and do not automatically convert back to fixed rents. Regarding the Series D, Parrish outlined several options, including paying it off with property sales, using the line of credit, or allowing the rate to float up from 5% to 8%. EVP Bill Reiman added that while annual row crops see normal market fluctuations, the key permanent crops like almonds and pistachios are showing positive trends.

Gaurav Mehta of Alliance Global Partners inquired about the timing of the projected $17 million in participation rents, the renewal process for these modified leases, plans for the Series D preferred stock redemption, and which crop types might be experiencing price weakness.

Answer

CFO Lewis Parrish estimated that 60-65% of participation rents would be recognized in the current year, with the remainder next year, noting the final amount depends on harvest results. Both Parrish and CEO David Gladstone clarified that leases must be renegotiated and do not automatically revert to fixed-rent structures. Regarding the Series D redemption, Parrish outlined several options, including using proceeds from property sales, drawing on the line of credit, or allowing the rate to float up from 5% to 8%. EVP Bill Reiman added that while wine grape markets have been low, they are showing positive signals, and the key nut crops (almonds, pistachios) are seeing positive momentum.

Gaurav Mehta of Alliance Global Partners inquired about the expected timing of the $17 million in participation rents, the renewal process for modified leases, plans for the Series D preferred stock redemption, and price trends for other crops in the portfolio.

Answer

CFO Lewis Parrish stated that approximately 60-65% of the participation rent is expected in the current fiscal year, with the remainder next year. CEO David Gladstone and Parrish confirmed that leases are not automatic and will be renegotiated. Parrish outlined several options for the Series D redemption, including using proceeds from property sales or the line of credit. EVP Bill Reiman added that the most important crop markets for the company are showing positive trends.

Gaurav Mehta asked for clarification on the projected year-over-year revenue decline, questioning why the figure increased from a previously mentioned $13 million to $17 million, and inquired about the total expected participation rents for 2025 and details surrounding a $2.4 million lease termination fee.

Answer

Lewis Parrish (executive) explained that the projected revenue decline increased to $17 million because one additional farm was converted to a direct-operated model and another lease incentive was granted. He clarified they expect to recover this amount, plus a small profit, through crop share proceeds, with 60-70% recognized in Q4 2025 and the remainder in H2 2026. Parrish also noted the $2.4 million termination fee was a one-time event related to three almond farms that are now vacant.

Gaurav Mehta of B. Riley Securities sought clarification on the financial impact of recent lease amendments, specifically questioning the calculation of the $3 million to $3.5 million lower fixed base rent, the expected timing for recovering this amount through participation rent, and the intended lease structure for these farms in 2026. He also inquired about the use of proceeds from a recent Florida farm sale.

Answer

CFO Lewis Parrish clarified that the rent reduction is an annualized comparison of 2025 versus 2024, not a sequential quarterly change. He confirmed the company expects to recover the majority of this amount, and potentially more, in the second half of 2025. For 2026, Parrish stated the hope is to revert to traditional leases, but this will be market-dependent. He also noted that proceeds from the Florida farm sale are currently held as cash on the balance sheet.

Gaurav Mehta of EF Hutton inquired about Gladstone Land's lease expiration schedule for 2025, asking for the total number of expiring leases and the breakdown between permanent and annual row crops. He also sought clarification on the reasons behind the lease amendments executed in the third quarter.

Answer

Lewis Parrish, an executive, stated that 17 leases, representing about 20% of revenue, are set to expire in 2025. He estimated that approximately 60% of these are for annual row crops and 40% are for permanent crops. Regarding the Q3 amendments, Parrish explained they were for various reasons, including extending some near-term expirations that were originally due in 2024 and even some as far out as 2028.

Asked for details on the company's $150 million asset recycling plan and the current conditions in the lending market for potential refinancing.

Answer

The company plans to sell accretive legacy assets (not including the Costco property) to redeploy capital at higher yields, providing strategic flexibility. The lending market appears favorable for future refinancing of their term loan, with terms expected to be the same or better, contingent on future interest rate movements.

Gaurav Mehta of Alliance Global Partners inquired about Motive's asset recycling strategy, seeking details on the $150 million of assets mentioned for potential sale and the current lending market environment.

Answer

CEO Aaron Halfacre explained the $150 million in potential dispositions involves legacy industrial assets that could be sold at high-five or low-six cap rates and redeployed accretively into assets in the sevens. He noted the timing is improving for such transactions. Regarding the lending market, Halfacre stated that early conversations about refinancing their 2027 debt maturity have been positive, with expectations for similar or better terms, contingent on the broader interest rate environment.

Gaurav Mehta questioned Modiv's plans for the development opportunity on a land parcel associated with a $6 million acquisition and asked about the key indicators the company is watching before increasing its acquisition activity.

Answer

CEO Aaron Halfacre clarified that the company is exploring a build-to-suit opportunity for the existing tenant on an adjacent parcel, potentially adding a 60,000-100,000 sq. ft. facility. Regarding the broader acquisition market, Halfacre emphasized the need for patience and a focus on institutional-quality assets in the $10-$25 million range, noting the current pipeline has been thin and the company is prioritizing capital protection over growth for growth's sake.

Gaurav Mehta inquired about the company's expiring interest rate swaps, asking if the new hedges being considered are expected to have terms and rates similar to the current ones.

Answer

CEO Aaron Halfacre explained that Modiv is structuring the new hedges to achieve the same or a lower all-in interest rate. He highlighted a key strategic change: the new swaps will not contain any cancellation or put features. Furthermore, they will be perfectly matched to the maturity dates of the underlying debt, a move designed to create a 'perfect hedge' for accounting purposes and eliminate the non-cash FFO volatility seen in previous quarters.

Gaurav Mehta of Alliance Global Partners inquired about Gladstone Commercial's current acquisition pipeline, the specifics of a recent industrial property sale, and the rationale for the incentive fee waiver.

Answer

President Buzz Cooper detailed an active acquisition pipeline with six letters of intent (LOIs) outstanding and a potential $50 million transaction expected soon. He explained the industrial property sale was the result of a tenant exercising a purchase option within their lease. Regarding the incentive fee, Cooper stated it is a quarterly discussion with management to ensure alignment with shareholder interests and to support employee retention.

Gaurav Mehta inquired about Gladstone Commercial's balance sheet, specifically its leverage expectations and the target mix between secured and unsecured debt. He also asked if the company expects to achieve its 70% industrial portfolio concentration target in 2025.

Answer

CFO Gary Gerson stated that the company's goal is to continue deleveraging from 44.1% into the 'low 40s' by reducing secured debt and increasing unsecured debt, while lowering overall debt. President Arthur 'Buzz' Cooper added that they are 'very hopeful' of reaching the 70% industrial concentration target in 2025 through a combination of acquisitions and dispositions.

Gaurav Mehta inquired about the financial impact of a property settlement in Q3, the expected timing for the sale of three properties held for sale, and the current conditions in the acquisition market.

Answer

CFO Gary Gerson disclosed that the settlement revenue totaled $2 million. He also projected that one property sale would close by the end of the year, with the other two likely closing by mid-2025. President Arthur Cooper added that the acquisition market is seeing increased activity, which is expected to pick up further in Q1 2025, and despite competition, the company is seeing its fair share of actionable deals.

Gaurav Mehta asked for more details on the improving transaction market in Hawaii and sought clarification on why the Q2 comparable leasing spread of 6.8% was lower than in previous quarters.

Answer

CEO Lance Parker responded that while more acquisition opportunities are appearing, any deals closed in 2025 are unlikely to have a material earnings impact. Regarding leasing spreads, he explained that the quarter lacked any significant outlier leases that had boosted spreads in prior periods, but he remained pleased with the overall leasing volume and strong ABR.

Gaurav Mehta asked for details on the new self-storage ground lease, including the transaction's background and the potential for an equity investment. He also inquired about the impact of macroeconomic uncertainty on tenants and the outlook for 2025 lease expirations, and whether the build-to-suit completion delay was related to tariffs.

Answer

Lance Parker, an executive, described the self-storage deal as a strategic 75-year ground lease that converts non-income-producing land into recurring FFO, contributing about $0.01 in 2025. He confirmed an opportunity to invest for a ~20% equity stake in the development. Parker stated that while construction costs are impacted by tariffs, real-time tenant metrics like foot traffic and sales remain positive with no signs of softness. He clarified the build-to-suit delay was a timeline adjustment after breaking ground, not due to tariffs.

Gaurav Mehta asked about Alexander & Baldwin's 2025 external growth priorities, specifically regarding development and redevelopment opportunities, and inquired about any known tenant move-outs for leases expiring in 2025.

Answer

CEO Lance Parker expressed optimism for external growth in 2025, noting the company is actively underwriting opportunities and has included $0.01 of FFO from unspecified growth initiatives in its guidance. He highlighted internal growth prospects at Maui Business Park, including potential build-to-suits and speculative development. SVP of Asset Management Kit Millan added that a significant anticipated industrial move-out did not occur and noted only one minor tenant bankruptcy. Lance Parker also pointed out that the 2025 lease expiration roll is low at just over 8% of ABR.

Gaurav Mehta inquired about the drivers behind the strong new and renewal rent spreads and sought more details on the expected Q4 tenant move-outs.

Answer

SVP of Asset Management Kit Millan explained that the high leasing spread was primarily driven by a single anchor renewal at Queens' Marketplace, and underlying spreads were consistent with recent trends. CEO Lance Parker detailed the three upcoming Q4 vacancies: a full floor at Kaka'ako Commerce Center (industrial), a smaller industrial space in Kapolei, and an office space in Kahului, Maui. Parker noted that while these vacancies are expected to carry into 2025, the company is already in discussions with potential backfill tenants for the industrial assets.

Gaurav Mehta inquired about the two new term sheets, asking if the funds would cover upcoming debt maturities and also provide capital for new loan originations. He also asked for an update on the macro environment in April, specifically regarding credit spreads and loan opportunities.

Answer

Executive John Villano explained that one new facility includes an initial funding for working capital and a delayed draw specifically to repay maturing notes. Executive Jeffery Walraven added that the second facility is intended for expansionary growth. Regarding the market, Villano noted that while their opportunity pipeline is robust, pricing for single-family and multifamily assets is compressing due to high demand, whereas mixed-use projects are maintaining standard pricing.

Gaurav Mehta of Alliance Global Partners inquired about the reduction in the active loan pipeline, the rationale behind the lower rate on a new Dallas loan, and the outlook for management fee waivers in 2025.

Answer

CEO Brian Sedrish explained the pipeline's dynamic nature, noting that lender pullback is creating strong opportunities. He characterized the Dallas loan as a strategic, lower-risk asset with potential for back-leveraging. Executive Chairman Leonard Tannenbaum highlighted the Dallas loan's attractive interest rate floor relative to their credit line. Both Tannenbaum and CFO Brandon Hetzel confirmed that approximately $140,000 in fee waivers remains from their $1 million commitment, which will be applied in the second quarter.

Gaurav Mehta of Alliance Global Partners sought clarification on the Q1 management and incentive fee waiver and asked about the criteria required to expand the East West credit line towards its full $200 million capacity.

Answer

Executive Chairman Leonard Tannenbaum confirmed a full waiver of management and incentive fees for Q1, which contributes to the committed $1 million waiver. He stated there are no specific hurdles to expanding the credit line and expects to increase it over the next two quarters as part of a broader strategy to achieve a 40% equity to 60% debt capital structure and eventually pursue an unsecured debt raise.

Gaurav Mehta of EF Hutton inquired about the timeline for leasing the 7% vacancy, the specifics of a new acquisition under contract including its cap rate and financing, and the company's outlook on covering its common dividend.

Answer

CEO David Sobelman confirmed that a lease with a Department of Defense contractor for the vacant space is very close to being executed. He detailed the new acquisition as a Best Buy in Overland Park, Kansas, at a 7.7% cap rate, to be funded with 50% debt and 50% equity. Sobelman noted the debt's interest rate is expected to be in the 6% range and affirmed that covering the dividend is a top priority.