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CFO Andrew Ahlborn confirmed the Portland asset's initial valuation and stated the Q2 negative carry of $5.3 million is a reasonable estimate for future quarters, though they are working to reduce it. Chief Credit Officer Adam Zausmer added that material future costs would be 'good news money' for tenant improvements. Regarding the dividend, Ahlborn acknowledged it was a fair question and stated the Board sees a path to earnings coverage and will continue to evaluate performance.

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Chief Credit Officer Adam Zausmer and CEO Thomas Capasse detailed the strategy for the levered Portland asset, which involves taking title to stabilize and sequentially exit its components, with the hotel and office expected to be liquidated sooner. On the SBA business, management guided for short-term volumes between $1.0B-$1.2B with stable ~10% gain-on-sale margins. Freddie Mac volumes were muted due to market-wide process changes but the pipeline is improving. Executives also confirmed the UDF share count, provided operating cash flow details, and expressed confidence in their ability to refinance upcoming debt maturities by utilizing their unencumbered asset pool if necessary.

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CEO Thomas Capasse and Executive Andrew Ahlborn addressed the questions. Regarding maturities, they have already begun retiring 2026 notes and will use cash flow or access debt markets, noting the asset maturity ladder aligns with liabilities. For the UDF merger, Capasse stated the primary driver was its highly accretive, unlevered EPS profile, not the need for unencumbered assets. On SBA credit, Chief Credit Officer Adam Zausmer noted that 60+ day delinquencies remain moderate at 2.8% with no concerning trends observed, even with growth in small balance loans.

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Executive Andrew Ahlborn stated there is no expected impairment on the deferred tax asset or goodwill, noting the Mosaic and Broadmark deals were bargain purchase gains. Chief Credit Officer Adam Zausmer broke down delinquencies to ~$400M originated and $150M M&A, with $160M in REO for sale, and noted ~$250M in bridge loan modifications occurred. Ahlborn explained the high PIK interest is temporary, as 77% of the related construction loan balance is expected to pay off or convert to cash-paying by year-end.

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President Jeffrey DiModica expressed confidence in the hotel portfolio, stating there are no 4 or 5-rated hotel loans and that the book is performing well. Regarding overall credit, he suggested that if the forward curve holds and SOFR declines toward 3%, the industry is likely over-reserved, but risks remain if rates stay higher. Chairman & CEO Barry Sternlicht added that the company was cautious on life science conversions and remains selective in its hotel lending, focusing on assets they would be comfortable owning.

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President Jeff DiModica responded, confirming that a significant volume of loan originations closed late in Q1, the earnings from which will be more fully realized in Q2. He expects the strong investment pace to continue. Regarding subordinate debt, DiModica clarified that their primary strategy is to create subordinate-like risk exposure by originating senior loans and applying leverage, rather than purchasing secondary subordinate securities, unless unlevered yields on those securities rise to more attractive levels of 11-12%.

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President Jeffrey DiModica addressed the life science loan, noting the company has minimal exposure and sees challenges in the sector due to oversupply and the potential for AI to reduce lab space needs. Regarding GSE multifamily, both DiModica and CEO Barry Sternlicht expressed interest but highlighted the high cost of entry and difficulties in finding partners whose credit standards align with their own, making organic growth in other segments a current priority.

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President Jeff DiModica stated that while higher long-term rates impact cap rates, a stronger economy driving those rates would be a net positive through increased leasing and rents. He clarified that the recent investment allocation was a "moment in time" and expects the core CRE lending business to return to approximately 70% of new activity as the market recovers.

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Priyanka Garg, EVP of Portfolio & Asset Management, clarified that the resolution pace seems slower because the company accelerated activity in the first half and is now being more patient with regular-way repayments. She confirmed the NY multifamily loan had a discounted payoff at 90 cents on the dollar, a loss already reflected in book value. President and CFO Michael McGillis added that the term loan refinancing process is underway with private credit providers and a reduction in the loan size is expected. He viewed preferred equity as a future option once the company is in a stronger position.

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President and CFO Michael McGillis confirmed recent extensions of repo facilities with Wells Fargo and Goldman Sachs, noting counterparties have been constructive. He and CEO Richard Mack indicated private credit options for the term loan could offer greater flexibility. EVP Priyanka Garg stated that while traditional metrics like occupancy are less relevant for their transitional portfolio, the portfolio's composition is improving with a shift from construction to cash-flowing multifamily. Garg also noted the REO pipeline is fluid, with active management already improving asset performance. McGillis added that a new REO facility prevents immediate liquidity drains upon foreclosure. Mack acknowledged the strategic merit of splitting the company but stated there are no current plans to do so.

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President and CFO John McGillis confirmed plans to deleverage by repaying higher-cost debt and is finalizing a financing facility for REO assets. He noted the Term Loan B would be addressed mid-year. He stated there are no current plans for an equity capital raise, emphasizing liquidity generation from resolving watch list loans. Priyanka Garg, EVP, reiterated that up to $2 billion in gross realization proceeds are underway, which will significantly improve liquidity.

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CEO Richard Mack clarified that not much distress has actually traded, with banks in particular holding onto office assets. He identified construction lending as offering the best current risk-adjusted return. President and CFO John McGillis addressed capital needs, stating the $584 million unfunded commitment ($185 million net equity) is manageable and expected to be funded over two years, supported by ongoing loan repayments. He also stated that the company does not expect to enter the term loan market.

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CFO Thomas Mayrhofer and CEO Marc Ganzi responded. Mayrhofer addressed the carried interest reversal, explaining that private asset valuations can be lumpy and that quarter-to-quarter movements shouldn't be over-analyzed. Ganzi added that the company prioritizes marking its portfolio to reality. Regarding 2026, Ganzi noted that official guidance is not yet set but highlighted the massive $43 billion CapEx pipeline and new growth strategies in digital power and private wealth. Mayrhofer affirmed that over the long term, they expect to raise more capital than they liquidate.

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CEO Marc Ganzi explained that the 2018 vintage fund (Fund I) is entering a logical period for exits to deliver DPI, noting the average hold is 5-9 years. Regarding capital allocation, he stated no preferreds were repurchased as investing in their own funds offers higher returns, but they may reconsider if they can raise cheaper debt. Ganzi also confirmed that while IRR was impacted by a new valuation framework, the MOIC multiple, which drives carry, has increased, and he expects performance to improve as assets are typically sold at a premium to NAV.

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CEO Marc Ganzi defended the co-investment strategy as a vital "force multiplier" for flagship funds that enables scale and growth, rejecting the merchant bank label and emphasizing the firm's successful multi-strategy approach. He attributed the FRE shortfall to fundraising timing. CFO Thomas Mayrhofer explained the carried interest reversal was not due to any single meaningful event but rather portfolio-wide valuations appreciating in line with preferred returns.

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Chairman & CEO Willy Walker stated that the Q3 pipeline looks 'great' with 'sustained velocity,' driven by the market's need to recycle and deploy capital. Regarding the European expansion, Walker explained the strategy involves both originating transactions within the European market and leveraging the strong W&D brand to facilitate global capital flows over the long term. CFO Greg Florkowski added that the company feels good about its path to achieving its full-year guidance.

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CEO Willy Walker stated that despite market volatility, deal flow has remained strong, with clients recognizing that waiting may not be advantageous. He noted the 10-year treasury's movement is more impactful than tariffs. CFO Greg Florkowski added that Fannie and Freddie are competing more aggressively than they have in three years, indicating a strong push to deploy capital.

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Willy Walker, Chairman and CEO, stated that while partnerships are always a possibility, the company is confident in its ability to scale its asset management business independently. He expressed optimism for the LIHTC business, citing recent management changes and the hiring of a new affordable housing team. While declining to provide mid-quarter volume guidance, Mr. Walker acknowledged a significant opportunity to grow their Freddie Mac business and improve their league table ranking after finishing fourth in 2024.

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CEO Willy Walker stated the company doesn't predict interest rates but noted that higher rates could reinforce multifamily demand by making homeownership less affordable. He emphasized that rate stability is more critical for transaction activity than the absolute rate level. Walker addressed GSE capacity, distinguishing Walker & Dunlop's control over its Fannie Mae DUS underwriting from competitors' potential bottlenecks with Freddie Mac's Optigo program. He expressed confidence in the tax syndication business for 2025, expecting a rebound from a slow Q3. CFO Greg Florkowski and CEO Willy Walker confirmed that a large, highly competitive brokerage deal in the quarter had a lower-than-typical fee, impacting the revenue-to-volume ratio.

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CEO Christian Ulbrich explained that 'non-linear' margin expansion means they expect stronger margin gains in the second half of the year, consistent with typical seasonality. Regarding Capital Markets, Ulbrich noted that while European interest rates have fallen, slow economic growth remains a headwind, making the U.S. the dominant driver of activity. CFO Kelly Howe added that the Capital Markets business is split approximately 60% in the Americas and 40% in the rest of the world.

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CEO Christian Ulbrich noted market resilience, highlighting strength in the U.S., Japan, Korea, and Australia, and a trend of Asian capital shifting to the U.K. CFO Karen Brennan acknowledged that tough H2 comps and macro uncertainty suggest a moderation in growth rates, but she reiterated the company's full-year adjusted EBITDA guidance.

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CEO Christian Ulbrich explained that while the office recovery remains a 'flight to quality,' a lack of new supply is creating opportunities for upgraded Grade B buildings. Regarding JLL Technologies, he stated a clear goal for full-year profitability in 2026, balanced with ongoing investment. He attributed the recent write-downs to a specific investment in the venture portfolio, noting the portfolio remains strategically important.

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Global CEO Christian Ulbrich characterized the 2025 recovery outlook as between 'modest' and 'very strong' and does not expect a negative impact from higher treasury rates in the near term due to strong international demand. He explained the property management realignment aims to capture synergies with the Workplace Management business. CFO Karen Brennan deferred providing a specific 2025 growth outlook until after Q4 results.

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CEO & Director Bryan Donohoe described the current lending environment as attractive, with a reset in asset values providing better attachment points. He noted relative stability in fundamentals, with a favorable forward supply-demand outlook for multifamily and industrial. For multifamily, he acknowledged a current 'digestion phase' but expressed optimism for modest rent growth.

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CEO Bryan Donohoe acknowledged that the Boston Life Science market has struggled but noted they are in discussions with the sponsor and feel the reserve is appropriate. He clarified that "strategic initiatives" primarily refers to evaluating capital deployment options like new investments and share buybacks. Regarding the GCP acquisition, Donohoe highlighted that it expands Ares' vertical integration and expertise in asset classes like data centers and self-storage, which benefits ACRE.

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CEO Bryan Donohoe explained the Boston loan was downgraded due to a business plan pivot from life science to traditional office use, which impacts rents and valuation amid market supply growth. An executive added that the reserve on this asset was increased. Regarding multifamily, Donohoe noted that fundamentals remain exceptionally positive, and while higher rates have muted transaction volumes, ACRE feels well-protected as a lender in the sector.

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CEO Bryan Donohoe acknowledged that higher funding costs are impactful but believes improved capital flows and rent inflation in key sectors should provide an offset. Regarding the office portfolio, he confirmed ongoing dialogue with sponsors and noted that while business plans are taking longer, they are seeing fundamental market improvements and more leasing conversations for their own assets.

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CEO Ivan Kaufman confirmed that falling rates boost repayment activity and attract capital to distressed assets. He affirmed Arbor's capability to hold and improve REO assets, particularly in workforce housing. Regarding GSE credit, Kaufman noted a cyclical peak in delinquencies but expressed confidence in the asset class. He added that an REO fund is under consideration but premature, and that Arbor is always open to partnerships to grow its unique and hard-to-replicate agency business.

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Executive Paul Elenio detailed the liquidity strategy, highlighting the company's deleveraged position (2.8:1) and plans to use the securitization and banking markets to increase leverage and liquidity. President and CEO Ivan Kaufman added that REO is expected to rise to the $400M-$500M range. Regarding economic sensitivity, Kaufman stated that they believe they've hit the bottom in many markets, with occupancies firming up in their workforce housing assets.

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Executive Paul Elenio stated there were no margin calls and that cash was used to fund growth in the bridge and SFR platforms. President and CEO Ivan Kaufman added that the lending environment has improved, with better terms in the CLO market and from commercial banks. Regarding putbacks, Kaufman confirmed that Arbor has not had to buy back any loans from the GSEs.

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Executive Paul Elenio stated that on a nine-month basis, operating cash flow of $328 million sufficiently covers the $265 million dividend, and quarterly fluctuations are normal. President and CEO Ivan Kaufman noted that resolving lowly-levered NPLs will generate cash and confirmed the company has not experienced any GSE loan putbacks. He declined to comment on the DOJ inquiry, referencing previous statements.

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CEO Dallas Tanner stated that while the company enjoys its Midwest footprint (Chicago, Minneapolis), it does not see the recent strength as a reason to strategically pivot. He attributed the growth to a decade of under-building in the region. The long-term strategy remains focused on high-growth, net-migration markets in the South, Southeast, and Southwest for their superior risk-adjusted returns.

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CEO Dallas Tanner acknowledged the strong recent performance of their Midwest markets (Chicago and Minneapolis) but stated it does not change their long-term strategy. He attributed the strength to a decade of under-building in the region. He reaffirmed that the company's long-term focus remains on high-growth, high-migration markets in the South, Southeast, and Southwest, where they see better risk-adjusted returns from both revenue growth and home price appreciation.

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President, CEO & Director Stuart Rothstein confirmed discussions are ongoing for adjacent parcels at The Brook, which could offer upside but are too early to predict. Regarding 111 West 57th, he noted the current basis is ~$270M and expects it to decrease by year-end but declined to give a specific number. He stated that leverage is expected to remain in the current ballpark, with capital redeployment from focus assets driving meaningful earnings growth.

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Chief Investment Officer Scott Weiner provided detailed updates, noting progress on modifications, new equity infusions, and leasing at the Berlin and Chicago office assets. For the Manhattan office, he mentioned a potential recapitalization and multifamily conversion. On 111 West 57th, Weiner explained the Q1 balance increase was due to pre-reserved funding for retail tenant improvements. Both Weiner and Stuart Rothstein confirmed Rahmani's pro forma balance calculation after pending sales was in the right ballpark and that 11 units remain to be sold.

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Chief Investment Officer Scott Weiner noted increased activity across all sectors, highlighting newly built multifamily, senior housing in the U.S. and U.K., student housing, and data centers as key opportunities. He clarified these are primarily acquisition and refinancing situations, not distressed deals. Regarding the REO hotels, Weiner stated the D.C. property is performing well and may be marketed later in 2025, while the Atlanta asset is still being evaluated. Both are cash-flow positive, allowing for a patient approach to sale.

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CFO Anastasia Mironova deferred the interest expense question for a follow-up. Executive Stuart Rothstein reported strong foot traffic at 111 West 57th, with four units under contract expected to yield ~$55 million in net proceeds. He also confirmed the retail space is fully leased to Bonhams. CIO Scott Weiner noted the Atlas combination has been a net positive, helping source business through introductions, though ARI is not currently buying B-pieces of securitizations.

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President, CEO, and Chairman Robert Sulentic confirmed a strong focus on growing infrastructure exposure across the company but said no specific allocation targets have been set. CFO Emma Giamartino explained that free cash flow was on track, with timing differences between Q1 and Q2, and the full-year conversion target remains intact.

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CFO Emma Giamartino attributed margin gains to strong incremental margins on high-margin transaction revenue in Advisory and cost-saving initiatives in BOE. CEO Robert Sulentic stated the data center services business had a strong quarter and is not materially impacted by hyperscaler pullbacks. He also explained that construction cost risks for the development portfolio are well-mitigated by GMP contracts, contingencies, and the nature of project costs.

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CFO Emma Giamartino clarified that significant 2024 restructuring costs are now complete and will not recur, meaningfully narrowing the gap between GAAP and core earnings in 2025. She stated the tax rate will normalize to 22% in 2025 from 18% in 2024. Of the ~$800 million in recent buybacks, she confirmed $500 million occurred in Q4 2024, with the remainder in early 2025.

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Chair and CEO Bob Sulentic confirmed that TCC is actively capitalizing on converting logistics land sites for data center use. However, he firmly stated that CBRE is not contemplating a spin-off of TCC, highlighting its high returns and critical synergies with other business lines, such as seeding a $5 billion investment fund and enabling large-scale development ventures with Turner & Townsend.

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CFO Emma Giamartino responded that while the company evaluates a dividend over time, it currently prefers the flexibility of share buybacks for capital return. She stated that as long as they can continue executing on buybacks, a dividend is not considered necessary.

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CEO Brian Harris stated that the investment grade rating primarily enhances profitability by lowering the cost of funds, rather than changing their investment strategy. He affirmed they will stick to their core credit discipline and not chase higher-risk assets. President Pamela McCormack added that the flexible capital structure allows them to originate their preferred loan types. Regarding the net lease portfolio, Harris explained that acquisitions are driven by the arbitrage between cap rates and financing costs, not just lease term, and emphasized their focus on asset quality and low dollar-per-foot exposure.

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CEO Brian Harris stated he expects loan originations to exceed the Q1 pace, viewing the quarter as a starting point for redeployment. Regarding the net lease portfolio, he described an opportunistic approach, noting all properties are for sale but not actively marketed. He anticipates the portfolio may shrink slightly in the near term but could grow later if a steeper yield curve creates favorable arbitrage opportunities.

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Executive Brian Harris explained that the CMBS conduit business is more attractive with a steeper yield curve, and other investments currently offer a more profitable allocation of capital. Regarding the CECL reserve, he noted that while the loan portfolio's denominator has shrunk, the specific loans with potential issues have not paid off, justifying the stable reserve. He added that a future release of reserves is more probable than an increase.

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CEO Brian Harris explained that originations are a lagging indicator and expects volumes to show up in Q1/Q2 2025. He cited valuation discipline as a key factor, stating Ladder avoids over-leveraged deals and takes cues from the securitization market. President Pamela McCormack added that Ladder's volume is now increasing with the uptick in new acquisitions, as they have avoided riskier 'bridge-to-bridge' loans. On bank loan portfolios, Harris confirmed interest but noted they haven't seen many opportunities, though recent calls suggest that might be changing.

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CEO Matt Salem responded that the lending pipeline is near record levels, with spreads for institutional transitional loans in the mid-200s, around 2.65%. He noted that while competition has returned, the opportunity is attractive, with ROEs ranging from the mid-11s to the 13s. Salem stated KREF aims to match the nearly $1 billion in expected second-half repayments with new originations, while managing leverage. He added that there are no significant near-term maturity concerns.

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SVP Jessica Hansen explained that D.R. Horton prefers using incentives over broad base price cuts, which are more targeted. EVP & COO Michael Murray added that local operators respond to market-specific competitive dynamics. Jessica Hansen concluded that, by and large, builders are taking a more rational and balanced approach to pace and price today.

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SVP Jessica Hansen stated that D.R. Horton prioritizes incentives over base price cuts, which are used more selectively on aged inventory. She noted that the homebuilding industry is generally taking a more rational and balanced approach to pace and price. EVP and COO Michael Murray added that local teams respond to specific competitive dynamics on a neighborhood-by-neighborhood basis.

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CFO Bill Wheat clarified that the ASP reflects the cost of incentives like rate buydowns, which are expected to be higher in Q2, leading to a slight downward movement in the net ASP. He noted that recent sequential changes have been modest, around 1-2%, and did not expect much more than that, declining to provide a specific ASP guide.

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EVP & COO Michael Murray responded that rate stability is more important than any specific rate level for improving buyer confidence. President & CEO Paul Romanowski stated that current promotional offerings range from the mid-4% to mid-5% APR, with the average rate in the company's backlog just over 5%.

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President & COO Robert McGibney stated that while he lacked specific data on lost buyers, markets with higher resale inventory (6-7 months of supply) are more competitive, whereas markets with limited resale supply are performing better. EVP & CFO Rob Dillard clarified that the year-over-year ASP was actually up slightly in Q2, driven by regional and community mix shifts, but did not provide a specific breakdown of price versus mix.

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Chairman & CEO Jeffrey Mezger clarified that an absorption pace of 4.0 per month is considered a floor, not a ceiling. The company will allow the pace to run higher in strong markets to optimize assets. President & COO Rob McGibney characterized demand in California as strong, highlighting the Inland Empire as one of the company's best-performing divisions during the quarter.

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CEO Barry Gosin positioned Newmark as a "go-to company" for talent, emphasizing a strategy of "high revenue per capita, more with less" rather than just adding headcount. He stated that the company is incredibly competitive, that most recruiting is going their way, and highlighted recent success in European expansion as evidence of the brand's appeal to top professionals.

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CEO Barry Gosin anticipates a steady, multi-year trickle of loan sales from banks rather than a large wave, noting a broader shift of debt to private capital. CFO Michael Rispoli clarified the 2025 guidance, stating that at the midpoint, capital markets revenue is expected to grow slightly faster than the 9% company average, with leasing growing slightly slower.

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CEO Barry Gosin noted a very active sales pipeline that is sensitive to interest rates, while the debt business is gaining market share from strategic hires. He confirmed interest across all asset classes, including office, where conversions are reducing inventory. Both Barry Gosin and Michael Rispoli attributed strong GSE volume to a combination of market share gains, a higher debt capture rate on sales, and a broad pickup in market demand, though year-end closing capacity is a variable.

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CEO Katharine Keenan affirmed that bank relationships remain very strong, with lenders eager to grow their credit facility exposure to high-quality platforms like BXMT. Regarding sectors, she identified hospitality as an area to watch due to economic sensitivity but noted BXMT's exposure is low. She expressed conviction in multifamily as supply pressures ease and viewed industrial as resilient, with long-term tailwinds balancing trade impacts.

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CEO Katharine Keenan stated that rate volatility has not had a material negative impact and has actually driven more capital into credit markets, improving liquidity. She confirmed that accessing diverse financing markets, including ABS or corporate debt, is a benefit of the net lease strategy. She noted the strategy will be scaled thoughtfully based on investment opportunities, following a 'build, not buy' approach.

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CEO Katie Keenan expressed confidence that the momentum has shifted, noting that the remaining 3-rated U.S. office loans are primarily high-quality new construction or have high cash flow. Regarding specific deals, she said the Spain portfolio continues to pay down steadily, while the Australia portfolio is on a "positive trajectory" after significant capital investment.

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CEO Katie Keenan confirmed that the resurgence of CMBS and CLO markets is a positive trend that aids repayments and is being monitored for strategic financing. She stated that while the core credit focus remains, the firm is always innovating on how to access risk-return tranches and views episodic bank loan portfolio sales as an attractive opportunity.

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Executive Steven Yi clarified that unlike competitors with a strong owned-and-operated presence, their marketplace model does not involve significant direct customer acquisition costs, particularly in P&C. He acknowledged that rising traffic costs in channels like Google affect their publisher and carrier partners but stated it does not have a direct material impact on their own business model or margins.

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CEO Phillippe Lord acknowledged rising resale inventory in Phoenix but stated it is not directly competitive due to different price points and Meritage's ability to offer rate buydowns. CFO Hilla Sferruzza confirmed that all financing incentives directly reduce the average sales price, but noted the recent 4% ASP decline was also caused by geographic and product mix shifts.

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