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    Rick Shane • JPMorgan Chase & Co.

    Rick Shane's questions to Arbor Realty Trust Inc (ABR) leadership

    Rick Shane's questions to Arbor Realty Trust Inc (ABR) leadership • Q2 2025

    Question

    Rick Shane of JPMorgan Chase & Co. requested details on the $10.5 million in REO-related losses, the accounting and balance of payment-in-kind (PIK) interest, the strategy for holding versus selling REO based on property absorption, and the expected capital expenditure for the REO portfolio.

    Answer

    CFO Paul Elenio clarified that a ~$9.5 million REO loss was a strategic decision to quickly flip a deteriorating asset, while a smaller loss was on another property. He stated the PIK receivable balance was $95 million at quarter-end, which is added to the loan's carrying value and assessed quarterly via CECL. CEO Ivan Kaufman explained their REO strategy focuses on workforce housing, not oversupplied Class A assets. Both executives estimated future CapEx on the REO portfolio would be in the $25-$50 million range over time.

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    Rick Shane's questions to KKR Real Estate Finance Trust Inc (KREF) leadership

    Rick Shane's questions to KKR Real Estate Finance Trust Inc (KREF) leadership • Q2 2025

    Question

    Rick Shane of JPMorgan Chase & Co. asked about KREF's strategy for managing its significant 2026 and 2027 loan maturity walls and sought clarification on the distinction between a loan refinance and an extension. In a follow-up, he requested a detailed timeline for repatriating capital from the company's REO portfolio.

    Answer

    CEO Matt Salem addressed the maturity walls, explaining that many loans are being refinanced ahead of schedule as sponsors seek to extend duration in a favorable market, and he does not see maturities as a major catalyst for new defaults. He clarified that most refinancings in KREF's pipeline are for new credits, not existing loans. Regarding the REO portfolio, Salem provided an asset-by-asset breakdown, indicating West Hollywood and Portland would see capital returns starting within the next year, while assets like Mountain View and Seattle require more patience to maximize value.

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