NexPoint Real Estate Finance - Q4 2023

Transcript

Operator (participant)

Good morning. My name is Dennis, and I will be your conference operator today. At this time, I would like to welcome everyone to the NexPoint Real Estate Finance Fourth Quarter 2023 conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then number one on your telephone keypad. To withdraw your question, press star one again. I would now like to turn the conference over to Kristen Thomas, Investor Relations. Please go ahead.

Kristen Thomas (Director of Investor Relations)

Thank you. Thank you. Good day, everyone, and welcome to NexPoint Real Estate Finance conference call to review the company's results for the fourth quarter ended December 31, 2023. On the call today are Brian Mitts, Executive Vice President and Chief Financial Officer, Matt McGraner, Executive Vice President and Chief Investment Officer, and Paul Richards, Vice President, Originations and Investments. As a reminder, this call is being webcast through the company's website at invest.nexpoint.com. Before we begin, I would like to remind everyone that this conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, that are based on management's current expectations, assumptions, and beliefs.

Listeners should not place undue reliance on any forward-looking statements and are encouraged to review the company's annual report on Form 10-K and the company's other filings with the SEC for more complete discussion of risks and other factors that could affect the forward-looking statements. The statements made during this conference call speak only as of today's date and, except as required by law, NexPoint does not undertake any obligation to publicly update or revise any forward-looking statements. This conference call also includes an analysis of non-GAAP financial measures. For a more complete discussion of these non-GAAP financial measures, see the company's presentation that was filed earlier today. I would now like to turn the call over to Brian Mitts. Please go ahead, Brian.

Brian Mitts (Executive VP and CFO)

Thank you, Kristen. Appreciate everyone joining us this morning. I'm going to briefly discuss our quarterly and year-to-date results, and then we'll go through some portfolio metrics, talk about the balance sheet a little bit, and then provide guidance for the next quarter. Then I'll turn it over to Matt and Paul to discuss the portfolio in a little more depth in the macro lending environment. So starting with our fourth quarter results, they were as follows: reported net income $0.74 per diluted share, compared to a net loss of $0.17 per diluted share for the fourth quarter of 2022. The increase was largely driven by mark-to-market adjustments on our common stock investments and changes in our net assets related to our consolidated CMBS VIEs.

Net interest income increased to $3.8 million for the fourth quarter of 2023, from $0.3 million in the fourth quarter of 2022. The increase is driven primarily by more originations of preferred equity investments with higher yields, and partially offset by higher financing costs in 2023. Earnings available for distribution was $0.44 per diluted share in the fourth quarter, compared to $0.42 per share, per diluted share in the same period, 2022, and $0.43 per diluted share in the third quarter of 2023. Cash available for distribution was $0.51 per diluted share in the fourth quarter, compared to $0.45 per diluted share in the fourth quarter of 2022. The increase in earnings available for distribution and cash available for distribution from the prior year was partially driven by originations of additional private preferred investments.

We paid a dividend of $0.50 per share in the fourth quarter, and the board has declared a dividend of $0.50 per share payable for the first quarter of 2024. Our dividend in the fourth quarter was 0.88 times covered by earnings available for distribution and 1.02 times covered by cash available for distribution. Book value per share decreased 10.4% year over year, and increased 0.7% quarter over quarter to $17.93 per diluted share, with the decrease year over year being primarily due to the $0.74 special dividends paid out during the year, and the increase from prior quarter being primarily driven by mark-to-market increases.

During the quarter, we contributed to 5 preferred equity investments with $16.5 million of outstanding principal and re-originated 1 loan with $15.3 million of outstanding principal. These 6 investments had a blended all-in yield of 11.5%. We had 3 senior loans redeemed for $29.5 million of outstanding principal, and 1 preferred investment redeemed for $3.5 million of outstanding principal. So moving to year-to-date results, they are as follows: reported net income of $0.60 per diluted share, compared to net income of $0.22 per diluted share in 2022. The increase was largely driven by changes in net assets related to our consolidated CMBS VIEs as compared to 2022. Net interest income decreased 55.5% to $16.8 million, from $37.7 million in 2022.

The decrease was driven primarily by prepayments on our SFR loans and CMBS portfolio and higher financing costs in 2023. Earnings available for distribution was $1.51 per diluted share in 2023, compared to $2.50 per share in 2022. Cash available for distribution was $1.67 per diluted share, compared to $2.97 per diluted share in 2022. The decrease in earnings available for distribution and cash available for distribution for the year was partially driven by higher weighted average share counts, increased financing costs, as well as our prepayments on SFR loans in 2023. Moving to the portfolio. Our portfolio is comprised of 87 investments, with a total outstanding balance of $1.6 billion.

Our investments are allocated across the following sectors: 47.2% multifamily, 46% single family, 5.2% life sciences, and 1.5% storage. Our portfolio is allocated across the following investment categories: 41.4% senior loans, 30.8% CMBS B pieces, 12.5% preferred equity investments, 8.5% mezzanine loans, 3.5% IO strips, and 3.3% MBS and MSCR notes. The assets collateralizing our investments are allocated geographically as follows: 20% Georgia, 17% Florida, 15% Texas, 7% California, 4% Maryland, 5% Minnesota, and 3% North Carolina, with 29% across states of less than two and a half percent exposure. All this reflecting our heavy preference for Sun Belt investments.

The collateral in our portfolio is 89.9% stabilized, with a 68.8% loan-to-value and a weighted average DSCR of 1.72 times. Moving to the balance sheet. We have $1.3 billion debt outstanding. Of this, $304 million or 24% is short-term debt. Our weighted average cost of debt is 4.23%, and has a weighted average maturity of 3.1 years. Our debt is collateralized by $1.7 billion collateral, with a weighted average maturity of 5.6 years. Our debt-to-equity ratio is 2.9 times. A couple other notes. In December, we launched a continuous offering of Series B 9% preferred equity.

To date, through February, we've raised $30 million of gross proceeds, which will be used to make accretive investments with low to mid-double-digit yields. In Q1 of 2024, we received a prepayment on an SFR senior loan of $509 million of principal, of which $466 million was used to repay the debt associated with the loan. We also received a prepayment penalty of $9 million. The net proceeds of $52 million will be redeployed into accretive investments with much higher yields than the repaid senior loan. Moving to guidance before I turn it over to the rest of the team. Earnings available for distribution for the first quarter of 2024 is -$0.45 per diluted share at the midpoint, with a range of -$0.50 on the low end and -$0.40 on the high end.

Earnings available for distribution will be negative for the quarter as a result of the $25 million reversal of the unamortized premium associated with the previously mentioned senior SFR loan that was prepaid in January. Cash available for distributions will be $0.58 per diluted share at the midpoint, with a range of $0.53 on the low end and $0.63 on the high end. So with that, let me turn it over to Paul.

Paul Richards (VP of Asset Management or Originations)

Thanks, Brian. The results from the fourth quarter showcase our overall strong performance across all of our investments and asset categories, especially within our CMBS B piece portfolio. Our strategy remains centered on investment areas where expertise is owning and operating commercial real estate gives us a unique edge. This dual role as both owner and lender in the commercial real estate market enables us to effectively utilize information, allowing us to underwrite and recognize value throughout the capital stack, with our aim in achieving superior risk-adjusted returns that exceed the average. Our investment approach remains centered on credit investments and stable and near stabilized assets, emphasizing cautious underwriting, low leverage and relative debt basis, along with the lending to healthy sponsors to deliver steady and reliable value to our shareholders.

In the fourth quarter, despite challenging commercial real estate conditions, our loan portfolio maintained steady performance, consisting of 87 individual assets with approximately $1.6 billion in total outstanding principal. The portfolio is geographically diverse, with a bias towards the Sun Belt markets. Texas, Georgia, and Florida continue to be our largest portion of our portfolio at approximately 52% as of year-end, though our Atlanta, Georgia, exposure has significantly decreased by more than 10% as our largest SFR whole loan was repaid in full as of Q1 of this year. From the beginning of the fourth quarter through today, the company has been very active in underwriting and deploying capital. We executed on making both follow-on and new investments of $31.8 million of preferred equity investments with an all-in yield of 11.5% in both our SFR and life science verticals.

We also completed the purchase on a new issue, 5-year fixed Freddie Mac B piece opportunity with extremely attractive specs. The overall securitization has a 59% LTV, a 1.34 DSCR, and a diverse geographical footprint. The B piece will pay an all-in unlevered fixed rate of 9.75%. With modest leverage, we expect to generate a mid-teen levered return on a very desirable collateral pool. The company has also purchased new issue SFR ABS paper in the gross amount of approximately $44 million and prudently levered to achieve low to mid-double-digit returns on a low LTV, high cash flowing, stabilized SFR property pool. Lastly, and Matt McGraner will touch more on this exciting investment during his prepared remarks, the company closed on a $218 million drawable first mortgage life science loan this past January.

This specific loan carries an attractive 27% detachment point on current as-is appraisal valuation and provides SOFR +900 pricing. On the disposition loan repayment side, as mentioned, we received approximately $500 million gross of financing and around $60 million in net-net of financing on the portfolio's SFR. The portfolio's largest SFR loan was repaid in full and a few small SFR loans, generating an attractive overall IRR for investors. At the end of the quarter, we maintained a cautious approach to our repo financing, with leverage standing at approximately 63% loan to value. We consistently engage in communication with our repo lending partners, discussing the market conditions and status of our financed CMBS portfolio. In summary, we continue to find attractive investment opportunities throughout our target markets and asset classes.

We will continue to evaluate these opportunities with the goal of delivering value to our shareholders. We maintain a strong belief in the resilience of the residential sector, especially in the current interest rate environment. We consider investments in the multifamily and single-family verticals to be safe, as demonstrated by the historical performance, and are extremely excited about our life science CDMO investment pipeline. To finalize our prepared remarks before we turn it over for questions, I'd like to turn it over to Matt McGraner.

Matt McGraner (Executive VP and Chief Investment Officer)

Thank you, Paul. As he just mentioned, we're pleased with the solid Q4 and full year 2023 results, especially on a relative basis. Our portfolio continues to perform very well, and despite short-term supply challenges, challenges in multifamily, underlying performance in multi SFR storage and life sciences remain relatively stable. As we announced last quarter, and as Brian mentioned, we have successfully launched an NREF Series B Preferred, and to date, have raised approximately $30 million over the past couple of months. At this current run rate, paired with the pipeline investments that Paul just mentioned, we expect to increase cash available for distribution by 15%-20% over the next 12 months. The life science loan originated in January, that Paul mentioned, will alone provide $200 million of fundings over the next 12 months.

We expect to match fund draws on this investment with proceeds from our Series B raise, providing maximum accretion to shareholders. In addition, the large SFR loan payoff will create additional capital to deploy into our $300 million plus investment pipeline. But it also delevers us by a full turn and now sits below 2x lever, the lowest of any commercial mortgage REIT. This delevering creates additional optionality in terms of sources of capital to the extent we wanted to relever some of the balance sheet and to fund opportunistic investments. To close, we're excited about these opportunities in the coming quarters and pleased with the company's continued stability and the opportunity to go on offense in this environment.

As always, I want to thank the team for their hard work, and now I'd like to turn the call over to the operator for questions.

Operator (participant)

At this time, I would like to remind everyone, in order to ask a question, simply press star, then the number one on your telephone keypad. Your first question is from the line of Crispin Love with Piper Sandler. Please go ahead.

Crispin Love (Director and Senior Research Analyst)

Thanks. Good morning, everyone. First, can you just talk about some of the opportunities that you've already begun to see or expect to see over the next several quarters in Bridge Multifamily? Have you started offering pref or mezz to borrowers in that space? And just how is that progressive or progressing? Are borrowers seeking you out? Are you working with other lenders to help, and do you expect this to be a key way for borrowers to get agency take-outs down the road?

Matt McGraner (Executive VP and Chief Investment Officer)

Yeah. Hey, Crispin, it's Matt. Great question. We have started seeing both portfolio deals and individual one-off deals seeking for cash in refinancing dollars both on the agency and on the CRE CRE CLO side. Borrowers are seeking money to fund replacement caps. They're, you know, seemingly okay with being diluted, seemingly okay with the terms we're providing in terms of risk mitigation and, and you know, mezz and liens, and the ability to take over the asset. They're being realistic as well on cap rates. So we're getting, you know, a better debt yield than, you know, we otherwise normally would. You know, we have $300 million of investment pipeline.

I would consider this to be, you know, an additional $100 million-$150 million opportunity for us this year. And they're beginning to come, you know, more fast and furious than they were in the fourth quarter.

Crispin Love (Director and Senior Research Analyst)

Okay. And just in the strategy of offering pref or mezz to borrowers, I find it very interesting, but what do you view as kind of the key risks here as these borrowers are likely stressed with high LTVs and low DSCR? So I'm curious what kind of LTVs you're coming in at and just if there's any risks that you think in the strategy.

Matt McGraner (Executive VP and Chief Investment Officer)

Yeah, I mean, we're going to make sure that we can prime enough equity such that, you know, we can own the asset at a, you know, in-place cap rate that we think we can either sell the asset or refi into agency. Now, candidly, some of those are few and far between, and we haven't hit on one yet. But we are, you know, underwriting. We will target, you know, to be no more than probably 80% of the stack on a as-is value today.

The structure of the investment, because of the cash flows, certainly in 2024, given supply will be challenged, will probably carry a little bit more of a, you know, a lower current pay, but the all-in pricing on that can still reach mid-teen. So, we're selective. Again, we haven't necessarily hit on one yet, but we are seeing opportunities come in the door on a daily basis from sponsors, from, you know, the large commercial real estate services companies, investment banks, et cetera. So, we do expect to be active this year in that strategy.

Crispin Love (Director and Senior Research Analyst)

Great. Thank you. That all makes sense, Matt. And then just one last question for me, just on the accelerated amortization of the premium with the prepayment on the senior loan you mentioned in the first quarter, which I think you expect to drive the negative EAD in the quarter. Can you give any more detail there? Which drove the prepayment on that SFR loan? Is there anything out of the ordinary with that loan or borrower specifically?

Brian Mitts (Executive VP and CFO)

No, I wouldn't say so. I mean, they've been reaching out to us for several years to restructure it. And I think they just got to a point now where they found other financing, or, you know, had equity capital and were willing to prepay it. But I don't think there's anything, knowing that the company that had the loan, that there's any issues, with that.

Matt McGraner (Executive VP and Chief Investment Officer)

I think I'd add to that. I think that it's a sign of a healthy ABS market in SFR, right? The sponsor is a well-heeled sponsor, you know, very active, very well known in the, in the ABS space. And just, it's, you know, while, you know, we, sad to see it go, it provides us with, with new capital, and I think it's a healthy sign for, you know, liquidity and commercial real estate in general.

Paul Richards (VP of Asset Management or Originations)

Awesome. Thank you. Appreciate you all taking my questions.

Matt McGraner (Executive VP and Chief Investment Officer)

Thank you.

Operator (participant)

Your next question is from the line of Stephen Laws with Raymond James. Please go ahead.

Stephen Laws (Managing Director of Equity Research)

Hi, good morning. Congrats on a nice close to the year. Looking forward to your results.

Matt McGraner (Executive VP and Chief Investment Officer)

Thank you.

Stephen Laws (Managing Director of Equity Research)

I wanna make sure I understand kind of the CAD as we move through the year. Matt, I think you mentioned in your comments that, you know, opportunity for a brief 15%-20% growth in the next 12 months. You know, as we think about moving through the year, does one benefit from the $9 million repayment penalty, and then we'll see a trough? And two, is as kind of you get a return capital fully redeployed, how do we think about, you know, the CAD, you know, migration through this year?

Matt McGraner (Executive VP and Chief Investment Officer)

Yeah, it's a good question. The Series B, the way we look at that is, with our construction loan for in the life science and the other pipeline that Paul just mentioned, it's about $0.04-$0.05, about $0.05 per $25 million of Series B raised that's accretive to CAD. So as we move through the year, that's where I'm picking up that 15%-20%, and perhaps it could be more accretion. But your point, again, is well taken. On the payoff, you will see, you know, a little bit of enhancement in the first quarter, and then, you know, our job is to redeploy that, in the second quarter and make sure that we're fully funded.

But again, you know, I'm comfortable with the ability to still be able to grow cash available for distribution while delevering a full term.

Stephen Laws (Managing Director of Equity Research)

Appreciate those comments. And, you know, when you think about the new investment pipeline and redeploying that capital, you know, given the large discount to book, you know, how do you, how do you think about any stock repurchases? I know there's some limits there, just given the liquidity, but, you know, can you talk about how you think about, you know, the returns you'd have to see on stock repurchases versus new investments versus redeploy that capital?

Matt McGraner (Executive VP and Chief Investment Officer)

Yeah, we, you know, we have an obligation to fund, you know, another $175 million-$200 million of deal commitments. To the extent that we are comfortable, you know, managing cash and funding those investments and getting other, you know, repayments, and we have excess cash, it's an absolute, you know, certainty that we'll look to buy back stock at a, you know, at these levels.

You know, we're gonna, again, kind of first and foremost fund what we have to fund, and then, with the excess capital and to the extent that our Series B, you know, our Series B preferred raise ramps, which we expect it to, I like our chances to be in a position to buy back stock if it-- if we continue to trade at a discount.

Stephen Laws (Managing Director of Equity Research)

Great. Appreciate the comment on this one.

Matt McGraner (Executive VP and Chief Investment Officer)

Thanks, Steven.

Operator (participant)

Your next question is from the line of Jade Rahmani with KBW. Please go ahead.

Jade Rahmani (Managing Director and Senior Equity Research Analyst)

Thank you very much. On the SFR repayment, wasn't there supposed to be a 20% prepayment penalty?

Paul Richards (VP of Asset Management or Originations)

Hey, Jade, it's Paul. Yeah, so of course, it just matters based on yield maintenance calculations. So when rates were low back, you know, a year and a half ago, and we discussed that, the prepayment penalty was a lot higher. Now that rates have traced back up to, you know, that 5.5% land, the prepayment penalty was a lot less than what it was back when the rate market was a lot lower.

Jade Rahmani (Managing Director and Senior Equity Research Analyst)

There's gonna be a $9 million prepayment penalty, correct?

Paul Richards (VP of Asset Management or Originations)

That's correct.

Jade Rahmani (Managing Director and Senior Equity Research Analyst)

That's factored into the earnings, but there's more than an offset to reverse the unamortized premium?

Paul Richards (VP of Asset Management or Originations)

That's correct.

Jade Rahmani (Managing Director and Senior Equity Research Analyst)

Okay. Do you know what pro forma book value should be for the reversal of the unamortized premium?

Paul Richards (VP of Asset Management or Originations)

Yeah, it's around. So the reversal of the unamortized premium, it's about, you know, a little less than $1 of book value.

Jade Rahmani (Managing Director and Senior Equity Research Analyst)

So we should expect book value to decline by $1?

Paul Richards (VP of Asset Management or Originations)

In a vacuum, that, if that was the only variable, yes. You know, of course, there could be mark-to-market movements, et cetera, on the CMBS book.

Jade Rahmani (Managing Director and Senior Equity Research Analyst)

Okay. Do you know to date where the mark to market is on CMBS?

Paul Richards (VP of Asset Management or Originations)

It's flat to relatively up a little bit. It is, you know, not going gangbusters by any means, but it's, you know, some, some bonds have been doing well from a mark-to-market basis, but overall up a little bit, through, through January. So we'll get March in February coming up, and then, of course, in March, and see how that works.

Matt McGraner (Executive VP and Chief Investment Officer)

Being active, Jade, in the CMBS and ABS markets in the first, you know, couple months of the year, we've seen spreads come in quite a bit as the indices rise and as more liquidity returns. So, you know, as we sit here today, we feel like the marks will be strong.

Jade Rahmani (Managing Director and Senior Equity Research Analyst)

Okay. That'll hopefully be a partial offset to the book value impact.

Matt McGraner (Executive VP and Chief Investment Officer)

Yeah. I mean, again, too, we like, you know, in terms of the trade-offs, we did delever by $500 million, you know, which is good.

Jade Rahmani (Managing Director and Senior Equity Research Analyst)

I was going through Howard Hughes's transcript, and their comments about the construction market, construction loan market really caught my attention. I mean, they basically said they've never seen a market like this, where even getting a multifamily loan is challenging. The banks are being told to, to, to not do office, it's totally red-lined, and to pull back everywhere else. So how do you all feel about that? And on the life science sounds like it is a construction loan based on the magnitude of future fundings and the attachment point being so low, you know, that's a pro forma LTC estimate. So is construction an area you're looking to get more active in?

Matt McGraner (Executive VP and Chief Investment Officer)

Yeah, I think so. And I'd say two things. One is the $220 million construction loan is on a 27-acre site in Cambridge, where the sponsor is a well-heeled, you know, repeat sponsor of ours and has roughly $420 million in equity into the project. This opportunity was born out of, you know, banks pulling back, you know, trying to syndicate the senior mortgage. We were, in fact, gonna do the mezz on this loan, and so when, you know, the banks pulled back, we just stepped in and did the senior mortgage at basically the same rate, lower detachment point, creating a pretty attractive risk-return profile.

The project was also already funded in terms of equity. 2 of the 3 buildings were built. The third is about to top out. So, from a risk-reward, you know, this one was a good one. Our you know, our storage platform has through the past, you know, decade, you know, through our storage team, led by John Good, you know, had a construction development pipeline whereby they would fund construction loans to developers of self-storage and take a profits participation interest. I would expect us to get more active in that space, as well as the multifamily space as well. Because as you mentioned, and this bodes well for, you know, multifamily and really all property types of performance in 2025 and 2026.

But over the past, you know, 9-18 months, you know, if you're a developer, you're hurting, you can't find access to capital. So, it is a good time. It is on our radar, and we've already been doing it, so, your bunny has a good nose.

Jade Rahmani (Managing Director and Senior Equity Research Analyst)

On the life science, is there a tenant already signed up? Because I know there's quite a lot of supply expected to hit this year and next year.

Matt McGraner (Executive VP and Chief Investment Officer)

Yeah, that's a rumor. You know, a lot of the supply hitting, it has been pushed out to 2027 and 2028. I think, you know, half of what was planned to deliver over the next 12 months is, it won't deliver. So if you dig into the numbers, and we're happy to share those with you, I think the supply in life sciences is fairly overstated. This particular project is, you know, one of the last to be developed in Cambridge, you know, before a moratorium hits. And, you know, the location, the size, the ability to take full blocks of 395,000 sq ft total, we expect to be very attractive.

Again, it opens, it COs in 2025. It's not like this is, you know, a far-out project, so we expect leasing velocity to do very well here. But as of today, there is no tenant.

Jade Rahmani (Managing Director and Senior Equity Research Analyst)

Okay.

Matt McGraner (Executive VP and Chief Investment Officer)

But our basis is below. I would just add one thing, our basis is land value, so.

Jade Rahmani (Managing Director and Senior Equity Research Analyst)

Okay. And then, on multifamily, you know, lots of, lots of noise, lots of, you know, there's CLO reports showing delinquencies, there's a lot of scrutiny on some of your peers, mortgage REIT peers, but at the same time, you know, the GSEs are showing pretty, pretty low delinquencies in their stabilized servicing portfolios that, you know, others like Walker & Dunlop manage. So can you just give us a sense, since you're so active, even on the equity side, of what's going on on the ground with multifamily, some of the supply challenges, and yet, you know, what looks like pretty, pretty decent credit performance?

Matt McGraner (Executive VP and Chief Investment Officer)

Yeah, you bet. I think you got to bifurcate, you know, agency versus non-agency. And just I guess generally in multifamily, you know, right now, Q2—Q1, Q2, Q3 is the eye of the storm, the supply storm, so to speak. And then it, you know, supply wanes throughout 2024 and into 2025. It gets, you know, the dynamic really flips in the landlord's favor. On the ground, you know, the CRE CLO loans, you know, obviously probably lower quality collateral are hitting air pockets. You know, their cash flows are-...

and, you know, they're almost zombie deals to the extent that there is no cash flow to fund operations or rehabs or business plans that were conducted or, you know, created a couple of years ago. So, those deals are challenged. And, I'm not gonna say you can't work through it. Multifamily is the easiest to work through, but those are where you're seeing the most weakness. The agency portfolios, including our own, have held up a lot better. You know, and that makes sense, right? They're particularly, you know, better sponsors, you know, maybe well located. They go through a bunch of different layers of underwriting, and they're more diversified.

And so, I think those deals will continue to be fine, and be able to be refinanced, especially as, you know, we get through the next three or four quarters, which I think things, you know, once the Fed decides to actually, you know, pivot, that'll ease some pressure on the system, and then getting through the supply will also help. So a little bit of a rough time in the next, you know, two or three quarters, but I do think there's light at the end of the tunnel.

Jade Rahmani (Managing Director and Senior Equity Research Analyst)

Thanks a lot.

Matt McGraner (Executive VP and Chief Investment Officer)

Thanks, Ray.

Operator (participant)

This concludes the Q&A session of today's call. I will now turn the call back to the management team for closing remarks.

Yeah, appreciate everybody's time. Great questions today. We'll look forward to speaking again soon. Thank you.

This concludes the NexPoint Real Estate Finance Fourth Quarter 2023 conference call. Thank you for your participation. You may now disconnect.