TPG RE Finance Trust Third Quarter 2026 Earnings Conference Call - TPG RE FINANCE TRUST INC

Welcome to TPG Real Estate's Finance Trust 3rd Quarter 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. The question and answer session will follow the formal presentation. If you'd like to ask a question, please press star 1 on your telephone keypad. The confirmation tone will indicate your line is in the question queue. You may press star 2 to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Please note that this call is being recorded. I'll now turn the conference over to Ashvin Rao. Thank you. You may begin. Good morning, and welcome to the TPG Real Estate Finance Trust earnings call for the third quarter of 2026. Today, I'm joined by Doug Lucard, our Chief Executive Officer, Brandon Fox, our Interim Chief Financial Officer, and Ryan Roberto are head of portfolio management and capital markets. Doug, Brandon, and Ryan will provide commentary regarding the company, its performance, and the general economy and will answer questions from call participants. Yesterday afternoon, we filed our Form 10-Q, issued a press release, and shared an earnings supplemental, all of which are available on the company's website in the investor relations section. This morning's call and webcast are being recorded. Information regarding the replay of this call is available in our earnings release and on the TRTX website. Recordings are the property of TRTX, and any unauthorized broadcast or reproduction in any form is strictly prohibited. This morning's call will include forward-looking statements which are uncertain and outside of the company's control. Actual results may differ materially from those set forth in or implied by these forward- looking statements. For a discussion of risks that could affect results, please see the risk factors section of the Company's latest Form 10-K and Form 10Q. The Company does not undertake any duty to update our forward- looking statements unless required to do so by law. We will refer during today's call to certain non-GAAP financial measures which are reconciled to GAAP amounts in our Form 10-Q, our earnings release, and our earnings supplemental, all of which are available in the Investor Relations section of our website. Now, I'll turn the call over to Doug. Thank you, Ashwin. Over the past quarter, the U.S. economy continued to navigate a complex and evolving environment. While economic growth has remained relatively resilient and labor market conditions generally healthy. Inflation has proven more persistent than many anticipated, contributing to a prolonged period of elevated interest rates and tighter financial conditions. As a result, businesses and investors continue to adapt to a higher cost of capital that differs meaningfully from the conditions that prevailed for much of the last decade. Within real estate, these dynamics have created both challenges and opportunities. Elevated rates, declining property values across certain sectors, and significant refinancing activity continue to pressure many real estate owners. With that backdrop, we continue to view the current market as an attractive investing environment, and we remain highly disciplined in our approach. We are not pursuing growth for growth's sake, but rather seeking to deploy capital into opportunities that offer compelling risk-adjusted returns. Importantly, one of our greatest advantages in the current environment is the breadth and depth of TPG's integrated real estate debt equity platform. The ability to evaluate markets through both the debt and equity lens provides valuable insight into property values, capital flows, refinancing risks, and emerging trends across the market. This perspective helps us identify risks earlier, make better underwriting decisions, and proactively position the portfolio for changing market conditions. Against this backdrop, TRTX continues to execute on the business plan we outlined several years ago. During the third quarter, we closed $773 million of new investments and increased net earning assets by $600 million. Since September 2025, we've originated $2.3 billion of loan investments, representing nearly 45% of our current loan portfolio, and contributing to a 36% year-over-year growth in net earning assets, while maintaining a disciplined approach to underwriting portfolio construction and risk management. Notably, that growth is beginning to translate into earnings. Net interest income increased approximately 13% from the second quarter, and a significant portion of our third quarter originations closed toward the end of the quarter and did not contribute meaningfully to third quarter. As these loans begin contributing over a full reporting period, the earnings capacity of the platform will become increasingly evident. From a credit perspective, portfolio performance continues to validate the disciplined approach we have taken throughout this cycle. Despite an evolving real estate market, our earnings remain resilient without any meaningful volatility to our risk ratings or CECL reserves. Throughout this period, we have sought to be proactive rather than reactive. We have maintained a transparent approach to risk ratings, established reserves that accurately reflect evolving market conditions, and actively managed credit exposures as market fundamentals changed. While these decisions have not always been easy, we believe they have positioned the company favorably relative to competitors that continue to work through these credit issues for investments made prior to 2023. Our portfolio consists of 59 loan investments secured by over 150 underlying properties representing $5.2 billion of total commitments. The average loan size is $88 million, and multifamily and industrial assets comprise approximately 75% of our investment portfolio. The diversification of the portfolio combined with our continued focus on institutional sponsorship and high-quality assets positions us well to navigate a challenging market environment while delivering stable earnings. We have applied the same proactive philosophy to liability management. We've diversified our funding sources, extended liability duration, reduced market exposures, and improved liquidity. As a result, the balance sheet optimization we have discussed throughout this cycle is now largely. Today, approximately 75% of our leverage is funded through series CLOs in our term loan B, providing stable, long-duration capital that supports earning visibility, dividend stability, and continued portfolio growth. An important example of this progress is the recent closing of FLA, 8th Series CLO. The transaction securitized approximately $1 billion of collateral that was approximately 95% multifamily and industrial and is expected to be accrued to our cost of funds and increased our percentage of non-marked market liabilities to over 85%. We are particularly pleased with this execution given the subsequent widening of series CLO spreads and softer market conditions. Beyond improving our financing profile, FL8 established a new 30-month reinvestment period that, when combined with the existing reinvested windows in FL6 and FL7, provides significant flexibility to recycle capital and continue to grow earnings in the coming years. This embedded reinvesting capacity represents a meaningful competitive advantage and further differentiates TRTX within the real estate credit sector. Loan spreads widen from current levels. These reinvestment vehicles provide us with the ability to capitalize on those opportunities and potentially enhance future earnings power. We remain focused on allocating capital where it can generate the greatest value for shareholders. During the quarter, we fully exhausted our existing $25 million share repurchase plan, repurchasing shares of what remains a meaningful discount to book value. Consistent with that belief, our board subsequently approved a new $50 million share repurchASE plan. We view these repurchases as a compelling use of capital and an effective way to create long-term shareholder value, while our shares continue to trade at levels that understate the quality of the platform and its earnings potential. As we look ahead, TRTX is operating from a position of considerable strength. Throughout the cycle, we have proactively managed both sides of our balance sheet, strengthened our liability structure, and created significant embedded reinvestment capacity. We continue to believe the market is not fully recognizing the earning stability embedded within our platform or the quality of our investment portfolio. We acknowledge that this higher interest rate environment will continue to stress legacy capital structures. Fortunately, the majority of our balance sheet was originated over the past two years, and these investments were sized and structured in a higher rate environment. We are well positioned to continue delivering resilient earnings given TRTX's granular diverse portfolio in tandem with a low-cost, stable liability structure. The significant increase in our Q3 NIM is beginning to show the impact of our 2026 investments and the quality of the company's earnings. The foundation we've built leaves TRTX exceptionally well-positioned not only to navigate this cycle, but to further differentiate from our competitive set while creating long-term value for shareholders. With that, I will turn the call over to Brandon to discuss our financial results in greater detail. Thank you, Doug, and good morning. For the third quarter of 2026, TRTX reported gap net income attributable to common stockholders of $5.8 million, or $0.08 per diluted common share. Distributable earnings were $5,100,000, or 0.07 per dilute common share, after a $13 million realized loss associated with the conversion of one multifamily loan to real estate owned. Distributable earnings before realized losses were $18.1 million, or $0.24 per diluted common share, covering our common stock dividend for the quarter. Net interest income increased $3 million, for 13%, from the second quarter, reflecting quarter-over-quarter growth in our loan portfolio. As Doug mentioned, we fully utilized the remaining capacity under our share repurchase plan. During the quarter, we repurchased 1.2 million shares of common stock at a weighted average price of $8 per share for a total consideration of $9.3 million. These repurchases increased book value per common share by $0.04. Subsequent to quarter end, our board approved a new $50 million share repurchase program, doubling the size of our prior authorization. Vote value per common share was $10.85 at quarter end, a decline of 10 cents from June 30th, primarily reflecting credit loss expense associated with the significant growth in our loan portfolio and macroeconomic conditions during the quarter. For the three months ended September 30th, we made nine first mortgage loan investments representing total commitments of $772.7 million at a weighted average credit spread of 3.02 percent, funded $71.8 million of future funding obligations on our existing loans, and received $119.6 million of loan repayments, including one full multifamily loan repayment of $106 million. Subsequent to quarter end, we received $72.2 million of additional loan repayements related to one full multi-family repayment and one industrial partial repayment. Quarter over quarter, net earning assets increased by $599.5 million or 14% to $4.9 billion. Total loan commitments increased to $5.2 billion. Over the last 12 months, we made $2.3 billion of loan investments, contributing to the 36% year-over-year growth in our net earning assets through September 30th. At quarter end, our loan portfolio was 100% performing, and our weighted average risk rating remained unchanged at 3.0. Our CECL reserve declined by $4.5 million to $76.1 million, or 147 basis points of total loan commitments, compared with 179 basis points at June 30th. The decrease reflects the conversion of a multifamily loan to REO during the quarter. The conversion to RIO did not have an impact to book value because it was fully reserved. This reduction in the CECR reserve was partially offset. by growth from the loan portfolio from a capital markets perspective following quarter end we closed trtx 2026 fl8 a 1 billion dollar managed creclo and placed approximately 820 million dollars of investment grade securities with institutional investors the issuance was leverage neutral to the company generated nearly 43 million dollars of net cash proceeds and is expected to further improve the company's cost of funds. Following the issuance, non-mark-to-market financing for our loan portfolio increased to approximately 85 percent, further strengthening the durability of our liability structure and providing additional flexibility to support future investment activity. We ended the quarter with near-term liquidity of $291.6 million, consisting of $70.8 million of cash on hand, including amounts held to satisfy liquidity covenants, $109.3 million of undrawn capacity under secured financing arrangements, $100 million of un-drawn capacity, under our corporate revolver, and $11.5 million of CRE CLO reinvestment proceeds held at the trustee. We also held $187.2 million of unencumbered loan investments eligible to be pledged under existing financing arrangements. Our liability structure was 78.8% non-mark-to-market financing, and our weighted average cost of funds was 1.81% compared to 1.95% a year ago. Total leverage increased to 4.03 times from 3.32 times at June 30th, reflecting our investment activity during the quarter. At quarter end, we had approximately $1.2 billion of available financing capacity to support loan investment activity, and remained in compliance with all financial covenants. With that, we welcome your questions. Operator? Thank you. We'll now be conducting a question and answer session. If you'd like to ask a question at this time, you may press star 1 from your telephone keypad, and the confirmation tone will indicate your line is in the question queue. You may press start 2 if you'd to withdraw your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please for our first question. Thank you. And our first question comes from the line of Rick Shane with J.P. Morgan. Please proceed with your question. Hey guys, good morning and thanks for taking my questions. Look, you know, you guys had pointed out the recency of your portfolio and transactions that are structured to reflect a new environment. I am curious, obviously, given how much rates even move during the third quarter, how you think about that. And specifically, I'm curious how it impacts transaction structure and sort of meeting of the lines for buyers, sellers, and lenders. Is fertile rates change so quickly and that potentially impacts property values? Does that slow transactions? are, should we, you know, even though the portfolio has the advantage of being constructed more recently, does the latest rate shift create some incremental concern? Thanks, Rick, and good morning. You know, I think, you know, what we see within our portfolio, I'd say kind of more locally across our integrated debt equity business is that the first order here has just been, I think, a continued drop in acquisition activity. Simply put, buyer and seller, particularly on the multifamily side, that gap continues to widen. So I think the sort of first result of all this is just a drop in activity. I would say secondly, as we think about sort of what the right kind of stabilized you know, debt yield should be and sort of how we think about, you know cap rate evolution, you know, we've been pretty consistent, you know, kind of trying to make loans that are reflective of an elevated rate environment and I know that, you know, you highlighted it but just, you know, the way our book is positioned and if you even kind of go into multifamily, 80% of our multifamily exposure is originated 2024 and later and then actually if you kind of look at some of our anticipated repayments, we expect that that can really increase closer to 90%. So our current balance sheet is, again, very much reflective of, I would say, a market where rates were higher, values were lower within, you know, within multi and industrial and really all other sectors. I think that really what's happening on the real estate, you know, credit side is we are really starting to see, I think, you know, borrowers think long and hard about, you know, how they think about capital allocation going forward, particularly for some of the, you know, sort of legacy exposures that I think people have, and we're seeing a lot of those loans. So, a lot those loans are sitting on others' balance sheets. They're loans from 2021 and sometimes earlier. Those loans are coming due, and when they come to us for a new loan, that likely is going to require some amount of cash in. We actually have a deal in our pipeline right now from a institutional sponsor, you know, class A real estate, where they're actually going to be paying off a loan from the agencies, but that's going to require, you Know, a cash equity infusion, you know from our capital base. That's a pretty unique, you Know, sort of flow of capital where you're seeing, you Know, an agency loan needing to get paid off and they're coming to, you Know a commercial mortgagery with, you Know, with the cash in to be able to effectuate that transaction. So that's a little bit of what we're seeing. And I would say, you know, lastly, you know, local to our portfolio, kind of what we're saying bottoms up is, you know, I think that, you know, the cost of owning a home, the cost of borrowing, if you're a first-time purchaser, continues to be elevated, and that's really kind of kept a really strong amount of demand, I would say, across multifamily generally, just when you look at, when you compare, you know, sort of your sort of mortgage payment to income relative to rent income, it still is very favorable towards renting. And that seems to be a dynamic that, again, is really kind of buoying what I'll call the sort of demand side of the equation in terms of tenants. Got it. Okay, that's helpful. And if I may ask one follow-up. Look, as you're responding to my question, it occurs to me that when we're looking left, it's the punch from the right that really determines the outcome. And so we're all sitting here higher for longer, but presumably eventually rates are going to move lower. I am curious in this environment, are you able to capture attractive floors on the loans that you're making? What sort of levels and is there power there in this environment given how high rates are? Is that something that's a really contentious deal point? Yeah. Look, I would say that the floors that we're able to get have been kind of slowly creeping up. I feel like most of what we were doing earlier, the sort of rate floor probably had somewhere sort of in like the 2.5% to 3% range, generally speaking, and we're starting to see that drift higher. I think in a kind of competitive process where we'll see the tradeoff is there can be a debate around sort of loan spread relative to rate. And if I can get a wider loan spread and maybe a lower rate floor, in some cases we'll pursue that. In other cases, maybe we want a slightly tighter loan spread to be able to kind of get a higher rate floor. But that definitely is value that we've been able to capture. And then, again, you think about, like, you know, the risk within our current balance sheet, given it's all largely newly originated, you know, those loans are all structured with interest rate caps, and those assets generally tend to be in transition. So, really, a sort of rate move like this locally and sort of in the near term has less effect in terms of our current exposure. But on new business, you Know, the sort of last thing I'll add is, you know, we have seen, you know, back leverage spreads, if you just look at the series CLO market, have come wider. You know, when we brought our series CLOs to market the first week after Labor Day to now, those weighted average cost of funds are give or take about 25 basis points wider. And that tends to flow into loan spreads, not instantly, but probably over a couple of weeks. And we're starting to see that right now with the loans that we're pursuing. And again, our balance sheet is really well positioned to capture that widening loan spread because we've effectively locked in our liabilities at a tighter point in the market. Got it. Well, paradoxically, I can't believe it's almost November. And at the same time, the week after Labor Day seems like a lifetime ago. So appreciate both sides of that. Thanks, guys. Thanks for it. Appreciate it. The next questions are from the line of Tom Catherwood with BTIG. Please just use your questions. Thanks, and good morning, everybody. Doug, let me kind of go into the originations. Obviously, strong this quarter, definitely better than feared. As you look at your forward pipeline, has there been a slowdown in either the entire pipeline or in kind of specific asset classes given the higher rates? And then along with that, do you expect origination activity to more match repayments now that you're at the upper end of your leverage targets? Yeah, and I'll cover the first. So I would say that what we have seen in terms of just our pipeline is there remains still a tremendous need for capital within real estate lending broadly and then specifically within multi and industrial, which is where we focus. I think that, you know, perhaps the only challenge lately has been the, you know, the sort of time from when we sign a deal up to when it closes is probably more what kind of keeps me awake, because that, of course, can put pressure in terms of our earnings. But I'd say our pipeline still looks incredibly strong. I'm not seeing, you know, really a big kind of drop-off at all, with the only thing of note being, you know. New acquisitions are few and far between. I mean, that's been consistent for, frankly, the last two or three years, but that seems to be a trend that doesn't really show kind of any sign of abating. And I'd add, secondly, to your kind of part two of the question, we're at a point now where, as we've sort of approached our target leverage and our sort of target balance sheet size, that you're exactly right where it's sort of our DE will sort of be less lever to sort of our minute-to-minute pipeline, and we're definitely at a point now where it's more of a kind of one-in, one-out in terms of our loan portfolio, which I think adds two things. One, provides a little bit more kind of stability in terms of our DE, and then we look at the sort of size and scale and diversity of our portfolio. It just allows us to sort of I think manage some of the volatility quarter-to quarter a little easier. I think as you guys have all been supporting us as we've been net grilling our balance sheet And that can be – sometimes you feel like you make two loans and then one loan pays off, and sort of getting that balance right as you're growing can be challenging. But we've really kind of hit, I think, a pretty nice point in terms of the size of our balance sheet and our liability structure, again, sort of allows us to be able to risk manage throughout any type of real estate cycle. Appreciate that, Doug. And there's one follow-up to that for me. The other thought or their ability besides loans in and out with repayments and originations is repatriating capital from the REO book. And that had been a plan earlier this year, obviously. But with higher rates, I assume that the transaction market is somewhat frozen. So maybe in that higher interest rate environment, where do REO monetizations sit in your list of either priorities or expectations through the balance of 26? Sure, yeah. So I would say that really no change to our strategy and pacing there. We are, you know, well, first, I think, just as a reminder, our REO portfolio is a positive contributor on a quarterly basis to our DE. So I always like to remind everyone that it's not a drag, and frankly, it's a positive generator of earnings. So the sort of rush or urgency that maybe others have it's a negative drag you know we're in a very different spot um you know secondly we are you know right now in the final stages of marketing one of our multi-family properties we do have an li in place and and as that you know transaction um you knows becomes more certain we'll we'll make sure to update the market uh accordingly but again from a timing perspective and its effect in terms of our business plan i'd say no no major change um and and you know again i think the fact that our portfolio is generating positive DE kind of allows us to be opportunistic in terms of when we sell and maximize value for shareholders. Appreciate the answers. Thanks, Doug. Absolutely. Thank you. We have next questions from the line of Chris Muller with Citizens Capital. Please proceed with your questions. Hey, guys. Thanks for taking the questions. So I wanted to ask on the foreclosure. I guess, first off, what kind of drove the quick turnaround from forerating to foreclosure, especially given that it was already modified. And looking at the 27% discount to par on multifamily seems a little high. Is that market-specific or property-specific, or are you guys seeing multifamily valuations trend lower in general? Yeah, I think this is actually very idiosyncratic. I mean, we had moved the risk rate on this roughly about a year ago, one, and I think that really, you know, the challenge with this asset was really a combination of a weak market and a borrower that was under a certain amount of distress, and it sort of had begun to, I'd say, underinvest within that asset. So, you Know, we, you Now, rated it as a four, and then as, you Know. Brendan had shared, these, You Know, this conversion to REO was, again, very idiosyncratic, specific to the property, less to do with kind of what we're seeing, You know, what we've seen broadly. And our plan with the asset is simple in terms of, you know, our plan is to, you know, now that we own it, stabilize it, and then basically sell it in the future. But again, it's a relatively small asset in the context of our balance sheet. And again, was a little bit more idiosyncratic relative to both a market and a borrower that was in distress. Got it. And I see there was also another multifamily loan that was modified in the quarter. Can just provide some details on that what was the prior rating where was the property located and kind of what drove the need for modification there thanks chris this is ryan yeah this was a property located in a sunbelt market um and just saw you know given given some of the migration trends we've seen just kind of a spike in vacancy at the property so again more of a temporary kind of one-time thing so again we modified it to provide a what i'll call solid footing and a clear plan to kind of re-stabilize the property so again i think because you're heading in the right direction there and again i would say this is a regular way of risk management of what we do in the portfolio throughout you know each got it appreciate you guys taking the questions this morning absolutely thank you thank you as a reminder to ask the question at this time you may press star 1 from your your telephone keypad the next questions from the line of gabe pokey with raymond james please just use your questions hey good morning guys and thanks for taking the questions um obviously the world's changed a lot in the last 45 to 60 days um and appreciate the fact that trtx's book is very much newer vintage can you guys talk about just because it's the focus of the market on um legacy credit that you still have i use the word legacy you know it's a little bit older vintage but some pending maturities that you have due in the fourth quarter early next year just talk to how your plan of attack is on those assets on those loans yeah yeah sure so you know i'd say first we you know we built i think you know a lot of credibility and we provide a lot of transparency over the years from both the cecil and risk ratings perspective so i think When anyone asks about our current balance sheet, I always point them to how we risk rate and the reserves that we take. You know, that really is the sort of guiding light in terms of our view around the risk. Now, when you think about, you know, to your point, there's always, you know, sort of tactical side. But, you know, we've also been, you know, very consistent that, you know, when we look at a loan and as long as, you know, the borrower is committed to the asset and as long as our LTV we feel like is, you know, at a substantial discount to today's value, we are more than willing to be working with that borrower if they need a little more time or, you know, relief on a certain item. I think that when that tone changes is where, you Know, if we have the opinion that our loan's out of balance or that's a borrwer that's going to be less committed to the asset, then frankly, we would, you know, we'd sort of change our posture. So I think, you know, the sort of high level answer, of course, would be, I think our CECL and our risk ratings, both historically how we've approached it and then and then also from a from a sort of resolution perspective in terms of you know where we've sold assets relative to carrying value and i think just how how little volatility we know we've had within cecil and and risk ratings i think that should really be the sort of guiding light uh you know i say lastly i think a really important point of all of this you know really gets to our liability structure i think it is is you know one of the of the most remarkable weapons that we have. And I give our team a lot of credit for what they've done over the years. And these things take years to really optimize. But when you look at our liability structure, you know, 85% of that currently is non-mark to market. It's all match term, long duration. So, you'll look in a downside scenario, which is what we as lenders are always focused on. I like the fact that our liability structure gives us a lot of flexibility to be able to risk manage through a different type of real estate market. If things were to get better or to get worse, again, we've got a very stable, long-duration, not mark-to-market heavy liability structure. And that's what allows you to practically maximize NPV and be ableto deliver for shareholders in terms of value. Very helpful, thorough answer. One follow-up, if I can, and you guys were proactive in getting the last series CLO done when you did. But obviously, series CLOs spreads have widened a bit even to the top of the stack. How has that translated to the lending environment, what you're seeing in spreads across kind of all subsectors, not only multi, but office, et cetera, where there may be relative value that you think is attractive in this higher rate environment? Yeah. So I think it's very much a moving target, I'd say, within multifamily and industrial uh it i'd say that you know spot in terms of what we're seeing within our pipeline uh i'd take two things one um for what i'll call you know class a a plus newly built multi-family um you know that you Know I would say loan spreads are probably out about 15 to 30 basis points very much kind of you know varies based on the deal i think that where we've seen more spread widening and I'd say probably more of the tune of 25 to even 50 basis points wider is kind of more class BC real estate, particularly multifamily where, you know, there's been fewer assets trading. It's a slightly older asset, slightly lower quality. I think that's where we're seeing kind of spreads move wider. But, you Know, again, at the same time, just in the past week, you Now, there has been some healing in terms of, you both where the 10-year is and also where the front end is pricing. So pretty quickly, those spreads can kind of move in either direction. But I'd say, simply put, spreads are wider within multifamily. I think it really kind of varies largely, I'd say, on just the quality of the asset. Outside of multi, I would say industrial has been very resilient. I think the industrial fundamentals, and if you look at the implied cap rates, a lot of the publicly traded industrial REITs, that continues to be a sector that has, I would say, you know, performed well. We've seen, you know, a lot of positive leasing velocity across the exposure that we have. So, you know, we're seeing both, I would say spreads remain somewhat firm for industrial and frankly, not seeing a ton of flow there as most of those assets have sort of turned out. I think we're seeing, again, just a lot more flow coming in on the multifamily side. And then, you know, as you zoom out sort of beyond multi and industrial where we have some smaller portfolios, I mean, that's really where we're a sharpshooter, right? We're looking at office, mixed use, hotel. That's where we're probably passing on 99% of the deals that we see. So it's kind of hard to comment on sort of how much wider spreads have gone. I feel like office specifically, spreads have just been generally wide. So I feel this rate move has actually probably affected that sector less. And I think that more of the effect of the move in rates has been on what I'll call the sort of tighter cap rate, you know, asset classes like a multifamily industrial. Thanks, guys. Thanks, Gabe. Appreciate it. Thank you. At this time, I'll hand the call back to Doug for closing remarks. thank you all for taking the time this morning for our quarterly earnings call and we look forward to updating you on progress in coming quarters have a great week this will conclude today's conference may disconnect your lines of assignment we thank you for your participation have a wonderful day