MRP - NYSE

Hello, everyone. Thank you for joining us, and Welcome to Millrose Properties First Quarter 2026 Earnings Call. After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I would now like to hand the conference over to Jesse Ross, Millrose's Head of Financial Planning and Analysis. Jesse, please go ahead.

Good morning, thank you for joining us to discuss Millrose Properties first quarter 2026 results. Joining me on the call today are Darren Richman, our Chief Executive Officer and President, Robert Nitkin, our Chief Operating Officer, Garett Rosenblum, our Chief Financial Officer, and Steven Hensley, our Senior Market Risk Analyst. Before we begin, I'd like to remind everyone that today's discussion may include forward-looking statements and references to non-GAAP financial measures. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. For a more complete discussion of these factors, as well as reconciliations of non-GAAP measures, please refer to our earnings release and investor presentation, both of which are available on our investor relations website. With that, I'll turn the call over to Darren.

Thank you, Jesse, and good morning, everyone. Millrose delivered solid results in the first quarter of 2026, performing in line with our expectations and continuing to demonstrate the strength and durability of our platform. We deployed capital in a disciplined manner, expanded our relationships across the home building ecosystem, and generated predictable recurring earnings consistent with the design of our model. Before I walk through the quarter, I want to share a broader observation. Over the past several weeks, we have had the benefit of listening to virtually every major public home builder report. The message was remarkably consistent, and it was also very relevant to what Millrose does.

Builders today are navigating four competing priorities simultaneously: maintaining sales pace through incentives and inventory management, protecting balance sheets amid meaningful margin compression, preserving, and in many cases, growing their land pipeline and community count, and restricting direct land ownership when visibility is limited. Those four objectives are fundamentally in tension with one another. You cannot grow community count while also shrinking your balance sheet unless you have a partner like Millrose. It is important to understand the time horizons embedded in these decisions. The homesite builders are taking down today may support closings this quarter or next, but the land acquisition and development commitments they are making right now are three- to five-year decisions about where they want communities producing in 2028 and 2029. Builders told the market very clearly this quarter that they will not sacrifice future community count, even in an uncertain near-term environment.

That long-duration commitment is exactly the duration of a Millrose option agreement, and it is why near-term demand variability does not translate into a pause in land investment activity. That tension is not a cyclical phenomenon. It reflects a permanent evolution in how this industry thinks about capital. Gross margins across the public builders have compressed 200 to 500 basis points year-on-year. When that happens, every point of return on equity matters more and owning land becomes more expensive in opportunity cost terms. Put simply, when builders are earning less on every home, the last thing they want is more capital tied up in the land that won't produce a closing for years. They can't afford to lose those future communities either. That is the exact problem Millrose solves. Capital efficiency is no longer just a balance sheet preference, it is a profit center.

That framing is important because it distinguishes what Millrose offers from simply providing financing. Demand from the home builders for land acquisition and development funding remains steady. Our platform continues to expand, and our model is working exactly as intended. Our model continues to generate predictable recurring cash flows, supported by strong capital recycling dynamics and a stable earnings profile that is independent of land price appreciation or market timing. During the quarter, invested capital increased to approximately $8.7 billion, up from $8.5 billion at year-end, of which 95% is pooled, reflecting continued discipline in deployment. That growth is reflected in our expanding relationships across the home building ecosystem. We ended the quarter with 17 counterparties, up from 15 at year-end, with approximately 31% of our portfolio deployed outside of the Lennar Master Program Agreement.

This continued diversification is a key indicator of both demand for our platform and our ability to scale beyond our foundational anchor relationship. AFFO for the quarter was $125.9 million, an increase from last quarter despite the first quarter, two fewer calendar days, 90 days versus 92 days in the fourth quarter. On a per-day basis, AFFO was 2.5% higher versus last quarter. Our income is contractual, recurring, and not dependent on land price appreciation, home prices or the pace of home sales. Despite a dynamic macro environment, we have seen no changes in our counterparty behavior. No terminations and continued engagement from builders seeking to optimize their balance sheets through our platform. As we move through the spring selling season, early indicators remain constructive.

Builders have described as choppy through the first quarter, generally solid in January and February, with some moderation in March tied to rate volatility and geopolitical uncertainty. What we are seeing from our counterparties is the continued discipline, pulling back on starts where appropriate, prioritizing returns, and leaning into partners like Millrose to maintain community growth without adding balance sheet risk. That is exactly the behavior our model is designed to support. Steven will provide more detail on what we are seeing across markets momentarily. During the quarter, we further strengthened our capital base. We amended and restated our credit agreement, converting it from a secured structure to an unsecured facility and adding a new $500 million delayed draw term loan commitment, bringing our total unsecured capacity to approximately $1.8 billion.

This reflects the confidence our partners have in the durability of our platform and positions us to deploy capital with greater speed and flexibility as our pipeline continues to build. As a publicly traded company with $1.5 billion of quarter end liquidity and a fully unsecured investment-grade caliber capital structure, Millrose offers counterparties a degree of capital certainty and transparency that private land banking alternatives are structurally unable to replicate. Operationally, we continue to execute at a high level. Our technology and operating infrastructure enable efficient capital deployment and portfolio management while ongoing capital recycling supports reinvestment across a growing opportunity set. We are continuing to deepen our reputation as the most operationally mature and efficient strategic capital partner to home builders, enabling their growth with confidence while improving their capital efficiency. Finally, we remain committed to delivering consistent and durable returns to our shareholders.

We declared a quarterly dividend of $0.76 per share, fully covered by AFFO of 76% per share, representing an annualized dividend yield of 8.7% on book equity, up approximately 30 basis points from the prior quarter. The full coverage of our dividend by AFFO reflects the predictable recurring cash flow characteristics of our platform and our confidence in the sustainability of these returns. With that, I'll turn the call over to Rob for an operational update.

Thank you, Darren. Our platform has continued to perform well at scale, executing consistently across deployment, portfolio management, and capital recycling. We continue to deploy capital selectively into high-quality opportunities, maintaining disciplined underwriting standards while deepening both existing and new builder relationships. During the quarter, we grew our total homesites under management to approximately 143 across 904 communities in 30 states, serving 17 distinct counterparties. We added two new counterparties in the period, including a newly added top 10 publicly traded national home builder counterparty. Further evidence of the continued institutional adoption of our platform and the ongoing industry-wide demand for capital-efficient homesite solutions. Darren described the competing priorities facing builders today. Increasingly, the decision to work with Millrose is being led by the CEO and CFO's office, not just the land acquisition team.

When margins are compressed and return on equity is under scrutiny, the leadership of these organizations becomes the primary advocates for capital-efficient growth, as they are the ones ultimately responsible for delivering on growth plans and shareholder returns. Our values proposition, lower capital intensity, improved inventory turns, liquidity preservation, and higher return on equity speaks directly to the metrics that leadership is measured on. Our ability to deliver on this need as the leading scaled institutional provider is why our relationships tend to rapidly expand once they begin. Across the industry, builders are telling the market they intend to grow community counts while simultaneously exercising discipline on capital allocation. Millrose is the bridge between land spend discipline and community growth. We enable builders to open new communities, maintain consistent subcontractor relationships, and serve buyer demand without the balance sheet drag of owning land outright.

That positioning is precisely what our counterparties are executing on today, and it's reflected in the growth we've seen. As Darren noted, these are not quarter-to-quarter decisions. A builder acquiring land today is making a commitment about where it wants to be selling homes three to five years from now. The development timeline from raw land through entitlement, horizontal development, and vertical construction means that pausing land investment today creates a community count gap years into the future. Builders understand that from hard experience in prior cycles, and it's why we continue to see robust engagement with our pipeline even in quarters where near-term demand signals are mixed. The duration of their business plans align precisely with the duration of our option agreements, which makes our platform the natural structural solution for builders who want growth without ownership. Crucial to our scalability is the infrastructure we've built around execution.

The technology and processes underpinning our platform allow us to underwrite based on real-time market data, effectuate lot selection and deed transfers required for homesite takedowns, and monitor project-level performance in real time to manage risk proactively as market conditions evolve. This operational discipline, combined with our experienced team, is critical to maintaining predictability and protecting downside while continuing to grow. One point that may be counterintuitive. We believe the current environment is actually widening our competitive moat. In a more challenging market, the requirements to operate effectively as a land banking partner increase, not decrease. Builders need sophisticated counterparties who could underwrite with precision, not just provide capital. Effective land acquisition, like all real estate, requires certainty of execution, not contingent offers. Scale matters because diversification across geographies and counterparties is what protects a portfolio through uneven market conditions.

Underwriting discipline matters. The software and workflow complexity of managing nearly 144,000 home sites across 904 communities in real time is a barrier that cannot be replicated quickly or cheaply. Our proprietary lot pricing data set, built transaction by transaction across 30 states, has become a genuine competitive advantage in underwriting. Compound with every deal we evaluate, giving us a quantitative real-time lens into market lot pricing that few market participants can match. When we pass on a deal, we don't just say no. We give our builder partners data-driven feedback on how their proposed pricing compares to our average comps on an anonymized basis. Builders see real value in these insights. It deepens the relationships regardless of whether that particular transaction closes. Newer entrants to land banking are more challenged in exactly this kind of environment.

For Millrose, it's where the value of our platform, our team, and our track record compounds most visibly. The growth we're seeing reflects both expanding wallet share with existing partners and new relationship formation. The embedded nature of our platform within builders' operating models is what drives that wallet share expansion and what makes these relationships durable over time. Turning to portfolio composition, we continue to see a clear evolution in both mix and earnings power. Our Lennar Master Program Agreement remains the stable foundation of the business, representing approximately 69% of invested capital. The remaining 31%, our other agreements, represents the primary growth driver for the platform. These investments are higher yielding and diversified across counterparties and geographies, currently generating weighted average yields of approximately 10.7% against an average cost of debt at Millrose of roughly 6%.

A spread that drives directly accretive AFFO growth with every incremental dollar deployed. As we've discussed, the option rates on these agreements are typically floating rates subject to a fixed rate floor. The weighted average yield on this segment of this portfolio declined approximately 30 basis points quarter-over-quarter, directly correlated with a similar decline in SOFR base rates, with option rate spreads over that base rate remaining unchanged. Importantly, the impact of lower base rates on option yields was largely offset by a corresponding reduction in interest rate on Millrose's floating rate credit facility, a natural hedge that is a deliberate feature of our capital structure. I also want to highlight the development that occurred shortly after quarter end. It speaks directly to the quality of our underwriting.

In early April, we received a full payoff of approximately $284 million on a development loan cross-collateralized by multiple Florida communities. Principal accrued interest and fees paid in full. Florida has received attention in recent months given pockets of new home oversupply in certain submarkets. This realization, however, is a reminder that market-level headlines often obscure significant dispersion at the submarket and asset level. Specific location selection and rigorous collateral underwriting are what matter, and this result reflects both. As we look ahead, our focus remains unchanged. Disciplined deployment, strong portfolio oversight, and deepening relationships with high-quality builders. Our pipeline is deep, diversified, and increasingly driven by repeat engagement from existing partners alongside continued inbound interest from builders seeking to adopt off-balance sheet land strategies to support their growth.

The environment reinforces the value of our model, and we believe we remain well-positioned to deliver consistent outcomes for both our builder partners and our shareholders. With that, I'll turn it over to Steven to walk through what we're seeing across our markets and why we remain constructive given the macro outlook.

Thanks, Rob. The macro environment has introduced some near-term variability since the start of the year, mainly higher interest rates and weakened consumer confidence. None of this changes the long-term backdrop of the industry, and we believe it is important to stay grounded in the fundamentals. Since our last call, we have had the benefit of hearing from virtually every major public home builder through their most recent quarterly earnings reports. That commentary provides valuable context for understanding the operating environment and why the strategic need for homesite option solutions continues to grow. Let me walk you through the key themes. The overarching message from the industry is straightforward. As builders seek to preserve margins while sustaining growth, demand for capital-light lot access is increasing. That single sentence captures the environment we are operating in. Let me unpack the specific dynamics behind it. The macro backdrop remains challenging but manageable.

Affordability is a central theme across the industry, but several builders also flag potential inflationary pressures from tariffs and rising energy costs, as well as geopolitical uncertainty tied to the Middle East as factors that have dampened consumer sentiment. These are near-term headwinds, but none of them change the structural undersupply of housing in this country. Incentive levels are elevated but showing signs of stabilization. Across the public builders, rate buydowns remain the dominant incentive tool, though several management teams reported sequential declines in incentive levels on new orders. For Millrose, elevated incentives are relevant context, but do not affect our contractual income. Our option payments are owed regardless of incentive levels or home pricing dynamics. Builders are pivoting decisively toward build to order and actively reducing spec inventory. This was a near universal theme across the earnings season. Several builders reported meaningful reductions in finished inventory levels.

Builders are also targeting meaningfully higher build to order sales. This pivot is significant for Millrose because it signals that builders are taking a disciplined long duration approach to their community life cycles. Exactly the posture that supports steady, predictable homesite takedowns from our platform. Builders who are building to order still need entitled development-ready homesites. They just don't want to own the land while they wait for the buyer. Construction costs are anecdotally declining, and cycle times are generally near or below pre-pandemic levels. Several builders reported direct construction costs declining year-over-year, and cycle times improving by a month or more compared to the prior year. These efficiencies are a tailwind for the builders and reinforce the operational discipline that supports healthy takedown activity in our communities. Community count growth is a near universal priority and a direct demand driver for Millrose.

Across the builders we track, community count growth targets range from 3% to as high as 25% year-over-year. Several builders are planning to open more than 80-125 new communities this year. Every new community requires entitled development-ready homesites. When homebuilders are simultaneously growing their community count and telling the market they want to reduce land ownership, we believe that math flows directly to platforms like ours. Demand is choppy, but not collapsing, with clear segmentation by buyer profile. Net order trends were generally positive across the group, digits to nearly 30% year-over-year growth, depending on the builder. The cadence within the quarter was instructive. January and February were generally solid, with some moderation in March tied to the rate volatility and geopolitical concerns. Move-up and active adult buyers are proving meaningfully more resilient than first-time buyers.

Now turning to our proprietary MSA monitoring system. The geographic signals are consistent with what builders are reporting. The Carolinas, much of the broader Southeast, and several Midwest markets continue to show relative strength. All are aided by stable job growth, low inventory, and comparative affordability. We are also encouraged by the signals we are picking up across most Florida markets. The supply-demand equation has improved meaningfully from a year ago in almost every market across the state. Multiple public builders reinforced this recently by reporting strong order growth in the state. The full payoff of our Florida development loan that Rob described is another data point reinforcing that well-located Florida assets continue to perform. Inversely, Texas continues to be somewhat challenged by high inventory levels. We expect that normalization to remain a 2026 story. Our underwriting continues to reflect that patience.

We are being appropriately selective in our Texas deployments while maintaining confidence in the long-term fundamentals of those markets. Overall, the current environment reinforces the strategic need for homesite option solutions. Builders are not pulling back from land. They are rethinking how they access it. The shift toward asset-light models, off-balance sheet structures, and build to order strategies all increase the relevance and utility of what Millrose provides. The geographic diversity of our portfolio, spanning 30 states and 904 communities in partnerships with strong operators, means we are not dependent on any single market's performance. To wrap up, the long-term fundamentals of this industry are intact. The demographic tailwinds and housing shortage that underpin demand have not changed, and we remain well-positioned to serve our builder partners through any market environment. With that, I'll hand the call over to Garett to walk through our financial performance.

Thank you, Steven, good morning, everyone. As Darren noted, our first quarter results were consistent with our expectations and demonstrate the cash generating power of our business model and the direct translation of capital deployment into shareholder returns. For the first quarter, we reported net income of $122.9 million or $0.74 per share, driven by $185 million in option fees and approximately $10 million in development loan income. As Darren noted, the quarter comprised 90 days versus 92 in the fourth quarter. In a spread business at our scale, that difference creates a modest reduction in option fee income with no bearing on the underlying earnings trajectory. First quarter adjusted funds from operations came in at $125.9 million or $0.76 per share.

AFFO offers the clearest view into the recurring distributable earnings power of our business with every dollar we deploy into Other Agreements at current yields directly driving accretive AFFO growth. Our ability to sustain and expand that spread while maintaining discipline on credit and structure is the core engine of our earnings trajectory. There is no change to our previously issued guidance. Book value per share at the end of the quarter stood at $35.26. Our management fee expense was $28.2 million, calculated transparently at 1.25% of gross tangible assets. Interest expense was $39.2 million, and income tax expense was $5 million.

On March 23rd, 2026, we declared a quarterly dividend of $126.2 million or $0.76 per share, reflecting the direct linkage between our growing invested capital base, earnings generation, and our capacity to distribute to shareholders. Turning to the balance sheet, we ended the quarter with total assets of approximately $9.6 billion and invested capital of $8.7 billion.

Our debt to capitalization ratio stood at approximately 29% inside our stated maximum of 33%. This intentional headroom provides meaningful capacity to fund the next phase of growth without compromising the conservative financial posture that underpins our platform. We ended the quarter with approximately $425 million drawn on a revolving credit facility and approximately $49 million of cash on hand, providing ample liquidity of $1.5 billion to fund our near-term pipeline. During the quarter, we completed a significant upgrade to our capital structure, converting our credit facility from a secured to an unsecured structure and expanded our total capacity, including a $500 million delayed draw term loan commitment. This enhances our financial flexibility, aligns our funding structure more closely with our asset base, and positions us to deploy capital efficiently as our pipeline continues to build.

With that, I'll turn the call back to Darren.

Thanks, Garett. I'll leave you with a few closing thoughts before we open the line. Our business is built around contractual recurring income, disciplined capital deployment, and a long duration relationships with high-quality home builders. Those fundamentals were evident again this quarter. They continue to differentiate Millrose's in a dynamic market environment. What this earning season made clear across builder after builder is that the industry shift towards a capital efficiency is not a cyclical response to a soft patch. It is a permanent evolution in how the industry operates. Builders are telling the market, in their own words, that they intend to own less land, control more through options, and grow community counts through partnerships rather than through their own balance sheets. That secular trend is the single most important demand driver for Millrose. It is accelerating.

As Rob described, we believe that this environment is widening our competitive moat, not narrowing it. The complexity of what we do, the scale at which we do it, and the trust we have earned with our 17 counterparties in 30 states are advantages that compound over time and are difficult to replicate, particularly in a more demanding environment. We are operating with strong visibility into our cash flows and expanding and diversified builder base and enhanced balance sheet flexibility to support future growth. The current environment where builders need to simultaneously protect margins, grow communities, and exercise land discipline is one where we believe Millrose is not just a financing option, but a strategic necessity. We are focused on executing thoughtfully, scaling responsibly, and delivering consistent and durable returns to our shareholders. Thank you for your continued support and interest in Millrose.

We look forward to updating you on our progress next quarter. With that, operator, please open the line for questions.

We will now begin the question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you're muted locally, please remember to unmute your device. Please stand by now while we compile the Q&A roster. Your first question comes from the line of Julien Blouin with Goldman Sachs. Your line is open, please go ahead.

Yeah, thank you for taking my question. Just a question on yields in the quarter. I'm wondering if there was any impact to yields from adding the large top ten builder. Would the yield for a larger builder be any lower than some of your smaller relationships?

No, that wasn't an impact. In general, when you think about a newly added counterparty, you know, we're gonna be starting small and building on sort of the origination platform in itself that's created when you have a new counterparty. It certainly wasn't just that builder. It was, as we tried to lay out in the earnings slides, it was just the impact of SOFR-based rates. As we mentioned in the remarks, you know, part of the genesis of this structure, in our Other Agreements category is that our shareholders are not meant to be taking interest rate risk. Similarly, part of our value proposition to our customers and builders is that there is, they themselves are not taking in interest rate risk on their agreements.

What you're seeing in the, in the yield impact is just simply the impact of the SOFR-base rate. Similarly, in the spread business, we expect to get the benefit of that on our own liabilities.

Got it. Thank you. Maybe taking a step back. I mean, it sounds like the demand for your capital and your solution continues to be strong. I guess, what do your partners make of the fact that, you know, soon they won't be able to expand their relationships with you, if you end up sort of being capital constrained? Are there any other options you're considering for access to capital, to extend the runway here, things like, you know, JV capital, or I don't know if there are other things that you're considering.

Julien, it's Darren. We haven't yet turned our attention to alternative financing security structures. For now, we have enough in our revolver and through just the recycling nature of our balance sheet. As you would imagine, we spend a lot of time thinking, though, about what could next steps be.

We are hopeful that we will trade at a level where we'll unlock the equity markets as a financing vehicle. We're not gonna walk away from business, and we're certainly not gonna walk away from our existing clients and our new and growing relationships. We'll have more to say in the coming months and quarters about that. For right now, we're gonna stay the course and continue to just leverage our revolver, our debt capital until, you know, unless and until the equity markets become accommodating. We'll just stay the course for now.

Your next question comes from the line of Eric Wolfe with Citi. Your line is open. Please go ahead.

Hey, thanks. Good morning. You've mentioned in the past that there's a floor on all your option rate agreements. You were close to that floor on average, I'd say. Can you just help us think through sort of how close you are to that floor? Just trying to understand if SOFR continues to drop, you know, what would the sort of floor be on your average option rate?

Yeah, the average floor is similar what it's been in past quarters, which is approximately 10%. There's still a bit of a buffer there, but, you know, it's, it does provide a good base as we approach it there.

I think you mentioned matching liabilities to assets. I think right now, $400 million of your debt is floating today. Correct me if I'm wrong, but around that. I guess as we look towards the next, call it $1 billion or so of deployment, I guess, do you think that that sort of floating rate debt will sort of approach your floating rate exposure on the asset side? Just trying to think through how the floating rate debt might grow from here.

Yeah. As we talked about actually in last quarter's call, we do plan to use floating rate debt for this reason going forward. The way to think about it is that we could use our existing credit facility, which is now larger with the additional $500 million term loan, or if any other debt security becomes available to us that, you know, we think the rate on our credit facility is representative of with a similar tenor, we could take advantage of that also, provided it's as accretive or more accretive. We do plan to continue use of floating rate debt, as we've talked about in the last couple of calls.

All right. Just last question from me. You know, there's obviously quite a bit of differences on in Washington about sort of SFR build. I guess could take a long time to figure out sort of the rules there. I guess, are you thinking about that business differently or any of your partners thinking about that business differently? Have you seen sort of less desire to move forward with the projects that haven't been started yet? Can you just give us a sense of sort of how you're thinking about it, given the uncertainty around potential regulation there? Thanks.

Yeah. No, Darren, I mean, it's a hard area to wade into, trying to forecast what's gonna happen in D.C. What I will comment on is we've seen no change in behavior in our existing portfolio. We've definitely seen changes prospectively in behavior, in terms of capital has definitely been cooled from entering the market to finance, build to rent and/or buying for sale homes and turning them into a rental product. That's more on a go-forward basis. The builders continue to do a really good job of kind of reorienting their own businesses, slowing starts, dealing with inventory that they have on hand. Like, the fundamental picture continues to brighten if you kind of step back a little bit. They're handling it as well as they can.

They may overcorrect with bringing less land ultimately into production because some of that land and some of those homes were gonna go into a build-to-rent structure at some point in the future. For right now, we've seen no change in behavior as it relates to our existing portfolio. We do suspect that prospectively, the builders are kind of recalibrating their production to not have that demand in the future.

Got it. Thank you.

Your next question comes from the line of Craig Kucera with Lucid Capital Markets. Your line is open. Please go ahead.

Hey, good morning, guys. I think you answered this question about the new top 10 builder that became part of the fold. Is it fair to assume that most of the third-party investment growth this quarter came from existing counterparties, and that we might see more of a ramp-up from those news that were added this quarter?

Yeah. Hey, Craig, it's Rob. Thank you for the question. That is fair to assume. You know, the nature of this business is that each relationship starts small but builds on itself and builds on itself quickly.

The ramp up that we've seen this quarter and really over the past few quarters really speaks to having already secured a beachhead becoming operationally integrated with the land finance team, gained trust with the C-suite. The wallet share just grows within each counterparty. Each relationship builds on itself. In any given quarter, including this quarter, the growth you're seeing exactly like you just suggested, is existing relationships continuing to not just move towards capital efficient asset light community count growth like we spoke about in the remarks, but also generally we believe, moving more of the land banking wallet to the largest institutional operator, which we believe is us.

Yeah, I mean, I'd add to that to say that each relationship is its own sourcing mechanism, its own sourcing platform. Once we have a relationship, it becomes a beachhead into growing with that counterpart. The other point I'd make, I'm gonna use this as an opportunity to go back to something that I think Julien was pulsing on, that is, does the decline in our yield have anything to do with the new relationship? Let me address that by saying that our rates are holding steady where they are. We haven't seen any noticeable change as it relates to the rate at which we're able to put money out at the window.

No new relationship is really gonna degrade, that ability for us to put money to work at, the same sort of spreads that we've historically been doing it at.

Okay, great. Changing gears, you know, I appreciate the color on the loan repayment in April, supported by the Florida communities. I think that was the majority of your loans outstanding. Does the guidance include any new development loan originations, which I think yield a little bit higher than land acquisition, or is that primarily land acquisition funding?

I would expect development loan yield to on average yield similar to the option agreements. All of our guidance is inclusive of that development loan item, which again, is a similar risk, similar form of exposure to homebuilders just through a slightly different avenue to get exposure to builders who choose to take their finished lots from developers and providing financing to that avenue. It is inclusive. While we're certainly pleased with that repayment, any investment manager is certainly gonna be happy to see realizations and repayments in the underwriting proving out. There has been just as much, if not more demand for other similar investments, not just growth and option agreements, but more development lending also. We certainly feel good about our guidance.

Okay, great. Just stepping back, I mean, given the continued margin compression in the industry this year, are you hearing any increased chatter regarding M&A that Millrose might be able to participate in?

There's always M&A out there, especially in times like this where there's been a retrenchment in valuations and there's been a compression in margins. This is a scale business, there are always discussions that are going on. We are definitely aware of certain discussions that are happening and we're in a fortunate position to now be a tool in the tool belt for M&A in the sector. It's hard to predict when a deal will be announced or consummated, but we are definitely in the middle of conversations that are occurring.

Okay, great. That's helpful. Thank you.

There are no further questions at this time. I would now like to turn the call back over to Darren Richman, CEO and President for closing remarks. Please go ahead.

Thank you to everybody for joining us today. We tried to give a little bit more of an expansive overview of what we were seeing in the industry. There are a lot of crosscurrents that we all are reading about, whether it's D.C. or it's from the builders themselves. We're always available to answer questions on a one-off basis, and we appreciate you joining us today, so thank you.