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Greetings, and welcome to the Starwood Property Trust, Inc. Fourth Quarter 2025 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. It is now my pleasure to introduce your host,

Thank you, Operator. Good morning, and welcome to Starwood Property Trust, Inc.'s earnings call. This morning, we filed our 10-Ks and issued a press release with a presentation of our results, which are available on our website and have been filed with the SEC. Before the call begins, I would like to remind everyone that certain statements made in the course of this call are forward-looking statements, which do not guarantee future events or performance. Please refer to our 10-Ks and press release for cautionary factors related to these statements. Additionally, certain non-GAAP financial measures will be discussed on this call. For a reconciliation of these non-GAAP financial measures to the most comparable measures prepared in accordance with GAAP, please refer to our press release filed this morning. Joining me on the call today are Barry Stuart Sternlicht, the Company's Chairman and Chief Executive Officer; Jeffrey F. DiModica, the Company's President; and Rina Paniry, the Company's Chief Financial Officer. With that, I will now turn the call over to Rina.

Thank you,

Thanks, Rina. As we enter 2026, our priorities are clear: resolve legacy credit, maintain a conservative balance sheet, and selectively grow our highest returning businesses to restore full earnings power. We exited 2025 with continued stabilization in credit markets and improving transaction activity. Activity is still below peak levels but trending positively as liquidity returns and rates move lower, supporting originations, refinancings, and more constructive resolution outcomes. Real estate as an asset class has taken longer to normalize than many other parts of the economy, and performance remains uneven across sectors and geographies. We do not expect the volatility in corporate credit markets to have a large impact on CRE fundamentals, which have largely insulated and outperformed in the lower-rate environment. We built Starwood Property Trust, Inc. to operate through cycles, and this year reflected that. In 2025, we raised and repriced a record $4.4 billion of capital in corporate debt with our debt issued at the tightest spreads in our 16-year history, strengthening liquidity, preserving flexibility to deploy capital accretively while maintaining low leverage, and significantly extending corporate debt maturities. We continued to diversify our business in 2025, with the acquisition of our net lease business, which added over $2 billion of long-term accretive assets with 2.3% annual rent bumps that will add incremental future distributable earnings for years to come. Cap rates have come down since we closed, as have financing costs, which increases the value of the existing portfolio we purchased as we have optimized their financing structure, adding to the long-term tailwinds of the business. As Rina mentioned, we closed one securitization in Q4 and another after quarter end, both at a lower cost of funds than we underwrote, and we are in the process of significantly improving our bank line financing spreads. We continued to increase our pace of investing across businesses in 2025, investing $12.7 billion, including $2.5 billion in the fourth quarter alone. This was our second-largest investing year in our 16-year history, and notably, our global team achieved that volume in an environment where overall transaction and origination volumes remained well below historical averages. We anticipate another robust origination year in 2026, which will produce additional earnings along with the funding of the $1.9 billion of unfunded commitments Rina mentioned. In commercial lending, we originated $1.7 billion in the fourth quarter and $6.4 billion for the full year. Our portfolio is expected to grow to a record $17 billion in the first quarter, and we expect to continue this momentum in 2026. U.S. office loans represent only 8% of our diversified asset base, the lowest percentage in our history and well below that of our peers. We have done this by repositioning our loan book to more stable assets like multifamily and industrial, which accounted for 72% of 2025 originations. I will start my discussion on credit and asset management with some positive outcomes, starting with multifamily loans to undercapitalized borrowers who are unable to continue to fund through resolution. We have executed multiple sales of multifamily REO at our original basis and have more slated for sale at or near our original basis. We have intentionally avoided forced liquidation and, in doing so, have protected shareholder value—taking over management, executing unfinished business plans, increasing occupancy and property values. We are seeing tangible improvement across portions of our office portfolio, highlighted by approximately 800,000 square feet of leasing finalized during the fourth quarter, the highest quarterly leasing volume of the year. This total includes a 200,000-square-foot lease at a Brooklyn property that was previously risk-rated 5. That 630,000-square-foot asset was vacant coming out of COVID, and with the pending execution of a third substantial lease, will be 100% leased to three strong credits on a 32-year weighted average lease term with average annual rent escalations of 2.2%. This is a great outcome for shareholders, again reflecting our patience, active engagement, and improved leasing momentum. Sales activity has also improved, allowing $200 million of office loans to repay at par in 2025. Year to date in 2026, an additional $200 million of loans originated as office have sold or are in the process of closing, including $115 million related to a formerly risk-rated 5 asset also in Brooklyn. Patience has paid off for us in the past when managing foreclosed assets, and we present-value and probability-weight potential REO outcomes individually as we decide whether to liquidate or hold and reposition assets, bringing the full strength of the Starwood platform to bear on these situations. We ended the year with approximately $1 billion of commercial loans on nonaccrual and $624 million of foreclosures. That exposure is concentrated in a small number of assets, and each of those is in an active execution phase with defined business plans being managed by our in-house management team at Starwood. Turning to rating migrations, we had three assets migrate to 5 in the quarter. The first is a $108 million studio production asset in New York that we co-originated pari passu with two large U.S. banks and own 32% of the first mortgage. Utilization declined materially following the writers' and actors' strike. The sponsor has invested substantial equity since origination, but the property has not yet stabilized as originally underwritten. Second is the $269 million asset outside the Midtown Tunnel in New York. We increased the risk rating this quarter due to the sponsor's unwillingness to contribute additional capital. We have increased our involvement and are executing a revised plan with the sponsor, who is currently negotiating lease proposals representing a substantial portion of the vacant space. This newly constructed, well-located asset is positioned for potential near-term stabilization. We also downgraded a $33 million multifamily asset outside Dallas. We anticipate assuming ownership via foreclosure in the near term. Upon transition, we intend to implement a focused value-add plan, as we have successfully done on similar multifamily projects. Our basis is below replacement cost, and our captive asset management team expects to be able to execute on a value-add business plan in the coming quarters. We also downgraded one loan to a 4 rating—a $90 million mixed-use portfolio in Ireland that we restructured to extend term and provide flexibility while assets are sold down. While asset sales have taken longer than originally contemplated, transactions completed to date have been in line with underwriting, and our base case continues to support full repayment over time. These are active asset management situations with defined action plans, and while resolution timing may vary, we are highly focused on resolving nonearning assets. Redeployment of this capital will be a tailwind to earnings as we achieve resolution. Our energy infrastructure lending platform had its largest origination year ever in 2025, investing $2.6 billion across the segment. The portfolio now totals almost $3 billion and remains diversified across power and midstream assets and has one of the highest ROEs in our portfolio. These are senior secured, asset-backed investments supported by durable cash flows and long-term demand drivers in energy and power markets. Loan-to-values continue to fall in this segment as loan performance remains strong, power needs and capacity auction prices continue to increase, and returns remain attractive. Finally, with the pricing of our seventh CLO, 75% of our SIFT loans now benefit from term, non-mark-to-market financing, reducing funding volatility. Turning to our new net lease business, Fundamental Income, Rina mentioned our integration is on plan, and we currently have a large pipeline and expect to increase volumes over the course of this year, which, along with 2.3% annual rent escalations, will increase returns in this cylinder each quarter and year. Rina told you we completed our first ABS financing in Q4, and subsequent to quarter end, we executed our second securitization for $466 million, again at tighter-than-underwritten spreads, which will allow us to continue to accretively invest in this cylinder at today's cap rates. We view the net lease business, along with our other owned real estate, as adding duration and contractual cash flow to the platform, and over time we expect it to become a more meaningful contributor to run-rate earnings. We are a hybrid company with approximately $7.5 billion of owned real estate, or 24% of our balance sheet. We are different than other mortgage REITs in our peer group. In a period where our stock has significantly underperformed, the stocks of equity REITs and triple-net lease REITs have significantly outperformed STWD and other mortgage REITs, with the largest underperformance coming in the last few months. It is important to remember that we are no longer simply a mortgage REIT. We operate a diversified real estate finance platform with true scale, operating businesses, and a strong, well-capitalized balance sheet, with access to capital at the lowest spreads in our history. The diversity and stability across our portfolio continues to uniquely insulate us through periods of sector instability. Our leverage is significantly lower than our peer group at just 2.4 turns today. While we could enhance near-term earnings by increasing leverage, we have deliberately chosen not to do so, instead prioritizing a strong, durable balance sheet to support our generational vehicle. Insider ownership further reinforces that alignment, standing at approximately 6%, or $380 million today—greater than the insider ownership of all our peers combined. We continue to look internally for ways to improve how we operate. We are investing in tools and technology to streamline underwriting, asset management, and reporting processes, and we expect to increasingly leverage data analytics and AI-driven tools as part of that effort. The foundation is in place for STWD 2.0 to come out of this cycle successfully as the only CRE mortgage REIT that never cut its dividend. Looking ahead to 2026 and beyond, resolving our nonaccrual and REO, and increasing originations pace and volume, allow us to earn more than the $1.95 we earned this year excluding the temporary items that Rina noted. With that, I will turn the call to Barry.

Thank you,

We will now open for questions. If you would like to ask a question, please press star 1 on your telephone keypad. A 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 the handset before pressing the star keys. One moment, please, while we poll for questions. Our first question comes from the line of Donald James Fandetti with Wells Fargo. Please proceed with your question.

Hi. Good morning. It seems like you are increasing the CRE loan portfolio again in Q1. Can you talk about the pace throughout 2026 and also the return profile of these originations versus historical?

Thanks, Don. Good morning, by the way. I think I mentioned in my script that we expect the loan portfolio on the CRE side to go over $17 billion in the first quarter. That would be the first time we have been growing the loan book for every quarter since COVID, every quarter in COVID, every quarter since we started. I think we have made commercial real estate loans, so it is nothing new. We are obviously sitting on a little bit more liquidity after all of the cash-out refinancings and raises that we were able to do last year, so our pace has increased as we try to deploy that. Rina spoke a little bit about drag last year. I think we did $6.5 billion or so of CRE lending. We expect to do at least that this year. My gut is that you are going to have more maturities this year. You have people who have executed their business plans on post-COVID or post-rate-rise loans. You have a number of loans from before that period that simply need to move out of the pipe, and we also have lower rates, which will create more transaction volume. In 2021, you had high $600 billion of transactions in the market. You will have two-thirds of that this year. So as transactions move up, as rates move down, as maturities come, we expect more opportunities. We borrow inside most of our peer group. Our last term loan was at 1.75% over, I believe, on a new issue, which was incredible, and then the high yield markets were somewhere around 200 over. No one in our space—well, one person in our space can borrow there—but the rest cannot. I think we have a cost of funds advantage. Also, being the biggest, we have bigger relationships with the banks who we will tend to repo with. They pick up a cross from us. The cross is worth more with us than it is with anyone else because our lines are bigger and we have relationships. So I think it looks like a very good year for originations. Last year was our second biggest. I would hope that we would be able to beat that number this year. We have $2 billion closed or in closing in the quarter. So we are still pedal down. We know we have to originate more loans and thoughtfully work out of the REOs and nonaccruals to get back to the run rate that we keep talking about by late '26, where we are covering the dividend.

Got it. And I guess, what is your expectation for credit migration near term? It sounds like you are playing the long game, which we appreciate. But I guess that also means that we will continue to see these sort of one-off type migrations.

Yeah. Barry, I will let you go after it. Maybe I will start. You know, on migration, there are people who sell things right away, and that is a business plan. There are people like us who will work on them. We do not have a business plan for what we do with a credit and putting it through a Python. We look at every one of them individually, try to present value what we think the value of getting the amount of cash we would get back in a distressed-ish sale today without working on the asset, then what is the present value of the cash we get back over the time that we would do it, and then against that we make assumptions of where we think the property could end up—positives, negatives. We look at our liquidity, our cost of capital, et cetera, and we look at what information can Starwood, the manager, bring to bear to make the asset better. We have a great history of making assets better than the next buyer. The next buyer is going to be a 20% return private equity guy who is going to buy from us at a 10% to 12% cost of capital, and then he is going to back up his bid a little bit because of the things that he does not know. We know the asset. We have a lower cost of capital. We can borrow against the assets significantly cheaper than corporate debt than he can. That all goes into our individual business plans as we look at each individual asset without having a business plan that we are a forced seller of assets. And when we look at those, we make the decision as a management team across our capital and our property trust to either stay in and ride it, which we have done successfully—Barry gave you an example of another one that we are redeveloping we expect to have successfully done. I gave you examples of a number of them. I think we resolved $300 million last year in actual resolutions—not foreclosures. We do not call foreclosures resolutions; some people do. We had $130 million more fall out, so it would have been $430 million. We hope to resolve—we have a sheet and we look quarterly at what we expect to resolve. Our goal is to resolve most of a billion dollars this year, and if we execute on that, great, and if we do not, it is going to be because we looked at the present value of the cash flows and the cash flow we get from that day, and we are going to make the best decision for shareholders on each bespoke asset. So we do not really have a plan. U.S. credit migration—you know, I think we have our arms around where we think the potential problems are. If you look at that, property types are going to make a difference. The market it is in is going to make a difference. Tenant movements are going to make a difference. It is all very bespoke, but we feel like we really have our arms around where the potential problems are going to be.

Got it. Thank you.

Should I add a few things? Can you hear me okay?

Yep. Go ahead, Barry. Go ahead, Barry. Yeah.

I mean, just given all the plan, we have a bunch of individual assets. And it has been remarkable, the amount of money we had at one asset that the cap stack was $1 billion, we are below these $400 million, and the borrower lost. When they walk, you know, they really have not—obviously, tenants want to lease and know the building is in trouble. They are not going to go in the building. It is the one that says the TI.

The borrower has absolutely zero incentive to do anything.

So in multiple cases in our pipe, we expect to have been—and, like, we are not supposed to be leasing our buildings for us. And if we are going to put the ads right here for the TI, we want to get the asset back. There is no reason to exercise their position. So, you know, we kind of—once you play hardball, we play fair ball, and we try to work with our borrowers if we can. I think the multi business is particularly interesting. I mean, it is one of these businesses you could all remember upon the go, we started iStar—what was Tallstar Financial—it changes into iStar, and wound up taking back a whole bunch of stuff in TFC, and turned themselves into a quasi equity REIT and made a fortune. Obviously, the best thing we can do in our loan is get our money back.

That is primarily our business, certainly—it is half our business—and we are happy to play in that ballgame. We are talking about real estate, but you know, long term, you make more money on the assets, and since we are comfortable on a great asset, although we are looking at what we can recycle once we stabilize the assets. And I would say, like, for the most part, it is mostly good news to get the assets back and find that there is great demand for it, and we expect to be able to move these properties. But I do not get to do this on a quarterly basis. Our clients do not march towards quarter-ends, and our borrowers do not give up the keys always willingly. In many cases, they do and work collaboratively, but in the exception they might move slower. I think people are surprised—I think in the real estate world today—borrowers are surprised with the slow pace of recovery of the multifamily market. And while you have some positives in closed lines and maybe some of the first cities that saw no supply, you have not seen the green shoots compared to the press reports of every public company, maybe save one. Remember, the growth rate of the Sunbelt markets is not great. The rental growth is not great. We are getting positives from renewals and negative from leases, pretty much across the board—maybe you are plus one or minus one or plus two—and I see that it is not robust, and expenses continue to march higher. So you have stressed P&Ls. I do not think—when we look at our attachment points where we are alone as opposed to, like, build-it or bought-it—in many cases, their loans are traditional, and that is something out of repositioning multi. I am kind of happy to get it back. We are able to move them. We probably have a dozen assets we have in our pipeline and are here today. But, you know, I have mixed emotions. If you really like the market, the Sunbelt may be overbuilt, but it is where all the jobs are. It is where all the companies are being. We are looking at our headquarters. It is where the factories are being built, and it is where the cost of living is generally less. It is where there are right-to-work states. They are attractive states and attractive markets, further reshoring of investment and nationalization of the country. So you know, when you know there is a new factory going up in a year and a half—let us say the year and a half to build the market—do you want to sell the multi now? Or do you want to be the guy—Jeff said—an opportunity fund is going to buy the asset, and we are not—it is funded to what we do in another part of our world. I always tell Jeff and Dennis, if you are changing—he is like, we will buy it. We do not do that, but we would. In this case, we already own it. So we will just keep it in the REIT. If we want to keep it, we will just hold it. So, you know, I think it is sloppy for you because we are a unicorn in our space. And if we really thought, you know, we had an issue, we—you know, we are not worried. It has been a bit—when you take out the noncash losses, take out some of the cash drag that we know we put into place, and we are pretty confident in the math. We will reach scale and leverage with our interface, and so once it reaches critical mass, it all—so we do not have a body or a dollar to go over that. So it becomes pretty positive and reliable and recurring and stable, which is exactly the metrics that we used to go public in 2009. Consistent level. We have had some potholes, but we are on the same field. To have this kind of destruction in our markets, including the pandemic and the office markets, it is inevitable. So I am fairly proud to see us this way. We are negotiating. I know it keeps my job on some of these audio assets, and we are looking at whether we should turn accruals back on in some asset cases, you know, because its performance has improved. So it is a mishmash. It is unfortunately a little hard to say. Thanks.

Thank you. As a reminder, if anyone has any questions, you may press star 1 on your telephone keypad to join the queue. Our next question comes from the line of Gabe Foggy with Raymond James. Please proceed with your question.

Hey, good morning all. Thanks for taking the questions. I wanted to talk about the residential portfolio and then the infra book. So on resi, Jeff, is there a point where, I do not know, in the market where rates get to a certain level where you guys look holistically and say that maybe you can sell the portfolio to kind of unearth the capital that sits under that to go make more infra or CRE loans? And then, Barry, on the infra side, Barry and Jeff, just remind us, what is the total opportunity set for the infra lending business? Who are your true competitors and how big can that book get over time?

Thanks. Thanks, Gabe. Hey, Barry, again, I will start unless you want to start. But on your first question on resi, resi performance has been great. I think we had a markdown in our GAAP book value of $247 million back in '22 when the rate change happened. We are significantly below that today. I think it is $100 million and after hedge maybe a little bit higher than that, but we have got back a significant portion of that by holding on—the same strategy that we have used. And also the thing that would surprise you is because we have a lot of legacy RMBS in bonds that we have, I think our ROE on our resi portfolio—this is hard for you to see because you see loans marked at $96 or $97 that we paid $101 or $102 for—I think our run-rate ROE is around 11% today across the entire resi business. So, to your point, things that will make it get better: spread tightening or lower rates. Spread tightening has come our way. Securitization spreads have tightened 25 basis points since January 1 alone. We are at the tightest securitization spreads since 2022. Securitization issuance, I think, is $10 billion year to date versus $5.3 billion at this time last year. Insurance cares about these assets. They get great insurance treatment, and that—along with the street conduits and others—there is a great bid for the types of assets that we have historically liked. That has allowed us to mark them up. That has allowed us to reduce that GAAP book value loss significantly. From here, we cannot count on spreads being significantly tighter from here. They probably can tighten a bit, but they have made their move. So to get back from the $96 or $97 or $98 price to par or $101 or $102, rates are going to be the other piece. You mentioned that. Lower rates help us because it increases CPRs. We were running at 5% or 6% CPR in our non-QM the last couple of years. We are up to 8% or 9% CPR today. We get more back at par when that happens. That is good. I think in-house, although we never make bets on rates, we believe rates are probably headed lower. It certainly feels like the AI-driven productivity will match that of previous productivity gains that we have seen and drive rates lower. We do not make any real bets based on that. But if I am betting on that, and betting on rates going lower, that will certainly help that book. As you know, we hedge that book, and so always moving our hedge around a little bit. The only way we probably get back to getting that full write-down back is by reducing that hedge a bit and being correct on rates going lower—not something we historically do—and I think we will wait and see. You create a distributable earnings loss when you take that GAAP book value hit into earnings. We like the assets. They are returning 11%, so I do not think we are going to rush to sell. Barry, unless you have anything on rates, I would then wait to infra and ask Sean Murdock in the room. Barry, do you have anything you want to add on residential?

Not really. I mean, we want to go back and forth adding value in there. We are going back into the business. So this is a business we have a team in place for following them. We are capable. We just have to make the numbers work. So if we can, we would go back, and then we can have that as well. One of the reasons you have to diversify business models is when some are not available, you have plenty to put in other verticals. I want to introduction to Sean because you precisely went into that business and to have another material lending for it also. Sean, all yours.

Yeah. Well, before we go, I will say we looked at, I think, 21 different resi originators last year. We have talked about getting back into resi originations. The combination of rate being a little bit low and spreads being a little bit tight make it a little bit hard to jump in today, but we are always looking. I cannot imagine we do not get back in the origination game on the resi side in the near future. We are just waiting for the right opportunity. On the infrastructure side, you asked about the potential size of the market, so I am going to turn it to Sean Murdock, who has done a great job of doing sole origination to kind of get off treadmill of what that market is. Sean runs that business for us.

Sure. I mean, I think the best way to contextualize the opportunity is to just talk about energy consumption in the United States. A couple of great points: consumption over the next five years is supposed to grow at sort of a 5% annual CAGR. Another good statistic to look at is the LNG export boom we have had in the U.S. We are exporting roughly 50 Bcf a day of gas to consumers around the world. That is supposed to double over the next five years. So we feel like there is a big tailwind to growth, both from the obvious AI data center value chain as well as LNG exports and other new initiatives that create a bigger market for us in which to prosecute opportunity. You asked about our competitors. I think it is similar to Dennis’s business in CRE lending. We have commercial banks that still make loans in our space. We also compete with alternative debt funds. There are just maybe not as many as either, given ESG constraints around some participants in the market. The third issuer of infra CLOs did their first deal at the end of last year concurrent with our seventh deal—Barings Asset Management. So competition is growing a little bit, but I think the tailwinds on demand for energy are significant and inform a much larger opportunity set for us over time.

Thank you, guys. That is helpful.

Thanks, Gabe.

Again, as a reminder, pressing star 1 on your telephone keypad will join you into the queue so you can ask your question. Our next question comes from the line of Jade Joseph Rahmani with KBW. Please proceed with your question.

Thank you very much. Just at a high level, follow-up to Don’s initial question. Do you think credit is getting better or worse? You know, it does seem to have deteriorated in the quarter. However, these could have been primarily problems you already knew about. And the new problems seem to be not in the office—I think that everyone has pored over the office exposure quite thoroughly—but in multifamily, where, as Barry noted, rents remain soft, and also industrial. So could you just comment on your overall view on credit trends?

Barry, I will go first and you can go after. You know, we had—hope you heard in the beginning of my discussion—we had a lot of leasing last year across a lot of assets that we may not have thought we would have. There are always some idiosyncratic things that might happen in the portfolio. As you mentioned, a couple of industrials—one of them that we moved to 5 that we are leasing on, but we felt it was right to move to 5 because the sponsor stepped away. One was a studio deal—not something that was really in our office purview. So I think where it comes from here, as we have seen green shoots—and I mentioned a number of green shoots—and the REO sales at our basis in multi. As I look at our multi book, even if you have a 4-cap asset from 2021 that you wrote a loan on expecting a 5% and a 5% debt yield, if you only achieved a 4.75% or 5% debt yield, you are not losing much money on those. They are very close, and it is just a matter of which side of par you are on. So I think the multi losses across most of our books should be paper unless someone made a really big mistake. Rates will help bail that out. If you end up with a 3% area SOFR—which is what the market is saying today—those losses should be completely immaterial for just about everybody. If forward SOFR backs up to 4%, then there might be a slightly different discussion. But you nailed it on a few bespoke industrial assets—whether it is the market or tenant or other reasons—that is where we are seeing a couple of things pop up. But I would say overall, the positives are better than the negatives. And when I say positives are better than the negatives, to your question, to me that means the credit cycle has turned a bit. Barry, do you have something to add to that?

No. Real estate is going to catch a bid. I mentioned that whenever the equity markets rock or shake, people come back to the property sector—the largest asset class in the world. We are operating in Europe, the U.S., Australia, and in general, markets are better. We are all confused, I think, would be the rule. I do. It is sad and terrifying. It is—you know, it is how many of you talk about the world in this AI convulsing—all the question marks and the fear and the anxiety. And yet, you know, if you see the markets clear, they are behaving pretty well. And you can see the office market—even despite McDonald’s—has been pretty strong. Housing remains very strong. The West Coast continues to perform pretty well. You know, I mean—and I think the political class and political interactions is something to watch. You know, I think we have to be careful about both the union cost in assets we went against and also cities like close-in near the city. Property taxes, 95%. I mean, that takes the value of an office down materially, if we can actually do it. So we are blessed with not that big of a portfolio of stuff in the city, and we have avoided most of those loans, but that is going to be an earthquake. If he passes that and then sends it through—and then you will see—the interesting thing is sometimes the tenant will pick up the real estate taxes, and if you do not, you do. What you do on the rent roll of the other tenants. So let us see. I do not know. But it is really just kind of uncertainty. It is a strange world. In general, we are definitely not selling. I think what you are seeing—we see it in our special servicer—because some borrowers are just giving up. I mean, they planned for things to get better. They were sailing after '25. '25 has passed. You know, the insurance fell, but the line did not go up. And what is ours—they kept rates up. Immigration—we did not have many people leaving, like, this last year. Growth was actually negative growth in U.S. population for the first time in—I think—ever. I think, like, fifty years later than ever—so we might have to check that one. But, I mean, that has definitely affected apartment markets. You know, with those things out—so deportation to the lack of not only people immigrating voluntarily, but we used to get a million skilled immigrants a year. And the U.S., just as you see in the national travel, is not the most hospitable place at the moment to— for the better people’s assumptions. And so, you know, they are not traveling here, and then their work—when people leave the country—that actually has been almost broken. I think some of the weakness in GDP is the fact that we have no contribution from immigration. So we want—I think most of us want to shovel toward lowering the amount of illegal immigrants—to shutter completely—but legal immigrants, I think, going to this would be very much favorable, and we need to get our act together and let people in the country. It will be good for the economy and for real estate markets.

Thank you very much. Just on the earnings path to covering the dividend, over what time frame is reasonable to expect? Is it your expectation that by the fourth quarter of this year, DE will be in line to potentially greater than the dividend? And are there any outsized gains you are expecting in 2026?

Barry, you want to start?

Oh, sorry. Sorry. I am on an airplane while I do this call. Sorry. I muted it. I think you will see us get a little better before. We have a lot of things. It is hard to say because there are some things we are considering. I mentioned turning on nonaccrual loans that we are still evaluating. And we have some really good things in the pipe, but we have to get them done. So I would say that, again, if you take out the noncash loss of the fee—it is accounted for different, you know, some of it five years—but we have the earnings power. We can have it anytime we want it. We can sell assets with our multifamily book. There are 56 of them, Jeff.

Yep. Good evening, Jeff. No. I know. I am—we, you know, we are just trying to—we are, like I said, we are playing long ball. And the asset is great and contributing meaningfully and should have virtually no real serious competition. I have to say, if you do not know how hard it is to build affordable housing in this country, it is ridiculous. And we are in the business. I sort of entered it in the equity side. And with all the—what I will call—the drifters along the way that you pay off: the consult, the branch you need, and the not-for-profit you have to get involved, it costs almost twice as much now to build an affordable building as a market-rate building. So the way to do this is not the current structure. You basically should build a market-rate apartment and then just donate it to a not-for-profit, and we would have more affordable housing. It was an eye-opening experience for me. And it takes, you know, 14 different grants of 13 different associations, and you have to do the tax credit equity. It is quite a weird business. And it does not really work very well. They need to do something about this, but they should trash the whole structure and try something else. Because we need affordable housing in all these markets, and we have it done. It is the patience done. So it is—you know, Miami, where I live—it is the most unaffordable city in the United States. Half the population makes less than $50,000 a year. Occupancy in affordable housing is 99.5%. And do not remember—affordable housing rents are not going to go down. They come up or down. So what we are finding, though, is that the calculation of the rent growth is strong, but our ability to pass it on gets a little tough sometimes because, you know, you feel bad—the people have nowhere to go. So it is a very odd corner of the world in real estate that—well, I think with the Mason’s large affordable housing owned—I think it is 62,000 units across our portfolio. So it is a fascinating business. And we look at markets where rents approach market rents, which is, like, Austin is an excess. You cannot raise your own, but you can just move out. But in Orlando and Tampa, where the REIT owns its properties, we are, as I mentioned, 30% below market rent. So we are pretty protected and have runway, and they are also high-cost cities by the federal government. So we always wind up—what is the role of the ones that—I think what is the number, you know, that rolled over from 2025 into 2026, that we could not take last year?

Yeah. It is about 9%, Barry, that is carryover.

I mean, 9%. Right. So we were allowed to take, like, eight or nine in seven individual markets, and then the rest of it—calculation. Orlando, I think last year, was 15% rent growth they gave us. They would not let us pass it on, but we paid five or six points in the notes here. So it is, as I said, a gift that keeps on giving. And when we bought those—you know, I think you know me—I said I want to buy things in a REIT that we will never have to sell and that I want my kids’ estates to have and their grandkids and their kids. And that is that book. It is shameful to sell it, but it does have—we have no equity in the portfolio. We have refinanced all of our equity.

Yes. We just got $2.3 billion out.

Thank you. And we have a $2 billion gain—something like that. So that is even more on that.

One and a half there.

Yeah. Okay. Well, there we go. Okay. Thanks, Barry.

Yeah. So, Jade, I think the earnings trend is improving. I think Barry just said our Woodstar $1.5 billion of gains give us unique staying power, and we will continue to work the year to maximize shareholder value. To Barry’s other point—and I made it in my opening remarks, but I do not want it to be lost on people—the equity REITs are doing really well. Owning real estate, long-term assets, like Barry said, has been a pretty good trade. For whatever reason, our stock is not trading very well, but we are 24% owned real estate with long duration and large gains.

Can I—Jeff, can I go ahead and interrupt? This is something we did not say, and I think we should say. You know, our triple net lease business in the market would be valued at, I think Jeff said, a 6%–6.5% dividend yield. That is the comp, so you take the high end. There are some trading even higher than that. So if it gets to scale and we are not getting the performance of our stock and it continues to just be a junk credit, we will spin it out. Because, you know, we have a big gain in that business, and we will have a big gain in the business. And it is obvious to us that a 6% dividend stream trading, and a 10.8% dividend stock is ridiculous. So we are not idiots. But we will grow the book, and then we will spin it and create—like we did long ago when we spun out our residential housing business and started Waypoint—we will do the same thing. I mean, we have to get recognized for the value of the portfolio and the stability of the income stream. And, you know, our credit markets actually appreciate it. I mean, we have the tightest spreads in our sector. But the equity markets do not. So I think it is confusion over some of the different accounting methods between the different firms in our space. And also I think, you know, some do not have diversification. They do not have the kind of company we put together, by purpose. We continue to look at other things, too. We just lost a very large deal—well, maybe we lost it. We are hoping to get it back—but there are other things that we have up our sleeve which could deploy capital really rapidly and get us the earnings power we need faster. So that is why it is hard to answer that question that was asked earlier.

Thank you, Operator. Are there any more in the queue?

There are no further questions at this time.

Thank you, Barry. Any other questions?

Thank you. No. Thanks, everyone, and we will be with you next quarter.