TRTX 2026년 3분기 실적 발표: 대출 집행이 순이자이익(NII) 13% 성장 견인

핵심 요약

• TPG 리얼 에스테이트 파이낸스 트러스트(NYSE: TRTX)는 2026년 3분기 보통주 주주 귀속 GAAP 순이익이 580만 달러(희석 주당 0.08달러)를 기록했다고 발표했다.
• 배당 가능 이익은 다세대 주택 대출 1건의 소유 부동산(REO) 전환에 따른 1,300만 달러의 실현 손실이 반영되어 510만 달러(희석 주당 0.07달러)를 기록했다. 실현 손실 이전 배당 가능 이익은 1,810만 달러(희석 주당 0.24달러)로 분기 보통주 배당금을 상회했다.
• 순이자이익은 순수익자산이 49억 달러로 전분기 대비 14% 증가함에 따라 전분기 대비 300만 달러(13%) 증가했다. 경영진은 분기 말에 이루어진 신규 대출 집행이 3분기 실적에 미친 기여도는 제한적이었다고 설명했다.
• TRTX는 총 약정액 7억 7,270만 달러, 가중평균 신용 스프레드 3.02% 규모의 선순위 담보 대출 9건을 신규 집행했다. 지난 12개월 동안 회사는 23억 달러 규모의 대출 투자를 실행했다.
• 분기 말 기준 대출 포트폴리오의 정상 실행 비율은 100%였으며, 가중평균 위험 등급은 3.0을 기록했다. CECL 충당금은 총 대출 약정액의 147bp에 해당하는 7,610만 달러로 감소했다.
• 10억 달러 규모의 TRTX 2026-FL8 CRE CLO 발행에 따라 시가평가 비대상 조달 비중이 약 85%로 증가했다. 이번 거래로 약 4,300만 달러의 순현금이 유입되었으며, 경영진은 조달 비용이 개선될 것으로 기대하고 있다.

주요 재무 데이터

사업 및 경영 실적

TRTX의 투자 포트폴리오는 다세대 주택 및 물류·산업용 부동산에 집중되어 있으며, 이는 전체 투자의 약 75%를 차지한다. 포트폴리오의 평균 대출 규모는 8,800만 달러이며, 150개 이상의 기초 자산을 담보로 하고 있다.

회사는 2025년 9월 이후 현재 대출 포트폴리오의 약 45%에 해당하는 23억 달러 규모의 대출을 신규 집행했다. 경영진은 재무제표의 대부분이 고금리와 부동산 가치 하락 환경이었던 지난 2년 동안 집행되었다는 점을 강조했다. 다세대 주택 익스포저의 약 80%는 2024년 이후에 집행되었다.

3분기 동안 TRTX는 기존 대출에 대한 향후 의무금 7,180만 달러를 자금 공급하였으며, 1억 1,960만 달러의 상환금을 회수했다. 분기 말 이후 추가로 7,220만 달러의 상환금이 회수되었다.

또한 회사는 주당 가중평균 8달러의 가격으로 보통주 120만 주를 자사주 매입하여 총 930만 달러를 소진했다. 이번 자사주 매입으로 보통주 1주당 장부가치가 0.04달러 증가했다. 기존 2,500만 달러의 매입 한도가 소진됨에 따라 이사회는 5,000만 달러 규모의 신규 자사주 매입 프로그램을 승인했다.

TRTX 2026-FL8은 약 10억 달러의 담보를 유동화했으며, 그중 약 95%가 다세대 주택 및 물류·산업용 부동산이었다. FL6 및 FL7과 함께 30개월의 재투자 기간이 부여되어 TRTX는 자본을 회수하여 신규 대출에 재투자할 수 있는 추가 여력을 확보하게 되었다.

리스크 및 주요 점검 사항

경영진은 지속적인 인플레이션, 고금리 유지, 금융 여건 타이트화, 일부 부문의 부동산 가치 하락, 기존 자본 구조의 재조달(리파이낸싱) 압박을 주요 리스크로 꼽았다. 고금리는 매수자와 매도자 간의 가격 간극을 넓혀 부동산 인수 활동을 위축시키기도 했다.

1,300만 달러의 실현 손실은 소유 부동산(REO)으로 전환된 다세대 주택 대출 1건에서 발생했다. 경영진은 이 상황이 현지 시장 침체, 차주의 재무적 곤경, 투자 부실에서 기인한 개별 자산 및 차주 특유의 문제라고 설명했다. 해당 자산은 이미 충당금이 전액 설정되어 있었으므로 REO 전환이 장부가치에 영향을 미치지는 않았다.

선벨트 지역의 또 다른 다세대 주택 대출은 공실률 상승 이후 조건이 변경되었다. 경영진은 이 문제를 일시적인 현상으로 규정하며 조건 변경을 통해 해당 자산의 안정화를 재도모할 계획을 마련했다고 밝혔다.

신규 대출의 종결(클로징) 소요 기간이 길어지면서 분기별 실적 인식 시점에 대한 압박이 발생할 가능성이 커졌다. 또한 TRTX는 목표 레버리지 및 재무제표 규모에 근접한 수준에서 분기를 마감했으므로, 향후 포트폴리오 운용은 신규 대출 집행과 기존 대출 상환의 시점을 맞추는 것에 더 크게 의존하게 되었다.

애널리스트 Q&A 주요 내용

• 금리 민감도 및 언더라이팅: 경영진은 최근 신규 집행 대출이 고금리 환경에 맞추어 구조화되었으며 일반적으로 금리 캡(상한)을 포함하고 있다고 밝혔다. 대출 금리 하한선(최저 금리)은 기존 2.5%~3% 수준에서 점차 상승하는 추세를 보이고 있다.
• 대출 스프레드 동향: TRTX가 FL8을 시장에 출시한 이후 CRE CLO 조달 비용이 약 25bp 확대되었다. 경영진은 이러한 변화가 신규 대출 금리 책정에 반영되기 시작한 반면, TRTX는 이미 더 축소된 수준에서 부채 조달 금리를 확정했다고 설명했다.
• 다세대 주택 가격 책정: 신축 A 및 A+ 등급 다세대 주택 대출 스프레드는 약 15~30bp 확대되었다. B 및 C 등급 다세대 주택 스프레드는 약 25~50bp 확대되었다.
• 대출 집행 파이프라인: 경영진은 부동산 차주들의 자금 수요가 특히 다세대 주택 및 물류·산업용 부동산 분야에서 여전히 견조하여 파이프라인이 유망하다고 밝혔다. 다만 신규 부동산 인수 활동은 여전히 제한적이다.
• 포트폴리오 성장: 레버리지가 목표 수준에 근접함에 따라 경영진은 대출 포트폴리오가 신규 집행과 상환이 1대 1로 이뤄지는 일입일출(one-in, one-out) 방식으로 운용될 것으로 예상하며, 이를 통해 배당 가능 이익의 변동성을 줄일 수 있을 것으로 보고 있다.
• REO 전략: TRTX의 REO 포트폴리오는 배당 가능 이익에 계속해서 긍정적인 기여를 하고 있다. 다세대 주택 1건은 의향서(LOI)가 체결된 상태로 매각 마케팅의 최종 단계에 있어 회사가 매각 시기를 선택적으로 조율할 수 있는 상황이다.
• 부채 보호: FL8 발행 이후 대출 조달의 약 85%가 시가평가 비대상 구조로 전환되었다. 경영진은 만기 일치형 장기 구조를 통해 기존 만기 건 및 부실 우려 자산을 관리할 수 있는 유연성을 확보했다고 밝혔다.

실적 발표 컨퍼런스 콜 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Welcome to TPG Real Estate Finance Trust Third Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note that this call is being recorded. I'll now turn the conference over to Ashvin Rao. You may begin.

Ashvin Rao

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 Bouquard, our Chief Executive Officer; Brandon Fox, our Interim Chief Financial Officer; and Ryan Roberto, our Head of Portfolio Management and Capital Markets. Doug, Brandon and Ryan will provide commentary regarding the company, its performance and the general economy, and we'll 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 10-Q. 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.

Doug Bouquard

Thank you, Ashvin Rao. 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 and 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 earnings. 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 the 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 manage 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 have diversified our funding sources, extended liability duration, reduced mark-to-market exposures and improved liquidity. As a result, the balance sheet optimization we have discussed throughout this cycle is now largely complete.

Today, approximately 75% of our leverage is funded through CRE CLOs and 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 FL8, our eighth CRE CLO. The transaction securitized approximately $1 billion of collateral that was approximately 95% multifamily and industrial and is expected to be accretive to our cost of funds and increased our percentage of non-mark-to-market liabilities to over 85%. We are particularly pleased with this execution given the subsequent widening of CRE 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 reinvestment in FL6 and FL7, provides significant flexibility to recycle capital and continue to grow earnings in the coming years. This embedded reinvestment capacity represents a meaningful competitive advantage and further differentiates TRTX within the real estate credit sector. Loan spreads widen from current levels. The 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 we 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 earnings 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 2 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 have 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.

Brandon Fox

Thank you, Doug, and good morning. For the third quarter of 2026, TRTX reported GAAP net income attributable to common stockholders of $5.8 million or $0.08 per diluted common share. Distributable earnings were $5.1 million or $0.07 per diluted 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 or 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. Book value per common share was $10.85 at quarter end, a decline of $0.10 from June 30, primarily reflecting credit loss expense associated with the significant growth in our loan portfolio and macroeconomic conditions during the quarter.

For the 3 months ended September 30, we made 9 first mortgage loan investments, representing total commitments of $772.7 million at a weighted average credit spread of 3.02%, funded $71.8 million of future funding obligations on our existing loans and received $119.6 million of loan repayments, including full multifamily loan repayment of $106 million. Subsequent to quarter end, we received $72.2 million of additional loan repayments related to full multifamily repayment and 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 30. 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 30.

The decrease reflects the conversion of a multifamily loans to REO during the quarter. The conversion to REO did not have an impact to book value because it was fully reserved. This reduction in the CECL 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 managed CRE CLO and placed approximately $820 million of investment-grade securities with institutional investors. The issuance was leverage neutral to the company, generated nearly $43 million 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%, 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 undrawn 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 4.03x from 3.32x at June 30, 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?

Operator

[Operator Instructions] Our first question comes from the line of Richard Shane with JPMorgan.

질의응답

Richard Shane

Look, you guys had pointed out the recency of your portfolio and transactions that are structured to reflect the new environment. I am curious, obviously, given how much rates even moved 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 minds for buyers, sellers and lenders as hurdle rates change so quickly and that potentially impacts property values. Does that slow transactions? Or should we -- even though the portfolio has the advantage of being constructed more recently, does the latest rate shift create some incremental concern?

Doug Bouquard

Thanks, Rick. I think first, what we see within our portfolio, I'd say, kind of more locally across our integrated debt and equity business is that the first order here has just been, I think, a continued drop in acquisition activity, simply put buyer and seller on the multifamily side, that gap continues to widen. So, I think the sort of the 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 debt yield should be and sort of how we think about cap rate evolution, we've been pretty consistent, kind of trying to make loans that are reflective of an elevated rate environment.

And I know that you highlighted it, but just 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 multi and industrials and really all other sectors. I think that really what's happening on the real estate credit side is we are really starting to see.

I think, borrowers think long and hard about how they think about capital allocation going forward, particularly for some of the sort of legacy exposures that I think people have, and we're seeing a lot of those loans. So, a lot of those loans are sitting on others' balance sheets. They're loans from 2021 and sometimes earlier. The 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 Class A real estate where they're actually going to be paying off a loan from the agencies, but that's going to require a cash equity infusion from our capital base.

That's a pretty unique sort of flow of capital where you're seeing an agency loan need to get paid off and they're coming to a commercial mortgage REIT with the cash in to be able to effectuate the transaction. So, that's a little bit of what we're seeing. And I would say, lastly, local to our portfolio, kind of what we're seeing bottoms up is I think 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 sort of your sort of mortgage payment to income relative to rent to 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.

Richard Shane

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?

Doug Bouquard

Yes. Look, I think 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 trade-off 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 and 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 the risk within our current balance sheet, given it's all largely newly originated, 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, the sort of last thing I'll add is we have seen back leverage spreads, if you just look at the CRE CLO market have come wider.

When we brought our CRE CLO 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.

Richard Shane

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.

Operator

The next questions are from the line of Tom Catherwood with BTIG.

William Catherwood

Doug, maybe kind of going to the originations, obviously, strong this quarter, definitely better than feared. When -- 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?

Doug Bouquard

Yes. 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 perhaps the only challenge lately has been 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 have -- can put pressure in terms of our earnings. But I'd say our pipeline still looks incredibly strong.

I'm not seeing really a big kind of drop-off at all with the only thing of note being new acquisitions are few and far between. I mean that's been consistent for, frankly, the last 2 or 3 years, but that seems to be a trend that is -- that doesn't really show kind of any sign of abating. And I'd add secondly, to your kind of part 2 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 sort of our DE will sort of be less levered 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 2 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 bit easier. I think as you guys have all been supporting us as we've been net growing our balance sheet, and that can be -- sometimes you feel like you make 2 loans and then 1 loan pays off and sort of getting that balance right as you're growing can be challenging, but we 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.

William Catherwood

Appreciate that, Doug. And just one follow-up to that for me. The other thought of or the 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?

Doug Bouquard

Yes. So, I would say that really no change to our strategy and pacing there. We are 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 for urgency that maybe others have where it's a negative drag, we're in a very different spot. Secondly, we are right now in the final stages of marketing one of our multifamily properties. We do have an LOI in place.

And as that transaction becomes more certain, we'll make sure to update the market accordingly. But again, from a timing perspective and its effect in terms of our business plan, I'd say no major change. And 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.

Operator

Next question is from the line of Christopher Muller with Citizens JMP.

Christopher Muller

So, I wanted to ask on the foreclosure. I guess, first off, what kind of drove the quick turnaround from 4 rating 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?

Doug Bouquard

Yes. I think this is actually very idiosyncratic. I mean we had moved the risk rating on this roughly about a year ago, one. And I think that really the challenge of this asset was really a combination of a weak market and a borrower that was under a certain amount of distress and sort of had begun to, I'd say, underinvest within that asset. So, we rated it as a 4.

And then as Brandon has shared, this conversion to REO was, again, very idiosyncratic specific to the property, less to do with kind of what we're seeing broadly. And our plan with the asset is simple in terms of our plan is to -- now that we own it, stabilize it and then 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.

Christopher Muller

Got it. And I see there was also another multifamily loan that was modified in the quarter. Can you 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?

Ryan Roberto

Thanks, Chris. This is Ryan. Yes, this was a property located in Sunbelt market and just saw given some of the migration trends that we've seen, just kind of a spike in vacancy at the property. So, again, more of a temporary, kind of onetime thing. So, again, we modified it to provide what I'll call solid footing and a clear plan, to kind of restabilize the property. So, again, I think things are 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 each quarter.

Operator

[Operator Instructions] The next question is from the line of Gabriel Poggi with Raymond James.

Gabriel Poggi

Obviously, the world has changed a lot in the last 45 to 60 days. And I appreciate the fact that TRTX's book is very much newer vintage. Can you guys talk about just because of the focus of the market on legacy credit that you still have, I use the word legacy, 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.

Doug Bouquard

Yes. Yes, sure. So I'd say, first, we've built, I think, a lot of credibility and we provide a lot of transparency over the years from both the CECL 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, that really is the sort of guiding light in terms of our view around the risk. Now when you think about -- to your point, there's always sort of tactical side, but we've also been very consistent that when we look at a loan and as long as the borrower is committed to the asset and as long as our LTV, we feel like is 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 relief on a certain item.

I think that when that tone changes is where if we have the opinion that our loan is out of balance or that the borrower's going to be less committed to the asset, then frankly, we would sort of change our posture. So, I think 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 also from a sort of resolution perspective in terms of where we sold assets relative to carrying value and I think just how little volatility we've had within CECL and risk ratings. I think that should really be the sort of guiding light I'd say lastly, I think a really important point of all of this really gets to our liability structure.

I think it is one 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, 85% of that currently is non-mark-to-market. It's all matched term, long duration. So, 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, non-mark-to-market heavy liability structure. And that's what allows you to, frankly, maximize NPV and be able to deliver for shareholders in terms of value.

Gabriel Poggi

Very helpful, thorough answer. One follow-up, if I can. And you guys were proactive in getting the last CRE CLO done when you did. But obviously, CRE CLO 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?

Doug Bouquard

Yes. So, I think it's very much a moving target, I'd say, within multifamily and industrial. I'd say that spot in terms of what we're seeing within our pipeline. I'd say it's 2 things. One, for what I'll call Class A, A+ newly built multifamily, that -- I would say loan spreads are probably out about 15 to 30 basis points, very much kind of varies based on the deal. I think that where we've seen more spreads widening, and I'd say probably more in the tune of 25 to even 50 basis points wider is kind of more Class B, C real estate, particularly multifamily where 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 again, at the same time, just in the past week, there has been some healing in terms of both where the 10-year is and also where the front end is pricing. So, pretty quickly, those spreads can kind of move in that 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 that 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, performed well. We've seen a lot of positive leasing velocity across the exposure that we have.

So, 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 termed out. I think we're seeing, again, just a lot more flow coming in on the multifamily side. And then 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 sharp shooter, 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 like 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 asset classes like a multifamily and industrial.

Operator

At this time, I'll hand the call back to Doug for closing remarks.

Doug Bouquard

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.

Operator

This will conclude today's conference. You may disconnect your lines at this time. We thank you for your participation. Have a wonderful day.