Cuộc họp công bố kết quả kinh doanh quý 3/2026 của TRTX: Hoạt động cho vay mới thúc đẩy tăng trưởng NII 13%

Tóm tắt điểm chính

• TPG Real Estate Finance Trust (NYSE: TRTX) công bố lợi nhuận ròng GAAP quý 3/2026 phân bổ cho cổ đông phổ thông đạt 5,8 triệu USD, tương đương 0,08 USD trên mỗi cổ phiếu pha loãng.
• Lợi nhuận có thể phân phối đạt 5,1 triệu USD, tương đương 0,07 USD trên mỗi cổ phiếu pha loãng, sau khi trừ khoản lỗ đã thực hiện trị giá 13 triệu USD liên quan đến việc chuyển đổi một khoản vay khu căn hộ cho thuê thành bất động sản sở hữu (REO). Trước các khoản lỗ đã thực hiện, lợi nhuận có thể phân phối đạt 18,1 triệu USD, tương đương 0,24 USD trên mỗi cổ phiếu pha loãng, đủ chi trả cổ tức cổ phiếu phổ thông hàng quý.
• Thu nhập lãi thuần tăng 3 triệu USD, tương đương 13% so với quý trước, do tài sản sinh lời ròng tăng 14% lên 4,9 tỷ USD. Ban lãnh đạo cho biết các khoản giải ngân mới vào cuối quý chỉ đóng góp một phần nhỏ vào lợi nhuận quý 3.
• TRTX đã giải ngân 9 khoản vay thế chấp ưu tiên với tổng cam kết đạt 772,7 triệu USD và chênh lệch lãi suất tín dụng bình quân gia quyền là 3,02%. Trong 12 tháng qua, công ty đã thực hiện các khoản đầu tư cho vay trị giá 2,3 tỷ USD.
• Danh mục cho vay đạt tỷ lệ 100% hoạt động bình thường vào cuối quý, với xếp hạng rủi ro bình quân gia quyền là 3,0. Dự phòng tổn thất tín dụng dự kiến (CECL) giảm xuống 76,1 triệu USD, tương đương 147 điểm cơ bản trên tổng cam kết cho vay.
• Sau đợt phát hành CLO bất động sản thương mại (CRE CLO) TRTX 2026-FL8 trị giá 1 tỷ USD, tỷ lệ nguồn vốn không bị điều chỉnh theo giá thị trường (non-mark-to-market) đã tăng lên khoảng 85%. Giao dịch này tạo ra gần 43 triệu USD tiền mặt ròng và được ban lãnh đạo kỳ vọng sẽ giúp cải thiện chi phí vốn.

Dữ liệu tài chính chính

Hoạt động kinh doanh và vận hành

Danh mục đầu tư của TRTX tập trung vào bất động sản khu căn hộ cho thuê và công nghiệp, chiếm khoảng 75% tổng danh mục đầu tư. Danh mục này có quy mô khoản vay trung bình là 88 triệu USD và được đảm bảo bởi hơn 150 bất động sản cơ sở.

Kể từ tháng 9/2025, công ty đã giải ngân 2,3 tỷ USD các khoản vay, chiếm gần 45% danh mục cho vay hiện tại. Ban lãnh đạo nhấn mạnh rằng phần lớn bảng cân đối kế toán được giải ngân trong hai năm qua trong điều kiện lãi suất cao hơn và giá trị bất động sản thấp hơn. Khoảng 80% dư nợ khu căn hộ cho thuê được phát hành từ năm 2024 trở lại đây.

Trong quý 3, TRTX đã tài trợ 71,8 triệu USD cho các nghĩa vụ tương lai đối với các khoản vay hiện có và nhận được 119,6 triệu USD tiền hoàn trả. Thêm 72,2 triệu USD tiền hoàn trả đã được nhận sau khi kết thúc quý.

Công ty cũng đã mua lại 1,2 triệu cổ phiếu phổ thông với mức giá bình quân gia quyền là 8 USD/cổ phiếu, tổng giá trị là 9,3 triệu USD. Các đợt mua lại này đã làm tăng giá trị sổ sách thêm 0,04 USD trên mỗi cổ phiếu phổ thông. Sau khi sử dụng hết hạn mức 25 triệu USD trước đó, Hội đồng quản trị đã phê duyệt một chương trình mua lại mới trị giá 50 triệu USD.

Đợt chứng khoán hóa TRTX 2026-FL8 đã chứng khoán hóa khoảng 1 tỷ USD tài sản thế chấp, trong đó khoảng 95% là khu căn hộ cho thuê và bất động sản công nghiệp. Cùng với FL6 và FL7, thời gian tái đầu tư 30 tháng mang lại cho TRTX thêm khả năng tái quay vòng vốn vào các khoản vay mới.

Rủi ro và các khía cạnh cần theo dõi

Ban lãnh đạo đã nhấn mạnh tình trạng lạm phát dai dẳng, lãi suất cao, điều kiện tài chính thắt chặt hơn, giá trị bất động sản giảm ở một số phân khúc và áp lực tái tài trợ đối với các cấu trúc vốn cũ. Lãi suất cao hơn cũng làm tăng khoảng cách kỳ vọng giữa bên mua và bên bán, làm giảm hoạt động thâu tóm bất động sản.

Khoản lỗ đã thực hiện trị giá 13 triệu USD phát sinh từ một khoản vay khu căn hộ cho thuê được chuyển đổi thành bất động sản sở hữu (REO). Ban lãnh đạo mô tả tình huống này mang tính chất đặc thù của bất động sản và bên vay, viện dẫn thị trường địa phương yếu kém, bên vay gặp khó khăn và tình trạng thiếu đầu tư. Tài sản này đã được trích lập dự phòng đầy đủ, do đó việc chuyển đổi không ảnh hưởng đến giá trị sổ sách.

Một khoản vay khu căn hộ cho thuê khác ở thị trường Vành đai Mặt trời (Sunbelt) đã được điều chỉnh sau khi tỷ lệ trống gia tăng. Ban lãnh đạo nhận định vấn đề này mang tính tạm thời và cho biết việc điều chỉnh đã thiết lập một kế hoạch để ổn định lại hoạt động của bất động sản.

Thời gian hoàn tất hợp đồng cho các khoản vay mới đã kéo dài hơn, tạo ra áp lực tiềm ẩn về thời điểm ghi nhận lợi nhuận giữa các quý. TRTX cũng kết thúc quý ở mức gần đòn bẩy và quy mô bảng cân đối kế toán mục tiêu, khiến hoạt động danh mục đầu tư trong tương lai phụ thuộc nhiều hơn vào việc cân đối giữa các khoản giải ngân mới và tiền hoàn trả.

Điểm nhấn phiên hỏi đáp với chuyên gia phân tích

• Độ nhạy lãi suất và bảo lãnh phát hành: Ban lãnh đạo cho biết các khoản giải ngân gần đây được cấu trúc cho môi trường lãi suất cao và nhìn chung bao gồm mức trần lãi suất. Lãi suất sàn của các khoản vay trước đây dao động trong khoảng từ 2,5% đến 3% và đang có xu hướng tăng cao hơn.
• Xu hướng chênh lệch lãi suất cho vay: Chi phí vốn CRE CLO đã nới rộng khoảng 25 điểm cơ bản kể từ khi TRTX đưa FL8 ra thị trường. Ban lãnh đạo cho biết điều này đang bắt đầu ảnh hưởng đến việc định giá các khoản vay mới, trong khi TRTX đã chốt được các khoản nợ phải trả ở mức chênh lệch hẹp hơn.
• Định giá phân khúc khu căn hộ cho thuê: Chênh lệch lãi suất đối với các khoản vay khu căn hộ cho thuê mới xây Hạng A và A+ đã nới rộng khoảng 15 đến 30 điểm cơ bản. Chênh lệch lãi suất khu căn hộ cho thuê Hạng B và C đã nới rộng khoảng 25 đến 50 điểm cơ bản.
• Danh mục khoản vay chờ giải ngân: Ban lãnh đạo mô tả danh mục chờ giải ngân là rất khả quan vì bên vay bất động sản vẫn có nhu cầu vốn lớn, đặc biệt là trong phân khúc khu căn hộ cho thuê và công nghiệp. Tuy nhiên, các hoạt động thâu tóm bất động sản mới vẫn còn hạn chế.
• Tăng trưởng danh mục đầu tư: Với đòn bẩy ở gần mức mục tiêu, ban lãnh đạo kỳ vọng danh mục cho vay sẽ hoạt động theo cơ chế "thêm một - bớt một" (one-in, one-out), điều mà họ tin rằng sẽ giúp giảm biến động trong lợi nhuận có thể phân phối.
• Chiến lược bất động sản tịch thu (REO): Danh mục REO của TRTX tiếp tục đóng góp tích cực vào lợi nhuận có thể phân phối. Một bất động sản khu căn hộ cho thuê đang trong giai đoạn tiếp thị cuối cùng với một thư ý định (LOI) đã được thiết lập, cho phép công ty duy trì sự chủ động lựa chọn thời điểm bán.
• Bảo vệ nợ phải trả: Khoảng 85% nguồn vốn tài trợ cho vay đã trở thành dạng không bị điều chỉnh theo giá thị trường (non-mark-to-market) sau FL8. Ban lãnh đạo cho biết cấu trúc kỳ hạn dài và phù hợp thời hạn cung cấp sự linh hoạt để quản lý các khoản nợ đến hạn tồn đọng và tài sản gặp áp lực.

Toàn văn biên bản cuộc họp kết quả kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

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.

Phần hỏi đáp

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.