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Edited Transcript of BXMT earnings conference call or presentation 13-Feb-19 3:00pm GMT

Q4 2018 Blackstone Mortgage Trust Inc Earnings Call

NEW YORK Feb 23, 2019 (Thomson StreetEvents) -- Edited Transcript of Blackstone Mortgage Trust Inc earnings conference call or presentation Wednesday, February 13, 2019 at 3:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Anthony F. Marone

Blackstone Mortgage Trust, Inc. - CFO & Assistant Secretary

* Douglas N. Armer

Blackstone Mortgage Trust, Inc. - Executive VP of Capital Markets, MD & Treasurer

* Stephen D. Plavin

Blackstone Mortgage Trust, Inc. - CEO, President & Director

* Weston M. Tucker

Blackstone Mortgage Trust, Inc. - Head of IR & Senior MD

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Conference Call Participants

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* Arren Saul Cyganovich

Citigroup Inc, Research Division - VP & Senior Analyst

* Benjamin Ira Zucker

BTIG, LLC, Research Division - Analyst

* Donald James Fandetti

Wells Fargo Securities, LLC, Research Division - Senior Analyst

* Douglas Michael Harter

Crédit Suisse AG, Research Division - Director

* Jade Joseph Rahmani

Keefe, Bruyette, & Woods, Inc., Research Division - Director

* Richard Barry Shane

JP Morgan Chase & Co, Research Division - Senior Equity Analyst

* Stephen Albert Laws

Raymond James & Associates, Inc., Research Division - Research Analyst

* Steven Cole Delaney

JMP Securities LLC, Research Division - MD, Director of Specialty Finance Research and Senior Research Analyst

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Presentation

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Operator [1]

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Good day, and welcome, everyone, to the Blackstone Mortgage Trust Fourth Quarter and Full Year 2018 Investor Call hosted by Weston Tucker, Head of Investor Relations. My name is Matthew, and I'm your operator today. (Operator Instructions) I would like to advise all parties that this conference is being recorded for replay purposes.

And now I'd like to hand over to Weston. Please go ahead.

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Weston M. Tucker, Blackstone Mortgage Trust, Inc. - Head of IR & Senior MD [2]

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Great. Thanks, Matthew, and good morning, everyone, and welcome to Blackstone Mortgage Trust's Fourth Quarter Conference Call. I'm joined today by Steve Plavin, President and CEO; Jonathan Pollack, Global Head of Blackstone Real Estate Debt Strategies; Tony Marone, Chief Financial Officer; Doug Armer, Managing Director and Head of Capital Markets; and Katie Keenan, Managing Director of Blackstone Real Estate Debt Strategies.

Last night, we filed our 10-K and issued a press release with the presentation of our results, which are available on our website and have been filed with the SEC.

I'd like to remind everyone that today's call may include forward-looking statements, which are uncertain and outside of the company's control. Actual results may differ materially. For discussion of some of the risks that could affect results, please see the Risk Factors section of our most recent 10-K. We do not undertake any duty to update these statements. And we will also refer to certain non-GAAP measures on this call. And for reconciliations, you should refer to the press release and our 10-K.

This audiocast is copyrighted material of Blackstone Mortgage Trust and may not be duplicated without our consent.

So a quick recap of our results. We reported GAAP net income per share of $0.61 for the fourth quarter and $2.50 for the full year. Core earnings were $0.69 per share for the quarter and $2.90 for the year, up from $2.55 in the prior year. A few weeks ago, we paid a dividend of $0.62 with respect to the quarter, reflecting an attractive annualized yield of 7.2% based on yesterday's closing stock price. If you have any questions following today's call, please let me know.

And with that, I'll now turn things over to Steve.

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Stephen D. Plavin, Blackstone Mortgage Trust, Inc. - CEO, President & Director [3]

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Thanks, Weston, and good morning, everyone. An excellent fourth quarter capped an extraordinary year for BXMT. We originated $3.5 billion of loans in the quarter and $10.7 billion for the year, our most active ever. In 2018, we grew our portfolio by $4.7 billion to $15.8 billion, while maintaining an origination LTV of 62%.

The portfolio growth helped drive core earnings to $2.90 per share, which produced 117% dividend coverage. The strong coverage reflects our focus in the quality of the dividend, which is generated solely from our pure-play, senior lending business. We are able to retain the excess earnings, which contributed to our increase in book value during the year.

In Q4, we closed 21 loans, our highest ever quarterly loan count, exclusive of the GE portfolio acquisition in 2015. We had several originations during the quarter that highlight the power of our platform. The biggest was a 65% of costs, $652 million acquisition bridge loan for Terminal Stores, a historic New York City asset acquired for redevelopment by a joint venture of 2 strong BX relationship clients. The large loan size and transitional nature greatly reduced competition for the loan as did the confidence that borrowers needed in the lender's ability to execute. So a great example of our competitive advantage.

Also during the quarter, we separately financed the purchase of the Park Central New York and the Park Central San Francisco for existing relationship borrowers that also need a quick and definitive loan closing. The hotels were sold by Pebblebrook at the closing of its acquisition of the LaSalle hotel REIT. The loan proceeds were a necessary component of the M&A deal. Because one of Blackstone's real estate equity investment vehicles also pursued the acquisition of LaSalle, the hotels have been recently underwritten. That experience, along with our borrower relationships and the investment scale, was critical in tying up the 2 loans totaling $545 million with limited competition.

Also during the fourth quarter, we financed other acquisitions in Midtown Atlanta, Washington, D.C., San Francisco, Chicago, London and Sydney as well as construction in New York and Fort Lauderdale. As this quarter exemplified, we achieved our best economic results when we can leverage our scale and real estate expertise, especially in larger loans, special situations where speed and certainty matter most, construction loans and loans in markets outside North America where Blackstone has extensive real estate holdings.

Late in the quarter, the significant debt and equity market volatility led to a slowdown in real estate transaction activity. Our Q4 transactions were already well advanced, but the Q1 origination pipeline slowed. We also saw an offsetting and slowing in repayments. To date, in 2019, we have $855 million of loans closed during the closing process. The capital markets are now quickly recovering, and we expect transaction volume to pick up as the year progresses.

Also, the real estate opportunity funds that comprise of the most active segment of our client base have reported over $110 billion of dry powder in their investment vehicles, with even more capital commitments being raised. The deployment of that equity should continue to help propel our business.

Keeping pace with the extraordinary performance of our originations group, our capital markets team also had a fantastic year, helping to drive strong BXMT returns and balance sheet stability.

To fund our 2018 portfolio growth, we raised $483 million of equity during the year at an average book multiple of 1.22x and added $5 billion of debt capacity. We now have 11 credit facility providers, $13.6 billion of capacity, an array of great term, index and currency-matched financing options for our senior loan originations.

Post quarter-end, we successfully completed the nonrecourse syndicated financing of the senior loan component of The Spiral, the $1.8 billion construction loan for Tishman Speyer and Hudson Yards, enabling us to significantly mitigate the future funding obligations, while preserving very substantial positive economics going forward for BXMT.

We are very pleased with the result, which is consistent with our business plan when we originated the loan and our overall financing strategy.

With the very significant growth in 2018 originations, BXMT's competitive positioning and market recognition have never been stronger. The majority of our loans are with repeat borrowers, the greatest endorsement of the way we do business and our differentiated client-centric approach.

We remain focused on dividend quality and stability and continuing to introduce investors to our Blackstone-sponsored senior mortgage company. Since the inception of BXMT, we have delivered a 13% return for our shareholders and stock still yields a very attractive 7.2%.

Before I turn the call over to Tony, I also want to let you know about an important step that we took at year-end. We named Doug Armer and Katie Keenan, BXMT executive vice presidents for capital markets and investments, respectively. Katie and Doug worked closely with me on the day-to-day strategic management of BXMT and are great contributors to the success of the business. In addition to our BXMT responsibilities, Katie also continues to originate loans, and she led the deal team for The Spiral, among many others.

And with that, I'll turn the call over to Tony.

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Anthony F. Marone, Blackstone Mortgage Trust, Inc. - CFO & Assistant Secretary [4]

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Thank you, Steve, and good morning, everyone. This quarter's results cap off an outstanding year for BXMT, characterized by continued strong earnings, supporting an attractive and steady dividend, growth in our loan portfolio while maintaining healthy credit metrics and a stable balance sheet, producing a solid book value. I will review each of these aspects of our 4Q results as well as BXMT's performance for the 2018 fiscal year.

We generated GAAP net income of $0.61 per share and core earnings of $0.69 during 4Q, bringing our 2018 full year GAAP earnings to $2.50 per share with a record $2.90 of core earnings.

Looking at 2018 fiscal results, in particular, 2Q and 3Q, our earnings included a significant amount of prepayment-related income, totaling $0.22 per share over those 2 quarters, net of incentive fees. This is outside of the $0.01 to $0.03 quarterly run rate we would expect in a typical period and contributed to our earnings power during the year.

In 4Q, we experienced relatively fewer such fees as the pace of loan repayments slowed. So our $0.69 of core earnings is almost entirely driven by run rate net interest income, positioning us well as we move into 2019. We maintained a stable, high-quality $0.62 dividend throughout 2018, which is well covered by our $2.90 of core earnings for the year.

During the quarter, we closed 21 loans totaling $3.5 billion of originations, our second largest quarter of direct originations, bringing our 2018 total to $10.7 billion across 52 loans, more than double our 2017 volume. We had net fundings of $2.1 billion during 4Q and $4.3 billion during 2018, bringing our total loan portfolio to $15.8 billion, up 42% from last year.

Our 2018 loan originations had an average size of $201 million, reflecting our continued focus on larger loans where we have a competitive advantage. We also funded $630 million under previously originated loans during 2018, generating additional value for our shareholders from these investments.

Importantly, we have not sacrificed credit quality as our business continues to grow, and our 2018 originations have a weighted average LTV of 61%, right in line with our overall portfolio origination LTV of 62% as of year-end. We have no loans with a risk rating above 3, with our last 4 rated loan repaid earlier this year and currently have fully performing loans across all geographic segments and asset classes in our portfolio.

We supported this growth of our loan book by expanding our credit capacity and raising additional equity capital. We added $3 billion of credit capacity in 4Q and $6.5 billion throughout 2018, highlighted by closing 6 newer upsized credit facilities and the core point securitization we closed in 3Q.

We remain focused on financing our assets with term, currency and index-matched liabilities with no capital markets mark-to-market provisions, which ensures the stability of our balance sheet throughout the course of the market cycle.

We raised $108 million of common equity during the quarter at an average price of 1.27x our 3Q book value and a total of $483 million of equity during 2018, which drove our book value up to $27.20 per share, a 10% increase from the beginning of the year.

Our focus remains on originating floating rate assets, currently 96% of our total portfolio, which is another aspect of our balance sheet stability as these assets are not mark-to-market and insulated from any implied valuation changes due to interest rate movements.

We closed the year with a debt-to-equity ratio of only 2.8x and liquidity of $470 million available to deploy into additional loan originations.

As I mentioned earlier, we view the fourth quarter and 2018 overall as a success for BXMT, and more importantly, our shareholders. We generated consistent reliable dividend by originating well-structured loans to quality assets with a 6-year track record of healthy loan performance and a stable balance sheet, supporting continued growth.

Thank you for your support. And with that, I will ask the operator to open the call to questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) And the first question comes from the line of Douglas Harter of Crédit Suisse.

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Douglas Michael Harter, Crédit Suisse AG, Research Division - Director [2]

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Steve, hoping you could talk about kind of the pace of spread compression that you saw kind of in the fourth quarter or over the second half, kind of whatever you think is more relevant time period. And kind of how -- what your outlook would be for your asset yields now that LIBOR is expected to be flat for the -- for at least the near term?

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Stephen D. Plavin, Blackstone Mortgage Trust, Inc. - CEO, President & Director [3]

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Doug, yes, we saw -- I think we saw a moderating of spread compression in the second half of the year. We still saw some spread compression. And we're still seeing fed moves on the short end and LIBOR increasing. I do think that with the LIBOR curve flattening out and the likelihood there'll be either no or just 1 or 2 more fed increases that we do expect to see spread compression continue to moderate. Perhaps, we may be or at where spreads are going to ultimately run to. As it relates to our fourth quarter originations, they've been sort of consistent from a return standpoint what we did earlier in the year. As I've mentioned in my remarks, we filed some -- we did originate a number of deals that were unique opportunities for us and we were very satisfied with the economic results. So I think we're dealing with spread compression pretty well on the originations side. And on the liability side, we continue to grind a little bit tighter in terms of all of our capital. Every time we go back to our lenders, we try and reduce spread, improve terms and all those help in terms of an ROI standpoint and in the competitive environment.

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Operator [4]

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Your next question is from the line of Don Fandetti.

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Donald James Fandetti, Wells Fargo Securities, LLC, Research Division - Senior Analyst [5]

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It sounds like across the industry, things slowed in December and then there was this bounce back in January. I was just curious, as you talk to private real estate investors, if you think that they're sort of -- they've been shaken? Or was it more of a blip to where you'd expect them to continue the appetite for transitional type acquisitions, if you can comment on that?

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Stephen D. Plavin, Blackstone Mortgage Trust, Inc. - CEO, President & Director [6]

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Yes. I think the impact from the debt market volatility was pretty much a blip, sort of a 60- to 90-day event and we're moving quickly beyond that already. As it relates to investor activity and transactions, when investors move to the sidelines and then move back to the point where they're willing to transact again, there's a 60- or 90-day delay just from when somebody resumes working on a deal to when it can be reasonably expected to close. So we're seeing resumption of a more active pipeline. It had gotten a little slow in December and January. So I think we'll -- we expect to see it continue to pick up during the year. I think there's a general view that assets in the U.S. are more fully valued, so I think the fund sponsors are being a little bit more cautious in their acquisitions. But they also have a lot of dry powder and a lot of capital deployed in their investment vehicles. We do expect that to happen. So we're anticipating an increasing flow of opportunities during the year, and we do think that the funds will find opportunities to deploy their vehicles.

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Donald James Fandetti, Wells Fargo Securities, LLC, Research Division - Senior Analyst [7]

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Got it. And then...

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Operator [8]

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And your next question is from the line of Rick Shane of JP Morgan.

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Richard Barry Shane, JP Morgan Chase & Co, Research Division - Senior Equity Analyst [9]

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First of all, congratulations to Doug and Katie. I did want to talk a little bit about geography. Historically, you've been highly concentrated in California and New York. That's certainly made sense and been a great strategy. This is a question we're starting to ask a little bit more. With some of the tax-driven shifts in terms of demographics, are you concentrating on more of some of the states where there's expected to be migration related to repeal -- excuse me, elimination of the SALT deduction?

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Stephen D. Plavin, Blackstone Mortgage Trust, Inc. - CEO, President & Director [10]

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Interesting question. I think we're certainly mindful of the forces of demand for space, whether they're tax driven or otherwise. We did -- we have been active in Florida and one of our deals in the quarter was a construction loan that was in part for multifamily in Fort Lauderdale, which has been a very strong market and getting stronger as a result of migration of people from the Northeast. SALT does provide some headwinds for some of the major markets, but we're still seeing a lot of demand for space. A lot of it is driven by the technology companies and where they want to locate. And we're still seeing a lot of in-migration to New York. We saw Amazon -- looks like Long Island City will remain HQ2 and we're seeing also California -- Southern California as well as Northern California with a lot of demand for space and also, the greatest array of large scale opportunities for our business. So we remain optimistic that the major markets are still the place to be, but I do think there'll be some interesting impacts in some states that will benefit from more favorable tax regimes.

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Operator [11]

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Your next question is from the line of Steve Delaney of JMP Securities.

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Steven Cole Delaney, JMP Securities LLC, Research Division - MD, Director of Specialty Finance Research and Senior Research Analyst [12]

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A lot of hotel activity in the fourth quarter. And obviously, that's an area that BX has significant expertise. I'm just curious, Steve, you're up to 23% of the portfolio. Is there any arbitrary limit there? Is there still room to grow? And also, when you get into that more specialized sector, do you find that there are fewer lenders that you're competing with in the hotel space?

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Stephen D. Plavin, Blackstone Mortgage Trust, Inc. - CEO, President & Director [13]

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Thanks for your question, Steve. I think, obviously, Blackstone has typically been among the largest, if not the largest, owner of hotels in the world and we have, obviously, great insight into the markets. And we have been -- we had been and continue to be a cautious hotel lender. We had -- and I think one of the things that did change a little bit in 2018 for us was that rolling into '18, we had no New York City hotels at all. And ordinarily, that probably would have been at least 5%, maybe as much as 10% of our overall portfolio, given the scale of the market and the opportunities that typically exist in that market for lenders of our profile. As the market strengthened a little bit in '18 and we got through more and more of the supply, we did see some opportunities to add some loans that we think are great opportunities for us, low basis, a little bit higher in spread than some -- than the other property sectors. And it did -- obviously, it increased our hotel percentage as a result. But our hotel percentage was very low going into 2018. And generally, in our business, we see the most opportunity in office buildings and hotels. We own a lot of those all over the world, and we have great insight into what we think and how they'll perform. And that really does dictate where we allocate most of our origination resources. So I think hotels will remain in the 20s in terms of overall percentage of our -- of allocation across property sectors. And we feel great about the hotel portfolio that we have on the books today.

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Operator [14]

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Your next question is from the line of Arren Cyganovich of Citi.

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Arren Saul Cyganovich, Citigroup Inc, Research Division - VP & Senior Analyst [15]

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I'm wondering if you can just give a little more detail about the Terminal Stores bridge loan, the kind of thought process behind that. I'm not familiar with the property, but it looks kind of like an old warehouse. I would imagine good retail components of that and with the risk associated with having retail loans, obviously, in this kind of environment, why that might be a differentiator in the investment? And then the other question is on the quarter-to-quarter decline in book value. We had some investors asking questions about that. I know it's related to the settlement of the convert, but if you can give a little more detail around that for investors too.

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Stephen D. Plavin, Blackstone Mortgage Trust, Inc. - CEO, President & Director [16]

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I'll take the first one and maybe Tony can take the second. Terminal Stores is a very cool historic structure between 10th and 11th Avenue. It's sort of the back door to Hudson Yards. So -- and there's obviously a huge influx of office and residential tenants moving into Hudson Yards. We think a huge source of new demand for the retail component of Terminal. Terminal will still be primarily office once this transforms. Our loan is really the -- is the bridge to the construction loan. So during the period -- during the 2 to 3 years we hope to have this loan, the sponsors are working on their final plan, getting approvals and the landmarks and all the things that they need to execute their plan. So this is 65% loan capitalized for the bridge period between acquisition and construction. Now I'm sure we'll be buying for the construction loan when the time comes. But at the moment, it's really in the planning stages and the thought of converting was -- what now has a lot of storage space in the more traditional office and then the ground floor to retail. The retail, I think, will do great. There's a ton of office around it, not a lot of retail like it in a market where we see a ton of growth.

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Anthony F. Marone, Blackstone Mortgage Trust, Inc. - CFO & Assistant Secretary [17]

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On the book value question, so I think you already answered it to some degree, but I'll unpack it a little bit. If we look at what happened to book value during the year and I'll get to the quarter, we're up $0.27 on the year. That's driven by a couple of positive movers. We've issued equity above book, which was accretive and increased our book value. We've also been retaining earnings as we've had a great earnings year and relatively -- not relatively, a stable dividend. That was offset by some share dilution for shares we issued under our equity plan similar to what we've done in prior years and really a onetime event of the convert premium. What you see in the fourth quarter is really the 2 negatives that happened during the year, happened to land in the fourth quarter and less of the positive activity around retained earnings and the accretive value of the equity offerings in the fourth quarter. So it's a little bit of a timing element. The convert overall over its 5-year life was quite valuable and generated value in terms of incremental earnings. It's just the way the accounting comes through that option value really comes through the books on the last day, so it's really more of a timing thing.

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Operator [18]

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Your next question is from the line of Ben Zucker of BTIG.

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Benjamin Ira Zucker, BTIG, LLC, Research Division - Analyst [19]

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Congrats on a strong origination quarter. I had a high-level question around the WD joint venture. Would you guys -- it revolves around -- do you guys have any interest in acquiring Walker & Dunlop? I know you won't go ahead and answer that outright, but what are your thoughts from a high level on the GSE origination in servicing business? And then as a follow-up, could that business model and revenue mix fit within your REIT structure?

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Stephen D. Plavin, Blackstone Mortgage Trust, Inc. - CEO, President & Director [20]

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Thanks for the question. And the Walker & Dunlop joint venture has really been a positive development for us and I think in Walker & Dunlop as well. We provide capital, both equity and financing capability to Walker on a pool of assets that they originate and we jointly approve. And then we've managed the portfolio. We've done about $700 million worth of volume through the program since inception, and I think the results have been great. I mean, it provides us access to multifamily assets and borrowers that we wouldn't ordinarily see. They're smaller and more granular. And so it's just additive to what we're doing. And we're not in the GSE origination business today and they are. So it's very complementary in that we provide the bridge to -- again, to their take out. As it relates to the agency origination business, we have no plans to make any agency origination acquisitions or any other acquisitions. We do, however, contemplate all possibilities to expand our platform in all the adjacent areas, whether it be in loan originations or other assets that would be complementary and additive to our company. And so -- again, I think the way we look at the business now is that we have the Walker & Dunlop JV, which has been very beneficial for us to take advantage of that opportunity in terms of agency originations.

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Operator [21]

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Your next question is from the line of Jade Rahmani of KBW.

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Jade Joseph Rahmani, Keefe, Bruyette, & Woods, Inc., Research Division - Director [22]

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Could you give any color on the percentage of your loans that are -- or your originations that are bridge-to-bridge financings? Are you seeing that as an increasing trend? And is it something you're looking to avoid or embrace as an opportunity?

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Stephen D. Plavin, Blackstone Mortgage Trust, Inc. - CEO, President & Director [23]

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Jade, I'm not -- can you -- what type of loans? You said bridge-to-bridge? I'm not sure I understood the question.

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Jade Joseph Rahmani, Keefe, Bruyette, & Woods, Inc., Research Division - Director [24]

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Yes. Basically, bridge lenders providing capital to take out other bridge loans. Essentially, business plans that have not hit their benchmarks, that have reached maturity; and the lender rather than granting extensions -- or the borrower rather than being able to have the extension granted is getting taken out -- the loans getting taken out by another bridge lender.

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Stephen D. Plavin, Blackstone Mortgage Trust, Inc. - CEO, President & Director [25]

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I think, typically, what we see in terms of the bridge lending space is, I think, a little bit of the opposite end of the spectrum. What we typically see is business plans that have performed and then the original loan being perhaps light on leverage or low on spread or no longer on point relative to the real underlying real estate asset. And so most of the refinancing opportunities that we see really relate to the trying to maintain loans that perform very well and are very -- are far advanced in their business plans. And we do actively asset manage and try and hold on to those loans through the life cycle of the business plan. Ultimately, most of our loans get repaid with a property sale, again, because our client base is primarily managers of finite-life investment vehicles that are ultimately buying, fixing and selling assets. So we do occasionally see assets that no longer work for other lenders for reasons other than outperformance, but it's a really small minority of what we see.

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Operator [26]

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Your final question is from the line of Stephen Laws of Raymond James.

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Stephen Albert Laws, Raymond James & Associates, Inc., Research Division - Research Analyst [27]

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A lot have been hit on, but maybe could you talk about how large do you think your portfolio can grow? You've continued to post significant growth. Do you have an additional need for capital this year? I guess, obviously, that depends on your origination versus repayment expectations, but have we got to the point or are we close to a point where it's really a full-time job just to recycle capital with new investments? Or do you think you continue to post net growth on the portfolio sides going forward?

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Stephen D. Plavin, Blackstone Mortgage Trust, Inc. - CEO, President & Director [28]

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Well, I think we've always had -- we've had a great run of posting really significant growth. And so I don't think we feel that we're really at the end of the business plan. We see -- we continue to see opportunities to do more interesting things, the platform is expanding internationally as well as increasing its penetration in the U.S. We created 8 new repeat borrowers in this past year and that has been our most productive source of new transactions. We expect we'll develop more of those in 2019 and further grow the portfolio. So I'm optimistic that looking at the magnitude of growth we had last year, I don't know if we'll continue at that pace, but I certainly expect that we'll continue to grow the portfolio.

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Douglas N. Armer, Blackstone Mortgage Trust, Inc. - Executive VP of Capital Markets, MD & Treasurer [29]

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Stephen, it's Doug here. On the capitalization point, I'd say we've got great capital markets access, both in terms of debt and equity products to fund future growth in the portfolio. We saw a lot of growth during 2018, and we continue to have a very efficient cost of capital and a wide array of options in terms of capitalizing a larger portfolio going forward.

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Operator [30]

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Thank you for your questions, everyone. I will now turn the call over to Weston Tucker for closing remarks.

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Weston M. Tucker, Blackstone Mortgage Trust, Inc. - Head of IR & Senior MD [31]

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Great. Thanks, everyone, for joining us. And if you have any questions, please follow up after the call.

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Operator [32]

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Thank you, sir. That concludes your conference call today. Everyone, you may now disconnect. Thank you very much indeed for joining.