Apollo Commercial Real Estate Finance, Inc. (NYSE:ARI) Q1 2024 Earnings Call Transcript

Stuart Rothstein: Yes, look, I think like most people, I think our expectation, first of all, with our biggest office exposure, which is an office redevelopment in London, obviously that one is 100% leased by a major financial institution. And at this point we’re just in that deal because we’re continuing to fund the completion of the work that needs to be done, but obviously feel very positive with respect to the exit on that loan at the finish line, in terms of the broader portfolio. Last year we had a handful of transactions where sponsorship stepped up and put more capital into transactions to play for time. And obviously the capital coming in is for a mix of some principal pay down, some funding of reserves for TI and LC as needed.

And then obviously any necessary interest rate protection as well. I would say, our view of most of the office portfolio is that we will be in the transactions for a period of time. We continue to have productive dialogue with sponsorship across the portfolio, which for us is, I think, 10 deals at this point. And that product which has been newly created, either ground up or redevelopment, we’re actually seeing decent leasing activity, not great leasing activity, but definitely some interest level from tenants for newly created products. So I think they’ll continue to be active dialogue with borrowers, but obviously nothing has risen to the level of individual deal commentary this particular quarter.

Jade Rahmani: Thanks a lot.

Stuart Rothstein: Sure.

Operator: Thank you. I would now like to turn the call back over to Mr. Rothstein for any closing remarks.

Stuart Rothstein: Appreciate everybody participating this morning. And as always, Hilary and Anastasia are reachable and available if people have follow-up questions. Thank you.

Operator: Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.