Welcome to the Claros Mortgage Trust third quarter 2025 earnings conference call. My name is Alisa, and I will be your conference facilitator today. Our participants will be in a listen-only mode. After a speaker's remarks, there will be a question-and-answer period. If you would like to ask a question, please press the star followed by one on your telephone keypad. I would now like to hand the call over to Anh Huynh, Vice President of Investor Relations for Claros Mortgage Trust. Please proceed. Thank you. I'm joined by Richard Mack, Chief Executive Officer and Chairman of Claros Mortgage Trust, and Mike McGillis, President, Chief Financial Officer, and Director of Claros Mortgage Trust. We also have Priyanka Garg, Executive Vice President, who leads credit strategies for Mack Real Estate Group. Prior to this call, we distributed CMTG's earnings release and supplement. We encourage you to reference these documents in conjunction with the information presented on today's call. If you have any questions, please contact me. I'd like to remind everyone that today's call may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in our other filings with the SEC. Any forward-looking statements made on this call represent our views only as of today, and we undertake no obligation to update them. We will also be referring to certain non-GAAP financial measures on today's call, such as distributable earnings, which we believe may be important to investors to assess our operating performance. For reconciliation of non-GAAP measures to their nearest GAAP equivalent, please refer to the earnings supplement. I would now like to turn the call over to Richard. Thank you, Anh, and thank you all for joining us this morning for CMTG's third quarter earnings call. As we approach the end of the year, we are encouraged by the continued signs of stabilization and recovery across the broader real estate markets. Liquidity has slowly but steadily returned to the commercial real estate industry, supporting increased transaction volumes and tighter lending spreads. Recent, and perhaps expected, rate cuts by the Fed have improved the outlook, even as investors consider the uncertainty surrounding the slowing economy. Collectively, these market dynamics have created a more constructive backdrop, enabling CMTG to continue executing on its strategic priorities for the year, in particular resolving watchlist loans, enhancing liquidity, and deleveraging the portfolio. At the beginning of the year, we stated that we expected approximately $2 billion in total resolutions. I'm pleased to share that we have already exceeded this target with $2.3 billion in total resolutions, which includes partial repayments. As of November 4, we have significantly improved liquidity by $283 million to $385 million, further delevered the portfolio, and resolved a total of nine watchlist loans. As previously reported, we have foreclosed on select cash-flowing multifamily assets and have identified additional multifamily assets that are foreclosure candidates. We remain positive on the multifamily sector given the favorable long-term supply-demand dynamics and persistent housing affordability constraints. As we look ahead, we believe that the sharp decline expected in multifamily deliveries over the next few years, coupled with declining base rates, should help offset any impact of an economic slowdown. Given our sponsors' experience as an owner, operator, and developer, and the progress we have made in our REO portfolio to date, we believe we are well-positioned to think creatively about value enhancement and exit strategies. For many of these multifamily assets in particular, we have identified opportunities to implement operational and capital improvements, some of which can be executed more quickly than others. Since foreclosing, we have received strong, unsolicited interest from prospective buyers on certain properties, which we believe is a positive reflection of the underlying demand for these assets. Taking into account our business plans, the strong interest we are seeing in the market, and the current capital markets environment, we are actively evaluating opportunities to monetize select multifamily REO assets in the coming quarters. Overall, we feel positive about the progress we've made so far this year. In addition to reporting more than $2 billion of resolutions, we have achieved the following. We resolved nine watchlist loans representing $1.1 billion of UPB, bolstered liquidity by $283 million to $385 million today, reduced total borrowings by $1.4 billion, and increased our unencumbered asset pool to $548 million from $456 million. We believe this progress positions us well to achieve our near-term priority of addressing the August 2026 term loan B maturity, and we will continue to evaluate our options with respect to this maturity. Before turning the call over to Mike to discuss CMTG's financial results and the portfolio, I want to note that we will not be addressing the New York mayoral elections in our prepared remarks. That said, we are happy to take questions in the Q&A portion of this call. Now I'd like to turn the call over to Mike. Thank you, Richard. For the third quarter of 2025, CMTG reported a GAAP net loss of $0.07 per share and a distributable loss of $0.15 per share. Distributable earnings prior to realized gains and losses were $0.04 per share. Earnings from REO investments contributed $0.01 per share to distributable earnings net of financing costs. CMTG's held-for-investment loan portfolio decreased to $4.3 billion at September 30 compared to $5 billion at June 30. The quarter-over-quarter decrease was primarily the result of four loan resolutions that occurred during the quarter and the reclassification of one loan to held for sale. One resolution was a regular-way repayment of a $168 million construction loan collateralized by a mixed-use property in Northern Virginia. Upon construction completion, the asset has experienced strong leasing momentum across its various components. Construction loans have been a valuable component of CMTG's portfolio and a point of differentiation for our firm, given our sponsors' development and asset management expertise. While our construction exposure has historically performed well, it has also become a smaller component of our portfolio as sponsors have pursued their business plans to refinance such assets upon completion. The other three resolutions, all watchlist loans, were addressed on last quarter's earnings call and consist of the discounted payoff on a $390 million loan collateralized by a New York City multifamily property, as well as foreclosures of two loans collateralized by multifamily properties in Dallas. Finally, we reclassified a $30 million Boston land loan from held-for-investment to held-for-sale as a result of a third-party buyer prevailing at a mortgage foreclosure auction in September. Subsequent to the third quarter, the sale was executed modestly below carrying value and, because the loan was unencumbered, generated $28 million of net cash proceeds. This transaction enabled us to enhance liquidity without incurring carry costs or assuming risks associated with taking title to this asset. To recap, we've had $2.3 billion of total resolutions year to date, which includes $81 million in partial repayments and nine watchlist loans totaling $1.1 billion of UPB. Turning to portfolio credit, during the third quarter, we did not have any loans migrate to a 4 or 5 risk rating. We had one loan move to non-accrual, a $170 million for-rated loan collateralized by a Colorado multifamily property. The underlying asset performance has been tracking below our expectations and has also been impacted by new supply in that market. We are evaluating all available options to pursue our remedies as a lender. Our total CECL reserve on loans at September 30th was $308 million, or 6.8% of UPB, compared to $333 million, or 6.4% of UPB, at June 30th. Our general CECL reserve increased by $0.6 million to $140 million, or 3.9% of UPB of loans subject to our general CECL reserve, compared to 3.8% of UPB as of June 30th. During the quarter, we determined that a sale of the New York hotel portfolio was no longer optimal amid evolving market conditions impacted by the New York City mayoral election. As a result, we reclassified the hotel portfolio to held-for-investment as we continue to evaluate the market. The underlying assets continue to perform well, and the strong return on equity generated by the portfolio provides an opportunity to optimize value for our shareholders when market conditions become more favorable, particularly in light of the refinancing executed in June. We also made progress during the quarter on further sales from the commercial condominiumization of our mixed-use REO asset. To date, we've sold nine of the 12 commercial condo units that were created. As Richard mentioned previously, it's our intention to accelerate the sale of some multifamily REO assets, given positive market sentiment. Our focus on loan resolutions has strengthened our balance sheet by significantly reducing leverage and improving liquidity. During the third quarter, outstanding financings decreased by $376 million, which included $52 million of incremental deleveraging, bringing the reduction in financing UPB to $1.2 billion during the first nine months of 2025 and to $1.4 billion year to date through November 4th. This activity is reflected in the meaningful decrease in our net debt-to-equity ratio, which was 1.9x at September 30th. This compares to 2.2x at June 30th and 2.4x at December 31, 2024. In terms of liquidity, as of November 4, we've increased our liquidity position by $283 million since year-end 2024. To quickly recap, at September 30, CMTG reported $353 million in liquidity, which has subsequently increased to $385 million as of November 4. At September 30, CMTG's total unencumbered assets were $398 million of loan UPB and $104 million of REO carrying value, which has since increased to a combined $548 million as a result of an additional loan becoming unencumbered, partially offset by the aforementioned loan and REO sales. We believe our liquidity position and unencumbered asset pool strengthen our position in addressing the upcoming maturity of CMTG's term loan B. We continue to explore various paths to a refinancing or extension, and we anticipate being in a position to provide additional details on a solution in the coming months. Before we open the call to Q&A, I'd like to share some recent news. We entered into an amendment to the terms of our term loan B, including the modification and waiver of certain financial covenants through March 31, 2026, including minimum tangible net worth and minimum interest coverage as defined, respectively. Pursuant to the terms of the modification, we're also utilizing a portion of our liquidity to make a principal repayment of $150 million on the term loan B. I would now like to open the call up to Q&A. Operator? Thank you so much. We will now begin the question-and-answer session. If you would like to ask a question, please press star followed by one on your telephone keypad. If you need to remove your question, please press star followed by two. Again, to ask a question, please press star one. As a reminder, if you're using a speakerphone, please remember to pick up your handset before asking your question. The first question comes from Rick Shane with J.P. Morgan. Your line is now open. Hey, guys. Two questions that are related. The first is, what was the impact in the third quarter of reversal of accruals on the loan that was placed on non-accrual so that we can get a sense of what the run rate is? Obviously, there's a recurring impact, but there's also a restatement. Effectively. Guys, are you there? I think Mike's on mute. Rick. Oh, sorry. Stunned silence is never reassuring. Rick, sorry. It was about $4.5 million, the reversal of the accrued interest receivable on that particular loan. Okay. Got it. Okay. Thank you. The narrative here has been that NII has been declining. Obviously, with that reversal, with the runoff of the portfolio, with the additional non-accrual, it was down again sequentially, fairly sharply. When do you think we will see a trough? Are we there at this point, or is there still going to be more downward pressure on NII? Thanks, Rick. Great question. I think right now we are really in the process of transitioning the portfolio and trying to aggressively move out of our 4 and 5 rated loans and non-earning and sub-earning assets. Obviously, with the liquidity we have, we can delever financings, which is helpful to earnings, but we really need to continue to make progress on moving out of the 4 and 5 rated loans, get that capital back, and get it earning again. It is going to be a little, what I'll call, lumpy over the near term while we work through that. Got it. Okay. Rick, I would just add one thing, and that is I feel like the market has come through a trough. The environment in which we are operating in is a lot more constructive for everything we're trying to do. It's not exactly. It is not exactly directly answering your question, but I think it's important to state. No, look, it's a totally fair observation. I think there are two stages to this. One is the identification stage of challenges within the portfolio, and it feels like we have reached that point or are very, very close. Then there is the resolution stage, and this is not like a credit card loan where 180 days later you charge it off. These resolutions can take years, as we've seen. I think we're probably in the midst of that right now. We absolutely are in the midst of it, but I will say that we have been in the midst of it for a while, and we are taking aggressive actions to resolve things. We're really not trying to allow problems to fester. We're not allowing problems to fester. Got it. Okay. Thank you guys very much. I appreciate it. Thank you for your question. The next question comes from Jade Rahmani with KBW. Your line is now open. Thank you very much. Can you give an update on the term loan? I know you touched on it, but where would liquidity stand post the $150 million repayment? Over what timeframe do you expect to consummate a refinancing? Are you considering any equity-like options in conjunction with this to bolster the company's capital base, give it wherewithal to deal with problems in the portfolio, and also improve the corporate financeability? Those things might include preferred equity. Thanks. Thanks, Jade. Boy, that's a big question. But a good question. Let's see. We continue to have very productive discussions on the term loan refinancing. As noted, we had, before the impact of this recent modification, the balance outstanding is about $712 million. We'll make a paydown of about $150 million in connection with this modification. That'll bring cash down to the, call it, $230 million-$235 million range. But we do expect some additional sort of monetizations of assets over the relatively near term, which will further improve liquidity. And what we would envision is a modest incremental paydown in connection with establishing a new facility or extending the existing facility. At this point, we do not anticipate going into the market for preferred equity as part of the solution. But obviously, further down the path, that. Could be an option, but we think the trajectory of the business in terms of liquidity, resolving watchlist loans, is heading in the right direction at this time. Jade, I would just like to add that the cost of prep equity is still quite high right now. The opportunities in the market to increase the implicit or explicit leverage, depending on how you want to view prep equity, in order to originate, I think we just do not see the trade-off right now. We are going to keep our eye on it. If we think that changes, certainly prep equity is an interesting approach for us to take. Regarding the risk 5, risk 4 loan buckets, which each total about $1 billion. So that's $2 billion in total. And then current REO. Can you give some expectations around the risk 5? Is that going to continue to moderate, and where will that be in one to two quarters? The risk 4s, do you contemplate any additional adds, or will those continue to moderate, and will those be improved through modification to risk 3? And then REO, what is the current balance expectation you have, including any monetizations in process and the additional multifamily foreclosures you noted? Yeah. Hi, Jade. It's Priyanka, thank you for the question. I'll start with the REO. We are continuing to monetize some of the REO. We have the mixed-use asset that we condominiumized that Mike discussed earlier. There will be some additional realizations out of that. Richard mentioned the realizations on some of our already REO multifamily. In the near term, we do expect the REO portfolio to increase in size. On page 10 of our earnings up, we show our 5-rated loans, and we show four of them being anticipated REO. Those are all in the multifamily asset class. This is a tool in the toolkit, and we always want to try to work with our borrowers. If we can't come to a resolution that we think is in the best interest of our shareholders, we are going to foreclose. We do identify those fours as anticipated foreclosures and coming on REO. In terms of additional 5s and 4s, we have obviously classified those loans as we see fit today. It is a dynamic environment. We cannot always control borrower decision-making or what happens at the borrower or the market level. Based on what we know today, we think that list is accurate, and we are actively negotiating with borrowers in the four categories, as you mentioned, to try to come to a reasonable modification, which could result in an upgrade. Also, as we have proven, I think, year to date, there is a lot of tools in the toolkit in terms of other ways to monetize the assets to turn over the book, as Mike mentioned earlier. I think the $640 million of risk 5 rated multifamily loans anticipated REO, that would put the REO portfolio to $1.3 billion and reduce the risk 5 from $1 billion to around $335 million. And then the risk 4, I do not believe that there is REO anticipated out of that. Is that correct? Yeah. At this moment, that is correct on the 4s. On the 5s, I would just say the REO. It does not go on to our balance sheet at the UPB. It is going to go on at the carrying value after the specific CECL reserve. So the 640s have been inflated, so it is lower than that. Yes, there will be growth in the REO portfolio. Like I said, there is very clear visibility into our current REO portfolio being partially monetized as well. Okay. So that would be actually about $1.24 billion less the $80 million specific reserve. Do you know what the yield? Do you know what the current yield is? On the REO in total? Yeah. The low single digits. It's a very mixed bag. On the hotels, that is. In the low to mid-teens. That is a very good return on equity because of the refinancing that we got done earlier this year, as well as just really strong underlying fundamentals. As you can imagine, as we've taken assets REO in the multifamily portfolio, there is a lot of noise in the NOI numbers. In terms of just blocking and tackling. You want to evict a number of non-paying tenants, and that means you're taking a charge-off. We're in this period of transition, so that yield is much lower. Over time, we see that increasing. I mean, it's anywhere between very low single digits to 6% today. On a levered basis. We'll see if our plan is certainly to improve the yield on some of those. Others, like I said, are ready for monetization now. Okay. Thanks very much for taking the questions. Thanks, Jade. Thank you. The next question comes from John Nickodemus with BTIG. Your line is now open. Hello, and thanks for taking the time this morning. Somewhat related to Jade's last question regarding the anticipated REO multifamily 5-rated loans, notice that your largest loan, the California multifamily, moved into that bucket of anticipated REO versus where it was in the last quarter. We'd just love to hear what changed there in being such a significant size, how that process could play out in terms of taking it REO. Thank you. Thanks, John, for the question. It's Priyanka. Yeah. Obviously, we're very, very focused on it, given the size, as you said. The reason for the change is really after extensive ongoing discussions with the borrower. It's clear that they are unwilling; sponsorship is unwilling to support the asset. At this juncture, I think we've proven our ability to evaluate. Whether we would like to do loan sales, DPOs, short sales. When we did all of that, we have determined that the best course of action is actually to take ownership of the asset. One, you immediately create value when you go from a loan to a deed if we wanted to flip and sell it. More importantly, as we have dug in, we've seen a lot of low-hanging fruit here in terms of ability to improve top line, ability to improve expenses. We think this is really a good opportunity for shareholders in terms of creating additional value. In terms of the process, it's in California. It's a non-judicial foreclosure state, so it should be a pretty clean process. The sponsor is well aware of the plan going forward. Great. Thank you, Priyanka. That's really helpful. The other one for me, just wanted to ask about repayments. You've had three significant repayments in the second half of the year so far. Two of those were on loans that weren't on the watchlist, a couple of 3-rated loans. Just curious if there was any line of sight on any significant repayments before the end of this year or maybe even early next year, whether that's out of the watchlist or just out of the rest of the loan book in general. Thanks. Yeah. Thanks, John. Yes, absolutely is the short answer. As both Richard and Mike alluded to, capital markets are healthy. We are seeing borrowers in various stages of refinancing plans, both on 3 and 4-rated loans. We alluded to this last quarter. We do not control those outcomes, so I cannot even put a number on it, but that is absolutely a possibility going into the balance of the fourth quarter in addition to the first quarter. Separately, absolutely dual-tracking the goal of turning over the book, and we will focus on effectuating transactions, even on difficult assets that are less borrower-driven and more lender-driven. That, again, goes to all the tools in the toolkit. That will be very facts and circumstances-based in terms of borrower, market, asset class. We have a couple of those in process. I can see a couple of those getting resolved here in the coming quarters. Great. Does that answer your question? Appreciate the answers, Priyanka, and thank you for the time today. Yes. No, it definitely does. Thank you. Okay. Thank you, John. Thank you, sir. There are no additional questions waiting at this time. As a reminder, it is star followed by one to ask the question. We'll pause here briefly as questions are registered. There are no additional questions at this time. I would like to pass the conference back over to Richard Mack for any closing remarks. I just want to thank everyone for joining and for the questions. I would summarize by saying we continue to be in a healing capital markets. We're seeing tightening spreads. High demand for assets. This is allowing us to create value in the portfolio by taking over assets when we need to, by accelerating repayments, all to continue to delever the book, reduce our cost of capital, and be prepared to refinance our term loan B, and hopefully get on the other side of that and resume originations and other opportunities. We thank you all again, and we'll look forward to speaking to many of you soon and to our next quarterly meeting. Thank you all very much. That will conclude the Claros Mortgage Trust third quarter 2025 earnings conference call. Thank you for your participation. You may now disconnect your line.