BXMT

At this time, I'd like to turn the conference over to Tim Hayes, Vice President, Shareholder Relations. Please go ahead.

Good morning, and welcome everyone to Blackstone Mortgage Trust first quarter 2026 earnings conference call. I'm joined today by Tim Johnson, Chief Executive Officer, Austin Peña, President, and Marcin Urbaszek, Chief Financial Officer. This morning, we filed our Form 10-Q and issued a press release of 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 subject to risks, uncertainties, and other factors outside of the company's control. Actual results may differ materially. For a discussion of some of the risks that could affect results, please see the Risk Factors section of our most recent Form 10-K. We do not undertake any duty to update forward-looking statements.

We will also refer to certain non-GAAP measures on this call, and for reconciliations, you should refer to the press release and Form 10-Q. This audiocast is copyrighted material of Blackstone Mortgage Trust and may not be duplicated without our consent. For the first quarter, we reported a GAAP net loss of $0.04 per share, while distributable earnings were $0.21 per share and distributable earnings prior to realized gains and losses were $0.49 per share. A few weeks ago, we paid a dividend of $0.47 per share with respect to the first quarter. With that, I'll now turn the call over to Tim.

Thanks, Tim. BXMT's first quarter results clearly demonstrate the breadth of our platform and our ability to execute on both sides of the balance sheet amidst an ongoing real estate recovery. Our key competitive advantages drove distributable earnings prior to realized gains and losses of $0.49 per share, marking our third consecutive quarter of dividend coverage. We leveraged our scale and proprietary sourcing channels to capture attractive investments across a range of sectors, markets, and strategies, with a focus on several of our highest conviction themes, such as diversified industrial portfolios and essential use net lease properties. We also closed our first data center loan this quarter and invested in a diversified portfolio of low-leveraged loans originated by a leading U.K. bank. Investments offering compelling relative value, which Austin will detail further in his remarks.

Real estate fundamentals continue to recover, benefiting from steadily increasing values and the sharp decline in new supply across all major property types. The public equity markets recognize this, with REITs significantly outperforming the S&P 500 year to date. Despite recent global volatility driven by the conflict in the Middle East, real estate equity and debt markets have remained resilient. U.S. CMBS issuance is up nearly 15% from this time last year and on pace for yet another post-GFC record, and spreads sit 15 basis points tighter compared to the beginning of the year. In Europe, we've observed a slightly larger impact, with a slowdown in CMBS new issue activity and spreads modestly wider. However, real estate lending markets in the region remain open and active.

Just a few weeks ago, we were fully repaid on a GBP 177 million U.K. student housing loan that was refinanced by a bank syndicate. We are aware of several other large, recently awarded deals in the market. Importantly, we've observed no change in the fundamental performance across our U.K. and Europe portfolio. Today, BXMT is in an advantageous position. We have a well-invested portfolio generating strong in-place current income, allowing us to maximize return on new capital deployment. Leveraging our scaled platform of over 170 real estate debt professionals, we cast a wide net across the global real estate credit markets, both in terms of sourcing new opportunities and also driving strong capital markets execution, setting up diversified investments to generate highly compelling risk-adjusted returns.

To that end, our investments this quarter generated levered returns of 900 basis points over base rates, in line with our investment activity over the past year. We also accretively refinanced $700 million of corporate debt, issued $1.3 billion of securitized debt, and added a new non-mark-to-market credit facility to our 16 counterparty complex, all further demonstrating the strength and creativity of our dedicated capital markets team. Moving to the portfolio, we continue to be pleased with performance. We received over $600 million of repayments, with more than half in U.S. office. We resolved one impaired hospitality loan via foreclosure, and we executed on the sale of a multifamily property, the first from our owned real estate portfolio, as we capitalized on the supportive capital markets backdrop.

While there is more work to do, including the eventual disposition of the remainder of our owned real estate portfolio, the trend in our business is now crystal clear. Resolutions and redeployment are driving earnings that cover our dividend and offer investors an attractive current yield of approximately 9.5%. These initiatives are supported by a compelling real estate credit backdrop, with loans secured by hard assets, property values still early in their recovery, and spreads still wide relative to other credit alternatives. With this setup, BXMT continues to be exceptionally well-positioned, with unique insights from our Blackstone real estate platform guiding our strategy and delivering strong results for our investors. I'll now turn it over to Austin to discuss our investments and portfolio in more detail.

Thanks, Tim. Our investment portfolio ended the quarter at just under $20 billion, consistent with year-end, as the funding of new investments largely offset repayments collected in the quarter.

Our loan portfolio comprises approximately 87% of our investments, with our fixed-rate and longer duration strategies like net lease and bank loan portfolios representing 6% and our owned real estate accounting for the remainder. The broad capabilities of our platform were on full display in the first quarter as we closed $540 million of new investments across various geographies and strategies. Q1 investments included $275 million of loan originations, with a weighted average LTV of 68%. The GBP 50 million investment in a U.K. bank loan portfolio that Tim mentioned earlier, and $197 million of net lease acquisitions at BXMT's share, our most active quarter in net lease to date. Our loan originations were largely concentrated in residential and industrial sectors with strong underlying fundamentals, where we continue to orient our investment strategy.

Of note, we financed several of our Q1 originations through the syndication market on a non-recourse, non-mark-to-market basis. Reflecting the sold positions, which are not included on our balance sheet, gross loan originations were over $800 million in the quarter, and our forward pipeline remains strong with over $1 billion closed or in closing so far in the second quarter. As Tim mentioned, we closed our first data center loan in BXMT, financing a stabilized asset in Northern Virginia, 100% leased to an investment-grade hyperscale tenant and owned by an experienced sponsor. Leveraging our scale and capital markets capabilities, we originated a fixed-rate whole loan and syndicated a senior mortgage, generating a mezzanine loan with a 14% all-in yield and four and a half years of call protection.

With $150 billion of data center assets owned and under development, Blackstone is the largest financial investor in data centers globally. As a result, BXMT sits in an extraordinary position to identify and underwrite investments in this space. With the AI megatrend driving unprecedented demand for compute and supporting critical infrastructure, we see more opportunities in this sector on the horizon. We also made a GBP 50 million investment in a portfolio of granular, high cash flowing U.K. bank loans. The loans are backed by over 3,000 properties, primarily in the residential and industrial sectors, with a weighted average LTV below 50%. Like the portfolios we acquired from U.S. banks last year, this investment adds diversification and duration with an underwritten term of over five years. The investment was sourced leveraging Blackstone's strong relationship with the bank.

Yet another example of our access to differentiated investments across the world. Our loan portfolio ended the quarter at $16.4 billion across 130 loans, with more than 50% in multifamily and industrial, and was 98% performing. We upgraded four loans this quarter. Additionally, post quarter end, the largest loan on our watch list, our Spanish residential NPL loan, was modified, significantly enhancing our credit position. The modification includes a spread reduction and maturity extension in exchange for meaningful additional commitment and credit support from the borrower. As a reminder, this loan has repaid by more than EUR 550 million since origination, including another EUR 20 million last quarter as the borrower sells the underlying collateral. The loan remains performing, paying interest current, and we expect it to continue to pay down over time.

We also added two office loans to our watch list and impaired two loans this quarter, booking modest additional reserves. Both were previously on our watch list. One was our only studio loan, a sector that has faced significant headwinds. Of note, this loan represents less than 1% of our portfolio and is secured by a 25 acre campus centrally located in L.A., across the street from one of the most productive retail assets in the country, providing significant optionality and redevelopment potential. The other loan is secured by a portfolio of 1980s vintage multifamily properties located in Dallas, originated in 2022. Older vintage properties in Sunbelt markets like this have been impacted by a combination of elevated new supply and weaker demand, a different profile than the vast majority of our multifamily portfolio, which continues to attract strong demand and demonstrate steady performance.

Across our 46 multifamily loans, we have just six with a similar profile, just 2% of our portfolio. One is on our watch list, and the rest are all risk rated three and carry in-place debt yields north of 6%. We continue to make good progress on our own real estate as we leverage our platform to maximize values over time. As we've said in the past, we are not a forced seller. With our strong balance sheet, liquidity, and earnings supporting our dividend, we can be patient. We make hold versus sell decisions like we do across our real estate business, using our data, insights, and asset class expertise to underwrite go-forward returns compared to where we can reinvest. This quarter, we saw several positive developments. We sold one multifamily asset in Texas in line with our carrying value.

We hit a key milestone on our Mountain View office asset, where we received local approvals to redevelop the site into for-sale residential, bringing us one step closer to unlocking significant value potential. Our fully renovated Hyatt Hotel in San Francisco continued to see improving performance as Q1 EBITDA more than doubled year-over-year. Finally, turning to net lease, our portfolio continues to scale, reaching $516 million a share at quarter end, up from $66 million this time last year, and with another $120 million in closing. Our dedicated team has assembled a high quality portfolio, acquiring 260 assets at an average price of $2 million at a discount to replacement cost. The portfolio generates three times rent coverage with 2% annual rent escalators and lease terms extending over 15 years on average.

We believe our net lease strategy continues to provide compelling relative value in today's investment environment, naturally complementing our floating rate lending strategy with long duration, contractually increasing cash flow, driving strong current returns. Overall, BXMT continues to demonstrate positive momentum, capturing diversified investments to drive strong earnings power and dividend coverage, underpinned by an investment strategy designed to deliver strong long-term performance for our investors. With that, I will pass it over to Marcin to unpack our financial results.

Thank you, Austin, and good morning, everyone. In the first quarter, BXMT reported GAAP net loss of $0.04 per share and distributable earnings or DE of $0.21 per share. DE included $46 million of realized losses related to the resolution of an impaired San Francisco hotel loan. We foreclosed on the property and now hold it on the balance sheet as owned real estate, with our basis representing an approximate 70% discount relative to the prior owner's cost basis. DE, prior to realized gains and losses, was $0.49 per share, covering our dividend for the third consecutive quarter. The $0.02 decline in this metric from the prior quarter was largely due to lower net operating income from owned real estate, reflecting the outsized seasonal benefit from hospitality properties recognized in the fourth quarter results, which we discussed on our last earnings call.

It is worth noting that we slightly amended our DE prior to charge off metrics this quarter to DE prior to realized gains and losses. This amendment reflects the evolving composition of our portfolio, though the spirit of the metric remains unchanged, which is to provide investors with a measure that we believe represents the ongoing earnings power of our business. Our own real estate portfolio generated $14 million of NOI this quarter and included a $3 million tax refund on one of our properties. Excluding this benefit, this represents an annualized asset yield on carrying value of approximately 3.5%, which we estimate is 250 to 300 basis points below yields we are achieving on new originations today. While some asset sales will take longer than others, rotating this capital provides further support to BXMT's earnings power over time.

Book value ended the first quarter at $20.20 per share, down modestly by 2.7% from the prior period, primarily due to a $0.33 per share increase in CECL reserves and $0.13 per share of depreciation and amortization or D&A related to our own real estate assets. In total, book value includes $0.57 per share of accumulated D&A and $1.80 per share of total CECL reserves, of which $1.30 per share is attributable to the general reserve. Turning to BXMT's capitalization, our balance sheet remains in excellent shape. We ended the quarter with $1 billion of liquidity. Our Q1 debt-to-equity ratio decreased to 3.7x from 3.9x in Q4 and remains squarely within our target range.

We were very active in the capital markets this quarter, taking advantage of robust liquidity and investor demand. We started by repricing approximately $700 million of our corporate term loan in early January, reducing our financing spread by 50 basis points. As a result of our proactive approach over the past few quarters, we ended Q1 with four years of weighted average remaining term on our corporate debt, with no maturities until 2027. Later in January, we issued our second reinvesting CLO, a $1 billion transaction, largely collateralized by new vintage investments. Reflecting this issuance and the addition of the new lending facility Tim mentioned earlier, total non-mark-to-market borrowings now represent about 86% of total debt, and we continue to have no capital markets mark-to-market provisions throughout our capital structure. In March, we closed our inaugural asset-backed securitization in our net lease joint venture.

The transaction was met with exceptional investor demand and was several times oversubscribed, driving an accretive execution and resulting in highly compelling structure and terms. Lastly, as Austin mentioned earlier, we also executed several senior loan syndications with attractive terms, underscoring our broad access to various sources of capital, which we believe is one of our key competitive advantages in the market. The benefits of our leading global real estate platform are driving results on both sides of our balance sheet and help position BXMT to deliver attractive risk-adjusted returns to our investors over time. Thank you again for joining us today, and I will now ask the operator to open the call to questions.

Thank you. As a reminder, please press star one to ask a question. We ask you limit yourself to one question and one follow-up question to allow as many callers to join the queue as possible. We will take our first question from Tom Catherwood with BTIG.

Thank you. Good morning, everybody. Austin, maybe starting with you. I know loan originations can be lumpy quarter to quarter. Was Q1 activity impacted primarily by the timing of closings? Was it just, you know, with more activity pushed into the second quarter? Was there something else driving the relatively slower pace in the first quarter?

Yeah. Thanks, Tom. Yeah, I think there is always a little bit, as you said, of changes quarter-to-quarter in terms of origination volatility and a bit of seasonality that can impact those quarter-to-quarter numbers. You know, as I mentioned earlier in my prepared remarks, when you look at our investment activity this quarter, there was a good amount of mezzanine loans or loans that we financed through the syndication market, which is not included in the roughly half a billion dollars that we mentioned in our reporting. When you gross up for those syndicated interests, you know, the quarter was a pretty regular quarter in terms of overall lending activity. As I also mentioned, we have a very good pipeline, over $1 billion, for the second quarter.

You know, I wouldn't read too much into the overall activity this quarter. I think it was a pretty regular quarter in terms of what we typically see, and we continue to have a really, really good opportunity set that we're looking at.

Got it. Very fair point on the syndications. I had not taken that into account. Maybe turning over to the net lease side of the business, which has now become a not insignificant part of the portfolio. Kind of two questions there. Pipeline-wise, you mentioned $125 million in closing. How large. What's the target that you have internally for that over the near term? The second part to it is, this is a competitive sector. It seems like everyone is out chasing net lease deals, be they, you know, other alternative asset managers or the REITs. What is it about this platform that's allowed it to do $500 million or I guess that's only your share, so, you know, north of probably $700 million of acquisitions in the past year alone?

Yeah. Thanks. It's a really good question. As you noted, and as we noted earlier, we had a really active quarter in net lease this quarter. You know, about $200 million of investments at our share. We've assembled what we think is a really great portfolio over the last year or so since we started this business. You know, we do intend to grow this part of our balance sheet and our portfolio to about 3% of the overall portfolio today. You know, obviously we look at risk-adjusted returns when we're looking at these investments relative to other things that we can do in terms of allocating our capital. We would be very happy if this could become at least 10% of our portfolio over time.

You know, in terms of what we see in the marketplace today, as you say, there are a lot of players, but we think we have an excellent team. You know, we have a dedicated team of experienced individuals led by someone who has been in this space for 30 or so years. You know, they are finding, we think, really attractive investments. It is a granular investment profile, as I mentioned, about $2 million per property, so it really takes a lot of experience and relationships to identify investments. You know, when you look at the portfolio that we've assembled, as I mentioned earlier, over 15 years of duration, 2% rent escalators over three times coverage, we really like that profile.

You know, we think it really complements our floating rate lending business, adding duration, adding an upwards sloping set of cash flows that we think really provides a very nice complement to the other side of our business.

Got it. Appreciate the answers. Thanks, everyone.

Thank you. We'll take our next question from Rich Shane with JPMorgan.

Hey, guys. Thanks for taking my questions. Look, you have two loans in your top 10 that are maturing this year, New York Multi-Use and Chicago Office. One is rated three, one is rated four. Can you just talk a little bit about your strategy on those maturities and what we should expect?

Yeah. Thanks, Rick. I can take that. You know, I'd say we take a very active approach across our portfolio. You know, we're obviously in conversations with our borrowers about their plans in terms of capital markets execution, you know, really all the time. You know, we go through every loan every quarter. You know, in terms of, you know, those specific deals, you know, without getting into specifics, you know, we have dialogue with our borrowers, you know, around what their plans might be. I think, you know, we'll take a very proactive approach to the extent, you know, to the extent that their plans are evolving, you know, we will be quite active on that approach.

Okay. I understand you need to be a little bit circumspect on that. I get it. Second thing is you work through resolutions within the portfolio, and it sounds like you're gonna be pretty aggressive there. What should we think about as the sort of ambient?

CECL reserve rate, general reserve for new originations. We can sort of think about over time what the convergence back to general reserves would be.

Hey, Rick, it's Marcin. Thanks for joining us. Look, I think our general reserve right now, obviously there's a lot of factors that go into it. It's somewhere around 100 to 120 basis points. Obviously that's driven by, like I said, you know, the age of the portfolio, historical loss rates and things like that. We don't see that changing dramatically. Obviously, as, you know, we work through the resolutions and the realized losses become a little bit of a smaller factor over time, that might decline. Again, in the near term, we don't see that changing dramatically.

Got it. Okay. That's very helpful. Thank you, guys.

Thank you. We'll take our next question from Chris Muller with Citizens Capital Markets.

Hey, guys. Thanks for taking the questions. I'm hopping around calls this morning, so I apologize if I missed any of this. I wanted to ask about the bank loan portfolio acquisitions. I guess, what is driving these? Are the banks approaching you guys to reduce their CRE exposure? Do you expect more of this over 2026?

Sure. Thanks, Chris. It's Tim. I'd say, it's a bit multidimensional. It can depend on the situation. The bank loan portfolio, you know, this quarter was a little bit different in its structure, as an SRT structure versus an outright acquisition. In some cases, it's a capital relief transaction. In some cases, it's driven by M&A activity, which we would say is probably the main driver between in terms of the portfolio loan sale activity. That's banks in the U.S. predominantly, going through M&A. A lot of it kind of the fallout from what happened in the regional banking industry, in 2023. That M&A activity tends to accelerate loan sale activity.

So I'd say that's the biggest driver, but it does come from a few different dimensions. I'd say from a sourcing standpoint, this is one of the main areas we spend our time on, both within our real estate debt business and broadly at the firm, is working with financial institutions to help deliver them solutions across not just real estate, but the entirety of their, of their credit portfolio. It's a very, I'd say, diversified ecosystem of sourcing, and really built on the banking relationships we have at the firm over a really long time.

Got it. That's very helpful. I guess just a high-level one. The tenure keeps creeping higher. It's at 4.38 right now. How is that impacting borrower sentiment that you guys are seeing?

I'd say in terms of borrower sentiment, the good news is that, you know, even though, you know, the tenure has moved up, really as a result of, you know, the Middle East conflict and energy prices, the capital markets continue to be very, very active. CMBS issuance this year is up 15%, on top of a year last year that was a post GFC high. We continue to see borrowers coming to the market. I think that it might put a little bit of a potential slowdown on sales of real estate. That would be, you know, something that you might keep an eye on. In terms of the credit markets, year to date, CMBS spreads are actually 15 basis points tighter.

There's good credit availability and good capital availability, so borrowers are able to refinance their debt today, and are doing so quite actively.

Got it. Appreciate you guys taking the questions.

Thank you. We'll take our next question from Jade Rahmani with KBW.

Thank you very much. Can you give any further color on what drove the $55 million CECL provision? Perhaps you could parse out how much ballpark related to the studio downgrade and what the outlook is there.

Sure, Jade. Good morning. It's Marcin. Out of the 55, I would say about 20% of that was general reserve, and then the rest was in the specific. You know, we don't wanna get specific on particular assets, but I think if you look at what was added to the specific pool, quarter-over-quarter vis-a-vis the impairments we had, you know, these reserves are obviously a little bit smaller in terms of what we've seen in the past. Obviously one of the assets is a multifamily, the other one, like you said, is a studio loan. Don't wanna get into particular loans and specifics, but the reserves this quarter were pretty modest.

Thanks, Marcin. It's Austin here.

Okay.

You know, I would also add, Jade, you know, as we mentioned, you know, obviously I commented a bit on the nature of the loans in my prepared remarks. You know, I think both of these loans were, you know, a little bit idiosyncratic in terms of the, you know, our portfolio. As I mentioned, it's our only studio loan. You know, and then the multifamily loan, you know, had a, you know, older vintage asset in a market that's been a bit more impacted by elevated supply, you know, which is quite different from sort of the rest of the portfolio. You know, I think that's really what's driving things here. You know, I just wanted to add that additional commentary.

Thank you. On the REO portfolio, can you give any updated thoughts as to timeline for resolution? Would you expect to resolve 40%, 50% this year, or should we think about a more extended timeline than that?

Yeah, thanks. You know, Jade, obviously, that's a moving, you know, something we look at. We're very focused on exiting those REO assets over time. As I said earlier in my remarks, we are not going to be a foreseller. We're going to take a patient approach in terms of a long-term goal of maximizing value for investors. You know, as I said earlier, we had a number of positive developments, you know, in terms of a few assets that have been making good progress towards getting to that place in terms of our ultimate exit plans. I mentioned the hotel in San Francisco that's seen good performance, positive elements on the Mountain View office asset.

You know, that obviously helps, with, you know, with moving towards that goal. You know, I really wouldn't give a specific timeline, you know, because I think we're gonna be patient, as I said. Obviously we're focused on exiting that over time because as Marcin mentioned earlier, you know, we do think that these assets are, while generating cash flow today, rotating that capital over time will unlock additional earnings power for the business.

Thank you.

Thank you. We'll take our next question from Harsh Hemnani with Green Street.

Thank you. I guess in terms of the SRT transaction, could you provide some details on where the underlying collateral of this loan portfolio is based geography-wise?

Yeah. Thanks, Harsh. This is Austin. You know, I mentioned a few things in my prepared remarks. As I mentioned, you know, it's a very granular portfolio. It is with a leading U.K. bank, so, you know, it's a U.K.-focused portfolio. You know, largely diversified across a lot of top markets, you know, in that area. You know, what we really like about all of these bank loan transactions that we've completed, including this one, is the fact that these are low leverage, high cash flowing loans with a lot of diversification, and they're originated by banks, and they're priced accordingly.

You know, these transactions allow us to invest in real estate credit that is, you know, at a lower risk tranche than we, you know, would typically, you know, see in terms of our direct originations but still generate really attractive returns. If you look at the return that we think we're getting here, we think it represents a very compelling risk-adjusted return and a premium to where similar risk tranches would be available in sort of other credit alternatives.

Got it. That's helpful. Understanding that you can't touch on any specific deals, but maybe more generally, when you, when you're underwriting stabilized data center assets, is it probably fair to assume that the spread on the whole loan may not be adequate to meet your return hurdles? If we see more data center deals, it would be more similar to what we've seen this quarter where maybe you're retaining a subordinated position in the loan?

Yeah. I would say obviously we're very excited and about the first data center loan that we're making. We think the space overall is gonna grow. You know, we do see a lot of opportunities and the capital needs across the data center sector we do think is going to mean we're gonna see more opportunities over time. I think we're going to be very thoughtful about where the opportunities work for us, both from a credit perspective as well as a return perspective. I think the deal you saw us do this quarter, you know, reflects our creativity on how to access that market and generate returns that we believe are, you know, really quite compelling and certainly meet our return requirements.

You know, I think, as we look forward, you know, because of the capital needs of the space, you know, we think that there's going to be a growing demand for capital from groups like us. You know, to date, a lot of the activity in the market, you know, has been done by the bank market or in other forums of the, of the public markets. The capital needs, we think, are gonna mean there's gonna be more things that fit our profile.

Got it. That's helpful. Maybe one last one from me. I might have missed this. Of course, there's about $1 billion that's closed or in closing post quarter end. Could you maybe share how that breaks down between net lease bank loans and internally originated loans?

You know, I, I would say it's pretty, it's pretty diversified, Harsh. You know, we continue to see good opportunities. As I mentioned, $120 million that's in our net lease pipeline right now. You know, not sure all of that 120 will close in the second quarter. You know, that's a little bit timing dependent. When we look at our pipeline, you know, it's still quite diversified across, you know, profile. Look, you know, quarter to quarter, the, you know, the composition of the investments are going to change. I think what our team is really focused on is really finding, you know, the best, the best opportunities out there.

Got it. That's helpful. Thank you.

Thank you. We'll take our last question from Donald Fandetti with Wells Fargo.

Hi. Good morning. Could you just talk a little bit about what you're seeing in the office market? Looks like you added two office loans to the watch list, but also getting repaid as well. Maybe just kinda give us your thoughts.

I'd say it's relatively consistent with what it's been in prior quarters. As you noted, we, you know, we had, you know, a little bit of movement on our in our portfolio in terms of risk ratings related to office, but I think relatively, you know, small in total. I'd say that, you know, broadly, leasing activity, market by market of course, but broadly leasing activity is picking up. Liquidity in the capital markets, debt capital availability, et cetera, continues to be generally on a positive trend. I'd say the, you know, the fundamentals, although still, you know, quite challenged relative to what they've been historically, are improving, and the capital markets activity, you know, continues to be solid and improving as well.

Thank you.

Thank you. That will conclude our question and answer session. At this time, I'd like to turn the call back over to Tim Hayes for any additional or closing remarks.

Yeah. Thank you, Katie, and to everyone joining today's call. Please reach out with any questions.