So, we will see some migration and improve rating there. There is a large hotel loan or second largest hotel loan in the portfolio where it’s been in the market for sale for quite a while. And we believe I can’t speak for the borrower, but we believe that that hotel is now under PSA to be sold. And we expect that that loan to be paid off. And we also did see some good leasing in some of the risk weighted four office loans. As Andy said in his prepared remarks in San Francisco, believe it or not, and in Baltimore, believe it or not, we got very good leasing on some of those assets that brought them to almost 100% occupancy in San Francisco, and I think low-80s. And in Baltimore, so the 72% average occupancy that Andy threw out, I think in his prepared remarks, you will see some improvement there.
And that occupancy is probably skewed down by the fact that the Long Island City assets, one of which was the office space is substantially vacant. As I said, those were up for sale. So, I have been long winded here, I apologize. I think there will be movement in the risk rankings. And I think our liquidity really is not about reserves, it’s about making sure you can protect the balance sheet.
Eric Hagen: Yes. That’s helpful perspective. Thanks for fleshing that out. I appreciate that. A follow-up here, I think you noted the Carlsbad office loan was partially paid down and modified. It sounds like there were maybe three more assets in that portfolio. Is the plan to get additional pay-downs from asset sales? What’s the outlook there just generally in that one credit?
Mike Mazzei: Andy, would you like to address that?
Andy Witt: Sure. Thank you, Mike. So, as you noted, we had a pay-down and the business plan going forward is to release one of the remaining buildings, and otherwise, it’s substantially leased. And then the borrower will look for liquidity, whether that’s through the sale of additional single assets, single properties, or through a refinancing or sale of the remaining three assets, so that’s the current plan.
Eric Hagen: Got it. Thank you very much.
Operator: Thank you. We will have next question from the line of Jade Rahmani with KBW. Please go ahead.
Jason Sabshon: Hi, this is actually Jade’s associate Jason Sabshon on. So, it was my first question. Now, we are starting to see a few cases of what looks like strategic defaults from borrowers in order to extract concessions from lenders since they know, lenders don’t want to foreclosure on their hands. And for example, there is a large Blackstone multifamily deal that hit special service. And so are you seeing that, that dynamic in your portfolio at all?
Mike Mazzei: Well, I am not going to comment on Blackstone, we have a lot of respect for that organization. But as I have said in my prepared remarks, these are non-recourse loans. And we expect when we make these loans, that every borrower at the end will act in their own economic self interests. There are borrowers who want to protect brand and name recognition. But in a market like this, where you have got such a dislocation in interest rates, it’s affecting the entire market, and issues around the office sector. We expect those borrowers to feel like they have a hallway pass regarding brand, having said that, every borrower is going to act in their own economic self interest. So, this notion that and we have heard this many times, we have institutional Blue Chip deep pocketed borrowers.
