Stephen Laws: Thanks for the color. I really appreciate the detail. As a follow-up, kind of bigger picture on multi, you mentioned – I can’t find it exactly in my notes, but I think the modifications, I think you said 10 maybe you put new equity, maybe it was 8, but the majority put new equity into the transaction. Is that equity coming from the sponsor? Are they going to third parties and getting mezz or pref loans to do those kind of recaps and pay down? Kind of can you talk about where they are getting that capital and general thoughts around multi and the ability of other borrowers to do the same?
Michael Comparato: Yes. So, I think largely the capital that was infused into those extensions was from the existing investors, the existing LPs. I think there has been a lot of conversation in the market about pref equity that is available to sponsors in these over-levered positions. And I’m just not sure at the end of the day, if it makes a whole lot of sense, right? It’s very expensive. It’s dilutive and if they are taking a piece of the common, we have not seen a lot of it. So, there is a lot of banter around it in the market, but we actually haven’t seen it solve any problems really because I’m not sure it really does solve any problems. So, I think the – generally, these outcomes have been fairly binary thus far, right?
It’s either we’re going to keep our existing investors, our existing investors want to bridge to brighter days or it’s – we’re out, we will sell it ourselves and get $0.10 or $0.20 back or we will just hand it off to you guys and deal with it that way. But we’ve seen – off the top of my head, I think only one transaction that I can think of where a new LP has stepped in, or a new equity provider stepped in to provide meaningful dollars.
Stephen Laws: Right. And then one last question, if you don’t mind, on the competitive front. You mentioned in the prepared remarks that you really haven’t seen the banks come back. Can you talk about the competitive landscape, kind of where spreads on new multi deals? Who are you competing against there? And then what do you think needs to happen in the market for banks to return?
Michael Comparato: So, I would say that what we’re seeing on the origination front is probably some of the highest quality credits that we’ve seen maybe in the 10 years that have been at Benefit Street. There is a very, very limited bid out there. As you know, the bank bid has gone, the publicly traded mortgage REIT space, I mean, I think of the 15 players that are out there, only three wrote alone all of 2023. So, they are largely on the sideline. The competition that we’re seeing is really only in the multifamily sector. I would say there is a handful of debt funds. And obviously, the agency bid never goes away that we’re competing with. But on all other asset classes, it’s fairly thinned out. And as you get higher in loan size, believe it or not, as loans get bigger, they are getting meaningfully tougher to do.
So, anything in the $75 million, $100 million, $125 million range, there is really not a deep bid there at all for anything. So, we’re seeing really interesting opportunities in the larger loan side of things. Pricing has tightened over the past, I would say, 30 to 60 days. You’ve seen an incredible spread rally kind of across the world for the past 4 months. That’s been on the screen. Real world usually delays 60 to 90 days, so we’re starting to see that come through in our spreads on loans. But I would say generic multifamily today is probably pricing around SOFR-300, 325. Really high-quality stuff has a two-handle, a little spicier stuff could be in the high 3s.
Stephen Laws: Fantastic. Appreciate the color this morning. Thanks a lot.
Michael Comparato: Thanks, Stephen.
Operator: The next question comes from Matthew Erdner of Jones Trading. Please go ahead.
Matthew Erdner: Hey, good morning, guys. Thanks for taking the questions. Can you expand on the hospitality loans that you originated this quarter in terms of LTV, geography? And then what your overall thought is on that sector going forward given the migration of the Dallas loan to a 4?
Michael Comparato: Yes. The Dallas loan, that was a pre-COVID origination. Repeat client of ours that has – we have done probably close to a dozen loans with. They had done the right thing through the totality of COVID. I mean paid us down substantially along the way, contributed to equity, kept going into their pockets. They just kind of said no mass. I think that the issue that we are dealing with on that specific asset is more a micro market locational issue than it is a broader commentary on the hospitality market. Generally speaking, I think we have seen hospitality perform exceptionally well. We have seen leisure-oriented hotels kind of blow through peak RevPAR numbers from 2019. Performance has been great. The business-oriented travel segment is still slow to recover.
