Adam Zausmer: Yep.
Tom Capasse: The – if you look at some of the larger balance peers, because of OpEx exposure, where we as a firm, both Freddie Cap and the external manager, are very negative on the sector. We think we’re only in the third inning of what’s to come in terms of the double whammy of recession on rent – on tenancy, vacancy, and then of course the work from home trend, similar to the malls in COVID. Anyway, so those ratios are running 10 to – I think sub one was north of 20%, 25%. So, anyways, I think the historic strategy we’ve had in terms of, A, small ballots, and, B, more defensive sectors like multifamily and industrial, are going to serve us well through this cycle.
Jade Rahmani: In terms of originations, did you provide any outlook for the full year by product type, which in the past is something you’ve done?
Tom Capasse: Adam or Andrew, do you want to comment on that?
Andrew Ahlborn: So, Jade, we have not provided any outlook at this point.
Jade Rahmani: Would you care to provide any parameters maybe broadly on the SBC side, on the SBA side?
Andrew Ahlborn: Yes. On, the SBA side, I think you’re going to see continued growth. Our large balanced program is up year-over-year, and suspect originations there come in around $400 million for the year. Add into that, our small loan SBA program is seeing exponential growth year-over-year. It was up three times. I suspect they will double volume headed into next year as well. So, I think in the SBA base, you’re going to see 10% to 20% growth from where we finished the year at 500. Adam, I’ll let you comment on the CRE out there.
Adam Zausmer: Yes. And then on the CRE side, again, with redeploying capital that we get from Broadmark into the multifamily sector, I’d expect to do somewhere between $3 billion to $4 billion of new originations and acquisitions in the CRE business.
Tom Capasse: And I would just add to that, Adam, we are definitely going to look to increase significantly our acquisition volume as well because of the – we just tend to – one of the benefits of our – Jade, as you know, of our platform, when we look at scarce capital and retain yields, we’ll pivot. If we’re not getting what we want in terms of let’s say a 15 on the direct lending, and there’s a 17 available on buying bank portfolios, then we allocate the capital to the acquisition business, which now there’s a significant pipeline that we expect over the next 24 months as this cycle unfolds.
Jade Rahmani: Thanks for taking the questions.
Operator: Our next question is coming from the line of Matt Howlett with B. Riley. Please proceed with your questions.
Matt Howlett: Hey, guys. Thanks for taking my question. Congrats on the deal. You certainly have the playbook on making these things work. As someone that covers Broadmark, I just want to address the unfunded commitments. I think they were around $0.5 billion last check. Just curious how you looked at those.
Tom Capasse: Andrew.
Andrew Ahlborn: Yes, certainly. As we underwrote the DL, considered those future funding commitments and our ability to not only redeploy the organic liquidity that we expect off the portfolio, but also the additional leverage to increase cash reserves post transactions. So, their future funding commitments are slightly different than ours. And then, of course, you have the takeout into our existing CLO program. So, it means carrying higher cash reserves on the balance sheet as we move through the transaction.
Matt Howlett: Okay. So, you just have the higher cash. Okay, got it. And just, but you get the discount off, so you’ve got the discount in there. You assume the debt here, which is attractive. I think they had about $100 million of REO. I mean, that stuff – I mean, update on where that stuff is in terms of getting off that – getting out of that stuff sooner?
