Bob Foley: I think Doug’s earlier comment about mixed signals in the market, I think, sort of highlights this particular point, which is demand by banks to provide financing is quite strong. I mean, we have a ton of inbound inquiry from our existing counterparties, about borrowing more from them. The nature of the financing that they’re providing to the CRE world has clearly shifted, as Doug described. And honestly, spreads are coming in with respect to secured financing that can be obtained by lenders like us. The investment sales market for properties and the financing market for those transactions, that environment is a little more opaque and a little less clear right now, which is really the point that Doug was making earlier. So, there’s an interesting technical thing going on right now where financing costs are coming in, but loan spreads are kind of all over the place.
Operator: Our next question is from Rick Shane with JPMorgan.
Rick Shane: Thanks for taking my questions. Steve actually covered a lot of the ground I was interested in and on the facilities. One thing, looking at the extension of the Goldman facility, spread stays the same. I am curious if there are any changes to the terms that we should be aware of, any sort of refinement of the credit box going forward?
Bob Foley: No, no material changes. We pay for financing on a pay as you go basis and Goldman has been another very important business partner of ours. They were actually our first credit counterparty when we were a private company. And your point about credit box, each, we’ve talked about this before. We view our liability; our portfolio liability providers and the construction of that portfolio is being as important as constructing our investment portfolio and everybody’s credit box is a little bit different. But when stitched together, what we want and what we have is a mosaic that works for our business. In the case of Goldman, we’re pretty simpatico. I wouldn’t say that there’s been a change in credit profile at all. And those decisions are made honestly on a deal-by-deal basis.
Rick Shane: And yes, obviously, given the history with Goldman, that’s a significant renewal. Look, the other question is, as you sort of change your footing and start to move back into making more loans. I’m curious, what you’re finding in the market? And is capital deployment going forward going to be idiosyncratic every quarter? We’re going to hear about some deployment and it’s going to be very much a story, hey, we found this opportunity, this is why we love it or is it going to be thematic? There is something in the market that you’re going to be targeting whether it’s a geo or property type or like I said a thematic approach to reemerging the market?
Doug Bouquard: Yes. I mean, I would say really for us at the top of the list, we do think about investing within the real estate space from a thematic lens and that’s really formed across both our debt and equity platform. One, as we think about themes, we really, I would say, are very much strong to a few things. I would say, one, we’ve mentioned our sort of bias towards housing and actually do acknowledge that again multifamily values are down from the peak, but when we can make new loans today at 65 LTV, acknowledging that V is now potentially 15% to 20% lower is, I think, a really attractive entry point. So that’s really one. I would say two from a team perspective, when you kind of get a little more granularity and you’re really out there looking at new investments, I think there’s kind of two areas that I think are particularly attractive for us to really focus on.
One is new acquisition activity is obviously going to be a big draw. I think wherever we see fresh capital coming in reflecting today’s market value, that’s attractive. And then I would say secondly, if there was a part of the market that’s probably most interesting and it really continues to be traffic in within the area where regional banks had been lending. I think that still is probably the story that’s obviously out there very broadly about banks pulling back. But acknowledging that of all the outstanding commercial real estate debt held by banks, about 75% resides in the regional banks. And those regional banks continue to typically, I’d say, not go up. And we’ve seen that in Q1 as we’re out there competing on loans. So again, really view it as a bias towards housing, one.
Second, a bias towards new acquisitions. And then as we think about capital deployment going forward, we’ve really positioned the balance sheet where we can navigate what I would describe as the sort of mixed signals that we’re getting from the market broadly. And that’s exactly kind of how we think about liquidity and really think about new investments going forward.
Rick Shane: Doug, that’s really helpful. I am curious as you start to look at multifamily, if you would just give some sort of context where cap rates were previously, where you see deals getting done today? And that’s it for me. Thank you, guys.
Doug Bouquard: Yes, sure. I mean, look, I think multifamily obviously I’d say is a very heavily debated sector right now just kind of given all the kind of right at the heart of the confluence of some of the macro trends with interest rates and inflation. The other thing that we’re seeing new transactions get done, generally speaking, have been in the sort of mid to high 5s cap rate range. That’s I think, but it feels like from a liquidity perspective as multifamily cap rates get into 6s, there is a lot of liquidity on the equity side. And I think as the cap rates get, let’s call it, inside of 5.25 is where I would say that liquidity ties up. So again, viewed as the sort of midpoint is to pick a number of 5.75 and that’s again, which allows us to be making loans from a risk perspective at stabilized debt yields in the 7.5% to 8.5% range, again, depending on the property type specifics to that certain asset.
Rick Shane: Thank you, Very much.
Operator: Our next question is from Hewett Derek with Bank of America.
Derek Hewett: Good morning. Most of the line have been covered, but just wanted to ask about how have conversations with borrowers changed all over the last month, as kind of the rate outlook has changed a bit, and kind of what you’re hearing from your portfolio borrowers?
