Oct 30, 2026 earnings call — Dividend suspended to preserve liquidity
Suspended quarterly common dividend to preserve $31 million a quarter and target around $700 million cash by Q1 end to repay the $275 million unsecured debt maturing in March.
Revenue $0.1B (est $0.1B) · EPS $-0.04 (est $0.04)
Key quotes
"With that in mind, our Board has decided to suspend the quarterly common dividend effective immediately, which will preserve $31 million a quarter or $125 million in annual cash flow."
"We have a $2 billion of this book we have been aggressively working through with the goal of restructuring and resolving approximately $400 million to $500 million of loans a quarter."
"The new CLO was an $825 million vehicle with pricing of 170 over an 88% leverage with a 2.5-year replenishment period."
Analyst Q&A 5
REO sale and liquidity plan
Q (Christopher Muller · Citizens): They asked if the $35 million REO line item was just a plug and whether the company could sell more REO if needed. They also asked if foreclosure activity would slow and what 10-year yield would restart market activity.
A: Management said the $35 million relates to one specific asset with a signed contract and permit approval and they expect it to close in November or December. They said they have about $500 million of REO on the books, expect to take more loans back and target taking back and disposing of about $225 million each, so REO should remain roughly flat by year-end. Management also said higher rates paused activity for 30–90 days, values may be 10% to 20% lower, but they expect momentum to return and plan to resolve assets over the next 4 to 6 quarters.
multifamily value drops and liquidity needs
Q (Richard Shane · JPMorgan): First, how much have multifamily prices fallen for Class A versus B/C and how that affects resolving the portfolio. Second, how much working cash they need and ability to handle the next maturities later in the year.
A: Management said Class A values in weaker markets can be down substantially more than 5%—Ivan suggested Class A could be down 15% to 25% in some markets—and that impacts portions of their portfolio by roughly a 5% to 15% range overall. On liquidity, management said suspending the common dividend frees up cash and they expect to generate additional capital from repayments, dispositions, and reducing forward funding; they see a path to generate $150 million to $200 million of additional capital before October. They said their target operating cash range is about $350 million to $450 million.
"I think we see a path that if it's early, but we see a path that after the March payoff, that we could generate $150 million to $200 million of additional capital before October." — Paul Elenio (CFO)
SFR loan stress and capital options
Q (Jade Rahmani · KBW): Why did special mention loans in the single-family rental business increase and what will happen to them? They also asked about using warrants or private credit to raise capital, selling part of the GSE agency business, and how much CapEx is needed on REO to monetize.
A: Management said special mention rose due to elevated delinquencies and lower values, but they view special mention as less concerning than substandard and doubtful. They said they will evaluate all options and alternatives for capital, including the types of actions mentioned, and they have many tools and discuss them with bankers. On the GSE agency business, management said they have not considered selling an interest but it is a valuable, cash-generating franchise; on REO CapEx they said it varies by asset and they spent about $8 million to $9 million in the quarter.
"We haven't considered selling an interest, but we definitely have a very, very valuable franchise, which produces a lot of cash flow." — Ivan Kaufman (CEO)
REO sale timing and occupancy
Q (Gabriel Poggi · Raymond James): If rates stay around the high 4s to 5% zone, how are they thinking about liquidity beyond March and what is the clearing price for REO/NPLs if they must sell quickly? Also, what is average occupancy for REO assets?
A: Management said they are focused on a 12-month execution to allow orderly dispositions and avoid fire sales, which gives time to sell REOs or loans without taking distressed pricing. They said if rates fall it gets easier, and if rates rise meaningfully it becomes tougher, but their guidance is what they think can be accomplished orderly through March and then the next period. For occupancy, management said the details are listed in their 10-Q filings and they report vacant versus occupied levels there.
"We're really looking for a 12-month execution, which gives us time to do an orderly disposition of our REOs without having to fire sale them and try and get a maximum return." — Ivan Kaufman (CEO)
originations and preferred dividend
Q (Crispin Love · Piper Sandler): Why did they fund nearly $370 million in SFR originations during the quarter instead of cutting originations to preserve liquidity? And is there any update or plan regarding the preferred dividend?
A: Management said about $194 million of the quarter's SFR fundings were drawdowns on previously committed loans and the rest were new originations; they need a pipeline to fill their CLOs and can place loans into CLOs or agency takeouts as they stabilize. They said SFR is their most attractive business and they will be selective about using cash versus CLO funding. On the preferred dividend, management said they evaluate all items relative to liquidity; it was not discussed at the recent Board meeting but remains a tool they could consider going forward.
"So we always need the pipeline of business that we have to fill that CLO." — Ivan Kaufman (CEO)