Good morning. My name is Rob, and I'll be your conference facilitator. At this time, I'd like to welcome everyone to Granite Point Mortgage Trust's Second Quarter 2025 Financial Results Conference Call. [Operator Instructions] Please note, today's call is being recorded. I would now like to turn the call over to Chris Petta with Investor Relations for Granite Point.

Thank you, and good morning, everyone. Thank you for joining our call to discuss Granite Point's Second Quarter 2025 financial results. With me on the call this morning are Jack Taylor, our President and Chief Executive Officer; Steve Alpart, our Chief Investment Officer and Co-Head of Originations; Blake Johnson, our Chief Financial Officer; Peter Morral, our Chief Development Officer and Co-Head of Originations; and Ethan Lebowitz, our Chief Operating Officer. After my introductory comments, Jack will provide a brief recap of market conditions and review our current business activities. Steve Alpart will discuss our portfolio, and Blake will highlight key items from our financial results and capitalization. The press release, financial tables and earnings supplemental associated with today's call were filed yesterday with the SEC and are available in the Investor Relations section of our website, along with our Form 10-Q. I would like to remind that remarks made by management during this call and the supporting slides may include forward-looking statements, which are uncertain and outside of the company's control. Forward-looking statements reflect our views regarding future events and are subject to uncertainties that could cause actual results to differ materially from expectations. Please see our filings with the SEC for a discussion of some of our risks that could affect results. We do not undertake any obligation to update any forward-looking statements. We also refer to certain non-GAAP measures on this call. This information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. A reconciliation of these non-GAAP financial measures to the most comparable GAAP measure can be found in our earnings release and slides, which are available on our website. I'll now turn the call over to Jack.

Thank you, Chris, and good morning, everyone. We would like to welcome you and thank you for joining us for Granite Point's Second Quarter 2025 Earnings Call. First, before turning to our results, we would like to express our condolences to the families and friends of those who lost their lives at 345 Park Avenue last week. Our thoughts are with all who were impacted, including our friends and colleagues at Blackstone, Rudin Management, KPMG as well as the NFL and the heroes of the New York Police Department. We share a particular grief and heartbreak over the passing of Wesley LePatner. Many of us at Granite Point have known her and her family for decades. Having worked extensively over that time with Wesley's father, Larry Mittman, as well as her brother Jordan and came to include the family as friends. The passing of such an exceptional and giving person is a tremendous loss to all who knew her. Now turning to our earnings. During the first half of 2025, we saw continued improvement in sentiment and liquidity in the commercial real estate market as refinancing activity notably increased and sales transaction volume picked up with more and more participants willing to transact in the market. Although the commercial real estate lending market recovery had initially stalled post deliberation day with credit market spreads widening due to the uncertain impact of looming tariffs. Since then, there has been a resumption of the recovery with the stabilization of spreads and associated improving liquidity. CMBS issuers have been originating at a strong pace. Commercial banks are actively pursuing warehouse lending opportunities, and the transitional floating rate lending market has continued to strengthen across most property types with the ability to lend at a reset basis. So far in 2025, we have continued…

Thank you, Jack, and thank you all for joining our second quarter earnings call. We ended the second quarter with $1.9 billion in total loan commitments and $1.8 billion in outstanding principal balance with about $78 million in future fundings, which accounts for only about 4% of total commitments. Our loan portfolio remains well diversified across regions and property types and includes 47 investments with an average UPB of about $39 million and a weighted average stabilized LTV of 65%. As of June 30, our portfolio weighted average risk rating improved slightly to 2.8 due to ongoing loan resolutions and no negative credit migration during the quarter. The realized loan portfolio yield for the second quarter was 7.1%, which excluding nonaccrual loans, would be 8.2% or 1.1% higher. The prior quarter realized loan portfolio yield was 6.8% and excluding nonaccrual loans, was 8.5% or 1.7% higher for that quarter. The improvement in our overall loan yield of about 30 basis points is due to the reduced proportion of nonaccrual loans in our portfolio. We had an active second quarter of loan repayments, partial paydowns and resolutions totaling about $128 million, including 2 par payoffs of office loans and funded about $13 million on existing loan commitments resulting in a net loan portfolio reduction of $115 million. During the second quarter, we successfully resolved 2 nonaccrual loans totaling about $132 million in UPB. As previously disclosed, the $79 million loan secured by the Baton Rouge mixed-use office and retail property was resolved via a property sale, resulting in a realized write-off of about $21 million, which was previously reserved for through the recorded allowance for credit losses. The second resolution also previously disclosed, was a $52 million loan secured by a Minneapolis hotel loan, which was resolved via a loan restructuring…

Thank you, Steve. Good morning, everyone, and thank you for joining us today. Turning to our financial results. For the second quarter, we reported a GAAP net loss attributable to common stockholders of $17 million or negative $0.35 per basic common share which includes a provision for credit losses of $11 million or negative $0.23 per basic common share, mainly from an increase in our general reserve due to less favorable macroeconomic forecast in our CECL model relative to the prior quarter. Distributable loss for the quarter was $45.3 million or negative $0.94 per basic common share, including write-offs of $36.1 million or negative $0.75 per basic common share, which were previously reserved for. The write-offs were related to 2 nonaccrual loan resolutions that Steve discussed earlier. Our book value at June 30 was $7.99 per common share, a decline of about $0.25 from Q1 which is primarily due to our GAAP net loss to common, partially offset by the accretive share buybacks, which we estimate benefited book value by roughly $0.15 per common share. Our aggregate CECL reserve at June 30 was about $155 million as compared to $180 million last quarter. The $25 million decline in our CECL reserve was driven by $36 million of write-offs related to the 2 resolutions partially offset by an increase from provision for credit losses of $11 million, primarily from the change in our general reserve. Approximately 63% of our total allowance are about $98 million is allocated to individually assessed loans. With the one resolution that occurred subsequent to quarter end, we expect to recognize a realized write-off of approximately $19 million, which we reserved for through a previously recorded $23 million allowance for credit losses and as a result, we expect to recognize a GAAP benefit of approximately $3 million…

[Operator Instructions] Our first question comes from the line of Doug Harter with UBS.

It's actually Marissa Lobo on for Doug today. On the topic of revolution of remaining assets, could you share your outlook on the 4 loans that are in the 4 rated bucket as well? And any thoughts on timing of resolution there?

Marissa, it's Steve Alpart, good morning. Thanks for joining the call this morning. So with respect to the 4 that you asked about, I would say, high level, they're all behind on business plan or affected by the local market or other factors. We're monitoring each of them. We're actively working with each of the sponsors similar to the 5-rated loans that we just talked about, we're focused on resolving all of them as soon as possible. The timing is hard to predict. 2 of them are secured by nicely renovated office assets with strong sponsors where the leasing has been slow, but we are seeing positive leasing trends here in Manhattan, and we're seeing that particularly happening in Manhattan. There's a multifamily deal in Atlanta. Let's face some market headwinds. There's a new property manager, we've seen an uptick in occupancy. The fourth one is a hotel in the Phoenix-Tempe MSA. So they're all on different schedules. We're working with all the sponsors. In the case of the hotel, the sponsor is currently exploring a recap or a sale. So I guess, highlight --

This is Blake. Thank you for the question. Yes. So the general reserve went up roughly around $11 million during the quarter, and the primary driver here was an update to the actual economic forecast that we use in our CECL model. So we use a model developed by Trepp and the actual forecast were less favorable relative to the previous quarter. And the primary driver for that was actually a decrease in what their expectation is for the CRE price index.

The next question is from the line of Jade Rahmani with KBW.

Can you comment on your outlook for originations. Do you plan to restart originations in the third quarter or in the fourth quarter any quantum of magnitude? And then for next year, what would you expect full year originations to look like?

Jade, it's Steve. Thanks for joining the call. So great question. As we just said in our prepared remarks, we are expecting to return to our core lending business and restarting origination efforts as we get into the end of the year. Early next year. We are seeing very interesting, increasing attractive investment opportunities. We want to begin to regrow our portfolio really in 2026. We also said that the timing and the pace will be dependent on asset resolutions, repayments, REO sales. So the exact timing is hard to predict. But based on what we know today, we expect to start quoting in the fourth quarter and start closing new loans, possibly late this year, more likely probably early 2026. As I just mentioned, the exact timing, we'll kind of assess as we get later in the year, into later in the third into the fourth quarter. So that's the timing. Jack, do you want to take 2026 forecast?

Jade, it's Jack. I'm sorry, I got a sore throat and head cold. My voice is a little scratchy. Yes, we will be balancing various uses of capital through a number of things, but we are going to lean into more the origination side. And I think it's -- give you the ballpark and I'd say we'd be doing $750 million and $1 billion in originations through the course of end of '25 into the end of '26.

Wow, that's great. And then just broadly speaking, what trends are you seeing in the outside of your focus list assets, your watch list assets in the office portfolio? I mean do you expect further deterioration in some of those office properties? Or is your view more positive and you feel like you've identified the issues and you're maybe seeing an uptick in prospects for that portfolio? Just a broader comment on trends there.

Jade, it's Steve again. So I think you're asking about our specific assets. So I'll kind of lean into that. So we're obviously very focused on this, just given the headwinds in the sector. We are seeing, I guess, I would call a generally slow but steady improvement in office leasing in many markets. We're seeing capital slowly returning to the sector, particularly in the debt markets. The tariff impact seemed like it had some impact on tenant decision-making. So I guess that feels like that's a bit of an overhang. But it seems to us that the sector is pushing forward. Before the tariff announcements, we have been seeing a lot of momentum in return to office mandates. That was obviously helping leasing activity. We were seeing a bit of a pickup in sales activity, initially more in the AA+ part of the market in many markets. Despite the hiccup that we saw at Liberation Day, that trend seems to be continuing. So I guess I would characterize it as slow but steady progress. Our portfolio continues to be very diversified. Fortunately, we're not in most of the markets that are the most impacted, but none of that is to say that there's not challenges ahead. So this is a big part of our focus. Most of our assets, I would characterize as Class A or recently renovated, so we feel like that the product that we have in our portfolio is the right product. I guess I mentioned the debt market rebounding is helpful in terms of liquidity, in terms of resolutions. So we're -- we're encouraged with the progress. We're encouraged with the reduction in the 5-rated loans. We have more work to do, and that will be a focus in the next couple of quarters.

Our next question is from the line of Chris Muller with JMP Securities.

Nice progress on the resolutions. So I guess piggybacking on Jade's question on new lending, how long does it take to rebuild that pipeline? And are you guys actively looking at loans right now so that when you make that decision to start new lending, you can kind of hit the ground running?

Great questions. We have a big network of borrowers and brokers. So we're in touch with them. We're also very direct and upfront with our counterparties. So we're not putting out quotes just to miss. So we're in touch with the market, but we are currently not actively quoting. I think I mentioned on our prior question that we would expect to begin quoting later this year, most likely in the fourth quarter. As far as how long it takes to kind of turn the engine back on, I don't think it's a switch, but we have a whole -- most of the team is here, right? So we have all the contacts, all the relationships. So it will take a little bit of time, but it's not -- it's not flipping a switch, but it won't take months and months, right? So it's just a matter of doing outreach. We're going to be very targeted on what we're looking for. So it will be a short process, I think, to get that up and running.

Got it. And then I guess, given the comments about expected portfolio decline in the back half of the year, is it likely that distributable EPS ex losses comes in below the dividend until you guys start originating again?

Chris, this is Blake. Yes, I would expect the actual DE to be below the dividend for just a period of time until we start actually rebuilding our book. So we will continue to see it below for a while.

At this time, I'll turn the floor back to Jack Taylor for closing comments.

Well, thank you, everybody, for joining us. We are very pleased with our progress, and we are on track to continue that. The markets remain uncertain as we all are aware, but it is on a reliquefying basis and a healing basis that we intend to move forward with the market progress itself and also our own efforts of our team working very hard to enable this progress. So thank you for your time and attention today. Thank you.

This will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation. Have a wonderful day.