Good day, everyone. Welcome to the Starwood Property Trust Third Quarter 2014 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Zach Tanenbaum, Director of Investor Relations. Please go ahead, sir.

Thank you, operator. Good morning, and welcome to Starwood Property Trust Earnings Call. This morning the company released its financial results for the quarter ended September 30, 2014, filed its Form 10-Q with the Securities and Exchange Commission and posted its earnings supplement to its website. These documents are available on the Investor Relations section of the company's website at www.starwoodpropertytrust.com. Before the call begins, I would like to remind everyone that certain statements made in the course of this call are not based on historical information and may constitute forward-looking statements. These statements are based on management's current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. I refer you to the company's filings made with the SEC for a more detailed discussion of the risks and factors that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. And the company undertakes no duty to update any forward-looking statements that may be made during the course of this call. Additionally, certain non-GAAP financial measures will be discussed on this conference call. Our presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. Reconciliations of these non-GAAP financial measures to the most comparable measures prepared in accordance with GAAP can be accessed through our filings with the SEC at www.sec.gov. Joining me on the call today are Barry Sternlicht, the company's CEO; Rina Paniry, the company's CFO; Jeff Dimodica, the company's President; Andrew Sossen, the company's COO; and Cory Olson, the President of LNR. With that, I'm now going to turn the call over to Rina.

Thank you, Zach, and good morning. I will begin this morning by reviewing the company's third quarter results, first on a consolidated basis and for each of our 2 business segments. Following my comments, I will turn the call over to Barry, who will discuss current market conditions, the state of our business and the opportunities we see looking forward. Starwood Property Trust continues to deliver strong results for its shareholders this quarter, deploying over $2.3 billion of capital and declaring another $0.48 per share dividend. During the third quarter, we reported Core Earnings of $124.8 million or $0.55 per diluted share, which is up 8% over the $115.2 million of Core Earnings and $0.51 per diluted share that we reported just last quarter. The primary drivers behind our earnings growth were continued strong performance from both our lending business and our securities portfolio. The rally in the CMBS markets drove our GAAP earnings with $52 million of realized and unrealized gains. Our loan book continues to grow as evidenced by our significant capital deployment during the quarter. Net of repayments, our loan book grew by $300 million this quarter. Overall, the unlevered return on our target investment portfolio remained constant at 8.2% with our levered returns remaining at just over 10%. As our business has evolved, we continue to deploy capital in those assets which will generate the most attractive risk-adjusted returns for our shareholders, while still maintaining our disciplined approach to investing. As we've stated in our recent public filing, at this point in the cycle, we believe it is prudent to take advantage of some of the opportunities we are seeing in the real estate equity market, specifically, Core plus equity investments. We consider these investments to be high-quality, stable real estate assets, which contain a value-added…

Thank you, Rina. That was quite comprehensive and more thorough than we've probably done in the past. So I'd just make some comments -- and good morning, everyone. When we started this company more than 4 years ago, we were asked a question about the fate of mortgage REITs and that they hadn't performed well and they always overstayed their welcome in the cycle. We kind of promised you that we wouldn't do that. By turning to a fairly significant -- although not in the scale of our company equity investment this quarter. We are demonstrating our ability to pivot as we see credit conditions get too tight and find new ways to deploy our capital with longer duration in our typical loan portfolio. What was unique about this regional mall portfolio was the high cash on cash yield we were able to deliver, well in excess of 8%, and the overall stability and excellence of the portfolio. We participated along with 3 sovereign wealth funds that co-invested in this -- with the mortgage trust. And we'll look to do similar investments that support a high cash on cash yield with reasonable and appropriate leverage globally going forward, if there's opportunities and as they arise. So we said we wouldn't overstay our welcome, and I think that reflects some of the -- what we saw going on in the credit markets being in the business for now 4 years at Starwood Property Trust and watching these credit cycles. I think this is the fourth time spreads really tightened, and we saw underwriting standards loosen to the point where we were getting nervous. But then we have this little shock wave go through the markets, the credit markets, and a more -- financing opportunities once again opened up. So by no…

Thanks, Barry, and thanks for the opportunity. It's been an exciting first 6 weeks. Being on the Board of Directors since the company's inception, I knew this was a complex business but I didn't appreciate how much hard work and coordination goes into managing the left and right side of the balance sheet to achieve above market returns with below market risk. I knew that this company's ability to source loans given its scale and breadth was tremendous, but have come to realize that our ability to optimize financing through multiple channels and to pick the right loans is just as important. We execute 10 or so deals in a given quarter, but that's after sifting through hundreds. Working with our partners at Starwood Capital, I feel that the thing that differentiates any REIT is not in the deals that you do, but in the ones that you don't. Most loans look worse, the more times you have knowledgeable eyes spent on them, but some actually look better. This platform finds those. And it helps explain why we haven't had a loss in the portfolio since inception, as Rina mentioned. We're already benefiting from our ability to work more closely with our managers, Starwood Capital Group: our COO, Andrew Sossen; Chief Originations Officer, Christian Dalzell; Chief Credit Officer, Carl Tash and I all have [indiscernible] and the communications from the top down is not only seamless but instantaneous. In the last 7 weeks, our team has put under contract a full quarter's worth of loans by count and by volume in both the U.S. and Europe and IRRs above our average for this year. This will not always be the case. And as Barry mentioned, markets are getting harder and harder. But there are still good risk adjusted returns in the market for organizations capable of underwriting large very complex deals. And we are finding them. We have already added to our originations team, and we'll continue to grow the organization as the opportunities persist and continue to invest in our LNR franchise as well. The scale and information flow that business brings us is difficult to duplicate and continuing to harness it will be the key to continuing to grow this business.

Thanks, Jeff. I should also mention that we're going out on the road. I'll be joining Andrew and Jeff. And I don't know if Rina will be coming or Cory. But we'll be going to be New York and also to Boston in the coming weeks, and we look forward to -- I look forward to telling our story in more depth at the shareholder base. So it's been a while since I've been out. And the more you look at us, led by our best-in-class disclosure, we're grateful that NAREIT gave us a gold award for disclosure. Recognizing -- I think we're the only mortgage trust that got that award. But I think as a shareholder, it's my -- and the same way I run our company, it's no surprise that we tell you what we're doing and you can follow along, and hopefully we can continue to grow the vehicle in a very profitable manner for everyone. So with that, we're going to take questions. And for myself, for Jeff, for Andrew or Rina or Cory Olsen and the President of LNR is also on the phone.

[Operator Instructions] We'll take your first question from Jade Rahmani with Keefe, Bruyette & Woods Investments. Jade J. Rahmani - Keefe, Bruyette, & Woods, Inc., Research Division: Can you discuss trends and investment trends across the product types you're targeting? I think it would be helpful if you could provide some comments on where you are signing the most attractive risk adjusted returns? Whether it's by loan type or investment size, geography and then also on the equity investments that you're looking to make.

On the debt side, it's -- I think the larger loans continue to be the best place for us to shop. And assets that may have a transition in place, clearly, there's a tenant turnover issue. And we can lend some of the TI, which is only drawn when the tenant moves in, obviously. But if a bank won't get to the proceeds at levels they want and it's not ready for securitization immediately -- don't forget, just like in bonds and currencies the bank's aren't holding inventory. So they want to hold the real estate loan for a short period of time and then flip it out. So if there's any instance of transitioning and emptiness, associated with any kind of income asset, whether it's a distribution center or an office building or even a retail part, those are prime candidates for us to make a large loan, because they can't -- the borrower typically can't get the proceeds he wants. And we were very competitive and we can take our -- because of the cost of our lines now, we continue to look at -- to drive. It's almost a joke over here, because every time I see anyone else's credit, I say, "Are we as good as that?" So we go back and adjust our lending partnerships to make sure we have the tightest spreads available in the marketplace so we can make loans at 3 Hanover and still generate 8.5, 9 mezzanine yields. And as I mentioned, we'll find the outliers to blend our book higher. So you've seen the 8.25 roughly unleveraged yields. Lever that, however you want, but you can see here close to double digits or above double-digit yields, especially when you apply 3.75 converts -- coupons to that. Interestingly, we issued a…

Yes, the land is a fantastic piece of property based in California. And I would say A+ dirt. When it comes to residential, we have an unbelievable seat at the table, because we obviously sponsored a homebuilder that operates in Orange County and this is near Orange County in Tripoint. We also have SWAY's book which we can see how this rents for. And we have perfect knowledge. So we're very excited. And we also have Starwood Land Ventures, which is a proprietary group of former homebuilder executives who work for Starwood Capital Group and are active in California. So we have a great loan, it's home building -- land improvement and home building. It's at a very modest LTV. And I think it's 50% to 55% or something like that in the 50s. And it is Cadillac dirt and we bid on it. So we knew exactly what it was worth, we lost the bid, the 2 very well-funded, I guess you call them, equity real estate managers. And we turned around. Obviously, easy for us to finance a deal like that. And when it came available, I said go get it. We would buy it 100 times at our loan balance, 2x, roughly 2x, our loan -- our bid was almost 2x what we lent. So they're very good deals and a very attractive return on our capital. And they were really happy too. Jade J. Rahmani - Keefe, Bruyette, & Woods, Inc., Research Division: And also just lastly, the loan loss provision?

Sure. Our loan loss reserve is, as we've disclosed in our Q and our K is based on how we rank our -- each of our loans based on certain criteria. So none of our loans are impaired, as we've disclosed, but we do provide a provision based on how we rate the loan. So any loans that are rated a 4 that has certain impairment indicators, we apply a 1.5% reserve to. Any loans that are rated a 5, we apply a 5% reserve to. So it's simply a function of certain loans having more or less impairment indicators in a given period. But again, there's no impairment, it's just -- it's kind of a general provision that we take on our loan book.

It's automatic based on the rating. And the rating is done by our asset management team. And as a group, they get together and review every loan in the book accordingly. But it is somewhat subjective. What we think is a 4 or 5, to somebody else, might be a 2 or a 1. And so we were actually talking about it earlier when we were reviewing our quarter that -- how we never get anybody to use it. So it's a general slush fund, I guess you'd call it.

We'll hear next from Dan Altscher from FBR. Daniel K. Altscher - FBR Capital Markets & Co., Research Division: I was wondering if you could talk a little bit about the share buyback authorization. I think it's admirable to have it out there. I think just the way you all think that the stock is relatively undervalued or it's an attractively valued instrument right now. But how do you weigh -- I think you got your stock buyback versus some of the other things that we've been talking about earlier, the lending side or equity investments were redeploying in some maybe LNR businesses.

Yes. It's a long road, right, and it partners with our shareholders to support our stock. Because sometimes, it looked like our stock weakened in the transition, and 8.5% dividend yield, it's pretty attractive to us. So it always has to be use of funds in buying back your stock, if that's the best investment you can make. And we just issued the convert and we had some excess cash laying around. It's really, as you know -- I mean, we're telling people our stock, we think is undervalued. And we do think it's undervalued. So we weigh that against everything else we're doing at the time, and I think that's it. I mean, it's very attractive buying in a dividend yield of whatever. I think that, that level is like 8%, 7% or something. So we're looking at our own cash flow projections not just this quarter, but next year, in determining what we think is a right use of incremental cash. And it's not what we want to do. We'd rather have the stock at 28 and not buy stock. But we have to prove -- I don't know, we have to prove that in 4 years, we should be -- have a track record by now. Anyway, that's why we continue. It's not the first time we've stepped in and bought stock in our life cycle, so. And I think, obviously, it reduces the management fee. But that's fine, we're fine with that. I mean, it's a long game and we're there to support our shareholders and support our stock. Daniel K. Altscher - FBR Capital Markets & Co., Research Division: That's helpful. On the equity investments, it sounds very interesting. But is it maybe the first transaction you looked at? Or has it been one of many and this is the first one that really met the threshold of yield and attractiveness and what fits within the REIT versus maybe an opportunity fund?

We looked at many, as you mentioned, and the credit net lease business, it was a company called CapLease, which I can talk about now, which is high-quality triple net leased buildings but fully amortizing debt. So we would have a taxable income but we'd have no cash to pay the dividend, because all the cash would be going into amortize the debt. And then in 10 years, you'd have these assets more or less unlevered and you couldn't defease the debt. So there's an example of why we have the company, actually own the stock in the company. We were going to make a tender offer. But when we examine the -- I just don't do that, I don't believe in drinking your own blood. So I'm hoping that down the road, you can pay a dividend, you'll re-lever in uncertain environment 10 years from now. So we didn't do that transaction. We've looked at probably every triple net lease deal that's been out there, including some that have opted to go public instead of accepting our bid. We've looked at other equity investments. But this is really, I think, the first time that we stepped up in the scale. And frankly, it was because of the cash on cash yields here were so good out of the box. And it was such a stable asset class and the kind of assets that you want to own long term. And I'm happy. When we look at ourselves and Jeff Dishner, my partner in London, and the other members of the Investment Committee and said, "Wow. We should own this. This is great stuff to own. Would you like to own it at this level, at this yield and this IRR?" And we said, "For sure." So we'll do that.…

Cory, you want to try that?

Sure. As it relates to people rushing to the marketplace, there is a significant amount of maturities the next couple of years. So regardless of risk retention, we see a considerable flow coming into the conduit markets, and we intend to take advantage of that, both at our Starwood Mortgage Capital conduit origination business as well as B-pieces. As it relates to how capital forms around the opportunities that are created around risk retention, hard to say, at the end of the day, it's a 2-year implementation period. I think it's just safe to say that our historical approach to the marketplace, which is a very long-range approach. We look at these investments over a decade. We intend, generally speaking, to hold those assets and to retain them on our balance sheet. So what has come down is very consistent with the long-term approach of Starwood Property Trust and of LNR. And we think we will be in an advantaged position as those new rules do get rolled out.

We'll hear next from Eric Beardsley from Goldman Sachs.

As we think about the moving parts in LNR, just curious as to what percentage of Core Earnings that might be in between now and the period it transitioned to, an increase in the special servicing?

Yes. Let's break up LNR. LNR has a conduit which has been -- and I was going to mention this in my comments. It's taxed, right? That all goes into the TRS. So their impact is smaller than you might think, because they're taxed. CMBS, which is now up significantly from where we acquired the company, both because we bought and deployed capital behind the database that they have and the knowledge of the trust. And also because the book, it appreciated in value with rates coming in. That part -- portion of the business we've talked about it, that can just move over theoretically into the core book of Starwood, because its long-term holding paper. But it's still, from an accounting standpoint, has to stay in this "LNR segment." But those are readable securities and they're in the REIT. And those are not taxed, the income on that goes -- flows through directly to our income. And then Hatfield Philips is a small servicing business, they're as small as its contribution to the company. It's not that small based in Europe, it's a hidden asset of the company, it's done much better than we thought. We're working on how to deploy capital behind that platform. And then also, we didn't talk about it. You do know we own an asset called Auction.com, an interest in this asset and Google has taken an interest in the company, which is trying to transform the auction marketplace for residential houses. It's kind of a free option and obviously, value in our stock that probably nobody attributes to the stock. So someday, we'll monetize that stake, I hope, for a lot of money and make our shareholders super happy. But we don't -- we've actually taken write-downs against it, instead of write-ups, even though some of the chatter about subsequent rounds with these be massive gains for our current holding price for the position. The core servicing book, in its totality, LNR is contributing roughly 1/3 of our earnings. That's taxed, I believe, right, Rina?

Most of it is. So the CMBS -- the servicing was at 100%.

But as we reported, it's roughly 1/3. And that's taxed and untaxed. So obviously, the CMBS stuff is untaxed. But that is roughly 1/3. And we don't really look at it like that, but you can, it's the way it's reported in our financials.

So how does that progress, I guess, with the amortization? Do you have offsets in those other areas to make up for that? Or you're looking at this, the core lending segment, offsetting any decline in the earnings that you would have from LNR over the next 12, 18 months?

Let's talk about what -- just the servicing portion which has that $188 million book value today. '15 is going to be our next year in servicing and '16 and '17 will be considerably the biggest years probably LNR's likely to have ever had, but a lot will depend on where our interest rates are. And offsetting that will be the CMBS securities. So just to go over this, because it's a little -- a lot less obvious than you think. If rates come down, right, or spreads stay in and things don't default, some of the things we wrote off in the CMBS book, even the way the world's going, may have huge value. You could see massive gains in the CMBS book. If rates go up and there's more defaults, the CMBS is going to be worth less, right, because we're not going to get any excess cash flow payments in the CMBS tranches. And instead, we're going to get servicing fees and extension fees and refinancing fees and all the fees that a servicer normally gets. So we have an interesting natural hedge in place. And it's -- and for us, I mean, I don't know which one we'd rather have. I like chaos, I like higher rates. I would help our Core Earnings of the lending book, as Rina pointed out, 300 basis points would be a bonanza for us, we'd make a ton of money. By the way, rates going down doesn't impact us, because most of our loans have a LIBOR floor or, I already said LIBOR plus 25 basis points. So how much lower can they go? So it's aced, it's a free option, right? The shareholders are getting a free option on higher rates. And the natural hedge business, chaos would also allow the loan company, the loan business, to help refinance all these loans, right? So we -- that's great for us. It falls into servicing and we approach every borrower and say, "Hey, we are a one-stop solution. We know the asset because we've been servicing it, and we even commit to making you a loan in 10 seconds because we have all the data." I guess if I had to choose, I'd probably take higher rates. I guess -- my guess is we're in through what we got for a while, on low rates for longer. And Jeff DiModica was the first call that and then later, the desk of RBS. But lower longer, and it's probably the world. Because our view of the world is Europe and Brazil and China are not strong enough to pull the global economy higher right now, and the U.S. is a bright spot. But we have issues. So maybe the Republican victory last night might help. I couldn't help myself, I had to say that. But I was told to stay away from politics. But I'm smiling for a second, okay? Now we're moving on. Sorry.

We'll hear next from Don Fandetti from Citi.

Barry, I think you may have made some comments about monetizing the Conduit business. I was wondering if you could talk a little bit about the gain on sale margin trends that you've seen over the last few quarters and where you think that might go as you look out over the next year, and then the competitive landscape in that business.

So it's an interesting business because of the velocity of the turns that the group does. I think we'll probably -- I'm sorry, your query was to 10 securitizations this year, 11?

Yes, we're going to do 11. So not quite one a month.

And I'll point out that our -- the way that business works in our firm is we can give them controls. And meaning that Larry and his team have never had a loan rejected out of securitization. So they're really good at what they do. And we actually don't want to disclose the margins, but I would tell you that they've come in but the ROE is fantastic. So we allocate a small portion of our balance sheet to him for warehousing loans, and they -- you saw at the end of the quarter, I think we had $254 million of loans on the books or something like that. They just did a securitization of $181 million of them, but he's already filled up the buck with a whole other group of loans. So I mean, it just turns really fast and he's -- there, the team's quite efficient at it. And also our management is sharing in the success of the business. So the net profitability of that business to us is not what you might think. It's less than you think even though it's very valuable business for us. I mean, management has very incented, both up and down, and aligned interest with them because it actually acts the way we've chosen the structure of the business.

And in terms of your outlook on where you think margins could go, is it pretty constructive outlook or it just depends?

I mean, we're -- I would guess and Corey could comment on this, I think. But we're among the more profitable operations out there. I think it goes to reputation of the team and the comfort of the agencies with the quality of their underwriting. And so they're able to get lower subordination levels than the other guys. And the velocity that they have, I think it's really -- actually they have an office in Manhattan and I dripped into that office occasionally and there's 50 people sitting at their desks -- okay, maybe 25, all the time and just minding their business and doing their business. So very impressive business. And by the way, I mean, we will look at stuff like NorthStar, okay, their split or -- and we -- it's not lost on us that we have this servicing business. And it's not just the conduit, it's other parts of the operation. And is there a way to increase shareholder value? So our job to study all these things all the time and look at the market. We'd say, "Hey, that's a Service business. That's accorded a much higher multiple than our mortgage book might be." And we play a very important role in securitizations because we originate small deals. These guys typically do loans less than $25 million. Occasionally, they break out and do a $45 million loan. And their, actually, Starwood Property Trust Core lending business helps them sometimes. Like in one case, we wrote the mezz and they securitized on a $50 million-plus loan. We -- I think we kept the $12 million mezz and they've securitized the rest of it. That actually got us a win, the deal, because we were happy with the multifamily asset, I think. And I was very happy with the way the teams worked together to execute to be a win-win across the platform is fantastic. Makes me smile when the team works well like that.

We'll hear next from Charles Nabhan from Wells Fargo.

I wanted to get your commentary on some of the volatility and spread widening we saw subsequent to the quarter, specifically if the impact that may have had on demand and if you were able to capitalize on some of the spread widening within your CMBS book?

It's Jeff. The volatility and spread widening was relatively short-lived, which created an opportunity during it, I think, during that volatility as things blew out. Corey and his team were able to get more actives on the CMBS side. We became a more active bidder and I think we did a decent job of taking advantage of that volatility. Our convert came out at the same time while the market was very volatile. I think the market showed that being willing to have over $500 million in orders on a convert on one of the worst days in the middle of that volatility was a testament to what we were doing. But at the same time, we were investing on the other side of that and taking pretty decent advantage of it, I think, that those are the opportunities that we look for. Certainly, on the conduit side, we were forced to probably widen things out a little bit. But as we were making our loans, they were wider also. And I think we took pretty good advantage of that volatility. It's hard. It makes the day to day here hard on both sides. I don't think any of us thinks that we want that kind of volatility all year long. But it is an opportunity, and we look at it as that.

So -- and to be specific, I mean, if you were shopping for a loan during that crazy period and even today, I don't think we've gone full circle on some of these spreads. All the lenders are gapping up. They're saying, "Okay, I need 10 basis points and then we'll close." And there's no way left for them to go. But there are, on last count, I heard 38 conduits operating in the U.S. now. So it's not like it's...

Over 40.

Over 40. Well, you have a better count. So look, they have a big team. They're good at what they do. It's not a major contributor of earnings to defer on a net basis after tax. But it's good, it's another cylinder. It's just another way to grow. We've talked about once upon a time, we were doing larger loans for this business. We got out of that business because of our inability to hedge ourselves on larger loans that we're going to aim towards securitization. We've talked about whether we should go back into that business. We have to really -- that's Jeff's expertise. I can't -- I don't know anything about hedging our exposures and that stuff, but he's a master at that. So I know that we got whipsawed on the hedges we put in place on the large loan securitization business. We could do it. It's not a cylinder today, but something we'd certainly should consider. We have all the athletes to do it and then you're neck and neck with the Street. And we -- I think we've been in the business long enough now that we only -- not only do we get every call in every broker transaction of every large loan in the country, but we also work now hard, and harder probably than we have in the past, combining the relationships that started capital on the equity side. So we have partners in the hotel space that we've done, let's say, 14 individual transactions with. Our debt guy should be calling on that guy to not only finance -- finance is everything he does. And he'll be the guy of choice and we have enough room in our quotes that we can win stuff if we want to win it. And…

Great. And keeping with the topic of selectivity, are you seeing any themes in terms of the deals you're turning down in terms of property-type geography, loan size?

We just lost a big industrial quote. Really good stuff, there's huge demand for it, if it's really tight, if it's fully leased. We've never in 4 years have been able to compete there. The life company used to take those loans. So I think -- and we don't want to do a ton of construction loans. We've done some. Some have already been harvested. I consider the construction loan on Hudson Yards, one of our best loans. I think we're in that brand-new building of like $500 a foot. It's super complicated, that's how we got it. In fact, they -- the borrower called us and said, "Can you help us? Because the 5 banks are tripping over each other." We'll do some, but we're trying to move ourselves away from that. Also, the AAA Internet company that wants to build a headquarters. But the construction, they're doing in a series of buildings that would have to commit today to fund some construction that would be out many years, like 3 years out. We just don't want to do -- we could do it, but why do it? I mean, why take that risk when we have other opportunities to deploy capital? So I can't point to any trends right now, other than the same trends that have been in the business since the day we started, really, which is -- I would say one thing that's good for us. I think more people are willing to lever a little higher. Before, when the world -- everyone was nuts, scared and conservative. You'd see a guy buy a property and he might borrow 40% of the property. And so there was no play for us, because that went to a life co. I think the same guys and the…

And your last question today will come from Ken Bruce from Bank of America.

First, thank you for the updated guidance. I guess looking at that, what does that say about the fourth quarter? It seems that, that would be quite a feat for you to come in at something like $0.47 in the fourth quarter.

We gave guidance that we thought we could achieve.

You've probably already achieved it.

No. Well, I can't say that. I have these forward-looking statements and I get text by Chief Counsel and everyone else in the room. Zach was trying to get on me. But no, we gave you a narrow range, a little narrower than we have before. We've pretty good visibility, I think, into the book and to our perspective. The needs are not for additional capital. So yes, I think your conclusion is correct.

Okay. And just as we think about the move into the equity space, is that, you think, just a natural extension of the diversification that you've been thinking about over time? Or is it more a reflection of just the -- maybe the tight markets that you find from time to time? I guess I'm trying to maybe catch a little bit of a nuance between kind of what is driving you into the equity side at this point?

I worry about the credit markets getting way too tight and losing the discipline completely. When the lending side starts making quotes higher than the equity bids, it's time to exit lending. And we're not going to do that. I mean, that's not what we were created for. We have a broad mandate in our origination agreement and we're going to try to find the best routes to congested returns across the spectrum for shareholders. And that business is a really good business if you play it correctly in my 28 years of experience in the equity markets and 500 people at Starwood Capital Group today, and we can do this business easily. So we want to have -- we are not going to force feed, as we mentioned, right off the bat. We're not going to force feed and overstay ourselves in the cycle. Every mortgage REIT in history has got in trouble, getting further and further out on the risk spectrum, making sloppier and sloppier loans. We don't intend to be one of those guys. And there's 2 ways to go, right? We can say we're going to do it for mezzanines at 7. Obviously, that would impact the dividend over time. Are we better off doing that? Are we better off buying equity deals and getting better than 8 cash on cash yields with no refinancing risks or anything for the shareholders? We'll tell you when we've made that call. But we're not making that call. Our current pipeline is really good. And I look at the average of the return on equity, that the stabilized return on equity is consistent with prior experiences, not slightly better. So we'll see how this goes. We'll tell you as it progresses. But we have a global acquisition team. We have 50 people in London. We have people in São Paulo. We have people across the United States in, I think, 12 offices. We see equity opportunities, historically, we have not played in. But really good real estate, the kind of real estate people -- our shareholders should want to own. So we can do better. These IRRs are our best guesses. Also REITs don't really sell assets. So we're looking for assets that we say in 10 years, we know it'll be worth more than we've paid for them today and significantly more. And we'll do that whether it's an office building in London or a multi in the Bay Area. We're going to probably look and we're actively considering transactions, because we see a lot of them and even with the multi deal that we just were looking at. That was really beautiful stuff. Part of the discussion there also is how levered will we take those equity back. So that's...

Right. You mentioned that you'd look at all the different opportunities to enhance shareholder value. And at least there's one example of a mortgage REIT that is considering an internalization and essentially wrapping up its private equity real estate business within the public REIT. Is that something that you -- and the market seems to perceive it fairly well? Is that something that you all would contemplate? Or is there any natural differences between what you're doing at Starwood Capital and what you view as the real mandate that Starwood Property Trust would just -- would prevent that from ever being a reality?

Well, it hasn't been lost on us. There's a small bio firm in KKR that went public merging with a vehicle, which was a European-listed company. I can't understate the liquidity in our book. We have -- every loan we own we probably sell and probably above the fair market value mark. So we could trade $3 billion of cash tomorrow if we wanted to. Fundamentally, some we'd have to consider over time. It's not something that's on the drawing board right now. We'd bust the REIT status because we'd have that income, a lot of it. So -- but it is something we've talked about and have considered and of course, some of the Wall Street firms have come to us, and suggest we do. We'll see how this all works. And if it really -- what the market thinks of these things and decide if it's something to do or not do. You would -- it's complicated, right, because you have a lot of funds that have interest in real estate. Does the real estate go in, go out? Every investor have [indiscernible] going in, the investors have to approve it from many different funds, there's relative valuations between funds. If the real estate stays out, it's just a C corp, that's going to bust REIT status, so if we got a group -- it's complicated, but we'll see. I'm watching what the market thinks of one of the companies that's announced last night so...

Right. And the last question, I'm sorry, I'll cut it off after this. But you mentioned that you, you're a little perplexed about the devaluation on the stock. I think many of us might agree with that. You've done what you said you were going to do from the outset of Starwood Property Trust. The returns are quite attractive, all the things you kind of laid out. What is it that you think that the market is either discounting, or is -- what -- maybe said differently, what do you think the market needs to kind of focus on to begin to give Starwood Property Trust the proper valuation?

I think that's what our job will be on this road show coming up. I mean, I think the market is confused by LNR. It has to be that, right? Because -- and so you segment. You broke our business into 2 pieces and did a DCF on the LNR cash flow streams. And then we take our -- the market multiple on the book. We think you get to a significantly higher stock price in excess of $25. So we're going to try to outline that. And for the shareholder base, and some people will say we get it and some people will disagree. Also, we charged our team with finding ways to deploy capital at attractive rates of return on a sustainable basis for the -- forever, right, for the foreseeable future. We have a long view of the window in 2018 when some of the servicing fees roll off. They're not that huge in the scheme of things, so it's not like we can't replace them. And Corey keeps telling me they never -- we always -- we're always doing things. We're always finding ways to deploy capital, and they've proven that. And we didn't underwrite -- Cory how much capital have you put out since we acquired you? What would you guess?

Over $0.25 billion.

Right. And that doesn't include conduit originations?

No. That capital, as we've talked about, is cycling every 34 days.

Right. So we will look in -- we have technology, we have all kinds of stuff that we can monetize and we're looking at doing. And that's what we're focused on. Thanks, everyone. It's been a long call, but we appreciate your time. And have a great day and may all your stock markets just go up. Okay. Bye-bye.

That does conclude our question-and-answer session. Everyone, have a great day.