Apollo Commercial Real Estate Finance, Inc. Q1 FY2025 earnings call

• Loan originations: Q1 had $650 million in new loans, with forward pipeline including US and Europe. Post-quarter end, ARI completed over $700 million in additional transactions, bringing year-to-date volume to $1.5 billion. • Loan portfolio: At quarter end, portfolio was 48 loans totaling $7.7 billion. No additional asset-specific seasonal allowances. • 111 West 57th: Strong sales momentum continued, with $45 million in net proceeds from three unit closings in Q1, and subsequent closings reduced ARI's net exposure. • Balance sheet: Active with secured borrowing, upsized facility with J.P. Morgan by $500 million to $2 billion, extended maturities on facilities. Ended quarter with $218 million in liquidity.

ARI's first quarter saw $650 million in new loan commitments. Originations were for US properties, with three of four Q1 transactions being residential loans and one being a data center construction loan. At quarter end, ARI's portfolio had 48 loans totaling $7.7 billion. ARI benefited from Apollo's over $5 billion in Q1 originations, and year-to-date volume including add-on funding was $1.5 billion.

• Expect $1.5 billion or more in repayments this year, with pacing on focus assets potentially increasing that. • New deployments to be funded by repayments from existing loans or resolution of focus assets, with modest uptick in leverage as capital is redeployed.

• Macroeconomic risk: Broad recession presents greatest risk to real estate recovery. • Specific asset risks: Losses tied to 111 West 57th and Liberty Center assets, with expectation to sell Liberty Center later in the year and ongoing sales progress at 111 West 57th.

Q: Rick Shane asked about the cadence of realizing losses and capital redeployment.

A: Stuart Rothstein said specific CECL is tied to 111 West 57th and Liberty Center, expecting to sell Liberty Center later in the year and confident in reserve positions.

Q: Doug Harter asked about market impacts on loan repayments and asset class vulnerability.

A: Stuart Rothstein said market is still functioning, with concern about hospitality in recession, but multifamily has tailwinds.

Q: Tom Catherwood asked about 111 West 57th income recognition and portfolio growth.

A: Stuart Rothstein said income kept off to avoid self-payment, and expect $1.5 billion in repayments with active deployment.

Q: Jade Rahmani asked about various assets and 111 West 57th balance.

A: Scott Weiner provided updates on Berlin office, Chicago office, Manhattan office, Cleveland multifamily, and explained 111 West 57th balance increase and sales progress.

Q: Harsh Hemnani asked about funding incremental deployments.

A: Stuart Rothstein said new deployments funded by repayments or resolution of focus assets, with modest leverage increase.