TPG RE Finance Trust, Inc. Q4 FY2025 earnings call

• Broader economic backdrop supports real estate investment activity, with capital allocation towards real estate credit.
• 2025 was an important turning point with new investments, growth in earning assets, and distributable earnings outearning dividend.
• Fourth quarter investment active, over 90% new originations with repeat borrowers.
• Liability side grew lender relationships, issued two CRE CLOs in 2025.
• Focus on continuing to build on success in 2026, with plans for net asset growth, increasing leverage ratio, and utilizing untapped liquidity.

2025 saw TPG RE Finance Trust close $1,900,000,000 of new investments, with a 25% year-over-year growth in earning assets. Distributable earnings were $0.97 per share, outearning the dividend. In the fourth quarter, $927,000,000 of new loans were closed, 62% multifamily and 38% industrial. Full year 2025 originated 20 loans with total commitments of $1,900,000,000, received $987,900,000 in loan repayments. Net assets grew from $3,300,000,000 to $4,100,000,000 (25%). Loan portfolio was 100% performing, risk rating unchanged at 3.0. Liability structure 82% non-mark-to-market, cost of funds declined 18 basis points to 1.82%, leverage increased to 3.02 times.

• Expect continued active origination pace in 2026.
• Target leverage ratio in 3.5 to 3.75 times range.
• Plan to continue selling down REO assets in 2026.

Refer to the Risk Factors section of the company's Form 10-K for discussion of risks affecting results.

Q: Congrats on strong quarter. Any thoughts on origination pace in 2026?

A: Pipeline is robust, seeing activity across property types and regions, with many five-year loans coming due and borrowers seeking new financing.

Q: Spreads on new loans below portfolio average, will it continue?

A: Combination of concentrated focus on multifamily and industrial with LTVs under 65%, cost of funds moving in line with loan spreads despite tighter spreads.

Q: Talk about target leverage.

A: Target 3.5 to 3.75 times, close to full investment.

Q: REO assets?

A: Sold two office assets last year, 2026 expected to be attractive year to continue selling down REO.

Q: ROE target as function of SOFR?

A: Generally achieve ROE in excess of SOFR plus 5%, relevant business model with back leverage market health.

Q: Stock trading at discount to book, closing value gap?

A: Focus on maximizing shareholder value, TPG platform evaluates opportunities for growth.

Q: Industrial exposure trend in 2026?

A: Industrial exposure has increased, target level around 25% to 30%, will assess market at that juncture with marginally more growth expected