Good morning, and thank you for joining us today. Ladder had a strong third quarter.

We generated distributable earnings of $44.7 million, or 35 cents per share, with modest adjusted leverage of 2.5 times. Results included a $31 million gain on the sale of our largest net lease asset, an office campus in Jacksonville, Florida.

The sale provides another clear example of unlocking value above our cost basis in the real estate portfolio. We are executing the plan we laid out at the start of the year, and the quarter reflects it.

Three things stand out this quarter. Book value increased, our loan portfolio is predominantly new vintage with limited legacy loans, and we're well positioned for rising rates.

Each one supports our earnings going forward. First, book value.

Our undepreciated book value per share did not just hold steady this quarter, it went up, rising to $13.50 from $13.44, driven primarily by the gain on sale of the Jacksonville office campus. That increase builds on book value that has held firm since the end of 2022, reflecting the strong credit performance of our portfolio.

The Jacksonville sale, along with the full payoff of our largest legacy office loan in Miami during the second quarter, is the latest proof. Second, our loan portfolio is new vintage.

Approximately 90% of our loans have been originated since late 2024. They were underwritten in a higher-rate environment at conservative loan-to-values on reset basises.

We believe that positions the portfolio well for today's rates and gives us room to keep growing it. Third, we are well positioned for rising rates.

Over 50% of our debt is fixed-rate, so as our floating-rate assets reset higher, our income rises while the cost of that debt stays the same. As the only investment-grade-rated commercial mortgage REIT with senior secured assets and modest leverage, our model is cycle-tested.

Ladder has been in business for 18 years, public for 13, and a bond issuer for 14. We are middle market by design, our average loan size is about $30 million, and our average investment size is about $15 million.

That granularity and diversification limit our exposure to any single asset, sponsor, or market, and we believe is one of the reasons our book value has remained stable, in addition to our clear alignment of interest with high insider ownership. Investment activity.

During the third quarter, we stayed selective as rates rose. We made $703 million of new investments, including $481 million of predominantly AAA-rated securities at attractive yields, and seven new balance sheet loans totaling $222 million.

Net of payoffs, sales, and amortization, our combined loan and securities portfolios grew by approximately $570 million. Year-to-date, we've originated $1.4 billion in new loans, already matching our 2025 volume, and our loan portfolio has grown over 50% in the trailing 12 months.

Balance sheet loans now make up approximately half of our total assets. Our goal is to keep growing that share over time, but we will stay flexible.

When higher rates slow lending activity, as they began to in September, we will put capital to work where we see the best risk-adjusted returns. Brian will talk more about that.

That said, with ample liquidity and payoffs expected to remain light in coming quarters, we are well positioned to keep growing our loan portfolio without compromising on credit. Securities portfolio.

During the third quarter, we acquired $481 million of primarily AAA-rated securities at attractive yields, and we continued buying into October. As of September 30th, our securities portfolio totaled $2.3 billion, representing 37% of total assets, with a weighted average yield of 5.5%.

The portfolio is 99% investment grade and 97% AAA-rated, with a weighted average duration of approximately three years. Because it is short duration, liquid, and largely floating rate, our securities portfolio earns attractive yields in today's market and gives us a ready source of capital to move into loans when they offer the best risk-adjusted returns.

Real estate portfolio. Ladder has consistently produced real estate and other gains on top of our carry income, and Brian will discuss that track record in more detail.

As mentioned, this quarter, we completed the sale of our net lease office campus in Jacksonville, Florida. The sale contributed $31 million to distributable earnings and generated an 18% IRR over the life of the investment.

We sold the property well above our carrying value, which highlights the value embedded in our real estate portfolio. Share repurchases.

We believe our stock is undervalued. During the third quarter, we repurchased $8 million of stock at an average price of $9.38 per share, a 31% discount to our undepreciated book value of $13.50 per share.

Repurchases at these levels are accretive to book value, and alongside loan growth and real estate gains, they remain one of the ways we create value for shareholders. In closing, this quarter showed our plan at work.

Our loan and securities portfolios grew. We realized a meaningful gain in our real estate portfolio, and our floating-rate assets earned more while the cost of our fixed-rate debt stayed the same.

Our plan for the coming quarters is unchanged: grow our loan portfolio, deploy capital where we see the best risk-adjusted returns, and realize gains across our businesses, all with the credit discipline that has always defined Ladder. We believe these levers will drive higher earnings, support our dividend, and create long-term value.

Finally, as promised, we've begun taking our story directly to shareholders, and will continue those conversations in the coming months. Our message is simple.

Management and board own 13% of Ladder and are collectively our largest shareholder group, we're focused on the same things you are: protecting principal, growing earnings, and building long-term value. With that, I'll turn the call over to Paul.

Thank you, Pamela. Good morning.

In the third quarter, Ladder generated distributable earnings of $44.7 million, or 35 cents per share. Excluding a realized loan loss previously reserved for, our third quarter earnings were 38 cents per share.

Our balance sheet remains strong. We maintained modest leverage and a resilient investment grade capital structure, with unsecured debt representing 69% of our total debt at an attractive cost of capital.

As of quarter end, our adjusted leverage ratio was 2.5 times, and we maintained robust liquidity of $784 million, including same-day capacity on our unsecured revolver. In addition, we held $1.2 billion of unencumbered, primarily AAA securities.

Our $1.25 billion unsecured corporate revolver continues to be a valuable asset, allowing for funding flexibility with same-day liquidity, driving our ability to execute our capital deployment strategy. Alongside of our revolver, our access to the investment grade unsecured corporate bond market allows us to fund our growth with long-term, fixed-rate unsecured debt.

We have been monitoring the markets closely, and expect the unsecured debt market to continue to be a meaningful source of capital for Ladder. As Pamela mentioned, rising rates this quarter highlighted the benefit of how we finance our balance sheet.

As of September 30th, 57% of our debt was fixed-rate, primarily unsecured corporate bonds, with a weighted average coupon of 5.3%. This is complemented by 92% or $4.8 billion of our interest-earning assets being floating rate.

Based on our balance sheet as of quarter end, we estimate that each 25 basis point increase in SOFR adds approximately $0.01 per share per quarter to our distributable earnings. Our unencumbered asset pool represented 73% of total assets as of quarter end September 30th.

88% of this pool is comprised of first mortgage loans, investment grade securities, and unrestricted cash. As of September 30th, Ladder's undepreciated book value per share was $13.50, which is net of $0.35 per share of CECL reserve established.

In the third quarter, we repurchased $8.2 million of common stock, or 871,000 shares, at a weighted average share price of $9.38. Year-to-date in 2026, we've repurchased $29.6 million of common stock, or 3 million shares, at a weighted average price of $9.89 per share.

As of September 30th, $83.8 million remains outstanding on Ladder's stock repurchase program. Overall, we continue to believe in our book value, and we'll seek to continue to opportunistically utilize our buyback program while our stock is trading at a meaningful discount.

In the third quarter, Ladder declared a $0.23 per share dividend, which was paid on October 15th, 2026. Going forward, we believe our largely floating-rate asset base, fixed-rate debt, and continued loan growth will support a durable dividend.

Turning to credit quality. As of September 30th, we had two loans on nonaccrual with a combined carrying value of $61 million.

The first, with a carrying value of $51 million, is collateralized by a hotel in Los Angeles, California. The second is collateralized by an office property in Minneapolis, Minnesota.

We expect to take ownership of that property in the fourth quarter. In anticipation, we charged off $3.5 million of an existing CECL allowance associated with that loan, bringing our carrying value to $9.9 million, or $67 per square foot.

As of September 30th, our CECL reserve was $44 million, or $0.35 per share, which represents 1.48% of our loan portfolio, and takes into consideration current market conditions, including the rise in interest rates, as well as the fact that 87% of our loan portfolio was originated since late 2024 at reset values. We continue to believe this reserve level is adequate.

As of September 30th, our securities portfolio totaled $2.3 billion, with a weighted average yield of 5.5%. Notably, 99% of the portfolio is investment grade, 97% was AAA-rated, with 96% being floating rate, and a weighted average duration of approximately three years, underscoring its high credit quality and overall liquidity.

During the quarter, we recognized a $4.5 million loss in distributable earnings on a legacy fixed-rate CMBS with no impact to book value as the loss was previously recognized through our other comprehensive income. As previously stated, as of quarter end, over 50% or $1.2 billion of our securities portfolio remained unencumbered, complimenting our $784 million of same-day liquidity.

We believe that this combined broad access to liquidity reinforces the strength of our balance sheet and positions Ladder well to continue to selectively originate and grow our loan portfolio to drive future earnings growth. Our $900 million real estate segment continued to generate stable net operating income during the quarter.

The portfolio includes 148 net lease properties, comprised primarily of investment grade credits committed to long-term leases with an average remaining lease term of 6.4 years. As noted, we sold our largest net lease property in the third quarter, the office campus in Jacksonville, Florida.

The sale contributed a $31 million gain to distributable earnings and produced a GAAP gain of $66 million. The difference between the two reflects the recapture of depreciation and amortization previously recorded on the property and is why we measure our real estate and our book value at an undepreciated basis.

For further details on our third quarter 2026 operating results, please refer to our earnings supplement presentation available on our website, as well as our quarterly report on Form 10-Q, which we expect to file in the coming days. With that, I'll let Brian take it from here.

Thanks, Paul. In the third quarter, interest rates moved quite a bit higher, especially in September.

This abrupt increase in global interest rates will undoubtedly put the brakes on a lot of refinancing activity. In addition, we are seeing many buyers of assets going back to sellers requesting lower purchase prices due to the recent spike in borrowing rates.

Knowing that both of these items would slow origination pipelines, we pivoted to acquiring more securities, $481 million in the quarter, as general market volatility created a higher-yield environment for these high-quality investments. After this week's inflation statistics were released, market sentiment now expects that we're in for another 25 basis point hike from the Fed before year-end.

As Paul said, our balance sheet is constructed to benefit from this kind of market change with incrementally higher earnings per share as the Fed hikes the Fed funds interest rate. Also, as mentioned earlier, we sold our largest office asset after owning it for about nine years.

Because we identified our five largest office exposures back in 2022 when that sector was causing some consternation among investors, I wanted to point out that this is the fourth of the five assets we highlighted at that time with no losses to date from these five larger exposures. We expect the final office loan from that 2022 group to pay off in full before year-end, and I will update you when and if that happens.

We hear a lot that investors don't really value one-time gains, preferring steady carry each quarter. I'd like to mention that we don't view these occasional sales of real estate as one-time gains.

While these gains are hard to model, when we look at the last 13 years since we went public, we've made $250 million in profits on the sale of 69 assets, with $76 million of gains reported in just the last 5 years after the pandemic. Owning real estate is a high-ROE business line at Ladder, not a hobby, and we don't think it's accurate to characterize these 69 transactions as one-time gains.

I'll end today by noting that the capital markets are very volatile lately, given many geopolitical events, price shocks in the energy sector, AI capital consumption, and ballooning deficits. Given our careful construct of our liability complex with primarily unsecured corporate debt funding our business, we are prepared to take advantage of the market opportunities that invariably come up as markets churn and investors raise liquidity.

We hope to continue migrating our capital out of securities and into higher-yielding loans, but sometimes markets lead us to consider other options. While we only leverage half of our securities, those levered returns are now reaching into the 14% to 15% range for AAA CLO securities.

The other half of our securities, totaling over $1 billion of mostly AAA mortgage-backed securities, are held unlevered and yield about 5.5%. We don't view these unlevered securities as long-term investments, but rather as a source of liquidity for higher-yielding loan origination in the quarters ahead.

We're pleased to have ample liquidity in this now higher-rate environment. We don't view a 10-year US Treasury yield of 5.25% to 5.5% as problematic.

Today, with higher rates, the returns available on almost everything we invest in have improved meaningfully. We think our slow but steady deployment of capital will now pay off for our investors as we lend in the quarters ahead at higher nominal mortgage interest rates.

Further benefiting our expectation of higher returns is our mostly floating-rate asset base, primarily financed with fixed-rate liabilities. While loan originations have slowed recently due to higher rates, we still see plenty of suitable investments that would produce safe and sustainable cash flows in the years ahead.

We think we should be compared to other investment grade REITs that finance themselves the way we do, and not to highly levered mortgage REITs that are only similar to us by virtue of the fact that they own mortgages. In the year ahead, we hope to appeal to investors who appreciate an attractive dividend that pays it much more than T-bills, while they own a stock at a steep discount to book value.

Our conservative approach to leverage, along with our slightly obsessive attention to credit, should start paying off in the quarters ahead. We can now take some questions.

Hi. Good morning.

Thank you for taking the questions. I was just wondering if you could provide some detail on the retail property in Carmel, New York.

We caught that in the press release. Just any commentary or color on that would be great to hear.

Thank you.

Sure. It's an asset that we foreclosed on a few years ago.

It is under contract for sale presently. There is likely going to be a slight loss associated with it of about $600,000, which I think we took this quarter, didn't we, Paul?

Yes. Correct.

Great. Then just a second one on my end.

Just thinking about how rates have moved and obviously you leaned back into securities this quarter, just in terms of general capital allocation maybe to year end, how are you thinking about balancing share repurchases, loan originations, maybe purchasing additional securities, selling securities, just trying to figure that out, maybe with an emphasis on what might limit buybacks or what might expand your appetite to buy back more shares? Thank you.

Sure. A couple of questions in there, but I'll take them as best I can.

If I leave one out, let me know. The securities movement lately with the volatility that has taken place really since September, a couple of types of companies are being hit particularly hard because of the view that higher interest rates cause big problems.

I think there's a big difference between taking interest rates from 2% to 7% very quickly than it is from taking them from 6% to 7.5% very quickly. I think most of the noise from the 2021 and '22 era is coming through the pipeline now.

It's now about five years later, so that's what you would expect. Ideally, we would like to do nothing but loans, if the market didn't provide alternatives that were safer and pretty acceptable yield.

What made us move towards securities, as we said in my opening comments, was we saw that acquisitions were falling down. We saw contracts were not being completed.

In addition to that, things that were under contract, borrowers were seeking lower prices. When you go back to a seller, the pens go down on the lending side until you know that you have a transaction to work on.

That's added some time too. Because we knew that that was going to slow the pipeline, we began to take advantage of what was happening elsewhere in the world, which was securities were getting wider and very attractive.

With the combination of repo rates tightening while spreads on CMBS and CLO AAAs are widening, a levered yield went from around 12% to 13% to 14% to 15%. That's pretty good levels for those that are comfortable using leverage.

We kind of bifurcate our book into 50% of the book is not levered at all on securities, and the other half is. As a result of that, we're doing quite well with the levered book.

The 5.5% is more or less a parking spot. We're just hanging on to that cash until we have reason to deploy it, and opportunity to deploy it.

As I've said for a while here this year, a lot of transactions are falling out. The other thing in the backdrop that's causing a slowdown is the multifamily rents in pretty much everywhere except a couple of places like New York and San Francisco, are falling.

However, I would point out they're not falling to a point where it's problematic from a debt cycle with loans originated in 20 25, 26. They're slowing, the rate at which rents are falling, it kind of does feel like we're putting in a bottom here.

In many ways, I almost feel about multifamily like I felt about office not too long ago. Rather than make loans in that subject, I'd almost rather buy these things.

Because if you get it right and rents do stop falling and start increasing, then you're going to get paid off on your 7% mortgage. If you own the property, you could do considerably better.

I think in markets like this where there's a lot of volatility, you want to seek higher-quality everything. That may be a AAA bond, or it might be a property coming off new construction as opposed to Class C multis that you're trying to figure out how to get rid of a crime problem in.

Then I think I'll jump over to your last one. The origination side, we'd love to sell all of our securities and put that money into loan originations, but the demand just isn't there and at least the quality demand, because the acquisition pipeline has effectively evaporated because borrowing rates have gone up so much.

What would stop me on the stock buyback? We think our stock is cheap.

We've thought it for a while. Our stock, I think, is doing okay today, but if you look at this a couple of days ago, it's pretty, frankly distressing that we're unable to separate ourselves from typical mortgage REIT, ETF thinking.

We got hit in the quarter on the stock price just like a lot of others did, but we feel very comfortable in our portfolio. The biggest fear people had a while back was office.

We identified our five biggest office properties. We're not going to take any losses there.

Four of them have already paid off. In fact, we're up $30 million-something dollars on all of them.

The buyback side of things, as long as the stock stays about where it is, we'll keep buying it back, I think. Are there limits?

Of course there are. We have bonds outstanding, and we have to deal with bondholders and make sure that they understand we're not borrowing money in the corporate unsecured bond market so that we can go buy our stock back.

We may buy some back when it's fortuitous, and I don't think anybody begrudges us of that, but we have quite a big buyback allowance left, and I suspect we'll continue to pick up some of our stock each quarter as long as it's anywhere near where it is now.

Great. That was super helpful.

Appreciate you answering all the questions today.

Did I get them all?

Yes, you did. Thanks again.

Thanks, Tim.

Thank you. You noted 87% of your loan portfolio was originated since late 2024, 13% pre that date.

Do you know what dollar amount or percentage is 2021 and 2022 vintage, and what percentage of that is multifamily?

I don't know if I don't have that number, but I'll ask Paul if he does, and if he doesn't, we'll get that number back to you. Paul, what do you think?

I should have it. Craig, I don't know if you have it handy.

If not, we'll get back to you, Jade.

The main question is around stress in multifamily. I think, Brian, you said rents are continuing to go down.

What we've been hearing is that we're kind of close to a bottom in terms of new lease rent growth. Concessions are burning off, net effective rents could be set to stabilize and go up next year.

The fundamentals could be bottoming, stabilizing, set to improve at a time when capital markets are going the opposite direction. Do you expect there to be stress in the multifamily book, either at Ladder or elsewhere, and what do you think the best way to deal with that is?

I don't really suspect Ladder is going to deal with a lot of stress in the multifamily book, and the reason why is I think most of the damage that's coming out of prior originations across the United States, most of those acquisitions and loans were made in 2021 and '22. When we saw people borrowing money at very low rates and buying properties in 3-cap areas saying that rents were going to go up, without any thought towards perhaps inflation would eclipse the rent growth, we backed away from that market in '21 and '22, and if you know some of the well-known syndicators that have been associated with very large losses, we don't have any of them in our book.

What we did do early on was rather than compete with some of the houses that were really pushing hard for multifamily products cuz the CLO market was saying, "We want all multifamily," at the time. Whenever a market says we want all of something, they're usually wrong.

In those days what we did was because we have that fixed-rate liability set, we began to offer fixed-rate one- and two-year loans, and that way people didn't have to buy the interest rate cap, which was getting very expensive as the Fed was chatting up their plans for much higher rates, and I think they moved in 75 basis points a couple of times. What we did was we gave people fixed-rate loans at slightly higher rates than they would get in the floating-rate market, but we took the uncertainty of risk off the table.

Unbeknownst to us, but ultimately a good side effect, was what really fits that description is brand new apartment buildings that are in lease-up coming off construction. I don't think that most of the problems we're experiencing in the multifamily sector as a country, not at Ladder, I don't think most of it is in the brand new construction of apartment complexes.

Rather, I think it's really the property types that have lower rents and more exposure to the bottom quartile of the economic earners in the country. I think that quartile is really getting hit by high prices on everything, including gasoline.

They drive trucks to work, whereas I think the higher-end of apartment complexes, they're usually populated by people with 401(k)s who just sold a house. We're not expecting problems in our multifamily sector.

Doesn't mean we can't have it if rates go too high. I do think that you're going to see some more multis from 2021 and '22 coming out at some unusually high losses.

I don't think Ladder is going to be impacted by that in any meaningful way.

Yeah. Brian, I want to jump in.

I'm sorry, I was struggling with the mute button. Jade, 99% of our multi-family loans were originated after late 2024.

We have one legacy multi-family loan, it's a $10 million, $10.2 million loan. I do expect that it's likely we'll end up taking title to that, but we do not expect an impairment on it, but that is the only multifamily loan that is pre-late 2024.

Wow. That's amazing.

Hats off to to you all for avoiding that vintage.

You can thank our securities portfolio for that. We were able to rotate and let our loans pay off because we have the securities buffer.

I think that's something that the market overlooks from time to time.

Yes, I agree with that. I wanted to ask you about special situations, distress.

The mortgage REIT stock prices are signaling distress. Many stocks trading well below $5 a share, some close to a dollar a share.

Yet Ladder has an investment grade rating, I don't think you want to do anything to jeopardize that. Do you expect to participate in special situations, M&A, or you could alternatively look to pick off assets from some of these players that need liquidity?

How do you think this theme will play out?

I would tell you that all of the above. We would very much like to participate in merger and acquisition activity.

I think I mentioned on our last call, you would think after all of the distress that took place as interest rates spiked from the Fed, that our phone would have rang, and it never did. This quarter, we did get a couple calls, a couple bankers checking in with us on a couple of names that we know a lot of the personnel over there, and so we'd like to, however, it takes two to tango.

I don't think that we're going to be an aggressive, hostile acquirer. We do think that we offer wonderful synergies to some of these companies that might have cleaned up most of their problems, but maybe have a few more, and the stock market is just not going to allow them to get much bigger because of the amount of book value that's been lost in the story.

We're hopeful. We do participate in some acquisition, like we make loans on buildings that are purchased at half the price they were sold at 5 years ago.

We do participate in that regard, that shows up in our loan book, but you don't know where those came from. We do see the REIT sellers that we've been wondering when are they just going to sell their assets, and some of them are beginning to do that.

I do attribute that to the calendar. I think at this point we're basically 5 years from the end of 2021, and that was really what I call the killing fields.

Those are the loans that are kind of hitting the time's up button, either sell it or not. The banks are in good shape, too, they're participating in it a little bit where they're taking losses here and there, as are some insurance companies.

We're happy to participate as an owner, partner, mezz, doesn't really matter, buying companies too. Again, like I said, I don't think we're going to be hostile with anybody, but we think this is a good opportunity to pick up high-quality assets.

If we can drift towards brand new properties that are in lease-up, or maybe one to five years old now, that is a much more attractive entry point than buying garden apartments in Dallas.

Okay. Appreciate your comments.

Thanks for taking the questions.

Sure.

everyone. Thanks for taking the questions and congrats on a solid quarter here.

You guys are in a unique position within the group to be able to play on offense here. I guess, how is the lending environment today in terms of competition, and how attractive are returns on new loans that are actually getting done?

Just trying to get a little bit of a gauge on how much the increase in yields in the portfolio were from higher SOFR versus wider spreads.

I would say that the transmission mechanism between wider spreads, credit spreads, which really were hanging in pretty tough for quite a while as things got a little tricky. I think that the wider spreads have not translated to a lot of places right now because they're just in the market now.

Almost every CLO deal that's in the market is backing up their AAAs a little bit. In fact, one deal was pulled not too long ago.

Spreads have widened, but not to the point where there's distress. I will say that the issuers of a lot of these CLOs are winding up holding a B-piece effectively, a piece of equity at the end.

That B-piece is yielding less than a levered AAA is yielding when they sell them to us. We always look at relative value and we'd rather be a buyer of those securities than a creator of those securities at the mercy of a market that's seeking liquidity or else distracted by AI investments.

The market at large is very competitive still, despite the fact that credit spreads are widening. There are entities out there that are tightening their spreads.

I guess for market share, always a dangerous two words. We're not.

We're happy to let them go to work at tight spreads, and when they come to market with CLOs, we'll buy the AAAs. In that regard, we're frenemies with them.

We don't wish them any bad will, but rather than compete with them in a sub-250-over type spread, we'll just wait and buy AAAs at 150 and 155. That's a better risk proposition.

It's safer. It's got more liquidity.

It really allows us to pivot quickly to create liquidity to put into other verticals that we manage. I think spreads will be widening because these deals in the market are not going well.

They're not going horribly, by the way. It's not like anyone's getting killed here.

They're not working out. If you went to work for three or four months writing dozens of loans and then get to a closing and wind up in this market if you have to go because of your financing, it's probably not an enviable position you want to be in here.

Although, like I said, it's not going to put anybody under. It's just a less than optimum scenario.

We kind of like where our position is. We would prefer to see more of these situations, but strangely, as you know as a REIT analyst, a lot of these companies, their boards of directors are very patient in sitting through difficult times and market cap reductions.

Got it. That's very helpful.

Then maybe changing gears a little bit, just given the volatility and shift higher in interest rates both at the short and the long end of the curve, can you guys just talk about how that plays into the CECL model? Should we expect reserves will trend higher, or are rates not that big of a factor into that model?

I don't pay attention to rates. I don't know if anyone else on our staff does, but I think that we'll address that intuitively, if you double the size of your loan book, you should probably add something to CECL, and we probably will.

It's not like credit is getting worse. Credit seems pretty stable.

You saw us take a small loss on something on an office building in Minneapolis, now down to $67 a foot. These are not unknowns.

We're not being surprised. I think last quarter when the REITs produced their earnings, there are a couple of surprises that after 5 years of difficulty, people are still finding problems in their book.

We know where our problems are, we've said that all along. They're not getting worse, they're actually getting better.

They're not going away, but we think we're adequately covered right now for any reserves that we would need in CECL. Depending on how the economy goes from here, I have to think that after the Fed gets done doing what they're doing before year end, and the midterm elections take place in November, like the result or not, the markets should be a little calmer after that with those two items out of the way.

We're constructive right now on fixed income, and last September really blew out a lot of people. It was a very difficult time, especially if you have fixed-rate financings outstanding, and you're trying to hedge them.

One of the best hedges we've had against rising rates was a fixed-rate liability set and a floating-rate asset book. We're in good shape for it, but again you have to take what the market gives you, not what you wish you had.

We think there's plenty to do right now, and I remember a while back, I think it was Mike Mazzei when he was our president, he said we really traffic in three products at the time, and it was loans, securities, and real estate. Mazzei said, "But there's a fourth loan, too."

A fourth item, and that's our stock. That's true.

It's uncomfortable at times, but we've checked the floorboards. We don't see anything wrong that would prevent us from continuing on the path of stock buybacks.

Got it. Appreciate the comments as always.

Hello, and good morning, everyone. Given the success of the office equity monetization in the third quarter, has that changed your team's appetite for any further monetizations from the CRE portfolio or potentially even adding to that area of your business further?

Just any further details there would be great. Thanks.

Sure. We have quite a bit of real estate equity, and we have been adding.

As I think I said earlier in the call, there was a time where we would rather just buy the office building than finance it because if you're right, you get paid off, and if you're right on the equity side, you can double and triple your money. We've made several investments in New York.

We don't think the office recovery is so robust that we would start calling office sector, let's go buy it. We do think that there are certain markets that, and within certain markets, there are micro-markets that are producing great opportunities.

One of them for us was we've acquired a couple of minority interests on some Manhattan office buildings over the last 2 years. We think we're already up on those.

In fact, we know we are, because one of them we already did a cash-out refinance on. As far as our appetite goes, we'll look at anything.

We do think that a good part of this country is struggling, you have to be a little bit careful how much does the economy impact the value of real estate, not just interest rates. Our desire is there to acquire real estate.

We like it, and as I said, we've sold I think it was 69 assets in the last 13 years and made $250 million. It's not much different to us than making an investment in securities or loans.

It just depends on price. We have a great desire to acquire more equity.

I would tell you, on the office side, I think the real healthy markets are really San Francisco, Miami, and New York at this point. Not much more.

We're seeing some stuff in Washington, D.C. What we're seeing in D.C.

is they're selling properties at low prices, but we are not seeing leasing on the follow-through. That's a little bit of a different act than what's going on in New York, especially in the Park Avenue in the Plaza District.

Those rents are simply rising rapidly. The reason why isn't because the office market has returned.

It's because there's a few very rich people building buildings that are buying everything in sight. One of them runs JPMorgan, and the other one runs Citadel.

A lot of the tenants in the buildings that they're acquiring and basically tearing down are moving, and we're the beneficiary of that because many of our office complexes are on the outskirts of that. The desire's there.

We're always happy to buy things, but it is not a blanket call. You can't buy every office building in New York City and think you're going to do fine.

I don't think so, anyway. I think you have to be very careful.

It's a little like I say sometimes, people say, "How do you like the stock market?" I'm like, "Tell me what stock."

It's a little hard to just say "stock market," at least in my world, the way I think. We think we will acquire more.

Real estate does a nice service for us because it's a very stable, durable income that lasts for 10 years. You don't have to keep recycling and getting into the wheel like you do in the conduit business, which is a very high-ROE business, but it's a grind because every 3 to 6 months the inventory falls out, gets into the market, and then you have to go replace it again.

It is a vertical at Ladder, it will stay a vertical at Ladder, and we're going to keep buying things in it. I know Pamela is occasionally fond of saying, "Everything is for sale at Ladder."

We do have some others that we've owned for a while now that we are taking a look at. We're always in discussions about selling things, but we'll take them when we think we have the right price, not when we're trying to create a good quarter.

Great. Thank you so much, Brian.

That is really helpful. Then other one for me, just wanted to ask about your earlier vintage loans.

Noticed that the pre-2024 loan balance dropped to 14% from 15%. Obviously, repayments were a little lighter this quarter.

Just was curious about expectations for how that figure could continue to shift and trend in the next few quarters ahead. Thanks.

Pamela may know that better than I, but so I won't try to answer it. The only thing I will say is we have over $100 million of loans coming due from that era that I fully expect them to pay off before year end.

I don't know if they will or they won't, but we're not overly worried about it at this point, and we're not allocating losses in our CECL reserve to things that are coming due any day here. Pamela, I don't know if you want to add to that, or Paul?

I just think that our legacy book is pretty small. It's $250 million with an average loan size of $25 million.

Included in that is a loan upcoming, one of the larger loans, that we expect to pay off that Brian referenced earlier. Really well-contained.

As we said, our CECL reserve is pretty healthy relative to that book.

Perfect. Thanks so much, Brian and Pamela.

That's all for me.

Sure.

Thank you.

Sure. Thanks, all, for participating in the call today, and those of you who listen later.

Our diverse earnings stream has come through again. It's working nicely, and being able to pivot out of one column and into another has been a very successful operation for us.

We're looking forward to a strong fourth quarter and finishing this year in very good shape. Ladder is very well positioned to thrive in a higher-for-longer interest rate environment.

We have plenty of liquidity, we look forward to investing our remaining capital into this higher rate market. We think it'll benefit us very nicely in the earnings column in the quarters ahead.

Thanks, everybody, and we look forward to our next call.