The following is a summary of the Ladder Capital Corp (LADR) Q1 2024 Earnings Call Transcript:
Financial Performance:
Ladder Capital reported Q1 distributable earnings of $42.3 million, or $0.33 per share, resulting in a 10.8% return on equity.
The company reduced leverage to 1.5x from 1.8x in the previous year.
The firm's balance sheet was 23% cash and cash equivalents, increasing liquidity over $1.5 billion.
Ladder's $2.8 billion balance sheet loan portfolio saw a weighted average yield of 9.42%.
Stable net operating income was contributed by the firm's $963 million real estate portfolio and $467 million securities portfolio.
Business Progress:
The company received $400 million of payoffs in its loan and security portfolio, increasing liquidity.
There's a shift of focus on new loans under application for future opportunities.
Ladder successfully concluded foreclosure proceedings on a newly renovated Class A multifamily portfolio in Los Angeles.
Company indicates starting to see attractive equity opportunities, particularly around properties being sold at fractions of their original price.
The firm expects opportunities for purchasing buildings or office spaces to emerge more prominently by the end of 2024.
Ladder Capital Corp believes the worst for the commercial real estate sector has passed and expects market conditions to improve.
They are holding onto cash, aiming to invest in long-term, sustainable options.
There is anticipation of adding more to their Current Expected Credit Loss (CECL) reserves.
The company is preparing for a real estate cycle characterized by low interest rates, high leverage, and significant market implications.
More details: Ladder Capital IR
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