Good morning, ladies and gentlemen. Welcome to the third quarter 2026 Arbor Realty Trust earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this period, you will need to press star one on your telephone.
If you would like to remove yourself from the queue, you can press star two. Please be advised that today's conference is being recorded, and if you should need operator assistance today, please press star zero. I would now like to turn the call over to your speaker today, Mr. Paul Elenio, Chief Financial Officer. Please go ahead, sir.
Good morning, everyone, and welcome to the quarter earnings call for Arbor Realty Trust. This morning, we will discuss the results for the quarter ended September 30th, 2026. With me on the call today is Ivan Kaufman, our President and Chief Executive Officer. Before we begin, I need to inform you that statements made in this earnings call may be deemed forward-looking statements that are subject to risk and uncertainties, including information about possible or assumed future results of our business, financial condition, liquidity, results of operations, plans, and objectives.
These statements are based on our beliefs, assumptions, and expectations of our future performance, taking into account the information currently available to us. Factors that could cause actual results to differ materially from Arbor's expectations in these forward-looking statements are detailed in our SEC reports.
Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of today. Arbor undertakes no obligation to publicly update or revise these forward-looking statements to reflect events or circumstances after today or the occurrences of unanticipated events. I'll now turn the call over to Arbor's President and CEO, Ivan Kaufman.
Thank you, Paul, and thanks to everyone for joining on today's call. On our last earnings call, we discussed at length the effect of the increase in interest rates is having on the timing and resolution of our non-performing and sub-performing loan book.
Since that time, we've seen a tremendous increase in interest rates with the five and 10-year treasury indexes up another 75 basis points-85 basis points and 140 basis points-160 basis points in the last nine months. This is a very material development which has resulted in further reduction in values across the multifamily sector of between 5%-15% and has significantly curtailed transaction volumes from the increased cost of debt and equity.
This will result in a temporary increase in our delinquencies and a slightly longer timeframe to resolving certain legacy assets, as well as an increase in our loan loss reserves due to a change in values. There has also been a significant negative impact on some of our legacy assets from ICE raids in certain areas of the country, including Jacksonville, Orlando, San Antonio, Houston, and Atlanta.
These raids have significantly reduced occupancy on some of our assets in these areas, which has contributed to an increase in our delinquencies. This was completely out of our control and not something we could have anticipated. We will continue to evaluate the long-term impact that this may have on our legacy assets and adjust our strategy and reserves accordingly.
As a result, one of our main objectives is to preserve capital, have the appropriate level of liquidity to pay off our upcoming debt maturities, and operate our platform to resolve our legacy issues and preserve our book value.
We are currently sitting on approximately $400 million of cash and believe we can organically create another $300 million of liquidity over the next four to five months through loan payoffs, loan sales, REO dispositions, increased efficiencies in our financing facilities and securitization vehicles, and by reducing our dividend. With that in mind, our board has decided to suspend the quarterly common dividend, effective immediately, which will preserve $31 million a quarter or $125 million in annual cash flow.
We anticipate that this will put our cash position at around $700 million by the end of the first quarter, which will allow us to repay the $275 million of unsecured debt that is maturing in March and still maintain $425 million of liquidity to work through this cycle and resolve our legacy loan book. We will also continue to look to other areas to bolster our liquidity position further.
As the largest shareholder with the highest inside ownership of any REIT, we are completely aligned with our shareholders and believe this strategy to be the most appropriate at this point in the cycle. Despite this extremely challenging environment, we continue to make progress in resolving our loan book and are working very aggressively to liquidate this collateral as quickly as possible.
As a result of the material change in interest rates, delinquencies have increased and the REO dispositions have slowed, which is pushing out the timing on resolutions another quarter or two. We are still dealing with the same universe of legacy loans that we have ring-fenced and remain confident in our ability to continue to make progress and reduce this exposure significantly over the next four to six quarters.
We ended the third quarter with approximately $750 million of delinquencies and around $500 million of REO assets, for total non-performing assets of roughly $1.25 billion, which is up around $200 million from last quarter's numbers as a result of the significant increase in rates, which again, has accelerated delinquencies and delayed the timing of the resolution of certain assets.
As we have discussed in detail on our last few calls, we continue to focus heavily on our legacy portfolio, which is down to $4.5 billion at September 30, from successfully resolving $1.1 billion of these loans in the last three quarters. $1.2 billion of this book continues to perform in accordance with their original terms, and $1.3 billion is either delinquent or an REO that we expect to be able to resolve over the next several quarters.
We have $2 billion of this book we have been aggressively working through with the goal of restructuring and resolving approximately $400 million - $500 million of loans a quarter. This will reduce our legacy book, including our delinquent scenario assets, down to around $2.7 billion by year-end and around $1 billion by the end of 2027.
As these legacy assets work through the system, we expect our total delinquencies to stay relatively flat until the remaining legacy book is reduced further, and then we should see a meaningful move down in total delinquencies as we continue on our pace of resolving approximately $400 million - $500 million a quarter. This will go a long way towards significantly reducing the drag on earnings and increasing our run rate of income in the future.
We also continue to have tremendous success in capital markets, issuing another CLO in the third quarter with exceptional terms. The new CLO was an $825 million vehicle with pricing of 170 over and 88% leverage with a two and a half-year replenishment period. This has allowed us to continue to drive higher returns on our capital and generate an additional $50 million of liquidity to enhance leverage.
We have now issued over $3 billion in new CLOs, which has reduced the position of our recourse debt outstanding and is driving higher returns on our capital. This success, combined with the unwind of approximately $8 billion of legacy CLOs and $1.3 billion of new unsecured debt issuance, means we have successfully completed in excess of $12 billion of capital markets transactions over the last 36 months.
As Paul will discuss in more detail, we have produced distributable earnings of $0.08 a share in the third quarter. Clearly, our earnings are being greatly affected by the significant recent rise in rates, which has increased our delinquencies, extended out the timing of resolving our non-interest-earning assets, and temporarily affected our agency volumes. We expect this trend to likely continue for a little longer, which could continue to affect our earnings in the short term.
Our goals are always longer term in nature, with our sights set on capital preservation and working through our legacy book as quickly as possible, which will reduce the earnings drag and allow us to start to build back up our run rate of interest income and drive higher earnings in the future.
This, again, we estimate will take us four to six quarters from now to accomplish, and we are taking a very methodical approach for resolving these loans each quarter and bringing down the remaining legacy book to a more normalized level relative to our total loan book. Turning now to our production numbers for the third quarter. In our agency business, we originated $900 million in volume, in addition to $75 million in CMBS brokerage transactions for a total third quarter volume of $975 million. This brings our year-to-date volume to around $2.8 billion.
Clearly, the elevated rate environment is greatly affecting our origination executions. We originated $450 million in August and had good momentum with a large pipeline until a significant rate spike, which curtailed originations and pushed out our pipeline. We originated less than $200 million in September and around $300 million in October.
As a result, we are targeting between $3.5 billion and $4 billion of total volume this year, which could obviously move up or down depending on rates and timing of closings, which is hard to predict in this environment. In our balance sheet lending business, we originated $600 million of volume through the first nine months of this year. We have been relatively inactive in screening new business given the current landscape, except for very selectively originating deals that fit into our current securitization vehicles to replenish runoff and reduce any inefficiencies.
We expect this to be our ongoing strategy over the next few quarters, as again, we focus our attention on continuing to bolster our liquidity position to work through this cycle. The one area we have remained active is in our single-family rental business. We believe this is a great business that offers us returns on our capital through construction, bridge, and permanent lending opportunities, and generates strong levered returns on our capital through very efficient financing vehicles. We had a solid third quarter, originating $250 million of new deals for total volume year-to-date of approximately $700 million.
We continue to have an active pipeline and believe we will close out the year with approximately $1 billion of volume, which is a strong year, especially considering the current interest rate environment and the fact that we had a very light first quarter from all the noise surrounding the housing bill that we resolved in the second quarter.
In summary, we continue to make significant progress in the capital markets and working through our legacy book, despite the extremely challenging environment. We are optimistic that we can continue to reduce this book significantly over the next four to six quarters and then start to build back our earnings rate as we resolve our delinquencies and REO assets. Again, our primary focus is to preserve and create the appropriate level of liquidity to repay our short-term debt maturities and execute our business plan.
This will afford us the necessary time needed to work through the teeth of this downturn and realize the true value of our franchise for our shareholders. I will now turn the call over to Paul to take you through the financial results.
Okay. Thank you, Ivan. In the third quarter, we produced distributable earnings of $14.8 million for $0.08 a share, excluding realized losses of $21.7 million from the resolution of certain delinquent and REO assets that we had previously reserved for.
These realized losses were in the range that we guided to last quarter of $20 million-$30 million, and it's something we expect to continue for the next four to six quarters as we work through resolving our non-performing loan book. As Ivan touched on earlier, our third quarter numbers were significantly impacted by the rise in interest rates. This rate move was a very material change, which accelerated delinquencies and slowed down the pace of resolutions during the quarter.
We also experienced a decline in our agency business origination volumes as a result of the drastic rate move, which affected our gain on sale numbers as well this quarter. We had approximately $450 million of new delinquencies, which resulted in around $4 million of back accrued interest being reversed, and a reduction of around $6 million in interest income for a $10 million impact to interest income this quarter from these assets.
This was slightly offset by around a $2 million increase in interest income from the resolution of roughly $250 million of prior delinquencies during the quarter. We also incurred approximately $7 million of additional interest expense from issuing our convertible debt offering and leveraging our balance sheet to create the appropriate level of liquidity to operate through this current environment.
Given the drastic recent change in the interest rate environment, we anticipate our earnings to likely bottom out over the next two quarters, and then start to build back up each quarter on a consistent basis as we continue to make more progress in resolving our delinquencies and working through our legacy book.
In the third quarter, we recorded an additional $34 million of impairment on our REO book to properly mark these assets to where we think we can effectuate a sale in the current environment, which has clearly been affected by the recent rate hike. We also booked another $27 million of specific reserves on our balance sheet loan book for total REO impairment and specific reserves of $61 million in the third quarter, which is up approximately $25 million from the second quarter.
General CECL was also elevated this quarter from a change in the outlook for real estate values, resulting in an additional $27 million in reserves on our balance sheet loan book, which is an increase of $11 million from the second quarter. Given the current environment, we expect that we could experience similar levels of reserves and impairments over the next few quarters, which is up from our last quarter's guidance due to the significant change in interest rates that have occurred.
As Ivan mentioned, as we work through our remaining legacy book, we expect it will funnel through our delinquencies and REO assets, which will likely keep our total non-interest earning assets at a similar level until we reduce the remaining legacy book down to a relatively small number.
Once this occurs, we will start to see our total delinquencies decline, which will greatly reduce the drag these assets are having on our core earnings. Our book value per share came in at $10.92 at September 30th as a result of the increased reserves and impairments we booked in the third quarter due to the change in values we are seeing from a rise in rates.
Even if we continue to book similar levels of reserves over the next four to six quarters, we still have substantial embedded equity value above where the stock is trading, in addition to the significant value of our origination platforms and our franchise. In our GSE agency business, we originated $900 million of volume and had $1 billion in loan sales in the third quarter.
The margins on these loans came in at 1.12% this quarter compared to 1.33% last quarter, mainly due to our continued commitment to originate larger transactions on higher quality assets to top-tier sponsors, which contain lower margins. We also recorded $11 million of mortgage servicing rights income related to $800 million of committed loans in the third quarter, representing an average MSR rate of around 1.35% compared to 1.1% last quarter due to a shift in product mix.
Our fee-based servicing portfolio was $36.8 billion at September 30th, with a weighted average servicing fee of 34.7 basis points and an estimated remaining life of 5.6 years, and will continue to generate a predictable annuity of income going forward of around $128 million gross annually.
In our balance sheet lending operation, our investment portfolio was $12 billion at September 30th, with an all-in yield in this portfolio of 6.97% compared to 6.95% at June 30th. This was mainly due to an increase in SOFR for the quarter, which was offset by the effect of increased delinquencies in the third quarter. The average balance in our core investments was $12.1 billion for both the second and third quarters.
The average yield on these assets decreased to 6.84% from 7.21% last quarter, mainly due to the impact from our third quarter defaults, which was slightly offset by a nominal increase in SOFR on our performing loan book. Total debt on our core assets was approximately $10.8 billion at September 30th compared to $10.5 billion at June 30th.
This increase was mainly due to the issuance of our convertible debt offering in July, as well as from additional leverage on existing collateral and from our new CLO execution. The all-in cost of debt was approximately 6.69% at September 30 versus 6.38% at June 30, mainly due to an increase in SOFR. The average balance in our debt facilities was approximately $10.7 billion for the third quarter compared to $10.5 billion in the second quarter, again, mainly due to the convertible debt issuance and enhanced leverage on our loan book.
The average cost of funds in our debt facilities was 6.49% in the third quarter compared to 6.40% for the second quarter- excluding interest expense from leveraging our REO assets, the debt balance of which is separately stated on our balance sheet, and therefore not included in our total debt on core assets.
This increase is mostly due to an increase in SOFR and additional leverage on certain assets during the quarter. That completes our prepared remarks for this morning, and I will now turn it back to the operator to take any questions you may have at this time. Operator?
Thank you very much, gentlemen. Ladies and gentlemen, at this time, if you would like to ask a question, please press star one on your telephone. And again, to withdraw your question, please press star two. So others can hear your questions clearly, we ask that you please pick up your handset for best sound quality. We will go first this morning to Chris Muller with Citizens Capital Markets.
Hey, guys. Thanks for taking the questions this morning. I guess looking at slide 13 in the deck on the liquidity bridge to repaying the March maturity, the $35 million of REO disposition stands out a little bit, given $500 million or so of REO. So I guess the question is that $35 million on that slide just kind of a plug for the remaining shortfall there? And is there additional REO that you guys could sell if you guys needed the capital?
Sure, Chris. Hey, it is Paul. Thanks for the question. So, it is related to one specific asset. There will be other REO dispositions during the fourth quarter, but this one is in our sights and likely to be disposed of. We have a contract signed, hard money up. They were waiting for approval from the city on a permit. They have gotten that approval, so it should close, we hope, in November or December.
And where our leverage point is on our asset with our bank lines, we would be picking up $35 million of recovered equity that we have tied up into that asset. That is specifically related to one asset. So, the bigger question you asked, I think the way you look at the math is we are sitting with around $500 million of REOs on our books as of September 30.
We are expecting to take some more back, obviously, as our delinquencies work through the system. I think actually in October, we took a loan back already that was $70 million. I think I am targeting to take back about $200 million-$225 million of new REOs that are in our delinquencies today, and probably dispose of, including that asset, another $200 million-$225 million.
I think where we are at, and maybe we can do better than this, we think our REOs will probably remain flat by year-end in total. New REOs coming in, older ones being disposed of, and yes, we will pick up some equity on the other ones we will dispose of. We will lose a little equity on the new ones that are coming on, but that $35 million is specifically related to one asset that we have on our sights to close over the next 30 days.
Got it. That makes a lot of sense, and that is a good dovetail on my follow-up here. I guess just given the focus on liquidity, should we expect foreclosure activity to slow? It sounds like, based on what you just said, maybe not a ton. Maybe we will see kind of turnaround on the other side of flipping the REO accelerate. Just curious how that all plays into the liquidity focus here.
Well, it is Ivan speaking. There is no question about the fact that with that jump in interest rates over the last 60 days, a lot of the REOs that we were in contract, under terms, or about to come under terms, went on pause. The market got adjusted, and it slowed the process, in my estimation, between 30 and 90 days, which is causing us to reevaluate what we are doing. But we are seeing it start to reach another level and get back on track.
So you will see levels coming a little bit lower. As I indicated in my comments, you will see a 10% drop in potential valuation, because that is where the market dropped with the rise in interest rates. But I think people are now settling in to where we are. So, we think we will get back on track. We think values will be affected a little bit, but we are still very ambitious to stick to that plan of resolving these over the next quarter, six quarters.
Got it. If I could just squeeze one last quick one in. 10-year is down back below five now. I am looking at 493 on my screen right now. I guess, what level on the 10-year do you guys think would unlock activity and accelerate things, versus slowing things down when we were at 5.4% type rates?
Let me do it in reverse. When we spoke a few quarters ago, the 10-year was around 4% and the five-year was around 350. Those were very, very attractive levels, and that is where we geared our plan to. When the 10-year jumped to 450 very quickly, it definitely had an impact, slowed things down. Going from 4.5% to 530 was, for calling it even dramatic, but I could call it material, that first change.
Clearly, going from 530 now below 5%, you will start to see momentum come back. As momentum comes back and people feel we are not at risk, I think you will see a lot of people step back in and be a little bit more aggressive. I think it happens in increments, and I think it also happens whether people feel that things are going to pop back up or not.
It has to do with investor sentiment, whether they feel this is the appropriate rate range that we are going to be in. But if there are concerns that rate is going to jump up a little bit, I think you will see a little bit of a slowdown.
Got it. That makes a lot of sense. Appreciate you guys taking the questions this morning.
Thanks, Chris.
Thank you. We'll go next now to Rick Shane with JP Morgan.
Hey, guys. Thanks for taking my questions this morning. One of your relative peer companies reported earlier this week, and they talked about pricing in multifamily down 5%-10% based on elevated cap rates, but they also indicated that that was sort of Class A, and their perception was that Class B, C was down more sharply. I am curious what your thoughts on that are, as we think about resolutions of the portfolio as well.
First, I'll say I disagree with their, I don't know, I didn't hear the call, but Class A may be down 5%-10% in good markets, but in weaker markets, I think it's down substantially more. That's something that we have been very concerned about in terms of our originations of Class A. Class A you're seeing in markets like Phoenix or markets like Dallas and Austin, Charlotte, and other markets, you're looking at three to four month concessions, and I would say values are down more than 5%-10%. Class A, I would say, could be 15%-25%. So I happen to disagree with that proposition.
With respect to Class B and C, we are seeing certain markets firm, but the big issues, as I said on my comments, were dealing with the impact of the ICE raids and a change in occupancy overnight, and also a change with the population that is going out versus going in.
I cannot answer that yet in some of those markets where ICE continues to be a very negative factor in those markets, but I will tell you that there are certain markets that we are starting to see firm up. In my comments, I said 5%-15% in range in terms of how we think it is affected our portfolio. Some are a little deeper, and some are a little bit less. That is definitely been the change that we have seen with the recent change in rates.
Got it. Okay, thank you. You guys cite about $400 million in available liquidity post, sort of net of the maturity in March. I believe you have another $250 million in maturities in the second half of the year, and I realize that some of the sources of liquidity that are available to you before March in terms of repayments will be there, the benefit of the impact, I should say, of cutting the dividend as well. But I am curious, as you look forward, what is the sort of working cash that you need, and then what is the ability to sort of continue to move forward to that second half maturity as well?
Sure. Rick, hey, it is Paul. Let me answer a little bit, and then Ivan will chime in. I think a couple of things you mentioned are exactly right. Suspending the dividend not only picks up $62 million, $31 million a quarter until the March distribute, the March payoff, but when you go to October, we pick up another 60 there.
So that is 62 right there that we are picking up between March and October to address what you are talking about prior to the 250 maturity. In addition, we have on the docket certain loans that we think will repay and certain loans we think will sell. Some of those loans have forward funding commitments associated with them, and we think we could pick up some capital there by not having to continue to fund forward commitments on those loans.
Lastly, as Ivan said, we continue to look to other sources to pick up liquidity. Obviously, continuing to look at what assets we can dispose of, what assets we can push for a payoff, and look at our leverage and see where our capital is tied up in those loans, which could accelerate.
I think we see a path that, if it is early, but we see a path that after the March payoff, that we could generate $150 million-$200 million of additional capital before October. To your last point, is what is the optimum cash level we would like to operate? I think Ivan, we would probably say it is between $350 million and $450 million we would like to have, right, to be able to operate through this environment absent those debt issuances.
That is correct. I think that we have also determined that any originations that we do do will be of service to replenishment of CLOs, and I think you will see the non-CLO side of our book come down and maintain the CLO side of the book at the very maximum level, and that should also generate a considerable amount of cash equity as well.
Got it. As always, I appreciate the answers, guys. Thank you.
Thank you. We will go next now to Jade Rahmani with KBW.
Thank you very much. I wanted to ask about the single-family rental strategy. That business did show a notable increase in special mention loans. What drove that, and what do you expect to happen to those loans?
Yeah, I think we saw a little bit of a jump, as maybe you put out in your morning note today, Jade, in substandard and doubtful, and that was obviously driven by the elevated delinquencies we had this quarter. Special mention is a bucket that we look at. Like we've always said, when we originate loans from the get-go, they can be passed, pass watch, or special mention just because of the nature, the transitional nature of those loans.
I'd have to dig in and see, but special mention is probably up a little bit because of the values are down. We're looking at where these loans are maturing. But we don't look at special mention as a category that is overly concerning. We look at, obviously, substandard and doubtful as the category that is a prelude to delinquencies, foreclosure, and potential deterioration.
Okay. Yes, because it did increase quite a bit, and that caught my attention, although I realize special mention is less worrisome than substandard and doubtful. During the financial crisis, companies like Arbor and other commercial mortgage REITs issued warrants in connection with standstill agreements with repo lenders to buy themselves flexibility to work through issues.
Even in recent periods, others have issued, raised capital from private credit, as well to optimize asset workouts, deal confidently with upcoming maturities, and also have more capital available to repurchase some of their own debt securities and even stock. So, what are your thoughts around that, if the company would look to do such actions?
Listen, we'll evaluate all options and alternatives. Certainly, everything you mentioned is something that we're consistently discussing. I think there are a lot of arbitrage opportunities in the market, and we have taken advantage of them in the past. I did it in the GFC, and we did it very well. So, we have a lot of tools that we can utilize, and a lot has to do with which direction rates go in and whether the market seems to recover or the market's under distress. But we are constantly evaluating that internally and with our bankers.
Okay. On a related note, the interest in the GSE agency business, you noted the strong cash flows it was generating, as well as the very high MSR gain in the quarter, 135 basis points. So, that business generates resilient cash flows and has about a five, six-year remaining duration. Would you consider selling an interest in that business to free up capital?
We haven't considered selling an interest, but we definitely have a very, very valuable franchise, which produces a lot of cash flows, really been a cornerstone of our business. And we're very pleased with it. Is that part of a potential capital solution one day down the road if things get worse? There's always options when you have good assets.
Great. Lastly, on the REO balance, just round numbers, close to $500 million. How much CapEx do you expect to spend on those assets in order to get them positioned to be able to monetize?
It's different for each asset. Obviously, we have a group of assets that we're pretty far along with agreements to be signed and moving off our balance sheet. We have others that are in the pre-marketing stage of marketing those assets to sell, and then we have others that we're looking to hold a little bit longer until we can season them more. I think during the quarter, we maybe put $8 million, $9 million of CapEx in some of those assets.
I think that number probably comes down on the older assets as we move them off, maybe some newer assets come on. It's a hard thing to answer, but it'll just be based on where we think the exit value is, whether it's long-term or short-term. I don't think it's a big number over a yearly basis, but we just have to see how quickly we can dispose of some and then which ones we want to hold onto for values outside of where this distressed market is.
Thanks very much.
Thank you. We'll go next now to Gabe Poggi with Raymond James.
Hey, good morning, and thanks for taking the question. It kind of piggybacks on what Jade was just asking. Obviously, the world's changed a whole heck of a lot in the last 60 days, and the world could change a whole heck of a lot in either direction in the next 60 or 90 days. But if we stay around this today, kind of benchmark rate environment, in and around 5%, high 4s%, et cetera, how are you guys thinking about liquidity?
Obviously, you've put a roadmap out for March, but beyond March, for later liquidity needs, and really, kind of what is the clearing price for existing REO NPLs today? If you just have to go put those on the market, take what you can get so that you can maximize liquidity. Any color there would be helpful.
Well, I think we're just now looking towards March. That's short-term in nature, and we believe that we have great strategies in place to get to March, and that's kind of what we've guided to. We're really looking for a 12-month execution, which gives us time to do an orderly disposition of our REOs without having to fire sale them and try and get a maximum return. It also gives us the opportunity if we want to sell some loans and recoup some equity and do it in an orderly basis, we can do that as well.
So, 12 months is a way to do it in a very orderly way. If rates come down and you get wind at your back, it gets done a little easier. If rates go up more meaningfully than what we've seen over the last 60 days, then it becomes much tougher. The guidance we're giving you is what we think we can accomplish orderly between now and March, and then between March and our next short-term piece of debt that's due. That's how we're looking at it.
Thank you. I've got one more quick follow-up. Can you guys provide an average occupancy number for REO? What you're holding in REO, what the occupancy is of those assets?
We do, actually. It's in our filings. I don't have it in front of me, Gabe, but it's in our-
Okay. I didn't see it yet. All good. I'll check the-
Yeah.
Thanks.
Okay. In the Form 10-Q, we list out the occupancy. Some of those assets may be vacant, right? Obviously, taking them offline, but we give you what's vacant, we give you what the occupancy is.
Yep. Got it. I just haven't seen it yet. Thanks. I'll check there.
Thank you. We'll go next now to Crispin Love with Piper Sandler.
Thank you. Good morning. Looking at your origination activity in the structured business in the quarter, you did nearly $370 million in the SFR business. Just given the liquidity constraints today, why does it make sense to do origination at that type of level rather than cutting that down and preserving liquidity further?
I think I will let Ivan answer the question on the business strategy, but I think just what I will point out is, of that $360 million, $194 million, or almost $200 million, was fundings of prior committed loans. So you have originated those loans. There is a construction element to it as you fund up, and that is what those were. The rest were new originations, which was really that $250 million number we gave you. But I think Ivan can do a better job of talking about our strategy on that platform.
Yeah. First of all, that is the most attractive part of our business, and we have a CLO that we have in existence, and we sometimes have to anticipate what the payoff is on those loans, versus what we originate to fill that CLO. So we will always need a pipeline of business that we have to fill that CLO. And those we think are the most high-quality loans.
We can also stick some of those loans to our existing CLOs as well. So it is an attractive part of the asset class that we like. The construction gets funded up over time. It turns into a bridge loan, can be put into our CLOs, and very quickly we can get those into agency takeout as they stabilize.
But we will be very selective in terms of what we are putting on our balance sheet using our cash, versus, as I said earlier in my comments, versus using something that we could just fill any payoffs or anticipated payoffs in our CLOs.
Got it. That makes sense. Appreciate the color there. Then, I definitely understand the suspension of the common dividend to preserve and build liquidity for the upcoming debt maturities, but do you, the board, have any update or plan for the preferred dividend, and could actions be necessary there over time?
Yeah. We evaluate everything relative to liquidity. It is not something we discussed at this board meeting. But clearly, that is always a tool that is out there that management will have the opportunity to evaluate as we go deeper into the next couple of quarters.
All right. Great. Thank you for taking my questions.
Thank you. Ladies and gentlemen, it appears we have no further questions today. Mr. Kaufman, I would like to turn things back to you, sir, for any closing comments.
Okay. I appreciate everybody's time. I know these are difficult times with a significant material adverse change in the market. The company has adopted its operating policies and the way it is going to do business to adjust to what the current climate is. Thank you for your participation. Have a great day.
Thank you very much, sir. Again, ladies and gentlemen, this will conclude today's conference call. We would like to thank you all so much for joining us and wish you all a great day. Goodbye.