All right, everybody. Thank you, guys, for joining us and for your patience. Our next presenting company is Franklin BSP Realty Trust, traded on the New York Stock Exchange under the ticker symbol FBRT. Presenting for the company today is Lindsey Crabbe, Director of Investor Relations.
Thanks, Philip. Hi, everyone. I'm Lindsey. Yeah, as Philip said, FBRT trades on the New York Stock Exchange. We're a commercial mortgage REIT, been public since 2021. I'll just quickly run through our platform, if this is going to go. Okay, yes. BSP, Benefit Street Partners, is our external manager, and they are owned by Franklin Templeton. As you can see, Franklin Templeton's almost $1.7 trillion in assets under management, more of a household name probably than Benefit Street Partners. BSP is a large alternative credit asset manager. We have $90 billion in AUM, and of that, about $13 billion sits in our commercial real estate platform. FBRT, the company you're here for today, obviously sits within the commercial real estate space on our platform. This is just kind of a bit of our history. As I mentioned, went public via a reverse merger in 2021.
We acquired Capstead Mortgage, which was actually a Dallas-based residential mortgage REIT at the time, but that got us our initial listing, as well as another $900 million in equity. This is our team. We're led by Mike Comparato. He is the President of our entire real estate, or President of FBRT and the head of our real estate platform. Jerry Baglien is probably, if you've seen us present before, he's usually with me. He's our CFO and COO. He was unable to make it today, so you're stuck with me. Yeah, we have a huge team. We actually, it's gotten quite a bit larger in the last quarter because we had an acquisition. I'll get into that here shortly. Just quickly to walk you through our strategy.
Commercial mortgage REIT, we play in the middle market space, which is typically anything in that $25 million-$75 million loan range. We look predominantly at multifamily assets. That makes up about 75% of FBRT's portfolio and also about 75% of our entire $13 billion portfolio across the different funds that we have at Benefit Street Partners. Currently, our core portfolio is sitting at $4.4 billion in size. This is within FBRT. We typically like to be right around the $5 billion range. We are working to obviously put some cash back to work into our core loan portfolio. We had to retain some cash this last quarter in order to fund our acquisition. Net leverage is about 2.5x as of 9/30, and we pay just under a 10% dividend yield on book value.
We're pretty significantly underpriced or are currently trading at about 70% of our book value. On our stock price, we're at about a 14% dividend yield, which is extremely high. I think I've touched on all of these or some of our competitive advantages. These are some of the peers you'll see in our space who also are in that middle market range. There are several other commercial mortgage REITs out there that also like this range, but we usually see more insurance-type private capital in there. Moving on to our portfolio, like I said, $4.4 billion in portfolio size as of the end of the quarter, with the vast majority of that being in multifamily. The rest, as you can see, is spread out between assets like hospitality and industrial. We tend to take a barbell approach to get a little more yield.
We are focused really in the Southwest, Southeast, Sunbelt areas, a lot of exposure to Texas, Carolinas, and we continue to look there and find value there. That's, let's see, yeah, and then almost all senior loans within the portfolio. We do like to look at our portfolio kind of as a pre-interest rate hike and a post-interest rate hike. Of that $4.4 billion, 40% of it is still sitting in loans that were originated pre-interest rate hike. We measure that as January 2023 is when we kind of is the dividing line for us. 60% of our portfolio now has been originated really under new valuations where there's been a bit of a correction since interest rates post-rate hike. We like sharing this stat.
We were, for the longest time, one of the only mortgage REITs originating, mainly because we're dealing with a lot of legacy portfolio issues. Because we stayed pretty focused in multifamily, specifically Class A multifamily, we've had less of the issues that our peers have seen with their legacy portfolios. Moving on, we also like to share what we have left in our office book. This was as of quarter end, so sitting at just about 2% of our entire portfolio is sitting in office assets. We still think office assets are a tough place to be. We haven't originated a loan in office, obviously, since 2020. Yeah, we're working through what we have left in that portfolio, but are very comfortable with the exposure that we have to that category of the market. This is how we finance our book.
We predominantly use CLOs to finance our loans. We just issued a $1.1 billion CLO that actually took out FL7, FL8, and FL10 at the end of the it closed on October 15th, so it's actually a Q4 event. That went in we had several prior CLOs that were out of their reinvestment period. Because of that, a lot of cash gets trapped in those capital structures, and so it's just kind of sitting there. We're not able to go out and use it. With this, basically recapitalizing it and issuing the CLO, we're able to take the cash that was stuck in those old CLOs and eventually get it originated back into our core book, which is how we will get to that $5 billion target that I had mentioned earlier. I did touch on we made an acquisition this quarter. It's actually NewPoint.
They are a Plano-based company, so I don't know if any of you have run across them if you're Dallas-based. NewPoint has agency licenses. They are one of 19 companies that have all three with Fannie, Freddie, and FHA HUD. It's something running a bridge loan portfolio. Agency licenses were something we've always wanted at FBRT and Benefit Street Partners, and they're basically impossible to get without an acquisition. We closed on this on July 1. We just published this is the first quarter of financials that we were able to kind of publish what they've done. NewPoint had actually a record origination quarter, the highest in their history with $2.1 billion of agency originations for the quarter. We're just really excited about it. It's obviously a lot of synergies there. Not only are we able our bridge loans can find a home at takeout.
Most of our multifamily properties, where they go after they stabilize, is to agency products. Now we have a natural exit path for them. It also opens up a whole range of new borrowers that maybe did not work with us in the past because they were looking for someone that could do more full do the whole thing, or they just were not familiar with the Benefit Street platform. It really gives us a lot more visibility on the street. With NewPoint, we also pick up a mortgage servicing rights portfolio. One of the, I guess, downsides to mortgage REITs is there is not a natural path to grow your book value. With MSRs, that is a way for us to slowly grow our book value over time. Every time we originate an agency loan through NewPoint, we retain the MSR strip and hold it on our books as an asset.
It's slow growing, but it'll add a couple cents to book value every quarter as we continue to integrate. Also on that note, like I said, we have a $13 billion portfolio across all of BSP. We will slowly move over all of the servicing from a third-party servicer. We used to service our loans through Situs. We'll now be able to do that all in-house with NewPoint. We expect that to complete, hopefully, by the end of Q1 of next year. We're still obviously in the throes of integration just with normal course, but that is a goal to get that done early in 2026 to start realizing some savings there. Let's see. I think that's everything on NewPoint. That's really, I mean, that's the basics of the company. I know that was quick, but I'm happy to open it up to your questions.
I know we were running behind. If anyone has questions on anything, happy to go through it. Yeah.
Can you talk about agency? Is agency usually residential or?
They're both. We play only in the commercial space, but you'll see agency originators across residential as well. Yeah. Yeah.
This is a scrappy question, but I keep looking at it. You can start to talk about assets organization. Do you guys have any ideas about changing some of this stuff? Are there any loans or raising capital or funding loans?
We haven't at Benefit Street Partners specifically, but I mentioned FT is our parent. They're getting more and more involved and interested in that portion of the market. It's not an area that I have any knowledge of, but I think it's maybe something that might slowly trickle down in the next.
It's coming. I'm trying to learn.
Yeah, it's good stuff.
I don't know if you guys are looking at it.
Not yet. I think as FT kind of starts to focus more on that, that'll be and kind of pushes it out to their alternative. They have a whole group of alternatives that they own. I think we may see more of it in the future, but as of right now, no. Yeah, you're good.
You have the 14% dividend yield that is currently not being covered.
Right.
What should they expect for? Is that usually red flag a dividend out for?
Yeah. No, I think the dividend is something we've looked at. Obviously, we look at it every quarter, but we've been pretty heavily focused on it as we continue to see that yield increase based on our stock market price. What we saw, I think at the beginning of the year, we had given some we were just unsure if we were going to maintain the level given the NewPoint acquisition, but we decided, given our we put out actually in our Q2 deck, it's not in our Q3 deck, a path to dividend coverage. We view it as being relatively near term, so we weren't sure it was worth the extra noise to cut the dividend, knowing that we'll get back to coverage probably in the back half of 2026.
Some of those, the three things that I guess I didn't, or I talked about, one of them was obviously the CLOs. Calling that CLO was really step one. I think that adds about $0.05-$0.07 per quarter in earnings power by doing that and getting that cash reinvested. Like I said, that could be, that'll take a couple quarters to get $1 billion reinvested because on top of that cash becoming free, we also have our natural repayments just on our portfolio. Those typically run about $300 million a quarter. We've got quite a bit of cash that we need to reinvest. We're working to get through that. We'd like to see all of it done by Q2 of next year. That was really one of the three.
The second, and I did not talk much about this either, was within our portfolio, we have our watchlist assets and we have our REO assets and real estate owned. It is properties where the borrower, for whatever reason, was not able to maintain the asset and they decided to turn the keys back over to us. Predominantly, all of those assets are multifamily. Within the BSP platform, we have a multifamily equity fund. They obviously have experience in running multifamily assets, and we are able to utilize that team because of the external management agreement. We can use that team to help us run our REO portfolio. We find more value in taking two quarters, three quarters to stabilize an asset and take it to market than we do in liquidating it immediately upon the borrower returning the keys to us.
I mean, it's obviously case by case, but for everything that we've done so far, we've sold all of our multifamily assets at or above our basis. We just continued to take that approach. We are working through what we have in REO. We expect that to add anywhere from $0.08-$0.12 to earnings per share once that equity is freed up as well. The last part was the NewPoint integration. I talked about moving over servicing and then just the additional origination capacity there through NewPoint. We expect anywhere from, on the low end in the near term, $0.04-$0.08 , but we do expect that to get up to about a low teens return once it's fully integrated. That's really the path of dividend coverage.
I think we had said back half of Q, sorry, back half of next year is when we expect to really have all three of those going. It is, in our view, near-term-ish, and it just did not make sense to further hurt the stock price with the dividend cut at this time.