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Q&A
Operator:
Thank you. [Operator Instructions] And we'll go to Steve DeLaney with JMP
Securities.
<Q - Steven DeLaney>: Thanks. Good morning everyone and thank you for keeping
it exciting for us here. I'm going to start with the most boring part of the
portfolio, the debt portfolio. So about $2 billion, if we take out the
corporate stuff including the RXR that Al just mentioned, I think were down
to about $1.6 billion in true CRE debt. I was not at all surprised to see no
activity there other than the small legacy fix CDO purchase. So my question
is in communicating with investors, would you be wrong to characterize this
portfolio is being in run-off mode? And if that is an accurate description,
just wondering Al, if you could give us based on maturities and all some sort
of estimate of how the $1.6 billion might pay down over the next couple of
years? Thanks.
<A - David Hamamoto>: Yes. Hey, Steve, it's David.
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<A - Albert Tylis>: I think it will be case by case. We're looking at that on
an overall leverage basis. We continue to believe very strongly that
non-recourse, non-cross collateralize, non mark-to-market mortgages are a
better approach than accessing the unsecured market. That's been the hallmark
of our business for 10 years now. We've proven that successfully with
leverage levels that have been higher than what traditional equity REITs have
deployed, and we've been able to outperform traditional equity REITs by
somewhere in the neighborhood of 1200 basis points a year in total returns.
So, we'll continue to be thoughtful about our financing approach and our
strategies, and will remain focused on things that have kind of gotten us to
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