I'd like to remind everyone that today's call and webcast are being recorded. Please note that they are the property of Apollo Commercial Real Estate Finance, Inc. and that any unauthorized broadcast in any form is strictly prohibited. Information about the audio replay of this call is available in our earnings press release. I'd also like to call your attention to the customary Safe Harbor disclosure in our press release regarding forward-looking statements. Today's conference call and webcast may include forward-looking statements and projections, and we ask that you refer to our most recent filings with the SEC for important factors that could cause actual results to differ materially from these statements and projections. In addition, we will be discussing certain non-GAAP measures on this call, which management believes are relevant to assessing the company's financial performance. These measures are reconciled to GAAP figures in our earnings presentation, which is available in our stockholders' section of our website. We do not undertake any obligation to update our forward-looking statements or projections unless required by law. To obtain copies of our latest SEC filings, please visit our website at www.apollocraft.com or call us at 212-515-3200. At this time, I'd like to turn the call over to the company's chief executive officer, Stuart Rothstein.

Thank you, operator, and thank you to those joining us this morning on the Apollo Commercial Real Estate Finance, Inc. fourth quarter and full year 2024 earnings call. As usual, I am joined today by Scott Weiner, our chief investment officer, and Anastasia Mironova, our chief financial officer. Consistent with the return of liquidity to the real estate capital markets, and the steady increase in transaction volume, ARI experienced a robust level of repayment activity and was very active in deploying capital in 2024. While the market was expecting more aggressive action from the Fed than actually took place during 2024, the continued strength of the overall economy and the modest Fed cuts were enough to generate a notable pickup in real estate investment activity. As we move into the New Year, with the benefit of hindsight, it appears that property valuation troughed in the early part of 2024. And during 2025, we expect increasing capital deployment and transaction activity across the real estate market as the significant dry powder within real estate funds is deployed and many of the participants who have been on the sidelines for the past eighteen months reenter the market. ARI finished 2024, originating $702 million worth of new loans in the fourth quarter, bringing total origination volume for the year to $1.9 billion. As of year-end, approximately thirty percent of the loans in ARI's portfolio were originated in the past twenty-four months, correlating with the rise in interest rates and the resulting reset of property values. ARI's newly originated loans were underwritten to generate very attractive returns, benefiting from wider spreads and higher base rates and interest rate floors. The strength of Apollo's broad-based real estate credit originations efforts is the key to ARI's active deployment. As Apollo's team originated over $16 billion worth of new loans during 2024, ARI can seamlessly tap into the pipeline when capital to invest is available. ARI's originations in 2024 were across a broad spectrum of property types and geographies, with more than half in the UK. Apollo's dominant market position in Europe continues to be a differentiator for ARI as we are able to invest in transactions with similar risk profiles and comparable credit quality to transactions in the US, while further diversifying the company's portfolio. Turning now to the loan portfolio. At year-end, ARI's portfolio was comprised of forty-six loans totaling $7.1 billion. No additional asset-specific CECL allowances were recorded in the fourth quarter. Shifting to 111 West 57th Street, there are currently four units under contract and several others in various stages of contract negotiations, including several with agreed-upon offers. Upon closing of the four units, and assuming one other unit closes, the net proceeds received will repay the senior mortgage in full, and all proceeds thereafter will go to ARI and can be redeployed into new loans. We remain highly focused on proactive asset management and targeting resolutions on our focused loans as we seek to maximize value recovery and convert underperforming capital into higher return on invested equity opportunities. We have defined pathways for our remaining nonperforming loans in REO assets, and we are actively pursuing resolutions. As we mentioned on last quarter's call, there is meaningful upside earnings potential for ARI as we recapture and redeploy capital. For example, ARI has approximately $300 million of net equity invested in the Brooklyn multifamily development. Upon completion and sale or refinancing of that asset, it is expected that ARI will be able to convert that non-income producing capital into generating an ROE consistent with recently originated loans. Across ARI, we estimate that if we were able to reinvest 100% of the equity tied to performing loans in REO into newly originated loans, we believe there is an additional approximately $0.46 per share of annual earnings uplift. With that, I will turn the call over to Anastasia Mironova to review ARI's financial results for the year.

Thank you, Stuart. And good morning, everyone. ARI reported distributable earnings of $45 million or $0.32 per share of common stock for the fourth quarter, which was $38 million or $0.27 per diluted share of common stock. For the full year, we reported distributable earnings of $190 million or $1.33 per share of common stock, with a GAAP net loss available to stockholders of negative $132 million or negative $0.97 per share. Our dividend was well covered with 128% coverage for the quarter, and 111% for the full year. It is worth noting that our fourth quarter distributable earnings included $0.07 of non-recurring items, such as prepayment fees, accelerated fee amortization on early repayments, and other similar one-time items. Coupled with the impact of rate cuts executed by the Fed over the course of the fourth quarter of 2024, we expect that our quarterly earnings in 2025 will be lower when compared to Q4 2024, while still providing sufficient coverage for our dividend. Our loan portfolio ended the year with a carrying value of $7.1 billion and a weighted average unlevered yield of 8.1%. As Stuart mentioned, we had a strong quarter of loan originations, closing three new commitments, two upsizes, and one refinance transaction. ARI funded about $300 million associated with these commitments. During the quarter, we also funded an additional $97 million for previously closed loans, bringing the year-to-date total add-on fundings to $627 million. We had another quarter of elevated loan repayments, which totaled $830 million and therefore outpaced new loan closings and add-on fundings. As a result, our loan portfolio balance decreased quarter over quarter. However, with an origination pipeline of over $1 billion for the first half of the year, we expect our loan portfolio to grow in 2025 as we recirculate capital from repayments into new loans. We closed one loan commitment for $114 million post-quarter end so far. With respect to risk ratings, the weighted average risk rating of our portfolio at quarter end was 3.0, unchanged from the previous quarter end. There were no asset-specific CECL allowances recorded during the quarter, and no material movements in ratings across the portfolio. Our total CECL allowance was relatively flat quarter over quarter. As of December 31, it equated to $379 million, which represents $2.74 per share of book value. Moving on to the right-hand side of the balance sheet. During the quarter, we continued to see spread tightening across repo facilities, with the average spread on new repo draws in Q4 being on average 45 basis points lower compared to the weighted average cost of borrowings across our secured facilities. Our debt to equity ratio at quarter-end was 3.2 times, down from 3.5 times at September 30. The company ended the quarter with over $380 million of total liquidity, comprised of cash on hand, undrawn credit capacity on existing facilities, and loan proceeds held by the servicer. Our book value per share, excluding general CECL allowance and depreciation, was $12.77, a slight increase from last quarter. And with that, we would like to ask the operator to open the line for questions.

Our first question comes from Rick Shane with JPMorgan. You may proceed.

Thanks for taking my questions this morning. Look, you guys still have a substantial specific reserve, and it appears that you are now really in a position where you've dimensionalized what you see as the big risk within the portfolio. As we think about that specific reserve and how it might translate into realized losses or transactions this year and realized losses over the next year or two, can you just give us some sense of what the cadence of that might look like? So we can dial in our distributed earnings estimates?

Yeah. Look. I think as you think about the big components of this specific reserve, I think, obviously, as I mentioned in my comments, if all continues at the pace it's going, we think we'll start clawing back some of the capital that is tied up in the 111 West 57th project. That doesn't impact the reserve per se because what we're carrying it at is our net post-reserve balance at this point, but it is certainly capital that we envision being able to redeploy into performing assets. So I think we're optimistic that we'll be part of our $375 million or so of net outstanding will start coming back to us this year, and we can put that to work. The Cincinnati asset, known as Liberty Center, is up over 90% leased at this point. I think there's potential opportunities to try and move that into the market this year and get that capital back. I think it's a later half of the year sort of event, but those are probably the two nearest term opportunities to start putting capital to work, which is the latter half of this year. And then as I mentioned in my comments, there's a lot of equity tied up in the Brooklyn REO, which realistically, that asset will be taking tenants in the latter part of this year, which means assuming things go as planned, we'll have proof of concept on the asset and we could start thinking early part of next year about sale or refinancing to pull out a fair bit of our equity in that. So it's really, I would say the latter part of this year heading into next year is when we should really start seeing underperforming capital slash REO start being put to work more productively.

Hey. I really appreciate you swinging at that pitch and the specificity of the answer. So thank you very much.

Thank you. Our next question comes from Jade Rahmani with KBW. You may proceed.

Thank you very much. Just a high-level question. If you could put some thematics around where you're seeing interesting opportunities geographically. Seems like you're still active in Europe. Multifamily has been picking up. But if you could just talk to maybe a bit of property type and geography, but then also, like, the kinds of situations you're stepping into? Are these capital structure challenged deals? Are they new acquisitions? What kinds of situations are these?

Thank you. Scott, do you want to take that one?

Sure. Yeah, Jade. Look, I think we're seeing really increased activity across all sectors and geographies. Multifamily is something that we're very constructive about, generally, newly built multifamily, so not at all distressed situations, but newly constructed where we're refinancing a construction loan. And so the transition is really just leasing. Yeah. We're seeing similar type deals within senior housing or care homes, both in the UK and the United States. That's certainly one area we've been spending a lot of time on. Continuing the residential theme, you're certainly seeing interesting stuff in both student housing as well as in certain markets, condo inventory loans. Hotels continue to be an area of focus. But really nothing is distressed. It's both acquisitions as well as refinancings. Data centers is an area where we've been active, and I think that's something that ARI in the future will be participating in really in the hyperscale area, long-term leases to major investment-grade credits about either stable assets or ones that are in the midst of construction. And as you mentioned, UK and Europe, we continue to find really good interesting opportunities there as well.

And I was wondering if you could give an update on the REO hooked hotels and the outlook there. Since you didn't mention that those two DC and Atlanta hotels as potential 2025 monetizations.

Yeah. I think on this ahead, Scott. I was going to say DC, I think we've referenced before, continues to perform very well. It's exceeding pre-COVID levels clearly with the inauguration this year and all the activity in DC off to a very good start. So I think that is an asset, considering the capital markets continue to be constructive, that we would potentially test the market later this year. And then Atlanta is really an asset we continue to evaluate, the right business model in terms of balancing putting capex into it, what's the return on investment, what is the highest and best use of the asset, in terms of what we're targeting and things like that. And again, also just trying to raise the cash flow. So I would say we continue to evaluate both assets. In terms of an exit. We think our marks are appropriate in terms of where we have it. On the DC asset, we did put on asset-level financing, so that is not dead capital for us. That's generating a nice levered return. The Atlanta asset is also generating cash flow, although below the type of return that we see on our capital, but both of them are at least contributing to income. So we're not going to be in a hurry to sell. So if we can get the right price on either one, we would sell later this year.

Thanks a lot.

Thank you. Our next question comes from Steve Delaney with Citizens JMP Securities. You may proceed.

Good morning, everyone. Happy New Year. Good to be on with you this morning. Wanted to talk about the portfolio. $7.1 billion at the end of the year. It sounds like I know you have some non-earning assets in the REO, and it sounds like you might be slightly under-levered in your core portfolio. Given what you're seeing in terms of its new attractive bridge loans, could that portfolio grow over the next six to twelve months, to $7.5 to $8 billion? Is that feasible?

Yeah. Absolutely. I mean, it's really just a matter of timing. We had some large repayments coming at the end of the year. And we have, as Stuart mentioned, a large pipeline of deals that are in closing, one of which did already close this quarter and a few will be coming. So if you just think of it, you know, as we take that cash capital that we have sitting there and invest it, and then you'll be senior mortgages that we leverage, we easily could see the portfolio growing by half a billion, a billion dollars easily.

Yeah. And, Steve, just to put a finer point on that, like, there is an abundant supply of capital available for back leverage for us as we seek to do new deals and use leverage to get to ROEs. So to Scott's point, as we find things that are interesting, there's a chance for us to leverage that equity and grow the portfolio a bit.

Yeah. So the banks start so much competing with you for bridge loans, but they're more than happy to lend you to finance your bridge loans. Is that the way we should think about it?

Yeah. There's plenty. Yes. I think whatever they like to say about their headline sort of on-balance sheet activities, they're very active behind the scenes looking to provide leverage.

There seem to be some green shoots. We heard it from you, Stuart. And in addition, let's just talk domestic, but it sounds like the UK has been something really nice for you guys to tap in. But the nature of the bridge loans today versus maybe nine to twelve months. I think same since for a while there that the market commercial real estate market was kind of stuck. And everybody was refinancing properties, but there didn't seem to necessarily be fresh new projects with new equity coming in through real estate investors tackling new projects. Are you seeing in your bridge loans now more new business plans and new properties, or are we still in this mode of we're moving money around loans around from bank to bank, and there's not as much financing on bridge loans of new projects as it is just the old stuff? Just curious if there's if the animal spirits have been aroused in within the real estate development, equity investor community. Thank you.

Well, as I mentioned in the opening remarks, and Scott could add some color as well, we're definitely seeing people coming off the sidelines. For lack of a better phrase, and starting to look for reasons to put capital to work. So there's definitely, you know, I'd say, look, absent the office space where it's generally sort of people playing for time. For lack of a better phrase, I think you are starting to see as Scott mentioned in his remarks, whether it's data center, multifamily, industrial, you know, people looking for ways to put capital into assets that they think work from a long-term perspective. So not fully back, but definitely, I would say people getting off the sidelines and recognizing that if they've got capital that they have raised for investment, they need to deploy that capital. I don't know, Scott, feel free to add some commentary.

No. I think that is. I mean, you know, I think just looking at our overall platform, I think about last year about a quarter of it was for acquisitions. You know, and as you were mentioning, we deployed $16 billion globally in loans. So certainly a lot of acquisitions, but you know, a lot of the stuff could be recently built, new construction stuff. I mean, sometimes people are bringing in new investors and recapping. So, yeah, the markets are certainly fully functioning, and I think that there's a bid-ask which between buyers and sellers has shrunk. And so you're certainly seeing a lot of that. A lot of people don't need or want to sell. They think there's upside in cash flows and certainly they think at some point interest rates will go down, which will lower cap rates even further.

Very helpful. Thank you both for your comments.

Thank you. Our next question comes from John Nicodemus with BTIG. You may proceed.

Hi. Good morning, everyone. Just kind of extension of what Steve was just asking. Obviously, I've heard the phrase extended pretend a ton in recent quarters. But kind of with that rate uncertainty to start 2025, just curious, sort of the instances of borrowers looking to extend into what they believe could be a more favorable rate environment down the line. Regardless of what's going on with the asset underlying the loans. Just sort of if you're seeing much of that or there's any real changes you've noticed with borrowers and how they're proceeding to start 2025 given everything that's transpired in the past couple. It'd be really helpful.

Yeah. Look. I mean, certainly, from our perspective, we've been never doing the extender. For ten. We want to make sure that sponsor is the right sponsor. At the right basis to sign leases or do deals and has capital. But I think, to my earlier point, people certainly have a lot more visibility and transparency in terms of where they think things are heading, whether that be office or multifamily and things like that and kind of also have worked through what's in their portfolio and kind of have decided what their winners are or not. So, not to say it's not going to continue. I still think there's a lot of challenges in particular in office, in markets that still have a way to work through whether that be because if something has a long-term lease, it hasn't expired yet, or still people are trying to figure out what they're going to do with it. But I think people really have a good sense on things.

Great. Really helpful, and that's all for me. Thank you.

Thank you. And as a reminder, to ask a question, please press star one one on your telephone. Our next question comes from Harsh Hemnani with Green Street. You may proceed.

Thank you. So it seemed like a couple of the highlighted transactions in Q4 were somewhat stabilized, especially maybe the retail assets in the UK. Could you sort of touch on the spreads that you might see on these types of stabilized assets and how they might differ from the more transitional assets that you're typically doing?

Yeah. Look. I mean, I think overall, you've heard from us and others. Certainly, spreads have over the past year, eighteen months, that have come in. But at the same time, you know, the financing spreads have come in a lot. Driven by the bank's appetite to put out warehouse and also in the US, the reemergence of the CRE CLO market. Where you can see those spreads have come in dramatically. So I would say even with tighter loan spreads, we're still able to generate our mid-teen returns. As far as stable spreads versus kind of transitional spreads, again, it's very much dependent on deals. Generally, as you think of property types or location, a hotel deal, for example, could be stable and still at a wider spread than a multifamily or would be at a wider spread than a multifamily. So I think there are some nuances there. But at the same time, if we're doing a tighter spread and a more stable asset, generally, the financing that we then get on that asset ourselves is better, either that be a higher advance rate and or a tighter spread. So generally, we're working towards the same levered return, whether it be a more stable asset or a more transitional asset. But I would say, generally, spreads these days for what we're doing are kind of high twos to low fours over, right? And then they call an upfront fee.

Got it. That's super helpful. Oh, and so maybe against sort of the backdrop of improving capital markets liquidity, transaction volumes picking up, it seems like a good time to get into sort of the higher-risk loans. But on the other hand, you can meet your return hurdles with stabilized loans at this point in the cycle. So how do you sort of weigh those two as you evaluate where you deploy new dollars?

Yeah. I mean, look, we're obviously risk is in the eye of the beholder. You know, we're very focused on downside protection and being senior in the capital structure, and you know, right now, we don't feel we need to be pushing, you know, leverage or business plans to get to the returns that we want. We're very comfortable in doing the moderate leverage that we've been doing for the past few years with the sponsors and the deal types we like. So there are certainly others who may need to push leverage or do more or searching kind of for a higher return or coming at it from equity then. And there's lots of deals that we do in ARI, for example, where the senior lender and there'll be mezz or preferred equity behind us. And we're very happy at our basis and getting to our return.

Got it. And last one from me. You mentioned previously CLOs in there, and given sort of the less transitional assets in the new origination, could we expect ARI to be in the CLO market at some point in 2025, 2026?

No. I mean, look, we obviously always evaluate the market. You know, we're active participants, both as Apollo, both investing in the market and actually underwriting and creating series CLOs. So we're well-versed in what's happening, what's going on. We thankfully have some very good financing partners that we work with well, who I think give us a lot of the flexibility that we'd like to have in our warehouse loans. I think our borrowers appreciate that their information is not out in the public domain when they do a loan with us. And so, the reality is, we can get a similar cost of funds with more flexibility in something our borrowers prefer. And also, things always come up on loans. Not necessarily bad things, but things kind of change and we like having the flexibility to do what we want and not to go back to the borrower and say, oh, we have to go talk to a servicer and do this and that. So I don't anticipate us using the series CLO market anytime soon.

Great. Thank you.

Thank you. I would now like to turn the call back over to Stuart Rothstein for any closing remarks.

Thank you, operator. Thanks to those of you who are participating this morning. And as always, Hillary, Anastasia, myself, to the extent people have follow-up questions, modeling questions, we're always around. Thank you all.

Thank you. This concludes the conference. Thank you for your participation.