Good morning. My name is Chad, and I will be your conference facilitator. At this time, I would like to welcome everyone to Granite Point Mortgage Trust’s Fourth Quarter and Year-End 2020 Financial Results Conference Call. All participants will be in a listen-only mode. After the speakers’ remarks, there will be a question-and-answer period. Please note today's call is being recorded. I would now like to turn the call over to Chris Petta with Investor Relations for Granite Point. Please go ahead.

Thank you, and good morning, everyone. Thank you for joining our call to discuss Granite Point's fourth quarter and year-end 2020 financial results. After my introductory comments, Jack will review our current business activities and provide a brief recap of market conditions. Steve Alpart will discuss our portfolio, and Marcin will highlight key items from our financial results. The press release and financial tables associated with today's call are filed yesterday with the SEC and our Form 10-K was filed this morning. If you do not have a copy, you may find them on our website or on the SEC's website at sec.gov. In our earnings release and slides, which are now posted in the Investor Relations section of our website, we have provided a reconciliation of GAAP to non-GAAP financial measures. We urge you to review this information in conjunction with today's call. I would also like to mention that this call is being webcast and may be accessed on our website in the same location. Before I turn the call over to Jack, I would like to remind you that remarks made by management during this conference call and the supporting slides may include forward-looking statements which are uncertain and outside of the company's control. Forward-looking statements reflect our views regarding future events and are typically associated with the use of words such as anticipate, expect, estimate and believe or other similar expressions. We caution investors not to rely unduly on forward-looking statements. They imply risks and uncertainties, and actual results may differ materially from expectations. We urge you to carefully consider the risks described in our filings with the SEC, including our most recent 10-K and 10-Q reports, which may be obtained on the SEC's website at sec.gov. We do not undertake any obligation to update or correct any forward-looking statements if later events prove them to be inaccurate. I will now turn the call over to Jack.

Thank you, Chris. And good morning everyone. We would like to welcome you all to our fourth quarter and year-end 2020 earnings call. I'm joined today by Steve Alpart, our CIO and Co-Head of Originations; Marcin Urbaszek, our CFO, Steve Plust our COO and Peter Morral, our Co-Head of Originations and newly appointed Chief Development Officer. We hope everyone continues to be safe and healthy, as we all navigate the ongoing impacts of the pandemic. 2020 was a challenging year for all on many fronts, particularly those arising from the global pandemic. Despite the disruptions to the overall economy and the commercial real estate market in particular, our strategy centered around delivering attractive risk-adjusted returns while providing significant downside protection has been proving out, even through the severe market dislocations.

Thank you, Jack. And thank you all for joining our call this morning. Over the course of 2020 and into early 2021, our portfolio has performed very well considering the major economic and real estate market challenges caused by the pandemic. Our interest collections have remained strong during 2020, running at about 99% of contractual payments through February. We ended the year with a portfolio of outstanding principal balance of $3.9 billion across 103 loans, with about $500 million in future funding obligations, which account for only about 11% of our total commitments. Reflecting the light to moderate transitional nature of the business plan we typically underwrite. Our future funding obligations have declined over the course of the year as a result of fundings, repayments, limited opportunistic loan sales earlier this year and select loan modifications that extinguish either a portion or all of the future funding commitments on amended loans. During the fourth quarter, we funded $51 million of loan balances on prior commitments, which brought our total fundings for the year to $239 million. We feel very comfortable with the level and pace of these future funding and continue to finance them with our lenders. As overall market sentiment stabilized and improved over the course of last year, we began to see transaction and financing activity slowly reemerge in the real estate sector on select property types. And these positive trends are further progressing in 2021. Consistent with these improving market conditions, our volume of loan repayments increased in the second half of the year and we received about $195 million of payoffs in the fourth quarter alone, bringing our total repayments for the year to about $517 million. Given the significant market dislocations last year, we believe these repayments demonstrate the strength and quality of our portfolio.

Thank you, Steve. Good morning, everyone, and thank you for joining us today. Before I discuss our fourth quarter financial results, I'd like to highlight that beginning with this quarter and similar to a number of our publicly traded commercial mortgage REIT peers, we have adopted distributable earnings as a key non-GAAP financial measure, and as a replacement for core earnings. This is only a change in terminology and the calculation itself and reconciliation to GAAP earnings is the same as it was for core earnings. Turning to our financial results, yesterday afternoon, we reported fourth quarter GAAP net income of $23.1 million or $0.42 per basic share, which included $8.5 million or $0.16 per share, decrease in our CECL reserve, and $2.6 million or $0.05 per share of additional restructuring charges related to our internalization process, which closed on December 31st. The decrease in our CECL reserves was mainly driven by the decline in the outstanding balance of our portfolio and somewhat improved macroeconomic forecast employed in our analysis. At year-end our allowance for credit losses was $72.2 million or $1.31 per share, and represented about 163 basis points of our total loan commitments. For full year 2020, we reported a GAAP loss of $40.5 million or $0.73 per basic share, which mainly reflects charges related to our internalization of $46.3 million or $0.84 per share, and provision for credit losses of $53.7 million or $0.97 per share recorded during the year. These items more than offset the strong earnings generated by our portfolio in 2020. Distributable earnings for the fourth quarter were $18.4 million or $0.33 per share, and excluded the non-cash provision for credit loss benefit and the internalization related restructuring charges. Our book value at year-end was $16.92 per common share, which was largely unchanged versus the prior quarter, and included $1.31 per share of cumulative impact of CECL. In December, our Board of Directors declared a regular common stock cash dividend of $0.20 per share, and a nonrecurring special cash dividend of $0.25 per share, both of which were paid in January of 2021. The special dividend was related to the distribution of a portion of our undistributed taxable income accumulated over the course of 2020. Our net interest income for the fourth quarter decreased by about $6.5 million or $0.12 per share to $27.4 million, mainly for two reasons. First, our average portfolio balance declined quarter-over-quarter and second, our interest expense increased due to the first full quarter recognition of costs associated with our term loan financing, which closed late in September. For the full year, our net interest income improved by about $15.5 million from 2019, mainly driven by a decrease in interest expense as LIBOR declined significantly over the course of the year. In 2020, our interest income benefited from the LIBOR floors embedded in our loans. As our portfolio is 98% floating rate with an average floor of 156 basis points as of December 31st. About 87% of our loans have LIBOR floors of at least 1%. In the near-term, we expect to continue to profit from the wider net interest margin supported by the LIBOR floors. As we receive more loan repayments and originate new investments, our net interest spread is likely to compress over time as LIBOR floors or newly originated loans will generally be at closer to current rates consistent with market standards. Our total operating expenses declined significantly in Q4 mainly related to the recognition of the majority of internalization related costs in the prior quarter. Going forward as an internally managed REIT, we will no longer incur any management or incentive fees. Instead, we will be reporting compensation related expenses beginning in the first quarter of 2021. We ended the year with about $260 million in cash on hand and as of March 3rd had approximately $235 million in cash. Plus our option to draw an additional $75 million in term loan proceeds through September of this year which is subject to payment of an extension fee. Our total debt to equity leverage on December 31st was 3.2 times largely unchanged from the prior quarter. And our recourse leverage which excludes our CLOs was at 2.2 times. Given current market conditions, we would anticipate our total leverage to be in the range of 3 to 3.5 times debt-to-equity depending on development in our portfolio. Thank you again for joining us today. And I will now ask the operator to open the call to questions.

Thank you. We will now begin the question-and-answer session. The first question will come from Doug Harter with Credit Suisse. Please go ahead.

Thanks. You mentioned that you'd be reentering the loan origination market. Can you just talk about your expectations for deploying your capital position and the outlook for replacing runoff to be able to net grow the portfolio? Just any thoughts on how you view the outlook.

Hi Doug. Thank you for joining us. This is Jack, and I'm happy to answer your question. As we mentioned, we've been focused on managing our portfolio and working with our borrowers and other counterparts. With the increase in market activity over the past month, we feel comfortable getting back in. Regarding our pipeline and volume, we will replace the runoff and aim for portfolio growth later in the year. Specifically, the volume can vary due to several factors, with the prepayment rate being a significant driver of origination volume. As these loans are repaid, it creates additional liquidity for new loans. Historically, we've estimated a prepayment rate of about 25% per year for a portfolio like this. Given the current situation, we expect that rate to be lower, and we have noticed it has been lower recently. Last year, during the first couple of months, we experienced about half the normal volume. So we might see a prepayment rate below half of 25%. However, as transaction activity, refinancing, and acquisitions increase throughout the year, we anticipate a gradual rise in origination volumes, likely somewhere between $500 million and $1 billion, with a stronger probability towards the higher end.

Great. And then you mentioned that you are hoping to be able to issue a CLO this year. I guess, just how should we think about what financing that would replace, would that replace kind of warehouse lines or the senior secured that you entered into in September? Just thoughts on that.

It primarily would be new originations plus warehouse lines. We're not signaling anything to the market, but it could also be partly a refinance of existing CLO debt. So I would say primarily it'll be warehouse lines. And right now, that market is quite strong. I'll point out only a significant part due to the robust performance of the bridge loans in the existing CLO securitizations outstanding including ours. And so the forward pipeline is strong, it's been well met by a strong demand from the investor base and it's actually even been opening up now to include more flexibility for ramp periods and also for reinvestment. So it's quite a positive set of developments for the overall market. As I said earlier, we've always positioned ourselves to be repeat issuers in that market and would hope to access that during the course of the year.

Great. Thanks, Jack.

Thank you.

And the next question will be from Jade Rahmani with KBW. Please go ahead.

Yes, thank you very much. Just starting with the cash flow statement. When I look at the fourth quarter, based on your 10-K, I calculate a negative $16 million of cash flow from operations with a negative $29 million working capital adjustment. So I just want to make sure does that include a payable to the external manager that would explain that difference, or is there anything else we should note that would have caused the cash flow in the fourth quarter to be negative?

Hey, Jade, it’s Marcin. Yes, there was a payable to the manager of $44.5 million in the fourth quarter. Additionally, there are a couple of other items to consider.

Okay. So I think that that's not a non-recurring expense and therefore cash flow from operations should be positive going forward.

That would be the expectation, yes.

And when we look historically at the management fees plus operating expenses and stock compensation, I think it was $10 million, $9.6 million in the fourth quarter. So annualized that would be $38.4 million. I think there could be some modest improvement to that. But for now, we're projecting around $40 million of G&A, about $35 million in operating expenses and $5 million in stock compensation. Is that reasonable to assume as a run rate for the company at its current size?

Look, it's hard to predict exactly what the numbers are going to be. When we announced the internalization, we said that we were anticipating kind of a $30 million to $35 million run rate of expenses, excluding the non-cash equity compensation. I would say that the non-cash equity compensation has been running somewhere around $5 million to $5.5 million a year. It may go up a little bit this year. So, I think you're probably in the ballpark, but there will be some variability on that.

And on the cash side, is there any increased asset management expenses or other back office functions, administrative expenses we should be expecting? Or is that included in the $30 million to $35 million that you've already mentioned?

No, that's inclusive of that. So I would say on a net-net basis, kind of apples to apples, the kind of core run rate cash expenses should be lower this year than in prior years.

Okay, I think I've asked Jack this, on many of these past calls, just given the management team's history and the business and now you're internally managed, maybe it would be more open to other business strategies. Would you explore a CMBS conduit or perhaps an asset management vehicle? The stock is currently trading at about 65% of book value. One of the lowest of peers. So clearly the market is looking at, number one, what the credit risk outlook is, but also to the current dividend yield. It's had a 7% yield and peers, the average is about 8.5%, so either the stock goes up because you raise the dividend or perhaps there's some other accretive way to grow earnings. Wondering what your thoughts are on those two potential business lines.

Hi, Jade, thank you. I remember your previous questions and I'm pleased to respond now. Our main focus will be on strengthening the foundation for our growth and protecting our existing credits. We plan to utilize our strong origination capabilities, redeploy our capital, enhance our cost of funds, and increase our earnings and dividends, which should positively impact our share price. We believe our portfolio is performing well, although the market has yet to fully recognize this. This serves as the foundation for any further expansion. Additionally, the floating rate market for non-bank lenders is becoming increasingly important in commercial real estate finance. While we will be keeping this as our primary focus, over time we will also evaluate other opportunities. Peter Morral and the rest of the team are with us, and we will thoughtfully consider adjacent businesses. There are no specific plans to announce at this moment. Now that we are an internally managed REIT, we have more flexibility to explore various growth avenues. In the near term, our priority will be on improving our credits, increasing earnings and dividends, and concentrating on our core book. This will strengthen our position to leverage our robust origination capabilities for business expansion.

Have you received any inquiries from asset managers interested in potential joint ventures? In this current market environment, there may be significant opportunities, including the possibility of contributing loans from the existing GPMT portfolio. You mentioned the $800 million on the watch list may face some challenges, but the underlying assets could provide a clear path to value creation. Considering the company's loan-to-value ratio, this could be a compelling investment opportunity. I have been surprised that mortgage REITs in this cycle have not engaged in share buybacks or more innovative value creation strategies. Since you are one of the few internally managed companies, does taking any real estate owned properties or loans into REO present opportunities for substantial returns and potentially lead to joint ventures or other strategies that can benefit GPMT shareholders?

We have received numerous inquiries and can engage with external capital sources through co-origination. This may not be limited to joint ventures but could involve accessing challenging markets. Without a deliberate structure and team focused on these markets, it is quite difficult to obtain loans and investments on a whole loan basis. We can certainly explore that option. There are opportunities for value creation, but these will vary case by case. At times, it may make more sense to sell a loan rather than hold onto it, particularly not to sell during peak market profitability. We have the flexibility to make such decisions and have successfully navigated portfolios in the past. Each asset requires a tailored approach, especially in current conditions. However, we recognize that we have substantial value to offer co-investors who are interested in partnering with us.

Thank you. The collections numbers you cited seemed really strong, I see that's a vast every company that same thing. It's on contractual loan agreements which have been modified and I think you said that 46 loans have been modified, so that's roughly half of the portfolio. Do you know what collections are relative to pre-COVID loans granted that some have repaid and you guys have had strong repayments? But maybe if you could give a sense of what that statistic would look like pre-COVID?

Hey Jade, Steve. Good morning. I can give you a statistic for 2020, where we deferred about $8.6 million of interest payments. So that's about 3.5% of total collections, if we had not entered into those forbearance agreements. Pretty much all of those forbearance agreements were deferrals, not waivers. It is important to note that most of them we discussed on prior calls were partial forbearance and tended to be short-term, but for the year it was about 8.69.

Okay, that's good to know. And what's the percentage of loans on non-accrual currently?

We currently have one relatively small loan on non-accrual, and it's the one that we highlighted earlier, which is the New York mixed-use asset.

Okay. Great. I'll get back in the queue, in case there are other questions on the line.

Jade, this is Marcin. I just want to clarify something. In your first question you refer to a watch list of about $800 million. I’m not sure if that’s how I would classify all those loans. I think, not all four-rated loans are watch list loans; they obviously have some elevated risk in them. But just because we put them as a four rating doesn't mean that we expect them to have a loss. I think if you want to think of a quote-unquote watch list, I'll probably be more focused on the $200 some million of loans that Steve Alpart referred to in his prepared remarks, which we're obviously happy to discuss if anyone has any questions on that.

Okay. Thanks very much.

And the next question will be from Charlie Arestia with JP Morgan. Please go ahead.

Hey, good morning, guys. Thanks for taking the questions. I wanted to ask about your repo facilities. I'm looking at the maturities coming up in the next few months that are disclosed in your 10-K. As you mentioned, the Goldman facility was refinanced in February, but wondering if you can provide an update on those other facilities and kind of just more broadly, how conversations are going with your lenders. It seems anecdotally like the banks are pretty eager to increase utilization, but just curious to get your take on that?

Hey, Charlie, it's Marcin. Good morning. Thanks for joining us. I would definitely agree with your last statement. I think there's a sentiment in the banking community that is more bullish than it was, banks are eager to get to the business. So we feel very good about that, and that's obviously part of the reason why we feel comfortable reentering the originations market, because obviously, when you make a loan, you have to find a way to finance it. So it's all good news on that front. Regarding your question of maturities, obviously, Goldman has a maturity in May. We refinanced all those assets with this new agreement, which we think is a great mark-to-market financing for us. It provides much more flexibility on the balance sheet. That facility is still outstanding; we will decide whether to extend it or terminate it; it's likely we'll extend it to have more flexibility. The other two Wells Fargo also have an option to extend a facility, which we intend to exercise, and we are in active discussions with Morgan Stanley about extending that facility as well. Again, we really haven't had any issues with our lenders in the past; we've always extended these facilities, and we are in good standing and constructive dialogue with all of them. So I wouldn't worry about any of those.

Okay, thanks, Marcin, I appreciate that. And then real quickly on the hotel property that was downgraded to five. Was this purely an issue of the cash flows being disrupted by COVID? Maybe I'm focusing too much on the new information available that you guys disclosed. I'm just wondering if there's anything else there that we should be thinking about?

Hey, good morning. It's Steve, I'll provide some color on the hotel asset. So, I think some of this has already been disclosed, but it's a well-located, recently renovated full-service hotel in the Minneapolis market. Very strong institutional sponsorship with a significant equity investment. When we closed this loan, our sponsor had just completed a major renovation. So, the hotel looks really great, and the business plan was to ramp operations as a rebranded hotel and ultimately sell the asset. When the pandemic began, as we saw across the whole country, hotel operations were impacted. This impacted this hotel, it impacted the entire Minneapolis market. Since then, the borrower here has continued to make a substantial ongoing financial commitment to the asset. But going to your question, just given the situation, it seems prudent to move the risk ranking from four to five in Q4. That notwithstanding, we continue to have very productive conversations with the borrower. And just want to highlight that it's a high-quality institutional asset and it's a beautifully renovated hotel.

Thanks, Steve. Appreciate the color.

And the next question comes from Stephen Laws with Raymond James. Please go ahead.

Hi, good morning. Marcin, to follow-up on Charlie's question. The new government facility, can you talk about the cost of that to get the more attractive characteristics trying to think about how financing costs are going to trend here in the near term, given the shift and mix of shifting financing facilities?

Hey, Stephen, this is Steve Plust, good morning. It's about a $450 million transaction. The coupon with LIBOR 361. It'll increase our cost of funds slightly, but it accomplishes some very important things for us. It provides match-term non-recourse, non-mark-to-market financing for the assets. About a third of the assets are hotel and the other two-thirds are assets that I would say wouldn't traditionally conform to a CLO. So we're happy to put those assets on long-term non-recourse financing. And the structure also gives us the ability to pull out $100 million of the loans in the pool that we think do conform to CLO profiles without any penalty. So, it's a very flexible structure for us and at a relatively modest cost of funds.

Great, appreciate the color there, Steve. Kind of thinking about the portfolio returns dividend policy. Marcin, can you touch on what undistributed taxable income was that spills forward to this year? And then Jack, how does the board expect to view the dividend policy—something unintentional last year but maybe a more conservative policy near-term or true up at the end of the year or more of a run rate dividend based on an outlook that can be sustained for 2021?

Sure, Stephen. So, we rolled $25 million of distributive taxable income into this year. Obviously, we paid out a $0.25 special dividend. So, we have some additional flexibility vis-à-vis the dividend for this year. Obviously, our earnings – our distributable earnings in Q4 were strong and covered the dividends quite nicely. So, look, the policy is to ensure that the dividend is sustainable, stable, and supported by the core profitability of the business. We continuously discuss this with our board as we try to assess the portfolio's performance and capital markets and obviously the overall environment. So, I would say we feel pretty good about our earnings run rate. Obviously, we may have some credit events here and there that are hard to predict. But from a core profitability perspective, we feel pretty good in terms of where we are and I think, over time, the dividend should closely track that, once we want to go through the period of uncertainty.

Great, thanks for the comments this morning.

Thank you.

And the next question comes from Arren Cyganovich with Citi. Please go ahead.

Thanks. Just looking through your portfolio, you have a handful of loans that have now been marked to carrying values that are in excess of a couple of percent of the original principal value. These ones, just I guess, the hotel example that you just marked down, are created reserved for this quarter? How are you coming up with the valuations for the carrying values? And does this suggest that the value of that property now is through the principal amount, and is that just a kind of I imagine there's not a ton of transactions to really follow to get a true value of that property? I'm just trying to think about the potential risk there and hear a little bit more about the process that you go through?

Sure. The carrying value is a function of various discounts and fees related to the property as well as the reserves that the CECL reserves we have across the portfolio. We're required to have reserves across the board on all assets, so that's part of our overall allowance analysis that we go through every quarter with the modeling exercises that we undertake, reviewing all the results of all the loans. So primarily, those are the differences between principal and carrying value.

Yes, but the ones that are more drastically reduced, some of them are 10%, 12% of the reduction. I guess it suggests given the initial LTVs that are in the 60s now that you would be pretty well protected for the most part. I guess the big discounts that you have associated with those, is that truly a function of what you view the collateral value to be? Or are there other things that are driving that bigger discount associated with those?

It's a function of the overall analysis on the reserves, which obviously value and LTV is one of the inputs into the overall analysis and the model. I think if you just step back and think about how these reserves work and what the ultimate performance of the portfolio may be. I think it's pretty safe to assume that their reserves tend to be concentrated in a subset of loans rather than evenly across the whole portfolio as all loans than the loans have varying credit characteristics and different property types and things like that. So, again, it's a function of the analysis that we do, where obviously value is one of the inputs, but it's not the only input. It's obviously cash flow and sponsorship market and property type and all and a bunch of other inputs that we use.

Okay, thank you.

The next question is a follow-up from Jade Rahmani with KBW, please go ahead.

Thank you very much. I think the big item on everyone's mind right now is interest rates. And I forgot to ask that. So how do you think that changes the commercial real estate outlook? It sounds like you're seeing an uptick in transaction volumes. And you said, select property types, which I assume means industrial and single-family rental, the invoke property types, and maybe multifamily as well due to rates. But overall, rates are up quite meaningfully, and it seems like there's the potential for rates rising further, especially if the stock market is signaling a strong economy. How does that change the way you're looking at the outlook for commercial real estate?

Hi Jade, this is Jack. There is a general perception over market cycles that the horizon the long end of interest rates will drive capitalization rates up. And in fact, many of the statistics don't bear that out. I like to look at this and therefore values. I do think that for longer-term, say 10-year fixed rate assets, a rise in interest rates would put pressure on some refinancing, but it depends on when those loans were made and how they're performing. The rise in rates is a function of the tremendous support both monetary and fiscal, this has been provided to the markets and to the economy. We are looking at support for commercial real estate through those actions. It's not like – well, let’s say it’s a support both for the tenant base and for the operators and ultimately, for the lenders and investors and securities that are backed by these loans. And I would say that the rise in rates may be proportionally because of the very small base it's got up from, but we're not talking about tremendously high interest rates. And if the short end goes up, our portfolio for example benefits from that. But I will say that it's really all a function of the liquidity supply, which is a positive for commercial real estate all around, including as an inflation hedge.

Thanks for that. Do you think that pricing in the CLO market has adjusted over the last couple of weeks?

Yes. Well, it firmed up quite a lot. I would describe it in an understated way as a vibrant market. And, there's a lot of supply in the CLO market, especially compared to say the CMBS market currently. That's for a number of reasons, one being that the, I think I mentioned the bridge loan, the loans from the bridge loan markets that were put into CLOs have outperformed and are doing quite well. The structures of the preexisting CLO issuances are holding up well with very minimal losses. And when I refer to structures, there's a deal recapitalization tests and things like that, but the fundamental structure is that the issuer retains, there's embedded equity from the borrower's so let's call it the average loan is in at 65% LTV. There's that equity plus the retention of the bonds when beneath the investment grade by the issuer provides a very strong alignment of interest. And this has been recognized by the outperformance; the positive structure has been recognized by the investor community. And so while there's been a lot of issuance that has occurred already this year, and we expect to continue, it's being met by very robust demand as well. As people search for yield, this is considered a very attractive, secure place to get more yield; it requires some technical expertise. And that's a reward on the part of the investors and that's rewarded with it. With respect to issuers like Granite Point, having well inside of all the costs, well inside of LIBOR 200 with bond spreads, under bonds themselves being in the say 115 to 120 range is a very positive environment.

And sorry if I missed it, but in response to Stephen Laws’ question, what did you say the cost of the Goldman facility was?

It's LIBOR 360. It's a little over a half point in fee, but as Steve Plust pointed out, and by the way, he was referring to the aggregate loan balance, the bond issuance, if you will, because it's just like a capital warehouse facility, the private CLO, some people refer to it as 349. And, as he pointed out, we're able to reduce that cost. If we so choose by taking out, we have the right to take out over 100 million of those loans and put them into a CLO securitization issuance without prepay penalty.

Okay. So the cost would be LIBOR 10 basis points plus 360, so it's 370 and just amortize the 50 basis points of fee over three years or so?

You bet. Yes, 55 basis points.

Is 18 plus 370. So the all-in cost is something like 390 basis points.

Right.

Okay. So, I'm looking at a sheet of loan spreads that Cushman Wakefield nicely sends out. And when I look at floating rate, three to five-year mortgages on Plain Vanilla office at an over 65 basis points, the spreads are somewhere in the 250 to 325 basis points range before fees. So that seems pretty close to the cost of this Goldman’s facility?

Your existing loan book has higher spreads than where we're currently at.

Hey, Jade, it's Steve. Obviously, it depends tremendously on what type of asset you're talking about. What we're seeing in the bridge space right now seems like a lot of folks are talking about coupons versus spreads, but we're seeing we're probably seeing multifamily depending on the deal in the low to mid threes. We're probably seeing office. It was a lot of office product two months ago in the fours. Some of that now is in the threes as well. But for the stuff that I think we're looking at something in the twos or even high teens, is a little below what we're seeing right now.

And that's coupon before fees.

Coupon before fees, with LIBOR floors that vary by deal, but let's just say 25 basis point LIBOR floor for something in that area.

Okay, so do you think that ROEs in the 10% to 12% gross ROEs are achievable on a leverage basis?

Yes, there's obviously a lot of variables in terms of spreads and floors and fees and liability pricing. But I would say when you kind of put it all together, we're seeing levered returns that are probably at or near where they were pre-pandemic.

Okay. Great. Thanks so much for taking all the questions. Really appreciate it.

Sure. Thanks for joining.

Ladies and gentlemen, this concludes our question and answer session. I would like to turn the conference back over to Jack Taylor for any closing remarks.

Thank you, Chad. And thank you, everybody, for joining us today. We really appreciate you taking the time and spending your hour with us to hear about our company. I want to particularly wish everybody out there in the Granite Point community and beyond a very safe and healthy period of time going forward, hopefully towards the final months or so of the pandemic. So good health and prosperity to you all. And thank you again.

And thank you, sir. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.