Good afternoon, and welcome to Ares Commercial Real Estate Corporation's Conference Call to discuss the company's Fourth Quarter and Full Year 2020 Financial Results. As a reminder, this conference is being recorded on February 18, 2021. I will now turn the call over to Veronica Mayer from Investor Relations.

Good afternoon and thank you for joining us on today's conference call. I am joined today by our CEO, Bryan Donohoe; David Roth, our President; Tae-Sik Yoon, our CFO; and Carl Drake, our Head of Public Company, Investor Relations. In addition to our press release and the 10-K that we filed with the SEC, we have posted an earnings presentation under the Investor Resources section of our website at www.arescre.com.

Great. Thanks Veronica and thanks everybody for joining today. In 2020 the global pandemic had a severe impact on each of our lives and the economy as a whole. Despite these challenges Acre outperformed in 2020 and delivered strong distributable earnings that more than fully covered our dividends for the fourth consecutive year. While we are certainly proud of what we accomplished in 2020 I want to focus on what we did to put ourselves in a position for an even stronger year ahead in 2021. We outperformed during this volatile period because our business model is designed to be stable and resilient. Our playbook is to originate senior loans with strong covenant protections in defensive property sectors. We are highly selective with a credit first approach and we lend to experienced real estate sponsors seeking to add value to institutional quality properties. As a result we built a highly diversified portfolio across sectors and markets. Throughout 2020 our business demonstrated that it was well positioned to navigate volatile markets as we maintain consistently high interest collections and no losses related to credit performance. Our portfolio is well constructed with 94% in senior loans with the majority collateralized by multi-family office and industrial properties. As stated previously we entered last year underweight hotels and had no loans collateralized by standalone retail centers. In addition, we never invested in real estate securities.

Great. Thanks Bryan and good afternoon everyone. Before going over our fourth quarter 2020 results similar to a number of our publicly traded commercial mortgage rate peers please note that we have renamed core earnings on non-GAAP financial measure the distributable earnings or DE. This is a terminology change only and we have made no material modifications to the calculation itself or the reconciliation to GAAP earnings. Turning now to our results. Earlier today for the fourth quarter of 2020, we reported GAAP net income of $14.4 million or $0.43 per share and distributable earnings of 13.7 million or $0.41 per share. For full year 2020 GAAP income was $21.8 million or $0.66 per share and distributable earnings were $45.1 million or $1.36 share. As a result for the fourth consecutive year Acre fully earned or exceeded its cash dividends through distributable earnings. Now let me discuss our liabilities and debt facilities. As you know we have historically followed a number of core principles when managing our liability structure. First we attempt to match fund our assets and liabilities with respect to both interest rate and term. So for example, 98% of our assets are floating rate loans and 100% of our liabilities are similarly floating rate; all of which are indexed to one month U.S. LIBOR. Second, we diversify our funding needs across multiple providers and funding vehicles. This practice has served us well during 2020, for example, where no single warehouse lender had more than one collateralized loan by a hotel. Third, we have pushed hard not to take mark to market spread risk on our warehouse lines. So again in 2020 Acre did not have any margin calls based on the initial sharp increase in spreads at the onset of the pandemic and finally over time we have pushed hard to limit the percentage of indebtedness that is recourse to Acre.

That's great. Thanks so much Tae-Sik. In conclusion looking ahead we believe we are well positioned to pursue new opportunities and continue to scale our business supported by our liquidity and attractive balance sheet positioning. For all the reasons cited today we have high confidence in our 2021 distributable earnings outlook and we are pleased to share a portion of the expected excess earnings with our shareholders through supplemental dividends while retaining the rest to make attractive new investments throughout the year. I would like to conclude by thanking the team for all of their hard work to deliver for our stakeholders in these challenging times. We're proud of what we've been able to accomplish delivering consistent returns to our shareholders. We also deeply appreciate all of our investors continuing support for our company and thank you for the time today.

First question will be from Stephen Laws of Raymond James.

Hi, good morning. I guess to start with can we touch on the first half maturities this year? Noticed a couple in January, February where the scheduled maturity I guess original maturity date. I think you've got two of your hotel loans scheduled for May. Can you talk about any of those that have repaid or extended? How those discussions are going with the hotel loans and any details you can provide kind of on the first half scheduled maturities?

Yes, absolutely. Certainly asset management remains a big part of what we're doing and we're in active dialogue with each of our borrowers and I think in each case there are extension, conditions or extensions available within those loans in normal course. Obviously cash flow covenants and the like are something that we're actively managing discussions with those borrowers with and I think we've talked through a little bit of amendments that we've made in keeping with what's gone on with COVID with respect to certain asset classes. So active dialogue with respect to those extensions but certainly the return of capital markets availability for refinancing, recapitalizations and willing buyers and sellers coming back to the table in real estate as a whole I think speaks to what we would expect to see with some of those assets as well.

Great. Thanks Bryan. And it looks like you pulled down a 150 million on most of loans from Ares facility around the execution of the CLO. Can you talk about the remaining balance that's sitting on that facility and certainly being able to do that keep capital deployed certainly highlights why that facility is so attractive. So can you talk about the balance there and how much turnover you think you'll see from repayments and pulling additional investments down from that over the next several quarters?

Yes. Of course and obviously that's something that structural component is something we've talked about a lot with you and others over previous quarters and it's a huge value add to what we do. As part of the CLO that warehouse facility is now fully available to us and I think the execution that we of that CLO proved out exactly the value proposition that we think we have there and so as we enter the remainder of the year having full capacity on that line plus increased liquidity year-over-year that's part of the theme that we touched on our prepared remarks is we're open to new business. We think to do so as efficiently as we did earlier in the first quarter is obviously the way we've designed our business but there's other avenues available as well.

Great. Thanks for the comments.

The next question will be from Tim Hayes of BTIG.

Good afternoon guys and thank you for taking my questions. My first one here, I just want to touch on the dividend policy and great to see a little bit of a bump there through the supplemental but maybe why you didn't decide to raise the regular quarterly dividend because as we look at distributable earnings versus where the pro forma payout is now there's still a nice delta there and some cushion for earnings power to come down, but you already locked in a good amount of your spread there with the hedging transactions you recently completed and so I guess the only other things that would result in lower earnings power or the delta between where distributable earnings and your new dividend is set is either growth which it seems like the pipeline's pretty strong, asset yields which it seems like spreads are relatively in line with pre-COVID levels or credit. And so I'm just curious if there's an expectation that one of those drivers might narrow the gap over time and that's why you decided to pay a supplemental dividend versus raise the regular dividend or if there's anything any other color you can provide on that decision. Thanks.

Sure and thanks for the question Tim. I'll start just to give a bit of background then I'll let Tae-Sik add some additional detail but as with prior quarters when we're discussing and deciding on the dividend we want something that reflects the stability of our platform which I think the regular way dividend and the supplemental does and the consistency of being able to deliver it and I think we have a very high confidence interval with respect to what we put forth, but we always balance that with growth and as we think about the pipeline as you reference we want to make sure that we're able to balance the confidence interval that we have of delivering the dividend that we stated but also continue to invest in what we see as a very positive environment in our space right now. So those are the high level things that we're balancing. I will let Tae-Sik add a little bit more detail.

Sure. Thanks Bryan and Tim. It's excellent question and obviously it's certainly something that we have been very focused on. As you know one of our core principles of course is to make sure that we set a dividend that management and the company has a high level of confidence that we will be able to fully cover through distributable earnings and we've certainly done that the last four years and also if you look back at our historical earnings on an annual basis, we've been at that call it $1.36, $1.40 which is kind of that $0.33 to $0.35 in the earnings per quarter and so I think we've demonstrated through very different market conditions the ability to consistently generate those type of returns. $0.33 is also a number that represents right around the almost exactly a 9% ROE on our book value. So we think that's a very attractive consistent reliable return to our shareholders. So that's certainly a number that we have aimed to reach and want to maintain and then maybe the final point is the $0.02 that we talked about in our opening remarks is of course a portion of the additional earnings that we expect to generate from these LIBOR floors particularly now that we have hedged out the interest rate component of the liabilities at least a substantial portion of that. So even the $0.02 again represents a portion of it not all of it and so I think this is a great first step for us in terms of determining what the right level of dividends we could have come out as you suggested with something more permanent but we felt at this point that this was the best approach for the company and best reflective of us coming out of the pandemic conditions; still not knowing with any certainty exactly how things are going to play out. So we felt overall that this was the right call.

Got it. Yes that makes sense. I really appreciate you guys walking through your decision there in a little bit more detail. I certainly commend you for expressing a little bit of caution there but also allowing shareholders to participate in the upside so that's great. Let's see. It looks like maybe one loan was downgraded to a four this quarter and maybe a couple were upgraded to a two. I'm just wondering if you can maybe touch on those loans broadly and the drivers behind the changes if I read that correctly and then obviously there's a few loans on non-accrual, which haven't changed over the past few quarters but just curious if maybe we can get an update on those as well?

Yes. Absolutely. First with respect to the upgrades I think as we've all thought about this COVID pandemic delaying business plans I think the uptick of those particular assets is reflected in further progress along the regular way business plan execution. So clearly a positive and so think about that progression of business plan as completion of construction or whatever value-add component there may have been or additional leasing or prospects for leasing. So obviously straightforward from a positive perspective. With respect to the downgrade that's a mixed-use asset in a college town that was a new build asset a mix of retail and office and notwithstanding the fact that there has been continued leasing at that asset so continued progression along the business plan. One of the tenants has not been paying current. So just to take that into account we chose to downgrade that asset to a four but the fact that it's well located new build asset and the college town institutional sponsor both in terms of the LP and the operating partner there gives us a positive view long term, but we just took the cautious approach to downgrade that particular asset. With respect to the three loans on non-accrual each of those remains stable and paying at least a portion of current debt service. So as we touched on when we put those assets on non-accrual including the fourth which has since been removed we felt that was the most cautious and judicious approach to those assets but we still feel and I think reflected in their current payment of debt service and the fact that sponsors continue to contribute speaks to long-term value and obviously we're continuing to actively asset manage that through our team and continuous dialogue with the sponsors to bring those to resolution.

Thanks Bryan. That's really helpful. I'll leave it there and hop back in the queue. But thanks again for taking my questions this afternoon.

Of course. Thank you.

The next question will be from Doug Harter of Credit Suisse.

Thanks. Tae-Sik you could help us with how you view the all-in cost of funds on the new CLO compared to one of the warehouse lines that are paying off and kind of how that compares?

Sure. No absolutely. So Doug I think when we look at the CLO so unlike the third CLO we did the fourth CLO you saw is a static CLO so you kind of have to take the initial constant capital versus what we expect to be kind of the average over the sort of expected life of the transaction itself like as you saw at least from an initial perspective we received an excellent advance rate of just over 4 to 1 just over 80% and the initial coupon on the senior certificates that we sold to third parties was L plus 117 again excluding expenses. So we're still going to the final counting for the transaction. We believe it will certainly be lower cost than the warehouse lines. In addition to the lower cost obviously there's a number of other benefits including the non- mark to market positions the non-recourse the match funding all of that we believe is an improvement as well but just to kind of give you a rough estimate I think we're estimating that the only cost of capital will be lower call it 40 to 50 basis points versus warehouse funding costs.

And just because is that on kind of the blended basis that you were talking about or is that kind of day one?

Yes more or less on a blended basis. So when you take into account all of the amortization of expenses both on the warehouse line and on the securitization itself again a lot of estimates go into that obviously depending on how quickly or slowly you expect the CLO to start to amortize down but again that's why we're sort of still working to the final numbers, but I would say a good estimate is 40 to 50 over the life of the CLO.

And then 67% and kind of non-recourse financing. What would be your appetite to kind of continue to add to that or kind of is that the right mix?

Yes. I think there's no magic number. I mean we certainly like to make the percent of our debt that is recourse Acre as low and low as possible being said that is one of the factors one of the core principles that I talked about in terms of what we're hoping to achieve in terms of our liability structure. So non-recourse match funding those are all important concepts and non-recourse will be one of those critical concepts but I do think getting to a level where your recourse level is about equal to your shareholder equity would make a lot of sense. So that's not a specific target but I think that would give us even more comfort than where we are today. So we're sort of approaching those kinds of levels and certainly securitizations one-off loan on loan type of financing, other types of non-recourse financings make sense but again there is very attractive benefits to some forms of recourse whether it's warehouse lines whether it's term loans whether it's convertible notes where it's working capital facilities. So I think it'll always be a blend of the two, but obviously all else being equal we would always want the lowest recourse ratio possible.

Good. Thank you Tae-Sik.

Absolutely. Thank you Dough.

The next question will be from Steve DeLaney of JMP Securities.

Hello everyone. I hope that everyone at Acre is doing well. Tae-Sik the CLO execution sounded exceptionally good. Can you just confirm that between the advance rates, the initial advance rate and the weighted average spread on the senior notes? Is this the best execution that you've had on any of your four CLOs?

Steve, look, thank you. Thank you for that comment and question. We're very-very happy with the execution I think coming out of 2020 seeing the markets improve as quickly as it has and frankly having the right collateral base that we did at that time particularly taking advantage of the Ares warehouse line real estate does put this together. So certainly it was very favorable market conditions. Again having said all that they're all a little different because as I mentioned FL3 was also very attractive. It's certainly priced a bit higher but it is certainly something that we did very efficiently given that it's a managed structure and even four years later effectively almost four years later that we still have the full balance of the senior certificates outstanding being said it was a very-very attractive and efficient financing source for us and we have been able to amortize those type of expenses over a much longer period as well as keep that full outstanding balance outstanding and by the fact that again using the resources of Ares management we were able to do that third securitization during those marked conditions on a private placement basis and therefore incurred less interesting upfront expenses. So again, I think you sort of compare FL3 to FL4 I would say it's not an apple to apple comparison because of the different nature of the two transactions and so yes no we think FL4 was terrific but we still think FL3 even looking back at the time we did it was also a very-very very attractive transaction and continues to be of great benefit to us.

Great. Thanks to that color. As far now that the CLO is done and your warehouse is significantly cleaned out if not completely your appetite can just comment Bryan on your appetite for new net loan growth in the first half of this year? Can we expect that you plan to at least cover repayments and is there any possibility of a small amount of net growth I guess that would have to come from cash of $90 million coming down a little bit?

Yes. Absolutely. I think okay 2020 was a difficult year for the real estate industry with I think I saw a transaction volume as a whole down 15% to 25% I but throughout the greater Ares real estate debt platform we still were very active and I think grew our market share and we saw significant uptick in activity throughout the industry in the fourth quarter and I think that continues into the first quarter and looking forward into this year and I think we're very well positioned to continue to grow our footprint and our market share in what will be a really interesting environment. So the fact I think you hit the nail on the head the fact that we've got access to various liquidity sources that are proprietary to ourselves and with respect to the warehouse line we also obviously repaid a lot of our third party warehouse providers as part of the CLO are sitting in a pretty enviable position with respect to our cash position and when you combine all those things I do think we expect to be active utilizing all of those resources to attack this market that we see as really attractive today.

Great. Well it's nice to hear that cautious prudent but optimistic tone in your voice and your outlook. So thank you both for those comments.

Of course. Thank you.

The next question will be from Jade Rahmani of KBW.

Yes. Thank you very much. I guess to start off with supplemental dividends I've covered this industry since 2007. I don't think I've seen that terminology before maybe I missed something but I've seen special dividends. So can you just clearly enunciate what you're trying to communicate to the market historically special dividends in the mortgage rate space? They don't really add much to the valuation of these companies because it's not really viewed as a promise not something set in stone in terms of a recurring dividend. So I guess for the foreseeable future are you saying that we will be, shareholders will be receiving a $0.33 regular weight dividend and a $0.02 supplemental dividend at least maybe over the next four quarters and beyond that maybe you're reluctant to potentially have to reduce the dividend so that's why you're classifying it as such? Just want to put a finer point on this so that shareholders could be extremely clear as to what you're trying to articulate.

Yes sure. Jade I'll start and I'll turn it over to Tae-Sik but by way of background obviously within the Ares family of companies we've got a lot of different corporate structures and the genesis as we started to talk about this over the past weeks and months was really that it is something that is used within the BDC realm fairly widely and so that was the genesis of why we thought it was appropriate as to transition it into the mortgage read space and specific to Acre but Tae-Sik why don't you I mean maybe you can give a little bit more color as to the conversations we've had.

Sure. Jade I think it's a great question. I appreciate the opportunity to sort of further clarify the distinction if you want to call it between maybe the nomenclature that has been used previously in the word special versus supplemental that we've chosen here borrowing from again the BDC space. Special to us I guess meant a little bit more of a one quarter or a one transaction based types of dividend payment to shareholders. So for example, if you sold a large asset and you realize the gain you can make a special one-time dividend to clear up some of the earnings from that one-time sale or if you found yourself in a position where for tax purposes you needed to make a cash dividend or an in-kind dividend to make sure that you met your requirements but it was really driven by a unique circumstance, a special circumstance, we think it would be appropriate to call it special. I guess, we wanted to distinguish it from that type of one transaction one-quarter type of situation because we do feel this is ongoing maybe not ongoing into perpetuity but ongoing for at least more than a couple of quarters. So as we indicated because of our positive outlook on the earnings benefit that we have from the LIBOR floors and from locking in the interest rate on a substantial portion of our floating net liabilities we feel comfortable that certainly over the next four quarters that we will be able to continue to share some of that excess benefit and earnings with our shareholders in the form of this incremental $0.02 number and that's why we felt borrowing from the terminology of the BDC space that supplemental was the right way to go with it and I do have to give our credit to our IR team who really thought of this and said that was the best nomenclature to kind of describe this circumstance and so while it is unique in the commercial mortgage read space to use that terminology we felt it was the most appropriate terminology that we come up with.

Thank you. Yes I mean just looking at the stocks performance today granted the space seems to be down most of the mortgage rates down maybe 1%, Acre's up 1% the dividend increase if you factor in the supplemental would be at 6% so Acre would be underperforming holding a dividend yield constant what the sector is doing and I've seen this a lot of times these special dividends these one-time announcements even if they're for the next few quarters shareholders never capitalize those into earnings. So maybe at some point you could consider a halfway point a modest increase in the dividend I think that would be more creative to the stock price than using terminology like supplemental. I also would say that we are recommending the stock so I'm not trying to be overly harsh but something just to think about. So as of today are there still three loans on non-accrual? I think Bryan said that there was a fourth loan that came off non-accrual including another loan that was modified. Could you classify that comment?

Sorry. Yes three loans on non-accrual earlier in the midst of last year we removed a fourth. So that was from prior quarter sorry for the confusion but three loans remain on non-accrual as I said continue to pay at least a portion of interest and outlook remains stable but working towards resolution on each of those remaining three.

Great. And when you say a 100% on interest collections I noticed you gave the number for the full year but not for the fourth quarter. So the fourth quarter would be helpful but also I know that when loans are modified and there's been 11 modifications in 2020 obviously the interest contract changes. So how would those interest collections compare with the pre-pandemic portfolio? If you could give some sense I mean should we just take the non-accruals which are about 2% of the portfolio so interest collections pre-pandemic would be about 98%. Is that an accurate statement or is there any other nuance you would want to put on that?

It's a good question and I'd say that like I said with respect to the three assets on non-accrual we are continuing to receive some interest, but classifying that differently. There have been I think that the pace of amendments clearly has slowed down from the acute portion of last year and when we are pursuing those amendments in concert with our borrower groups that's generally coming with as we talked about in previous quarters. New equity coming in from borrowers in return in general for additional duration or some leniency with respect to extension covenants but a continued high pay rate throughout the fourth quarter with respect to just kind of an apples to apples comparison versus 100% collections pre-COVID let us come back to you a little bit with greater details if that's right.

Yes. That's great. Thank you very much. Just in terms of the earnings outlook I know you guys don't provide guidance none of your peers do so not expecting that but clearly distributable earnings have been running well in excess of the dividend. I think you've articulated what you expect the dividend policy could be for the next few quarters but do you think that there's enough visibility into which to project sort of a consistent level of distributable EPS? There could be some timing differences with respect to originations and repayments but overall are you projecting consistency for 2021 and I think also there could be upside potential based on the CLO you put in place as well as the LIBOR floor hedges as well?

Yes. I'll start. A good question. I think like we touched on the philosophy behind our dividend announcement is one of confidence and stability and as much transparency as we have based on what we see we try to reflect that notwithstanding the nomenclature issue that you cite. So we feel good about where we sit today with respect to specifics Tae-Sik I don't know if you have anything to add to Jade's question here.

Jade the only thing I would add is we've been able to generate we think very attractive returns in rather challenging environment while still maintaining a pretty defensive posture. So in other words we have 15% to 20% of our book values sitting in cash effectively earning zero and yet we still have been able to generate the distributable earnings that we have the past few quarters and so as conditions change we will then look to potentially deploy that excess capital as well as take advantage of the Ares warehouse line but once you start to deploy that capital into more interest earning assets again we could find ourselves with further avenues of growth either to add incremental to where we are today or to replace some of the earnings that may run off for the next several quarters. So I guess it's sort of a long-winded way of saying that there's a number of moving pieces. The good news is that we find ourselves in a very advantageous position to have a few levers that we can continue to take advantage to what we would say is at least maintain the kind of earnings that we've been able to generate.

Thanks very much. Lastly just wanted to ask about M&A something we used to talk about quite frequently. I think Acre's trading act very close to book value and there's a number of mortgage REITS as well as probably who assume valuations on private cap vehicles substantially below a close peer which is diversified and internally manages that 75% of book value. What is the company's interest in pursuing M&A at this point or given where we are in the cycle does it make sense to be more prudent with capital not reach for an M&A transaction to grab scale and rather wait until things become more certain?

We don't have anything specific with respect to the M&A opportunity that exists today. I think clearly we see the value of a scaled business and as we think about some of the retained earnings I think that speaks to that continued growth of the book and scale and further deployment and as Tae-Sik points out I think we feel really good about having all of the different levers that we can pull available to us post CLO and I think in addition to normal course warehouse lines, etc. we also have access to the greater Acre's platform including some strategic thinkers and execution folks to pursue strategies like that. But we don't have anything specific to discuss but clearly it's something that we're always paying attention to and looking at a number of opportunities throughout the market.

Thank you very much.

The next question will be from of JP Morgan.

Hey good afternoon guys. Thanks for taking all the questions. Most have been covered already. I really appreciate all the color but I did want to ask about LIBOR floors a bit given the significance of those floors especially in the context of the supplemental dividend and the hedging transaction. Can you just help me understand sort of the cadence of how those floors are going to shift over the next few quarters especially as the older vintages pay down and new loans are coming onto the book? I'm just trying to get a sense because the weighted average floor for the whole portfolio is sort of a snapshot static analysis and the portfolio is obviously more dynamic than that.

Yes. Absolutely. A lot of thought went into exactly how this was structured. So I will let Tae-Sik walk you through the specifics but I think your question is good.

Yes. Thanks Bryan and Charlie thanks for the question. You're 100% on while we can easily summarize the benefit of LIBOR floors and the fact that again 95% of our loans have LIBOR floors with a weighted average of 1.73% which is quite a premium over where LIBOR is today. Clearly the real analysis is done on a loan by loan basis. So for example we do expect over the next call it three years for the loans with LIBOR floors to repay and that when we redeploy the capital from the proceeds of those repayments that we will not be able to achieve LIBOR floors anywhere near the existing rates today. In fact, most LIBOR floors are set very low or even at market at the time we close a loan or close the loan. So that is certainly all factored into our forecasting business plan. It is as we've always said on a deal by deal, loan by loan basis that we make that determination and one thing to note on the interest rate hedge that we did very similar there is that as I mentioned both the swap and the cap have the initial balances of 870 million and 275 million but that they do amortize down over the next three years and again that amortization schedule of even the interest rate hedging is largely based upon what we expect the runoff of the loans with interest rate floors the LIBOR floors to pre-pay as well or to repay as well. So it's a very granular exercise that we go through to make sure that we are again continuing to maximize the benefit of LIBOR floor for but knowing that those loans will eventually run off and we have to make sure that our liability structure closely as matches that run off as possible as well.

Okay. Thanks Tae-Sik. That makes sense. And just one more question some of your peers have made some comments recently that their warehouse lenders are actively looking to kind of grow their footprint and grow facility utilization. I'm just curious if you guys can provide any color around the conversations you guys are having with your lenders and if you feel that that view is pretty consistent across the sector?

Yes. I think so. Look from a macro perspective we've all seen what's occurred in rates over the past 12 months and clearly that was part of the genesis for our hedging strategy. The other impact of that is I think across the board you've seen relatively positive credit performance and a search for yield throughout the globe and what we are taking advantage of at a high level is the ability to lend in what we'll call a private market. So direct origination channels throughout our foot our origination offices in the country and then borrow in either the capital markets directly through the CLO or through our financing counterparties and clearly as the CLO market has kind of cleared the decks for a lot of our warehouse lending counterparties they are seeking out additional assets in pursuit of NIM and that is absolutely something we're seeing almost universally with respect to our counterparties and something that we will likely benefit from of over the coming 6-12 months.

I appreciate the color guys. Thanks so much.

Thank you.

This concludes our question and answer session. I would now like to turn the conference back over to Bryan Donohoe for any closing remarks.

Great. Thank you and in closing I just want to once again thank everybody on the team for their contribution over the last 12 months. It really has been exceptional and I want to thank everybody for joining today and for all the questions from our analysts. I appreciate all the continued support of Acre and we look forward to speaking to you again on our next earnings call. Thank you again.

Ladies and gentlemen this concludes our conference call for today. If you missed any part of today's call an archive for replay of this conference call will be available approximately one hour after the end of this call through March 4, 2021 to domestic callers by dialing 1-877-344-7529 and to international callers by dialing 1-412-317-0088. For all replays please reference conference number 10150859. An archive replay will also be available on a webcast link located on the home page of the Investor Resources section of our website.