Good day ladies and gentlemen and welcome to today’s Starwood Property Trust Third Quarter 2016 Earnings Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Zach Tanenbaum, Director of Investor Relations. Please go ahead, sir.

Thank you, Operator. Good morning, and welcome to Starwood Property Trust's earnings call. This morning, the company released its financial results for the quarter ended September 30, 2016, filed its 10-Q with the Securities and Exchange Commission, and posted its earnings supplement to its website. Starting this quarter, all of the quarterly disclosure by business segment that was previously contained in the company’s earnings press release can be found in the company’s earnings supplementary. These documents are available on the Investor Relations section of the Company's website at www.starwoodpropertytrust.com. Before the call begins, I would like to remind everyone that certain statements made in the course of this call are not based on historical information and may constitute forward-looking statements. These statements are based on management's current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. I refer you to the company's filings made with the SEC for a more detailed discussion of these risks and factors that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. The company undertakes no duty to update any forward-looking statements that may be made during the course of this call. Additionally, certain non-GAAP financial measures will be discussed on this conference call. A presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. Reconciliations of these non-GAAP financial measures to the most comparable measures prepared in accordance with GAAP can be accessed through our filings with the SEC at www.sec.gov. Joining me on the call today are Barry Sternlicht, the Company's CEO, Rina Paniry, the Company's CFO, Jeff DiModica, the Company's President; Andrew Sossen, the Company's COO; and Adam Behlman, the President of our Real Estate Investing and Servicing Segment. With that, I'm now going to turn the call over to Rina.

Thank you, Zach, and good morning everyone. This quarter once again demonstrated the strength of our multi-cylinder platform with each components of our business delivering strong earnings performance. Collectively we generated core earnings of $141.1 million or $0.59 per diluted share up from the $0.50 we reported last quarter. Our annualized net return on equity also increased this quarter to just under, 14%. I will begin our segment discussion this morning with the results of our lending segment. During the quarter this segment contributed core earnings of $101.3 million, or $0.42 per share in line with the first two quarters this year. We originated or acquired $553 million of loans with an average size of $92 million and a weighted average LTV of just under, 60%. During the quarter, we funded $457 million of these loans in addition to $132 million under preexisting loan commitments. Similar to past quarters, our loan fundings were made with recycled cash from this segment’s seasoned investment portfolio, which returned $1 billion during the quarter in line with our expectation. Sales of A-notes returned another $150 million. Our fourth quarter pipeline appears strong with $315 million of loans having already closed subsequent to quarter-end. All of the loans we originated during and after the quarter were floating rates. With expectations building for an increase in interest rates, it is important to note that nearly 90% of our loan portfolio is LIBOR based. Thus, we would expect to benefit in a rising rate environment. A 100-basis point increase in LIBOR would generate an additional $0.07 of net interest income annually with an incremental benefit realized by our servicer. That brings me to our investing and servicing segment, which contributed core earnings of $70.7 million or $0.30 per share this quarter, up from the $0.21 we reported…

Thanks, Rina. Since our IPO over seven years ago, our shares have had a total return of 140% or 12.9% annualized. We believe our diversified low leverage, low LTV credit-centric business model is highly sustainable through market cycles and that we have set up a company that performs well in a rally. And we believe will outperform if and when the cycle turns. Our Special Servicer picks up revenue and as Rina said, we will also be more profitable in a higher rate environment. As we have said in the past, certain cylinders in our business are susceptible to some level of earnings’ volatility. But overall we expect to see a steady contribution from our collective cylinders overtime though maybe not all at once. That is the strategy. We believe this is a great advantage for our multi-cylinder platform that allows us to make the best risk reward investments by sector every day and not be forced to chase investments in any one sector. We have talked about the combined per view of Starwood Property Trust and Starwood Capital Group as a borrower, lender and servicers and that only in combination do we get a full view of the relative value of the opportunity set in front of us. Despite caution on our capital deployment earlier in the year, our multi-cylinder platform has delivered a strong performance for our shareholders so far in 2016, generating $1.59 of core earnings for the first nine months of the year. We try to run every facet of our business conservatively from our credit process and independent internal underwriting and credit function to our LTVs, from our leverage which is by far the lowest of our peers to our hedging strategies where we fully hedge rate risk and foreign exchange risk and will always…

Thanks Jeff, thanks Rina, good morning everyone. I have a terrible cold. So, I’m going to keep my comments relatively brief. Let’s start by saying that I think the most important thing for the company is really the environment that we’re operating in. It’s probably one of the more exciting times for the company since the formation of the company when it was clearly a dearth capital for lending is no significant dearth today, we have the government warning the banks about getting over-extended to real-estate. But at the same time you have the structural changes coming into the market as Jeff mentioned where banks are reluctant to increase their LTVs, the capital treatments, requirements are awful. And especially construction lending has become almost impossible for major banks at large volumes. It’s become, considered high volatility real-estate assets and have incredibly difficult capital requirements that has two implications for us and for the market in United States. One: supply is going to harder to add than it’s been probably in the last 20 years. It’s going to be expensive to build, costs will go up. And if cost go up then rents have to go up to make those projects worthwhile. I think that’s good for existing portfolio bodes well for LTVs, and obviously we’re positioned to do what we’ve done in this year selectively choose our own construction loans. The biggest competitors we have today are actually not other banks, even other non-banks like us we sealed a number of hedge funds you’ve probably read it recently about the Children’s Fund in London making large construction loans, billion-dollar construction loans. And if you think about that loan in hedge fund format let’s you’re getting L plus 8, you’re clipping 20% of the profits with no hurdle and you’re getting…

[Operator Instructions]. And first from JMP Securities we have Steve Delaney.

Hi, good morning everyone and congrats on a strong quarter. I think the market must have read a different press release than I did this morning. But that’s the times we live in too I think with the Fed and the Election. I’d like to start with the large billion-dollar pay-off in the quarter. Rina, I was curious if you realized any incremental revenue on that pay-off in terms of your maintenance or something of that nature?

So, we did but it’s not really any different than what we’ve realized in past quarters. So, every quarter we’ve got about roughly that amount in pay-offs. And we do have yield maintenance that accretes through the interest income line. So, what we had this quarter was actually not any different. In fact it was maybe $1 million less than what we recognized last quarter.

Got it. So nothing out of line there? We’re just trying to figure out, just kind of the pieces of the bead if you will versus our estimate. Would it be possible Jeff to comment on what you’re seeing in pay-offs. This is obviously going on and ties into Barry’s comments about long duration assets. But we’ve seen it, with all the commercial movie treats over the last two quarters just you’ve got to lend a lot of money just to stay flat in your portfolio. So, any help you could give us about what the outlook is for fourth quarter would be useful.

Yes, I have the number here somewhere. It does trail-off. A number of the construction loans that we wrote in 2012 and early 2013 have paid-off. And that was a significant amount of the growth in the last couple of quarters. It does tail loss. Rina, do you have the exact number of what our expectation is?

For Q4, sorry Jeff, are we talking repayments?

Yes, for Q4.

Yes, Q4, we’re projecting about $0.5 billion right now.

Okay. So pretty good decline. Okay. Thank you.

Wait, let me comment on that. We’re commensurate right the more transitions out that the better the spread we can get when we make the loan out. But pass-through the equity, it fixes the asset the faster they want to refinance us. So, what we’ve done in the quarter is we worked to actually improve the spreads on our credit facilities, our lines from the banks and they’ve been willing to do so as we. And we can actually move up the credit quality which will meaning, you’ll make a more permanent kind of loan, finance it maybe 30 basis points cheaper than we’re used to and maybe even slightly higher leverage. And have a higher - we only have today with more duration. So, it’s a bit of an issue for us. The kinds of deals we’ve been able to do in the past, they were real-estate underwritings, primarily and we say okay, they need some space, we’ll give the money for the TI, renovate this hotel and we underwrite that. It’s great. We continue to do that. But we also want to add this concept of doing it slightly lower coupon loans finance that are tighter spread for similar returns on the floor. So, we’re totally focused on that. And what happened in the repayment, there were no surprises to us in the quarter. We kind of knew this. And one thing that’s interesting, our earnings this year, if you recall, we sat on lot of cash in the first quarter because the world was wobbling. And we told you we’re doing that. And so for the year, so far, we’ve had much larger cash balances than we would normally have. And despite that we’re still going to earn, how, do I say this, within the estimates of a streak. And we did so actually without deploying as much capital as we normally might have. And we are working hard to put the capital out. So, we do not need to raise equity to buy the MOB portfolio, you should point that out and with finite capacity. We will always go to look, we’re consistent from the start, bigger is better, bigger is better, bigger is better, would this company be better as a $10 billion company than a $5 billion company? Absolutely. But we have to have good reasons to deploy capital accretively in order to raise any additional capital. And as you pointed out, we got plenty to do with our existing cash and availability today.

That’s helpful. I appreciate it Barry. And I guess to close out, another large direct real-estate investment. And Rina shared 10% cash-on-cash. Could you generally comment, one of you on when you’re looking at opportunities such as this, when you compare it to your principle lending business, what is sort of your range? The 10% sounds high for cash-on-cash and I guess it has to do with the nature of these particular properties. But what would sort of your range of sort of an unlevered and levered return on equity that you would expect over time as that real-estate portfolio grows to 25% or more?

We looked at a lot of deals. And the market doesn’t pay us for IRR. And that’s one of the things I learned when server hotels. So, I do a 20 IRR in a piece of paper that has a three cash-on-cash yield coming out. And I believe it’s a 20, I have to sell it to realize that IRR. And then you’d say what are you going to do for me tomorrow? We’re much more focused on the current yield and make them consistent supporting our dividend and covering our costs of running the vehicle. So, yes, that’s why there are so few of them. It’s very hard to find investments that will pay you double-digit cash yields out of the box. And that they are pure that are actually pure meaning that we don’t but below the line we’re not spending half of it on TI or capital improvements. So we’ve looked, and we’ve been talking about this for four or five years, we look at every triple-net lease company. One of the reasons we do this which is not as obvious is that if we buy equity, it creates a deprecation shield for us. And over time it’s theoretically possible that we could have a lower payout ratio and preserve cash. So, we’re not, it gives us that option that we wouldn’t have if we didn’t have the deprecation shields in the company. So right now we’re fine with our dividend. And it’s actually probably in excess of what we have to pay from a 95% of taxable income because of the acquisition of the equity portfolios. But it used to be the case that we were a pure interest income company that had to payout 95% of everything they earned. Now it’s depreciation shield, and in a negative climate if that would occur, we have some room to payout every penny we earned. So it’s just, it’s a nuance to what we’ve been doing that’s kind of important.

Yes, it sounds like it provides a little more balance too in your decision making. So thank you all for your comments this morning.

Thank you.

And moving on, our next question comes from Douglas Harter with Credit Suisse.

Thanks. Did you guys quantify the exact level of conduit earnings this quarter and how that compared to last quarter?

Do we want to do that Rina?

Sure. We can obviously do that. So, Doug…

I wasn’t saying, I know we can, I said, do we want to? Larry asked that’s not to talk about it, so up to you. We are in three different locations - that’s why we’re talking this way to each other. Rina, are you going to make the comment?

I’ll comment. So, in Q2 you know Doug that we’ve reported securitization profits of $11.7 million, this quarter it was $48.3 million.

Okay. And I know you said the timing of one deal pulled forward. I guess, how should we think within that, obviously a wide range, what is kind of a normalized level of profitability or something that we could expect over a normalized 12-month period?

I mean on…

Yes, I mean, Doug, as the first quarter was anomaly because of originating loans into a rapidly widening CMBS market kind of Q3 was the opposite of that. And it was a bit higher because of the increase in total volume that came through in the quarter. So, I think the other quarters are probably more equalized kind of running relative to the type of volume that it typically does.

And I think what we’ve said Doug is - we expect over a year that his - not only his earnings but his volume would normalize as well. So, if you look at sort of the profit that he earned last year on roughly call it $2.2 billion of volume, I think will probably hit that approximate $2 billion of volume this year as well with, again on par for the year overall we’d be very close to the profitability of last year.

Got it, okay. That makes sense. Then, obviously you’re making some progress in deploying excess liquidity with the property buy. I guess can you talk for look for being able to grow the lending business kind of net of pay-downs in the coming quarters?

I guess I’ll touch that. We did have a very strong second quarter. We do expect to have a strong fourth quarter. We have ample cash available to continue to grow the lending business and to close on the large pipeline that we hope to finish up on for the fourth quarter. 2007 was obviously a large origination year you’ve heard I’ve talk about that on the servicing side. There was also a lot of 10-year fixed rate loans that were written outside of the conduit world in 2007 and 2017 will have a significant amount of maturities. We’re increasing staff to look at all of these maturities and make sure that we’re in front of every opportunity. And as Barry and I both said on this call, the banking environment is changing. And there will be more opportunities for us to pick up things that have historically gone to a bank market. So we’re making sure that we have the resources to do that and we’re pretty excited about what we think is in front of us in 2017. Additionally, as I said in my comments, we’re funding ourselves better. And Barry spoke to it as well. We are funding ourselves tighter. Higher LTVs are available to us if we want to take more leverage. And we’re optimistic about the lending book in 2017. And as Barry would say that is our core business. And it’s a business that we would like to see grow and as the opportunity is there. And we will continue to grow that at the expense of other businesses.

I want to add one thing. I mean, we’re really picky. We are maybe because we’ve been doing this for 30 years. There are a lot of deals that we don’t do that we just let someone else do it, it might work out or they might not. But so far we’ve had an unblemished track-record of no losses. And we really, I’m probably wrong on we have a large investment committee but I would say that I’ve probably been long two or five times deals worked out and we didn’t make them. So, we make each loan, we look at every little and large loans, and when just that we raise our LTV, it doesn’t mean our origination LTV on our side, he meant that the warehouse lines, we can borrow more against the assets than previously, so we can maintain our ROEs on net invested capital. So, it’s - we’re really looking for quality, we’re really looking for good assets. And there has been some we had a loan in Florida on a hotel across the street from the hotel that we built. And I was really worried about it because the hotel wasn’t making its projections. And our loan was like $54 million or something. It was a construction loan actually. And despite the fact the hotel made very little money which was sold for $100 million. So and we retired, we paid-off. I thought - I was actually looking forward to getting a hotel, half of construction cost. But we lost it and it was too bad. That was like [indiscernible] close on. But the environment for assets is still robust. On the equity side there is a lot of capital. And I expect that will continue despite the fact that REIT thing to be correcting, because that of the fear of rising rates. It’s little overdone it’s probably a hockey stick. And ultimately the retail gets supported by their dividend yields. But right now if anybody panic in the streets for the REITs and I don’t really see why that is unless people thought interest rates will rise in December and it continues rising materially which I see being the case. So, I think we’ll get through this and it’s good for our business. We’re happy. And people are nervous we’re delighted. That’s our best investing time.

And Barry, a build quickly on what you said. Coming to this shop inside Starwood, it was surprising to me to see just the level of detail that goes into debt underwriting. We underwrite debt here through an equity lens. We make a similar investment committee memo to what you would do if you were buying the property. It’s 60 to 90 pages long. We have a separate underwriting function under our Head of Credit that writes that, that does all the confirmatory due diligence. And it is not done as most of our competitors were the originators, originate alone and bring something through with a much shorter credit deck and bring it through the entire process. We have a separation there that’s very distinct and it’s distinct for a reason. Credit is extremely important and we take it very seriously. And I think it’s an interesting thing to note versus how other people look at their business as well as once we write the loan, we have our own internal asset management. So we will hand the loan along the way to our own internal asset managers who will asset manage it for the life of the loan, again allowing us an opportunity for ReFi at the end and to create the best borrowing experience that we can.

Thank you, guys.

Moving on. Our next question comes from Jade Rahmani with Keefe, Bruyette & Woods.

Thanks. Can you discuss the risk-five rated loans that I believe matures in December and how you’re thinking about that?

Barry, do you want me to take that?

Yes, sure.

So, we were able to purchase a first mortgage that is - that goes along with the mezzanine that we owned. And in combination, because of the fact that we now own a piece of paper that has the higher attachment point of the mezz. We have the risk rating on the combined piece fairly high. We do believe that rating has very little to do with what the ultimate cash flow of that property will be. And at the end of the day, we did have to extend that loan. And whenever we hit an extension, we will tend to be more onerous on the property’s rating. And we believe with high certainty that that loan will pay-off in 2017. And we felt fairly good about that.

Thanks. On the acquisition side, I’m sorry, just the loan loss provision what did that relate to?

The same - go ahead.

The senior portion of the senior bond on the same loan, excuse me.

So, you have a 5% provision on this loan?

So, Jade, under GAAP actually, it’s actually two different loans. So the senior and the mezz are treated as separate loans. And the senior is what you’re seeing driving the increase in the provision this quarter. It’s the senior that’s rated a 4 and has 1.5% provision on it, which drove the increase. The mezz is rated a 5 has always been rated a 5 at least since last quarter. So there is no change to our provision resulting from that piece.

Okay, thanks. From my vantage point it seems that you guys have been highly diligent in your view of additional acquisitions. In terms of the types of deals you’re looking at, can you just give any color on maybe the split between equity and debt? You did mention growing the equity portfolio to 25%. But in terms of what you’re looking at, what’s the split between equity and debt and also maybe portfolios versus actual operating businesses?

I’ll take that. I mean, we’d always like to buy a portfolio business we could grow, so the MOB business we obviously can grow. I would say the multi-business we entered with the Wilson portfolio, we always buy multi, so they are good for us. If we can find the yields that we want we’re taking out risk. And I think I answered your question, I think we’ll take the equity book around 25% is what we’re thinking. And it really has been an effort to extend duration because it is really hard to keep putting money out, get 18-month, 24-month or 28-month duration loans even though they are. And I think that’s one of the interesting things about marketplace, I think it’s going to change. I think construction lenders might be able to make mini-firms. And I mean, this construction debt can become so difficult and so expensive, it’s going to go from 300 over to 600 and 700 over. And so, I think the next 12 months, our goal, as we said, our core goal is to build our lending book, that’s our number one business. But it’s simply, we’re being patient, we know the markets are changing, the regulation is going to affect on B-piece, as our retention provision to be under December. And then the whole thing is going to change, the whole game is going to change. I think everyone is confused. Nobody knows exactly how this is going to work other than we’ve already seen the banks get very cautious on lending on construction loans. It’s going to be really hard to build a hotel. You’re probably going to have to do it with offshore capital base or something like that. It’s going to be really hard. It’s really good for existing investments all the existing REITs are going to have longer duration because the markets are healthy across the board as they’ve been in my 20 or 30 years of doing real-estate. I mean, there are pockets of weakness, hotels in Miami, hotels in New York, or multi in New York, multi in San Francisco. But in general, the market is pretty strong and occupancies remain pretty high on every asset class in real-estate right now.

In terms of risk retention, I was wondering if Adam from L&R could comment on what do you think the level of conversations, are around horizontal strip structures right now. It seems like the vertical strips have been somewhat successful. And there is some confirmation on the horizontal side. So, how do you think that plays out in the next few months?

Well, yes, you’re correct. We’ve seen one deal close one deal priced both from the same source wells. And we are seeing as much activity being discussed on both the vertical and horizontal basis. So, I think that we are just at the point where people are having conversations about what’s going to happen in January and February. And this is probably a better time to ask this quarter next quarter because we’re seeing both, I think people are trying to explore both options at this moment.

Thanks very much for taking my questions.

Our next question comes from Charles Nabhan with Wells Fargo.

Hi, good morning. Most of my questions have been asked but if I could follow-up on Jade’s question on the CMBS market. I know there is a lot of moving parts. But as we stand today I was wondering if you could comment on your expectations for volumes - securitization volumes in the non-agency market for 2017 as well as how your expectations for yields on B-piece next year as well?

You want me to go Jeff.

Yes, please.

I think there are two conflicting things going on simultaneously. As far as volume goes, you’re going to have the risk retention rules going into effect on December 24. At the same time we’re going to have the massive wall maturities coming due in 2017. So, if I just put my hat on now, I’m going to guess they’ve offset each other in some ways, maybe slightly higher volume because the markets are in good condition. And especially with the abilities, it seems like the people that do the vertical transactions should keep things in relatively normal order. I would expect that some of the lenders potentially don’t come out of this because they can’t afford the change in cost of funds that maybe associated with the markets moving here. So, on that front I think we may see some lenders move out but I expect increase in volumes potentially in others due to that. And in addition, as far as B-piece pricing, really too early to tell, obviously it depends on which way this goes. If it goes vertical I would expect kind of benign movements because of the market just 95% of the same size. If it goes more vertical, I’m sorry more horizontal, I think it is slight increase in yield due to the liquidity issues that are associated.

I would think of it simply this way. If the vertical happens and the entire market goes vertical, it’s fine for us, it’s business as usual because 95% of what was yesterday at B-piece will be available for us to continue to do what we do tomorrow. If we go horizontal or L-shaped, we’re going to pick up either yield or structure, and by structure I mean, a better attachment point, a higher rated bond for the same yield if we don’t pick up yield. Obviously we have more to pick up and more to gain in horizontal or L-shaped world, but a vertical world by no means hurts us, 95% of what was there yesterday is there for us to invest in tomorrow just like we always have. So, we’re looking forward to however it plays out.

Great. And as a follow-up I was hoping you could comment on any trends you’re seeing in the special servicing business, specifically what you’re seeing in terms of inflows and resolutions and whether there is any imminent resolutions that could have an impact on earnings over the next couple of quarters?

I don’t think that any one resolution would have an impact on earnings going forward. I think steady state on $11 billion that’s in the portfolio. So, just to give you a sense, this quarter we were flat but we had movement of $1.1 billion come into the portfolio and another $1.1 billion transferred out. So like I said, I don’t think it’s any one asset that would drive that.

And moving on. We’ll hear from Jessica Ribner with FBR & Company.

Good morning guys, most of my questions have been answered and answered. But a question on the equity portfolio. Barry I know that you mentioned you want assets that you want to own for the next 20 years. And I think widely the medical office building space has been seen as demographically favorable and all that. Are there any other segments of the market you would be looking at similar to the medical office business, meaning demographics are great, the pricing is good, it’s good to get in or are you more looking opportunistically?

I’d say we were considering a large office portfolio, which I kind of like. But I was worried about the current yield. We’re kind of addicted to paying our dividend from cash we earned currently. And we want to keep it that way. Even though interesting from the accounting standpoint we don’t really look at the GAAP accounting, we’re well aware of that. But if you straight-line a rent in an office building that’s going up I’d say, you’re going to have a dividend, a cash dividend, you’re going to have GAAP earnings but you’re not going to have the cash because there is some portion of that rent is phantom. It’s just that’s GAAP but it’s not actually cash. So, I think you can imagine which asset classes are far more stable and that we’d be interested in. But the security of the income stream, the credit quality of the tenants, it’s the roller-risk schedules. So it’s almost, we have a couple of portfolios that we could have done but I think when you see one you say, it does meets all our criteria you just try to get it. And yes, it is, the longer you hold these things and we’re not predicting exit cap rates in 10 or 20 years, inconsistent with what we’re purchasing. But if we can get these yields, the cash flow up, it takes a lot of risk off the residual. And I think we’ve looked in Europe as you know, we’re not adverse to realizing some of the profits we have in the equity book too, I think we’ve mentioned on prior calls that we think we’re weighing the money on our business in Dublin, the rents have almost doubled in Dublin, which was not our pro forma. So, what we thought would be a solid core investment, it’s turned out to be a hell of a deal and probably 30 plus IRRs. So we will look to actually recycle some of that capital as yields are falling in that case maybe the 4s. Then it makes no sense to keep investing capital that that what would probably be a levered 8. So we have to probably take off some of that capital that’s nearly deployed into something else. So we’ll do that. I mean, we have I think everything we’ve done is working out pretty much as we expected so far. And so I would say, we would look at, imagine mobile home parks, they’re fiercely fought for and things like that, things that are very stable, good long-term cash generators.

Okay, thank you. And a question about the principle lending business. Obviously you guys have talked about it a lot and everyone is talking about the bank pull-back, HVCRE and how all of those regulations really are going to benefit the non-bank lender. But you also mentioned that competition this quarter was tight. And we appreciate your conservatism in not chasing loans at any price. But how do we think about that going forward. I mean, do you guys think about the competition remaining tight? Do you think some of these lenders are going to back-off from the market? How can we think about that really?

Look, a capital holds a vacuum. And the search for yield globally goes on across all our clients and all our asset bases. So while the commercial banks might set out to take share on an LTV basis and act more like insurance companies. Insurance companies were very aggressive lending 50% LTV at tight spreads, competing ends and trying to beat the CMBS execution. So I imagine the commercial banks are going to evolve or be pushed into that kind of position, which means if you want to borrow 65% or 70% or 75% you won’t be able to do it from any bank, especially those that have already extended their books. But I do think there will be plenty of competition, it’s not going to be - we're the only guys standing. We’re not second - the largest guy in our space is Black Badger too. I do think we’re small on a global basis we’re not that big a company. And you do see as I mentioned hedge funds and non-traditional guys that are not maybe performing so well in their core businesses, moving into this space and making loans and they will often times because they’ll usually go high on LTVs than we’re willing to go. So, and they’re not really with typically 100-meter real-estate background. So it will be took in our favor, it’s not going to be just us, the only lender in the world. So I do think the landscape will be better for us. I think, we’re all going to see and we have our theories, we’re not going to share with you on how we think this might evolve over time. But I think even the banks don’t know. Sorry, I’m coughing.

And Jessica, did you have anything further ma’am? All right, with no response, then no further questions in the queue. I’d like to turn the floor back to Mr. Sternlicht for any additional or closing remarks.

Thank you everyone. We look forward to talking to you again next quarter. And as always our team is around to answer your questions after the call. Thank you. Have a great day.

And ladies and gentlemen that does conclude today’s conference. We appreciate your participation. And you may now disconnect.