© 2024 Alpha Spread Limited. All Rights Reserved.
www.alphaspread.com is not operated by a broker, a dealer, or a registered investment adviser. Under no circumstances does any information posted on www.alphaspread.com represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. In no event shall Alpha Spread Limited be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on www.alphaspread.com, or relating to the use of, or inability to use, www.alphaspread.com or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance.
You don't have any saved screeners yet
Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Good day, ladies and gentlemen. Welcome to the Timbercreek Financial Fourth Quarter earnings call. [Operator Instructions] As a reminder, today's call is being recorded. I would now like to turn the meeting over to Blair Tamblyn. Please go ahead.
Thank you very much. Good afternoon, everyone, and thank you for joining us today to discuss Timbercreek Financial's fourth quarter and year-end financial results. Similar to the Q3 call. I'm joined today by Scott Rowland, our CIO; Tracy Johnston, our CFO; and Geoff McTait, our Head of Canadian Originations and Global Syndications. We have a long history as a lender in the Canadian market, and it's safe to say 2020 was a year without precedent from an economic, social and geopolitical perspective. Like many other businesses, this resulted in a rapidly changing operating environment for Timbercreek and presented new challenges for some of our borrowers. Fortunately, our team was able to adopt quickly and operate remotely without interruption. And on the whole, our portfolio is quite resilient through 2020, owing to our focus on income-producing assets and significant multifamily residential exposure. I'll let Scott review the portfolio composition and performance in greater detail shortly. Ultimately, we're in the business of creating attractive risk-adjusted income for our shareholders. And we concluded the year with a 97.3% dividend payout ratio on distributable income of $0.71 (sic) [ $0.17 ] per share, which are within both our operating target and expectations. Of note, over the past 16 quarters, we have maintained an average dividend payout ratio of 94.9% on dividend income despite the historically low interest rate environment we find ourselves in, demonstrating our ability to maintain substantial steady income, which is fundamental to our investment proposition. As we discussed periodically during the last year, we have not been fully immune from the effects of COVID. Looking at industry-wide data for 2020, national commercial real estate investment volume decreased by almost 22% from 2019 and volume in the underlying commercial debt markets fell to levels not seen since 2016. This had predictable effects on our loan origination activity, which was materially lower earlier in 2020 that showed resilience increased as the year progressed, culminating in a fairly active fourth quarter. Not surprisingly, the crisis affected certain asset types and sectors materially, while others were stable and some even thrived. The Canadian multifamily sector, where we have always been highly focused withstood the worst of the pandemic better than most other property types. Conversely, office, retail and hotel assets were harder hit, resulting in multiple large real estate investment trusts in Canada reducing their distributions. We felt the impact of COVID in Q4 as well as we recorded material fair value adjustments, principally on a legacy retail asset that has been affected by the negative retail environment, which has primarily been driven by a deep and sustained pivot to e-commerce. Scott will provide more context in detailing this portfolio review. While it's disappointing to report a negative value adjustment, these are unique legacy situations in a small portion of the total portfolio, 3.5% of total assets. Frankly, in a portfolio of 116 loans and given the environment in 2020, we are very pleased with the durability of the investments. Our conservative positioning served us well through the worst of this crisis. I'll pause here and turn it over to Scott to discuss the portfolio and market trends. Scott?
Great. Thanks, Blair. Listen, I would echo Blair's comments on the resilience of the portfolio. At year-end, we had only 2 mortgage investments of 116 in arrears, and we had no COVID-19 related concessions. In addition, the interest and principal payments from our borrowers continue to be largely unaffected. We collected approximately 99% of December 2020 interest payments, which is materially in line with historical collection rates. As Blair mentioned, we faced an industry-wide slowdown in transaction activity in 2020 as borrowers and lenders needed time to adopt to the new COVID environment. Coming off of a slow Q3, we anticipated a stronger transaction volume in Q4 and that materialized. I'll now review some key metrics within the portfolio and will include some further detail on specific loans. We fared comparatively well in 2020, in large part because of how we have constructed the portfolio. Close to 85% of our investments were secured by income-producing assets at year-end. At 52% of the portfolio, multiunit residential remains the largest segment of the book. The fundamentals in this sector were mostly insulated from the impacts of the pandemic and consequently, it remains a highly desirable and in-demand asset class. Finally, we remain almost entirely invested in urban markets, which provides superior tenancy and asset liquidity. Looking at a multiyear view, our efforts to derisk the portfolio have also proved valuable. First, mortgages represent 90.3% of the portfolio, the same as in Q3. Our average loan-to-value was 68.5%, unchanged from Q3 2020 and reflecting the conservative approach we are taking on new deals. Despite a reduction in the primary we have been able to maintain our weighted average interest rate. The WAIR on our portfolio was 7.2% once again in Q4. This rate was well protected due to floating rate loans and with rate floors representing 78.1% of the portfolio at quarter end, our highest level ever. And lastly, terms of maturity was 1 year, down slightly from Q3. Looking at portfolio activity and turnover, this chart shows the uptick and activity in the fourth quarter, both in terms of new investments and repayments. We invested roughly $280 million in new mortgage investments, and additional advances on existing mortgages. This was then offset by repayments of $276 million, and this drove overall a healthy portfolio turnover of 19.6% in the fourth quarter up from 12.3% in Q3. Overall, the portfolio remains highly diversified, which is an important way we manage risk. The portfolio is heavily weighted towards Canada's largest provinces, with approximately 97% invested in Ontario, BC, Quebec and Alberta. The majority of which are in urban markets that generally experience better liquidity and offer a better risk profile. Our Alberta exposure was reduced over the course of 2020 from 20% at the end of 2019 to 18% of the portfolio. This is reflecting our cautious view of this energy exposed market. Conversely, our Quebec investments increased to 23% of the portfolio, up from 9% at the same time last year. Quebec was a real focus area for us in 2020, given its diversified economic characteristics, and this resulted in 21 loans at year-end versus 11 at the end of 2019. And to further support our activity in the province, we have decided to open an office in Montreal this year, and that will continue to enhance our presence in that market. Finally, our year-end exposure in Ontario was reduced as a result of specific repayments in late 2020. However, this percentage is expected to increase to typical levels throughout 2021. As we mentioned, the portfolio remains firmly weighted in multifamily residential assets at over 52%. When you look at the sectors that were most affected by COVID, we had 0 hospitality exposure and a reasonable weight of 16.1% on net mortgages not held at fair value within retail. Now a little further in our retail book, approximately 80% of our exposure is secured by well-located downtown assets in major markets, such as Vancouver, Toronto and Montreal. These assets are characterized by their strategic locations and have direct storefront access. These have performed well through the pandemic and have strong long-term value expectations. That will be compared with traditional format, fashion-oriented assets that were already facing headwinds pre-COVID and have felt a deeper impact from the shift to e-commerce. On that note, that leads me to talk about a few specific loans. While the aggregate portfolio has held up well in the pandemic environment, the component of the net mortgage portfolio measured at fair value, which represents 3.5% of total assets or approximately 5% of net mortgages was reduced by $15.5 million in Q4 2020. The majority of this reduction reflects a reduced valuation on a smaller market and closed retail asset that we've talked about many times, Northumberland Mall. This has been materially affected by the retail environment and COVID. We've discussed this asset many times and working with the borrower, a strategic review was completed during the fourth quarter. The conclusion from that review is that a redevelopment plan to reduce the retail footprint of the mall is likely the best path forward. This will continue to be analyzed in the coming months, but we have taken a material value adjustment to reflect a new path for Northumberland. A second fair market value adjustment was taken on a manufactured housing project that has experienced significant approval delays and the associated risks in commencing the development of that project. We are focused on these fair value loans, and of course, we will look to optimize their outcomes for Timbercreek, we will work to exit when prudent to do so and will then redeploy this capital into new mortgage investments. On a final note, I do want to discuss this fair value adjustment from the perspective of distributable income. If the fair value loss taken in 2020 were to prove to be permanent, the income earned on that capital would represent approximately 1.7% of total distributable income. While any impairment is negative, the fair market loans are a small component of our total portfolio and would not affect our ability to pay the dividend. At this point, I'll turn it over to Tracy to review the financials in more detail.
Thanks, Scott. Good afternoon, everyone. Our full filings are available online, so I'll just cover the main highlights of the fourth quarter. First, let's start with the income statement. Net investment income on financial assets measured at amortized cost was $24 million in Q4, which is only down modestly from the prior year, mainly due to lower weighted average net investments over the periods. Similarly, interest income at $21 million in the period and $85.7 million for the year was down marginally, again, due to the lower weighted average net investments in the period. The biggest year-over-year difference on the income statement as the guides have highlighted, was the total fair value loss and other income on financial assets measured at fair value through profit and loss of $14.9 million this quarter, resulting primarily from negative unrealized fair value adjustments of $15.5 million for the 2 loans Scott discussed. Net rental income was $373,000 in the period and $1.5 million for the year, reflecting stable occupancy levels, offset by a moderate operating cost increase. Lender fee income was down over the period -- over the prior year to $1.8 million compared to $3.5 million in Q4 2019, reflecting on the impact COVID-19 has had on the market. Although it was an active Q4 from a transaction perspective, with a 19.6% turnover ratio, we are comparing against a record Q4 2019. Because of the unrealized fair value adjustments we recorded, we recorded a net loss in the quarter of $1.6 million compared with net income of $14.1 million last year. Adjusting for these fair value losses, net income for the period was $13 million, which is in line with adjusted net income of $13.6 million in Q4 2019. Basic and diluted adjusted earnings per share was $0.16 for both periods. On the Q3 call, we called out 2 cost management initiatives to enhance our financial flexibility, and these are worth quickly revisiting. First, we used the normal course issuer bid to repurchase $20 million in shares at an average 5% discount to the current book value per share during the market turmoil associated with the onset of COVID-19. This is accretive to book value per share. Secondly, during the -- sorry, fourth quarter, we repaid $45.8 million or 5.4% convertible debentures using the existing credit facility, which carries a substantially lower cost of capital. The credit facility was also renegotiated to increase its current size to $535 million from $500 million. And the revolving nature of this facility allows us to save even further during periods when the funds are undrawn. Together, these initiatives will enhance net income and comprehensive income on a go-forward basis or allow for similar profitability on reduced revenue. While the fair value adjustments had an impact on reported earnings, this is a noncash impact, and we were able to deliver distributable income of $0.18 per share, which is within our target and consistent with prior quarters. Our payout ratio in DI was also in our desired range at 95.4% compared to 92.3% last year. Picking up on Blair's earlier comment, we had delivered consistent DI performance since 2016 in a steady range of $0.17 to $0.20 per quarter. Turning to the balance sheet highlights at year-end. Our financial position remains strong. Between syndications, repayments and line availability, we remain very well capitalized with ample liquidity. The net value of the mortgage portfolio, excluding syndications, was $1.14 billion at the end of the year, a decrease of $10.1 billion from Q3 2020, $10.1 billion. The enhanced return portfolio was $91.6 million, which included $74.4 million of other investments and $17.2 million of net equity and investment properties. With approximately $76 million on the credit facility, we are in a strong liquidity position entering 2021 to take advantage of the opportunities Scott discussed, our credit utilization rate was 88% at year end versus 94% at year end 2019.Our credit utilization rate was 88% at year-end versus 94% at year-end 2019. I will now turn the call back to Scott for closing comments.
Thanks, Tracy. Sorry about that, I was just on mute. There's no question COVID had an imprint on the commercial real estate market in 2020. While our overall transaction volumes declined, it was an active fourth quarter and as we look ahead in 2021, we continue to see strong overall demand and attractive risk-adjusted opportunities. As usual, our view is very much sector dependent. Retail, hospitality and office have been more challenging sectors, and we will continue to approach these cautiously. Multifamily proved resilient and remains an attractive and important segment for the company. Overall, Canadian commercial real estate saw $11 billion of volume for property transactions in 2020, 43%, which was multi-family, of course, we're not the only ones trying to finance these deals. From a competitive standpoint, the low rate environment has resulted in modest near-term compression of mortgage coupons, especially in conventional longer-term lending. While our focus on shorter-term lending opportunities generally results in more durable pricing, competition is a potential headwind to our ability to deploy capital in the near term, especially earlier in the year when large institutional players typically put capital to work to meet their allocation targets. Fortunately, there are offsetting factors that support our ability to meet our financial objectives. Reduced interest rates result in a corresponding reduction in interest expense on our credit facility; and secondly, an increased ability to leverage lower cost of capital from syndication partners to generate strong B-note returns. Our history and reputation in the market put us solidly in the transaction flow for Canadian multifamily assets. In general, we will continue to be cautious in 2021 as we evaluate the ongoing economic environment and COVID 19 related uncertainty. Through these periods of transition, there will also be opportunities for nimble lenders that are well capitalized to take advantage of these situations. For example, during this period of uncertainty with multifamily assets, we will likely be more active in well-located development projects where risk return opportunities are quite attractive currently. However, non income-producing assets will remain less than 20% of total exposure. With that, that completes our prepared remarks, and we'll hand it over to questions from the operator.
[Operator Instructions] And your first question comes from the line of Sid Rajeev.
Thank you for the details. I see a increase in exposure in Alberta, I think, 10%, 15% Q-over-Q. Can you please talk about what you planned for this year in terms of are you expanding more into Quebec? And what's your plan for Alberta?
Sure. And you said a decrease, right? There's a decrease in our exposure? What did you say?
Well, I see from increased from $175 million at the end of Q3 in Alberta to over $200 million by end of Q4.
Sure. quarter-over-quarter. Sure. But for the year, it is a little bit lower. That is a quarterly variance. No, Sid, I think -- and just to answer your question, 2 things. I mean one, I think when it comes to Alberta, we continue to look at Alberta loans, Calgary, Edmonton, large markets, we continue to like specific opportunities. I would just say we're being more cautious as we go. Certainly, making sure that if we're going into a new loan, we go into sort of a post-pandemic perspective, right? Sort of an adjusted valuation. But in any of these sort of markets where there are strong risk-adjusted opportunities, we'll continue to lend there. When -- we pivoting to Quebec, right? We just really -- we like the Quebec market a fair amount. And I'd say, in 2020, it was a strategic objective for us to increase our exposure. We spent a lot more time in that in those markets. And we just like the diversified economy that's there. So I think we were able to achieve that in 2020. And then just to further support it and basically just to build on the success, we are going to be opening a Montreal office. And placing an originator in that market, just a full time, and continue to enhance our presence and try to get additional flow out of Quebec.
In Quebec, outside of [indiscernible], which other property types look more attractive for you?
Yes. So look, we're kind of like the Quebec City and Montreal market. Multifamily, for sure. We are seeing some multifamily development opportunities in Quebec that are really well-located with strong sponsors. And we'll look for sort of a regular diversified portfolio, right? So if we see certainly some downtown office, maybe some mixed-use, maybe a main floor, street front retail with some second floor office or multifamily, those sort of mixed-use properties can also be attractive.
Okay. I think for us, for the entire financials, every line item is almost in line with what we expected, except for the write-down, obviously. The 2 mortgages in arrears, are you able to tell us a little bit about what's the exposure -- total exposure on those 2.
Yes, I think we can, for sure. So really, it's the little -- is it 3% and 3.2%, Tracy? I'm just...
Yes, yes. Yes. Yes. It's 3% and 3.2%, 2 mortgages, both in Ontario, of which we have provisions of approximately $1 million or so against each of them.
And these are not connected to the Northumberland Mall or the housing projects that had the issues, right.
That's correct. Those are fair value loans that are held in a different accounting policy, basically.
And then the increase in stage 3 mortgages, is that connected to the housing project and then the mall or it's connected to the 2 mortgages in arrears.
Yes. No, correct. Again, separate from those projects. There was an additional the new stage 3 asset is -- it's called Monmouth Mall. It's Brookfield asset. That is a traditional format retail enclosed mall. We have about $7 million on that asset. And essentially, it's gone into stage 3. It's been delinquent now for over 90 days. And so we are actually now -- we're in negotiations with the borrower, and we are starting to pursue our enforcement rates.
And your next question comes from the line of Jaeme Gloyn.
Yes. Question on the Northumberland loan. I guess, can you just give us a little bit more color as to around -- to what changed in recent months to cause the write down? And then looking forward, what are some of the factors or data points criteria that would cause you to have to write it down further or conversely get that fair value mark down back?
Yes. No, it's a super fair question. So listen, so we talked about Northumberland for a few quarters now. And really, as we went into the -- and I'll just give you the background, right? So Northumberland, it's a pretty large retail assets for the -- it's in the town of Cobourg, which is a small town. And this is a traditional type of a mall that would have historically had your large anchors on either side and that interior enclosed small retailers in the middle of the asset. So when you have an asset like that, the main valuation model that we have and what you start with is 1 where you basically re-lease the vacancy. And that's sort of the as is plan. And that plan for us, as we took possession of that mall, went into default back in late 2018 and into 2019. It was already sort of under pressure from e-commerce but you sit there and say, "Hey, listen, with some re-leasing, you can gather momentum and you can continue growing the value of that asset. So I think what happened is, as we really rolled into COVID, really, for us as well as other -- anyone else sort of owns major retail, it really, really accelerated, I think, that change away and sort of that inability for these assets to sort of recover in the traditional sense. So what has been basically in the fourth quarter, working with the borrower, we went through a real strategic review. So what is the best outcome for Northumberland? What is the likely case? And really, what we've done is we've sort of landed on the conclusion that the status quo is not going to be sufficient to save this asset. And so from that perspective, we do believe the best path forward is likely to make the retail footprint smaller, and so that will be some sort of a mix of whether it's adding multifamily or storage or some way to reduce that interior footage as the best, most sort of optimal path forward, right? And so what that does is, as we came to that conclusion at the end of the fourth quarter, it changes the valuation model, right? So it becomes a valuation model with a smaller footprint. And what that means is, ultimately, when we ran through the sort of a new valuation model, the reality is it cost money to do that. And at the end of the day, you're in a smaller footprint. So that is what really -- as we changed that dynamic of how we were looking and evaluating the asset, it changed it to this to a lower value where we had to take a fair value loss and sort of reposition that asset to where we think that value is today. And I think, going forward, so sorry, just to pivot there. So yes, I mean really -- I do think this is the value today. I think we could continue to be a part of it to see it or we could look to trade out of the asset and exit. I think the value is fairly stable at this point. It is our best representation of what we think the fair value is today. And that's where we are right now. And we'll be spending the next few months really trying to get detailed plans to finalize next steps?
Okay. That's great. Appreciate that color. In terms of the first couple of months here, and I'm looking at like the geographic exposure shift. Obviously, there's some timing factors going on there. Have those timing factors sort of resolved themselves where Ontario comes back to a bit more of a normal run rate level? Or is that something that's still in process? And then in line with that commentary, I guess, is maybe just a quick comment around how the first few months have gone so far in terms of loan origination and competition around that.
Sure. So I'll start with the first half of your question, and then I'll let Geoff pivot to the second half. But first, just, yes, in general, we're always going to pivot around Ontario. So I would say we're -- I think that's still a work in progress. But the Ontario levels will go back up, that we can sort of see that foreshadowing. And I think just in general, I was going to say of a sort of a planned geographic shift would be, again, as we said earlier on the call, a little more focus in Quebec and probably a little less focus in sort of the prairies. Right, with Ontario, still pivoting around Ontario. I mean that would be sort of a longer-term goal.
Yes. And then I'll jump in here, Scott, from a market perspective.
Yes, Geoff.
Yes, hi. This is Geoff. Yes, so from a market perspective, I think Q1 -- Q1 is always interesting because Q1, everyone has first allocations. And the cheap money goes out first and the Life Co lenders are looking to go golfing in June and July, that sort of thing. So it's always an overly competitive point in time. That said, we're feeling pretty good about where the pipeline is. We've seen a bunch of activities. I think just indicatively, there's been a fairly broad-based reallocation of debt towards the multifamily and industrial spaces, kind of referencing some comments that Scott had noted before, I think, really, from a transactional perspective and from a lending perspective, that's really where the focus is. That's where we're seeing the majority of the compression from a pricing perspective, again, vast majority of this really is most materially seen in the more sort of commoditized, conventional and top-tier mortgage lending segments. But that said, again, we are seeing a bit of compression in our space. Again, it tends to be stickier where we are. But no question, it continues to be, in particular, for these 2 asset classes a competitive landscape. That said, from our perspective, I think we're leveraging and seeing the benefit of the relationship-focused lender that we are in terms of continuing to see good flow of opportunities. And again, I think, as Scott had also mentioned, our underlying cost of capital has improved with the compression overall in the market as well, which is enabling us to ensure we can generate the returns we need to ensure the dividend continues to get paid. But it's -- again, for us, we feel good about where we are from a Q1 perspective. And I'd say, in general, it's a competitive environment, and in particular for multifamily and industrial, and in particular, because it's Q1, but again, fairly typical otherwise from our standpoint.
And your next question comes from the line of Graham Ryding.
Could I start with the $15.5 million fair market value adjustment. Does that -- you made a comment where the redevelopment of that mall is going to require some capital? Is that capital from -- is that going to be capital from year end? And is that baked into that $50.5 million adjustment that you took this quarter?
Yes. If we are involved, it does involve capital from us. But yes, it's 100% baked into that number, if full redevelopment. Having said that, so it goes, Graham, to like a -- as a present value modeling as well, right? So it's also -- it's the value today. So we feel this is a tradable value today, but it also -- it's the future value as well.
Understood. Okay. And the -- within that fair value adjustment this quarter and also some -- related with manufacturing housing project I believe, how much was related to that? And what is the size of, I guess, your exposure with that mortgage?
Yes. I mean, it's a small group. I don't want to get into exact numbers because these are all -- these are potential assets that we could be looking to trade. In the near term, right? So I don't want not to give specifics, but to give you -- there's really the 3 projects, right, Graham, that are in the fair value is Northumberland, the Mobile Home Park project, Macey Bay that we've talked about before and Lagoon City, right, which we've also talked about on previous calls. Within the world of Macey Bay and Lagoon City, those are split kind of 25% Macey Bay and 75% Lagoon. So it's not the largest exposure by any means. That's kind of without getting into too specifics. One thing just to, I think, would be helpful color for everyone on the call is when I think about these fair value loans, I look at Northumberland yields a bit over 5%. And then the Macey Bay and Lagoon don't have a current coupon. So they're held almost like equity investments, right, where we received upside on future sales. When I look at the entire bucket that's left, it's yielding about 2.5% in current interest, right? And these are also loans because of their fair value nature. We don't receive a leverage on them. So from a distributable income perspective, they contribute about $1.5 million of total income versus our $58 million of distributable. So it's funny, you sit there as a -- and myself, in my chair as CIO, there's obviously value to hold to redevelop and get that down to a value. But certainly, it's an opportunity cost, right, in distributable income, where I could take this capital and redeploy it obviously, at average yields or higher yields, frankly. And that's attractive from a DI perspective. So I'd say this, listen, we're not happy about the write-down this quarter. Northumberland, West Northumberland and the events of what's happening in the retail market is tough. But I do feel that we've rightsized that ship. I'm happy that the materiality of the fair market value loans on distributable income is not very high. And what we will certainly do is spend as much time as we can to optimize these investments and just exit them as prudently as we can.
Yes. Okay. That's fair. The PCLs that you took this quarter, were they specific to their loans in stage 3? Or were there some macro-driven factors that caused or PCL rate to pick up?
Yes, there was a change there. I would say and I'll let Tracy answer part of this question, too. But I would say the vast majority of it, Graham, were specific. We have 1 loan in stage 3. It's a multifamily project in Quebec that there was sort of a material CapEx deficiency that we had to make a reserve for? And then the second sort of major item was a mark we made against Monmouth Mall that we mentioned earlier that just moved into stage 3 because we are going to be proceeding with enforcement, that just creates uncertainty. And so we took a reserve to protect us against that process. And then I'll talk about -- yes, Go ahead Tracy. Thanks.
I would echo to what Scott said. It was largely the stage 3 loans. We did certainly take a closer look at our methodology and our overall ACL but that didn't really result in a significant change with respect to the Stage 1 or even the stage 2 loans. It was really driven off of the stage 3 loans that Scott alluded to.
Okay. Great. And Tracy, your SG&A had fell in Q4 relative to your run rate. Was there anything unique driving that? Or is that perhaps a new run rate?
I'd say that would be closer to new run rate looking forward. Part of that is just the mark-to-market on the DSUs, the directors, just with where the share price was for the year, there was a bit of a valuation adjustment going through on that. But I think going forward, we're pretty comfortable with where we landed and hoping to come a little inside in this fiscal, but it's a pretty good run rate going forward.
Okay. And the -- my last question would just be -- you mentioned to price compression, specifically within the multi and the industrial space, is there anything to quantify there and sort of the amount of price compression that you've seen year-to-date in that space?
Yes. I mean, I think quarter-over-quarter, in the more commoditized sort of the more conventional bank and Life Co space, I'd say that was kind of in that a 20 to 25 basis point sort of range. I think in our case, I'd say it's going to be dependent on specific opportunities anywhere from, I'd say, $10 million to $20 million. Again, very specifically in the multifamily space and the industrial as well. Again, as we and it's really not consistent across the board. I think it can vary from deal to deal. But in general, I think where we're seeing that whole loan pricing compression in the range as I noted. And I think the good news for us is underlying bank line cost of capital, the broader focus on kind of a strategic syndication initiative has identified a number of new potential [indiscernible] partners with materially compressed underlying costs, which more than offsets that compression on the whole loan. In addition to obviously, the cheaper bank line facility, which is similarly generating strong levered returns from a B-note perspective.
Excuse me presenters, there are no more phone questions. You may continue.
Okay. Well, thank you all for joining us today, and certainly enjoying the opportunity to update you on the business in the fourth quarter and the year. And as Scott and Tracy and Geoff have mentioned, and I'd certainly reiterate, we're excited about the opportunity to continue executing on your behalf on the quarter and year ahead. Thanks very much, and I hope everyone has a great afternoon. Thank you, operator.
You're welcome sir. And this concludes today's conference. You may now disconnect.