BrightSpire Capital, Inc. Q1 FY2025 earnings call

• Market volatility due to tariff discussions and credit spread widening, but CRE lenders are better positioned. Loan inquiries increased, though CRE debt markets face challenges with borrowers seeking equity-neutral transactions. - Portfolio management: Year-to-date deployments outpaced repayments for the first time since 2022, CECL levels stable, watch list exposure reduced. Phoenix multifamily property nearing sale, Long Island City leasing inquiries up, Manhattan leasing market recovering. - Stock repurchase: Repurchased ~200,000 shares at average $5.59, trading at ~45% discount to undepreciated book value with 13% dividend yield. - Repayments and originations: Received $133 million in repayments, sold one REO office property for $5 million; new loan commitments totaled $182 million across five originations, with $8 million funded in Q1 and $111 million in future funding obligations as of quarter end.

BrightSpire Capital reported first quarter GAAP net income attributable to common stockholders of $5.3 million or $0.04 per share; distributable earnings of $11.4 million or $0.09 per share; and adjusted distributable earnings of $20.1 million or $0.16 per share. Current liquidity stands at $310 million of which $145 million is unrestricted cash. GAAP net book value was $7.92 per share and undepreciated book value was $8.75 per share as of March 31, 2025. The loan portfolio consists of 74 investments with an average loan balance of $33 million.

• Goal to get portfolio from $2.4 billion to $3.5 billion to reach ~$0.20 per share in earnings. - Plan to execute a CLO in the fourth quarter of 2025 to manage warehouse lines and leverage portfolio. - Aim to maintain dividend while improving balance sheet and growing earnings.

• Market volatility and credit spread widening in CRE debt markets. - Challenges with borrowers seeking equity-neutral refinancing transactions. - Potential impact of unemployment levels on real estate performance. - CLO market widening in April, though starting to tighten.

Q: Could you let me know what the remaining buyback authorization was at March 31 or as of today?

A: The share repurchase program was repurchased at $50 million, reapproved at $50 million for the upcoming year, extending from now for a year from the end of April.

Q: Any indications among borrowers of hesitancy to take down loan demand due to macro uncertainty?

A: Borrowers need to refinance existing debt, but actionable deals are challenged by borrowers not wanting to put equity into deals. Loan inquiry is up, but origination may dip in Q2 due to macro factors.

Q: Is the $1 billion origination goal still relevant based on current repayment schedule and how is the origination pipeline trending?

A: Need to get portfolio to $3.5 billion to reach ~$0.20 per share. Q2 expected to be relatively quiet, but plan to maintain dividend and grow portfolio. The $182 million in new loan commitments includes a large loan consistent with typical size range for stabilized properties.

Q: Update on San Jose hotel property and elevated operating expenses?

A: San Jose hotel loan in default with TRO granted, expected to resolve soon. Elevated operating expenses due to foreclosed property in Q4 and property taken control of in Q1.

Q: Update on CLO market and earnings from cash flow this quarter?

A: Plan to do a CLO in Q4, though market widened in April but starting to tighten. Earnings from cash flow this quarter were $0.11.