BrightSpire Capital, Inc. Q3 FY2024 earnings call

• Completed a $675 million CLO, featuring an $85 million ramp and two-year reinvestment period, with collateral from warehouse lines and 2019 CLO loans.
• Restarted loan originations, having closed the first loan and with another in process.
• Reduced watchlist exposure through asset resolutions, loan upgrades, and REO sales; sold Washington D.C. office, marketing Oakland office, and delayed Phoenix multifamily sale to Q2 2025.
• Repurchased 1.2 million shares at an average price of 552, emphasizing conviction in the company's embedded value.

The company reported GAAP net income attributable to common stockholders of $12.7 million, or $0.10 per share, distributable earnings of $17.9 million, or $0.14 per share, and adjusted distributable earnings of $27 million, or $0.21 per share. Current liquidity stands at $416 million, of which $251 million is unrestricted cash. GAAP net book value was $8.39 per share and undepreciated book value was $9.11 per share as of September 30, 2024.

• Expect leverage to grow as they redeploy capital.
• Anticipate growing the loan portfolio over time.
• Continue to reassess share buyback based on stock price dynamics.

• Market conditions may impact loan originations and portfolio growth.
• Potential surprises in CECL reserves or adjustments to book value.
• Uncertainties in resolving certain watchlist assets, especially in specific regions like Long Island City.

Q: Please go ahead.

A: Stephen Laws asked about portfolio size outlook and capital allocation between new investments and stock repurchases. Mike Mazzei responded discussing leverage growth, capital allocation thoughts, and stock buyback rationale.

Q: Steve Delaney asked about portfolio growth and evolution into CMBS lending. Mike Mazzei responded discussing portfolio growth expectations, market conditions, and potential evolution into CMBS lending.

Q: Jason Weaver asked about watchlist timelines and dividend policy. Mike Mazzei responded discussing watchlist resolution timelines, foreclosure progress, and dividend policy considerations.

Q: Eric Dray asked about pipeline growth and Long Island City assets. Mike Mazzei and Andy Witt responded discussing pipeline growth insights, product focus, and Long Island City asset plans.

Q: Matthew Howlett asked about CLO ROE and differentiation. Mike Mazzei responded discussing CLO ROE expectations, reinvestment periods, and company differentiation through internal asset management and special servicer role