BrightSpire Capital (BRSP) 4 Aug 212021 Q2 Earnings call transcript

Greetings and welcome to the BrightSpire Capital Incorporated second quarter 2021 earnings call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions].

As a reminder, this conference is being recorded. pleasure your my General David now Counsel. is to host, introduce Palamé, It you, Thank sir.

begin. may You

and afternoon earnings XXXX BrightSpire conference Good to call. welcome Capital's second quarter

or call. refer company will to Capital BrightSpire, We BrightSpire throughout BRSP this as the

Chief Speaking on are Officer, Witt Mike today the Frank Andy Saracino. Chief Officer, Chief Executive President Operating the Mazzei, and Officer, company's call and Financial

subject statements company's Before potential to could expectations presented contains information and this call, I hand certain assumptions. current heightened and the uncertainties risks cause including of financial management's call statements. risks, over, to are These Potential please and uncertainties the on differ materially effect are note business that on and results based forward-looking with associated adverse risks and the COVID-XX.

call could Factors the please the filed future SEC XX-Q of periodic that affect no circumstances. to information with statements most and recent XX, time. and For to results, section today, and other our All the a from on time Risk risk or factors in reports and for and company forward-looking of see update of intend does is duty current August undertakes discussion not company's as risks events XXXX the this discussed

Chief to believes the Executive and of Capital. company And company's presented information are why such explanation presents addition, Mike certain the represents its I measures. non-GAAP to reconciliations financial company's an the to GAAP BrightSpire this In financial to of appropriate Mazzei, earnings presentation, was website, call on now, turn is released on and available call financial and like which Mike? non-GAAP The investors. measures the supplemental and release this morning Officer useful over would President measures

I I build. year and you momentum our second last David. would from company's and by joining has start Welcome call. you wishing XXXX continues carried for thank to us Thank The everyone well like today. earnings quarter to to into

Right while our and grown Today management strategy On company's very in first assets our CLO execute focused Capital. announced out operating the We deploying five BrightSpire the name have July. the our of co-invest our our the of assets. and sale in gates, of objectives. we we rapidly today, quarterly first into excited functions. of issued capital we We is the under And is an on in increase BrightSpire quarterly as announced With earnings the resolve becoming we key dividend. is to track the to realize respect savings our more from investment we are fully this earnings are And so, event. transformative about on to business internalization BrightSpire internalization, our anticipated specific rapidly and rebranding company team, standalone call a following dividend cost and $X.XX. behalf doing operational BrightSpire

better internally managed for being an we shareholders. stated, previously is simply As believe structure a company

As the with is and operating its and base, efficiencies. shareholders model The alignment company grows organizational structure from our scale managed our more company transparent equity increased the a shareholders. will internally between improved benefit

financial some to highlights. key now Turning

had For earnings of share. second $X.XX quarter, we distributable per the adjusted

million. $XXX at stands X August of as liquidity Our

Our per value from undepreciated down $XX.XX, the is for $XX.XX. book share quarter second

quarter this the into by that fit our longer assets was value book Our sell business to negatively transaction certain we entered no impacted model.

return to remarks. will plan earlier as cost $X.XX recently net are successful Board as our of I aspects value. year. share. all provide of With is to quarter of this in our overall this dividend improved realized in our up the issued supported $X.XX when we CLO. our continued is reinstating of to on line the have prior execution result increase second the increase approved be quarter achieved by the increase as internalization mentioned, However, in from Frank detail equity a the dividend, since is our transaction respect greater a savings business dividend completed, This has book of result will from and Directors the with third well his an The substantially in as our

have Since to last billion this XXXX, totaling rate on floating we we capital steadily $X.X XX originations to redeploy of quarter, new the mortgage first commencing have quarter committed into or continued During over fourth dollars. closed in loans. loans

continues especially has properties, impacted sector of properties in auto multifamily the see we office been beginning in the as much While loan the case our down middle lending been property opportunities risk-reward investment than increased This demand sales CBD and to that activities are office. market is pandemic the less pandemic from on has good we to suburban types given wind where other are increase. most activity seeing

of the cash remainder plan portfolio is toward with company our and our continue to to an XXXX, loan new originations third CLO. further For and our structure eye into redeploy asset liability issuing rotate

the sale off and transaction the equity We to completed those will June to XXXX. asset close pay announced company proceeds utilize our also of preferred in financing look recently

would remain closing, asset assets. continue deliver a on we to and our or execution of additional dividend. the earnings plan of first remainder portfolio growth that Operating both pure-play will Whit. that BrightSpire over Officer, base call remaining like our turn resolving bridge and any into throughout successful will to Finally, current stability in its to loans XXXX to the focus business I the way mortgage well In is now earnings. non-earning Chief and confident Andy can our to on Andy? stated lead predictable underperforming evolving of We our its

BrightSpire's of today business execution will everyone. continued objectives. morning our Mike operational you Thank good focus on comments and and highlights My

these loans fronts, seven sell associated co-investments, continuing entered have on the a senior to entering month, sell meaningful managed underscored million most totaling notably no disposition transaction the preferred agreement Mike an five value mortgages. transaction CLO financing This approximately the five total new with strategy. assets. equity-oriented the Upon for a serve made to of progress that into we the for of into June included a a remarks, are to executed Last our in $XXX with core the substantially Four the and company originate in as five-pack completion, be expected investments to consisting the his sales accelerates company in on XXXX. number combined of is portfolio collateral co-investments. of five in dated longer longer As investments transaction of executing carrying to line

coupon initial financing. retire cost The mortgages structure floating secured L+XXX before on of million weighted million two-year $XX such, collateralized As transaction costs. capital transaction features second generating executed managed approximately reinvestment sources a or from our using originations and The by this the successfully $XXX transaction we XX.XX% an is a XX properties diversifies July, at and company anticipate of the this CLO. rare of average in liquidity while proceeds CRE our The of our XX CLO to further interest by issuance reduces In advance with opportunities. funding also rate period. new

Additionally, LIBOR our existing at $X continues October loan floors the billion XXXX perform managed level. benefit in CLO from of underlying to and executed

open also have year. the loans as We October remains replacing been in through vehicle, reinvestment this of that window

platform Our remains active. originations

and team aggregate commitment million. new today, quarter an loans second of the XX the amount $XXX has with originated During through senior

on are investments financing these cash All assets. majority acquisition flowing which first mortgages, of are of the

And now debt loans estate net of and the CRE estate. lease quarter, distinct preferred last mezzanine three is real as and investment highlighted equity. real other three, segments. portfolio senior Two, As securities. presented One,

last of June at-share preferred $X of and the quarter. portfolio, XXXX, XX% billion net approximately net The and an XX, and XX diversified and value from As excluding senior on portfolio balance this comprised book mezzanine assets terms aggregate of cash sheet, loan XX% of loans type the remains size, in geographies. collateral in or of equity, investments up

more a focus We activity, loan anticipate of on multifamily as balances XX lease we estate continue the comprised this lower investments to real specifically mortgages to segment company senior the our with of recent capital our and allocating higher earnings. estate other is properties. and has Given portfolio build originations of our with is $XX Net X% toward and majority XX% of securities, quarter. real portfolio, at the portfolio, average in of $XXX portfolio aggregate office of last a million one net positions value at-share an X% or remaining interest, comprised debt net and last CRE an or segment down includes at-share value aggregate equity million of the in book from CMBS of and book line six reporting. private approximately which

with Hotel During reduced senior the on the $XX one the during assets of first our filed LA and loan. Jose this investments. four the after include investment related quarter, XXXX. to significant bankruptcy. million. The loans to positions through the The the million and investments associated portfolio Chapter remaining June equity Pro retention subject $XXX XX value be the sold for loan San used non-accrual California risk the two portfolio The bonds of $XX associated remaining closed net to company Jose in for placed sale, year quarter non-accrual reporting was will highlighted CMBS forma, hotel is previously BP's segment two proceeds borrower of Hotel in this and provisions majority preferred million mix transaction San the with loan

loan the in We has at its the discussions quarter which X the the LA respect investment. date will on mortgage it the become borrower. from a emerge group in and third mixed borrower loan passed remain expect With to This senior use time with performing July loan, bankruptcy maturity the to lending is non-accrual. would

these and information the Additional the asset in has summary specifically XX-Q loans will loans included progress the section more made In specific senior specific company substantial company's of other composition mortgage towards rotating Form loans. and on portfolio summary, be the filing.

increasing a new on in over to on results to continue the dividend our Chief earnings support while executing will of to originations building will and growth We Financial payments that, Saracino, drive Officer, quarter to Frank elaborate I on turn call existing to order opportunities the to remain second the focused With portfolio shareholders, pipeline

morning everyone. you Andy and Thank good

to second Before want to expect results, quarter mention discussing I that file we Form our XX-Q tomorrow. our

I supplement that, With or Form addition, report distributable asset million our attention fair turn details of $X.XX our reported of to adjustments, shareholder second let's total by $XX to per company excludes in adjusted We results. your XX-Q. to is second value the in continues which provide to The share losses financial XXXX. our like realized quarter does quarter and earnings, the section In asset available would supplemental our as which draw website.

also to and per a We or million a net of million or GAAP share. loss per common $XX.X total net reported $X.XX distributable attributable $XX.X shareholders GAAP loss of primarily million to $X.XX in The These share $XX.X million adjustments two fair adjustments. $XX.X our reflects of value attributable with the distributable are loss recording loss of common items. and shareholders associated $XX of million company

lower the certain of costs to principles to to that I co-investments. announcement each sell investment July us want highlight accounting require the at market. value or First, individual GAAP

investments three such, value write-down. below As carrying second in quarter a value fair resulted with allocations

two Additionally, closing. carrying there recognized to are investments gains value that relative at with their be expected will

four which an unrealized and second positions I a was there The one CMBS to as want our a million a already most in sale $XX million. resulted realized approximately related BP's gain that the recorded $XX relative to transaction, net item note result, of loss recent was basis. million to loss as is $X markdown

GAAP book total share $XX.XX sale to quarter, undepreciated $XX.XX due associated per transaction. change to $XX.XX decreased primarily the second net with and the from adjustments fair $XX.XX value decreased per share. the book from This to value is value During

off utilize of the value. their result to to increase as net the relative and our June result financing. Mike well we recording $X.XX sale of under gains combination book The of so five-pack both projected XX, the the proceeds reflects of increase preferred to Andy XXX% the This a investment close XXXX transaction, doing financing ownership. with associated remarks, the of back over reverting is undepreciated BrightSpire the asset mentioned the As remaining with pay plan in as to the the sale preferred five-pack

of growth $XXX the the Looking including invested the the well the impact of adjusted year, originations of detail million in primarily deployment during first quarter quarter. quarter quarter's of million the earnings, cash contributions from more full first a the as reflects significant $XXX distributable at second second as half idle quarter-over-quarter company's in

on We approximately savings saving we $XX cost per also a benefits completed run generating rate of of XX. approximately basis, our per operating April was started to On realizing anticipate the from continue internalization $XX year management the cost or share. which contract,

Turning to dividend. our

outlook, for we growth our our share quarter $X.XX share suitable dividend in adjusted the of $X.XX business operating along XXXX, with earnings, improved of third a up Given and from performance last per declared quarter. per

as record shareholders quarter October third is XX, The on XXXX. of dividend XX of payable September to

sheet. our to Moving balance

approximately at stood assets undepreciated $X.X at-share billion total as XXXX. Our XX, of June

of XX% Our times to compared was the credit availability originations primarily ratio approximately of new In at today increase million and end driven debt X.X loan increase the This to a at to was between stands was quarter. hand ratio slight as second under liquidity facility. assets our first quarter, net by cash debt the and $XXX bank equity on our addition,

Looking end quarter. loans the Our quarter at have CECL X.X originations ranking to is reserves, loan end risk a of This which change rankings compared three improved risk the to the of related one the to overall at and second performance quarter the rating. first day of at primarily certain improved and second X.X

with concludes for originations. quarter-over-quarter X.X% let's of million provision call and $X.X Operator? approximately represents increase prepared that, primarily remarks. This by That is And new our CECL $XX.X questions. was the against and is Our reserved million our a open loans. driven

[Operator Instructions].

Tim your question. proceed BTIG. question first comes Our with from Please Hayes with

Hi question and you questions. loans for significant on completing have Tim. guys. made quarter the my the deployment, first strategic increasing internalization, raising end divesting My be, non-accrual dividend. Thanks your progress since taking by would the of on capital is for Ethan, This guys first initiatives

want accomplish your how do able for get those you think quickly guys strategic to be your initiatives focus? will how rank goals? you to feel And a kind today? What's you So I of greatest

you How Hi. Thank joining. you? are for

Good.

said cash rest the We This the going the of to for have balance on to kind the the realize you couple deploy there time. goals XXXX, we to are on of Mike. pretty as remarks, here. balances much continue calls in Thank With today. regard a we are at the is sheet being same

cash from forward. out how I we then somewhere actual think we point and to down liquidity were that projecting $XXX manage of getting much we figuring need about think million to

in multifamily opportunities think dramatically to We property up get evolve will from into We other as we and away property themselves sales especially those other other in are opportunities as types also investment expected present for trying look types. to activity, QX. pick

loans in And evolve and commercial transitional more some as the toward ROE plan, so more perhaps to property though, different The continue to I add structured is edges. pure-play REIT remarks, to mortgage the incremental the said of, types highly portfolio overall portfolio. structured, around a

off third So assets that will move and a pre-development with sale we move mortgages are counts putting CLO. we mortgage first these assets continue that new undertaken and on assets, because then eye come loans this asset on, on the assets mortgages executing first producing of got type, to portfolio And are we kind have do first that off an as further because more transitional a the potentially coming those full have today. game non-income here toward our that at as versus there also

And kicker that the the increase will external equity I are we everything to we then fell the more do that's benefits whether place, REIT of potentially and issue being the end commercial mortgage maximize we the and return. could capital, continued we into really paying well. said no So X.X follow in evolution toward we goals, capital management a the base towards of more a around pref capital a maybe if as could portfolio above longer internally more of pref as stock at of issue remarks look hopefully third base managed we small said as point, are fully the fee what whereas CLO, grow to pure-play, the year, price the the increase potentially follow dividend as earnings and will think a

that all the bottomline. to And so falls

goals, kind end the say, of of I now would year. between the So the and basic those are

just then risk of weighted my you. And notable as CECL average portfolio any what quarter? downgrades Thank rating quarter-over-quarter and those the improved you drove this Great. question percentage for is, next to you changes? guys right. upgrades on declined. the the slightly All reserve a touch loan And Can

five small loans some a new by loans went notable one three of of two, We loan, from kind was But any that to it went think moving loan a moved one drastically. four don't particular where all three there one to coming from offset and was wasn't I had Yes. a that on. kind

we pandemic think generally the the variant economy, you concerned and improved away spike, if albeit we higher some felt pandemic on you I terms in the improves, ratings pandemic. starting to the of from emerge are I improved melt about are will, as as are see see we has Delta its as effects it economy was risk appropriate you has to going that, pandemic. add generally into but seeing the the And all the of

guys. Thanks All right. Great.

you. Thank

James. Our question. Raymond next comes question your from with Laws, proceed Stephen Please

morning. kind guess to kind Good the of seems right. is I to I two it go, Mike, group guess, that, follow-up ways across there Hi. on of like

fits multifamily, taking life looking or doesn't on the on stuff do go stuff into lighter can at sciences You into maybe CLOs well industrial, that some more CLOs. transitional it that some ROE are

mix your kind on is remarks, don't into that incremental start of are loans fit said to or at there about kind know have and looking thinking wanted your in need of you that I a to get you you the CLO? maybe third a CLO. So thoughts prepared what targeting I return

is focus. So a know I that

Thank for you, for us question. How thanks joining and Steve. This Hi. the you is are Mike.

Okay.

non-CLO there is a selective that amount think So assets. we capital would I of use for

some in that We that behind development some some loans. created have loans we very had have experience as good were

step certain but that any either do something we have e. or senior do and and in the mezz. the doing a and directly, it to key laying we loan mezz that cure, we can done loan think are the would senior it's off make I chosen just that a that loan is have i there behind we senior fund is

selective the we and and do look more QX, are in transactions more pick multifamily sales robust. spreads when those in of Overall, So for very lending those think we will we entered will up. as see opportunities market that we we general investment

We the come low XXXs. XX quarters, have probably this seen solid origination in over a loan past to spreads will basis points several

commensurately well. However, have seen with as bank that, the we lines improve

the spreads, rate on have deal. in the somewhere come in So in XX roughly spread, some XX lines of advance And points come in XX lending on between basis cases points. spreads depending have warehouse those five, terms to the

AAA but in those our are best-in-class were than a that In in well. to on close first to spreads only of addition good not nickel was more in And the ours for assets. were only executed the very The at reinvestment a parameters the that our priced CLO as pool dime of a priced spreads XXX% that, tighter. mixed up to rate LIBOR+XXX. better But rate pool were XX%. The advance a at also we multifamily,

compression of the lot So well. A into year warehouse basis on rate while we seen also spreads, we last the liability a are ROEs And that saw that seen some post-COVID CLO. several probably we line that we the in quarter of closing, a in you the to being lending an example, advance improve the side those XX%. hundred from points originated have attributable give compression have fourth loans started to as we is

the seeing forward, are reflected enormous as in Going being multifamily itself in the of underlying valuations it's assets. we the of interest and level

wage multifamily And acknowledge the we path to valuations our seeing while are materially in building, population back. been lack the growth supported growth and starting the that pull South. are of and learning growth, borrowers/investors in of by have We

of valuations. we is us also seeing shift giving and demographic that a So lot support are

say the assets there's finally are What are to starting from finally, back coming so backlog, what hearing most be community investors pushback say Labor I push I that noticing a to multifamily, on We comes consistently to on that is, I and across are really from you what in coming is will Day it are are we to after valuation on now credit. market starting line, market us see notably. low And drawing and investment sales. are the would say And that brokerage line will down lenders the XXXs. the other see to some would we

are and see hoping diverse more sales we So in see lending opportunity we multifamily that dramatic uptick expecting we are will a more a sector. lot the investment in to away from and that

I there, Great. comp, internal of under Frank, Thanks think I Two of the Mike. had million equity those for CLO? the time one Under second detailed Kind life this structure. half internal how of do And the maybe the forward? able questions of the color for item non-cash about over of in Or around of transaction? line a do year. couple be amortized it's running about one specifically. they account that need I average the kind expenses all quarter will expenses how a think kind structure, XQ around the first are comp, is, we of the as $X an going of the to any be to expenses,

Okay.

So thanks, Steve.

that So question. the adjusted the That first into going beginning that's running remain award The of of received year, getting forward consistent we The that's compensation the be equity that future will of kind should out the that's distributable at years. amount equity constant. through earnings.

now. a I right that's kind can use think number So you of

a As far CLO other of of those amortized costs over one-time be as time. XQ, and period will the items

expenses one-time needle, move the won't that XQ. really but abnormal not any expecting for So

Great. questions I morning. my taking this for there. appreciate the clarity Thanks

Thank you.

Howlett question Please Riley. comes from Matthew proceed B. with question. your Our next with

I end Hi. of questions. non-dilutive Thanks the a the the accessing like at in maybe my comments really preferred for taking Mike, of terms year.

And assume towards your end of we sort the year? to could you by excess to sort access preferred equity of be look can So cash of the end all you going the are repeat that the year? for some deploying of

you Thank the call. the question. to for welcome all, of First

that's of year doing terms the the with the the of When that in the of line I toward. in have that. eye internalization, how bank an something have the we accomplished, at you have something all we portfolio, at can at look CLO, end we we extending things look evolving our probably far absolutely terms that think come will

look in and is, of the time toward point at price of what we see end reap at is goal those stock The and whole see think where I will the year, is of do. managed structure the can that the of the internally economies the capital being scale. benefits point So to we

to and to We follows first we there, And other price cost can't it suit. open that. hopefully doors So foremost, earnings, at will dictate that We and million $XXX if and that. expand to we the grow look $XXX get down get sheet. will we want the at time, about And when dividend the then thinking in can grow active hope and stop does. about million, to we point of stay cash, we have ways balance other

the So we the press through do year, at yes. a of come that that end may

We will of advantage managed is with our equity again, the on And this to being expand operating want the base. internally I absolutely think consider that. that scale

So preferred And the managed for many does management an gets equity. externally generally fee. times what's included calculated that in

really towards the cost us, if paying capital benefit benefit. we management fee that nearest get not by scale So that issue of our that, and we for

So we will the have yes. the an year, eye to at of that end look

an it So terms capital capital? if the additional you overhead there's work, there's to additional in incur, extra you extra really you really said, of putting need no no to raise

That's correct.

It you big have have balance. means, you pretty a

you the have where there on getting are from issue? been idea mean small. market with referenced stuff since calls is out. I investment inundated coming you X%, of banks. rates has any range seen But I could am Any You sure sub-X% sort for you? Is any the much idea what? idea I how

market quarter. at that a number until point, the We quarter, would key. we think working we this understand suspending going we are assets transition that have initiatives of on which say is. Right now, we got this where are are I that the judgment get to our for But through this we are

we the see that go a have on get to got much would want add that there. assess settles, that in this we to better that whether We can agreed to be position have machinations that like accomplished think on if to not quarter I dust we the And capital. have once we will sale we or to depending

look sale total for the $X.XX pick on Could quarter? that certainly up We we And to forward just back in the then again? walk of to moving of look that. right. through are comp we to low just with lost the, All assets, We it. the two going the remaining second the me

transaction? you related Are about asking to the

Yes.

Yes.

pick in to on about said remarks value to XXX% now five-pack So of undepreciated gains book going a book greater one my are that what on prepared value. well the back will $X.XX up come the is, the asset we it's our I as our And GSAM in combination as ownership.

$X.XX over get will we So back.

Great.

Okay.

addition Thank clarifying to So $X.XX the Great $XX.X. you for that.

some are assets If of we you preferred we see by contributed vehicle. when was executed quarters, we that that value being the year, look that, book back are to recapturing back. previous you that reduced at undermining last will that the this structure equity now And

structure asset taken it once of Frank the back but quarters is us repatriated is was via that stated, of to referring which in write-down away to, that Some we gets a preferred collapsed. an previous balance that

Correct.

that's when get And so and it? it retire SPV again back you you

involved these of Andy proceeds sale, also are the of collapse from That's that why that assets said, are as that vehicle. used the And equity right. many will in you in this vehicle, financing because involved That's see sale entirety the preferred to

GAAP accounting, low you for comps. just have elected And

June XX. You it couldn't on recognize

the this and gains get of you write-downs of principles or lower and markets, have have closed. benefit we fully GAAP costs take will the Under type the transaction, why which the is we Correct. to

Great.

that. it's will adjust question. we for I Well, the great. guess Okay, definitely last And

on discount bids sort dead seen the strong want of at look, the to But pro have than horse. could question have With forma you have stock the a this been asked lease net discount a triple we to XX% to now even undepreciated that marketplace. book, greater I at a don't portfolio what's you beat you, buybacks. in

know we is story. one-off periods announcing the and is people for all do many you could common tender and extremely shares, sense make for know something group what the and buybacks you getting few gains. where there sales sell, over the strategically internalization, you any street next doesn't it I you something the do Some I mean, do managed used I just where know repurchase via which of is for stock, quarters? of anything could But guys. are strategically just capital return you

at I think in whole improve being And new balance for at internal we back CLO. these the want the in into And lower where ROE efficiencies manager in point operations buying to buyback company loans want we share, given a overall made of I the the CLO the had $XXX levels to capital and we an the time, And goal. we that emphasize levels equity the ROE grow is the again, the is is these deploying to stock versus investment a and of of sheet growing the company. the return $X.XX at base. probably an can and the capital the point this roughly million that to execute

scale us. the at competing Now we I And capital, enjoy for the think step forward to make buyback use a we for want is base, that levels, can efficiencies. to to stock take sense the of so versus these it reason grow that other a and our capital try operating those important and doesn't

XX% it sense you been over want on you said, bigger and well ROEs are Look, makes and inflection. CLOs know Right. get complete the the as to I

loans the in you if let's a just on That's loans, strip I ROE. really mid-teens. the so those are ROE mentioned, in the handle something to three ROE you the the those focus contributed highly we post-COVID why loans loans, we ClO, and could them, on they that pre-COVID move floors to that's I have that those vintage. all saw call The mean the in And out were, establish on

stock latter. when the you affects sheet, and accretion think what buyback the you at ROE and the capital is balance book to so the preference look today price I and the to do the deploying how And buyback that growing versus

Absolutely. Thanks complete appreciate sense. Really everyone. Mike. Makes Thanks it.

[Operator Instructions]. Thank you.

with question. Steve Delaney JMP from with comes question next Our proceed Please Securities. your

also everyone progress rebranding. and up the Thanks. balance on clean on Hello and the sheet the congrats

an name. feel aspirational the like to anyway. step has to think very you I it's my of it, BrightSpire a ear important we and for sort really new

Just XX, about X.X but very initially X.X CLO. lot current CLO to are or normally peer in one as to times group early of leverage, transition, quarters times you lot we because a as next five level at the a does in around we, your settles you to CLOs, But a of you to to a in do close including even of debt has should forward But far a where to do looking year, debt been covered. obviously see relative think that times thing, you a equity. equity three equity terms The leverage think low there. clearly, you What third that's where debt range would are couple what modeling, June if should maybe course? because

will I take that. It's Frank,

Hi Frank.

so more as to pursue we grow we expect So that these And continue money debt to work. look help as that we mentioned, XXs. obviously I if to some type numbers. think as the drive line depending assets, continue some particularly to peers. level of into I closer sheet, move But cash numbers on previously balance to Mike that the we will that offerings, in thinking of we somewhere our our do with am deploy to expect on, And put

it's How And Steve, we also have, you? Hi. are Mike.

Mike. Hi

We that. of And thank greatly you appreciate for our your name. optimistic view

smiles got of You the room. in a lot have

got Yes. But up to now to it, right, yes. you little

to, of it's you we I have Virtually Yes. And unencumbered interesting portfolio. every was a taken. also an name on ran. when point number process the But we assets would

just So this we are quarter And earlier, on Frank assets focused as it's I cash. those on getting alluded to the as deploying said, back. not

is the that a one The hotel, out hearing. confirmation loan Jose the bankruptcy to as bankruptcy possible. one have ones, is that of instance, San going particular, borrower larger in endeavoring as of quickly For pull

quarter. to at, so, can loan We this asset accruing again, now expect two reinstated pref then One, that with $XXX in completely we we have $XXX a And happen the loan is do will have call which it, that will that's it, million, will we including finance. unencumbered million, have that as an doing And loan a things. we we secondly, that current.

loans. we be of So originated comes there cash out that utilize can more through will that that

some that the and see or one, of repatriate cash up, So as resolve our loans. sheet we assets the utilize I as it unencumbered you tick as leverage and capital will we to two, them into non-earning balance underperforming to turn assets new alluded

you both Makes Thank sense. comments. for the

Thank you.

with proceed from question Please Jade comes next KBW. Rahmani Our with your question.

there. to Hi are want as create? the taking CMBS you I thanks question. still view something And for wanted business ask conduit to attractive you if and the

Welcome. How you? Jade. are Hi

Thank you.

question. the you. Thanks for Thank

haven't. We

to We have it. the tools do

would a at turn looked goal and to toward, year been it has year. this for consistent earnings. The portfolio first REIT we mortgage more the we as commercial say, had haven't pure-play really the more where We mortgages

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that. about mentioned loans? loans more you transitional I loans? about Are Okay. component. talking construction structured talking What referring Are transitional And heavily you you you are there? with appreciate to

bath, to It's the say, Well, have quite are It's pretty work. that would frankly, I kitchen, down been easy transitional straight we multifamily middle. easy washer, It's loans very exterior and dryer, dishwasher, light pretty, interior, and doing, they monitor. the

chose of mezz. of So directly as of we where that scope success, office, there's loans terms as size the the earlier, more where the said you In assets good we been done with is have will to where multifamily look do of And loans. in construction success of construction loan real loan, the of roll maybe into but have CapEx, it's more behind have think some tenant done move we do I positioning cases with the mezz we have in the loan we Jade, had that. we to something I had development could size where

little So say list the maybe down of I in deals. terms structured. further bit that But smaller would that's probably highly a

construction industrial with the been we to move transitional property multifamily. have maybe this we the into CapEx and at than and say, more value-add, where want the point are, rent at think let's and just I that the away roll evolve office from transitional doing modest more

management remarks. any the There turn are time. closing floor you. questions to no would this further Thank like the at I for back over

and us third Well, seeing Capital joining you joining our for BrightSpire at you first for call forward we quarter. end earnings of Thank on you look today. us the thank the today

today's this and webcast. Ladies gentlemen, concludes

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