BrightSpire Capital(US:BRSP)2026-02-18 16:02Financial Data and Key Metrics Changes - The company reported a fourth quarter GAAP net loss attributable to common stockholders of $14.4 million, or $0.12 per share [3] - Distributable earnings loss was $35.5 million or $0.28 per share, while adjusted distributable earnings were $19.3 million or $0.15 per share [4][19] - Current liquidity stands at $168 million, including $98 million in unrestricted cash [4][23] - GAAP net book value decreased to $7.30 per share from $7.53 in the previous quarter, and undepreciated book value decreased to $8.44 from $8.68 [20] Business Line Data and Key Metrics Changes - The loan portfolio increased by $315 million to $2.7 billion, representing a 13% increase from the third quarter [7] - The company closed 32 new loans for $941 million of total commitments since restarting originations, with 13 loans of $416 million closed in the fourth quarter [7][13] - The average loan balance in the portfolio is $27 million, with a risk ranking consistent with the previous quarter [13] Market Data and Key Metrics Changes - The commercial real estate debt capital markets are experiencing a surge in new issuance, particularly for CRE CLOs, driven by strong historical credit performance [10] - There is significant demand for loan originations, particularly in the multifamily sector, as property equity investors seek to monetize legacy assets [11][52] Company Strategy and Development Direction - The company aims to grow the loan book to approximately $3.5 billion by year-end 2026 [12] - Key strategies include resolving remaining watchlist loans, monetizing REO assets, and executing a fifth CLO in the second half of the year [12] - The company is focused on improving portfolio quality by addressing challenged investments and increasing new loan originations [5][6] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the demand for loan originations in 2026, anticipating a solid demand as more assets change hands [11][52] - The company plans to achieve positive dividend coverage by mid-year and grow earnings by year-end [9][12] - Management noted that the resolution of watchlist and REO assets is a critical source of capital for new loan originations [8][12] Other Important Information - The company repurchased approximately 1.1 million shares of stock at an average price of $5.39, resulting in book value accretion [20] - Specific CECL reserves recorded during the fourth quarter were approximately $54.9 million [19][22] Q&A Session Summary Question: How do you think about the amount of leverageable capital? - Management indicated that approximately $200 million of equity is tied up in REO assets, which are currently a drag on the portfolio [28] Question: Can you provide an update on the San Jose property? - Management reported that the San Jose property performed well during the Super Bowl and is undergoing upgrades, with expectations of reaching approximately $9 million in NOI [36][37] Question: What is the plan for the net lease and other real estate portfolio in 2026? - Management stated that there is currently no significant activity in the net lease portfolio and they are not looking to grow it at this time [40] Question: How are you thinking about the pace of originations in 2026? - Management expects to maintain a pace of $300 million to $400 million in originations per quarter going forward [44] Question: How are you thinking about spreads and competition in the market? - Management noted that while competition is typical, the demand for CRE CLOs has been strong, and they do not anticipate significant tightening in loan spreads [56][58]