BrightSpire's Watch List Shrinks as Originations Resume
The CRE credit REIT booked $319 million of new senior loans and cut watch-list exposure to $136 million, or 5% of the book.
BrightSpire Capital (BRSP), an internally managed commercial real estate credit REIT, posted a GAAP net loss of $18.3 million, or $0.15 a share, for the second quarter of 2026, after net income of $4.8 million, or $0.03 a share, in the first quarter.
Distributable Earnings were $15.8 million, or $0.12 a share. Adjusted Distributable Earnings were $16.8 million, or $0.13 a share.
Chief Executive Officer Michael J. Mazzei said the quarter included the largest share buyback in the company’s history, positive net loan originations and a net reduction in watch-list exposure.
The loan book grew to $2.9 billion across 106 loans from $2.73 billion and 100 loans at March 31, 2026, on $196 million of positive net deployment. In the quarter, the company committed $319 million of capital across 10 new senior loans, with an average size of $32 million and a weighted-average cash coupon of S+2.54%. Subsequent to quarter-end, it committed $295 million across 7 additional senior loans that were closed or in execution. President and Chief Operating Officer Andrew E. Witt said the loan book stood at approximately $2.9 billion as of the release date, up more than 20% year over year, and that the company expects to continue growing the portfolio.
Credit quality improved. Watch-list loans fell to $136 million, or 5% of the loan portfolio, from $166 million, or 6%, at the end of the first quarter. The weighted-average risk ranking improved to 3.0 from 3.1. Three risk-rank-5 multifamily loans totaling $99 million were repaid in the quarter, and the company received $123 million of repayment proceeds across 7 loans. Multifamily remained 70% of the loan portfolio. Ninety-eight percent of loans were floating-rate, and the weighted-average unlevered all-in yield was 7.2%.
GAAP net book value declined to $6.81 a share from $7.05 a share. Undepreciated book value fell to $8.10 a share from $8.24 a share. The undepreciated book-value bridge for the quarter showed $0.08 of share repurchases, $0.11 of real-estate impairment, primarily related to one Mesa, Arizona multifamily REO asset under contract, $0.07 of CECL reserve change, and $0.03 of earnings less dividends and other. The general CECL reserve was $100 million, or $0.79 a share, with no specific CECL reserve on the balance sheet.
The company repurchased 3.8 million shares, or $21.0 million of Class A common stock, at a blended price of $5.46 a share. Total liquidity was $131 million, comprising $45 million of unrestricted cash, $30 million of revolver capacity and $56 million of approved and undrawn borrowings under credit facilities. Master repurchase facilities had $1.4 billion of availability against $2.35 billion of capacity. Debt-to-equity was 2.7 times.
Remaining real estate owned totaled $330 million across 6 assets, including one hotel REO of $144 million, or 44% of REO. Two REO multifamily properties totaling $62 million are under contract with an expected closing in the third quarter of 2026. The company also executed a purchase-and-sale agreement for an industrial net-lease asset at a $300 million gross sales price, with the purchaser to assume a $200 million mortgage note, expected to close in the third quarter.
The board declared a quarterly cash dividend of $0.16 a share for the second quarter, paid on July 15, 2026, a 12.2% annualized yield on the current share price. Witt said the company remains focused on resolving remaining REO properties and redeploying capital to drive earnings growth.
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