BrightSpire Capital, Inc.

Good day, and welcome to the Bright Spire Capital second quarter 2025 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, then two. Please note that this event is being recorded. I would now like to turn the conference over to David Palame, General Counsel. Please go ahead, sir.

Good morning, and welcome to Brightspire Capital's second quarter 2025 earnings conference call. We will refer to Brightspire Capital as Brightspire, BRSP, or the company throughout this call. Speaking on the call today are the company's Chief Executive Officer, Mike Mazzei, President and Chief Operating Officer, Andy Witt, and Chief Financial Officer, Frank Saraceno. Before I hand the call over, please note that on this call, certain information presented contains forward-looking statements. These statements, which are based on management's current expectations, are subject to risks, uncertainties, and assumptions. Potential risks and uncertainties could cause the company's business and financial results to differ materially. For a discussion of risks that could affect results, please see the risk factors section of our most recent 10-K and other risk factors and forward-looking statements in the company's current and periodic reports filed with the SEC from time to time. All information discussed on this call is as of today, July 30th, 2025, and the company does not intend and undertakes no duty to update for future events or circumstances. In addition, certain financial information presented on this call represents non-GAAP financial measures. The company's earnings release and supplemental presentation, which was released yesterday afternoon and is available on the company's website, presents reconciliations to the appropriate GAAP measures and an explanation of why the company believes such non-GAAP financial measures are useful to investors. Before I turn the call over to Mike, I will provide a brief recap on our results. The company reported second quarter GAAP net loss attributable to common stockholders of $23.1 million, or 19 cents per share, distributable earnings of $3.4 million, or 3 cents per share, and adjusted distributable earnings of $22.9 million, or 18 cents per share. Current liquidity stands at $325 million, of which $106 million is unrestricted cash. The company also reported GAAP net book value of $7.65 per share and undepreciated book value of $8.75 per share as of June 30, 2025. Finally, during this call, management may refer to distributable earnings as DE. With that, I would now like to turn the call over to Mike.

Thanks, David, and welcome to our second quarter earnings call. We had a solid second quarter and are pleased with our progress and the results. Our dividend was covered by adjusted DE, while our undepreciated book value remained unchanged. In addition, our net loan originations were again positive for the quarter. Most importantly, we made substantial headway in reducing exposure to watch list loans, thus making further progress in continuing to de-risk the portfolio. We also, of course, remain actively engaged in managing the resolution of REO assets. Turning briefly to the markets, we saw a notable improvement in market conditions and a welcome decline in volatility since our call in April. Commercial real estate debt markets appear to be largely unaffected by the headlines over the last 90 days. We've seen credit and lending spreads stabilize, loan inquiry has increased steadily, and the CMBS market has returned to normal and is quite active. Moreover, bank warehouse lenders have remained ready, willing, and engaged to provide competitive financing throughout the second quarter. These recent improvements are encouraging and provide optimism for the CRE market's continued progress. Now, turning briefly to our balance sheet, during the quarter and subsequently, we have reduced the watch list on a net basis by 50%. The most notable reduction was the result of foreclosing on the San Jose hotel loan. We now own the property free and clear with no financing in place. During the protracted foreclosure process, the hotel experienced meaningful deferred maintenance that we are now in the process of addressing. Our intention is to make much needed and neglected physical and operational improvements to the property ahead of significant events taking place in the Bay Area through mid- This is most notably the Super Bowl and the World Cup. We will look to sell the asset sometime in 2026. However, while the asset remains unlevered, it is currently cash flow positive and is now contributing to earnings. In the interim, given the asset is unlevered, it also serves as a significant source of immediate liquidity as a result of committed but undrawn financing capacity. On the origination side, as anticipated and highlighted in our last call, we experienced a lull in new loan closings during the second quarter. This quarter's origination dynamics were mirrored by a slowdown in payoffs in our own loan portfolio. As a result, on a net basis, we experienced positive growth in the loan book. We expect loan origination conditions to improve in the second half of the year as we already have an additional six loans for $114 million that have closed or are in execution. Finally, during the quarter, we repurchased 561,000 shares at an average price of $5.19. Brightspire continues to trade at a roughly 40% discount to its undepreciated book value. This equates to a discount of approximately $450 million to a book value, which includes a CECL reserve of $137 million or $1.06 per share. Given the recent improvements in our watch list and the consistency in book value, we feel the stock is significantly undervalued. In closing, we navigated a very dynamic first half of the year. We delivered net positive growth in our loan book, our adjusted distributable earnings covered the dividend, and we cut the watch list in half. We will continue to make progress on our remaining watch list loans as well as our REO resolutions. The REO resolution proceeds are a significant source of liquidity for future loan originations and the continued regrowth in our loan book. We enter the second half of the year with a more defined path forward to capitalize on the opportunities ahead. With that, I will turn the call over to our president, Andy Webb. Andy?