The following is a summary of the BrightSpire Capital, Inc. (BRSP) Q4 2023 Earnings Call Transcript:
Financial Performance:
BrightSpire reported a GAAP net loss of $16.3 million or $0.13 per share, with dividend coverage for the quarter at 1.4 times.
The company has over $203 million in unrestricted cash and a low leverage ratio of 1.8 times.
For the full year of 2023, the company generated adjusted Distributable Earnings of $138.2 million, or $1.06 per share, representing a return on undepreciated shareholders' average equity of about 9.2%.
Due to increase in CECL reserves and a small impairment taken on an REO asset, the company's GAAP net book value decreased to $9.83 from $10.11 per share.
Company's debt to equity ratio stands at 1.8 times.
Business Progress:
Major challenges in 2023 were addressed by maintaining high liquidity levels and low leverage ratios, combined with managing a smaller average loan size of around $34 million.
The company aims to reverse balance sheet trends from the past two years in 2024 by monetizing and effectively redeploying capital.
BrightSpire plans to assess new lending opportunities in 2024, with particular optimism about opportunities from regional banks looking to reduce their commercial real estate exposures.
The company plans to keep a minimum cash balance of around $100 million to prepare for market uncertainties in 2025.
In Q4, the company reduced exposure to the office segment and saw a significant increase in value of their South Pasadena, California office loan due to successful upzoning entitlements for residential senior living.
The company displays resilience in the multifamily sector, expecting growth in this sector to remain flat over the next 12-18 months.
More details: BrightSpire Capital IR
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