Greetings, and welcome to the BrightSpire Capital Inc. 1Q 2024 Earnings Call. At this time, all participants are in a listen-only mode. The question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce David Palamé, General Counsel. Thank you, David. You may begin. Good morning, and welcome to BrightSpire Capital's 1Q 2024 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, May 1, 2024, 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 this morning and is available on the company's website, presents reconciliation to the appropriate GAAP measures and an explanation of why the company believes such non-GAAP financial measures are useful to investors. 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. Thank you, David. Welcome to our 1Q 2024 earnings call, and thank you for joining us this morning. In my remarks today, I will focus on some key financial highlights for the company, briefly discuss market conditions, and provide visibility as to what is ahead. I will turn the call over to Andy for more specifics on the portfolio. Starting off with some financial highlights. For the 1Q, we reported GAAP net loss of $57.1 million, or $0.45 per share, positive DE of $22.5 million, or $0.17 per share, and adjusted DE of $29.7 million, or $0.23 per share. Our current liquidity stands at $323 million, of which $158 million is cash on hand. This quarter, we recorded a $0.68 reduction in undepreciated book value, which currently stands at $10.67. This reduction was primarily driven by a net increase in our CECL reserves of $0.37 per share. This brings our total CECL reserves to $151 million, or $1.15 per share. Our leverage ratio remains unchanged at 1.8x, and our adjusted DE dividend coverage for the 1Q was 1.15x. Now, let's briefly discuss the financial markets. In the first two months of this year, the markets went into a high gear risk-on mode, which resulted in an everything rally. As we all know, this was driven by the Fed telegraphing the end of the higher for longer period and that the next move would be a near-term cut in the Fed funds rate. This fueled a strong conviction for continued economic growth and at worst, a very soft landing. However, as the 1Q progressed, it became apparent that inflation is sticking while geopolitical risks have increased. Therefore, while the Fed's next move will likely be a cut, the expectations have shifted from multiple cuts starting in the second quarter to perhaps not starting until December. In response, the 10-year Treasury yield has risen once again, while gold rallied to an all-time high, along with other commodity prices. When interest rates and the price of gold are positively correlated, it is generally not a good thing. In light of this, we are maintaining a conservative position, and as a result, we increased our CECL reserves and also downgraded two loans to a risk rating four during the quarter. We, of course, remain focused on the resolutions of our watchlist loans and REO assets, as this segment of the portfolio is critical to our path to doing new business and improving earnings. Separately, on our 4Q call in February, I stated that over the last 12 months, many peers in our sector, along with BrightSpire, have recognized write-downs in capital. I also emphasized the impact of holding higher cash balances as well as increases in underperforming and undercovered assets. Therefore, prior points in time dividend coverages obviously do not reflect the impact of these factors on future earnings. For BrightSpire, our dividend remains unchanged from the prior quarter. Our current dividend coverage is 1.15 x based on adjusted DE of $0.23 per share. This is down from our previous quarter's coverage of 1.4 x based on our then-adjusted DE of $0.28 per share. For further context, our dividend coverage based solely on cash flow for this quarter is 1.05 times. This coverage ratio is based on 1Q cash flow earnings of $0.21 per share. In the previous quarter, the equivalent dividend coverage ratio was 1.25 x, based on a per share cash flow of $0.25. As we look ahead, our earnings will be buffered by achieving faster resolutions and monetization of lower earning assets, whether watchlist loans or unencumbered assets, including REO. As I said earlier, we're striving to make headway on this portion of our portfolio to unlock the earnings power of this capital. However, in the coming quarters, we're also facing some potential headwinds on earnings that might not immediately affect distributable earnings, but would affect cash flow. Specifically, this pertains to three of our older vintage office property equity investments. The largest of the three is our Norway asset, which we have discussed often in the past. Each of these equity investments have some form of upcoming debt covenant test or maturity date within the next few quarters. For example, the Norway asset has a loan-to-value test in the second quarter of this year. Despite having passed last year's test, this year's hurdle will be more challenging. The other 2 office equity investments have debt maturity dates within the next nine months. We will work with the lenders in an attempt to get extensions, but it's still too early to have certainty as to what those outcomes will be. The forthcoming debt events on these equity investments may result in lower going forward cash flow. Therefore, as I said, while there might still be distributable earnings recognized on these assets near term, the actual excess cash flow over debt service could be held by the lenders and not passed on to BrightSpire. The cash flow generated by these three assets in aggregate is approximately $0.15 per share annually. The undepreciated net equity NAVs for each, along with asset narratives, can be found in our supplemental. Importantly, as I mentioned earlier, these impacts could be offset by additional earnings pickup from monetizing watchlist and REO assets. We do anticipate positive movement and having much more to say on a multiple of these assets over the next 2 quarters. There are also select watchlist assets where developments can prove to be very fluid near term as we work with our borrowers. We will know much more by our next earnings call. Regarding the office equity investments I discussed, the existing debt on each, as well as our tenant's commitment to our Norway property, will be significant factors for valuation in the coming months. We, along with our board of directors, will continue to assess dividend coverages based on the progress, timing, and the net effect of these factors I have discussed. In closing, while both the capital markets and geopolitical events continue to be a challenge, we will continue to remain focused on what we can control in the near term and act prudently in managing the balance sheet and maintaining liquidity. With that, I will now turn the call over to our President, Andy Witt. Thank you, Mike. Good morning, and thank you all for joining. During the 1Q, we received $114 million in repayments across four investments, which included our largest office loan for $88 million, one industrial loan for $20 million and two partial repayments. We expect repayment activity to remain slow for the remainder of 2024, given tempered expectations for interest rate relief. Deployment for the quarter consisted of $14 million of future funding obligations. At the end of the quarter, remaining future funding obligations stand at $139 million, or 5% of total outstanding commitments. Subsequent to quarter end, we upsized one loan by $9 million to consolidate collateral related to a mixed-use asset in Pasadena, California. The original collateral consists of a fully leased 94,000 sq ft office building with developable land. Upsizing the loan provided the borrower with proceeds to complete the purchase of additional parcels of land previously under contract. Assembling the collateral under one lender was an important step towards protecting entitlements consisting of a 310-unit senior living development project. In terms of asset level updates, the San Jose hotel loan borrower is continuing to market the property for sale and exploring refinancing alternatives. The loan remained current in April. Last quarter, we downgraded a Denver, Colorado, multifamily loan from a risk rating of 4 - 5 and placed the loan on non-accrual. During the quarter, in cooperation with the borrower, we marketed the property for sale. The marketing process evidenced ample liquidity in the multifamily sector. There was substantial interest in the property, and it is currently under contract with a hard deposit. We anticipate the sale will close mid-year. On the REO side, the Washington, D.C., office property, which we took ownership of during the 4Q, is now under contract at our net asset value, and we anticipate finalizing the sale also mid-year. Turning to our watchlist update. During the 1Q, we added two investments for a total of $87 million. We added the $57 million Santa Clara, California, multifamily development loan to the watchlist due to an uncertainty associated with the upcoming maturity.... This is the remaining collateral associated with the multifamily development loan, which was paid down by $51 million in June of 2022, concurrent with the release of a parcel from the collateral. Current market conditions have impacted the borrower's go-forward business plan. We are in active dialogue with the borrower regarding alternative options for the remaining parcel. In addition, we also downgraded a Miami, Florida, office loan. The collateral consisted of 2 buildings, and the borrower was pursuing a conversion to multifamily on one of the buildings. The borrower owns the adjacent parcel, and the plan was to consolidate the parcels in order to effectuate this redevelopment. We are approaching a final maturity, and it's unclear whether or not the borrower will be able to refinance the combined properties. The lack of certainty on both of these investments has compelled us to move the investments to the watchlist from risk rating of 3-4. As it relates to the loan portfolio, as of March 31, 2024, excluding cash and net assets on the balance sheet, the loan portfolio is comprised of 85 investments with an aggregate carrying value of $2.8 billion and a net carrying value of $877 million, or 79% of the total investment portfolio. Our weighted average risk ranking remains flat quarter-over-quarter at 3.2. The average loan size is $33 million. First mortgage loans constitute 97% of our loan portfolio, of which 100% are floating rate and all of which have interest rate caps. The multifamily portion of our portfolio remains the largest segment, with 51 loans representing 54% of the loan portfolio or $1.5 billion of aggregate carrying value. Office comprises 30% of the loan portfolio, consisting of $847 million of aggregate carrying value across 25 loans with an average loan balance of $34 million. The remainder of our loan portfolio is comprised of 8% hospitality, with mixed use and industrial collateral making up the remainder. With that, I will turn the call over to Frank Saracino, our Chief Financial Officer, to elaborate on the 1Q results. Frank? Thank you, Andy, and good morning, everyone. Before discussing our 1Q results, I want to mention that our 1Q 2024 supplemental financial report is available on the investor relations section of our website. As Mike mentioned, for the 1Q, we generated adjusted DE of $29.7 million, or $0.23 per share. 1Q DE was $22.5 million, or $0.17 per share. DE includes a specific reserve on the Denver, Colorado, multifamily loan of approximately $7.1 million. Additionally, we reported total company GAAP net loss of $57.1 million, or $0.45 per share, which reflects the sequential increase in our CECL reserves. Quarter-over-quarter, total company GAAP net book value decreased to $9.10 from $9.83 per share. Undepreciated book value also decreased to $10.67 from $11.35 per share. The change is mainly driven by an increase in our CECL reserves and partially offset by adjusted DE in excess of dividends declared. I would like to quickly bridge the 1Q adjusted distributable earnings of $0.23 versus the $0.28 recorded in the 4Q. The change is driven by loan repayments, non-accrual loans, and performance at our operating real estate portfolio. Looking at reserves, our specific CECL reserves totaled $7.1 million and is related to the Denver, Colorado, multifamily loan. As Andy mentioned, this loan was downgraded to a 5 in Q4, and the underlying property is currently under contract with a hard deposit. During Q1, no loans were downgraded to a 5. Our general CECL provision stands at $143.7 million, or 488 basis points on total loan commitments, an increase to $67 million from the prior quarter. The increase in the general CECL was primarily driven by economic conditions, as well as specific inputs on certain loans. Looking at our watch list loans, our 1 risk rank 5 loan represents 1% of total loan portfolio carrying value. 11 loans equating to 18% of the total portfolio carrying value are risk rank 4. This concludes our prepared remarks, and with that, let's open it up for questions. Operator? Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for your question. Our first questions come from the line of Stephen Laws with Raymond James. Please proceed with your question. Hi, good morning. Mike, I may have been typing faster and should have been listening, but wanted to touch base back on the cash flow comment around the real estate. I think you said $0.15 is kind of the number that those three assets contribute. You know, looks like adjusted distributable earnings, you know, if I look, say, trailing twelve months, clearly has overearned by more than $0.15 on the dividend. So, you know, can you talk a little bit or, you know, make sure I'm clear as far as the coverage comments that it's just a little bit less coverage on the dividend, or maybe if you could, you know, speak to that? ... Great. Thank you. Some of the, some of the coverage deterioration that we had came from various, that nickel, so it came from various sources that we can go through the three kind of places where that came from. So those are all small numbers, adding up to a nickel. But as we look forward, we really are—there are a lot, there are a lot of questions we see on these calls about it's not just about DE, it's about cash flow and are companies paying out, capital to sustain their dividends? So we want to be very clear, going backward, telling you what that cash flow coverage was. And that cash flow coverage drop, is similar to the drop, the same drivers, if you will, as the drop in, in DE coverage, dividend coverage. So when we look out ahead, we're seeing that there are certain events that while they may not affect actual DE, i.e., if you're getting cash trapped at an entity level with your lender, you're still getting that distributable earnings in your income. But we do recognize that they can affect cash. And so that $0.15 was something that we want to make sure putting out there and telegraphing. Everyone knows about these assets. Everyone knows about the Norway asset. We passed the dividend test last year, but we see this test is going to be more difficult. So we just want to make sure that we're ahead of that and that we know everyone is also focused on cash flow coverage, and we want to make sure we earmark that. As I said in the call, we have other things that we're working on that will offset that. It'll be a timing issue. With the equity investments, you have drop-dead date certains that these events, maturities, covenant tests are going to happen. The two U.S. assets, those tests are going to be, or maturity dates, I should say, are going to be at the end of the year or very beginning of next year. So we'll start working with the lenders there. So that those three things add up to the $0.15 we're talking about. And hopefully, what we're working on with the watchlist and resolutions will offset that. Yep. No, no, appreciate the clarity there, and that leads to my next question. You know, when I think about the Denver loan, you know, it's already on non-accrual, now it's under contract for sale. You know, can you talk about whether there's financing on that? Will we see a pickup in net interest income? Is that debts repaid on sale? And similarly, the D.C. office at REO, that's expected to finalize the sale mid-year. You know, is that capital that'll be recycled into new performing loans that's accretive to earnings? Or can you talk about the potential lift from, you know, after that transaction is completed? There were a lot of requests. As Andy said, we had so many bids on the Denver multifamily assets. Many of them were requesting some sort of seller, effectively seller, even though with a lender or stapled financing. Both of those transactions, the sale of the Denver multifamily and the sale of the DC REO are both all cash, so there'll be no debt provided from us. And that kind of also indicates that feels like there's a trough in the market where investors can come out and say, "You know what? That's expensive, but this looks on an all-cash basis, okay." And so if you're getting transactions happening on an all-cash basis, it is an indication that you're kind of bottoming out in some of these markets. Then I guess generally, you know, around portfolio leverage, appetite for new investments, you know, as you look here to the end of the year, do you think the loan portfolio is flattish? Do you expect it to increase as you see opportunities? Kind of how do you expect new originations versus repayments to trend over the year? We're going to drive this down before we drive it up. So you know, and that's really going to. We're going to have some payoffs, but it's really around the resolution of the watchlist assets and some of the remaining REO there. We've been chopping wood on that watchlist for quite a long time. We're actually tired of talking about it as well. But we are going to make headway. We think there are some assets on the watchlist that are going to stick around. We see two assets there, multifamily assets that look like we can upgrade them. We're waiting another quarter to make sure that those business plans are really on track before we do so. So we probably could have done that this quarter, but we hesitated. We have another multifamily asset that is the marketing process, a Phoenix asset. I believe it's about $19 million. That marketing process has started. We don't know if we're going to provide debt on that. And, you know, on the large hotel asset in San Jose, there's been some public chatter about that. We're not going to comment on it here, but that public chatter would indicate that things are underway there. We're going to wait patiently to see how that gets resolved. So we do think there's going to be some movement on the watch list, which is going to give us a decrease in assets, but give us an increase in the amount of capital we'll have to work with. So it's going to happen sequentially. Let's get that watchlist fixed and then utilize that capital to reinvest, and it'll be a timing issue with regard to the trigger dates on the equity and what those effects on cash flow will be, coupled or against how fast we can resolve and repatriate the capital on the watchlist. You know, one other thing on that is on the REO, we did sell the D.C. one. You know, we could sell the Long Island City 2 assets that we have there, collectively, roughly $70 million in capital unencumbered. We are playing those through. We have a single user that is looking at those closely, and that would be significant enough. I'm not shorting anything, but that would be significant enough to play those through and allow that to see where it goes. I'd say we're in the early innings there. But otherwise, if that falls down, then we'll take those to market and sell them where is as is. But so to get back to your question, we think we're going to trough a little bit more on the balance sheet, more focused on the watch list... and REO before we start putting money out and growing new assets again. Got it. Appreciate the comments this morning, Mike. Thank you. Our next questions come from the line of Steve Delaney with Citizens JMP. Please proceed with your question. Thanks. Good morning, everyone. So look, Mike, I was going to ask about new loan originations, but I'm glad I scratched that. You're I applaud the clarity about playing defense and being effective and managing your liquidity as opposed to, you know, putting a toe in the water as far as new loans. It's kind of it sounds like to me, you know, the focus of the team. It's just better to be 100% focused on the near-term task rather than to sort of ease into new lending. So I just want to applaud that. I think that clarity of the focus of management is very helpful to us where we sit. To that end, the boost in the CECL reserve, in your opening comments, you talked about the Fed's shift in policy. How impactful was higher for longer in terms of your, your thought as you were evaluating the assets and the, and the need for, you know, boosting the reserve by $0.57? Thank you. Well, Steve, thank you for the kind words. You're very generous. I wanna underscore that, you know, we are playing defense a little bit longer than we'd like. And we- Yeah. We do recognize that we’ve seen others in our peer group make substantial headway on their watchlist assets and now focusing on our REO. Yeah. And we've seen that—what the effect has that been, that has been. And so, you know, we are really looking to accomplish the same. And so we've been working really hard on making progress there. I don't want to use the word the dams are going to break, but we are. We've been at this for a while. We do think some things over the next quarter or two are really going to start to rear their heads in terms of resolutions around that. And we do underscore that that has had a big effect on our, some of our peers in terms of getting certainty around what's out there. And we recognize that, and we wanna be forward with that. With regard to the CECL- Yeah ... we generally saw the Fed reduce its commercial real estate index, which rolls into the Trepp model. They did that right after our earnings last quarter. No surprise. This longer for higher, we've heard this mentioned on other calls where, you know, it's wearing borrowers out. We- Yeah. You know, many borrowers are looking at, you know, "Hey, if this gets cut in May, my, my cap costs re-up for the second half of the year is going to look better," and now that's looking further away. So we're kind of recognizing those aspects in our model, and we're trying to be to lean more into it. We're not, you know, where we can, and then also where markets are softer, we're really trying to make sure that the model is reflecting the softness in those markets. So we really, it's a combination of those three things. I can't say there won't be any more CECL coming, but we are—this rate environment persisting where it is did have a big effect on how we were looking at, at our model and, and the underlying trends. Applaud that for being ahead of it. With respect to the buyback, I know that liquidity is important to be able to, you know, manage your bank financings, et cetera. Obviously, with the stock, you know, in the 60% of book range, or so, and the peer group at 70-some%, you know, gosh, it would be, it would be great to-- I guess my comment about not lending, I mean, heck, if I was in your seat, I think I'd rather buy back some stock than make a new loan. But I hope the, I applaud the board for putting the new authorization up, and we'll just watch to see how you're able to work that into your cash flow- ... going forward. Well, Steve, I- Thanks for the opportunity. I would say to you, I would say to you, arithmetically, you're correct. But, you know, we're here for a reason. Let's just be blunt. The stock is where it is. Yeah ... because of the uncertainty around that. Our, I think our first job is to resolve that uncertainty. As I said, some in our peer group have done a good job at that. We need to follow that lead and make sure we're doing that. And right now, I think buying back some stock, you're right, it would have a bigger impact than making new loans, but letting capital get out of the firm isn't really helpful right now. We are trading where we are, and I think resolving those watch list assets will pay us a bigger reward than buying back the stock. Well, we'll keep that in mind and maybe defer that for our modeling purposes until later this year after you've resolved some more of the problems. Thank you so much, Mike. Yes, we'd love to, we'd love to be in that. We'd love to be in a position where we can do that, but right now, I think near term, it's exactly what I said, make headway on the watchlist. Appreciate it. Thank you. Thank you. As a reminder, if you would like to ask a question, please press star one on your telephone keypad. Our next questions come from the line of Matthew Erdner with JonesTrading. Please proceed with your questions. Hey, good morning, guys. Thanks for taking the question. On some of these watch list loans, are you guys seeing a specific group of sponsors or borrowers, kind of play out the same way? Thank you. Okay, so our watch list is really divergent in terms of sponsors, but I, I think what you're, you're getting at, politely, is there are deals, especially, in the multifamily sector, where there have been syndicators, and I think those are the weaker deals. We're finding on the multifamily loans where you have local owners with friends and family money that they could go back and tap, those are proving more resilient, and we're finding that where they're more highly syndicated, and you don't have that connectivity with your, your limited, that is where we're seeing more of a breakdown, and we're working more closely with those GPs. So really, it's whether they're syndicated. That's the big, sensitive point, soft tissue in multifamily. In office, it don't matter. I mean, in office, it's office is the issue. And as we resolve the watchlist, and I think this is gonna be the case with everyone in our peer group. As we resolve the watchlist, and we get through the multifamily, and there's plenty of liquidity out there for multi and hotel, as Andy indicated in his remarks, we think that the watchlist and- or the REO are gonna start to gravitate more toward the office. But to answer your question, it's the syndicators in the multifamily sector that are probably the weakest issue. Gotcha. Yeah, that's helpful. Thanks for the color there. And then, you know, talking about loan extensions, you know, are you guys open to continue making those? And then, you know, I guess, what's the willingness on your guys' part to do that? And then, you know, are the borrowers willing to do that as well? There's willingness on all sides of the table to do that, and the willingness is really where it makes sense. There's only so much and so far we can go. If a borrower is showing that they're really focused on the asset, they're the best operator for that asset, and they're putting some level of skin back in the game, then there's a willingness to absolutely work with those borrowers. We're not here to pull the rug out from folks who are really committed to the assets and where we think they could do a better job at running them than we can, or somebody else just buying them and hitting a bid. So on both sides, there's a willingness. If we think we've run out of rope, that's really the watchlist loans that got downgraded. We felt like that we've worked with those borrowers, the economic situation out there, with the higher for longer environment, is really weighing on those assets, and we're really questioning the ability to go forward with them, and so that's why we downgraded, we downgraded those loans. Yeah, that makes sense. Thank you, guys. Thank you. We have reached the end of our question-and-answer session. I would now like to turn the floor back over to Michael Mazzei for closing remarks. Well, thank you for joining us today, and we look forward to seeing you in August. And before we go, we just wanna give a shout-out to Sarah Barcomb, who is leaving BTIG. She joined the sector just a short time ago, but in that short time, she made a big impact. We have a lot of respect for Sarah. We wish her luck in her new role. And again, thank you for joining us today, and we will see you in August. Thank you. This does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.