NEW YORK–(COMMERCIAL THREAD) – BrightSpire Capital, Inc. (NYSE: BRSP) (âBrightSpire Capitalâ or the âCompanyâ), formerly known as Colony Credit Real Estate, Inc. (NYSE: CLNC), one of the largest listed commercial real estate (CRE) credit REITs, today announced that it has entered into an agreement to sell the majority of its historical development and / or unaccounted assets to vehicles managed by Fortress Investment Group LLC (“Fortress”) , a leading global diversified investment manager, for gross proceeds of $ 223 million (the âCo-Investment Portfolio Saleâ). The proceeds are substantially in accordance with the Company’s aggregate GAAP and the unamortized book value of the underlying assets as at March 31, 2021.
The Co-Investment Portfolio Sale resolves 5 (of 6) legacy co-investment assets held alongside Colony Capital, Inc. (now known as DigitalBridge Group, Inc., (NYSE: DBRG)). On June 7, 2021, Colony Capital announced a portfolio sale with Fortress that included its joint venture interests in these five underlying investments. The sale of the co-investment portfolio is conditional on the transaction between Colony Capital and Fortress and is expected to close concurrently with this, which is scheduled for the fourth quarter of 2021 and will allow Fortress to acquire control and ownership. 100% of these investments.
The sale of co-investment portfolio advances key company objectives, including:
- Leaves several historical developments and / or unrecognized assets – The sale of the co-investment portfolio includes (i) the four co-investments subject to the Company’s â5-investment preferential financingâ, which includes both development loans in Dublin, Ireland and two others mixed-use and single-family development loans in the United States, and (ii) a residual equity interest in a hotel loan in Austin, Texas (loan 64 on the loan table reported by the Company), each as described further in detail in the Company’s 10-Q for the quarterly period ended March 31, 2021;
- Portfolio simplification – Reduces exposure to larger scale development investments, including two in non-US markets;
- Preservation of book value – $ 223 million in gross revenue, resolved primarily in line with the combined GAAP book value of assets as at March 31, 2021; and
- Reduce leverage – The proceeds from the sale of the co-investment portfolio are intended to repay the â5-investment preferential financingâ, a COVID-19-related financing obtained in June 2020 for balance sheet protection purposes.
âWe look forward to continuing to work with the Fortress team to complete this transaction which is another step towards simplifying our business by rebalancing our portfolio and reducing exposure to certain investment profiles that are no longer in focus. core of our strategy. We remain focused on generating current and predictable earnings primarily through exposure to senior mortgages, âsaid Andy Witt, COO of BrightSpire Capital.
âThis is another win-win transaction, following our agreement in June to become general partner and manager of Colony Capital’s CDCF series of funds. We are very pleased to acquire these assets, which perfectly match our expertise in managing complexity across a wide range of asset classes and geographies, while providing BrightSpire Capital with a ‘one-stop-shop solution’ to accelerate the achievement of their strategic goals, âsaid Fortress CEO Noah Shore.
The sale of the co-investment portfolio is subject to certain purchase price adjustments (including for contributions, distributions and currency adjustments during the execution period), customary closing conditions and third party consents. .
About BrightSpire Capital, Inc.
BrightSpire Capital, Inc. (NYSE: BRSP), formerly Colony Credit Real Estate, Inc. (NYSE: CLNY), is one of the largest publicly traded, origin-focused Commercial Real Estate Credit REITs (CREs), the acquisition, financing and management of a diversified portfolio composed mainly of CRE debt investments and net real estate leased mainly in the United States. The investments in CRE’s debt consist primarily of senior mortgages, which we believe to be the primary investment strategy. BrightSpire Capital is organized as a Maryland corporation and taxed as a REIT for US federal income tax purposes. For more information on the Company, its management and activities, please visit www.brightspire.com.
Caution Regarding Forward-Looking Statements
This press release may contain forward-looking statements within the meaning of federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions regarding matters that are not historical facts. In some cases, you can identify forward-looking statements by using forward-looking terminology such as âmayâ, âwillâ, âshouldâ, âexpectsâ, âintendsâ, âanticipatesâ, âanticipatesâ, “” Believes “,” estimates “,” predicts “or” potential “or the negative of such words and expressions or similar words or expressions which are predictions or indicate future events or trends and which do not relate solely to historical questions. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and contingencies, many of which are beyond our control, and may cause actual results to differ significantly from those expressed in any forward-looking statement. Factors that could cause actual results to differ materially from BrightSpire Capital’s expectations include, but are not limited to, conditions for the completion of the sale of the co-investment portfolio which may not be met, or approvals. required for the transaction may not be obtained on the expected terms, on schedule, or not at all; the impact of timing, other conditions or adjustments on the ability to preserve the carrying value; the timing or ability of the Company to repay the preferential financing of 5 investments following the sale of the co-investment portfolio and the net effect on the carrying value of the Company for such events (including the extent purchase price adjustments); the ability to simplify the portfolio and / or achieve efficiency gains, as well as achieve the strategic and financial benefits expected from internalization; and uncertainties regarding the continued impact of the novel coronavirus (COVID-19). The foregoing list of factors is not exhaustive. Additional information on these and other factors can be found in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, as well as other documents filed by BrightSpire Capital with the US Securities and Exchange. Commission. In addition, each of the factors mentioned above is likely to be also directly or indirectly affected by the continued impact of COVID-19 and investors are urged to interpret substantially all of these statements and risks as being heightened by due to the continued impact of COVID-19[FEMININE. Additional information on these and other factors can be found in BrightSpire Capital reports filed from time to time with the Securities and Exchange Commission.
BrightSpire Capital cautions its investors not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of this press release. BrightSpire Capital has no obligation to update any of these forward-looking statements after the date of this press release, or to comply with any statements made prior to actual results or revised expectations, and BrightSpire Capital has no responsibility. ‘intention to do so.