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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-38377

BRIGHTSPIRE CAPITAL, INC.

(Exact Name of Registrant as Specified in Its Charter)

Maryland

38-4046290

(State or Other Jurisdiction of
Incorporation or Organization)

(I.R.S. Employer
Identification No.)

590 Madison Avenue, 33rd Floor

New York, NY 10022

(Address of Principal Executive Offices, Including Zip Code)

(212) 547-2631

(Registrant’s Telephone Number, Including Area Code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A common stock, par value $0.01 per share

BRSP

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date:

As of April 29, 2025, BrightSpire Capital, Inc. had 130,461,995 shares of Class A common stock, par value $0.01 per share, outstanding.

Table of Contents

BRIGHTSPIRE CAPITAL, INC.

FORM 10-Q

TABLE OF CONTENTS


Index		Page

Part I.		4
Item 1.	Financial Information	4
	Financial Statements	4
	Consolidated Balance Sheets as of March 31, 2025 (unaudited) and December 31, 2024	4
	Consolidated Statements of Operations (unaudited) for the three months ended March 31, 2025 and 2024	6
	Consolidated Statements of Comprehensive Income (Loss) (unaudited) for the three months ended March 31, 2025 and 2024	7
	Consolidated Statements of Equity (unaudited) for the three months ended March 31, 2025 and 2024	8
	Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2025 and 2024	9
	Notes to Consolidated Financial Statements (unaudited)	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	46
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	73
Item 4.	Controls and Procedures	75
Part II.	Other Information	76
Item 1.	Legal Proceedings	76
Item 1A.	Risk Factors	76
Item 2.	Unregistered Sales of Equity and Use of Proceeds	76
Item 3.	Defaults Upon Senior Securities	76
Item 4.	Mine Safety Disclosures	76
Item 5.	Other Information	76
Item 6.	Exhibits	77
Signatures

Table of Contents

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q may contain forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. 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.

Among others, the following uncertainties and other factors could cause actual results to differ from those set forth in the forward-looking statements:

•operating costs and business disruption may be greater than expected;

•we depend on borrowers and tenants for a substantial portion of our revenue and, accordingly, our revenue and our ability to make distributions to stockholders will be dependent upon the success and economic viability of such borrowers and tenants;

•higher interest rates may adversely impact the value of our variable-rate investments, resulting in higher interest expense, materially impacting our borrowers’ ability to refinance existing loans, and creating disruptions to our borrowers’ and tenants’ ability to finance their activities, on whom we depend for a substantial portion of our revenue;

•lower interest rates may materially impact earnings as a result of generating less income on our loans and our ability to redeploy funds in a timely manner or to supplement earnings loss;

•deterioration in the performance of the properties securing our investments (including depletion of interest and other reserves or payment-in-kind concessions in lieu of current interest payment obligations, population shifts and migration, or reduced demand for office, multifamily, hospitality or retail space) may cause deterioration in the performance of our investments and, potentially, principal losses to us;

•the fair value of our investments may be subject to uncertainties including impacts associated with inflationary trends, the volatility of interest rates and credit spreads increased market volatility affecting commercial real estate businesses and public securities;

•our use of leverage and interest rate mismatches between our assets and borrowings could hinder our ability to make distributions and may significantly impact our liquidity position;

•the ability to realize expected returns on equity and/or yields on investments;

•adverse impacts on our corporate revolver, including covenant compliance and borrowing base capacity;

•adverse impacts on our liquidity, including available capacity under and margin calls on master repurchase facilities, debt service or lease payment defaults or deferrals, demands for protective advances and capital expenditures;

•our real estate investments are relatively illiquid and we may not be able to vary our portfolio in response to changes in economic and other conditions, which may result in losses to us;

•our inability to refinance existing mortgage debt on our real estate portfolio;

•the timing of and ability to deploy available capital;

•our lack of an established minimum distribution payment level, and whether we can continue to pay distributions in the future;

•the timing of and ability to complete repurchases of our common stock;

•the risks associated with obtaining mortgage financing on our real estate, which could materially adversely affect our business, financial condition and results of operations and our ability to make distributions to stockholders;

•the impact of legislative, regulatory, tax and competitive changes, regime changes and the actions of governmental authorities, and in particular those affecting the commercial real estate finance and mortgage industry or our business; and

•the ongoing impacts of global geopolitical uncertainty and unforeseen public health crises such as the COVID-19 pandemic on the real estate market.

The foregoing list of factors is not exhaustive. We urge you to carefully review the disclosures we make concerning risks in the sections entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, “Risk Factors” in this Form 10-Q for the quarter ended March 31, 2025 and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” herein.

Table of Contents

We caution investors not to unduly rely on any forward-looking statements. The forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. The Company is under no duty to update any of these forward-looking statements after the date of this Quarterly Report on Form 10-Q, nor to conform prior statements to actual results or revised expectations, and the Company does not intend to do so.

Table of Contents

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

BRIGHTSPIRE CAPITAL, INC.

CONSOLIDATED BALANCE SHEETS

(in Thousands, Except Share and Per Share Data)


	March 31, 2025 (Unaudited)		December 31, 2024
Assets
Cash and cash equivalents	$	200,911	$	302,173
Restricted cash	90,896		148,523
Loans held for investment	2,457,835		2,518,925
Current expected credit loss reserve	(155,365)		(165,932)
Loans held for investment, net	2,302,470		2,352,993

Real estate, net	782,248		777,421
Receivables, net	37,810		38,732
Deferred leasing costs and intangible assets, net	46,566		47,172
Assets held for sale	34,173		5,170
Other assets	55,579		51,294

Total assets	$	3,550,653	$	3,723,478
Liabilities
Securitization bonds payable, net	$	983,357	$	1,087,074
Mortgage and other notes payable, net	627,390		619,055
Credit facilities	733,494		785,183

Accrued and other liabilities	82,020		82,625
Intangible liabilities, net	2,483		2,805

Escrow deposits payable	70,183		80,132
Dividends payable	20,843		20,793

Total liabilities	2,519,770		2,677,667
Commitments and contingencies (Note 13)
Equity
Stockholders’ equity
Preferred stock, $0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively	—		—
Common stock, $0.01 par value per share
Class A, 950,000,000 shares authorized, 130,658,176 and 129,685,185 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively	1,307		1,297
Additional paid-in capital	2,865,666		2,865,341
Accumulated deficit	(1,827,543)		(1,812,083)
Accumulated other comprehensive loss	(4,506)		(6,337)
Total stockholders’ equity	1,034,924		1,048,218
Noncontrolling interests in investment entities	(4,041)		(2,407)
Total equity	1,030,883		1,045,811
Total liabilities and equity	$	3,550,653	$	3,723,478

The accompanying notes are an integral part of these consolidated financial statements.

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BRIGHTSPIRE CAPITAL, INC.

CONSOLIDATED BALANCE SHEETS

(in Thousands)

The following table presents assets and liabilities of securitization vehicles and certain real estate properties that have noncontrolling interests as variable interest entities for which the Company is determined to be the primary beneficiary.


	March 31, 2025 (Unaudited)		December 31, 2024
Assets
Cash and cash equivalents	$	4,209	$	4,237
Restricted cash	13,467		61,194
Loans held for investment, net	1,165,035		1,218,140
Real estate, net	220,138		191,102
Receivables, net	11,164		11,455
Deferred leasing costs and intangible assets, net	8,204		7,209

Other assets	26,535		22,662

Total assets	$	1,448,752	$	1,515,999
Liabilities
Securitization bonds payable, net	$	983,357	$	1,087,074
Mortgage and other notes payable, net	164,980		165,810
Credit facilities	45,145		25,866
Accrued and other liabilities	13,913		9,229
Intangible liabilities, net	1,905		2,208

Escrow deposits payable	2,387		2,801

Total liabilities	$	1,211,687	$	1,292,988

The accompanying notes are an integral part of these consolidated financial statements.

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BRIGHTSPIRE CAPITAL, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in Thousands, Except Per Share Data)

(Unaudited)


	Three Months Ended March 31,
	2025		2024
Net interest income
Interest income	$	48,086	$	67,563
Interest expense	(32,211)		(40,133)


Net interest income	15,875		27,430

Property and other income
Property operating income	26,858		25,105
Other income	2,618		3,099
Total property and other income	29,476		28,204

Expenses

Property operating expense	9,966		8,645
Transaction, investment and servicing expense	629		622
Interest expense on real estate	6,565		6,782
Depreciation and amortization	10,552		10,390
(Decrease) increase of current expected credit loss reserve	(235)		74,411

Compensation and benefits (including $4,213 and $2,170 of equity-based compensation expense, respectively)	10,429		8,771
Operating expense	3,214		3,199

Total expenses	41,120		112,820

Other income


Other (loss) gain, net	(241)		331
Income (loss) before income taxes	3,990		(56,855)

Income tax expense	(282)		(252)
Net income (loss)	3,708		(57,107)
Net (income) loss attributable to noncontrolling interests:
Investment entities	1,634		4

Net income (loss) attributable to BrightSpire Capital, Inc. common stockholders	$	5,342	$	(57,103)

Net income (loss) per common share - basic (Note 15)	$	0.04	$	(0.45)
Net income (loss) per common share - diluted (Note 15)	$	0.04	$	(0.45)

Weighted average shares of common stock outstanding - basic (Note 15)	127,082		127,326
Weighted average shares of common stock outstanding - diluted (Note 15)	129,860		127,326

The accompanying notes are an integral part of these consolidated financial statements.

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BRIGHTSPIRE CAPITAL, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in Thousands)

(Unaudited)


	Three Months Ended March 31,
	2025		2024
Net income (loss)	$	3,708	$	(57,107)
Other comprehensive income (loss)


Foreign currency translation gain (loss)	1,831		(3,594)
Total other comprehensive income (loss)	1,831		(3,594)
Comprehensive income (loss)	5,539		(60,701)
Comprehensive (income) loss attributable to noncontrolling interests:
Investment entities	1,634		4

Comprehensive income (loss) attributable to common stockholders	$	7,173	$	(60,697)

The accompanying notes are an integral part of these consolidated financial statements.

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BRIGHTSPIRE CAPITAL, INC.

CONSOLIDATED STATEMENTS OF EQUITY (Continued)

(in Thousands)

(Unaudited)


	Common Stock			Additional Paid-in Capital		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Equity		Noncontrolling Interests in Investment Entities		Total Equity
	Class A
	Shares	Amount
Balance as of December 31, 2023	129,985	$	1,300	$	2,864,883	$	(1,586,292)	$	(2,556)	$	1,277,335	$	1,131	$	1,278,466

Issuance and amortization of equity-based compensation	1,243	$	12	$	2,158	$	—	$	—	$	2,170	$	—	$	2,170
Other comprehensive loss	—	—		—		—		(3,594)		(3,594)		—		(3,594)
Dividends and distributions declared ($0.20 per share)	—	—		—		(26,036)		—		(26,036)		—		(26,036)
Shares canceled for tax withholding on vested stock awards	(592)	(6)		(3,969)		—		—		(3,975)		—		(3,975)
Net loss	—	—		—		(57,103)		—		(57,103)		(4)		(57,107)
Balance as of March 31, 2024	130,636	$	1,306	$	2,863,072	$	(1,669,431)	$	(6,150)	$	1,188,797	$	1,127	$	1,189,924

Balance as of December 31, 2024	129,685	$	1,297	$	2,865,341	$	(1,812,083)	$	(6,337)	$	1,048,218	$	(2,407)	$	1,045,811

Issuance and amortization of equity-based compensation	1,619	16		4,197		—		—		4,213		—		4,213
Other comprehensive income	—	—		—		—		1,831		1,831		—		1,831
Dividends and distributions declared ($0.16 per share)	—	—		—		(20,802)		—		(20,802)		—		(20,802)
Shares canceled for tax withholding on vested stock awards	(646)	(6)		(3,872)		—		—		(3,878)		—		(3,878)
Net income (loss)	—	—		—		5,342		—		5,342		(1,634)		3,708
Balance as of March 31, 2025	130,658	$	1,307	$	2,865,666	$	(1,827,543)	$	(4,506)	$	1,034,924	$	(4,041)	$	1,030,883

The accompanying notes are an integral part of these consolidated financial statements.

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BRIGHTSPIRE CAPITAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in Thousands)

(Unaudited)


	Three Months Ended March 31,
	2025		2024
Cash flows from operating activities:
Net income (loss)	$	3,708	$	(57,107)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization	10,552		10,390
Straight-line rental income	(256)		(612)
Amortization of above (below) market lease values, net	59		112
Amortization of premium/accretion of discount and fees on investments and borrowings, net	(353)		(2,104)
Amortization of deferred financing costs	2,072		2,545
Amortization of right-of-use lease assets and operating lease liabilities	(2)		101
Paid-in-kind interest added to loan principal, net of interest received	(523)		(572)






Realized loss on sale of real estate	245		—

Increase (decrease) of current expected credit loss reserve	(235)		74,411


Amortization of equity-based compensation	4,213		2,158
Mortgage notes below market value amortization	5		2

Deferred income tax benefit	(58)		(137)

Changes in assets and liabilities:
Receivables, net	918		1,133
Deferred costs and other assets	(7,249)		984

Other liabilities	(2,595)		(6,727)
Net cash provided by operating activities	10,501		24,577
Cash flows from investing activities:
Acquisition, origination and funding of loans held for investment, net	(112,625)		(15,171)
Repayment on loans held for investment	133,000		116,790

Proceeds from sale of real estate	5,184		—
Cash and restricted cash received related to consolidation of loans held for investment	511		—

Acquisition of and additions to real estate and related intangibles	(2,514)		(2,368)











Change in escrow deposits payable	(9,949)		(19,825)
Net cash provided by investing activities	13,607		79,426
Cash flows from financing activities:
Distributions paid on common stock	(20,748)		(25,995)

Shares canceled for tax withholding on vested stock awards	(3,878)		(3,975)



Repayment of mortgage notes	(2,303)		(1,404)
Borrowings from credit facilities	49,224		11,840
Repayment of credit facilities	(100,913)		(133,082)

Repayment of securitization bonds	(104,288)		(6,734)

Payment of deferred financing costs	(500)		(75)



Issuance of common stock	—		12
Net cash used in financing activities	(183,406)		(159,413)
Effect of exchange rates on cash, cash equivalents and restricted cash	409		(439)
Net decrease in cash, cash equivalents and restricted cash	(158,889)		(55,849)
Cash, cash equivalents and restricted cash - beginning of period	450,696		362,089
Cash, cash equivalents and restricted cash - end of period	$	291,807	$	306,240

The accompanying notes are an integral part of these consolidated financial statements.

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BRIGHTSPIRE CAPITAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(in Thousands)

(Unaudited)


	Three Months Ended March 31,
	2025		2024
Reconciliation of cash, cash equivalents, and restricted cash to consolidated balance sheets
Beginning of the period
Cash and cash equivalents	$	302,173	$	257,506
Restricted cash	148,523		104,583
Total cash, cash equivalents and restricted cash, beginning of period	$	450,696	$	362,089

End of the period
Cash and cash equivalents	$	200,911	$	221,505
Restricted cash	90,896		84,735
Total cash, cash equivalents and restricted cash, end of period	$	291,807	$	306,240


	Three Months Ended March 31,
	2025		2024
Supplemental disclosure of cash flow information:











Accrual of distribution payable	$	20,802	$	26,026
Assets transferred to held for sale	34,173		—
Assumption of accounts payable, accrued expenses and other liabilities related to consolidation of VIE	(527)		—
Assumption of receivables and other assets related to consolidation of VIE	197		—
Consolidation of VIE	31,784		—

Right-of-use lease assets and operating lease liabilities	—		4,454

The accompanying notes are an integral part of these consolidated financial statements.

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BRIGHTSPIRE CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Business and Organization

BrightSpire Capital, Inc. (the “Company”) is a commercial real estate (“CRE”) credit real estate investment trust (“REIT”) focused on originating, acquiring, financing and managing a diversified portfolio consisting primarily of CRE debt investments and net leased properties predominantly in the United States. CRE debt investments primarily consist of first mortgage loans, which the Company expects to be its primary investment strategy. Additionally, the Company may selectively originate mezzanine loans and make preferred equity investments, which may include profit participations. The mezzanine loans and preferred equity investments may be in conjunction with the Company’s origination of corresponding first mortgages on the same properties. Net leased properties consist of CRE properties with long-term leases to tenants on a net-lease basis, where such tenants generally will be responsible for property operating expenses such as insurance, utilities, maintenance capital expenditures and real estate taxes.

The Company was organized in the state of Maryland on August 23, 2017 and maintains key offices in New York, New York and Los Angeles, California. The Company elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, beginning with the taxable year ended December 31, 2018. The Company conducts all activities and holds substantially all assets and liabilities through the Company’s operating subsidiary, BrightSpire Capital Operating Company, LLC (the “OP”).

2. Summary of Significant Accounting Policies

The significant accounting policies of the Company are described below. The accounting policies of the Company’s unconsolidated ventures are substantially similar to those of the Company.

Basis of Presentation

The accompanying unaudited interim financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and footnotes required by generally accepted accounting principles in the United States of America (“GAAP”) for complete financial statements. These statements reflect all normal and recurring adjustments which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows of the Company for the interim periods presented. However, the results of operations for the interim period presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2025, or any other future period. These interim financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in, or presented as exhibits to, the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, as certain disclosures that would substantially duplicate those contained in the audited consolidated financial statements have not been included in this interim report.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates and assumptions.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its controlled subsidiaries. All intercompany accounts and transactions have been eliminated. The portions of equity, net income and other comprehensive income of consolidated subsidiaries that are not attributable to the parent are presented separately as amounts attributable to noncontrolling interests in the consolidated financial statements.

The Company consolidates entities in which it has a controlling financial interest by first considering if an entity meets the definition of a variable interest entity (“VIE”) for which the Company is deemed to be the primary beneficiary, or if the Company has the power to control an entity through a majority of voting interest or through other arrangements.

Variable Interest Entities

Variable Interest Entities—A VIE is an entity that either (i) lacks sufficient equity to finance its activities without additional subordinated financial support from other parties; (ii) whose equity holders lack the characteristics of a controlling financial interest; or (iii) is established with non-substantive voting rights. A VIE is consolidated by its primary beneficiary, which is defined as the party who has a controlling financial interest in the VIE through (a) power to direct the activities of the VIE that

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BRIGHTSPIRE CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

most significantly affect the VIEs economic performance, and (b) obligation to absorb losses or right to receive benefits of the VIE that could be significant to the VIE.

In March 2024 and February 2025, the Company modified senior loan agreements on an Arlington, Texas multifamily property and a Mesa, Arizona multifamily property, respectively, which resulted in reconsideration events under ASC 810, Consolidation. The Company became a preferred equity investor in the parent of the borrowers in the Arlington, Texas and Mesa, Arizona properties following the modifications, through which it can make contributions to the borrower. The Company made the determination that its investments in the Arlington, Texas and Mesa, Arizona multifamily properties were VIEs. Once the Company made its initial preferred equity contributions in July 2024 for the Arlington, Texas multifamily property and February 2025 for the Mesa, Arizona multifamily property it triggered control rights over the properties and the Company became the primary beneficiary of the VIEs. The Company has the ability to control the most significant activities of the two multifamily properties’ economic performance and the obligation to absorb losses or the right to receive benefits of the VIEs that could be significant to the VIEs. The Company consolidated the assets and liabilities of the VIEs as well as the operations of the two properties and are included in real estate, net on its consolidated balance sheets. The consolidation did not result in a gain or loss. The loans and preferred equity investments for the Arlington, Texas and Mesa, Arizona are eliminated in consolidation. See Note 3, “Loans Held for Investment, net” and Note 4, “Real Estate, net and Real Estate Held for Sale” for further information.

Voting Interest Entities—Unlike VIEs, voting interest entities have sufficient equity to finance their activities and equity investors exhibit the characteristics of a controlling financial interest through their voting rights. The Company consolidates such entities when it has the power to control these entities through ownership of a majority of the entities’ voting interests or through other arrangements.

At each reporting period, the Company reassesses whether changes in facts and circumstances cause a change in the status of an entity as a VIE or voting interest entity, and/or a change in the Company’s consolidation assessment.

As of March 31, 2025 and December 31, 2024, the Company has identified certain consolidated VIEs. Assets of each of the VIEs, other than the OP, may only be used to settle obligations of the respective VIE. Creditors of each of the VIEs have no recourse to the general credit of the Company.

Consolidated VIEs

Consolidated VIEs include securitization bonds payable, net, the Arlington, Texas multifamily loan, the Mesa, Arizona multifamily loan and certain operating real estate properties that have noncontrolling interests. At March 31, 2025 and December 31, 2024, the noncontrolling interests in the operating real estate properties, excluding the Arlington, Texas and Mesa, Arizona multifamily loans, represent third party joint venture partners with ownership ranging from 5.0% to 11.0%. These noncontrolling interests do not have substantive kick-out nor participating rights. The Arlington, Texas and Mesa, Arizona are multifamily loans in which we also hold preferred equity interests.

Unconsolidated VIEs

As of March 31, 2025 and December 31, 2024, the Company did not hold, and had no remaining obligations to, any unconsolidated VIEs.

Noncontrolling Interests

Noncontrolling Interests in Investment Entities—This represents interests in consolidated investment entities held by third party joint venture partners.

Allocation of net income or loss is generally based upon relative ownership interests held by equity owners in each investment entity, or based upon contractual arrangements that may provide for disproportionate allocation of economic returns among equity interests, including using a hypothetical liquidation at book value (“HLBV”) basis, where applicable and substantive. HLBV uses a balance sheet approach, which measures each party’s capital account at the end of a period assuming that the subsidiary was liquidated or sold at book value. Each party’s share of the subsidiary’s earnings or loss is calculated by measuring the change in the party’s capital account from the beginning of the period in question to the end of period, adjusting for effects of distributions and new investments.

Comprehensive Income (Loss)

The Company reports consolidated comprehensive income (loss) in separate statements following the consolidated statements of operations. Comprehensive income (loss) is defined as the change in equity resulting from net income (loss) and other

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BRIGHTSPIRE CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

comprehensive income (“OCI”). The components of OCI include gain (loss) on derivative instruments used in the Company’s risk management activities used for economic hedging purposes (“designated hedges”) and gain (loss) on foreign currency translation.

Fair Value Measurement

Fair value is based on an exit price, defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Where appropriate, the Company makes adjustments to estimated fair values to appropriately reflect counterparty credit risk as well as the Company’s own creditworthiness.

The estimated fair value of financial assets and financial liabilities are categorized into a three-tier hierarchy, prioritized based on the level of transparency in inputs used in the valuation techniques, as follows:

Level 1—Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2—Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in non-active markets, or valuation techniques utilizing inputs that are derived principally from or corroborated by observable data directly or indirectly for substantially the full term of the financial instrument.

Level 3—At least one assumption or input is unobservable and it is significant to the fair value measurement, requiring significant management judgment or estimate.

Where the inputs used to measure the fair value of a financial instrument fall into different levels of the fair value hierarchy, the financial instrument is categorized within the hierarchy based on the lowest level of input that is significant to its fair value measurement.

Fair Value Option

The fair value option provides an option to elect fair value as an alternative measurement for selected financial instruments. Gains and losses on items for which the fair value option has been elected are reported in earnings. The fair value option may be elected only upon the occurrence of certain specified events, including when the Company enters into an eligible firm commitment, at initial recognition of the financial instrument, as well as upon a business combination or consolidation of a subsidiary. The election is applied on an instrument by instrument basis and is irrevocable unless a new election event occurs.

Business Combinations

Definition of a Business—The Company evaluates each purchase transaction to determine whether the acquired assets meet the definition of a business. If substantially all of the fair value of gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, then the set of transferred assets and activities is not a business. If not, for an acquisition to be considered a business, it would have to include an input and a substantive process that together significantly contribute to the ability to create outputs (i.e., there is a continuation of revenue before and after the transaction). A substantive process is not ancillary or minor, cannot be replaced without significant costs, effort or delay or is otherwise considered unique or scarce. To qualify as a business without outputs, the acquired assets would require an organized workforce with the necessary skills, knowledge and experience that performs a substantive process.

Asset Acquisitions—For acquisitions that are not deemed to be businesses, the assets acquired are recognized based on their cost to the Company as the acquirer and no gain or loss is recognized. The cost of assets acquired in a group is allocated to individual assets within the group based on their relative fair values and does not give rise to goodwill. Transaction costs related to the acquisition of assets are included in the cost basis of the assets acquired. Such valuations require management to make significant estimates and assumptions.

Business Combinations—The Company accounts for acquisitions that qualify as business combinations by applying the acquisition method. Transaction costs related to the acquisition of a business are expensed as incurred and excluded from the fair value of consideration transferred. The identifiable assets acquired, liabilities assumed and noncontrolling interests in an acquired entity are recognized and measured at their estimated fair values. The excess of the fair value of consideration transferred over the fair values of identifiable assets acquired, liabilities assumed and noncontrolling interests in an acquired entity, net of fair value of any previously held interest in the acquired entity, is recorded as goodwill. Such valuations require management to make significant estimates and assumptions.

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BRIGHTSPIRE CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Cash and Cash Equivalents

Short-term, highly liquid investments with original maturities of three months or less at the time of acquisition are considered to be cash equivalents. The Company’s cash is held with major financial institutions. Certain cash account balances exceed Federal Deposit Insurance Corporation insurance limits of $250,000 per account and as a result, there is a concentration of credit risk related to amounts in excess of the insurance limits. The Company monitors the financial stability of these financial institutions and believes it is not exposed to any significant credit risk in cash and cash equivalents.

Restricted Cash

Restricted cash consists primarily of securitization trust unused proceeds, borrower escrow deposits, tenant escrow deposits and real estate capital expenditure reserves.

Loans Held for Investment

The Company originates and purchases loans held for investment. The accounting framework for loans held for investment depends on the Company’s strategy whether to hold or sell the loan or whether the loan was credit-impaired at the time of acquisition.

Loans Held for Investment

Loans that the Company has the intent and ability to hold for the foreseeable future are classified as held for investment. Originated loans are recorded at amortized cost, or outstanding unpaid principal balance plus exit fees less net deferred loan fees. Net deferred loan fees include unamortized origination and other fees charged to the borrower less direct incremental loan origination costs incurred by the Company. Purchased loans are recorded at amortized cost, or unpaid principal balance plus purchase premium or less unamortized discount. Costs to purchase loans are expensed as incurred.

Interest Income—Interest income is recognized based upon contractual interest rate and unpaid principal balance of the loans. Net deferred loan fees on originated loans are deferred and amortized as adjustments to interest income over the expected life of the loans using the effective yield method. Premium or discount on purchased loans are amortized as adjustments to interest income over the expected life of the loans using the effective yield method. When a loan is prepaid, prepayment fees and any excess of proceeds over the carrying amount of the loan is recognized as additional interest income.

The Company has debt investments in its portfolio that contain a payment-in-kind (“PIK”) provision. Contractual PIK interest, which represents contractually deferred interest added to the loan balance that is due at the end of the loan term, is generally recorded on an accrual basis to the extent such amounts are expected to be collected. The Company will generally cease accruing PIK interest if there is insufficient value to support the accrual or management does not expect the borrower to be able to pay all principal and interest due.

Nonaccrual—Accrual of interest income is suspended on nonaccrual loans. Loans that are past due 90 days or more as to principal or interest, or where reasonable doubt exists as to timely collection, are generally considered nonperforming and placed on nonaccrual status. Interest receivable is reversed against interest income when loans are placed on nonaccrual status. Interest collected is recognized on a cash basis by crediting income when received; or if ultimate collectability of loan principal is uncertain, interest collected is recognized using a cost recovery method by applying interest collected as a reduction to loan carrying value. Loans may be restored to accrual status when all principal and interest are current and full repayment of the remaining contractual principal and interest are reasonably assured.

Loans Held for Sale

Loans that the Company intends to sell or liquidate in the foreseeable future are classified as held for sale. Loans held for sale are carried at the lower of amortized cost or fair value less disposal cost, with valuation changes recognized as impairment loss. Loans held for sale are not subject to Current Expected Credit Losses (“CECL”) reserves. Net deferred loan origination fees and loan purchase premiums or discounts are deferred and capitalized as part of the carrying value of the held for sale loan until the loan is sold, therefore included in the periodic valuation adjustments based on lower of cost or fair value less disposal cost.

At March 31, 2025 and December 31, 2024, the Company had no loans classified as held for sale.

Operating Real Estate

Real Estate Acquisitions—Real estate acquired in acquisitions that are deemed to be business combinations is recorded at the fair values of the acquired components at the time of acquisition, allocated among land, buildings, improvements, equipment

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BRIGHTSPIRE CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

and lease-related tangible and identifiable intangible assets and liabilities, including forgone leasing costs, in-place lease values and above- or below-market lease values and assumed debt, if any. Real estate acquired in acquisitions that are deemed to be asset acquisitions is recorded at the total value of consideration transferred, including transaction costs, and allocated to the acquired components based upon relative fair value. The estimated fair value of acquired land is derived from recent comparable sales of land and listings within the same local region based on available market data. The estimated fair value of acquired buildings and building improvements is derived from comparable sales, discounted cash flow analysis using market-based assumptions, or replacement cost, as appropriate. The fair value of site and tenant improvements is estimated based upon current market replacement costs and other relevant market rate information.

Real Estate Held for Investment

Real estate held for investment is carried at cost less accumulated depreciation.

Costs Capitalized or Expensed—Expenditures for ordinary repairs and maintenance are expensed as incurred, while expenditures for significant renovations that improve or extend the useful life of the asset are capitalized and depreciated over their estimated useful lives.

Depreciation—Real estate held for investment, other than land, is depreciated on a straight-line basis over the estimated useful lives of the assets, as follows:


Real Estate Assets						Term
Building (fee interest)						28 to 47 years
Building leasehold interests						Lesser of remaining term of the lease or remaining life of the building
Building improvements						Lesser of the useful life or remaining life of the building
Land improvements						1 to 15 years
Tenant improvements						Lesser of the useful life or remaining term of the lease
Furniture, fixtures and equipment						2 to 9 years

Impairment—The Company evaluates its real estate held for investment for impairment periodically or whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. The Company evaluates real estate for impairment on an individual property basis. If an impairment indicator exists, the Company evaluates the undiscounted future net cash flows that are expected to be generated by the property, including any estimated proceeds from the eventual disposition of the property. If multiple outcomes are under consideration, the Company may apply a probability-weighted approach to the impairment analysis. Another key consideration in this assessment is the Company’s assumptions about the highest and best use of its real estate investments and its intent and ability to hold them for a reasonable period that would allow for the recovery of their carrying values. If such assumptions change and the Company shortens its expected hold period, this may result in the recognition of impairment losses. Based upon the analysis, if the carrying value of a property exceeds its undiscounted future net cash flows, an impairment loss is recognized for the excess of the carrying value of the property over the estimated fair value of the property. In evaluating and/or measuring impairment, the Company considers, among other things, current and estimated future cash flows associated with each property, market information for each sub-market, including, where applicable, capitalization rates, discount rates, competition levels, foreclosure levels, leasing trends, occupancy trends, lease or room rates, and the market prices of similar properties recently sold or currently being offered for sale, and other quantitative and qualitative factors. See Note 4, “Real Estate, net and Real Estate Held for Sale” and Note 12, “Fair Value” for further detail.

Real Estate Held for Sale

Real estate is classified as held for sale in the period when (i) management approves a plan to sell the asset, (ii) the asset is available for immediate sale in its present condition, subject only to usual and customary terms, (iii) a program is initiated to locate a buyer and actively market the asset for sale at a reasonable price, and (iv) completion of the sale is probable within one year. Real estate held for sale is stated at the lower of its carrying amount or estimated fair value less disposal cost, with any write-down to fair value less disposal cost recorded as an impairment loss. For any increase in fair value less disposal cost subsequent to classification as held for sale, the impairment loss may be reversed, but only up to the amount of cumulative loss previously recognized. Depreciation is not recorded on assets classified as held for sale. At the time a sale is consummated, the excess, if any, of sale price less selling costs over carrying value of the real estate is recognized as a gain.

If circumstances arise that were previously considered unlikely and, as a result, the Company decides not to sell the real estate asset previously classified as held for sale, the real estate asset is reclassified as held for investment. Upon reclassification, the real estate asset is measured at the lower of (i) its carrying amount prior to classification as held for sale, adjusted for

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depreciation expense that would have been recognized had the real estate been continuously classified as held for investment, and (ii) its estimated fair value at the time the Company decides not to sell.

At March 31, 2025, the Company classified one property as held for sale. At December 31, 2024, the Company classified one property as held for sale. Refer to Note 4, “Real Estate, net and Real Estate Held for Sale” and Note 12, “Fair Value” for further detail.

Foreclosed Properties

The Company receives foreclosed properties in full or partial settlement of loans held for investment by taking legal title or physical possession of the properties. Foreclosed properties are generally recognized at the time the real estate is received at foreclosure sale or upon execution of a deed in lieu of foreclosure. Foreclosed properties are initially measured at fair value. If the fair value of the property is lower than the carrying value of the loan, the difference is recognized as CECL reserves and the cumulative reserve on the loan is charged off. Fair value of foreclosed properties is generally based on a discounted cash flow, third party appraisals, broker price opinions, comparable sales, direct capitalization method or a combination thereof.

Investments in Unconsolidated Ventures

A noncontrolling, unconsolidated ownership interest in an entity may be accounted for using one of (i) equity method where applicable; (ii) fair value option if elected; (iii) fair value through earnings if fair value is readily determinable, including election of net asset value (“NAV”) practical expedient where applicable; or (iv) for equity investments without readily determinable fair values, the measurement alternative to measure at cost adjusted for any impairment and observable price changes, as applicable.

Fair value changes of equity method investments under the fair value option are recorded in earnings from investments in unconsolidated ventures. Fair value changes of other equity investments, including adjustments for observable price changes under the measurement alternative, are recorded in other gain (loss), net on the Company’s consolidated statements of operations.

Equity Method Investments

The Company accounts for investments under the equity method of accounting if it has the ability to exercise significant influence over the operating and financial policies of an entity, but does not have a controlling financial interest. The equity method investment is initially recorded at cost and adjusted each period for capital contributions, distributions and the Company’s share of the entity’s net income or loss as well as other comprehensive income or loss. The Company’s share of net income or loss may differ from the stated ownership percentage interest in an entity if the governing documents prescribe a substantive non-proportionate earnings allocation formula or a preferred return to certain investors. For certain equity method investments, the Company records its proportionate share of income on a one to three month lag. Distributions of operating profits from equity method investments are reported as operating activities, while distributions in excess of operating profits are reported as investing activities in the statement of cash flows under the cumulative earnings approach.

Impairment

Evaluation of impairment applies to equity method investments and equity investments under the measurement alternative. If indicators of impairment exist, the Company will first estimate the fair value of its investment. In assessing fair value, the Company generally considers, among others, the estimated fair value of the investee, which is based on significant assumptions including the estimated timing and probabilities of the future cash flows of the unconsolidated joint venture, utilizing discount rates and capitalization rates.

For investments under the measurement alternative, if carrying value of the investment exceeds its fair value, an impairment is deemed to have occurred.

For equity method investments, further consideration is made if a decrease in value of the investment is other-than-temporary to determine if impairment loss should be recognized. Assessment of other-than-temporary impairment involves management judgment, including, but not limited to, consideration of the investee’s financial condition, operating results, business prospects and creditworthiness, the Company’s ability and intent to hold the investment until recovery of its carrying value. If management is unable to reasonably assert that an impairment is temporary or believes that the Company may not fully recover the carrying value of its investment, then the impairment is considered to be other-than-temporary.

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Investments that are other-than-temporarily impaired are written down to their estimated fair value. Impairment loss is recorded in earnings from investments in unconsolidated ventures for equity method investments and in other gain (loss), net for investments under the measurement alternative.

Identifiable Intangibles

In a business combination or asset acquisition, the Company may recognize identifiable intangibles that meet either or both the contractual-legal criterion or the separability criterion. Finite-lived intangibles are amortized over their useful life in a manner that reflects the pattern in which the intangible is being consumed if readily determinable, such as based upon expected cash flows; otherwise, they are amortized on a straight-line basis. The useful life of all identified intangibles will be periodically reassessed and if useful life changes, the carrying amount of the intangible will be amortized prospectively over the revised useful life.

Lease Intangibles—Identifiable intangibles recognized in acquisitions of operating real estate properties generally include in-place leases, above- or below-market leases and deferred leasing costs, all of which have finite lives. In-place leases generate value over and above the tangible real estate because a property that is occupied with leased space is typically worth more than a vacant building without an operating lease contract in place. The estimated fair value of acquired in-place leases is derived based on management’s assessment of costs avoided from having tenants in place, including lost rental income, rent concessions and tenant allowances or reimbursements, that hypothetically would be incurred to lease a vacant building to its actual existing occupancy level on the valuation date. The net amount recorded for acquired in-place leases is included in intangible assets and amortized on a straight-line basis as an increase to depreciation and amortization expense over the remaining term of the applicable leases. If an in-place lease is terminated, the unamortized portion is charged to depreciation and amortization expense.

The estimated fair value of the above- or below-market component of acquired leases represents the present value of the difference between contractual rents of acquired leases and market rents at the time of the acquisition for the remaining lease term, discounted for tenant credit risks. Above- or below-market operating lease values are amortized on a straight-line basis as a decrease or increase to rental income, respectively, over the applicable lease terms. This includes fixed rate renewal options in acquired leases that are below-market, which are amortized to decrease rental income over the renewal period. Above- or below-market ground lease obligations are amortized on a straight-line basis as a decrease or increase to rent expense, respectively, over the applicable lease terms. If the above- or below-market operating lease values or above- or below-market ground lease obligations are terminated, the unamortized portion of the lease intangibles are recorded in rental income or rent expense, respectively.

Deferred leasing costs represent management’s estimate of the avoided leasing commissions and legal fees associated with an existing in-place lease. The net amount is included in intangible assets and amortized on a straight-line basis as an increase to depreciation and amortization expense over the remaining term of the applicable lease.

Transfers of Financial Assets

Sale accounting for transfers of financial assets requires the transfer of an entire financial asset, a group of financial assets in its entirety or if a component of the financial asset is transferred, that the component meets the definition of a participating interest with characteristics that mirror the original financial asset.

Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. If the Company has any continuing involvement, rights or obligations with the transferred financial asset (outside of standard representations and warranties), sale accounting requires that the transfer meets the following sale conditions: (1) the transferred asset has been legally isolated; (2) the transferee has the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred asset; and (3) the Company does not maintain effective control over the transferred asset through an agreement that provides for (a) both an entitlement and an obligation by the Company to repurchase or redeem the asset before its maturity, (b) the unilateral ability by the Company to reclaim the asset and a more than trivial benefit attributable to that ability, or (c) the transferee requiring the Company to repurchase the asset at a price so favorable to the transferee that it is probable the repurchase will occur.

If sale accounting is met, the transferred financial asset is removed from the balance sheet and a net gain or loss is recognized upon sale, taking into account any retained interests. Transfers of financial assets that do not meet the criteria for sale are accounted for as financing transactions, or secured borrowing, including the Company’s Master Repurchase Facilities (as defined herein).

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Financing Costs

Financing costs primarily include debt discounts and premiums as well as deferred financing costs. Deferred financing costs represent commitment fees, legal and other third-party costs associated with obtaining financing. Costs related to revolving credit facilities are recorded in other assets and are amortized to interest expense using the straight-line basis over the term of the facility. Costs related to other borrowings are recorded net against the carrying value of such borrowings and are amortized to interest expense using the effective interest method. Unamortized deferred financing costs are expensed to other gain (loss), net when the associated facility is repaid before maturity. Costs incurred in seeking financing transactions, which do not close, are expensed in the period in which it is determined that the financing will not occur.

Revenue Recognition

Property Operating Income

Property operating income includes the following:

Rental Income—Rental income is recognized on a straight-line basis over the non-cancellable term of the related lease, together with renewal options that are reasonably certain of being exercised, which includes the effects of minimum rent increases and rent abatements under the lease. Rents received in advance are deferred.

When it is determined that the Company is the owner of tenant improvements, the cost to construct the tenant improvements, including costs paid for or reimbursed by the tenants, is capitalized. For tenant improvements owned by the Company, the amount funded by or reimbursed by the tenants are recorded as deferred revenue, which is amortized on a straight-line basis as additional rental income over the term of the related lease. Rental income recognition commences when the leased space is substantially ready for its intended use and the tenant takes possession of the leased space.

When it is determined that the tenant is the owner of tenant improvements, the Company’s contribution towards those improvements is recorded as a lease incentive, included in deferred leasing costs and intangible assets on the balance sheet, and amortized as a reduction to rental income on a straight-line basis over the term of the lease. Rental income recognition commences when the tenant takes possession of the leased space.

Tenant Reimbursements—In net lease arrangements, the tenant is generally responsible for operating expenses related to the property, including real estate taxes, property insurance, maintenance, repairs and improvements. Costs reimbursable from tenants and other recoverable costs are recognized as revenue in the period the recoverable costs are incurred. When the Company is the primary obligor with respect to purchasing goods and services for property operations and has discretion in selecting the supplier and retains credit risk, tenant reimbursement revenue and property operating expenses are presented on a gross basis in the statements of operations. For certain triple net leases where the lessee self-manages the property, hires its own service providers and retains credit risk for routine maintenance contracts, no reimbursement revenue and expense are recognized.

Foreign Currency

Assets and liabilities denominated in a foreign currency for which the functional currency is a foreign currency are translated using the exchange rate in effect at the balance sheet date and the corresponding results of operations for such entities are translated using the average exchange rate in effect during the period. The resulting foreign currency translation adjustments are recorded as a component of accumulated other comprehensive income or loss in stockholders’ equity. Upon sale, complete or substantially complete liquidation of a foreign subsidiary, or upon partial sale of a foreign equity method investment, the translation adjustment associated with the investment, or a proportionate share related to the portion of equity method investment sold, is reclassified from accumulated other comprehensive income or loss into earnings.

Assets and liabilities denominated in a foreign currency for which the functional currency is the U.S. dollar are remeasured using the exchange rate in effect at the balance sheet date and the corresponding results of operations for such entities are remeasured using the average exchange rate in effect during the period. The resulting foreign currency remeasurement adjustments are recorded in other gain (loss), net on the consolidated statements of operations.

Disclosures of non-U.S. dollar amounts to be recorded in the future are translated using exchange rates in effect at the date of the most recent balance sheet presented.

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Equity-Based Compensation

Equity-classified stock awards granted to executive officers and non-employee directors are based on the closing price of the Class A common stock on the grant date and recognized on a straight-line basis over the requisite service period of the awards for restricted stock awards. For performance stock units (“PSUs”) the fair value is based on a Monte Carlo simulation as of the grant date and the expense is generally recognized on a straight-line basis over the measurement period, except when certain performance metrics are achieved. See Note 9, “Equity-Based Compensation” for further discussion.

The compensation expense is adjusted for actual forfeitures upon occurrence. Equity-based compensation is classified within compensation and benefits in the consolidated statements of operations.

Earnings Per Share

The Company presents both basic and diluted earnings per share (“EPS”) using the two-class method. Basic EPS is calculated by dividing earnings allocated to common shareholders, as adjusted for unallocated earnings attributable to certain participating securities, if any, by the weighted-average number of common shares outstanding during the period. Diluted EPS is based on the weighted-average number of common shares and the effect of potentially dilutive common share equivalents outstanding during the period. The two-class method is an allocation formula that determines earnings per share for each share of common stock and participating securities according to dividends declared and participation rights in undistributed earnings. Under this method, all earnings (distributed and undistributed) are allocated to common shares and participating securities based on their respective rights to receive dividends. The Company has certain share-based payment awards that contain nonforfeitable rights to dividends, which are considered participating securities for the purposes of computing EPS pursuant to the two-class method.

Income Taxes

For U.S. federal income tax purposes, the Company elected to be taxed as a REIT beginning with its taxable year ended December 31, 2018. To qualify as a REIT, the Company must continually satisfy tests concerning, among other things, the real estate qualification of sources of its income, the real estate composition and values of its assets, the amounts it distributes to stockholders and the diversity of ownership of its stock.

To the extent that the Company qualifies as a REIT, it generally will not be subject to U.S. federal income tax to the extent of its distributions to stockholders. The Company believes that all of the criteria to maintain the Company’s REIT qualification have been met for the applicable periods, but there can be no assurance that these criteria will continue to be met in subsequent periods. If the Company were to fail to meet these requirements, it would be subject to U.S. federal income tax and potential interest and penalties, which could have a material adverse impact on its results of operations and amounts available for distributions to its stockholders. The Company’s accounting policy with respect to interest and penalties is to classify these amounts as a component of income tax expense, where applicable.

The Company may also be subject to certain state, local and franchise taxes. Under certain circumstances, U.S. federal income and excise taxes may be due on its undistributed taxable income. The Company also holds an investment in Europe which is subject to tax in its local jurisdiction.

The Company made joint elections to treat certain subsidiaries as taxable REIT subsidiaries (“TRSs”) which may be subject to taxation by U.S. federal, state and local authorities. In general, a TRS of the Company may perform non-customary services for tenants, hold assets that the Company cannot hold directly and engage in most real estate or non-real estate-related business.

Certain subsidiaries of the Company are subject to taxation by U.S. federal, state and local authorities for the periods presented. Income taxes are accounted for by the asset/liability approach in accordance with GAAP. Deferred taxes, if any, represent the expected future tax consequences when the reported amounts of assets and liabilities are recovered or paid. Such amounts arise from differences between the financial reporting and tax bases of assets and liabilities and are adjusted for changes in tax laws and tax rates in the period during which such changes are enacted. A provision for income tax represents the total of income taxes paid or payable for the current period, plus the change in deferred taxes. Current and deferred taxes are recorded on the portion of earnings (losses) recognized by the Company with respect to its interest in TRSs. Deferred income tax assets and liabilities are calculated based on temporary differences between the Company’s GAAP consolidated financial statements and the U.S. federal, state and local tax basis of assets and liabilities as of the consolidated balance sheet date. The Company evaluates the realizability of its deferred tax assets (e.g., net operating loss and capital loss carryforwards) and recognizes a valuation allowance if, based on the available evidence, it is more likely than not that some portion or all of its deferred tax assets will not be realized. When evaluating the realizability of its deferred tax assets, the Company considers estimates of expected future taxable income, existing and projected book/tax differences, tax planning strategies available and the general and industry-specific economic outlook. This realizability analysis is inherently subjective, as it requires the Company to

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forecast its business and general economic environment in future periods. Changes in estimate of deferred tax asset realizability, if any, are included in income tax expense in the consolidated statements of operations.

For the three months ended March 31, 2025 and 2024, the Company recorded income tax expense of $0.3 million and $0.3 million, respectively.

Current Expected Credit Loss (“CECL”) reserve

The CECL reserve for the Company’s financial instruments carried at amortized cost and off-balance sheet credit exposures, such as loans, loan commitments and trade receivables, represents a lifetime estimate of expected credit losses. Factors considered by the Company when determining the CECL reserve include loan-specific characteristics such as loan-to-value (“LTV”) ratio, vintage year, loan term, property type, occupancy and geographic location, financial performance of the borrower, expected payments of principal and interest, as well as internal or external information relating to past events, current conditions and reasonable and supportable forecasts.

The general CECL reserve is measured on a collective (pool) basis when similar risk characteristics exist for multiple financial instruments. If similar risk characteristics do not exist, the Company measures the CECL reserve on an individual instrument basis. The determination of whether a particular financial instrument should be included in a pool can change over time. If a financial asset’s risk characteristics change, the Company evaluates whether it is appropriate to continue to keep the financial instrument in its existing pool or evaluate it individually.

In measuring the general CECL reserve for financial instruments that share similar risk characteristics, the Company primarily applies a probability of default (“PD”)/loss given default (“LGD”) model for instruments that are collectively assessed, whereby the CECL reserve is calculated as the product of PD, LGD and exposure at default. The Company’s model principally utilizes historical loss rates derived from a commercial mortgage-backed securities database with historical losses from 1998 through March 2025 provided by a third party, Trepp LLC, forecasting the loss parameters using a scenario-based statistical approach over a reasonable and supportable forecast period of twelve months, followed by a straight-line reversion period of twelve-months back to average historical losses. Where management has determined that the credit loss model does not fully capture certain external factors, including portfolio trends or loan specific factors, a qualitative adjustment to the reserve may be recorded. This may include when management has determined a loan to be collateral dependent and elects to utilize the practical expedient when measuring the general CECL reserve.

For determining a specific CECL reserve, financial instruments are assessed outside of the PD/LGD model on an individual basis. This occurs when it is probable that the Company will be unable to collect the full payment of principal and interest on the instrument. The Company records a reserve to reduce the carrying value of the instrument to the present value of the expected future cash flows discounted at the instrument’s effective rate or to the fair value of the collateral. The Company applies broadly accepted and standard real estate valuation techniques, such as a discounted cash flow (“DCF”) or direct capitalization methodology, to determine the fair value of the collateral where it is probable that the Company will foreclose or the borrower is experiencing financial difficulty based on the Company’s assessment at the reporting date, and the repayment is expected to be provided substantially through the operation or sale of the collateral. Determining fair value of the collateral, including utilization of a practical expedient, may take into account a number of assumptions including, but not limited to, market rents and cash flow projections, market capitalization rates, discount rates and sales comps. Such assumptions are generally based on current market conditions and are subject to economic and market uncertainties.

In connection with developing the CECL reserve for its loans held for investment, the Company determines the risk ranking of each loan as a key credit quality indicator. The risk rankings are based on a variety of factors, including, without limitation, underlying real estate performance and asset value, values of comparable properties, durability and quality of property cash flows, sponsor experience and financial wherewithal, and the existence of a risk-mitigating loan structure. Additional key considerations include loan-to-value ratios, debt service coverage ratios, loan structure, real estate and credit market dynamics, and risk of default or principal loss. Based on a five-point scale, the Company’s loans held for investment are rated “1” through “5,” from less risk to greater risk, and the ratings are updated quarterly. At the time of origination or purchase, loans held for investment are ranked as a “3” and will move accordingly going forward based on the ratings which are defined as follows:

1.Very Low Risk

2.Low Risk

3.Medium Risk

4.High Risk/Potential for Loss—A loan that has a high risk of realizing a principal loss.

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5.Impaired/Loss Likely—A loan that has a very high risk of realizing a principal loss or has otherwise incurred a principal loss.

The Company also considers qualitative factors, including, but not limited to, economic and business conditions, nature and volume of the loan portfolio, lending terms, volume and severity of past due loans, concentration of credit and changes in the level of such concentrations in its determination of the CECL reserve.

The Company has elected to not measure a CECL reserve for accrued interest receivable as it is reversed against interest income when a loan is placed on nonaccrual status. Loans are charged off when all or a portion of the principal amount is determined to be uncollectible.

Changes in the CECL reserve for the Company’s financial instruments are recorded in increase/decrease in current expected credit loss reserve on the consolidated statement of operations with a corresponding offset to the loans held for investment or as a component of other liabilities for future loan fundings recorded on the Company’s consolidated balance sheets. See Note 3, “Loans Held for Investment, net” for further detail.

Future Application of Accounting Standards

Income Tax Accounting—In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU requires public business entities to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. The ASU is effective for periods beginning after December 15, 2024, with early adoption permitted. The Company is evaluating the impact of this standard.

Any new accounting standards that have not been disclosed that have been issued or proposed by FASB and that do not require adoption until a future date are being evaluated and not expected to have a material impact on the financial statements.

3. Loans Held for Investment, net

The following table provides a summary of the Company’s loans held for investment, net (dollars in thousands):


	March 31, 2025								December 31, 2024
	Unpaid Principal Balance		Carrying Value		Weighted Average Coupon(1)		Weighted Average of Contractual Maturity(2)	Weighted Average Maturity in Years(3)	Unpaid Principal Balance		Carrying Value		Weighted Average Coupon(1)		Weighted Average of Contractual Maturity(2)	Weighted Average Maturity in Years(3)





Variable rate
Senior loans	$	1,176,935	$	1,180,769	6.5	%	0.4	1.6	$	1,205,685	$	1,209,645	7.2	%	0.3	1.5
Securitized loans(4)	1,211,208		1,210,855		7.6	%	0.6	1.6	1,264,456		1,264,148		7.7	%	0.5	1.7


	2,388,143		2,391,624						2,470,141		2,473,793
Fixed rate
Senior loans	19,804		19,804		15.0	%	0.9	1.9	—		—		—	%	—	—
Mezzanine loans	46,407		46,407		8.2	%	0.9	1.9	45,137		45,132		8.2	%	0.1	1.5
	66,211		66,211						45,137		45,132
Loans held for investment	2,454,354		2,457,835						2,515,278		2,518,925

CECL reserve	—		(155,365)						—		(165,932)
Loans held for investment, net	$	2,454,354	$	2,302,470	7.2	%	0.5	1.6	$	2,515,278	$	2,352,993	7.4	%	0.4	1.6

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(1)Calculated based on contractual interest rate. As of March 31, 2025, all variable rate loans utilize Term Secured Overnight Financing Rate (“Term SOFR”).

(2)Calculated using current maturity date.

(3)Calculated using extended maturity date.

(4)Represents loans transferred into securitization trusts that are consolidated by the Company.

The Company had $11.1 million and $11.9 million of interest receivable related to its loans held for investment, net as of March 31, 2025 and December 31, 2024, respectively. This is included in receivables, net on the Company’s consolidated balance sheets.

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Activity relating to the Company’s loans held for investment, net was as follows (dollars in thousands):


	Carrying Value
	Three Months Ended March 31,
	2025		2024
Balance at January 1	$	2,352,993	$	2,860,478
Acquisitions/originations/additional funding(1)	112,625		15,171
Loan maturities/principal repayments(1)	(133,000)		(116,790)
(Increase) decrease of CECL reserve(2)	770		(74,186)
Discount accretion, net	461		2,104
Capitalized interest, net of repayments	523		572
Transfer to Real Estate, net(3)	(32,945)		—

Charge-off of CECL reserve-transfer to Real Estate, net and Real Estate Held for Sale(3)	1,043		—
Charge-off of loan held for investment(4)	(9,174)		—
Charge-off of CECL reserve-other(4)	9,174		—
Balance at March 31	$	2,302,470	$	2,687,349

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(1)During the first quarter of 2025, the Company amended a senior mixed-use loan as part of the resolution of a senior mixed-use loan with the same sponsor. In relation to this amendment, there was a transfer of principal of $8.8 million. This transfer is not included within these lines as it was neither additional funding nor a repayment. See “Loan Modifications” below for more detail. During the first quarter of 2025, the Company originated four loans with a total of $111.7 million in committed principal balance.

(2)Provision for loan losses excludes $0.5 million for the three months ended March 31, 2025 and $0.2 million for the three months ended March 31, 2024 as determined by the Company’s PD/LGD model for unfunded commitments reported on the consolidated statements of operations, with a corresponding offset to accrued and other liabilities recorded on the Company’s consolidated balance sheets.

(3)During the first quarter of 2025, the Company eliminated a multifamily loan in Mesa, Arizona as part of the consolidation of the Mesa, Arizona property as the primary beneficiary. As a result, the property was consolidated as real estate and removed from loans held from investment, net. The CECL reserve related to this loan was charged off and the net amount is reflected as an addition to real estate, net. There was no gain or loss recorded as part of the consolidation. Refer to Note 4, “Real Estate, net and Real Estate Held for Sale” for further discussion.

(4)During the three months ended March 31, 2025, the Company charged off uncollectible amounts of $9.2 million relating to one multifamily loan upon resolution of the loan.

Loan Modifications

The Company may amend or modify a loan depending on the loan’s specific facts and circumstances. These loan modifications typically include additional time for the borrower to refinance or sell the collateral property, adjustment or waiver of performance tests that are prerequisite to the extension of a loan’s maturity, and/or deferral of scheduled principal payments. In exchange for a modification, the Company may receive a partial repayment of principal, a short-term accrual of capitalized interest for a portion of interest due, a cash infusion to replenish interest or capital improvement reserves, termination of all or a portion of the remaining unfunded loan commitment, additional call protection, and/or increase the loan coupon.

During the first quarter of 2025, the Company amended a senior mixed-use loan (“Loan A”) as part of the resolution of a senior mixed-use loan (“Loan B”) with the same sponsor. The sponsor obtained new financing on the Loan B collateral that was $8.8 million short of a full principal payoff. The $8.8 million of principal was transferred to Loan A as part of the full resolution of Loan B. A joint venture agreement was entered into with the sponsor with respect to the Loan B collateral providing that (i) any available cash after Loan B debt service is paid is distributed to the Company to pay down Loan A and (ii) if, at any time after two years, Loan A is not paid off, the Company may unilaterally force a sale of the collateral for Loan B.

During the fourth quarter of 2023, the Company amended a senior office loan with an outstanding principal balance of $39.4 million. The modification reduced the loan spread from 3.96% to 1.5%, and included an exit fee upon repayment of the loan of 2.5% of the principal balance. The modification allows the sponsor to utilize tenant improvements and leasing commission funds for capital improvements such as rezoning the collateral for additional commercial uses, and exploring rezoning certain parcels for multifamily use. Additionally, the sponsor funded $0.3 million into a reserve to fund operating shortfalls. During the fourth quarter of 2024, this senior loan was extended to March 9, 2025 and the exit fee was increased to 5.0%. Upon purchasing an updated rate cap in the first quarter of 2025, the loan was extended to September 9, 2025. During the three months ended March 31, 2025 and year ended December 31, 2024, this loan remained current on interest payments.

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BRIGHTSPIRE CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Nonaccrual and Past Due Loans

Loans that are 90 days or more past due as to principal or interest, or where reasonable doubt exists as to timely collection, are generally considered nonperforming and placed on nonaccrual status.

The following table provides an aging summary of loans held for investment at carrying values before CECL reserve (dollars in thousands):


	Current or Less Than 30 Days Past Due(1)		30-59 Days Past Due(2)		60-89 Days Past Due		90 Days or More Past Due (3)		Total Loans
March 31, 2025	$	2,250,980	$	57,442	$	—	$	149,413	$	2,457,835
December 31, 2024	2,368,591		—		—		150,334		2,518,925

_________________________________________

(1)At December 31, 2024, includes one multifamily senior loan in maturity default as of December 9, 2024. There was an extension to the loan in the first quarter of 2025 and the borrower is no longer in maturity default as of March 31, 2025.

(2)At March 31, 2025, includes one multifamily construction/development project senior loan which was placed on nonaccrual status on February 1, 2025 and has a carrying value of $57.4 million.

(3)At March 31, 2025, includes one hotel senior loan which was placed on nonaccrual status on June 9, 2024 with a carrying value of $134.7 million and an office mezzanine loan which was placed on nonaccrual status on April 1, 2024 with a carrying value of $14.7 million. At December 31, 2024, includes one hotel senior loan which was placed on nonaccrual status on June 9, 2024 with a carrying value of $136.0 million and an office mezzanine loan which was placed on nonaccrual status on April 1, 2024 with a carrying value of $14.4 million.

As of March 31, 2025, all loans were performing in accordance with the contractual terms of their governing documents and were categorized as performing loans, except for one nonperforming hotel senior loan, one nonaccrual multifamily construction/development project senior loan and one nonaccrual office mezzanine loan. As of December 31, 2024, all loans were performing in accordance with the contractual terms of their governing documents and were categorized as performing loans, except for one nonperforming hotel senior loan, one nonaccrual office mezzanine loan and one multifamily senior loan in maturity default. For the three months ended March 31, 2025 and March 31, 2024, no debt investment contributed more than 10.0% of interest income.

Current Expected Credit Loss Reserve

The following table provides details on the changes in CECL reserves (dollars in thousands):


CECL reserve at December 31, 2024	$	165,932
Decrease in general CECL reserve(1)	(9,524)
Increase in specific CECL reserve(2)	9,174
Charge-off of CECL reserve-other(2)	(9,174)
Charge-offs of CECL reserve-transfer to Real Estate, net and Real Estate Held for Sale(3)	(1,043)
CECL reserve at March 31, 2025	$	155,365

CECL reserve at December 31, 2023	$	76,028
Increase in general CECL reserve(1)	67,058
Increase in specific CECL reserve(2)	7,128


CECL reserve at March 31, 2024	$	150,214

_________________________________________

(1)Excludes CECL reserves related to unfunded commitments reported on the consolidated statements of operations: $0.5 million for the three months ended March 31, 2025 and $0.2 million for the three months ended March 31, 2024.

(2)During the first quarter of 2025, the Company recorded specific CECL reserves totaling $9.2 million for one multifamily loan. The specific CECL reserves were charged off during the period upon resolution. During the first quarter of 2024, the Company recorded specific CECL reserves of $7.1 million related to one multifamily senior loan. The specific CECL reserve was based on the proceeds received from the borrower’s sale of the property.

(3)During the first quarter of 2025, the Company consolidated a multifamily loan in Mesa, Arizona as the primary beneficiary. As a result, the property was consolidated as real estate. The CECL reserve related to this loan was charged off.

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BRIGHTSPIRE CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Loans are typically secured by direct senior priority liens on real estate properties or by interests in entities that directly own real estate properties, which serve as the primary source of cash for the payment of principal and interest. The Company evaluates its loans at least quarterly and differentiates the relative credit quality principally based on: (i) whether the borrower is currently paying contractual debt service in accordance with its contractual terms; and (ii) whether the Company believes the borrower will be able to perform under its contractual terms in the future, as well as the Company’s expectations as to the ultimate recovery of principal at maturity.

The following tables provide a summary by carrying values before any CECL reserves of the Company’s loans held for investment by year of origination and credit quality risk ranking as of March 31, 2025 and December 31, 2024 (dollars in thousands). Refer to Note 2, “Summary of Significant Accounting Policies” for loan risk ranking definitions.

At March 31, 2025, the weighted average risk ranking for loans held for investment was 3.2.


	March 31, 2025
	Year of Origination
Risk Rankings	2025		2024		2023		2022		2021 and earlier		Total
Senior loans


3	$	107,350	$	72,520	$	—	$	703,878	$	1,131,975	$	2,015,723
4	—		—		—		55,563		147,980		203,543
5	—		—		—		—		192,162		192,162
Total Senior loans	107,350		72,520		—		759,441		1,472,117		2,411,428

Mezzanine loans



3	—		—		14,692		31,715				46,407


Total Mezzanine loans	—		—		14,692		31,715		—		46,407










Total Loans held for investment	$	107,350	$	72,520	$	14,692	$	791,156	$	1,472,117	$	2,457,835
Current period gross write-offs	$	—	$	—	$	—	$	—	$	10,217	$	10,217

As of December 31, 2024, the weighted average risk ranking for loans held for investment was 3.2.


	December 31, 2024
	Year of Origination
Risk Rankings	2024		2023		2022		2021		2020 and earlier		Total
Senior loans


3	$	62,997	$	—	$	703,245	$	856,161	$	440,354	$	2,062,757
4	—		—		55,350		162,265		—		217,615
5	—		—		—		—		193,421		193,421
Total Senior loans	62,997		—		758,595		1,018,426		633,775		2,473,793

Mezzanine loans



3	—		14,355		30,777		—				45,132


Total Mezzanine loans	—		14,355		30,777		—		—		45,132










Total Loans held for investment	$	62,997	$	14,355	$	789,372	$	1,018,426	$	633,775	$	2,518,925
Current period gross write-offs(1)	$	—	$	—	$	6,155	$	2,413	$	20,407	$	28,975

_____________________________________

(1)Current period gross write-offs exclude all transfers to real estate, net.

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BRIGHTSPIRE CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Lending Commitments

The Company has lending commitments to borrowers pursuant to certain loan agreements in which the borrower may submit a request for funding contingent on achieving certain criteria, which must be approved by the Company as lender, such as leasing, performance of capital expenditures and construction in progress with an approved budget. Assuming the terms to qualify for future advances, if any, had been met, total gross unfunded lending commitments were $111.4 million and $106.3 million at March 31, 2025 and December 31, 2024, respectively. Refer to Note 13, “Commitments and Contingencies” for further details. The Company recorded $0.7 million and $0.2 million for allowance for lending commitments in accrued and other liabilities on its consolidated balance sheets in accordance with CECL at March 31, 2025 and December 31, 2024, respectively. See Note 2, “Summary of Significant Accounting Policies” for further details.

4. Real Estate, net and Real Estate Held for Sale

The following table presents the Company’s net lease portfolio, net, as of March 31, 2025 and December 31, 2024 (dollars in thousands):


	March 31, 2025		December 31, 2024
Land and improvements	$	119,424	$	121,881
Buildings, building leaseholds, and improvements	465,202		476,712
Tenant improvements	19,181		19,354

Subtotal	$	603,807	$	617,947
Less: Accumulated depreciation	(123,312)		(116,089)
Less: Impairment(1)	—		(30,693)
Net lease portfolio, net	$	480,495	$	471,165

The following table presents the Company’s portfolio of other real estate, net as of March 31, 2025 and December 31, 2024 (dollars in thousands):


	March 31, 2025		December 31, 2024
Land and improvements	$	73,720	$	77,219
Buildings, building leaseholds, and improvements	250,014		269,062
Tenant improvements	26,954		30,369
Furniture, fixtures and equipment	2,546		3,108
Construction-in-progress	3,581		2,394
Subtotal	$	356,815	$	382,152
Less: Accumulated depreciation	(55,062)		(53,608)
Less: Impairment(1)	—		(22,288)
Other portfolio, net	$	301,753	$	306,256

_________________________________________

(1) See Note 12, “Fair Value,” for discussion of impairment of real estate.

At March 31, 2025, the Company held three foreclosed properties in other real estate, net with a combined carrying value of $81.6 million and one foreclosed property as held for sale with a carrying value of $34.2 million. At December 31, 2024, the Company held four foreclosed properties in other real estate, net with a combined carrying value of $115.2 million and one foreclosed property as held for sale with a carrying value of $1.9 million.

Depreciation Expense

Depreciation expense on real estate was $7.1 million and $6.9 million for the three months ended March 31, 2025 and 2024, respectively.

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BRIGHTSPIRE CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Property Operating Income

For the three months ended March 31, 2025 and 2024 the components of property operating income were as follows (dollars in thousands):


	Three Months Ended March 31,
	2025		2024
Lease revenues
Minimum lease revenue	$	23,870	$	22,192
Variable lease revenue	3,047		3,025


Total property operating income(1)	$	26,917	$	25,217

_________________________________________

(1)Excludes amortization expense related to above and below-market leases of $0.4 million and income of $0.3 million for the three months ended March 31, 2025, respectively. Excludes amortization expense related to above and below-market leases of $0.5 million and income of $0.4 million for the three months ended March 31, 2024, respectively.

For the three months ended March 31, 2025 and 2024 the Company had no single property with property operating income equal to or greater than 10.0% of total revenue of the Company.

Minimum Future Rents

Minimum rental amounts due under leases are generally either subject to scheduled fixed increases or adjustments. The following table presents approximate future minimum rental income under noncancellable operating leases, excluding variable lease revenue of tenant reimbursements, to be received over the next five years and thereafter as of March 31, 2025 (dollars in thousands):


Remainder of 2025	$	64,204
2026	76,571
2027	71,645
2028	62,175
2029	59,238
2030 and thereafter	258,133
Total	$	591,966

The rental properties owned at March 31, 2025, are leased under noncancellable operating leases with current expirations ranging from 2025 to 2038, with certain tenant renewal rights. For certain properties, the tenants pay the Company, in addition to the contractual base rent, their share of real estate taxes and operating expenses. Certain lease agreements provide for periodic rental increases and others provide for increases based on the consumer price index.

Commitments and Contractual Obligations

Ground Lease Obligation

In connection with real estate acquisitions, the Company assumed certain noncancellable operating ground leases as lessee or sublessee with expiration dates through 2050. Rents on certain ground leases are paid directly by the tenants. Ground rent expense for the three months ended March 31, 2025 and 2024 was $0.8 million and $0.8 million, respectively.

Refer to Note 13, “Commitments and Contingencies” for the details of future minimum rental payments on noncancellable ground lease on real estate as of March 31, 2025.

Real Estate Acquisitions

The Company previously held investments in senior loans collateralized by multifamily properties in Mesa, Arizona and Arlington, Texas that were determined to be VIEs. The Company was determined to be the primary beneficiary of the VIEs and consolidated the assets and liabilities as well as the operations of the multifamily properties in February 2025 (Mesa, Arizona) and July 2024 (Arlington, Texas). The multifamily properties are included in real estate, net on the Company’s consolidated balance sheets. The consolidation did not result in a gain or loss.

In November 2024, the Company acquired legal title to one multifamily property which is included in real estate, net on the Company’s consolidated balance sheets.

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BRIGHTSPIRE CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

In accordance with ASC 805-50, the Company allocated the fair value of the assumed assets and liabilities on the respective acquisition dates for each property acquired.

The following table summarizes the Company’s real estate acquisitions for the three months ended March 31, 2025 and year ended December 31, 2024 (dollars in thousands):


					Purchase Price Allocation
Acquisition Date	Property Type and Location	Number of Buildings/Units(1)	Purchase Price		Land and Improvements(2)		Building and Improvements(2)		Furniture and Fixtures(2)		Lease Intangible Assets(2)		Other Assets		Other Liabilities
Three Months Ended March 31, 2025
February 2025	Multifamily - Arizona(3)	285	$	31,965	$	9,007	$	21,051	$	270	$	1,456	$	708	$	(527)
Year Ended December 31, 2024
November 2024	Multifamily - Texas(4)	354	$	33,540	$	4,023	$	25,629	$	795	$	2,380	$	1,703	$	(990)
July 2024	Multifamily - Texas(3)	436	40,019		8,895		27,443		1,109		1,935		2,836		(2,199)






			$	105,524	$	21,925	$	74,123	$	2,174	$	5,771	$	5,247	$	(3,716)

_________________________________________

(1) For multifamily properties, represents number of units.

(2) Useful life of real estate acquired is 28 to 45 years for buildings, four to nine years for tenant improvements, four to nine years for furniture and fixtures, and three to 12 years for lease intangibles.

(3) Represents a multifamily property held in a VIE for which the Company was deemed the primary beneficiary. The Company consolidated the assets, liabilities and the property's operations on the acquisition date in accordance with ASC 810.

(4) Represents assets acquired by the Company through foreclosure.

Impairment

There was no impairment recorded during the three months ended March 31, 2025.

During the year ended December 31, 2024, in connection with the Company’s preparation of its quarterly financial reporting, the Company recorded $47.5 million of impairment related to three office properties held for investment. The impairment was due to a reduction in the current expected holding period of the properties. The estimated fair value of the collateral was determined by using a discounted cash flow model.

Real Estate Held for Sale

The following table summarizes the Company’s assets held for sale related to real estate (dollars in thousands):


	March 31, 2025
Assets
Land and improvements	$	7,590
Buildings, building leaseholds, and improvements	24,019
Tenant improvements	3,160
Furniture, fixtures and equipment	832
Construction-in-progress	132
Subtotal	35,733
Less: Accumulated depreciation	(1,560)
Total assets held for sale	$	34,173

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BRIGHTSPIRE CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

As of December 31, 2024, the Company classified a multifamily property it previously acquired through a deed-in-lieu of foreclosure as held for sale with real estate, net of $1.9 million and deferred leasing costs and intangible assets, net of $3.3 million.

The Company acquired one office property in Oakland, California through a deed-in-lieu of foreclosure in July 2023. During the three months ended June 30, 2024, the Company classified the office property as held for sale. The Company recorded $6.7 million of impairment related to this office property, which was based on a reduction in the expected holding period as well as the expected proceeds from the sale. During the three months ended March 31, 2025, the office property was sold for a gross sales price of $5.5 million, resulting in a loss on sale of $0.2 million.

During the three months ended March 31, 2025, the Company classified a multifamily property it previously acquired through a deed-in-lieu of foreclosure as held for sale.

There were no real estate sales during the three months ended March 31, 2024.

5. Deferred Leasing Costs and Other Intangibles

The Company’s deferred leasing costs, other intangible assets and intangible liabilities, excluding those related to assets held for sale, at March 31, 2025 and December 31, 2024 are as follows (dollars in thousands):


	March 31, 2025
	Carrying Amount		Accumulated Amortization		Net Carrying Amount
Deferred Leasing Costs and Intangible Assets
In-place lease values	$	83,975	$	(51,767)	$	32,208
Deferred leasing costs	30,161		(17,794)		12,367
Above-market lease values	11,587		(9,596)		1,991
	$	125,723	$	(79,157)	$	46,566
Intangible Liabilities
Below-market lease values	$	16,797	$	(14,314)	$	2,483


	December 31, 2024
	Carrying Amount		Accumulated Amortization		Net Carrying Amount
Deferred Leasing Costs and Intangible Assets
In-place lease values	$	82,530	$	(49,495)	$	33,035
Deferred leasing costs	32,864		(21,021)		11,843
Above-market lease values	11,587		(9,293)		2,294
	$	126,981	$	(79,809)	$	47,172
Intangible Liabilities
Below-market lease values	$	16,798	$	(13,993)	$	2,805

The following table summarizes the amortization of deferred leasing costs, intangible assets and intangible liabilities for the three months ended March 31, 2025 and 2024 (dollars in thousands):


	Three Months Ended March 31,
	2025		2024
Above-market lease values	$	(382)	$	(474)
Below-market lease values	323		362
Net decrease to property operating income	$	(59)	$	(112)

In-place lease values	$	2,840	$	2,728
Deferred leasing costs	625		694

Amortization expense	$	3,465	$	3,422

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BRIGHTSPIRE CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

The following table presents the amortization of deferred leasing costs, intangible assets and intangible liabilities, for each of the next five years and thereafter as of March 31, 2025 (dollars in thousands):



	Remainder of 2025		2026		2027		2028		2029		2030 and thereafter		Total
Above-market lease values	$	(855)	$	(601)	$	(130)	$	(84)	$	(92)	$	(229)	$	(1,991)
Below-market lease values	966		1,081		81		81		81		193		2,483
Net increase (decrease) to property operating income	$	111	$	480	$	(49)	$	(3)	$	(11)	$	(36)	$	492

In-place lease values	$	5,439	$	3,814	$	3,201	$	3,091	$	3,079	$	13,584	$	32,208
Deferred leasing costs	1,892		2,083		1,895		1,679		1,318		3,500		12,367
Amortization expense	$	7,331	$	5,897	$	5,096	$	4,770	$	4,397	$	17,084	$	44,575

6. Restricted Cash, Other Assets and Accrued and Other Liabilities

The following table presents a summary of restricted cash as of March 31, 2025 and December 31, 2024 (dollars in thousands):


	March 31, 2025		December 31, 2024
Restricted cash:
Borrower escrow deposits	$	70,183	$	80,132
Capital expenditure reserves	9,416		11,027
Working capital and other reserves	4,763		2,096
Real estate escrow reserves	3,958		3,167
Tenant lockboxes	2,576		2,014
Securitization trust unused proceeds(1)	—		50,087

Total	$	90,896	$	148,523

_________________________________________

(1) Refer to Note 7, “Debt” for further discussion.

The following table presents a summary of other assets as of March 31, 2025 and December 31, 2024 (dollars in thousands):


	March 31, 2025		December 31, 2024
Other assets:
Right-of-use lease asset	$	22,306	$	23,238
Tax receivable and deferred tax assets	16,233		16,299
Prepaid expenses and other	12,641		6,379
Investments in unconsolidated ventures at fair value	2,235		2,235
Deferred financing costs, net – credit facilities	2,164		3,143

Total	$	55,579	$	51,294

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BRIGHTSPIRE CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

The following table presents a summary of accrued and other liabilities as of March 31, 2025 and December 31, 2024 (dollars in thousands):


	March 31, 2025		December 31, 2024
Accrued and other liabilities:
Operating lease liability	$	23,185	$	24,119
Current and deferred tax liability	22,220		21,147
Accounts payable, accrued expenses and other liabilities	16,353		17,830
Interest payable	11,039		10,046
Prepaid rent and unearned revenue	7,435		7,852
Tenant security deposits	1,092		1,443
Unfunded CECL loan allowance	696		188

Total	$	82,020	$	82,625

Investments in Unconsolidated Ventures at Fair Value

Private Funds

The Company elected the fair value option to account for its indirect interests in real estate through real estate private equity funds (“PE Investments”), which interests ranged from 1.0% to 10.0% as of March 31, 2025 and December 31, 2024. The Company records equity in earnings for these investments based on a change in fair value of its share of projected future cash flows.

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BRIGHTSPIRE CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

7. Debt

The following table presents debt as of March 31, 2025 and December 31, 2024 (dollars in thousands):


							March 31, 2025				December 31, 2024
	Capacity ($)		Recourse vs. Non-Recourse(1)	Final Maturity	Contractual Interest Rate		Principal Amount(2)		Carrying Value(2)		Principal Amount(2)		Carrying Value(2)

Securitization bonds payable, net
BRSP 2024-FL2(3)			Non-recourse	Aug-37	SOFR + 2.47%		$	583,875	$	577,149	$	583,875	$	576,577
BRSP 2021-FL1(3)			Non-recourse	Aug-38	SOFR + 1.71%		406,208		406,208		510,497		510,497
Subtotal securitization bonds payable, net							990,083		983,357		1,094,372		1,087,074

Mortgage and other notes payable, net
Net lease 1			Non-recourse	Sep-33	4.77%		200,000		198,993		200,000		198,963
Net lease 2(4)			Non-recourse	Jun-25	3.91%		142,614		142,832		132,879		133,152
Net lease 3			Non-recourse	Aug-26	4.08%		28,491		28,430		28,671		28,599
Net lease 4			Non-recourse	Oct-27	4.45%		21,208		21,208		21,368		21,368
Net lease 5(5)			Non-recourse	Nov-26	4.45%		16,553		16,429		16,663		16,521
Net lease 5(6)			Non-recourse	Mar-28	4.38%		10,937		10,500		11,007		10,570
Net lease 6			Non-recourse	Nov-26	4.45%		6,576		6,527		6,620		6,564
Net lease 8			Non-recourse	Nov-26	4.45%		3,048		3,025		3,069		3,043
















Other real estate 1			Non-recourse	Dec-28(7)	4.47%		98,683		97,674		99,224		98,124
Other real estate 2			Non-recourse	Jan-25(8)	4.30%		67,271		67,306		67,699		67,685

Loan 1(9)			Non-recourse	Jun-25	5.50%		34,466		34,466		34,466		34,466
Subtotal mortgage and other notes payable, net							629,847		627,390		621,666		619,055

Bank credit facility
Bank credit facility	$	165,000	Recourse	Jan-27 (10)	SOFR + 2.25%		—		—		—		—
Subtotal bank credit facility											—		—

Master repurchase facilities


Bank 1	600,000		Limited Recourse(11)	Apr-27	SOFR + 2.43%	(12)	346,946		346,946		422,438		422,438
Bank 2	600,000		Limited Recourse(11)	Apr-30(13)	SOFR + 2.01%	(12)	160,075		160,075		160,847		160,847
Bank 3	400,000		(14)	June-27(15)	SOFR + 1.78%	(12)	176,466		176,466		177,466		177,466
Bank 4	400,000		Limited Recourse(11)	Nov-29(16)	SOFR + 1.80%	(12)	50,007		50,007		24,432		24,432

Subtotal master repurchase facilities	$	2,000,000					733,494		733,494		785,183		785,183











Subtotal credit facilities							733,494		733,494		785,183		785,183

Total							$	2,353,424	$	2,344,241	$	2,501,221	$	2,491,312

_________________________________________

(1)Subject to customary non-recourse carveouts.

(2)Difference between principal amount and carrying value of securitization bonds payable, net and mortgage and other notes payable, net is attributable to deferred financing costs, net and premium/discount on mortgage notes payable.

(3)The Company, through indirect Cayman subsidiaries, securitized commercial mortgage loans originated by the Company. Senior notes issued by the securitization trusts were generally sold to third parties and subordinated notes retained by the Company. These securitizations are accounted for as secured financing with the underlying mortgage loans pledged as collateral. Principal payments from underlying collateral loans must be applied to repay the notes until fully paid off, irrespective of the contractual maturities on the notes. Underlying collateral loans have initial terms of two to three years.

(4)As of March 31, 2025, the outstanding principal of the mortgage payable was NOK 1.5 billion, which translated to $142.6 million. In July 2024, the trustee placed the property into a cash flow sweep where excess cash flow is utilized to amortize the principal of the mortgage.

(5)Payment terms are periodic payment of principal and interest for debt on two properties and periodic payment of interest only with principal at maturity (except for principal repayments to release collateral properties disposed) for debt on one property.

(6)Represents a mortgage note collateralized by three properties.

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BRIGHTSPIRE CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

(7)The current maturity date is December 2027, with a one-year extension available, subject to satisfaction of certain customary conditions set forth in the governing documents.

(8)The mortgage payable collateralized by Other real estate 2 is in maturity default as of January 2025. The Company is currently negotiating an extension with its lender and remains current on interest payments.

(9)The current maturity of the note payable is June 2025. In March 2025, Loan 1 was modified to a fixed rate of 5.50%. Following the modification, there are no extension options remaining.

(10)On January 28, 2022, the Company, through its subsidiaries, including the OP, entered into an Amended and Restated Credit Agreement. Refer to “Bank Credit Facility” within this note for more details.

(11)Recourse solely with respect to 25.0% of the financed amount.

(12)Represents the weighted average spread as of March 31, 2025. The contractual interest rate depends upon asset type and characteristics and ranges from SOFR plus 1.50% to 2.75%.

(13)The current maturity date is April 2028, with two one-year extensions available at the option of the Company, which may be exercised upon the satisfaction of certain customary conditions set forth in the governing documents.

(14)Recourse is either 25.0% or 50.0% depending on loan metrics.

(15)The current maturity date is June 2025, with two one-year extensions available at the option of the Company, which may be exercised upon the satisfaction of certain customary conditions set forth in the governing documents.

(16)The current maturity date is November 2026, with three one-year extensions available at the option of the Company, which may be exercised upon the satisfaction of certain customary conditions set forth in the governing documents.

Future Minimum Principal Payments

The following table summarizes future scheduled minimum principal payments at March 31, 2025 based on initial maturity dates or extended maturity dates to the extent criteria are met and the extension option is at the borrower’s discretion (dollars in thousands):


	Total		Securitization Bonds Payable, Net		Mortgage and Other Notes Payable, Net		Credit Facilities


Remainder of 2025(1)	$	246,680	$	—	$	246,680	$	—
2026	54,145		—		54,145		—
2027	543,612		—		20,200		523,412
2028	108,822		—		108,822		—
2029	50,007		—		—		50,007
2030 and thereafter	1,350,158		990,083		200,000		160,075
Total	$	2,353,424	$	990,083	$	629,847	$	733,494

________________________________________

(1)Mortgage and other notes payable, net includes Other real estate 2, which is in maturity default as of January 2025. The Company is currently negotiating an extension with its lender and remains current on interest payments.

Bank Credit Facility

The Company uses bank credit facilities (including term loans and revolving facilities) to finance the business. These financings may be collateralized or non-collateralized and may involve one or more lenders. Credit facilities typically have maturities ranging from two to five years and may accrue interest at either fixed or floating rates.

On January 28, 2022, the OP (together with certain subsidiaries of the OP from time to time party thereto as borrowers, collectively, the “Borrowers”) entered into an Amended and Restated Credit Agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent (the “Administrative Agent”), and the several lenders from time to time party thereto (the “Lenders”), pursuant to which the Lenders agreed to provide a revolving credit facility in the aggregate principal amount of up to $165.0 million, of which up to $25.0 million is available as letters of credit. Loans under the Credit Agreement may be advanced in U.S. dollars and certain foreign currencies, including euros, pounds sterling and Swiss francs. The Credit Agreement amended and restated the OP’s prior $300.0 million revolving credit facility that would have matured on February 1, 2022.

The Credit Agreement also includes an option for the Borrowers to increase the maximum available principal amount of up to $300.0 million, subject to one or more new or existing Lenders agreeing to provide such additional loan commitments and satisfaction of other customary conditions.

Advances under the Credit Agreement accrue interest at a per annum rate equal to, at the applicable Borrower’s election, either (x) an adjusted SOFR rate plus a margin of 2.25%, or (y) a base rate equal to the highest of (i) the Wall Street Journal’s prime rate, (ii) the federal funds rate plus 0.50% and (iii) the adjusted SOFR rate plus 1.00%, plus a margin of 1.25%. An unused

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(Unaudited)

commitment fee at a rate of 0.25% or 0.35%, per annum, depending on the amount of facility utilization, applies to un-utilized borrowing capacity under the Credit Agreement. Amounts owed under the Credit Agreement may be prepaid at any time without premium or penalty, subject to customary breakage costs in the case of borrowings with respect to which a SOFR rate election is in effect.

The maximum amount available for borrowing at any time under the Credit Agreement is limited to a borrowing base valuation of certain investment assets, with the valuation of such investment assets generally determined according to a percentage of adjusted net book value. As of March 31, 2025, the borrowing base valuation is sufficient to permit borrowings of up to the entire $165.0 million. If any borrowing is outstanding for more than 180 days after its initial draw, the borrowing base valuation will be reduced by 50% until all outstanding borrowings are repaid in full. The ability to borrow new amounts under the Credit Agreement terminates on January 31, 2026, at which time the OP may, at its election and by written notice to the Administrative Agent, extend the termination date for two additional terms of six months each, subject to the terms and conditions in the Credit Agreement, resulting in a latest termination date of January 31, 2027.

The obligations of the Borrowers under the Credit Agreement are guaranteed pursuant to a Guarantee and Collateral Agreement by substantially all material wholly owned subsidiaries of the OP (the “Guarantors”) in favor of the Administrative Agent (the “Guarantee and Collateral Agreement”) and, subject to certain exceptions, secured by a pledge of substantially all equity interests owned by the Borrowers and the Guarantors, as well as by a security interest in deposit accounts of the Borrowers and the Guarantors in which the proceeds of investment asset distributions are maintained.

The Credit Agreement contains various affirmative and negative covenants, including, among other things, the obligation of the Company to maintain REIT status and be listed on the New York Stock Exchange, and limitations on debt, liens and restricted payments. In addition, the Credit Agreement includes the following financial covenants applicable to the OP and its consolidated subsidiaries: (a) minimum consolidated tangible net worth of the OP to be greater than or equal to the sum of (i) $1,112,000,000 and (ii) 70% of the net cash proceeds received by the OP from any offering of its common equity after September 30, 2021 and of the net cash proceeds from any offering by the Company of its common equity to the extent such proceeds are contributed to the OP, excluding any such proceeds that are contributed to the OP within ninety (90) days of receipt and applied to acquire capital stock of the OP; (b) the OP’s ratio of EBITDA plus lease expenses to fixed charges for any period of four consecutive fiscal quarters to be not less than 1.50 to 1.00; (c) the OP’s minimum interest coverage ratio to be not less than 3.00 to 1.00; and (d) the OP’s ratio of consolidated total debt to consolidated total assets to be not more than 0.80 to 1.00. The Credit Agreement also includes customary events of default, including, among other things, failure to make payments when due, breach of covenants or representations, cross default to material indebtedness, material judgment defaults, bankruptcy matters involving any Borrower or any Guarantor and certain change of control events. The occurrence of an event of default will limit the ability of the OP and its subsidiaries to make distributions and may result in the termination of the credit facility, acceleration of repayment obligations and the exercise of remedies by the Lenders with respect to the collateral.

As of March 31, 2025, the Company was in compliance with all of its financial covenants under the Credit Agreement.

Securitization Financing Transactions

Securitization bonds payable, net represent debt issued by securitization vehicles consolidated by the Company. Senior notes issued by these securitization trusts were generally sold to third parties and subordinated notes retained by the Company. Following expiration of the reinvestment period, payments from underlying collateral loans must be applied to repay the notes until fully paid off, irrespective of the contractual maturities of the loans.

The Company evaluated the key terms in the collateralized loan obligation (“CLO”) governing documents of the issuers of the CRE CLOs (“CRE CLO Issuers”), which are wholly-owned subsidiaries of the Company, to determine if they were VIEs and, if so, whether the Company was the primary beneficiary and therefore consolidate the CRE CLOs. The Company concluded that the CRE CLO Issuers are VIEs and the Company is the primary beneficiary because it has the ability to control the most significant activities of the CRE CLO Issuers, the obligation to absorb losses to the extent of its equity investments, and the right to receive benefits that could potentially be significant to these entities.

As of March 31, 2025, the Company had $1.2 billion carrying value of CRE debt investments financed with $990.1 million of securitization bonds payable, net. As of December 31, 2024, the Company had $1.3 billion carrying value of CRE debt investments financed with $1.1 billion of securitization bonds payable, net.

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(Unaudited)

BRSP 2021-FL1

In July 2021, the Company executed a securitization transaction through wholly-owned subsidiaries, BRSP 2021-FL1, Ltd. and BRSP 2021-FL1, LLC (collectively, “BRSP 2021-FL1”), which resulted in the sale of $670.0 million of investment grade notes.

BRSP 2021-FL1 included a two-year reinvestment feature that allowed the Company to contribute existing or newly originated loan investments in exchange for proceeds from repayments or repurchases of loans held in BRSP 2021-FL1, subject to the satisfaction of certain conditions set forth in the indenture. The reinvestment period for BRSP 2021-FL1 expired on July 20, 2023. During the three months ended March 31, 2025, four loans held in BRSP 2021-FL1 were fully repaid, totaling $103.1 million, and one loan was partially repaid totaling $1.2 million. The proceeds from the repayments were used to amortize the securitization bonds in accordance with the securitization priority of repayments. At March 31, 2025, the Company had $536.2 million of unpaid principal balance of CRE debt investments financed with BRSP 2021-FL1. As of March 31, 2025, the securitization reflects an advance rate of 75.8% at a weighted average cost of funds of Term SOFR plus 1.71% (before transaction costs), and is collateralized by a pool of 20 senior loan investments.

Additionally, BRSP 2021-FL1 contains note protection tests that can be triggered as a result of contributed loan defaults, losses, and certain other events outlined in the indenture, beyond established thresholds. A note protection test failure that is not remedied can result in the redirection of interest proceeds from the below investment grade tranches to amortize the most senior outstanding tranche. The Company did not fail any note protection tests during the three months ended March 31, 2025 and March 31, 2024. While the Company continues to closely monitor all loan investments contributed to BRSP 2021-FL1, a deterioration in the performance of an underlying loan could negatively impact its liquidity position.

BRSP 2024-FL2

In August 2024, the Company executed a $675.0 million securitization transaction through wholly-owned subsidiaries, BRSP 2024-FL2, Ltd. and BRSP 2024-FL2, LLC (collectively, “BRSP 2024-FL2”), which resulted in the sale of $583.9 million of investment grade notes (the “2024-FL2 Notes”).

BRSP 2024-FL2 included a six-month ramp-up acquisition period that allowed the Company to contribute existing or newly originated loan investments in exchange for $84.8 million in unused proceeds held in BRSP 2024-FL2, subject to the satisfaction of certain conditions set forth in the indenture. BRSP 2024-FL2 also includes a two-year reinvestment feature that allows the Company to contribute existing or newly originated loan investments in exchange for proceeds from repayments of loans held in BRSP 2024-FL2, subject to the satisfaction of certain conditions set forth in the indenture. As of March 31, 2025, the securitization reflects an advance rate of 86.5% at a weighted average cost of funds of Term SOFR plus 2.47% (before transaction costs), and is collateralized by a pool of 26 senior loan investments. During the three months ended March 31, 2025, the Company contributed existing or newly originated loan investments totaling $50.1 million, in exchange for a combination of reinvestment and unused proceeds. At March 31, 2025, the unused proceeds have been fully utilized and the Company had $675.0 million of unpaid principal balance of CRE debt investments financed with BRSP 2024-FL2.

Additionally, BRSP 2024-FL2 contains note protection tests that can be triggered as a result of contributed loan defaults, losses, and certain other events outlined in the indenture, beyond established thresholds. A note protection test failure that is not remedied can result in the redirection of interest proceeds from the below investment grade tranches to amortize the most senior outstanding tranche. The Company did not fail any note protection tests during the three months ended March 31, 2025. While the Company continues to closely monitor all loan investments contributed to BRSP 2024-FL2, a deterioration in the performance of an underlying loan could negatively impact its liquidity position.

Master Repurchase Facilities

As of March 31, 2025, the Company, through subsidiaries, had entered into repurchase agreements with multiple global financial institutions to provide an aggregate principal amount of up to $2.0 billion to finance the origination of first mortgage loans and senior loan participations secured by senior loan investments (each, a “Master Repurchase Facility” and collectively, the “Master Repurchase Facilities”). The Company agreed to guarantee certain obligations under the Master Repurchase Facilities, which contain representations, warranties, covenants, conditions precedent to funding, events of default and indemnities that are customary for agreements of this type. The Master Repurchase Facilities act as revolving loan facilities that can be paid down as assets are repaid or sold and re-drawn upon for new investments. As of March 31, 2025, the Company was in compliance with all of its financial covenants under the Master Repurchase Facilities.

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(Unaudited)

As of March 31, 2025, the Company had $1.2 billion carrying value of CRE debt investments financed with $733.5 million under the Master Repurchase Facilities. As of December 31, 2024, the Company had $1.0 billion carrying value of CRE debt investments financed with $785.2 million under the Master Repurchase Facilities.

As of March 31, 2025 and December 31, 2024, the Company had one counterparty, Bank 1, with net exposure (collateral that exceeded amounts borrowed) totaling more than 10% of the Company’s total equity. As of March 31, 2025 and December 31, 2024, the Company’s net exposure to Bank 1 was $263.4 million and $198.8 million, respectively.

8. Related Party Arrangements

The Company had no related party transactions as of and for the three months ended March 31, 2025 and 2024.

9. Equity-Based Compensation

On February 15, 2022, the Company’s board of directors adopted, and at the annual meeting of stockholders held on May 5, 2022, the stockholders approved, the 2022 Equity Incentive Plan (the “2022 Plan”), which was effective as of May 5, 2022 and amends and restates the Company’s 2018 Equity Incentive Plan (the “2018 Plan”) to increase the total number of shares of the Class A common stock issuable by 10.0 million shares (subject to adjustment pursuant to the terms of the 2022 Plan) and extending the termination date to May 4, 2032. Awards may be granted under the 2022 Plan to (x) any employee, officer, director, consultant or advisor (who is a natural person) providing services to the Company, or its affiliates and (y) any other individual whose participation in the 2022 Plan is determined to be in the best interests of the Company. The following types of awards may be made under the 2022 Plan, subject to the limitations set forth in the plan: (i) stock options (which may be either incentive stock options or non-qualified stock options); (ii) stock appreciation rights; (iii) restricted stock awards; (iv) stock units; (v) unrestricted stock awards; (vi) dividend equivalent rights; (vii) performance awards; (viii) annual cash incentive awards; (ix) long-term incentive units; and (x) other equity-based awards.

Shares subject to an award granted under the 2022 Plan will be counted against the maximum number of shares of Class A common stock available for issuance thereunder as one share of Class A common stock for every one share of Class A common stock subject to such an award. Shares subject to an award granted under the 2022 Plan will again become available for issuance under the 2022 Plan if the award terminates by expiration, forfeiture, cancellation, or otherwise without the issuance of such shares (except as set forth in the following sentence). The number of shares of Class A common stock available for issuance under the 2022 Plan will not be increased by (i) any shares tendered or withheld in connection with the purchase of shares upon exercise of a stock option, (ii) any shares deducted or delivered in connection with the Company’s tax withholding obligations, or (iii) any shares purchased by the Company with proceeds from stock option exercises. Shares granted to non-independent directors, officers and employees, if applicable, generally vest ratably in three annual installments following the grant date.

On May 5, 2022, the Company granted 1,456,366 shares of Class A common stock to certain of its employees, including executive officers. The remaining one-third increment of such share grant vested on March 15, 2025. On March 6, 2023, the Company granted 1,391,217 shares of Class A common stock to certain of its employees, including executive officers. The remaining one-third increment of such share grant will vest on March 15, 2026.

On May 17, 2023, the Company granted 93,285 shares of Class A common stock to the non-employee directors of the Company which vested on May 17, 2024. On May 17, 2024, the Company granted 79,495 shares of Class A common stock to the non-employee directors of the Company which vest on May 17, 2025.

On March 15, 2024, the Company granted 1,243,696 shares of Class A common stock to certain of its employees, including executive officers. Remaining one-third increments of such share grant will vest on March 15, 2026 and March 15, 2027.

On March 17, 2025, the Company granted 1,392,965 shares of Class A common stock to certain of its employees, including executive officers. The shares vest in one-third increments on March 15, 2026, March 15, 2027 and March 15, 2028. Additionally, on March 17, 2025 the Company granted 225,544 shares of Class A common stock to its executive officers. Such share grant vested immediately.

Equity-Based Compensation Expense

In connection with the share grants, the Company recognized share-based compensation expense of $4.2 million and $2.2 million within compensation and benefits in the consolidated statements of operations for the three months ended March 31, 2025 and 2024, respectively.

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(Unaudited)

Restricted Stock—Restricted stock awards relating to the Company’s Class A common stock are granted to non-employee directors of the Company and generally vest within one year. Restricted stock awards are granted to certain employees of the Company, with a service condition only and are generally subject to annual time-based vesting in equal tranches over a three-year period. Restricted stock is entitled to dividends declared and paid on the Company’s Class A common stock and such dividends are not forfeitable prior to vesting of the award. Restricted stock awards are valued based on the Company’s Class A common stock price on grant date and equity-based compensation expense is recognized on a straight-line basis over the requisite three-year service period.

Performance Stock Units (“PSU”)—PSUs are granted to certain employees of the Company and are subject to both a service condition and a performance condition. Following the end of the measurement period for the PSUs, the recipients of PSUs may be eligible to vest in all or a portion of PSUs granted, and be issued a number of shares of the Company’s Class A common stock, ranging from 0% to 200% of the number of PSUs granted and eligible to vest, to be determined based upon the Company’s total shareholder return relative to certain peer group companies at the end of a three-year measurement period for the 2023 PSU grant (the “2023 Grant”), the 2024 PSU grant (the “2024 Grant”) and the 2025 PSU grant (the “2025 Grant”). PSUs also contain dividend equivalent rights which entitle the recipients to a payment equal to the amount of dividends that would have been paid on the shares that are ultimately issued at the end of the measurement period.

Fair value of PSUs, including dividend equivalent rights, was determined using a Monte Carlo simulation, with the following assumptions.


	2025 Grant		2024 Grant		2023 Grant
Expected volatility(1)	35.7	%	35.6	%	74.4	%
Risk free rate(2)	4.0	%	4.3	%	4.6	%
Expected dividend yield(3)	—		—		—

_________________________________________

(1)Based upon the Company’s historical stock volatility.

(2)Based upon the continuously compounded zero-coupon U.S. Treasury yield for the term coinciding with the measurement period of the award as of valuation date.

(3)Based upon award holders being entitled to dividends paid during the measurement period on any shares earned.

Fair value of PSU awards, excluding dividend equivalent rights, is generally recognized on a straight-line basis over their measurement period as compensation expense, except when certain performance metrics are achieved.

The table below summarizes the Company’s awards granted, forfeited or vested under the 2022 Plan during the three months ended March 31, 2025 and 2024:


	Number of Shares			Weighted Average Grant Date Fair Value
	Restricted Stock	PSUs	Total	Restricted Stock		PSUs














































Unvested shares at December 31, 2023	2,787,807	384,378	3,172,185	$	7.61	$	9.69
Granted	1,243,696	534,056	1,777,752	6.71		7.82
Vested	(1,326,222)	—	(1,326,222)	7.92		—

Unvested shares at March 31, 2024	2,705,281	918,434	3,623,715	7.05		8.60

Unvested shares at December 31, 2024	2,742,917	918,434	3,661,351	$	6.92	$	8.60
Granted	1,618,509	542,789	2,161,298	5.97		6.78
Vested	(1,428,999)	—	(1,428,999)	7.21		—
Unvested shares at March 31, 2025	2,932,427	1,461,223	4,393,650	6.25		7.93

Fair value of equity awards that vested during the three months ended March 31, 2025 and March 31, 2024, determined based on their respective fair values at vesting date, was $8.5 million and $9.1 million, respectively. Fair value of granted awards is determined based on the closing price of the Class A common stock on the date of vesting of the awards. Equity-based compensation is classified within compensation and benefits in the consolidated statement of operations.

At March 31, 2025, aggregate unrecognized compensation cost for all unvested equity awards was $23.7 million, which is expected to be recognized over a weighted-average period of 2.4 years.

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10. Stockholders’ Equity

Authorized Capital

As of March 31, 2025, the Company had the authority to issue up to 1.0 billion shares of stock, at $0.01 par value per share, consisting of 950.0 million shares of Class A common stock and 50.0 million shares of preferred stock.

The Company had no shares of preferred stock issued and outstanding as of March 31, 2025 and December 31, 2024.

Dividends

During the three months ended March 31, 2025 and 2024, the Company declared the following dividends on its common stock:

Declaration Date

Record Date

Payment Date

Per Share

March 17, 2025

March 31, 2025

April 15, 2025

$0.16

March 15, 2024

March 29, 2024

April 15, 2024

$0.20

Share Repurchases

In April 2025, the Company’s board of directors authorized a stock repurchase program (“Stock Repurchase Program”) under which the Company may repurchase up to $50.0 million of its outstanding Class A common stock until April 30, 2026. The Stock Repurchase Program replaces the prior repurchase program authorization which expired on April 30, 2025. Under the Stock Repurchase Program, the Company may repurchase shares in open market purchases, in privately negotiated transactions or otherwise. The Company has a written trading plan as part of the Share Repurchase Program that provides for share repurchases in open market transactions that is intended to comply with Rule 10b-18 under the Exchange Act. The Stock Repurchase Program will be utilized at management’s discretion and in accordance with the requirements of the SEC. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate requirements and other conditions.

As of March 31, 2025, there was $42.3 million remaining available to make repurchases under the prior stock repurchase program.

On March 31, 2025, the Company repurchased 0.2 million shares of Class A common stock under the prior stock repurchase program at a weighted average price of $5.59 per share for an aggregate cost of $1.1 million. In accordance with the Company’s policy, this transaction will be reflected in the consolidated financial statements in April 2025 on the settlement date.

Accumulated Other Comprehensive Income (Loss)

The following tables present the changes in each component of Accumulated Other Comprehensive Income (Loss) (“AOCI”) attributable to stockholders, net of immaterial tax effect.

Changes in Components of AOCI - Stockholders


(dollars in thousands)	Unrealized gain on net investment hedges		Foreign currency translation gain (loss)		Total
AOCI at December 31, 2024	$	18,603	$	(24,940)	$	(6,337)
Other comprehensive gain	—		1,831		1,831
AOCI at March 31, 2025	$	18,603	$	(23,109)	$	(4,506)


(dollars in thousands)	Unrealized gain on net investment hedges		Foreign currency translation loss		Total
AOCI at December 31, 2023	$	18,603	$	(21,159)	$	(2,556)
Other comprehensive loss	—		(3,594)		(3,594)


AOCI at March 31, 2024	$	18,603	$	(24,753)	$	(6,150)

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(Unaudited)

11. Noncontrolling Interests

Investment Entities

Noncontrolling interests in investment entities represent third-party equity interests in ventures that are consolidated with the Company’s financial statements. Net loss attributable to noncontrolling interests in the investment entities was $1.6 million for the three months ended March 31, 2025 and de minimis for the three months ended March 31, 2024.

12. Fair Value

Fair Value Hierarchy

Financial assets recorded at fair value on a recurring basis are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following table presents financial assets that were accounted for at fair value on a recurring basis as of March 31, 2025 and December 31, 2024 by level within the fair value hierarchy (dollars in thousands):


	March 31, 2025								December 31, 2024
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Other assets - PE Investments	$	—	$	—	$	2,235	$	2,235	$	—	$	—	$	2,235	$	2,235

The following table presents the changes in fair value of financial assets which are measured at fair value on a recurring basis using Level 3 inputs to determine fair value for the three months ended March 31, 2025 and 2024 (dollars in thousands):


	Three Months Ended March 31,
	2025		2024
	Other assets - PE Investments
Beginning balance	$	2,235	$	2,251

Distributions/paydowns	—		—






Ending balance	$	2,235	$	2,251

As of March 31, 2025 and December 31, 2024, the Company elected to apply the fair value option for its PE Investments and the key unobservable inputs used in the analysis included discount rates with a range of 11.0% to 12.0%.

Fair Value of Financial Instruments

In addition to the above disclosures regarding financial assets or liabilities which are recorded at fair value, GAAP requires disclosure of fair value about all financial instruments. The following disclosure of estimated fair value of financial instruments was determined by the Company using available market information and appropriate valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimated fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize on disposition of the financial instruments. The use of different market assumptions and/or estimation methodologies may have a material effect on estimated fair value.

The following table presents the principal amount, carrying value and fair value of certain financial assets and liabilities as of March 31, 2025 and December 31, 2024 (dollars in thousands):


	March 31, 2025						December 31, 2024
	Principal Amount		Carrying Value		Fair Value		Principal Amount		Carrying Value		Fair Value
Financial assets:(1)
Loans held for investment, net(2)(3)	$	2,454,354	$	2,457,835	$	2,298,989	$	2,515,278	$	2,518,925	$	2,349,346
Financial liabilities:(1)
Securitization bonds payable, net	$	990,083	$	983,357	$	990,083	$	1,094,372	$	1,087,074	$	1,094,372
Mortgage and other notes payable, net	629,847		627,390		603,030		621,666		619,055		587,349
Master repurchase facilities	733,494		733,494		733,494		785,183		785,183		785,183

_________________________________________

(1)The fair value of other financial instruments not included in this table is estimated to approximate their carrying value.

(2)Excludes future funding commitments of $111.4 million and $106.3 million as of March 31, 2025 and December 31, 2024, respectively.

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(Unaudited)

(3)Carry value excludes CECL reserves of $155.4 million and $165.9 million as of March 31, 2025 and December 31, 2024, respectively.

Disclosure about fair value of financial instruments is based on pertinent information available to management as of March 31, 2025. Although management is not aware of any factors that would significantly affect fair value, such amounts have not been comprehensively revalued for purposes of these consolidated financial statements since that date and current estimates of fair value may differ significantly from the amounts presented herein.

Loans Held for Investment, Net

For loans held for investment, net, fair values were determined: (i) by comparing the current yield to the estimated yield for newly originated loans with similar credit risk or the market yield at which a third party might expect to purchase such investment; or (ii) based on discounted cash flow projections of principal and interest expected to be collected, which includes consideration of the financial standing of the borrower or sponsor as well as operating results of the underlying collateral. These fair value measurements of CRE debt are generally based on unobservable inputs and, as such, are classified as Level 3 of the fair value hierarchy.

Securitization Bonds Payable, Net

The Company’s securitization bonds payable, net bear floating rates of interest. As of March 31, 2025, the Company believes the unpaid principal balance approximates fair value given the floating rate nature of the bonds and significant level of subordination within the securitization. These fair value measurements are based on observable inputs, and as such, are classified as Level 2 of the fair value hierarchy.

Mortgage and Other Notes Payable, Net

For mortgage and other notes payable, net, the Company primarily uses rates currently available with similar terms and remaining maturities to estimate fair value. These measurements are determined using comparable U.S. Treasury rates as of the end of the reporting period. These fair value measurements are based on observable inputs, and as such, are classified as Level 2 of the fair value hierarchy.

Master Repurchase Facilities

The Company has amounts outstanding under Master Repurchase Facilities. The Master Repurchase Facilities bear floating rates of interest. As of March 31, 2025, the Company believes the carrying value approximates fair value due to the short-term nature of the debt, and as a result, contractual rates should equate to market rates. These fair value measurements are based on observable inputs, and as such, are classified as Level 2 of the fair value hierarchy.

Other

The carrying values of cash and cash equivalents, restricted cash, receivables, and accrued and other liabilities approximate fair value due to their short term nature and credit risks, if any, are negligible.

Nonrecurring Fair Values

The Company measures fair value of certain assets on a nonrecurring basis when events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Adjustments to fair value generally result from the application of lower of amortized cost or fair value accounting for assets held for sale or write-down of asset values due to impairment.

During the first quarter of 2025, the Company recorded a $9.2 million specific CECL reserve related to one multifamily loan that was subsequently charged off during the quarter following repayment of the loan. The specific CECL reserve was based on the proceeds the Company received from the repayment of the loan during the three months ended March 31, 2025.

Additionally, the Company recorded general CECL reserves on one multifamily loan that is determined to be collateral dependent as of March 31, 2025. The Company estimated expected losses based on the loan’s collateral value, which was determined by applying a capitalization rate of 5.8% and discount rate of 10.7%.

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BRIGHTSPIRE CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

During the year ended December 31, 2024, the Company recorded specific CECL reserves of $30.0 million related to two multifamily loans, two office loans and one development mezzanine loan based on the proceeds received from the repayment of the loans. Following repayment of one of the office loans, the Company recognized a specific CECL reversal of $1.0 million after receiving higher than expected proceeds. The Company also recorded specific CECL reserves of $9.0 million related to one multifamily loan that was acquired through a foreclosure in the fourth quarter of 2024. The Company elected to apply the practical expedient, afforded to the Company under ASC 326, to use the fair value of the collateral to determine the specific CECL reserve. The specific CECL reserves on the one multifamily loan was based on the estimated fair value of the collateral using a discounted cash flow model and Level 3 inputs, which included a capitalization rate of 5.3% and discount rate of 6.0%. All specific CECL reserves recorded during the year ended December 31, 2024 were charged off.

Additionally, the Company recorded general CECL reserves on two office loans, one hotel loan and one multifamily loan that it determined to be collateral dependent as of December 31, 2024. The Company estimated expected losses based on the loan’s collateral value, which was determined either by applying a capitalization rate between 8.0% and 8.8% and a discount rate between 9.5% and 20.2%, or by the expected proceeds from the sale of the underlying collateral.

During the year ended December 31, 2024, the Company recorded $47.5 million of impairment related to three office properties. The impairment was due to a reduction in the current expected holding period of the properties. The estimated fair value of the collateral was determined by using a discounted cash flow model and Level 3 inputs, which included capitalization rates ranging from 5.5% to 9.5%, discount rates ranging from 8.1% to 9.8% and a weighted average capitalization rate of 7.6% based on carrying value. The Company also recorded $6.7 million of impairment related to one office property held for sale. The impairment was due to a reduction in the expected holding period as well as the proceeds expected from the sale of the property. The Company sold the office property during the first quarter of 2025. Refer to Note 4, “Real Estate, net and Real Estate Held for Sale” for further discussion.

13. Commitments and Contingencies

Lending Commitments

The Company has lending commitments to borrowers pursuant to certain loan agreements in which the borrower may submit a request for funding contingent on achieving certain criteria, which must be approved by the Company as lender, such as leasing, performance of capital expenditures and construction in progress with an approved budget. At March 31, 2025, assuming the terms to qualify for future fundings, if any, had been met, total unfunded lending commitments for loans held for investment were $108.9 million for senior loans and $2.5 million for mezzanine loans. At December 31, 2024, total unfunded lending commitments for loans held for investment were $105.2 million for senior loans and $1.1 million for mezzanine loans.

Ground Lease Obligation

The Company’s operating leases include ground leases acquired with real estate.

At March 31, 2025 and December 31, 2024, the weighted average remaining lease term was 11.9 years and 12.0 years for ground leases, respectively.

The following table presents ground lease expense, included in property operating expense, for the three months ended March 31, 2025 and 2024 (dollars in thousands):


	Three Months Ended March 31,
	2025		2024
Operating lease expense:
Minimum lease expense	$	794	$	786
Variable lease expense	—		—
	$	794	$	786

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BRIGHTSPIRE CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

The operating lease liability for ground leases was determined using a weighted average discount rate of 5.4%. The following table presents future minimum rental payments, excluding contingent rents, on noncancellable ground leases on real estate as of March 31, 2025 (dollars in thousands):



Remainder of 2025	$	2,391
2026	3,186
2027	2,868
2028	2,839
2029	1,896
2030 and thereafter	12,263
Total lease payments	25,443
Less: Present value discount	7,275
Operating lease liability (Note 6)	$	18,168

For these ground leases, the Company has elected the practical expedient to combine lease and related nonlease components as a single lease component.

Office Lease

At March 31, 2025 and December 31, 2024, the weighted average remaining lease term was 4.2 years and 4.3 years for office leases, respectively. The office leases are located in New York, New York and Los Angeles, California.

For the three months ended March 31, 2025 and 2024, the following table summarizes lease expense, included in operating expense (dollars in thousands):


	Three Months Ended March 31,
	2025		2024
Corporate Offices
Operating lease expense:
Fixed lease expense	$	324	$	321
Variable lease expense	—		—
	$	324	$	321

Total cash paid for office leases was $0.3 million and $0.3 million for the three months ended March 31, 2025 and March 31, 2024, respectively.

The operating lease liability for the office leases was determined using a weighted average discount rate of 2.4%. As of March 31, 2025, the Company’s future operating lease commitments for the corporate office leases were as follows (dollars in thousands):


	Corporate Offices

Remainder of 2025	$	983
2026	1,323
2027	1,339
2028	1,155
2029	574
2030 and thereafter	—
Total lease payments	5,374
Less: Present value discount	357
Operating lease liability (Note 6)	$	5,017

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BRIGHTSPIRE CAPITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

For these office leases, the Company has elected the practical expedient to combine lease and related nonlease components as a single lease component.

Litigation and Claims

The Company may be involved in litigation and claims in the ordinary course of the business. As of March 31, 2025, the Company was not involved in any legal proceedings that are expected to have a material adverse effect on the Company’s results of operations, financial position, or liquidity.

14. Segment Reporting

The Company presents its business through three operating and reportable segments described below and is how management views the business activities of the Company.

•Senior and Mezzanine Loans and Preferred Equity—CRE debt investments including senior and mezzanine loans, and preferred equity interests as well as participations in such loans.

•Net Leased and Other Real Estate—direct investments in CRE with long-term leases to tenants on a net lease basis, where such tenants generally will be responsible for property operating expenses such as insurance, utilities, maint

BrightSpire Capital, Inc. 10-Q