Good morning, and welcome to BrightSpire Capital's First Quarter 2024 Earnings Conference Call. We will refer to BrightSpire Capital as BrightSpire, BRSP or the company throughout this call. Speaking on the call today are the company's Chief Executive Officer, Mike Mazzei, President and Chief Operating Officer, Andy Witt; and Chief Financial Officer, Frank Saracino. Before I hand the call over, please note that on this call, certain information presented contains forward-looking statements. These statements, which are based on management's current expectations are subject to risks, uncertainties and assumptions. Potential risks and uncertainties could cause the company's business and financial results to differ materially. For a discussion of risks that could affect results, please see the Risk Factors section of our most recent 10-K and other risk factors and forward-looking statements in the company's current and periodic reports filed with the SEC from time to time. All information discussed on this call is as of today, May 1, 2024, and the company does not intend and undertakes no duty to update for future events or circumstances. In addition, certain financial information presented on this call represents non-GAAP financial measures. The company's earnings release and supplemental presentation, which was released this morning and is available on the company's website, presents reconciliations to the appropriate GAAP measures and an explanation of why the company believes such non-GAAP financial measures are useful to investors. Finally, during this call, management may refer to distributable earnings as DE. With that, I would now like to turn the call over to Mike.

Thank you, David. Welcome to our first quarter 2024 earnings call and thank you for joining us this morning. In my remarks today, I will focus on some key financial highlights for the company, briefly discuss market conditions and provide visibility as to what is ahead. Then I will turn the call over to Andy for more specifics on the portfolio. Starting off with some financial highlights. For the first quarter, we reported a GAAP net loss of $57.1 million or $0.45 per share, positive DE of $22.5 million or $0.17 per share and adjusted DE of $29.7 million or $0.23 per share. Our current liquidity stands at $323 million, of which $158 million is cash on hand. This quarter, we recorded a $0.68 reduction in undepreciated book value, which currently stands at $10.67. This reduction was primarily driven by a net increase in our CECL reserves of about $0.07 per share. This brings our total CECL reserves to $151 million or $1.15 per share. Our leverage ratio remains unchanged at 1.8x, and our adjusted DE dividend coverage for the first quarter was 1.15x. Now let's briefly discuss the financial markets. In the first two months of this year, the markets went into high gear, risk-on mode, which resulted in an everything rally. As we all know, this was driven by the Fed telegraphing the end of the higher-for-longer period and that the next move would be a near-term cut in the Fed funds rate. This fueled strong conviction for continued economic growth and at worst a very soft landing. However, as the first quarter progressed, it became apparent that inflation is persistent while geopolitical risks have increased. Therefore, while the Fed's next move will likely be a cut, the expectations have shifted from multiple cuts starting in the second quarter to perhaps not starting until December. In response, the 10-year treasury yield has risen once again, while gold rallied to an all-time high. Along with other commodity prices, when interest rates and the price of gold are positively correlated, it is generally not a good thing. In light of this, we are maintaining a conservative position, and as a result, we increased our CECL reserves and also downgraded two loans to a risk rating of 4 during the quarter. We, of course, remain focused on the resolution of our watch list loans and REO assets as this segment of the portfolio is critical to our path to doing new business and improving earnings. Separately, on our fourth quarter call in February, I stated that over the last 12 months, many peers in our sector, along with BrightSpire, have recognized write-downs in capital. I also emphasized the impact of holding higher cash balances as well as increases in underperforming and unencumbered assets. Therefore, dividend coverage based solely on cash flow for this quarter is 1.05x. This coverage ratio is down from our previous quarter's coverage of 1.25x based on a per share cash flow of $0.25. As we look ahead, our earnings will be buffered by achieving faster resolutions and monetization of lower earning assets, whether watch list loans or unencumbered assets, including REO. However, in the coming quarters, we're also facing some potential headwinds on earnings that might not immediately affect distributable earnings but would affect cash flow. Specifically, this pertains to three of our older vintage office property equity investments. The largest of the three is our Norway asset, which we have discussed often in the past. Each of these equity investments have some form of upcoming debt covenant tests or maturity date within the next few quarters. For example, the Norway asset has a loan-to-value test in the second quarter of this year. As I said earlier, we're striving to make headway on this portion of our portfolio to unlock the earnings power of this capital. In closing, while both the capital markets and geopolitical events continue to be a challenge, we will continue to remain focused on what we can control in the near term and act prudently in managing the balance sheet and maintaining liquidity. And with that, I will now turn the call over to our President, Andy Witt.

Thank you, Mike. Good morning and thank you all for joining. During the first quarter, we received $114 million in repayments across four investments, which included our largest office loan for $88 million, an industrial loan for $20 million and two partial repayments. We expect repayment activity to remain slow for the remainder of 2024, given tempered expectations for interest rate relief. Deployment for the quarter consisted of $14 million of future funding obligations. At the end of the quarter, remaining future funding obligations stand at $139 million or 5% of total outstanding commitments. Subsequent to quarter end, we upsized one loan by $9 million to consolidate collateral related to a mixed-use asset in Pasadena, California. The original collateral consists of a fully leased 94,000 square foot office building with developable land. Upsizing the loan provided the borrower proceeds to complete the purchase of additional parcels of land previously under contract. In terms of the asset-level updates, the San Jose hotel loan borrower is continuing to market the property for sale and exploring refinancing alternatives. The loan remains current in April. Last quarter, we downgraded a Denver, Colorado multifamily loan from a risk rating of 4 to a 5 and placed the loan on non-accrual. During the quarter, in cooperation with the borrower, we marketed a property for sale. The marketing process evidenced ample liquidity in the multifamily sector. There was substantial interest in the property, and it is currently under contract with hard deposit. We anticipate the sale will close this year. On the REO side, the Washington, D.C. office property, which we took ownership of during the fourth quarter, is now under contract at our net asset value, and we anticipate finalizing the sale also midyear. Turning to our watch list update. During the first quarter, we added two investments for a total of $87 million. We added a $57 million Santa Clara, California multifamily development loan to the watch list due to uncertainty associated with the upcoming maturity. Current market conditions have impacted the borrowers' go-forward business plan. We are in active dialogue with the borrower regarding alternative options for the remaining parts. In addition, we also downgraded a Miami, Florida office loan. The borrower was pursuing a conversion to multifamily on one of the buildings, but it is unclear whether or not the borrower will be able to refinance the combined properties. As it relates to the loan portfolio as of March 31, 2024, the loan portfolio is comprised of 85 investments with an aggregate carrying value of $2.8 billion and a net carrying value of $877 million or 79% of the total investment portfolio. Our weighted average risk ranking remained flat quarter-over-quarter at 3.2. The average loan size is $33 million. First mortgage loans constitute 97% of our loan portfolio, all of which are floating rate and have interest rate caps. The multifamily portion of our portfolio remains the largest segment with 51 loans representing 54% of the loan portfolio or $1.5 billion of aggregate carrying value. Office comprises 30% of the loan portfolio consisting of $847 million of aggregate carrying value across 25 loans. With that, I will turn the call over to Frank Saracino, our Chief Financial Officer, to elaborate on the first quarter results.

Thank you, Andy, and good morning, everyone. Before discussing our first-quarter results, I want to mention that our first quarter 2024 supplemental financial report is available on the Investor Relations section of our website. As Mike mentioned, for the first quarter, we generated adjusted DE of $29.7 million or $0.23 per share. First quarter DE was $22.5 million or $0.17 per share. Additionally, we reported total company GAAP net loss of $57.1 million or $0.45 per share, which reflects a sequential increase in our CECL reserves. Quarter-over-quarter, total company GAAP net book value decreased to $9.10 from $9.83 per share. Undepreciated book value also decreased to $10.67 from $11.35 per share. The change is mainly driven by an increase in our CECL reserves and partially offset by adjusted DE in excess of dividends declared. I would like to quickly bridge the first quarter adjusted distributable earnings of $0.23 versus the $0.28 recorded in the fourth quarter. The change is driven by loan repayments, non-accrual loans and performance at our operating real estate portfolio. Our general CECL provision stands at $143.7 million or 488 basis points on total loan commitments, an increase from the prior quarter. The increase in the general season was primarily driven by economic conditions as well as specific inputs on certain loans.

Mike, I may have been typing faster and should have been listening. But I wanted to touch base back on the cash flow comment around the real estate. I think you said $0.15 is kind of the number that those three assets contribute. It looks like adjusted distributable earnings. If I look, say, trailing 12 months, clearly has overearned by more than $0.15 on the dividend. So can you talk a little bit to make sure I'm clear as far as the coverage comments that it's just a little bit less coverage on the dividend? Or maybe if you could speak to that?

Some of the decline in coverage we experienced came from various sources, contributing to the overall impact of $0.05. While these are small amounts, they add up to that figure. Looking ahead, we understand there are many questions regarding our financials, particularly around cash flow and our commitment to maintaining the dividend. We want to clarify past cash flow coverage, which has decreased in line with dividend coverage. There are certain situations that might not impact our distributable earnings directly, such as instances where cash is trapped at an entity level, but these scenarios can influence cash flow. We are addressing other issues that will help to counterbalance this, although it will depend on the timing of equity investments, maturity dates, and their effects on cash flow alongside how quickly we can reclaim capital from our watchlist.

Mike, I appreciate the clear approach to prioritizing defensive strategies and effectively managing liquidity instead of cautiously engaging in new loans. It seems to me that the team's focus is better spent fully concentrating on immediate tasks rather than gradually transitioning into new lending. I want to recognize that clarity of management's focus is very beneficial for us.

Thank you for the kind words. I want to emphasize that we are extending our defensive strategy longer than we would prefer. I acknowledge that this situation has significantly impacted some of our peers by creating uncertainty in the market. We are aware of this and are working to ensure our model accounts for the weaknesses in those markets. The ongoing rate environment has considerably influenced our perspective on our model and the underlying trends.

On some of these watch list loans, are you guys seeing a specific group of sponsors or borrowers play out the same way?

All watch list is really divergent in terms of sponsors, but I think what you're getting at politely is there are deals, especially in the multifamily sector, where there have been syndicators, and I think those are the weaker deals. We're finding on the multifamily loans where you have local owners with friends and family money that they could go back and tap, those are proving more resilient. We're working more closely with those GPs. To answer your question, it's indicators in the multifamily sector that is probably the weakest tissue. I would say to you, arithmetically, you're correct. But we're here for a reason; the stock is where it is because of the uncertainty around that. And I think our first job is to resolve that. Right now, we believe resolving those watch list assets will pay us a bigger reward than buying back stock. I want to be clear; the three assets that contribute approximately $0.15 per share, while they may not affect actual DE, could affect cash flow. Therefore, we just want to ensure everyone understands that we're actively working on ensuring the best outcomes for those. Well, thank you for joining us today, and we look forward to seeing you in August. We just want to give a shout out to Sarah Barcomb, who was leading BTIG. She joined the sector just a short time ago, but in that short time, she made a big impact. We have a lot of respect for Sarah. Thank you for joining us today, and we will see you in August.

Thank you. This does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.