브라이트스파이어 캐피털(BRSP) 2026년 3분기 실적 발표 콜: 유동성 최우선

핵심 요약

• 브라이트스파이어 캐피털(BrightSpire Capital)은 2026년 3분기 보통주 주주 귀속 GAAP 순이익이 4,690만 달러(주당 0.37달러)를 기록했다고 밝혔다. 조정 배당 가능 이익은 1,780만 달러(주당 0.14달러)였다.
• 대출 포트폴리오 규모는 전년 동기 대비 7억 달러(30%) 이상 증가한 약 31억 달러에 달했다. 3분기 신규 대출 집행액은 총 2억 7,200만 달러였으며, 상환액은 7,900만 달러였다.
• 포트폴리오 구성은 대출의 72%를 차지하는 주거용 멀티패밀리(multifamily) 부문으로 계속 전환되었다. 현재 전체 대출 장부의 약 3분의 2는 소구권이 없고 시가평가(mark-to-market)를 받지 않는 CLO 부채를 통해 자금이 조달된다.
• 실적 발표 시점 기준 유동성은 현금 1억 600만 달러와 신용 한도 약정액 7,500만 달러를 포함해 약 1억 8,100만 달러를 기록했다. 경영진은 유동성 확보와 재무제표 건전성 유지가 단기적 최우선 과제라고 밝혔다.
• 브라이트스파이어는 평균 단가 4.81달러에 약 1,000만 달러 규모인 210만 주를 매입해 주당 감가상각 전 장부가치를 0.06달러 증가시켰다.
• 경영진은 금리 변동성, 거래 활동 위축, 투자 기회의 질적 하락 속에서 대출 자산 증가세가 둔화될 것으로 예상하고 있다. 이에 따라 본격적인 자본 집행과 배당 커버리지의 긍정적 전환이 지연될 수 있다.

주요 재무 데이터

사업 및 운영 실적

브라이트스파이어는 이번 분기를 111건의 대출(평균 잔액 2,800만 달러, 가중평균 위험 등급 3.1)로 마감했다. 포트폴리오의 72%를 차지한 멀티패밀리는 평균 대출 규모 축소, 다각화 확대, 대형 쏠림 현상 방지라는 회사의 전략을 반영한다.

회사는 5번째 CLO이자 2026년 들어 2번째 발행을 완료했다. 이 거래에는 1억 달러 규모의 램프업(ramp) 조건과 30개월의 재투자 기간이 포함되었다. 경영진은 현재 대출 포트폴리오의 약 3분의 2가 소구권이 없고 시가평가를 받지 않는 CLO 부채로 자금이 조달되고 있다고 밝혔다. 브라이트스파이어는 우선주나 텀론을 보유하고 있지 않다.

알버트슨 트립플넷(triple-net) 투자 자산은 감가상각 전 장부가치보다 2% 낮은 가격에 매각되었다. 이 거래로 약 6,030만 달러의 GAAP 매각 이익이 발생했으며, 감가상각 전 장부가치는 약 870만 달러 감소했다.

또한 브라이트스파이어는 애리조나주 메사와 텍사스주 포트워스에 위치한 멀티패밀리 REO 부동산을 매각했다. 두 건의 매각으로 약 260만 달러의 GAAP 손상차손이 발생했으며, 감가상각 전 장부가치가 약 720만 달러 감소했다. 회사는 캘리포니아주 산타클라라 부지 매각 마케팅을 시작했으며, 비교적 빠른 시일 내에 추가로 2개의 멀티패밀리 REO 자산을 시장에 매물로 내놓을 것으로 예상하고 있다.

경영진 전망

경영진은 2026년 4분기에도 대출 포트폴리오가 대체로 안정적 수준을 유지하거나 완만하게 성장할 것으로 예상한다. 회사는 향후 수개월에 걸쳐 1억 달러 규모의 CLO 램프업 금액을 집행할 계획이지만, 자본시장 상황이 명확해질 때까지 현금 유동성을 축적할 방침이다.

브라이트스파이어는 국채 시장 상황, 신용 스프레드, 이용 가능한 투자 자산의 질적 수준에 따라 2027년 1분기 중에 신규 대출 집행을 보다 본격적으로 재개할 수 있다. 경영진은 대출 포트폴리오 목표를 35억 달러 이상, 최대 37억 5,000만 달러 수준으로 계속 유지하고 있으며, 이를 위해서는 2027년에 추가 CLO 발행이 필요할 것으로 보인다.

자금 집행 속도가 둔화됨에 따라 배당 커버리지의 긍정적 전환이 지연될 수 있다. 경영진은 현재 분기별 이익이 배당금 대비 주당 약 0.02~0.03달러 부족한 상태라고 설명했으며, 커버리지 개선 시점은 자본 집행 및 REO 매각에 달려 있다고 덧붙였다.

리스크 및 주시 사항

경영진은 지속적인 장기 금리 고공행진을 주요 리스크로 꼽았다. 이번 분기 미국 10년 만기 국채 금리는 6월 30일 수준보다 100베이시스 포인트 가까이 상승한 5.37%를 기록했다. 경영진은 금리가 5.5% 수준으로 향할 경우 환원율(자본화율)이 약 25베이시스 포인트 상승하여 상업용 부동산 가치와 리파이낸싱 활동에 압박을 가할 수 있다고 경고했다.

신용 여건도 악화되었다. CRE CLO AAA 등급 및 은행 창고형 환매조건부채권(repo) 스프레드가 약 10~15베이시스 포인트 확대되었다. 경영진은 AI 관련 채권 발행 및 AI 투자 수익률을 둘러싼 불확실성이 자본시장의 위험 회피 심리를 자극하고 상업용 부동산 거래 활동에도 영향을 미쳤다고 밝혔다.

펜실베이니아주 블루벨에 위치한 부동산을 담보로 하는 2건의 연관 오피스 대출은 만기 도래 및 해결 방안에 대한 불확실성으로 인해 위험 등급이 4등급으로 하향 조정되었다. 회사는 향후 수 분기 내에 구체적인 윤곽이 드러날 것으로 예상하고 있다.

애널리스트 Q&A 주요 내용

• 다가오는 만기: 브라이트스파이어는 다음 분기에 약 2억 7,500만 달러 규모의 최종 만기가 도래한다. 관련 자산의 약 65%가 매각 매물로 등록되었으며, 조만간 매각에 들어갈 댈러스 오피스 대출을 포함하면 그 비율은 약 80%로 올라간다. 나머지 물량은 만기가 연장되었다.
• 신규 대출 구성 및 금리 조건: 파이프라인 기회 중 약 60%가 멀티패밀리 부문이다. 현재 대출 스프레드는 멀티패밀리 및 산업용 자산의 경우 200베이시스 포인트 중반대, 리테일 및 호스피탈리티 자산의 경우 300베이시스 포인트 대 수준인 것으로 설명되었다.
• 인수 보호(언더라이팅): 현재 멀티패밀리 장부의 대출 수익률(debt yield)은 6%를 웃돌고 있다. 멀티패밀리 비중이 95%에 달했던 최신 CLO의 초기 대출 수익률은 7%였다.
• 레버리지 및 자본 재활용: 경영진은 차입 비율이 낮거나 없는 REO 자산이 매각되고 해당 매각 대금이 신규 대출로 재투자됨에 따라 레버리지가 구조적으로 상승할 것으로 예상하고 있다.
• 자사주 매입: 경영진은 장부가치 대비 주가 할인율이 여전히 매력적이라고 밝혔으나, 국채 금리와 신용 시장에 대한 가시성이 높아질 때까지는 유동성 확보가 최우선이라고 강조했다.

실적 발표 설명회 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Good day, and welcome to the BrightSpire Capital, Inc. Third Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to David Palame, General Counsel. Please go ahead.

David Palamé

Good morning, and welcome to BrightSpire Capital's Third Quarter 2026 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 the 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, October 28, 2026, 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 yesterday afternoon 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.

Before I turn the call over to Mike, I will provide a brief recap on our results. The company reported third quarter GAAP net income attributable to common stockholders of $46.9 million or $0.37 per share, distributable earnings of $10.3 million or $0.08 per share and adjusted distributable earnings of $17.8 million or $0.14 per share. The company also reported GAAP net book value of $7.08 per share and undepreciated book value of $7.87 per share as of September 30, 2026. 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.

Michael Mazzei

Thanks, David. And welcome to our third quarter 2026 earnings call. We are pleased with our performance this quarter, especially given the tremendous volatility in the capital markets. Despite that backdrop, we continue to execute across multiple areas of the business.

Before turning to our third quarter activity, I would like to spend time on the capital markets. During the quarter and through today, we experienced significant volatility in the rates market. The 10-year treasury peaked at 5.37%, which at the time marked a 25-year high and represented nearly a 100 basis point move since June 30. The volatility then reversed direction with yields falling sharply back below 5% following a 1-day 20 basis point rally last Friday.

At the same time, the bond vigilantes were joined in the revolt by the credit market investors as spreads widened across corporate bonds, term loans and structured products. Also, it is less typical for credit spreads to widen alongside rising interest rates. That dynamic reflects heightened concerns around the endless financing requirements of the hyperscalers. In addition, there are growing doubts regarding the return on investment for the trillions being spent on AI build-out. As a result, there is greater focus on the most vulnerable credits in the AI ecosystem, especially given the co-dependent nature of these counterparties.

This is most evident in the yield levels where certain AI-related debt is currently trading. These dynamics have caused capital market investors to take pause and lean toward a more wait-and-see risk-off posture. We have seen some of this bleed into the commercial real estate markets where investment sales transactions have been repriced or simply pulled from the market.

On the CRE debt side, CLO AAAs and bank warehouse repo spreads widened about 10 to 15 basis points, prompting lenders to briefly tap the brakes as well. With that as context, valuations across the public commercial mortgage REIT sector have come under considerable pressure over the past several months with BrightSpire, along with our public peers, trading at deep discounts to book value. We have repurchased stock over the past several quarters, including approximately 2.1 million shares during the third quarter. We, of course, recognize that our stock presents an even more compelling opportunity at these current price levels.

However, where public mortgage REITs are trading today reinforces the importance of maintaining market and lender confidence in the strength and durability of our balance sheet. Periods like this, we believe cash liquidity becomes the single most important asset of a mortgage REIT. That said, we anticipate our liquidity levels may continue to increase over the coming months.

A short-term pullback in demand for acquisition financing, coupled with permitting our near-term liquidity to build, could result in slower growth in the loan book than we have experienced in recent quarters. This may extend our time line for full deployment and in turn, a delay in reaching positive dividend coverage. However, we believe that maintaining balance sheet strength and liquidity is the right near-term priority given the current environment.

Now turning to the third quarter, let me highlight a few key developments. First, we had another solid quarter of originations totaling $272 million. We continue to positively reshape the portfolio with smaller average loan sizes, greater diversification and continued greater weighting toward multifamily loans. We also will continue to be deliberate in avoiding large loan concentrations. As such, in the coming quarters, we expect our loan office exposure and pre-2024 loans will continue to shrink both on a relative and absolute basis.

Second, we closed on the sale of our Albertsons triple-net investment. This sale was agreed to when the 10-year treasury was at 4.42%. Given the subsequent move in rates, it proved a substantially more favorable result for BrightSpire than when it was first announced. Importantly, it removed the risk of material ROE dilution at refinancing and was sold at only 2% below undepreciated book value.

Third, we completed our fifth CLO, which was our second issuance this year. As a result, approximately 2/3 of our loan book is now in the form of nonrecourse non-mark-to-market CLO liabilities. Completing 2 CLOs this year is an important validation of our origination and financing capabilities. This recent CLO includes a $100 million ramp and a 30-month reinvestment window. These features allow us to continue to actively originate new loans while also preserving near-term liquidity. Furthermore, as a reminder, BrightSpire has avoided employing additional leverage in our capital base. Specifically, we have no preferred stock and no term loan.

Taken together, our third quarter activity builds on the progress we've made year-to-date and demonstrates our continued ability to recycle capital, identify attractive lending opportunities and thus improve the loan portfolio and strengthen the balance sheet.

In closing, we made meaningful progress this quarter, continuing to execute despite a more challenging market environment. Looking ahead, our focus is on opportunistically deploying our CLO ramp and reinvestment capacity while maintaining momentum on watch list and REO assets. As we pursue these priorities, we will continue to take our cues from the market. While the treasury market appears to have calmed over the past week, it may be because of a flight to quality due to growing concerns in the AI credit markets. So in the near term, we will remain disciplined, continue to strengthen our liquidity position and first and foremost, protect the balance sheet.

As an internally managed company, our interests are aligned with those of our shareholders and lenders. Our leadership team continues to be fully invested alongside our shareholders.

With that, I would like to now turn the call over to our President, Andy Witt. Andy?

Andrew Witt

Thank you, Mike. Our third quarter results reflect continued progress across all areas of the business. As Mike highlighted, BrightSpire's originations activity have been healthy over the past several quarters, driving net loan portfolio growth of over $700 million or 30% year-over-year to $3.1 billion. Importantly, that growth continues to enhance the composition of the portfolio. The loan portfolio is now 72% multifamily and with the completion of our second CLO this year, approximately 2/3 is financed with nonrecourse, non-mark-to-market financing.

The past year was highlighted by significant loan portfolio growth. However, we expect our loan portfolio growth to moderate in the near term. While our pipeline continues to be robust, we anticipate the current interest rate volatility, the upcoming elections and seasonality will contribute to moderated transaction activity, a dynamic that is already beginning to emerge in real time.

Looking more closely at our lending activity, we originated 7 loans with an aggregate total commitment of $272 million. Repayments totaled $79 million across 4 positions. As of quarter end, the loan portfolio is comprised of 111 loans with an aggregate loan balance of approximately $3.1 billion, a net increase of nearly $200 million quarter-over-quarter. The average loan balance across the entire portfolio is $28 million, comfortably within our target range with a weighted average risk ranking of 3.1.

We continue to make progress resolving REO properties. During the quarter, we closed on the sale of one Mesa, Arizona, multifamily REO and the Fort Worth, Texas, multifamily property closed yesterday, further reducing our REO exposure. We have also initiated a marketing process for our Santa Clara, California, REO land asset. Despite the rise in rates, given the strength of the market and the asset, we believe the property will be well received by the market given the substantial demand for housing and favorable market dynamics we're observing in the Bay Area.

Additionally, we anticipate bringing 2 remaining multifamily REO properties to market in the relatively near term. Our goal is to continue reducing REO exposure, ultimately reducing this segment of the portfolio to the San Jose hotel property, which we also anticipate to market at some point in 2027. In the interim, as it relates to the hotel, we are making progress on our business plan, addressing deferred maintenance and improving operating performance in anticipation of taking the property to market.

As it relates to our watch list loans, we resolved the Denver, Colorado, office property during the quarter. Additionally, we are actively working with borrowers on several assets to evaluate potential exit opportunities while remaining focused on protecting value. Specifically, both the Austin, Texas and Las Vegas, Nevada, multifamily loans as well as the Dallas office loan have been repositioned and reached stabilized occupancy, positioning them for resolution in the near term.

During the quarter, we downgraded 2 related office loans to the watch list as risk rated 4s. The loans are secured by properties within the same complex and have one common borrower. We expect to have greater clarity on the ultimate resolution of these investments in the coming months. Additional details on REO and watch list loans can be found in the supplement.

Ultimately, our efforts on the REO and watch list segments of the portfolio are focused on reducing exposure that contributes to the difference between book and market value. Reducing REO and watch list exposure should reduce uncertainty and improve the profile of the portfolio. We believe these are important elements of long-term value creation.

Our business plan is straightforward: maintain prudent levels of liquidity, reduce REO and watch list exposure, removing uncertainty in the portfolio. Over the next few quarters, we will also continue to reduce office exposure. To that end, the property underlying our largest office loan recently went under contract. As we make further headway across these areas of the portfolio, the focus will naturally shift towards our diversified portfolio of middle market loans generating current cash flow, supported by our internally managed and vertically integrated platform.

In summary, we made substantive progress during the quarter and remain focused on building that momentum across the business. Looking ahead, our short-term priority will be on maintaining sufficient liquidity and balance sheet management given market volatility while deploying our CLO ramp proceeds into new investments and in parallel, addressing watch list and REO assets.

With that, I will turn the call over to Frank Saracino, our Chief Financial Officer. Frank?

Frank Saracino

Thank you, Andy, and good morning, everyone. For the third quarter, we generated adjusted DE of $17.8 million or $0.14 per share. Third quarter DE was $10.3 million or $0.08 per share, which includes specific reserves of approximately $7.5 million. Additionally, we reported total company GAAP net income of $46.9 million or $0.37 per share. GAAP net income reflects a $60.3 million gain on the sale of our Albertsons triple-net lease portfolio and approximately $6 million in operating real estate impairment related to a legacy retail triple-net investment and the sale of 2 REO multifamily properties.

As Mike highlighted, during the quarter, we closed on the sale of the Albertsons triple-net lease investment. Based on net sales proceeds, we recorded a GAAP gain of approximately $60.3 million and an approximate $8.7 million reduction to undepreciated book value. Regarding the retail triple-net lease investment, earlier this year, we received notice of default on mortgage notes payable cross-collateralized by 5 retail properties.

In August 2026, the receiver was appointed and took possession and full control of triple-net lease Kansas retail property, requiring deconsolidation of the related assets and liabilities from the company's consolidated balance sheet. This resulted in our recording a $3.4 million operating real estate impairment charge in the third quarter. Importantly, this GAAP impairment charge had an immaterial impact on our undepreciated book value as we had written down this investment over 2 years ago. Post the deconsolidation of the Kansas triple net, there are 2 remaining cross-collateralized retail triple-net investments.

Next, as Andy mentioned, we closed on the sale of one Mesa, Arizona multifamily property and one Fort Worth, Texas multifamily property. Based on the net sales proceeds of both, we recorded GAAP impairment charges of approximately $2.6 million and approximate $7.2 million reduction to undepreciated book value.

Turning to book value. Quarter-over-quarter, undepreciated book value decreased to $7.87 from $8.10. The change is mainly attributable to an increase in our CECL reserves and real estate impairments discussed earlier, offset by share repurchases. Total company GAAP net book value increased to $7.08 per share from $6.81 in the second quarter. On a net basis, this was driven by the gain on the sale of the Albertsons investment and share repurchases, offset by the increase in CECL reserves and real estate impairments.

Looking at CECL reserves. During the third quarter, we recorded and charged off specific CECL reserves of approximately $7.5 million resulting from the resolution of a risk rank 4 Denver, Colorado office loan. Our general CECL provision increased to $107 million or 332 basis points on total loan commitments compared to $100 million or 327 basis points reported in the second quarter. The increase was driven by macroeconomic conditions, originations activity and other model inputs.

As Mike highlighted, during the third quarter, we repurchased 2.1 million shares for approximately $10 million at an average share price of $4.81. This resulted in a $0.06 increase to the company's undepreciated book value per share. Following this activity, we have approximately $20.5 million remaining under our stock repurchase program. Our debt-to-assets ratio is 70%, and our debt-to-equity ratio is 2.7x. And finally, our liquidity as of today stands at approximately $181 million. This includes $106 million of cash on hand and $75 million under our credit facility.

This concludes our prepared remarks. And with that, let's open it up for questions. Operator?

Operator

[Operator Instructions] And the first question will be from Gabe Poggi from Raymond James.

질의응답

Gabriel Poggi

Mike and team, just at a high level, obviously, the world is a much different place today than it was 60, 90-odd days ago. Can you talk about how you're viewing pending loan maturities either this quarter or just in the first half of next year amidst varying rate constructs, conversations with borrowers? Any conversations or color you can provide would be helpful.

Michael Mazzei

Yes. We're going to direct that to Andy and maybe Matt Heslin. Andy, do you want to lead off with that?

Andrew Witt

Yes. So as it relates to 2021 and '22 maturities, as part of our proactive asset management process, we're always talking to borrowers well ahead of maturities and having an in-house asset management group gives us the ability to have direct dialogue with our borrowers. So as it relates to the upcoming quarter, we've got about $275 million worth of final maturities. 65% of that is listed for sale right now. We have one additional property from our watch list, which we expect to list in the short term, the Dallas office loan, which brings that number to about 80%... [Technical Difficulty]

Michael Mazzei

I don't know if Andy cut out. Andy, you're there?

Gabriel Poggi

Yes. I lost Andy.

Michael Mazzei

I think we lost Andy. Matt?

Andrew Witt

Hello?

Michael Mazzei

Andy, I'm sorry, we lost you for a second.

Andrew Witt

Pardon me. Where did I cut out?

Gabriel Poggi

We lost you at 80%.

Andrew Witt

Yes. Great. Thank you. So 80% with the inclusion of the Dallas office loan, which is on our watch list, which we anticipate will go to market here momentarily. And then the remainder has been extended. So that's really the cadence in which we expect to proceed as we move through the subsequent quarters. Again, we're having dialogue with borrowers no less than 120 days out, addressing these maturities in a very proactive fashion.

Gabriel Poggi

Got it. That's great to hear. And then one follow-up, if I can. Mike, you talked about being opportunistic, not in a rush to do anything necessarily as you kind of wait and watch and see how the world shakes out. But as you're having conversations on the new origination front, right, you guys have stayed active every quarter on the new origination front, the book has gotten to north of $3 billion. Are you looking outside of multifamily? Are there other interesting opportunities that you're seeing from a spread perspective? Just any incremental color you can give on new lending opportunities would be helpful.

Michael Mazzei

Well, we have Dan Katz, who runs our origination team in L.A., on the wire as well. Dan, do you want to take the lead on that question?

Daniel Katz

Yes, sure, I'm happy to. Thank you. So the bulk of the flow, just top of the funnel for us has been multi. It's been about 60%. So when you, kind of, look at the opportunity set, a lot of it has been in multi and will likely continue to be. But that being said, we're looking at industrial. We're looking at hospitality. We've been looking at retail. We did a handful of industrial deals this year. We did one hospitality deal earlier this year. So we are spending time in the other asset classes as well.

Spreads are in the mid-2s right now for us on multi. Industrial kind of seems to be in the same spot, and then retail and hospitality, a little wider kind of in the 300s. So we are spending time in all those asset classes. It's just that the bulk of what's coming in is still predominantly multi.

Operator

And the next question will come from Tom Catherwood from BTIG.

William Catherwood

Mike, I want to go back to your opening remarks on the capital markets environment. It seems that with rate volatility and AI fears and global turmoil, investors have just assumed the worst for commercial real estate, especially on the loan side. But 3Q results were steady. You're transacting, you're originating. With all the noise that is out there, in your mind, what are the real risks for BrightSpire? And how do you position the company for those right now?

Michael Mazzei

Okay. Tom. Well, the real risk is rates which went to 5.37% on the 10-year. And at the time, market pundits were talking about 6 handles in September. So the real risk is long rates stay above 5% and get closer to 5.5%, and that could have an effect on cap rates. And that is the, I think, the overall #1 concern in any market, capitalization. So cap rates could affect the real estate side significantly. So that's what we're watching for.

In Q2, we had dialogue about this, and I was concerned there. I mentioned on the call that if the 10-year punched above 5%, we would be concerned. And then I recall a conversation you and I had in August where we were both lamenting over, the market seemed very quiet, too weird, very quiet and what was lurking in the weeds there. And here, we had September breakout, which I think neither of us were expecting on that call. So overall, we think that cap rates are an issue if rates stick much higher. Refinancing issues are also an issue with Freddie and Fannie rates getting higher.

But during the quarter and what is causing us to want to sit on more cash than we would normally would have expected, as I said, 100 basis point move in rates in 1 quarter, albeit it's gotten better recently, but maybe it's gotten better for the wrong reasons. AAA CLO spreads, as I said in the prepared remarks, they went out 15 basis points, and they didn't go out like 5 basis points a deal. They kind of went out 15 basis points in 1 deal. And in fact, one CLO issuer dropped from the market, pulled their deal altogether, unhappy with the spread environment.

And then on the corporate side, we had things like Skydance when their issue broke in trading, the price dropped, like, by 5 points on those bonds. And you have, in the AI sector, something like CoreWeave trading at 15%. So when you see things like that, you get concerned. And then our origination team was telling us that during the month of September, there was a national broker who was indicating that their transaction sales pipeline was beginning to go sideways. And in fact, in one city, they had a lot of their transactions just kind of not pull from the market, but their owners were saying, we have to sit tight and let things calm down. So let's not solicit offers at this point. So when you see things like that, you start to say, you know what, you're supposed to pay attention.

And then lastly, as a mortgage REIT, the loan books are -- they're 4x levered. And CLOs are a little bit more than 4x levered. So when you're operating a model like this, cash liquidity is absolutely essential that you maintain that. And when the market indicates that there's noise out there, unfortunately, it may cause us to slow down the pipeline growth or I should say, the loan book growth, but you have to pay attention. And liquidity is absolutely essential, which is why I'm thinking that until we get more clear visibility, we're going to lighten up and hold that cash.

Now again, we have a CLO ramp that we have to invest. We have anticipated repayments that we need to reinvest for. So we will continue to stay active in the market in Q4. And yes, opportunistically, if something comes along and we want to shoot it, yes, we'll do that. But generally speaking, I think we're going to err towards the side of letting our cash liquidity build. And if that means that the pipeline or the loan book growth has to slow a little bit for the quarter. As Andy said, it's grown $700 million in the year. We did a good job there. We originated $900 million of product. If it has to slow for a quarter, it slows for a quarter.

William Catherwood

I appreciate that, Mike. And maybe as a follow-up, I just want to dig deeper on cap rates. And again, totally get the fear of higher rates, higher cap rates. We're hearing from the equity REIT side of the world, especially multifamily, maybe 25, maybe 50 given on markets and kind of Class B, Class C assets. But you're still transacting, you're still selling. So kind of 2 parts are, what have you seen kind of directly in the market cap rate-wise?

And then second off, what kind of debt yields are you generating on your legacy multifamily? Because that would, in theory, be kind of your cushion against higher cap rates.

Michael Mazzei

Okay. I'll take the first part of that, and I'll turn it over to Matt Heslin, our Chief Credit Officer for the second part of that.

First of all, we have REO to sell. And given the business model we have, we're not going to sit back and hold REO for another quarter or 2 and play an interest rate game. We didn't do that with Albertsons. We're not going to do that in the REO portfolio. We're going to go to market and sell it. If that means if the market is a little less stable, we get nicked here or there, we're going to still sell.

Generally speaking, earlier in the year, folks were buying multifamily with some negative leverage upfront with an anticipation that as you move into 2027 and beyond, the supply was going to wane substantially enough that the back-ended rent growth would more than substantiate and overcome any negative leverage upfront. As we move further into this year and early next year, it's not implausible that those buyers start to look at it and say, we have to factor in some of this, negative leverage is getting a little bit too much based on where rates are. So you could have an effect on our REO sales, absolutely.

And it's going to overall affect valuations only if the 10-year treasury -- the negative leverage is kind of a short-term thing. I do think that the rent growth that we're going to see in '27, '28 is going to be very powerful given how little building is going on, especially given that rates are now higher. Shovels in the ground are going to be less. Homeownership is going to drop. Secondary home sales are going to drop. So more residents into multifamily will be the case in '27 and '28. But we think that the 10-year treasury is staying where it is, fine, if the 10-year treasury gets to 5.5%, then I think cap rates are going to move by 25 basis points or so.

Matt, do you want to talk about the current loan book?

Matthew Heslin

Sure. Thanks, Mike. In terms of multi, our current book, debt yields above the 6%, you hit the nail on the head in terms of what we've been tracking not only over the last month, but really over the last 9 months in terms of rates and where we feel comfortable even on multifamily assets. So a good example would be to look at our most recent CLO, going in debt yield for that deal, which was 95% multi was 7%. Compare that to other recently issued all-multi CLO deals, which are generally in kind of the 5%, low 5% range. So it's definitely something that's been on our radar.

As we continue to look at more opportunities, as Dan mentioned, which are primarily multi, we'll still be focused on those going in debt yields even when there is a significant business plan in place that's expected to increase that.

Operator

And the next question will be from Timothy D'Agostino from B. Riley Securities.

Timothy D'Agostino

It seems like cash and liquidity are, kind of, of importance for you all, and you could -- it seems like it could take a step back on loan origination. So I guess just sitting here with the CLO completed towards the end of September. As we look out to '27, is the idea to get 1 CLO per year, issue CLO per year? And if so, with kind of how we're thinking about the market and maybe holding more cash and liquidity, what might push a CLO in '27 out to '28? And I know that might be a little far out, but any commentary there would be great.

Michael Mazzei

Yes, that's pretty far out. Really, we're targeting getting the loan book, which is now about $3.1 billion kind of north of $3.5 billion, close to, call it, like $3.750 billion to pick a number. So that entails probably one more CLO. So I think we'll have 3 managed CLOs outstanding. There's no reason why that doesn't get done in '27. We've already originated $900 million. We had net loan growth of $700 million in the portfolio.

So I would anticipate that, that would not be in 2028 that it would be in 2027. If we're not deploying capital to that extent, then something else has gone on in the market that is affecting all of us. So we don't anticipate that happening, and we would expect one more CLO and then have 3 CLOs outstanding all at one time and much less on repo. Right now, we're -- as we said on the call, we want to emphasize that we are 2/3 of the portfolio non-mark-to-market and nonrecourse and match funded. And that's the highest we've been in our history.

Timothy D'Agostino

Okay. Great. And then I guess just quickly on the loan portfolio size. In earnings calls prior, you had mentioned about $3.5 billion by year-end and then $4 billion by middle of 2027. I was just wondering, it kind of seems like that may slip out a little bit. And I was just wondering if you all were going to provide or maybe talk about how you're thinking about the loan portfolio at year-end '26 and then halfway or midway through '27.

Michael Mazzei

We don't expect the loan portfolio to shrink in the next quarter. And if we could get it to grow modestly, that would be good. The question becomes, is the periscope back up in the first quarter? It very plausibly could be by then. I think things would have to be really very difficult in the market for us to not start originating at some point in time in Q1, and we'll take it as it comes.

But again, I don't think this is going to be a very protracted thing. I think we're just saying right now, we're taking our cue from the market. The treasury market appears to have calmed down. We'll see what happens in the credit spread market in the next CLO that prints and where our warehouse lenders are. We are widening spreads on multifamily in tandem with what our banks are telling us and what the CLO market is telling us. But I do think that we will be back in the market. This is just us being cautious about where we stand today.

And as also, as Andy emphasized earlier, the quality of what we're seeing generally in the portfolio, right, in the pipeline hasn't been as good as it was in the first 3 quarters of the year. So we're seeing a little bit of a tail off in terms of the type of product that we want to do as well. So as we move into year-end, I think that the portfolio stays where it is, maybe grows very modestly, and then we'll reengage more fully in Q1.

Operator

The next question will be from Chris Muller from Citizens Capital Markets.

Christopher Muller

So you just touched on this a little bit, but you've talked about $500 million of net growth in the back half of the year. And I heard Mike's comments on rates extending time lines and also just being cautious right now. But I guess the flip side of that is repayments have also been pretty low. So net growth seems pretty likely, I guess, in the next couple of quarters. Is positive net deployment, but maybe just a little lighter a fair assumption given the environment out there?

Michael Mazzei

Matt?

Matthew Heslin

Yes. I think that's probably a fair assumption. As Mike mentioned, we have $100 million in our ramp that's immediate, right? We expect to put that to work over the next few months. So that would obviously be net growth. That's not as a result of payoffs. So that is our expectation for the coming months before we get additional clarity.

Christopher Muller

Got it. And then just looking at leverage, I mean, you guys definitely have some capacity to push that higher. It sounds like that's probably not likely in this environment. But I guess just naturally, as some of this REO gets sold and then recycled combined with the new CLO, should we expect that to just push leverage higher just mechanically?

Michael Mazzei

Oh, yes. Absolutely, yes. And we've got low leverage embedded in some of the REO that's either underlevered or unlevered entirely. So as we sell that out, that's going to be the capital that we'll be using to push the loan book north of $3.5 billion.

Operator

The next question is from Jason Weaver from JonesTrading.

Jason Weaver

First of all, taking into account your comments on some moderating growth in the loan book looking ahead versus wanting to maintain excess liquidity. Talk a bit about your appetite to pursue more share repurchase here given the discount that still persists.

Michael Mazzei

Good question. And like I said in the prepared remarks, we bought it at $4.80. It's obviously super compelling at this level. When you look at the gap between book value and where it's trading right now, it's an astonishing number for the entire sector. We are not burdened with -- we're looking at some of the other capital stacks across the peer group. We're not burdened with pref. We're not burdened with the term loan. So it's just cash and the repo book.

So we look at that stock right now, but we also look at the market, as I said, and the market is telling us something. Is it plausible that we purchase some stock again? It is plausible, absolutely, as I said. It's obviously a point more compelling than where it was when we repurchased during the quarter. But we really have to -- as a mortgage REIT and given the leverage that we run, you really have to look at the market and take your cue from it. And we have to really be confident that something else here isn't happening and that the treasury doesn't revert to where it was.

When you look at the factors in the duration market, you still have massive deficits. You still have hyperscalers coming at the market with enormous amounts of debt requirements. So the things that -- and oil is still very high. So the things that were driving the treasury market higher, the uncertainties there, those things still exist, which is why I referenced the reason why the market may have come down a lot was because of the first time we had a flight to capital, a flight to safety. We had the hyperscalers be reverse correlation to the treasury market, the equity market versus where treasury rates were. That's been the first time that's happened in a while.

So it could just be a flight to quality that is pushing rates down where they are. So when we get a better visibility into what the market is doing, then we'll decide whether we want to venture back in. But right now, to miss a trade on buying some stock here and giving up on liquidity, that's something we're not going to do.

Jason Weaver

Understood. And then maybe on the portfolio specifically, I think both the downgrades were Blue Bell, Pennsylvania. And I think those were originally underwritten at some pretty conservative LTVs. Can you talk about what changed within those specific markets that caused you to push them to Level 4?

Michael Mazzei

Andy?

Andrew Witt

Sure. So those properties essentially migrated on to the watch list as a function of upcoming maturities. And the properties are really connected physically in terms of location. It's about 420,000 square feet of office complex. And we downgraded the loans because we're coming up on an upcoming maturity and there's uncertainty around those positions, which we'll provide more insight on in the coming quarters.

Operator

And the next question is from Gaurav Mehta from Alliance Global Partners.

Gaurav Mehta

I wanted to ask you, in the light of slowing loan growth for maybe next 1 or 2 quarters, how should we expect the dividend coverage in the -- I know in the past, you had said maybe positive dividend coverage by, I guess, next year.

Michael Mazzei

Right. Thank you. So right now, the leakage has been about, call it, $0.02 to $0.03 a quarter, which is not significant. And really, it depends on 2 things. One, getting back and deploying capital quickly. So we don't expect to do a lot of that in the fourth quarter. Things could change, but we don't expect to do a lot of it, which is why we're telegraphing it here. And it really depends on if we're back in the market in Q1 or we still think that there's -- there are concerns about the overall market. My guess is that, that probably is more likely that we are.

But right now, we're just being -- we're being cautious. It also depends on where we -- how we're deploying -- how we're getting off the sales for the REO. We have a lot that's listed something listed this quarter. We have a number of things going out in the first quarter. If we're able to get those deals done, we'll have more capital to deploy. And so that could help us as well. So this is something that the Board will watch over the course of the next coming quarters to see if we're getting back in the market, and we're going to get north of that $3.5 billion number.

But right now, the leakage is modest. It's tolerable. It really is a question of does the market continue to give us angst where we're not deploying capital. And I think for us to do that, it's something that you're going to be watching as well and agreeing with that there's something going on here where we should hold on to cash a little bit longer.

Gaurav Mehta

All right. And maybe on the adjusted EAD sort of run rate, should we expect earnings to remain around the current level that you reported in 3Q?

Michael Mazzei

We're not going to give forward guidance. But I think as we said, I kind of said $0.02 to $0.03 a quarter is the leakage. That's probably something that is somewhat consistent. Other than that, we don't want to give forward guidance.

Operator

And ladies and gentlemen, this concludes our question-and-answer session. I would like to turn the conference back over to Mike Mazzei for any closing remarks.

Michael Mazzei

Thank you all for participating today. For those listening, if there are any one-on-ones that you'd like to request, please contact us. We'll be glad to do so. Otherwise, we will see you all in the new year. Thank you.

Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.