BrightSpire Capital (BRSP) 2026年第三季度业绩电话会议：流动性优先lg...

核心要点

• BrightSpire Capital公布的2026年第三季度归属于普通股股东的GAAP净利润为4690万美元，即每股0.37美元。调整后可分派收益为1780万美元，即每股0.14美元。
• 贷款投资组合达到约31亿美元，同比增加超7亿美元，增幅达30%。第三季度新发放贷款总额为2.72亿美元，还款额为7900万美元。
• 投资组合结构继续向多家庭住宅倾斜，该板块占贷款总额的72%。目前，约三分之二的贷款账面资产是通过无追索权、非公允价值变动计量的CLO负债进行融资的。
• 截至业绩说明会召开时，流动性约为1.81亿美元，其中包括1.06亿美元现金和信贷设施下的7500万美元可用额度。管理层表示，保持流动性和资产负债表稳健是近期首要任务。
• BrightSpire以4.81美元的平均价格回购了210万股股票，总耗资约1000万美元，使每股未扣除折旧的账面价值增加了0.06美元。
• 管理层预计，在利率波动、交易活动疲软和项目质量下滑的背景下，贷款增长将放缓。这可能会推迟资本的充分投放以及股息覆盖率转正的进程。

关键财务数据

业务与经营业绩

截至本季度末，BrightSpire共有111笔贷款，平均余额为2800万美元，加权平均风险评级为3.1。多家庭住宅占投资组合的72%，体现了公司降低平均贷款规模、提高多元化程度并限制大额集中度的策略。

该公司完成了其第五期CLO，也是2026年的第二期发行。该交易包括1.00亿美元的建仓期和30个月的再投资期。管理层表示，目前约三分之二的贷款投资组合由无追索权、非公允价值变动计量的CLO债务提供资金。BrightSpire没有优先股或定期贷款。

Albertsons三净租赁投资项目的出售价格比未扣除折旧的账面价值低2%。该交易产生了约6030万美元的GAAP收益，并使未扣除折旧的账面价值减少了约870万美元。

BrightSpire还出售了位于亚利桑那州梅萨市和德克萨斯州沃斯堡市的多家庭住宅REO资产。这两笔出售导致了约260万美元的GAAP减值计提，并使未扣除折旧的账面价值减少了约720万美元。该公司已开始推介其位于加利福尼亚州圣克拉拉的土地资产，并预计在近期将另外两处多家庭住宅REO资产推向市场。

管理层展望

管理层预计贷款投资组合在2026年第四季度将保持总体稳定或温和增长。公司计划在未来几个月内投放1.00亿美元的CLO建仓资金，但打算积累现金流动性，直到资本市场状况更加明朗。

根据美债市场状况、信用利差和可投资项目的质量，BrightSpire可能会在2027年第一季度更全面地重新参与贷款发放。管理层继续将贷款投资组合目标定在35亿美元以上，甚至可能接近37.5亿美元，这可能需要在2027年进行另一次CLO发行。

较慢的资金投放节奏可能会推迟股息覆盖率转正的时间。管理层将目前相对于股息的单季度收益缺口归纳为每股约0.02至0.03美元，并表示股息覆盖率改善的时间将取决于资本投放和REO资产出售情况。

风险与关注事项

管理层将长期利率持续高企列为主要风险。本季度10年期美国国债收益率达到5.37%，比6月30日的水平高出近100个基点。管理层警告称，如果收益率升至5.5%，可能会将资本化率推高约25个基点，并对商业地产价值和再融资活动构成压力。

信用状况也有所转弱。商业地产CLO AAA级和银行仓库回购融资利差扩大了约10至15个基点。管理层指出，围绕AI相关债务发行及AI投资回报的不确定性导致资本市场避险情绪上升，并影响了商业地产交易活动。

由于临近到期以及处置方案存在不确定性，以宾夕法尼亚州布鲁贝尔财产为抵押的两笔相关写字楼贷款的风险评级被下调至4级。公司预计在未来几个季度将获得更多明确信息。

分析师问答环节要点

• 即将到期的债务： BrightSpire在接下来的一个季度中约有2.75亿美元的最终到期债务。相关资产中约有65%已挂牌出售；若计入预计很快推向市场的达拉斯写字楼贷款，这一比例将升至约80%。其余部分已办理展期。
• 新发放贷款结构与定价： 储备项目中约60%为多家庭住宅。据称，目前多家庭住宅和工业地产资产的贷款利差在200个基点中段区间，而零售和酒店地产的利差则在300个基点区间。
• 核保保护： 目前多家庭住宅账面资产的债务收益率超过6%。最新发行的CLO中多家庭住宅占比达95%，其初始债务收益率为7%。
• 杠杆率与资本回收利用： 管理层预计，随着低杠杆或无杠杆的REO资产被出售且收回资金被再投资于新贷款，杠杆率将机械性上升。
• 股票回购： 管理层表示，股价相较于账面价值的折价依然具备吸引力，但强调在公司对国债利率和信用市场有更清晰的前瞻认识之前，流动性仍是首要考量。

业绩说明会完整文字记录

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完整财报电话会议逐字稿

管理层陈述

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.

分析师问答

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.

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