BRIGHTSPIRE CAPITAL, INC.
Fitch Ratings has affirmed
RATING ACTIONS
Entity / Debt
Rating
Prior
CMBS Special Servicer
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Affirmed
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VIEW ADDITIONAL RATING DETAILS
Key Rating Drivers
The affirmation of the rating reflects BrightSpire's continued proficiency in resolving defaulted commercial mortgage loans and robust surveillance over its portfolio of loans largely secured by transitional commercial real estate (CRE) assets. The rating also reflects a decline in asset manager turnover, higher average management tenure, full implementation of its new asset management application, and short-term financial position, which is adequate to support the servicing platform.
BrightSpire is the captive special servicer of
The special servicing group comprises 16 employees, 15 of whom are fully dedicated to performing loan asset management and special servicing functions. BrightSpire increased employee allocations to special servicing in 2023 to focus on asset and liquidity management across its portfolio and maintaining high cash balances until market conditions improve. Aggregate turnover, which was isolated to one middle manager and two staff employees, remained consistent from the prior review at 18%. Irrespective of turnover, the company continues to add junior staff having added one analyst in 2023 and three in 2022 who average three years of industry experience.
Fitch identified three members of the special servicing group as asset managers who are actively working out defaulted loans. Asset managers average 24 years of industry experience and 11 years with the company and currently maintain an assets to asset manager ratio of less than 2:1, which is amongst the lowest for Fitch-rated special servicers.
BrightSpire began fully utilizing RealINSIGHT through 2023 and has sunset its Anaplan based asset management reporting. The company also maintains data feeds from its primary servicers providing updated balance and loan information daily which is loaded into RealINSIGHT. Additionally, BrightSpire uses Yardi ERP for corporate and fund accounting, SharePoint and OneDrive, a third-party document management tool.
The company maintains an internal control environment along the three-lines-of-defense methodology. Controls consists of high-level policies and procedures, detailed desktop procedures, active management oversight and outsourced internal audits. BrightSpire monitors compliance with policies and procedures through operational controls integrated within workflows and a formal committee approval process for material decisions. The company completed its second internal audit resulting in two consecutive years with no findings, consistent with its most recent external
The special servicing group comprises a dedicated asset management team that is assigned performing and defaulted loans based on expertise and region. The team is responsible for all aspects of asset resolution, including foreclosure and REO management, as well as performing loan surveillance and asset management for transitional loans. The company relies on two primary servicers to provide surveillance data and holds regular servicer meetings to monitor loan performance. Asset managers have increased performing loan surveillance and maturity testing to focus on working with borrowers of performing loans to mitigate potential defaults.
As of
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PARTICIPATION STATUS
The rated entity (and/or its agents) or, in the case of structured finance, one or more of the transaction parties participated in the rating process except that the following issuer(s), if any, did not participate in the rating process, or provide additional information, beyond the issuer's available public disclosure.
APPLICABLE CRITERIA
Criteria for Rating Loan Servicers (pub.
Criteria for Rating North American Commercial Mortgage Servicers (pub.
ADDITIONAL DISCLOSURES
Solicitation Status
Endorsement Policy
ENDORSEMENT STATUS
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