BrightSpire Capital Unloads Legacy Investments to Fortress for $223M

reprints


BrightSpire Capital is executing its second transaction in six weeks with Fortress Investment Group as part of its ongoing effort to unload legacy real estate assets, the companies announced Monday.

The real estate investment trust, known as Colony Credit Real Estate prior to a June 24 rebrand, is expected to net $223 million of gross proceeds from the sale of its portfolio containing development and non-accrual investments. The move follows an other equity and debt (OED) sale in early June by former BrightSpire affiliate, Colony Capital (now known as DigitalBridge Group), to Fortress for an estimated $535 million of gross proceeds to be used for digital investments.

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“We look forward to continuing to work with the Fortress team to effectuate this transaction which is another step toward simplifying our business by rebalancing our portfolio and reducing exposure to certain investment profiles that are no longer core to our strategy,” BrightSpire COO Andy Witt said in a statement. “We remain focused on delivering current and predictable earnings primarily through exposure to senior mortgages.”

The portfolio sale resolves five of six co-investment assets that BrightSpire owns alongside DigitalBridge, a Boca Raton, Fla.-based real estate investment firm. BrightSpire said the co-investment portfolio sale, which is slated to close in the fourth quarter, would result in Fortress obtaining 100 percent ownership of these legacy investments.

Proceeds from the sale will be used to pay off $200 million of COVID-related financing secured from Goldman Sachs in June 2020 for balance sheet protection.

“This is another clear win-win transaction, following on our June agreement to become general partner and manager to Colony Capital’s [cumulative discounted cash flow] series of funds,” Fortress Managing Director Noah Shore said in a statement. “We are very pleased to acquire these assets, which fit perfectly with our expertise in managing complexity across a wide range of asset classes and geographies.”

In addition to its name change, BrightSpire also announced last month that it was changing its corporate headquarters from Los Angeles to 590 Madison Avenue in Manhattan.

Andrew Coen can be reached at acoen@commercialobserver.com.