Analyst Bullish on BrightSpire Capital, Citing Strong Liquidity to Fuel 2026 Growth
In a new initiation report, investment firm B.Riley has placed a bullish bet on BrightSpire Capital, Inc. (NYSE: BRSP), a commercial real estate credit REIT. The firm started coverage with a Buy rating and a $7.50 price target, arguing the company's solid balance sheet positions it for a stronger 2026.
Analyst Timothy D'Agostino points to BrightSpire's "considerable liquidity firepower" as a central thesis. The company holds approximately $280 million in cash and has access to over $1.1 billion in master repurchase agreement capacity. "This liquidity cushion is not just for stability; it's fuel for growth," D'Agostino wrote in the note. "We expect it to directly support an acceleration in loan origination volume as market opportunities arise in the coming years."
Further bolstering the case is an improvement in credit metrics. BrightSpire's internal watch list—loans requiring closer monitoring—has shrunk from seven loans valued at $411 million at the end of 2024, to five loans worth $182 million as of September 30. This trend suggests active and effective portfolio management, a critical factor for credit-focused REITs.
Currently, BrightSpire's shares trade around 80% of their GAAP book value, a discount D'Agostino believes will narrow. The analyst projects that the combination of strategic lending growth and sustained credit discipline should help close this valuation gap.
Market Voices:
"This is a classic case of the market overlooking solid fundamentals for a niche player," says Michael R. Chen, a portfolio manager at Horizon Trust. "The liquidity detail is key—it gives them dry powder to act when others might be constrained, especially in the commercial real estate debt space."
"A Buy rating based on 2026 projections? That's a long runway for a sector still facing rate headwinds," counters Sarah J. Feldstein, an independent market analyst known for her skeptical takes. "This feels like early hype. Show me the originations now, not the promise of them two years out. The 'discount to book' narrative has been a value trap for many REITs lately."
"The reduction in the watch list is the most tangible positive here," notes David Park, a veteran real estate investor. "It indicates underlying asset health is improving, which de-risks the story. Paired with their cash, it makes them a contender for selective acquisitions."
BrightSpire Capital focuses on originating and managing a portfolio of commercial real estate debt investments and net-leased properties. The company's strategy is often seen as a play on the health of the broader CRE lending market.