Franklin BSP Realty Trust, Inc. Announces the Acquisition of NewPoint Holdings JV LLC
Franklin BSP Realty Trust, Inc. (NYSE: FBRT) (referred to as “FBRT” or “the Company”), a prominent real estate investment trust (REIT), has announced its entry into a definitive agreement to acquire NewPoint Holdings JV LLC (“NewPoint”), a private commercial real estate finance company headquartered in Plano, Texas. This transaction is expected to be finalized in the third quarter of 2025, subject to customary closing conditions, including regulatory approvals.
A Transformative Acquisition for FBRT
Richard Byrne, CEO of FBRT and Chairman of the FBRT Board of Directors, expressed enthusiasm about the acquisition, highlighting its transformative nature. He stated, “We are pleased to announce our acquisition of NewPoint, which is a transformative transaction for FBRT. This strategic expansion of our multifamily lending offerings significantly increases our total addressable market in our highest conviction sector. We anticipate this transaction will enable FBRT to deliver long-term stockholder value and create a clear path for FBRT to be able to trade at a premium to book value.”
Michael Comparato, President of FBRT, echoed Byrne’s sentiments, emphasizing the importance of adding agency capabilities to the company’s platform. “For years, we have been looking to add agency capabilities to the FBRT platform, which already boasts one of the Franklin BSP Realty Trust, Inc. Announces the Acquisition of NewPoint Holdings JV LLC most extensive product offerings in the market. We believe this transaction is the final piece to complete our ‘one-stop-shop’ puzzle and is even more compelling given the strong cultural alignment between the two teams. We’re excited to build on the momentum of this acquisition alongside the NewPoint team, who worked tirelessly in close partnership with us to finalize this deal.”
Strategic Benefits and Long-Term Impacts
This acquisition significantly expands FBRT’s capabilities across multiple business lines, further enhancing its position in the real estate investment market. By integrating NewPoint’s expertise and portfolio, FBRT aims to establish a diversified mortgage finance platform with strong synergies. The company expects the combined entity to benefit from the following key advantages:
Increased Earnings Power
The acquisition is expected to drive financial growth by enhancing FBRT’s earnings potential. According to projections, the combined operations will contribute to earnings growth, with expectations that the acquisition will be accretive to GAAP earnings per share (EPS) in the first half of 2026. Additionally, fully converted distributable EPS is projected to experience growth in the latter half of 2026. The company further anticipates that the deal will lead to an increase in fully converted book value per share in the first half of 2026.
Diversified Business Lines
A major advantage of this transaction is the expansion of FBRT’s multifamily operations. NewPoint’s expertise in agency lending and mortgage servicing complements FBRT’s existing commercial real estate lending products, which include bridge lending, subordinate lending, construction Franklin BSP Realty Trust lending, and commercial mortgage-backed securities (CMBS). This diversification strengthens FBRT’s position in the mortgage finance sector and allows the company to cater to a broader range of clients and investment opportunities.
Expansion into Agency Originations
NewPoint is one of only 19 multifamily originators and servicers approved by three major government-sponsored entities: the Federal National Mortgage Franklin BSP Realty Trust Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac), and the U.S. Department of Housing Franklin BSP Realty Trust, Inc. Announces the Acquisition of NewPoint Holdings JV LLC and Urban Development (HUD). With this acquisition, FBRT will gain the ability to originate agency mortgage loans, enabling the company to establish a seamless exit strategy for its multifamily bridge loan portfolio, which comprises 71% of its total book. By incorporating agency originations into its portfolio, FBRT will significantly broaden its market reach and increase its overall lending capacity.
Strengthening Mortgage Servicing Rights Portfolio
Another key benefit of the transaction is NewPoint’s existing mortgage servicing rights (MSRs) portfolio, valued at approximately $54.7 billion. These MSRs provide a stable and predictable income stream, offering long-term financial benefits for FBRT. The agency MSRs Franklin BSP Realty Trust will be maintained as an asset on FBRT’s consolidated balance sheet, presenting a substantial opportunity for book value growth. This move aligns with FBRT’s broader financial strategy of enhancing its asset base while maintaining a stable and durable income flow.
Enhanced Market Presence and Geographic Expansion
NewPoint’s agency origination and servicing portfolio, when combined with the capabilities of FBRT’s external manager, Benefit Street Partners L.L.C. (BSP), will substantially strengthen FBRT’s market presence. The acquisition extends FBRT’s geographic footprint, providing Franklin BSP Realty Trust better local access to key real estate markets and improving market intelligence. With enhanced capabilities, FBRT is poised to leverage new business opportunities and capitalize on emerging trends in the real estate finance sector.
Financial Strategy and Funding Approach
To finance the acquisition, FBRT intends to use a combination of existing cash reserves and the issuance of debt and equity. By maintaining a balanced approach to funding, the company aims to optimize its financial position while ensuring a smooth integration of NewPoint’s operations.
Additionally, FBRT will operate the acquired business through a taxable REIT subsidiary, which allows for better alignment with its overall corporate structure. The decision to structure the acquisition in this manner ensures compliance with REIT regulations while maximizing operational efficiencies and financial benefits.
Industry Perspectives on the Acquisition
The acquisition of NewPoint by FBRT comes at a time when the real estate finance industry is undergoing significant transformations. The integration of agency lending capabilities is seen as a strategic move that enhances FBRT’s ability to compete Franklin BSP Realty Trust in an increasingly complex market. Industry experts highlight the importance of diversification in the mortgage finance sector, and FBRT’s acquisition aligns well with broader industry trends.
Market analysts also view this transaction favorably, given the strong synergies between the two companies. The move to incorporate agency Franklin BSP Realty Trust originations and mortgage servicing rights into FBRT’s portfolio is expected to provide Franklin BSP Realty Trust long-term value for investors. Additionally, the alignment of corporate cultures between FBRT and NewPoint is seen as a positive factor that will contribute to the successful integration of the two businesses.
Advisory and Legal Representation
To ensure a smooth execution of the transaction, both FBRT and NewPoint engaged top-tier financial advisors and legal counsel. Barclays served as the financial advisor to FBRT, with legal Franklin BSP Realty Trust representation provided by Hogan Lovells US LLP and Reed Smith LLP. On the other side, NewPoint was advised by BofA Securities, with legal counsel from Paul, Weiss, Rifkind, Wharton & Garrison LLP.
These strategic partnerships have played a crucial role in structuring the deal and navigating regulatory requirements, reinforcing the credibility and feasibility of the acquisition.
