BXMT Q1 2026 Earnings Call Transcript

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Date

Wednesday, April 29, 2026 at 9:00 a.m. ET

Call participants

• Chief Executive Officer — Timothy Johnson
• President — Austin Pena
• Chief Financial Officer — Marcin Urbaszek

Takeaways

• GAAP net loss — $0.04 per share, directly reported for the quarter.
• Distributable earnings — $0.21 per share; prior to realized gains and losses, $0.49 per share, supporting dividend coverage for the third straight quarter.
• Dividend — $0.47 per share paid for the quarter.
• Book value — $20.20 per share at quarter end, down 2.7% from the prior period, driven primarily by a $0.33 per share increase in CECL reserves and $0.13 per share depreciation and amortization from owned real estate.
• CECL reserve — $1.80 per share in total CECL reserves, including $1.30 per share attributable to the general reserve.
• Debt-to-equity ratio — 3.7x at quarter end, improved from 3.9x in the previous quarter.
• Liquidity — $1 billion at quarter end.
• Portfolio size — Investment portfolio ended the quarter just under $20 billion; loan portfolio was $16.4 billion across 130 loans, with 98% of loans performing.
• Loan originations — $275 million of new loan originations in the quarter at a weighted average LTV of 68%; gross loan originations exceeded $800 million after including syndicated interests not on the balance sheet.
• New investments — $540 million of new investments closed, spanning multiple geographies and strategies; $197 million allocated to net lease acquisitions at BXMT share, the most active quarter for this category to date.
• Net lease portfolio — $516 million at share, up from $66 million a year ago; average property price $2 million, average lease term over 15 years, with 2% annual rent escalators and 3x rent coverage.
• Owned real estate NOI — $14 million generated this quarter, including a $3 million tax refund; excluding refund, annualized asset yield is approximately 3.5%.
• Leverage on new investments — Quarterly investments generated levered returns of 900 basis points over base rates, aligned with activity from the prior year.
• Capital markets activity — $700 million of corporate debt refinanced, $1.3 billion of securitized debt issued, and a new non-mark-to-market credit facility added, totaling 16 counterparts in the structure; non-mark-to-market borrowings represent 86% of total debt.
• Loan upgrades, watch list, and impairments — 4 loans upgraded; 2 office loans added to the watch list; 2 loans impaired in the quarter, both previously on the watch list, with combined modest reserves added.
• Specific asset actions — Foreclosure on impaired San Francisco hotel loan, now owned real estate with an entry basis reflecting a 70% discount to predecessor’s cost; Dallas multifamily loan (1980s vintage, Sunbelt market) impaired; sale of 1 multifamily asset in Texas at carrying value; progress on Mountain View office redevelopment approvals; Q1 EBITDA at San Francisco Hyatt more than doubled year over year.
• Net lease growth plans — Management aims to grow net lease to at least 10% of the portfolio over time; currently about 3%, with $120 million in net lease deals in closing.
• Bank loan portfolio acquisition — GBP 50 million investment in granular U.K. loan portfolio with weighted average LTV below 50% and over 3,000 underlying properties, primarily residential and industrial.
• Data center lending — First data center loan closed on a stabilized asset in Northern Virginia leased to an investment-grade hyperscale tenant; mezzanine loan features 14% all-in yield and 4.5 years of call protection.

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Risks

• Impaired and watch list loans — “We also added 2 office loans to our watch list and impaired 2 loans this quarter, booking modest additional reserves. Both were previously on our watch list.” These issues align with borrower stress in select office and vintage multifamily sectors.
• Owned real estate yield — CFO Urbaszek noted, “Excluding this benefit, this represents an annualized asset yield on carrying value of approximately 3.5%, which we estimate is 250 to 300 basis points below yields we are achieving on new originations today.” This suggests lower contribution from legacy assets versus redeployed capital.
• CECL reserve increase — CECL reserves increased by $0.33 per share in the quarter; Marcin Urbaszek specified $55 million in new provision, with 80% relating to specific loans, including the impaired studio and Dallas multifamily assets.

Summary

Blackstone Mortgage Trust (BXMT 4.65%) achieved distributable earnings prior to realized gains and losses of $0.49 per share, fully covering its $0.47 dividend and marking the third consecutive quarter of dividend coverage. Management executed $540 million in new investments across diversified real estate credit sectors, expanded its net lease portfolio to $516 million, and generated levered returns of 900 basis points over base rates. The company’s capital markets transactions included refinancing $700 million of corporate debt, issuing $1.3 billion in securitized debt, and introducing a new non-mark-to-market credit facility, raising non-mark-to-market borrowings to 86% of total debt. Portfolio performance remained stable, with 98% of loans performing and selective action on impaired and watch list assets. Balance sheet metrics show a debt-to-equity ratio of 3.7x and $1 billion of liquidity at quarter end.

• The loan portfolio ended at $16.4 billion, with over 50% exposure to multifamily and industrial and 130 total loans.
• Net lease acquisitions represented the most active deployment in that strategy to date, and management targets further growth towards at least 10% of the portfolio.
• Ownership of a foreclosed San Francisco hotel reflects distressed asset resolutions; entry basis stands at a 70% discount to prior cost basis.
• First data center loan originated, syndicating the senior mortgage and retaining a mezzanine loan yielding 14% with 4.5 years of call protection.
• New U.K. bank loan investment introduces low leverage, high cash flow diversification with a term over 5 years.
• Book value decreased to $20.20 per share, mainly impacted by higher CECL reserves and depreciation/amortization on owned real estate assets.

Industry glossary

• CECL (Current Expected Credit Loss): An accounting standard requiring estimation of expected credit losses on financial assets over their lifetime, updated quarterly and reflected as reserves against loan balances.
• Net lease: A property lease structure in which the tenant pays not only rent but also a proportion of property taxes, insurance, and maintenance costs, providing stable, long-term cash flow for owners.
• REO (Real Estate Owned): Property held by the lender following foreclosure on a defaulted loan, typically awaiting sale or redevelopment.
• SRT structure (Significant Risk Transfer): A synthetic transaction used by banks to transfer credit risk of loan portfolios to third parties for capital relief, rather than direct loan sales.

Full Conference Call Transcript

For the first quarter, we reported a GAAP net loss of $0.04 per share, while distributable earnings were $0.21 per share and distributable earnings prior to realized gains and losses were $0.49 per share. A few weeks ago, we paid a dividend of $0.47 per share with respect to the first quarter. With that, I’ll now turn the call over to Tim.

Timothy Johnson: Thanks, Tim. BXMT’s first quarter results clearly demonstrate the breadth of our platform and our ability to execute on both sides of the balance sheet amidst an ongoing real estate recovery. Our key competitive advantages drove distributable earnings prior to realized gains and losses of $0.49 per share, marking our third consecutive quarter of dividend coverage. We leveraged our scale and proprietary sourcing channels to capture attractive investments across a range of sectors, markets and strategies, with a focus on several of our highest conviction themes such as diversified industrial portfolios and essential use net lease properties.

We also closed our first data center loan this quarter and invested in a diversified portfolio of low leverage loans originated by a leading U.K. bank, investments offering compelling relative value, which Austin will detail further in his remarks. Real estate fundamentals continue to recover, benefiting from steadily increasing values and the sharp decline in new supply across all major property types. The public equity markets recognize this, with REITs significantly outperforming the S&P 500 year-to-date. And despite recent global volatility driven by the conflict in the Middle East, real estate equity and debt markets have remained resilient. U.S.

CMBS issuance is up nearly 15% from this time last year and on pace for yet another post-GFC record and spreads hit 15 basis points tighter compared to the beginning of the year. In Europe, we’ve observed a slightly larger impact with a slowdown in CMBS new issue activity and spreads modestly wider. However, real estate lending markets in the region remain open and active. Just a few weeks ago, we were fully repaid on a GBP 177 million U.K. student housing loan that was refinanced by a bank syndicate and we are aware of several other large recently awarded deals in the market. Importantly, we’ve observed no change in the fundamental performance across our U.K. and Europe portfolio.

Today, BXMT is in an advantageous position. We have a well-invested portfolio generating strong in-place current income, allowing us to maximize return on new capital deployment. Leveraging our scaled platform of over 170 real estate debt professionals, we cast a wide net across the global real estate credit markets, both in terms of sourcing new opportunities and also driving strong capital markets execution, setting up diversified investments to generate highly compelling risk-adjusted returns. To that end, our investments this quarter generated levered returns of 900 basis points over base rates, in line with our investment activity over the past year.

We also accretively refinanced $700 million of corporate debt issued $1.3 billion of securitized debt and added a new non-mark-to-market credit facility to our 16 counterparty complex, all further demonstrating the strength and creativity of our dedicated capital markets team. Moving to the portfolio. We continue to be pleased with performance. We received over $600 million of repayments with more than half in U.S. office. We resolved on impaired hospitality loan via foreclosure and we executed on the sale of a multifamily property, the first from our owned real estate portfolio to be capitalized on the supportive capital markets backdrop.

While there is more work to do, including the eventual disposition of the remainder of our owned real estate portfolio, the trend in our business is now crystal clear. Resolutions and redeployment are driving earnings that cover our dividend and offer investors an attractive current yield of approximately 9.5%. These initiatives are supported by a compelling real estate credit backdrop with loans secured by hard assets property value is still early in their recovery and spreads still wide relative to other credit alternatives. With this setup, BXMT continues to be exceptionally well positioned with unique insights from our Blackstone real estate platform guiding our strategy and delivering strong results for our investors.

I’ll now turn it over to Austin to discuss our investments and portfolio in more detail.