BLACKSTONE MORTGAGE TRUST INC
For the period ended Jun 30, 2024. Filed Jul 24, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Jul 24, 2024
BXMT$11.16-2.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-04-24.
0001061630-24-000064
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-07-24.
0001061630-24-000116
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 234 previous paragraphs and 241 current paragraphs.
165 unchanged; 58 reworded; 17 added; 8 removed; 3 previous and 1 current paragraphs rearranged.
Tables are not compared: 29 previous and 29 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (17)
Current report
Agency Multifamily Lending Partnership
Current report
In the second quarter of 2024, we entered an agreement with M&T Realty Capital Corporation, or MTRCC, a subsidiary of M&T Bank, that will allow our borrowers to access multifamily agency financing through MTRCC’s Fannie Mae DUS and Freddie Mac Optigo lending platforms. We will receive a portion of origination, servicing, and other fees paid under the programs for loans that we refer to MTRCC for origination. Similarly, we will share in losses with MTRCC and Fannie Mae on loans that we refer to MTRCC for origination under the Fannie Mae program. There were no loans originated under the MTRCC agreement during the three months ended June 30, 2024.
Current report
Share Repurchase Program
Current report
In July 2024, our board of directors authorized the repurchase of up to $150.0 million of our class A common stock. Under the repurchase program, repurchases may be made from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and the actual amounts repurchased will depend on a variety of factors, including legal requirements, price and economic and market conditions. The repurchase program may be changed, suspended or discontinued at any time and does not have a specified expiration date.
Current report
Third Quarter Dividend
Current report
In July 2024, we declared a dividend of $0.47 per share of common stock for the third quarter of 2024, which is payable on October 15, 2024 to stockholders of record as of September 30, 2024.
Current report
(1)Total loan exposure reflects our aggregate exposure to each loan investment. As of June 30, 2024, total loan exposure, includes (i) loans with an outstanding principal balance of $23.0 billion that are included in our consolidated financial statements, (ii) $725.4 million of non-consolidated senior interests in loans we have sold, which are not included in our consolidated financial statements, and excludes (iii) $100.6 million of junior loan interests that we have sold, but that remain included in our consolidated financial statements. See Note 2 to our consolidated financial statements for further discussion of loan participations sold.
Current report
(4)Includes all impaired loans.
Current report
(1)Total loan exposure reflects our aggregate exposure to each loan investment. As of June 30, 2024, total loan exposure, includes (i) loans with an outstanding principal balance of $23.0 billion that are included in our consolidated financial statements, (ii) $725.4 million of non-consolidated senior interests in loans we have sold, which are not included in our consolidated financial statements, and excludes (iii) $100.6 million of junior loan interests that we have sold, but that remain included in our consolidated financial statements. See Note 2 to our consolidated financial statements for further discussion of loan participations sold.
Current report
(1)Total loan exposure reflects our aggregate exposure to each loan investment. As of June 30, 2024, total loan exposure, includes (i) loans with an outstanding principal balance of $23.0 billion that are included in our consolidated financial statements, (ii) $725.4 million of non-consolidated senior interests in loans we have sold, which are not included in our consolidated financial statements, and excludes (iii) $100.6 million of junior loan interests that we have sold, but that remain included in our consolidated financial statements. See Note 2 to our consolidated financial statements for further discussion of loan participations sold.
Current report
Net expense from real estate owned
Current report
During the three months ended June 30, 2024, we recognized net expense from REO of $963,000, which primarily relates to operating expenses and depreciation expense. We did not earn any income or incur any expense from REO during the three months ended March 31, 2024.
Current report
Net expense from real estate owned
Current report
During the six months ended June 30, 2024, we recognized net expense from REO of $963,000, which primarily relates to operating expenses and depreciation expense. We did not earn any income or incur any expense from REO during the six months ended June 30, 2023.
Current report
Uses of Liquidity
Current report
In July 2024, our board of directors authorized the repurchase of up to $150.0 million of our class A common stock. Under the repurchase program, repurchases may be made from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and the actual amounts repurchased will depend on a variety of factors, including legal requirements, price and economic and market conditions. The repurchase program may be changed, suspended or discontinued at any time and does not have a specified expiration date.
Current report
(4)Total loan exposure reflects our aggregate exposure to each loan investment. As of June 30, 2024, total loan exposure, includes (i) loans with an outstanding principal balance of $23.0 billion that are included in our consolidated financial statements, (ii) $725.4 million of non-consolidated senior interests in loans we have sold, which are not included in our consolidated financial statements, and excludes (iii) $100.6 million of junior loan interests that we have sold, but that remain included in our consolidated financial statements.
Removed paragraphs (8)
Previous report
Macroeconomic Environment
Previous report
The three months ended March 31, 2024 have shown a mix of positive and challenging developments leading to continued volatility in global markets. Investor concerns over inflation, interest rates, slowing economic growth, political and regulatory uncertainty and geopolitical conditions have persisted. If inflation and other economic indicators do not meet central banks’ relevant expectations, interest rates could remain higher for longer than expected by market participants and observers, which could create further uncertainty for the economy and our borrowers.
Previous report
(1)Total loan exposure reflects our aggregate exposure to each loan investment. As of March 31, 2024, total loan exposure, includes (i) loans with an outstanding principal balance of $23.3 billion that are included in our consolidated financial statements, (ii) $742.6 million of non-consolidated senior interests in loans we have sold, which are not included in our consolidated financial statements, and excludes (iii) $100.5 million of junior loan interests that we have sold, but that remain included in our consolidated financial statements. See Note 2 to our consolidated financial statements for further discussion of loan participations sold.
Previous report
(1)Total loan exposure reflects our aggregate exposure to each loan investment. As of March 31, 2024, total loan exposure, includes (i) loans with an outstanding principal balance of $23.3 billion that are included in our consolidated financial statements, (ii) $742.6 million of non-consolidated senior interests in loans we have sold, which are not included in our consolidated financial statements, and excludes (iii) $100.5 million of junior loan interests that we have sold, but that remain included in our consolidated financial statements. See Note 2 to our consolidated financial statements for further discussion of loan participations sold.
Previous report
(1)Total loan exposure reflects our aggregate exposure to each loan investment. As of March 31, 2024, total loan exposure, includes (i) loans with an outstanding principal balance of $23.3 billion that are included in our consolidated financial statements, (ii) $742.6 million of non-consolidated senior interests in loans we have sold, which are not included in our consolidated financial statements, and excludes (iii) $100.5 million of junior loan interests that we have sold, but that remain included in our consolidated financial statements. See Note 2 to our consolidated financial statements for further discussion of loan participations sold.
Previous report
(3)The weighted-average all-in yield and cost are expressed as a spread over SOFR, which is the relevant floating benchmark rate for each securitized debt obligation. All-in yield excludes loans accounted for under the cost-recovery method.
Previous report
Liquidity Needs
Previous report
(4)Total loan exposure reflects our aggregate exposure to each loan investment. As of March 31, 2024, total loan exposure, includes (i) loans with an outstanding principal balance of $23.3 billion that are included in our consolidated financial statements, (ii) $742.6 million of non-consolidated senior interests in loans we have sold, which are not included in our consolidated financial statements, and excludes (iii) $100.5 million of junior loan interests that we have sold, but that remain included in our consolidated financial statements.
Reworded paragraphs (58)
Previous wording
As a real estate finance company, we believe the key financial measures and indicators for our business are earnings per share, dividends declared, Distributable Earnings, and book value per share. For the three months ended March 31, 2024, we recorded a basic net loss per share of $0.71, declared a dividend of $0.62 per share, and reported $0.33 per share of
Current wording
As a real estate finance company, we believe the key financial measures and indicators for our business are earnings per share, dividends declared, Distributable Earnings, and book value per share. For the three months ended June 30, 2024, we recorded a basic net loss per share of $0.35, declared a dividend of $0.62 per share, and reported $0.49 per share of Distributable Earnings. In addition, our book value as of June 30, 2024 was $22.90 per share, which is net of cumulative CECL reserves of $5.21 per share.
Previous wording
(1)Represents net loss attributable to Blackstone Mortgage Trust. Refer to Note 14 to our consolidated financial statements for the calculation of diluted net income per share.
Current wording
(1)Represents net loss attributable to Blackstone Mortgage Trust. Refer to Note 14 to our consolidated financial statements for the calculation of diluted net loss per share.
Previous wording
(2)Represents realized losses related to loan principal amounts deemed non-recoverable during the three months ended March 31, 2024.
Current wording
(2)Represents realized losses related to loan principal amounts deemed non-recoverable during the three months ended June 30, 2024 and March 31, 2024, respectively.
Previous wording
(4)Reflects the $6.3 million incentive fee expense that would have been incurred if such charge-offs had not occurred.
Current wording
(4)Reflects the $6.3 million of incentive fee expenses that would have been incurred if such charge-offs had not occurred during the three months ended March 31, 2024.
Previous wording
Loan fundings during the quarter totaled $353.2 million and loan repayments and sales totaled $1.0 billion. We generated interest income of $486.1 million and incurred interest expense of $343.7 million during the quarter, which resulted in $142.4 million of net interest income during the three months ended March 31, 2024.
Current wording
During the three months June 30, 2024, we originated $103.2 million of loans. Loan fundings during the quarter totaled $375.8 million and loan repayments and sales totaled $700.6 million. We generated interest income of $466.2 million and incurred interest expense of $339.4 million during the quarter, which resulted in $126.8 million of net interest income during the three months ended June 30, 2024.
Previous wording
(2)Loan fundings during the three months ended March 31, 2024 and December 31, 2023, include $49.1 million and $36.1 million, respectively, of additional fundings under related non-consolidated senior interests.
Current wording
(2)Loan fundings during the three and six months ended June 30, 2024, include $44.6 million and $89.3 million, respectively, of additional fundings under related non-consolidated senior interests.
Previous wording
(3)Loan repayments and sales during the three months ended March 31, 2024 and December 31, 2023 include $454.8 million and $795.8 million, respectively, of additional repayments or reduction of loan exposure under related non-consolidated senior interests. Additionally, loan repayments and sales during the three months ended December 31, 2023 include $50.0 million of sales of junior loan interests. There were no sales of junior loan interests during the three months ended March 31, 2024.
Current wording
(3)Loan repayments and sales during the three and six months ended June 30, 2024, include $57.3 million and $512.1 million, respectively, of additional repayments or reduction of loan exposure under related non-consolidated senior interests.
Previous wording
(1)Total loan exposure reflects our aggregate exposure to each loan investment. As of March 31, 2024, total loan exposure, includes (i) loans with an outstanding principal balance of $23.3 billion that are included in our consolidated financial statements, (ii) $742.6 million of non-consolidated senior interests in loans we have sold, which are not included in our consolidated financial statements, and excludes (iii) $100.5 million of junior loan interests that we have sold, but that remain included in our consolidated financial statements. We have retained an aggregate $185.3 million of subordinate mezzanine loans, as of March 31, 2024, related to non-consolidated senior interests that are included in our balance sheet portfolio.
Current wording
(1)Total loan exposure reflects our aggregate exposure to each loan investment. As of June 30, 2024, total loan exposure, includes (i) loans with an outstanding principal balance of $23.0 billion that are included in our consolidated financial statements, (ii) $725.4 million of non-consolidated senior interests in loans we have sold, which are not included in our consolidated financial statements, and excludes (iii) $100.6 million of junior loan interests that we have sold, but that remain included in our consolidated financial statements. We have retained an aggregate $187.1 million of subordinate mezzanine loans, as of June 30, 2024, related to non-consolidated senior interests that are included in our balance sheet portfolio.
Previous wording
(2)Unfunded commitments will primarily be funded to finance our borrowers’ construction or development of real estate-related assets, capital improvements of existing assets, or lease-related expenditures. These commitments will generally be funded over the term of each loan, subject in certain cases to an expiration date. Excludes $332.0 million of unfunded loan commitments related to our non-consolidated senior interests, as these commitments will not require cash outlays from us.
Current wording
(2)Unfunded commitments will primarily be funded to finance our borrowers’ construction or development of real estate-related assets, capital improvements of existing assets, or lease-related expenditures. These commitments will generally be funded over the term of each loan, subject in certain cases to an expiration date. Excludes $291.9 million of unfunded loan commitments related to our non-consolidated senior interests, as these commitments will not require cash outlays from us.
Previous wording
(3)The weighted-average cash coupon and all-in yield are expressed as a spread over the relevant floating benchmark rates, which include SOFR, SONIA, EURIBOR, and other indices as applicable to each investment. As of March 31, 2024, substantially all of our loans by total loan exposure earned a floating rate of interest, primarily indexed to SOFR. Floating rate exposure includes an interest rate swap we entered into with a notional amount of $229.9 million that effectively converts certain of our fixed rate loan exposure to floating rate exposure. In addition to cash coupon, all-in yield includes the amortization of deferred origination and extension fees, loan origination costs, and purchase discounts, as well as the accrual of exit fees. Excludes loans accounted for under the cost-recovery method.
Current wording
(3)The weighted-average cash coupon and all-in yield are expressed as a spread over the relevant floating benchmark rates, which include SOFR, SONIA, EURIBOR, and other indices as applicable to each investment. As of June 30, 2024, all of our loans by total loan exposure earned a floating rate of interest, primarily indexed to SOFR. Floating rate exposure includes an interest rate swap we entered into with a notional amount of $229.9 million that effectively converts certain of our fixed rate loan exposure to floating rate exposure. In addition to cash coupon, all-in yield includes the amortization of deferred origination and extension fees, loan origination costs, and purchase discounts, as well as the accrual of exit fees. Excludes loans accounted for under the cost-recovery and nonaccrual methods, if any.
Previous wording
(4)Maximum maturity assumes all extension options are exercised by the borrower, however our loans and other investments may be repaid prior to such date. As of March 31, 2024, 13% of our loans by total loan exposure were subject to yield maintenance or other prepayment restrictions and 87% were open to repayment by the borrower without penalty.
Current wording
(4)Maximum maturity assumes all extension options are exercised by the borrower, however our loans and other investments may be repaid prior to such date. As of June 30, 2024, 12% of our loans by total loan exposure were subject to yield maintenance or other prepayment restrictions and 88% were open to repayment by the borrower without penalty.
Previous wording
(5)As of March 31, 2024, the weighted-average index rate floor of our total loan exposure was 0.76%. Excluding 0.0% index rate floors and loans with no floor, the weighted-average index rate floor was 1.30%. As of December 31, 2023, the weighted-average index rate floor of our total loan exposure was 0.56%. Excluding 0.0% index rate floors and loans with no floor, the weighted-average index rate floor was 1.02%.
Current wording
(5)As of June 30, 2024, the weighted-average index rate floor of our total loan exposure was 0.80%. Excluding 0.0% index rate floors and loans with no floor, the weighted-average index rate floor was 1.35%. As of December 31, 2023, the weighted-average index rate floor of our total loan exposure was 0.56%. Excluding 0.0% index rate floors and loans with no floor, the weighted-average index rate floor was 1.02%.
Previous wording
(3)In addition to cash coupon, all-in yield includes the amortization of deferred origination and extension fees, loan origination costs, and purchase discounts, as well as the accrual of exit fees. Excludes loans accounted for under the cost-recovery method.
Current wording
(3)In addition to cash coupon, all-in yield includes the amortization of deferred origination and extension fees, loan origination costs, and purchase discounts, as well as the accrual of exit fees. Excludes loans accounted for under the cost-recovery and nonaccrual methods, if any.
Previous wording
(1)Net loan exposure reflects the amount of each loan that is subject to risk of credit loss to us as of March 31, 2024, which is our total loan exposure net of (i) $742.6 million of non-consolidated senior interests, (ii) $1.1 billion of asset-specific debt, (iii) $234.8 million of senior loan participations sold, (iv) $57.9 million of cost-recovery proceeds, and (v) our total loans receivable CECL reserve of $751.4 million. Our non-consolidated senior interests, asset-specific debt, and loan participations sold are structurally non-recourse and term-matched to the corresponding collateral loans.
Current wording
(1)Net loan exposure reflects the amount of each loan that is subject to risk of credit loss to us as of June 30, 2024, which is our total loan exposure net of (i) $725.4 million of non-consolidated senior interests, (ii) $1.1 billion of asset-specific debt, (iii) $76.3 million of cost-recovery proceeds, and (iv) our total loans receivable CECL reserve of $893.9 million. Our non-consolidated senior interests, asset-specific debt, and loan participations sold are structurally non-recourse and term-matched to the corresponding collateral loans. Geographic locations that represent less than 1% of net loan exposure are excluded from the chart above.
Previous wording
As of March 31, 2024, 99.0% of borrowers, based on net loan exposure, were compliant with the contractual terms of each respective loan. We believe this demonstrates the overall strength of our loan portfolio and the commitment and financial wherewithal of our borrowers generally, which are primarily affiliated with large real estate private equity funds and other strong, well-capitalized, and experienced sponsors. As of March 31, 2024, one of our impaired loans with an amortized cost basis of $138.8 million was past its current maturity date. This loan was also more than 90 days past due on its interest payment and had a risk rating of “5.” Additionally, as of March 31, 2024, one other impaired loan with an amortized cost basis of $223.4 million was less than 30 days past due on its interest payment and had a risk rating of “5.”
Current wording
As of June 30, 2024, 90% of our loans were performing with risk ratings of “1” through “4,” and the remaining 10% were impaired with a risk rating of “5.” Of the performing loans, 99.8%, based on net loan exposure, were in compliance with the contractual terms of each respective loan. We believe this demonstrates the overall strength of our loan portfolio and the commitment and financial wherewithal of our borrowers generally, which are primarily affiliated with large real estate private equity funds and other strong, well-capitalized, and experienced sponsors.
Previous wording
We maintain a robust asset management relationship with our borrowers and utilize these relationships to maximize the performance of our portfolio, including during periods of volatility. We believe that we benefit from these relationships and from our long-standing core business model of originating senior loans collateralized by large assets in major markets with experienced, well-capitalized institutional sponsors. Our loan portfolio’s low weighted-average origination LTV is 63.4%, excluding any loans that are impaired and any junior participations sold, as of March 31, 2024. While we believe the principal amounts of our loans are generally adequately protected by underlying collateral value, there is a risk that we will not realize the entire principal value of certain investments. As of March 31, 2024, we had an aggregate $602.6 million asset-specific CECL reserve related to 17 of our loans receivable, with an aggregate amortized cost basis of $2.4 billion, net of cost-recovery proceeds. This CECL reserve was recorded based on our estimation of the fair value of each of the loan's underlying collateral as of March 31, 2024.
Current wording
We maintain a robust asset management relationship with our borrowers and utilize these relationships to maximize the performance of our portfolio, including during periods of volatility. We believe that we benefit from these relationships and from our long-standing core business model of originating senior loans collateralized by large assets in major markets with experienced, well-capitalized institutional sponsors. Our loan portfolio’s low weighted-average origination LTV is 62.9%, excluding any loans that are impaired and any junior participations sold, as of June 30, 2024. While we believe the principal amounts of our loans are generally adequately protected by underlying collateral value, there is a risk that we will not realize the entire principal value of certain investments. As of June 30, 2024, we had an aggregate $759.4 million asset- specific CECL reserve related to 19 of our loans receivable, with an aggregate amortized cost basis of $2.9 billion, net of cost-recovery proceeds. This CECL reserve was recorded based on our estimation of the fair value of each of the loan's underlying collateral as of June 30, 2024.
Previous wording
As discussed in Note 2 to our consolidated financial statements, we perform a quarterly review of our loan portfolio, assesses the performance of each loan, and assigns it a risk rating between “1” and “5”, from less risk to greater risk. Our loan portfolio had a weighted-average risk rating of 3.0 as of both March 31, 2024 and December 31, 2023, respectively.
Current wording
As discussed in Note 2 to our consolidated financial statements, we perform a quarterly review of our loan portfolio, assesses the performance of each loan, and assigns it a risk rating between “1” and “5”, from less risk to greater risk. Our loan portfolio had a weighted-average risk rating of 3.0 as of both June 30, 2024 and December 31, 2023.
Previous wording
(2)Net loan exposure reflects the amount of each loan that is subject to risk of credit loss to us as of March 31, 2024, which is our total loan exposure net of (i) $742.6 million of non-consolidated senior interests, (ii) $1.1 billion of asset-specific debt, (iii) $234.8 million of senior loan participations sold, (iv) $57.9 million of cost-recovery proceeds, and (v) our total loans receivable CECL reserve of $751.4 million. Our non-consolidated senior interests, asset-specific debt, and loan participations sold are structurally non-recourse and term-matched to the corresponding collateral loans.
Current wording
(2)Net loan exposure reflects the amount of each loan that is subject to risk of credit loss to us as of June 30, 2024, which is our total loan exposure net of (i) $725.4 million of non-consolidated senior interests, (ii) $1.1 billion of asset-specific debt, (iii) $76.3 million of cost-recovery proceeds, and (iv) our total loans receivable CECL reserve of $893.9 million. Our non-consolidated senior interests, asset-specific debt, and loan participations sold are structurally non-recourse and term-matched to the corresponding collateral loans.
Previous wording
During the three months ended March 31, 2024, we recorded an increase of $235.4 million in the CECL reserves against our loans receivable portfolio, primarily related to seven new impaired loans, offset by charge-offs of our CECL reserves of $61.0 million, bringing our total loans receivable CECL reserve to $751.4 million as of March 31, 2024. These charge-offs related to three previously impaired loans that were resolved during the three months ended March 31, 2024. The resolutions were the result of (i) a deed-in-lieu of foreclosure related to an office asset in Mountain View, CA, which is now included on our consolidated balance sheet as an REO asset, (ii) the sale of an office asset in Miami, FL to a new borrower, resulting in a repayment of $9.5 million and a reduction to the outstanding principal balance of the loan, and (iii) a repayment of a multifamily asset in New York, NY. As of March 31, 2024, the income accrual was suspended on the seven additional loans that were impaired as the recovery of income and principal was doubtful. During the three months ended March 31, 2024, we recorded $16.8 million of interest income on these seven loans.
Current wording
During the three months ended June 30, 2024, we recorded an increase of $142.6 million in the CECL reserves against our loans receivable portfolio, primarily related to three new impaired loans, offset by charge-offs of our CECL reserves of $12.5 million, bringing our total loans receivable CECL reserve to $893.9 million as of June 30, 2024. These charge-offs primarily related to one previously impaired loan that was resolved during the three months ended June 30, 2024. The resolution was the result of the repayment of a loan collateralized by an office asset in New York, NY. As of June 30, 2024, the income accrual was suspended on the three additional loans that were impaired as the recovery of income and principal was doubtful. During the three months ended June 30, 2024, we recorded $11.1 million of interest income on these three loans.
Previous wording
As of March 31, 2024, we had an aggregate $602.6 million asset-specific CECL reserve related to 17 of our loans receivable, with an aggregate amortized cost basis of $2.4 billion, net of cost-recovery proceeds. This CECL reserve was recorded based on our estimation of the fair value of each of the loan's underlying collateral as of March 31, 2024. No income was recorded on our impaired loans subsequent to determining that they were impaired. During the three months ended March 31, 2024, we received an aggregate $16.8 million of cash proceeds from such loans that were applied as a reduction to the amortized cost basis of each respective loan.
Current wording
As of June 30, 2024, we had an aggregate $759.4 million asset-specific CECL reserve related to 19 of our loans receivable, with an aggregate amortized cost basis of $2.9 billion, net of cost-recovery proceeds. This CECL reserve was recorded based on our estimation of the fair value of each of the loan's underlying collateral as of June 30, 2024. No income was recorded on our impaired loans subsequent to determining that they were impaired. During the three and six months ended June 30, 2024, we received an aggregate $18.5 million and $35.3 million, respectively, of cash proceeds from such loans that were applied as a reduction to the amortized cost basis of each respective loan.
Previous wording
As of March 31, 2024, one of our impaired loans with an amortized cost basis of $138.8 million was past its current maturity date. This loan was also more than 90 days past due on its interest payment and had a risk rating of “5.”. Additionally, as of March 31, 2024, one other impaired loan with an amortized cost basis of $223.4 million was less than 30 days past due on its interest payment and had a risk rating of “5.” As of March 31, 2024, all other borrowers were compliant with the contractual terms of each respective loan, including any required payment of interest. Refer to Note 2 for further discussion of our policies on revenue recognition and our CECL reserves.
Current wording
As of June 30, 2024, one of our performing loans with an amortized cost basis of $33.0 million was past its current maturity date, was less than 30 days past due on its interest payment, and had a risk rating of “4.” Subsequent to June 30, 2024, we foreclosed on the assets securing this loan and recognized them as REO. This loan was not impaired as of June 30, 2024 as the fair value of the underlying collateral exceeded our basis in the loan. As of June 30, 2024, all other borrowers under performing loans were in compliance with the contractual terms of each respective loan, including any required payment of interest. Refer to Note 2 for further discussion of our policies on revenue recognition and our CECL reserves.
Previous wording
As of March 31, 2024, our multifamily joint venture held $614.4 million of loans, which are included in the loan disclosures above. Refer to Note 2 to our consolidated financial statements for additional discussion of our multifamily joint venture.
Current wording
As of June 30, 2024, our multifamily joint venture held $473.2 million of loans, which are included in the loan disclosures above. Refer to Note 2 to our consolidated financial statements for additional discussion of our multifamily joint venture.
Previous wording
(2)Represents the amount of new borrowings we obtained approval for during the three months ended March 31, 2024.
Current wording
(2)Represents the amount of new borrowings we obtained approval for during the six months ended June 30, 2024.
Previous wording
(3)In addition to spread, the cost includes the associated deferred fees and expenses related to the respective borrowings. In addition to cash coupon, all-in yield includes the amortization of deferred origination and extension fees, loan origination costs, and purchase discounts, as well as the accrual of exit fees. All-in yield excludes loans accounted for under the cost-recovery method.
Current wording
(3)In addition to spread, the cost includes the associated deferred fees and expenses related to the respective borrowings. In addition to cash coupon, all-in yield includes the amortization of deferred origination and extension fees, loan origination costs, and purchase discounts, as well as the accrual of exit fees. All-in yield excludes loans accounted for under the cost-recovery and nonaccrual methods, if any.
Previous wording
As of March 31, 2024, we had a $100.0 million full recourse secured credit facility that was designed to finance eligible first mortgage originations for up to nine months as a bridge to term financing without obtaining discretionary lender approval. The cost of borrowing under the facility was variable, dependent on the type of loan collateral. As of March 31, 2024, we had no assets pledged to our acquisition facility and no outstanding borrowings. This facility matured on April 3, 2024.
Current wording
We previously had a $100.0 million full recourse secured credit facility that was designed to finance eligible first mortgage originations for up to nine months as a bridge to term financing without obtaining discretionary lender approval. The cost of borrowing under the facility was variable, dependent on the type of loan collateral. This facility matured on April 3, 2024.
Previous wording
(5)During the three months ended March 31, 2024, we recorded $41.5 million of interest expense related to our securitized debt obligations.
Current wording
(5)During the three and six months ended June 30, 2024, we recorded $40.2 million and $81.7 million, respectively, of interest expense related to our securitized debt obligations.
Previous wording
(2)These floating rate loans and related liabilities are currency and index-matched to the applicable benchmark rate relevant in each arrangement. In addition to cash coupon, yield/cost includes the amortization of deferred origination fees and financing costs.
Current wording
(2)The weighted-average all-in yield and cost are expressed as a spread over SOFR. These floating rate loans and related liabilities are currency and index-matched to the applicable benchmark rate relevant in each arrangement. In addition to cash coupon, yield/cost includes the amortization of deferred origination fees and financing costs.
Previous wording
During the three months ended March 31, 2024, we repurchased an aggregate principal amount of $26.2 million of the Senior Secured Notes at a weighted-average price of 88%. This resulted in a gain on extinguishment of debt of $3.0 million during the three months ended March 31, 2024.
Current wording
During the six months ended June 30, 2024, we repurchased an aggregate principal amount of $26.2 million of the Senior Secured Notes at a weighted-average price of 88%. This resulted in a gain on extinguishment of debt of $3.0 million during the six months ended June 30, 2024.
Previous wording
Generally, our business model is such that rising interest rates will increase our net income, while declining interest rates will decrease net income. As of March 31, 2024, substantially all of our loans by total loan exposure earned a floating rate of interest and were financed with liabilities that pay interest at floating rates, which resulted in an amount of net equity that is positively correlated to rising interest rates, subject to the impact of interest rate floors on certain of our floating rate loans.
Current wording
Generally, our business model is such that rising interest rates will increase our net income, while declining interest rates will decrease net income. As of June 30, 2024, all of our loans by total loan exposure earned a floating rate of interest and were financed with liabilities that pay interest at floating rates, which resulted in an amount of net equity that is positively correlated to rising interest rates, subject to the impact of interest rate floors on certain of our floating rate loans.
Previous wording
(4)Excludes $2.4 billion of floating rate impaired loans.
Current wording
(4)Excludes $3.0 billion of floating rate impaired loans.
Previous wording
(5)Excludes $742.6 million of non-consolidated senior interests and $335.3 million of loan participations sold, as of March 31, 2024. Our non-consolidated senior interests and loan participations sold are structurally non-recourse and term-matched to the corresponding loans, and have no impact on our net floating rate exposure.
Current wording
(5)Excludes $725.4 million of non-consolidated senior interests and $100.6 million of loan participations sold, as of June 30, 2024. Our non-consolidated senior interests and loan participations sold are structurally non-recourse and term-matched to the corresponding loans, and have no impact on our net floating rate exposure.
Previous wording
(7)Includes amounts outstanding under secured debt, securitizations, asset-specific debt, and Term Loans.
Current wording
(7)Includes amounts outstanding under secured debt, securitizations, and asset-specific debt.
Previous wording
(8)Represents the U.S. dollar equivalent as of March 31, 2024.
Current wording
(9)Represents the U.S. dollar equivalent as of June 30, 2024.
Previous wording
In addition to the risks related to fluctuations in cash flows and asset values associated with movements in interest rates, there is also the risk of non-performance on floating rate assets. In the case of a significant increase in interest rates, the cash flows of the collateral real estate assets may not be sufficient to pay debt service due under our loans, which may contribute to non-performance or, in severe cases, default. This risk is partially mitigated by our consideration of rising rate stress-testing during our underwriting process, which generally includes a requirement for our borrower to purchase an interest rate cap contract with an unaffiliated third party, provide an interest reserve deposit, and/or provide interest guarantees or other structural protections. As of March 31, 2024, 95% of our performing loans have interest rate caps, with a weighted-average strike price of 3.4%, or interest guarantees. During the three months ended March 31, 2024, interest rate caps on $4.2 billion of loans, with a 3.3% weighted-average strike price, expired and 95% were replaced with new interest rate caps, with a weighted-average strike price of 4.2%, or interest guarantees.
Current wording
In addition to the risks related to fluctuations in cash flows and asset values associated with movements in interest rates, there is also the risk of non-performance on floating rate assets. In the case of a significant increase in interest rates, the cash flows of the collateral real estate assets may not be sufficient to pay debt service due under our loans, which may contribute to non-performance or, in severe cases, default. This risk is partially mitigated by our consideration of rising rate stress-testing during our underwriting process, which generally includes a requirement for our borrower to purchase an interest rate cap contract with an unaffiliated third party, provide an interest reserve deposit, and/or provide interest guarantees or other structural protections. As of June 30, 2024, 95% of our performing loans have interest rate caps, with a weighted-average strike price of 3.3%, or interest guarantees. During the six months ended June 30, 2024, interest rate caps on $8.1 billion of performing loans, with a 3.4% weighted-average strike price, expired and 94% were replaced with new interest rate caps, with a weighted-average strike price of 3.5%, or interest guarantees.
Previous wording
Income from loans and other investments, net decreased $11.4 million during the three months ended March 31, 2024 compared to the three months ended December 31, 2023. The decrease was primarily due to a decline in interest income related to additional loans accounted for under the cost-recovery method during the three months ended March 31, 2024. This was offset by a decrease in the weighted-average principal balance of our outstanding financing arrangements by $144.4 million for the three months ended March 31, 2024 compared to the three months ended December 31, 2023.
Current wording
Income from loans and other investments, net decreased $15.6 million during the three months ended June 30, 2024 compared to the three months ended March 31, 2024. The decrease was primarily due to a decline in interest income related to additional loans accounted for under the cost-recovery method during the three months ended June 30, 2024. This was offset by a decrease in the weighted-average principal balance of our outstanding financing arrangements by $264.7 million for the three months ended June 30, 2024 compared to the three months ended March 31, 2024.
Previous wording
Other expenses include management and incentive fees payable to our Manager and general and administrative expenses. Other expenses decreased by $6.9 million during the three months ended March 31, 2024 compared to the three months ended December 31, 2023 primarily due to a decrease of $7.5 million of incentive fees payable to our Manager, due to a decrease in Distributable Earnings, driven primarily by charge-offs of CECL reserves. This was offset by an increase of $353,000 of non-cash restricted stock amortization related to shares awarded under our long-term incentive plans.
Current wording
Other expenses include management and incentive fees payable to our Manager and general and administrative expenses. Other expenses decreased by $269,000 during the three months ended June 30, 2024 compared to the three months ended March 31, 2024 primarily due to a decrease in management fees payable to our Manager. Additionally, there was a decrease of $150,000 of non-cash restricted stock amortization related to shares awarded under our long-term incentive plans as a result of forfeitures.
Previous wording
During the three months ended March 31, 2024, we recorded a $234.9 million increase in our CECL reserves, as compared to a $115.3 million increase during the three months ended December 31, 2023. These CECL reserves primarily reflect certain impaired loans in our portfolio.
Current wording
During the three months ended June 30, 2024, we recorded a $152.4 million increase in our CECL reserves, as compared to a $234.9 million increase during the three months ended March 31, 2024. These increases in CECL reserves primarily reflect certain impaired loans in our portfolio.
Previous wording
During the three months ended March 31, 2024, we recognized a gain on extinguishment of debt of $3.0 million related to the repurchase of an aggregate principal amount of $26.2 million of our Senior Secured Notes. There was no repurchase activity or gain on extinguishment of debt in the three months ended March 31, 2023.
Current wording
During the three months ended March 31, 2024 we recognized a gain on extinguishment of debt of $3.0 million related to the repurchase of an aggregate principal amount of $26.2 million of our Senior Secured Notes. During the three months ended June 30, 2024, there was no repurchase activity or gain on extinguishment of debt.
Previous wording
The income tax provision increased by $304,000 during the three months ended March 31, 2024 compared to the three months ended December 31, 2023 primarily due to an increase in the income tax provisions related to our taxable REIT subsidiaries.
Current wording
The income tax provision increased by $215,000 during the three months ended June 30, 2024 compared to the three months ended March 31, 2024 primarily due to an increase in the income tax provisions related to our taxable REIT subsidiaries.
Previous wording
During the three months ended March 31, 2024, we declared dividends of $0.62 per share, or $107.7 million in aggregate. During the three months ended December 31, 2023, we declared dividends of $0.62 per share, or $107.4 million in aggregate.
Current wording
During the three months ended June 30, 2024, we declared dividends of $0.62 per share, or $107.6 million in aggregate. During the three months ended March 31, 2024, we declared dividends of $0.62 per share, or $107.7 million in aggregate.
Showing the first 40 of 58 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
(8)Includes amounts outstanding under Term Loans.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Distributable Earnings. In addition, our book value as of March 31, 2024 was $23.83 per share, which is net of cumulative CECL reserves of $4.40 per share.
Previous report — wording carried elsewhere
(4)Includes all floating rate impaired loans.
Previous report — wording carried elsewhere
(ii) a decrease in the weighted-average principal balance of our loan portfolio by $1.6 billion for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. This was offset by a decrease in the weighted-average principal balance of our outstanding financing arrangements by $1.7 billion for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023.