BLACKSTONE MORTGAGE TRUST, INC.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

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References herein to “Blackstone Mortgage Trust,” “Company,” “we,” “us,” or “our” refer to Blackstone Mortgage Trust, Inc. and its subsidiaries unless the context specifically requires otherwise.

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References herein to “Blackstone Mortgage Trust,” “Company,” “we,” “us,” or “our” refer to Blackstone Mortgage

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The following discussion should be read in conjunction with the unaudited consolidated financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q. In addition to historical data, this discussion and analysis contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which reflect our current views with respect to, among other things, our business, operations and financial performance. You can identify these forward-looking statements by the use of words such as “intend,” “goal,” “estimate,” “expect,” “project,” “projections,” “plans,” “seeks,” “anticipates,” “should,” “could,” “may,” “designed to,” “foreseeable future,” “believe,” “scheduled,” and similar expressions. Such forward- looking statements are subject to various risks, uncertainties and assumptions. Our actual results or outcomes may differ materially from those in this discussion and analysis as a result of various factors, including but not limited to those discussed in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2023 and elsewhere in this Quarterly Report on Form 10-Q.

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with the unaudited consolidated financial statements and notes thereto appearing elsewhere in this Quarterly Report on

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Blackstone Mortgage Trust is a real estate finance company that originates senior loans collateralized by commercial real estate in North America, Europe, and Australia. Our portfolio is composed primarily of loans secured by high-quality, institutional assets in major markets, sponsored by experienced, well-capitalized real estate investment owners and operators. These senior loans are capitalized by accessing a variety of financing options, including borrowing under our credit facilities, issuing CLOs or single-asset securitizations, and corporate financing, depending on our view of the most prudent financing option available for each of our investments. We are not in the business of buying or trading securities, and the only securities we own are the retained interests from our securitization financing transactions, which we have not financed. We are externally managed by BXMT Advisors L.L.C., or our Manager, a subsidiary of Blackstone Inc., or Blackstone, and are a real estate investment trust, or REIT, traded on the New York Stock Exchange, or NYSE, under the symbol “BXMT.”

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Blackstone Mortgage Trust is a real estate finance company that originates, acquires, and manages senior loans and other

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We benefit from the deep knowledge, experience and information advantages of our Manager, which is a part of Blackstone’s real estate platform. Blackstone has built the world's preeminent global real estate business, with a proven track record of successfully navigating market cycles and emerging stronger through periods of volatility. The market-leading real estate expertise derived from the strength of the Blackstone platform deeply informs our credit and underwriting process, and we believe gives us the tools to expertly manage the assets in our portfolio and work with our borrowers throughout periods of economic stress and uncertainty.

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We benefit from the deep knowledge, experience and information advantages of our Manager, which is a part of

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We conduct our operations as a REIT for U.S. federal income tax purposes. We generally will not be subject to U.S. federal income taxes on our taxable income to the extent that we annually distribute all of our net taxable income to stockholders and maintain our qualification as a REIT. We also operate our business in a manner that permits us to maintain an exclusion from registration under the Investment Company Act of 1940, as amended. We are organized as a holding company and conduct our business primarily through our various subsidiaries.

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We conduct our operations as a REIT for U.S. federal income tax purposes. We generally will not be subject to U.S. federal

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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 September 30, 2024, we recorded a basic net loss per share of $0.32, declared a dividend of $0.47 per share, and reported $0.39 per share of Distributable Earnings. In addition, our book value as of September 30, 2024 was $22.17 per share, which is net of cumulative CECL reserves of $5.89 per share.

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As a real estate finance company, we believe the key financial measures and indicators for our business are earnings per

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As further described below, Distributable Earnings is a measure that is not prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP. Distributable Earnings helps us to evaluate our performance excluding the effects of certain transactions and GAAP adjustments that we believe are not necessarily indicative of our current loan portfolio and operations. In addition, Distributable Earnings is a performance metric we consider when declaring our dividends.

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As further described below, Distributable Earnings and Distributable Earnings prior to charge-offs are measures that are

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The following table sets forth the calculation of basic net income (loss) per share and dividends declared per share ($ in thousands, except per share data):

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The following table sets forth the calculation of basic net income (loss) per share and dividends declared per share ($ in

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(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 (loss) per share.

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(1)Represents net (loss) income attributable to Blackstone Mortgage Trust. Refer to Note 15 to our consolidated

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Distributable Earnings is a non-GAAP measure, which we define as GAAP net income (loss), including realized gains and losses not otherwise recognized in current period GAAP net income (loss), and excluding (i) non-cash equity compensation expense, (ii) depreciation and amortization, (iii) unrealized gains (losses), and (iv) certain non-cash items. Distributable Earnings may also be adjusted from time to time to exclude one-time events pursuant to changes in GAAP and certain other non-cash charges as determined by our Manager, subject to approval by a majority of our independent directors. Distributable Earnings mirrors the terms of our management agreement between our Manager and us, or our Management Agreement, for purposes of calculating our incentive fee expense.

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define Distributable Earnings as GAAP net income (loss), including realized gains and losses not otherwise recognized in

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Furthermore, we believe it is useful to present Distributable Earnings prior to charge-offs of CECL reserves to reflect our direct operating results and help existing and potential future holders of our class A common stock assess the performance of our business excluding such charge-offs. We utilize Distributable Earnings prior to charge-offs of CECL reserves as an additional performance metric to consider when declaring our dividends. Distributable Earnings mirrors the terms of our Management Agreement for purposes of calculating our incentive fee expense. Therefore, Distributable Earnings prior to charge-offs of CECL reserves is calculated net of the incentive fee expense that would have been recognized if such charge-offs had not occurred.

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calculating our incentive fee expense. Therefore, Distributable Earnings prior to charge-offs of CECL reserves is calculated

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Our CECL reserves have been excluded from Distributable Earnings consistent with other unrealized gains (losses) pursuant to our existing policy for reporting Distributable Earnings. We expect to only recognize such potential credit losses in Distributable Earnings if and when such amounts are realized and deemed non-recoverable upon a realization event. This is generally at the time a loan is repaid, or in the case of foreclosure, when the underlying asset is sold, but realization and non-recoverability may also be concluded if, in our determination, it is nearly certain that all amounts due will not be collected. The timing of any such credit loss realization in our Distributable Earnings may differ materially from the timing of CECL reserves or charge-offs in our consolidated financial statements prepared in accordance with GAAP. The realized loss amount reflected in Distributable Earnings will equal the difference between the cash received, or expected to be received, and the book value of the asset, and is reflective of our economic experience as it relates to the ultimate realization of the loan.

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Our CECL reserves have been excluded from Distributable Earnings consistent with other unrealized gains (losses)

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We believe that Distributable Earnings provides meaningful information to consider in addition to our net income (loss) and cash flow from operating activities determined in accordance with GAAP. We believe Distributable Earnings is a useful financial metric for existing and potential future holders of our class A common stock as historically, over time, Distributable Earnings has been a strong indicator of our dividends per share. As a REIT, we generally must distribute annually at least 90% of our net taxable income, subject to certain adjustments, and therefore we believe our dividends are one of the principal reasons stockholders may invest in our class A common stock. Refer to Note 16 to our consolidated financial statements for further discussion of our distribution requirements as a REIT. Further, Distributable Earnings helps us to evaluate our performance excluding the effects of certain transactions and GAAP adjustments that we believe are not necessarily indicative of our current loan portfolio and operations, and is a performance metric we consider when declaring our dividends.

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We believe that Distributable Earnings provides meaningful information to consider in addition to our net income (loss)

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Distributable Earnings and Distributable Earnings prior to charge-offs of CECL reserves do not represent net income (loss) or cash generated from operating activities and should not be considered as alternatives to GAAP net income (loss), or indicators of our GAAP cash flows from operations, measures of our liquidity, or indicators of funds available for our cash needs. In addition, our methodology for calculating Distributable Earnings and Distributable Earnings prior to charge-offs of CECL reserves may differ from the methodologies employed by other companies to calculate the same or similar supplemental performance measures, and accordingly, our reported Distributable Earnings and Distributable Earnings prior to charge-offs of CECL reserves may not be comparable to similar metrics reported by other companies.

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Distributable Earnings and Distributable Earnings prior to charge-offs of CECL reserves do not represent net income (loss)

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The following table provides a reconciliation of Distributable Earnings and Distributable Earnings prior to charge-offs of CECL reserves to GAAP net income (loss) ($ in thousands, except per share data):

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The following table provides a reconciliation of Distributable Earnings and Distributable Earnings prior to charge-offs of

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(1)Represents net loss attributable to Blackstone Mortgage Trust.

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(1)Represents net (loss) income attributable to Blackstone Mortgage Trust.

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(2)Represents realized losses related to loan principal amounts deemed non-recoverable during the three months ended September 30, 2024 and June 30, 2024, respectively.

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(2)Represents realized losses related to loan principal amounts deemed non-recoverable.

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(3)Represents realized gains (losses) on the repatriation of unhedged foreign currency. These amounts were not included in GAAP net income (loss), but rather as a component of other comprehensive income in our consolidated financial statements.

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(3)Represents realized losses on the repatriation of unhedged foreign currency. These amounts were not included in

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(4)The weighted-average shares outstanding, basic, exclude shares issuable from a potential conversion of our Convertible Notes then outstanding. Consistent with the treatment of other unrealized adjustments to Distributable Earnings, these potentially issuable shares are excluded until a conversion occurs. Refer to Note 14 to our consolidated financial statements for the calculation of diluted net income per share.

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(7)The weighted-average shares outstanding, basic, exclude shares issuable from a potential conversion of our

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(1)The book value per share excludes shares issuable from a potential conversion of our Convertible Notes then outstanding. Refer to Note 14 to our consolidated financial statements for the calculation of diluted net income per share.

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(1)The book value per share excludes shares issuable from a potential conversion of our Convertible Notes then

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During the three months September 30, 2024, we originated or acquired $131.5 million of loans. Loan fundings during the quarter totaled $403.7 million and loan repayments and sales totaled $1.8 billion. We generated interest income of $430.1 million and incurred interest expense of $321.7 million during the quarter, which resulted in $108.3 million of net interest income during the three months ended September 30, 2024.

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During thethree months ended March 31, 2025, we originated or acquired$1.6 billion of loans. Loan fundings during the

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(1)Includes new loan originations and additional commitments made under existing loans.

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(1)Includes new loan originations and acquisitions, and additional commitments made under existing loans.

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The following table details overall statistics for our loan portfolio as of September 30, 2024 ($ in thousands):

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The following table details overall statistics for our loans receivable portfolio as of March 31, 2025 ($ in thousands):

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(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 $247.1 million of unfunded loan commitments related to our non-consolidated senior interests, as these commitments will not require cash outlays from us.

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(1)Unfunded commitments will primarily be funded to finance our borrowers’ construction or development of real

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(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 September 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.

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(2)The weighted-average cash coupon and all-in yield are expressed as a spread over the relevant floating benchmark

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(5)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 loan. As of September 30, 2024, all of our loans by total loan exposure earned a floating rate of interest, primarily indexed to SOFR. 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.

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indexed to SOFR. In addition to cash coupon, all-in yield includes the amortization of deferred origination and

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(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. Excludes loans accounted for under the cost-recovery and nonaccrual methods, if any. As of September 30, 2024, 14% of our loans by total loan exposure were subject to yield maintenance or other prepayment restrictions and 86% were open to repayment by the borrower without penalty.

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(3)Maximum maturity assumes all extension options are exercised by the borrower, however our loans and other

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(5)Based on LTV as of the dates loans were originated or acquired by us, excluding any loans that are impaired and any junior participations sold.

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(4)Based on LTV as of the dates loans were originated or acquired by us, excluding any loans that are impaired and any

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The following table details the index rate floors for our loan portfolio based on total loan exposure as of September 30, 2024 ($ in thousands):

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The following table details the index rate floors for our loan portfolio as of March 31, 2025 ($ in thousands):

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(2)Includes Euro, British Pound Sterling, Swedish Krona, Australian Dollar, and Swiss Franc currencies.

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(1)Includes Euro, British Pound Sterling, Swedish Krona, Australian Dollar, Canadian Dollar, and Swiss Franc

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(5)As of September 30, 2024, the weighted-average index rate floor of our total loan exposure was 0.97%. Excluding 0.0% index rate floors and loans with no floor, the weighted-average index rate floor was 1.56%. 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%.

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(3)As of March 31, 2025, the weighted-average index rate floor of our floating-rate loans receivable principal balance

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The following table details the floating benchmark rates for our loan portfolio based on total loan exposure as of September 30, 2024 (total loan exposure amounts in thousands):

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The following table details the floating benchmark rates for our loan portfolio as of March 31, 2025 (loans receivable

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(2)We use foreign currency forward contracts to protect the value or fix the amount of certain investments or cash flows in terms of the U.S. dollar. We earn forward points on our forward contracts that reflect the interest rate differentials between the applicable base rate for our foreign currency investments and prevailing U.S. interest rates. These forward contracts effectively convert the foreign currency rate exposure for such investments to USD-equivalent interest rates.

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(1)We use foreign currency forward contracts to protect the value or fix the amount of certain investments or cash

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(5)Includes floating rate loans indexed to STIBOR, BBSY, and SARON indices.

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(3)Includes floating rate loans indexed to STIBOR, CORRA, BBSY, and SARON indices.

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(1)Net loan exposure reflects the amount of each loan that is subject to risk of credit loss to us as of September 30, 2024, which is our total loan exposure net of (i) $770.2 million of non-consolidated senior interests, (ii) $1.2 billion of asset-specific debt, (iii) $99.0 million of cost-recovery proceeds, and (iv) our total loans receivable CECL reserve of $1.0 billion. 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.

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Geographic locations that represent less than 1% of net loan exposure are excluded from the chart.

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(2)Assets with multiple components are proportioned into the relevant collateral types based on the allocated value of each collateral type.

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(2)Assets with multiple components are proportioned into the relevant collateral types based on the allocated value of

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As of September 30, 2024, 88% of our loans were performing with risk ratings of “1” through “4,” and the remaining 12% were impaired with a risk rating of “5.” All of the performing loans were in compliance with the applicable contractual terms. 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.

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As of March 31, 2025, 95% of our loans were performing with risk ratings of “1” through “4,” and the remaining 5% were

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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 62.8%, excluding any loans that are impaired and any junior participations sold, as of September 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 September 30, 2024, we had an aggregate $883.6 million asset-specific CECL reserve related to 20 of our loans receivable, with an aggregate amortized cost basis of $3.2 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 September 30, 2024.

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We maintain a robust asset management relationship with our borrowers and utilize these relationships to maximize the

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Our portfolio monitoring and asset management operations benefit from the deep knowledge, experience, and information advantages derived from our position as part of Blackstone’s real estate platform. Blackstone has built the world's preeminent global real estate business, with a proven track record of successfully navigating market cycles and emerging stronger through periods of volatility. The market-leading real estate expertise derived from the strength of the Blackstone platform deeply informs our credit and underwriting process, and gives us the tools to expertly asset manage our portfolio and work with our borrowers throughout periods of economic stress and uncertainty.

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Our portfolio monitoring and asset management operations benefit from the deep knowledge, experience, and information