BXMT

Image source: The Motley Fool. Thursday, July 30, 2026 at 9:00 a.m. ET Vice President, Shareholder Relations - Tim Hayes Chief Executive Officer - Tim Johnson President - Austin Pe!!a Chief Financial Officer - Marcin Urbaszek Operator: Good day, and welcome to the Blackstone Mortgage Trust second quarter 2026 investor call. Today's call is being recorded. At this time, all participants are in a listen-only mode. If you require operator assistance at any time, please press star zero. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. At this time, I'd like to turn the call over to Tim Hayes, Vice President, Shareholder Relations. Please go ahead. Tim Hayes: Good morning, and welcome everyone to Blackstone Mortgage Trust's second quarter 2026 earnings conference call. I'm joined today by Tim Johnson, Chief Executive Officer, Austin Peña, President, and Marcin Urbaszek, Chief Financial Officer. This morning, we filed our 10-Q and issued a press release and a presentation of our results, which are available on our website and have been filed with the SEC. I'd like to remind everyone that today's call may include forward-looking statements, which are subject to risks, uncertainties, and other factors outside of the company's control. Actual results may differ materially. For a discussion of some of the risks that could affect results, please see the risk factor section of our most recent 10-K. We do not undertake any duty to update forward-looking statements. We will also refer to certain non-GAAP measures on this call, and for reconciliations, you should refer to the press release and 10-Q. This audiocast is copyrighted material of Blackstone Mortgage Trust and may not be duplicated without our consent. For the second quarter, we reported a GAAP net loss of $0.48 per share, while distributable earnings were $0.31 per share, and distributable earnings prior to realized gains and losses were $0.48 per share. A few weeks ago, we paid a dividend of $0.47 per share with respect to the second quarter. With that, I'll now turn the call over to Tim. Tim Johnson: Thanks, Tim. BXMT's second quarter results reflect continued execution of our goal of driving portfolio turnover and reallocating our capital into high-conviction investment themes. We received $1.2 billion of repayments in the second quarter, nearly all of which were seasoned loans originated before 2023. We reinvested our capital into $1.4 billion of new investments concentrated in sectors with strong underlying fundamentals, such as residential, industrial, and net lease. Over the past year, these sectors have accounted for approximately 80% of our total portfolio deployment, and we've leveraged our global platform to source investments offering highly compelling relative value. Our investment activity this quarter includes our entry into the single-family home builder finance sector. This is an area where there has been significant pullback from the banking system, and our platform positions us well to gain market share amidst a fragmented competitive landscape. We see a large-scale growth opportunity with a total addressable market of $200 billion. Investments in this sector help to further diversify BXMT's portfolio with granular, well-structured loans, delivering some of the most attractive risk-adjusted returns we see today with mid to high teens levered yields. This strategy is reflective of our intentional approach to invest in high-conviction sectors, increase the granularity and diversity of our portfolio, and leverage our franchise to capture the best relative value opportunities across global markets. Another component of our portfolio turnover strategy is working our way through our legacy investments. On that front, we continued to make progress resolving an impaired multifamily loan and completing a modification of our largest watchlist loan, contributing to a 23% reduction in our overall watchlist from last quarter. We are also taking advantage of current market liquidity to strategically sell certain assets. This week, we expect to launch a sales process for one of our largest assets, a 686-key Hyatt Hotel in San Francisco, capitalizing on the sharp fundamental recovery and increasing investor demand in that market. We recently initiated sales processes for over $1 billion of loans, mostly office. We are disciplined, strategic sellers and expect only to transact at levels that we deem attractive. At the right price, we believe reallocating this capital into our highest conviction investment themes is in the best long-term interest of our shareholders. Turning to portfolio performance, the overall trends we see are consistent with prior quarters, with the exception being that we're seeing higher rates impact some of our legacy watchlist assets. We saw the pillars of the real estate recovery beginning to emerge in 2024, and they remain in place today. CMBS issuance is tracking a near 20-year high. New supply is down approximately 60%-90% across major asset classes, and values have steadily improved for 10 consecutive quarters. These market tailwinds have supported strong performance in the vast majority of our portfolio, driving approximately $13 billion of repayments over the period and bringing back capital that we've reinvested into new investments that reflect today's fundamental backdrop. As a result, we've reduced our total office exposure from 36% of our portfolio to just 21% today, significantly enhancing the composition of our $20 billion portfolio. Recently, we've observed increased pressure on a subset of our portfolio, approximately $1 billion of watchlist loans or about 5% of our total investments. These loans are predominantly secured by office assets with lower in-place cash flow and where fundamentals have lagged the broader real estate market, making them more sensitive to changes in the rate environment. These loans are on our watchlist precisely for these reasons but have been performing and supported by our institutional borrowers, who have invested nearly $800 million of subordinate capital into these assets since the end of 2023. These borrowers have been playing through a challenging environment with the expectation that a recovery in fundamentals and lower rates were on the horizon. Given headwinds in these specific sectors and markets, performance has taken longer to recover, and rates, of course, have remained elevated, with the tenure up more than 60 basis points since early March. This dynamic was at play this quarter as we took three new impairments on loans where borrowers had previously been supporting them. As we engage with borrowers on this $1 billion subset of loans as they approach upcoming maturities or other decision points, some may be similarly less willing to invest subordinate capital than they have been in the past. We think addressing these watchlist assets is critical to driving BXMT's long-term performance. Importantly, we believe the profile of these assets is different from what we see in the rest of our office portfolio. All of our other office watchlist loans have been modified or restructured with significant new equity invested at a basis that reflects today's environment, and we've seen recent leasing momentum across these assets further supporting performance. For our other performing office loans with risk rating three or better, nearly half are currently in the market for refinancing, while the remainder have strong in-place cash flow with an average debt yield of 10%. As we execute these strategies to accelerate portfolio turnover and address our watchlist, we may see some impact on book value and earnings, which as always, we will take into account, along with other factors such as interest rates and the investment environment, as we discuss our dividend with the board. We expect these initiatives to produce tangible near-term results. Between increased repayment activity and our proactive asset management approach, we see a path to reducing our exposure to both office loans and to legacy pre-2023 loans by 40% or more by year-end. Our new investments are laying the groundwork for a more diversified, granular BXMT, as evidenced by our average investment size declining from over $130 million just a few years ago to approximately $20 million today. This is our path forward. Address the tail of our portfolio and complete the transition to a more diversified business. We believe this best positions us to deliver strong long-term performance for our shareholders, and we are well on our way. I'll now turn it over to Austin to discuss our investments and portfolio in greater detail. Austin Peña: Thanks, Tim. In the second quarter, BXMT closed $1.4 billion of investments across multiple strategies, underscoring the breadth and diversification of our global real estate credit platform. We originated $1.1 billion of loans with an average LTV of 61%, mostly secured by residential and industrial. 80% of our lending was in the U.S., and the remainder was in Europe and secured by well-leased, diversified portfolios. We continue to grow our net lease strategy, where we acquired over $135 million of properties at share. Our portfolio now stands at $661 million. When we entered the net lease sector, we were faced with a choice: buy an existing platform to scale quickly, but likely at premium pricing, or build from scratch. Invest time and resources to hire an experienced, dedicated team to thoughtfully assemble a portfolio underwritten with the benefit of the unique data and insights from the Blackstone platform. We chose the latter, allowing BXMT to capture that aggregation premium for our investors. Our curated high-quality portfolio adds granularity and duration with long-term, steadily increasing cash flows that serve as a natural complement to our floating rate lending strategy. While just 3% of our portfolio today, we see continued growth ahead, with over $150 million of acquisitions closed or in closing so far in July. As Tim mentioned earlier, we continue to evolve and diversify our investment strategies. We entered the home builder finance sector, acquiring approximately $130 million of loans at share in a newly established joint venture. Like net lease, home builder finance loans are geographically diverse and granular. The initial portfolio consisted of 36 loans across 10 states with an average loan commitment of just $12 million. Our joint venture with the largest private lender in the sector positions BXMT to grow our footprint in this attractive area over time. With a healthy real estate capital markets backdrop, we are seeing active pipeline activity across our origination channels, as well as robust repayments in our floating rate loan portfolio. This is a good setup to execute our various strategic initiatives and accelerate turnover of our portfolio. As Tim mentioned, we collected $1.2 billion of repayments in the quarter, effectively all originated prior to 2023. In July, we've collected another $1.4 billion of similar vintage. This includes a EUR 450 million paydown on our Dublin mixed-use loan, our largest position as of last quarter. This loan now represents just 25% of our initial commitment and generates a double-digit debt yield. Our loan portfolio ended the quarter at $17 billion across 133 loans, with the majority in multi-family and industrial sectors. Our portfolio was 97% performing at quarter end, down slightly from 98% last quarter, reflecting impairments of three loans, two traditional office assets, and one mixed-use asset with a sizable office component, and the resolution of a Dallas multi-family loan, which we foreclosed on in June. Our most significant impairment in the quarter was a $345 million Chicago office loan originated in 2018. We downgraded this loan to our watchlist in 2022, reflecting well-known challenges in the Chicago office market following the COVID-19 pandemic. While this asset has secured over 500,000 sq ft of leasing over the last two and a half years the borrower had been supportive, investing incremental equity to fund leasing costs. The combination of elevated interest rates and continued headwinds in the Chicago market ultimately put more pressure on the borrower, who defaulted on the loan in June. Our asset management team acted quickly, and subsequent to quarter end, we substantially agreed terms on a restructure with the borrower, who intends to commit significant new capital at a reset basis in exchange for additional term and a reduction of our loan balance, which is reflected in our CECL reserves as of quarter end. Following this modification, the asset will be well-capitalized to reach stabilization with a seven-year average remaining lease term and minimal near-term rollover. Our watchlist today sits at $2 billion, down from $2.5 billion last quarter. This reflects an upgrade of our largest watchlist loan after completing a credit-enhancing modification that we mentioned on last quarter's call. In exchange for a term extension and slightly reduced economics, the borrower invested significant new equity, putting this loan on stable footing for the long term. We added three loans to our watchlist this quarter, a Denver office loan and a hotel loan in Hawaii, both originated prior to 2023, and a multifamily loan in Australia, secured by a high-quality new-build asset in Melbourne, a strong market with less than 2% vacancy. Our owned real estate portfolio consisted of 14 assets with $1.4 billion of carrying value at quarter end. As Tim mentioned, we expect to launch the sale of our Hyatt Hotel in San Francisco, our second-largest owned asset. We have several others that we are evaluating to bring to market this year as we remain highly focused on reducing this portion of our portfolio and reinvesting that capital accretively into target investments. With a deeply experienced team of 170 real estate debt professionals and the resources of the broader Blackstone real estate platform, we are well-positioned to execute our various strategic initiatives with a relentless focus on maximizing outcomes and delivering for our investors. With that, I will turn things over to Marcin. Marcin Urbaszek: Thank you, Austin, and good morning, everyone. In the second quarter, BXMT reported a GAAP net loss of $0.48 per share and distributable earnings, or DE, of $0.31 per share. DE included $29 million of realized losses, primarily related to the resolution of an impaired Dallas multifamily loan following the foreclosure of the collateral property. We now hold the asset on the balance sheet as owned real estate at a significant discount to prior ownership's basis. DE prior to realized gains and losses was $0.48 per share, which covered our $0.47 per share dividend but was down $0.01 from the prior quarter. DE, prior to realized gains and losses, benefited from continued growth in our unconsolidated joint ventures as we actively deployed capital across our net lease and single-family home builder finance businesses. Altogether, we had $322 million of capital invested in our joint venture investments at quarter end, up from $244 million as in Q1, and recognized a little over $9 million of DE this quarter from these diversified strategies. We also recognized higher seasonal net revenues generated by our New York hotel, which contributed to $15 million of NOI we earned from our owned real estate assets this quarter, up about $1 million from Q1. Looking ahead to Q3, we expect DE will be impacted by the new loan impairments recognized in the quarter and the timing of several large repayments collected in July. Book value ended the second quarter at $19.31 per share, down 4% from Q1, primarily due to an $0.80 per share increase in CECL reserves and $0.12 per share of depreciation and amortization related to our owned real estate assets. In total, book value includes $2.43 per share of total CECL reserves, of which $1.13 per share is the general reserve and $1.30 per share are the asset-specific reserves. The majority of the net increase in the CECL reserve this quarter was related to the impairment of a large Chicago office loan Austin discussed earlier, which we believe is appropriately reserved for. The modest decline in our Q2 general reserve reflects risk rating movements this quarter, including a smaller balance of watchlist loans. Turning to BXMT's capitalization, we ended the quarter with $1.2 billion of liquidity. Our Q2 debt-to-equity ratio increased to 3.9x from 3.7x in Q1, mainly due to the timing of repayments and the increase in CECL. We remain active across the capital markets. In May, we issued $450 million of senior secured notes, which largely pre-funded our corporate debt maturity set to occur in the first quarter of 2027. The offering was met with strong investor demand and priced at the tightest new issue spread we've ever achieved across our corporate debt complex. Upon repayment of the 2027 notes, we will have nearly five years of weighted average remaining term on our corporate debt and no maturities until 2029. Working closely with our sophisticated capital markets team, we continue to drive lower financing costs and are now regularly borrowing at or near our historical all-time highs. We also closed on a new non-mark-to-market lending facility with a major bank in the U.K. Our ability to source unique and attractive investments for our portfolio, combined with our broad access to various and attractively priced sources of capital, remain some of our key competitive advantages. Our balance sheet continues to be very well positioned with total non-mark-to-market borrowings now representing about 88% of total debt, and with no capital markets mark-to-market provisions throughout our capital structure. Thank you again for joining us today. I will now ask the operator to open the call to questions. Operator: Thank you. As a reminder, please press star one to ask a question. We ask you to limit yourself to one question and one follow-up to allow as many callers to join the queue as possible. We will take our first question from Tom Catherwood with BTIG. Tom Catherwood: Thanks and good morning, everybody. Maybe either Tim or Austin, I just want to square up the commentary on CECL reserves and the potential sale of a $1 billion or a $1 billion+ in loans. It sounds like CECL reserves were, especially the specific ones, were primarily on the three assets downgraded to the five-rated bucket. When you think of the $1 billion in loans that's out there, from a marking standpoint, is that marked to where you're getting bids at right now? What's the process for maybe adjusting that going forward and the potential for additional reserves as you get towards the sale? Tim Johnson: Thanks, Tom. This is Tim. I'd say that process is still pretty early on in terms of the loan sale. We're going to review what we get. As we noted in the prepared remarks, that is kind of an optional sale we're looking to take advantage of what we think is a reasonably liquid market to sell loans. There are not reserves against those $1 billion of loans today. As we evaluate what we receive in terms of bids, we'll walk through that next quarter after we have more information. Tom Catherwood: Perfect. As a follow-up, obviously that's an optional sale, but there are other sales you have teed up. You mentioned the sale of the Hyatt Hotel in San Francisco. When you think of this goal of kind of being a more diversified platform, what are your capital allocation priorities for the proceeds from these sales as they come in? Do you primarily put them into loans, or could you look to accelerate net lease investments or invest kind of elsewhere in a variety of different strategies? What are your thoughts on those priorities? Tim Johnson: It's a great question, and it really is about that rotation into the strategies that we have the most conviction and we think have the best relative value today. As we highlighted in the prepared remarks, net lease, Homebuilder finance, as well as our traditional lending businesses all provide compelling opportunities. We're going to take that capital back in and we'll evaluate each and every option we have in the market to determine where the best relative value is. We highlighted some of those areas, and you've seen it in our recent investment activity where we're putting that capital. It's really concentrated in the sectors where we see the best underlying fundamentals and where we think we can achieve the best relative value in terms of returns. Tom Catherwood: Great. Thanks for the answers. Operator: Thank you. We'll take our next question from Jade Rahmani with KBW. Jade Rahmani: Thank you very much. The $1 billion of watch list loans that are, you said, at the margin impacted by higher rates, are those risk four-rated loans? Austin Peña: Yes, Jade. This is Austin. Those are on our watch list, which, yes, have a risk rating of four. Jade Rahmani: Okay. Those are primarily office? Austin Peña: Yes. Jade Rahmani: Okay. My main question is if you're starting to see pressure in multifamily loan performance. How do you think sponsors are thinking about the outlook today? I think that multifamily rent growth was about flat this quarter year-over-year. The negative rent growth in Sunbelt is a little bit better than it had been, but still negative. Are investors seeing the light at the end of the tunnel on supply for 2027 and looking to hold through this period of high rates? Are they more worried about rates where they are and ability to cover debt service and kind of value recovery? Just what are your views on multifamily credit risk? Tim Johnson: Yeah, I think we continue to see broadly really good liquidity in multifamily both within our portfolio and more broadly in the markets. I think a good thing to highlight would be that we've received about $5 billion of repayments on multifamily loans originated in 2021 and 2022. There have been repayments recently, and we're expecting repayments in the near term that are pre-2022 vintage multifamily. I think that the diversity of capital sources in that space is a real valuable thing for refinancing activity. You've got a broad base of investor appetite for multifamily loans. As you noted, we are seeing fundamentals generally improve in multifamily. Net absorption nationally in the first half was the strongest in five years, so we are seeing positive trends there. I'd say in our portfolio, we continue to see good fundamentals and good liquidity and repayment activity. Jade Rahmani: Thank you very much. If I could squeeze one more in, it'd just be on special situations in M&A. We've seen a pickup in the real estate space, whether it be equity REITs. Even in the commercial mortgage REIT space, one company selling its portfolio and liquidating, another announcing strategic alternatives. Do you expect to participate in M&A, do you think this could be a source of attractive opportunities? Tim Johnson: Sure, Jade, it's Tim again. I'd say first we're always going to evaluate opportunities to maximize shareholder value, and we see what's going on in the markets. I think we are pursuing some attractive things today, like we've talked about with portfolio turnover, looking to sell a loan portfolio to do some of that redeployment of capital. I really think when we look at things like M&A, we look at it as a build versus a buy concept, and we've generally chosen build in terms of our net lease strategy and our home builder strategy. We think we offer a really compelling investment opportunity to the market broadly, given our $78 billion overall real estate debt platform. We can create some very compelling opportunities that are very difficult to access. We think we have a platform that can deliver something that's really valuable to shareholders, and we're going to continue on that path. We'll always evaluate opportunity as they arise. Jade Rahmani: Thank you. Operator: We will take our next question from Harsh Hemnani with Green Street. Harsh Hemnani: Thank you. As we think through the decision to sell a portion of the office loan portfolio, could you maybe talk through the thinking behind that? I guess on the one hand it makes sense the office market is not great, even though fundamentals are starting to improve. I guess on the one side, the fundamentals are starting to improve and there could be, if you wait for a little bit, recovery might be higher. On the flip side of that, you've talked about this when entering the bank loan portfolio, joint ventures, there's certain accruing and earning assets that may fit better in a REIT wrapper in the public market. It's fair to expect that some of these office loans may be non-accruing and a drag on distributable earnings in the short term. I guess, how do you address the question as to this decision was made more from a perspective of long-term shareholder value creation, than from it being an exercise in near-term earnings management? How do you address investor concerns around that, and how were you thinking of that internally? Tim Johnson: Thanks, Harsh. This is Tim. I'd say, first of all, the loan sale process is early stage and underway, as we noted we're under no obligation to sell, and we may look at selling some, all, or none of it. There are many options here. I think it's really about rotating our portfolio more than something driven by a near-term earnings impact. It's really about rotating our portfolio into the sectors where we see the best fundamentals, the best risk-adjusted return, and the best relative value. What's underpinning it is that, as I noted before, we're very active in the loan trading market, and you noted it as well, both really more as a buyer than a seller, but we see good liquidity in that space. If we can take advantage of an opportunity to rotate out of office into other sectors, we think that is going to be the best outcome for long-term value for our shareholders. Of course, we're going to look at price, and it's got to work for us and make sense relative to the risk of those underlying loans themselves. Harsh Hemnani: Got it. That's helpful. Maybe in terms of the balance sheet. Total leverage has ticked up a little bit in the high fours if you include the CLOs. As you've sort of diversified all the new ventures, the net lease portfolios, the bank loan portfolios that show up as equity interests on the balance sheet have their own leverage added onto it. I guess, how are you thinking about leverage at this point, if and when there are any office asset sales, does part of it get used to de-lever the balance sheet, or are you fairly comfortable with leverage levels where they are? Marcin Urbaszek: Thanks, Harsh. It's Marcin. Thank you for joining us. Thanks for your question. I think as I mentioned in my prepared remarks, the leverage was a little elevated at the end of the quarter, largely driven by the timing of some repayments and obviously the resource service. It's within our 3x-4x debt-to-equity range. Even though the prepayment we've already realized, as I mentioned earlier it takes that leverage down quite a bit in this quarter. I think our overall leverage strategy is not shifting or changing at the moment. It's obviously a function of the market conditions, balance sheet structure, cost, and structure of leverage. We intend to be in that 3x-4x debt-to-equity range going forward. Again, quarter to quarter, there will be some variability depending on the timing of closing of repayments and originations and things like that. Harsh Hemnani: Got it. Thank you. Operator: Thank you. We'll take our next question from Rick Shane with JPMorgan. Rick Shane: Hey, guys. Thanks for taking my question. One quick cleanup question. I just apologize. I forget. Policies diverge across the industry. Do you guys realize losses when you put REO and mark it down, or do you wait until you actually complete the sale for the realization event? Marcin Urbaszek: Hey, Rick. It's Marcin. We realize the loss when we take over when we foreclose or consolidate the asset. That happened in this quarter with that Denver multifamily loan. Obviously, as we own real estate, we are required to assess them for any potential impairments every quarter, which we go through a robust process. That initial charge-off happens when you take ownership. Rick Shane: Got it. Assuming, for example, the San Francisco hotel is sold close to your carrying value, no further realized loss is associated with that. Marcin Urbaszek: Yes. We look at what the net proceeds are vis-à-vis where we carry it, and then if there needs to be an adjustment, there is one. Correct. Rick Shane: Got it. Okay, great. Thank you. Look, Marcin, you alluded to the fact that there's going to be some drag versus distributable X losses in the third quarter. Can you help us think about where that run rate is versus the $0.48 that you guys reported in the second? Marcin Urbaszek: Look, I think it's hard giving all the moving pieces right now, and it's still early in the quarter. Obviously, given some of the impairments we took in Q2 and the pretty substantial repayment volume that we had this quarter, we do expect some impact to the third quarter. Again, it'll take us probably a couple quarters to be fully deployed with the money that we're getting back. It's hard to say exactly where we're going to be right now on a run rate basis. There's a lot of things moving around at the moment. Rick Shane: Got it. Okay. That actually leads to my final question, which is how should we think about that in the context of dividend and dividend policy? If, for example, how far forward do you look in setting that policy? If we are in a situation over the next, for example, two to three quarters where there is a shortfall, does it make sense to recalibrate the dividend that quickly? Or are you looking at a sort of more optimistic dividend run rate once you're fully redeployed? Again, you're sort of saying, "Hey, look, DPS is going to come down." There was a comment about reevaluating dividend. Again, I think that's sort of a generic comment that you do that every quarter. I think everybody really needs to know the interplay between the drag on earnings and the dividend policy in the near term. Tim Johnson: Thanks, Rick. It's Tim. I'd say conceptually, the dividend is really focused around long-term earnings power of the business, and that's how we've always looked at it. Marcin noted there's some short-term impacts and there are a number of moving pieces. Obviously, as Marcin said, we had impairments in the second quarter, and given the initiatives that we're undertaking to drive portfolio turnover, as we noted in the prepared remarks, it's possible we see impacts from that. There's a number of moving pieces that we'll have to evaluate with the board, and it's too early to kind of tell what that's going to look like right now. What we're going to evaluate really is the long-term earnings power of the business. That's what we evaluate when we look at the dividend. Rick Shane: Got it. Okay. Thank you guys very much. Appreciate it. Operator: Thank you. We will take our final question from Marissa Lobo with UBS. Marissa Lobo: Good morning. Thanks for taking my question. You mentioned that nearly half of your performing office loans were three-rated or better, and they're currently in the refi market. With the tenure up, what are you seeing in terms of lender appetite for these processes and what's the contingency if they don't close by year-end? Austin Peña: Thanks, Marissa. It's Austin. I think as we noted, obviously, rates are moving around. What we've seen very recently is, as we noted earlier, is a really liquid debt market. We've gotten a lot of repayments, a lot in the second quarter, another nearly $1.5 billion so far in July. You see an active CMBS market, as Tim mentioned earlier. We really see pretty active capital markets out there and strong demand from lenders to finance good assets. As Tim mentioned, and as you alluded to, that includes a lot of different sectors, including a lot of our office loans. Today we continue to see a lot of activity in the refinance market and the capital markets. Nothing's really changed, I would say, sitting here today. Marissa Lobo: Okay. Thank you. Just shifting to the portfolio rotation, you cited a $200 billion TAM in homebuilder finance. What is the realistic allocation for BXMT in this sector over the next year? How does the credit profile of these loans compare to your transitional lending book? Austin Peña: Thanks. This is Austin. We're really excited about this new opportunity and this sector. We really see a few things that make this what we think a really attractive and compelling opportunity. The first is the overall sector of housing in the U.S. is undersupplied, that creates a good fundamental setup. Secondly, there's been a pretty big pullback in lending to the space, particularly with regional banks that are historically big lenders to this sector. Finally, as Tim mentioned earlier, this is a sector where it's really hard to access these investments without a platform. In terms of the underlying loans, they're very granular, they're very geographically diverse. You really need a national footprint and a presence in this space to access these investments. For those reasons, what we're seeing in the space is really an interesting and pretty compelling yield opportunity. In terms of the underlying loans themselves, they're really well-structured. Typically carry very good recourse to corporate entities, in many cases, individuals. They're often on cross portfolios. From an underlying credit perspective, we really like the credit, of course, the return also we think is attractive. The last thing I would say is we've partnered with the largest private lender to the space. They have a really great product suite that they can offer to this market. We think that really sets us up well to grow in this space. We're just getting started, but we think we have a really good foundation. Marissa Lobo: Got it. Appreciate the answers. Operator: Thank you. With no additional questions in queue, I will turn the call back over to Tim Hayes for any additional or closing remarks. Tim Hayes: Yeah. Thank you, Katie, and to everyone on today's call. Please reach out with any questions. Operator: Goodbye. Thank you. That will conclude today's call. We appreciate your participation. Before you buy stock in Blackstone Mortgage Trust, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Blackstone Mortgage Trust wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $386,727!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,232,139!* Now, it’s worth noting Stock Advisor’s total average return is 906% — a market-crushing outperformance compared to 208% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 3, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Blackstone Mortgage Trust (BXMT) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Image source: The Motley Fool. Thursday, July 30, 2026 at 9:00 a.m. ET Vice President, Shareholder Relations - Tim Hayes Chief Executive Officer - Tim Johnson President - Austin Pe!!a Chief Financial Officer - Marcin Urbaszek Operator: Good day, and welcome to the Blackstone Mortgage Trust second quarter 2026 investor call. Today's call is being recorded. At this time, all participants are in a listen-only mode. If you require operator assistance at any time, please press star zero. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. At this time, I'd like to turn the call over to Tim Hayes, Vice President, Shareholder Relations. Please go ahead. Tim Hayes: Good morning, and welcome everyone to Blackstone Mortgage Trust's second quarter 2026 earnings conference call. I'm joined today by Tim Johnson, Chief Executive Officer, Austin Peña, President, and Marcin Urbaszek, Chief Financial Officer. This morning, we filed our 10-Q and issued a press release and a presentation of our results, which are available on our website and have been filed with the SEC. I'd like to remind everyone that today's call may include forward-looking statements, which are subject to risks, uncertainties, and other factors outside of the company's control. Actual results may differ materially. For a discussion of some of the risks that could affect results, please see the risk factor section of our most recent 10-K. We do not undertake any duty to update forward-looking statements. We will also refer to certain non-GAAP measures on this call, and for reconciliations, you should refer to the press release and 10-Q. This audiocast is copyrighted material of Blackstone Mortgage Trust and may not be duplicated without our consent. For the second quarter, we reported a GAAP net loss of $0.48 per share, while distributable earnings were $0.31 per share, and distributable earnings prior to realized gains and losses were $0.48 per share. A few weeks ago, we paid a dividend of $0.47 per share with respect to the second quarter. With that, I'll now turn the call over to Tim. Tim Johnson: Thanks, Tim. BXMT's second quarter results reflect continued execution of our goal of driving portfolio turnover and reallocating our capital into high-conviction investment themes. We received $1.2 billion of repayments in the second quarter, nearly all of which were seasoned loans originated before 2023. We reinvested our capital into $1.4 billion of new investments concentrated in sectors with strong underlying fundamentals, such as residential, industrial, and net lease. Over the past year, these sectors have accounted for approximately 80% of our total portfolio deployment, and we've leveraged our global platform to source investments offering highly compelling relative value. Our investment activity this quarter includes our entry into the single-family home builder finance sector. This is an area where there has been significant pullback from the banking system, and our platform positions us well to gain market share amidst a fragmented competitive landscape. We see a large-scale growth opportunity with a total addressable market of $200 billion. Investments in this sector help to further diversify BXMT's portfolio with granular, well-structured loans, delivering some of the most attractive risk-adjusted returns we see today with mid to high teens levered yields. This strategy is reflective of our intentional approach to invest in high-conviction sectors, increase the granularity and diversity of our portfolio, and leverage our franchise to capture the best relative value opportunities across global markets. Another component of our portfolio turnover strategy is working our way through our legacy investments. On that front, we continued to make progress resolving an impaired multifamily loan and completing a modification of our largest watchlist loan, contributing to a 23% reduction in our overall watchlist from last quarter. We are also taking advantage of current market liquidity to strategically sell certain assets. This week, we expect to launch a sales process for one of our largest assets, a 686-key Hyatt Hotel in San Francisco, capitalizing on the sharp fundamental recovery and increasing investor demand in that market. We recently initiated sales processes for over $1 billion of loans, mostly office. We are disciplined, strategic sellers and expect only to transact at levels that we deem attractive. At the right price, we believe reallocating this capital into our highest conviction investment themes is in the best long-term interest of our shareholders. Turning to portfolio performance, the overall trends we see are consistent with prior quarters, with the exception being that we're seeing higher rates impact some of our legacy watchlist assets. We saw the pillars of the real estate recovery beginning to emerge in 2024, and they remain in place today. CMBS issuance is tracking a near 20-year high. New supply is down approximately 60%-90% across major asset classes, and values have steadily improved for 10 consecutive quarters. These market tailwinds have supported strong performance in the vast majority of our portfolio, driving approximately $13 billion of repayments over the period and bringing back capital that we've reinvested into new investments that reflect today's fundamental backdrop. As a result, we've reduced our total office exposure from 36% of our portfolio to just 21% today, significantly enhancing the composition of our $20 billion portfolio. Recently, we've observed increased pressure on a subset of our portfolio, approximately $1 billion of watchlist loans or about 5% of our total investments. These loans are predominantly secured by office assets with lower in-place cash flow and where fundamentals have lagged the broader real estate market, making them more sensitive to changes in the rate environment. These loans are on our watchlist precisely for these reasons but have been performing and supported by our institutional borrowers, who have invested nearly $800 million of subordinate capital into these assets since the end of 2023. These borrowers have been playing through a challenging environment with the expectation that a recovery in fundamentals and lower rates were on the horizon. Given headwinds in these specific sectors and markets, performance has taken longer to recover, and rates, of course, have remained elevated, with the tenure up more than 60 basis points since early March. This dynamic was at play this quarter as we took three new impairments on loans where borrowers had previously been supporting them. As we engage with borrowers on this $1 billion subset of loans as they approach upcoming maturities or other decision points, some may be similarly less willing to invest subordinate capital than they have been in the past. We think addressing these watchlist assets is critical to driving BXMT's long-term performance. Importantly, we believe the profile of these assets is different from what we see in the rest of our office portfolio. All of our other office watchlist loans have been modified or restructured with significant new equity invested at a basis that reflects today's environment, and we've seen recent leasing momentum across these assets further supporting performance. For our other performing office loans with risk rating three or better, nearly half are currently in the market for refinancing, while the remainder have strong in-place cash flow with an average debt yield of 10%. As we execute these strategies to accelerate portfolio turnover and address our watchlist, we may see some impact on book value and earnings, which as always, we will take into account, along with other factors such as interest rates and the investment environment, as we discuss our dividend with the board. We expect these initiatives to produce tangible near-term results. Between increased repayment activity and our proactive asset management approach, we see a path to reducing our exposure to both office loans and to legacy pre-2023 loans by 40% or more by year-end. Our new investments are laying the groundwork for a more diversified, granular BXMT, as evidenced by our average investment size declining from over $130 million just a few years ago to approximately $20 million today. This is our path forward. Address the tail of our portfolio and complete the transition to a more diversified business. We believe this best positions us to deliver strong long-term performance for our shareholders, and we are well on our way. I'll now turn it over to Austin to discuss our investments and portfolio in greater detail. Austin Peña: Thanks, Tim. In the second quarter, BXMT closed $1.4 billion of investments across multiple strategies, underscoring the breadth and diversification of our global real estate credit platform. We originated $1.1 billion of loans with an average LTV of 61%, mostly secured by residential and industrial. 80% of our lending was in the U.S., and the remainder was in Europe and secured by well-leased, diversified portfolios. We continue to grow our net lease strategy, where we acquired over $135 million of properties at share. Our portfolio now stands at $661 million. When we entered the net lease sector, we were faced with a choice: buy an existing platform to scale quickly, but likely at premium pricing, or build from scratch. Invest time and resources to hire an experienced, dedicated team to thoughtfully assemble a portfolio underwritten with the benefit of the unique data and insights from the Blackstone platform. We chose the latter, allowing BXMT to capture that aggregation premium for our investors. Our curated high-quality portfolio adds granularity and duration with long-term, steadily increasing cash flows that serve as a natural complement to our floating rate lending strategy. While just 3% of our portfolio today, we see continued growth ahead, with over $150 million of acquisitions closed or in closing so far in July. As Tim mentioned earlier, we continue to evolve and diversify our investment strategies. We entered the home builder finance sector, acquiring approximately $130 million of loans at share in a newly established joint venture. Like net lease, home builder finance loans are geographically diverse and granular. The initial portfolio consisted of 36 loans across 10 states with an average loan commitment of just $12 million. Our joint venture with the largest private lender in the sector positions BXMT to grow our footprint in this attractive area over time. With a healthy real estate capital markets backdrop, we are seeing active pipeline activity across our origination channels, as well as robust repayments in our floating rate loan portfolio. This is a good setup to execute our various strategic initiatives and accelerate turnover of our portfolio. As Tim mentioned, we collected $1.2 billion of repayments in the quarter, effectively all originated prior to 2023. In July, we've collected another $1.4 billion of similar vintage. This includes a EUR 450 million paydown on our Dublin mixed-use loan, our largest position as of last quarter. This loan now represents just 25% of our initial commitment and generates a double-digit debt yield. Our loan portfolio ended the quarter at $17 billion across 133 loans, with the majority in multi-family and industrial sectors. Our portfolio was 97% performing at quarter end, down slightly from 98% last quarter, reflecting impairments of three loans, two traditional office assets, and one mixed-use asset with a sizable office component, and the resolution of a Dallas multi-family loan, which we foreclosed on in June. Our most significant impairment in the quarter was a $345 million Chicago office loan originated in 2018. We downgraded this loan to our watchlist in 2022, reflecting well-known challenges in the Chicago office market following the COVID-19 pandemic. While this asset has secured over 500,000 sq ft of leasing over the last two and a half years the borrower had been supportive, investing incremental equity to fund leasing costs. The combination of elevated interest rates and continued headwinds in the Chicago market ultimately put more pressure on the borrower, who defaulted on the loan in June. Our asset management team acted quickly, and subsequent to quarter end, we substantially agreed terms on a restructure with the borrower, who intends to commit significant new capital at a reset basis in exchange for additional term and a reduction of our loan balance, which is reflected in our CECL reserves as of quarter end. Following this modification, the asset will be well-capitalized to reach stabilization with a seven-year average remaining lease term and minimal near-term rollover. Our watchlist today sits at $2 billion, down from $2.5 billion last quarter. This reflects an upgrade of our largest watchlist loan after completing a credit-enhancing modification that we mentioned on last quarter's call. In exchange for a term extension and slightly reduced economics, the borrower invested significant new equity, putting this loan on stable footing for the long term. We added three loans to our watchlist this quarter, a Denver office loan and a hotel loan in Hawaii, both originated prior to 2023, and a multifamily loan in Australia, secured by a high-quality new-build asset in Melbourne, a strong market with less than 2% vacancy. Our owned real estate portfolio consisted of 14 assets with $1.4 billion of carrying value at quarter end. As Tim mentioned, we expect to launch the sale of our Hyatt Hotel in San Francisco, our second-largest owned asset. We have several others that we are evaluating to bring to market this year as we remain highly focused on reducing this portion of our portfolio and reinvesting that capital accretively into target investments. With a deeply experienced team of 170 real estate debt professionals and the resources of the broader Blackstone real estate platform, we are well-positioned to execute our various strategic initiatives with a relentless focus on maximizing outcomes and delivering for our investors. With that, I will turn things over to Marcin. Marcin Urbaszek: Thank you, Austin, and good morning, everyone. In the second quarter, BXMT reported a GAAP net loss of $0.48 per share and distributable earnings, or DE, of $0.31 per share. DE included $29 million of realized losses, primarily related to the resolution of an impaired Dallas multifamily loan following the foreclosure of the collateral property. We now hold the asset on the balance sheet as owned real estate at a significant discount to prior ownership's basis. DE prior to realized gains and losses was $0.48 per share, which covered our $0.47 per share dividend but was down $0.01 from the prior quarter. DE, prior to realized gains and losses, benefited from continued growth in our unconsolidated joint ventures as we actively deployed capital across our net lease and single-family home builder finance businesses. Altogether, we had $322 million of capital invested in our joint venture investments at quarter end, up from $244 million as in Q1, and recognized a little over $9 million of DE this quarter from these diversified strategies. We also recognized higher seasonal net revenues generated by our New York hotel, which contributed to $15 million of NOI we earned from our owned real estate assets this quarter, up about $1 million from Q1. Looking ahead to Q3, we expect DE will be impacted by the new loan impairments recognized in the quarter and the timing of several large repayments collected in July. Book value ended the second quarter at $19.31 per share, down 4% from Q1, primarily due to an $0.80 per share increase in CECL reserves and $0.12 per share of depreciation and amortization related to our owned real estate assets. In total, book value includes $2.43 per share of total CECL reserves, of which $1.13 per share is the general reserve and $1.30 per share are the asset-specific reserves. The majority of the net increase in the CECL reserve this quarter was related to the impairment of a large Chicago office loan Austin discussed earlier, which we believe is appropriately reserved for. The modest decline in our Q2 general reserve reflects risk rating movements this quarter, including a smaller balance of watchlist loans. Turning to BXMT's capitalization, we ended the quarter with $1.2 billion of liquidity. Our Q2 debt-to-equity ratio increased to 3.9x from 3.7x in Q1, mainly due to the timing of repayments and the increase in CECL. We remain active across the capital markets. In May, we issued $450 million of senior secured notes, which largely pre-funded our corporate debt maturity set to occur in the first quarter of 2027. The offering was met with strong investor demand and priced at the tightest new issue spread we've ever achieved across our corporate debt complex. Upon repayment of the 2027 notes, we will have nearly five years of weighted average remaining term on our corporate debt and no maturities until 2029. Working closely with our sophisticated capital markets team, we continue to drive lower financing costs and are now regularly borrowing at or near our historical all-time highs. We also closed on a new non-mark-to-market lending facility with a major bank in the U.K. Our ability to source unique and attractive investments for our portfolio, combined with our broad access to various and attractively priced sources of capital, remain some of our key competitive advantages. Our balance sheet continues to be very well positioned with total non-mark-to-market borrowings now representing about 88% of total debt, and with no capital markets mark-to-market provisions throughout our capital structure. Thank you again for joining us today. I will now ask the operator to open the call to questions. Operator: Thank you. As a reminder, please press star one to ask a question. We ask you to limit yourself to one question and one follow-up to allow as many callers to join the queue as possible. We will take our first question from Tom Catherwood with BTIG. Tom Catherwood: Thanks and good morning, everybody. Maybe either Tim or Austin, I just want to square up the commentary on CECL reserves and the potential sale of a $1 billion or a $1 billion+ in loans. It sounds like CECL reserves were, especially the specific ones, were primarily on the three assets downgraded to the five-rated bucket. When you think of the $1 billion in loans that's out there, from a marking standpoint, is that marked to where you're getting bids at right now? What's the process for maybe adjusting that going forward and the potential for additional reserves as you get towards the sale? Tim Johnson: Thanks, Tom. This is Tim. I'd say that process is still pretty early on in terms of the loan sale. We're going to review what we get. As we noted in the prepared remarks, that is kind of an optional sale we're looking to take advantage of what we think is a reasonably liquid market to sell loans. There are not reserves against those $1 billion of loans today. As we evaluate what we receive in terms of bids, we'll walk through that next quarter after we have more information. Tom Catherwood: Perfect. As a follow-up, obviously that's an optional sale, but there are other sales you have teed up. You mentioned the sale of the Hyatt Hotel in San Francisco. When you think of this goal of kind of being a more diversified platform, what are your capital allocation priorities for the proceeds from these sales as they come in? Do you primarily put them into loans, or could you look to accelerate net lease investments or invest kind of elsewhere in a variety of different strategies? What are your thoughts on those priorities? Tim Johnson: It's a great question, and it really is about that rotation into the strategies that we have the most conviction and we think have the best relative value today. As we highlighted in the prepared remarks, net lease, Homebuilder finance, as well as our traditional lending businesses all provide compelling opportunities. We're going to take that capital back in and we'll evaluate each and every option we have in the market to determine where the best relative value is. We highlighted some of those areas, and you've seen it in our recent investment activity where we're putting that capital. It's really concentrated in the sectors where we see the best underlying fundamentals and where we think we can achieve the best relative value in terms of returns. Tom Catherwood: Great. Thanks for the answers. Operator: Thank you. We'll take our next question from Jade Rahmani with KBW. Jade Rahmani: Thank you very much. The $1 billion of watch list loans that are, you said, at the margin impacted by higher rates, are those risk four-rated loans? Austin Peña: Yes, Jade. This is Austin. Those are on our watch list, which, yes, have a risk rating of four. Jade Rahmani: Okay. Those are primarily office? Austin Peña: Yes. Jade Rahmani: Okay. My main question is if you're starting to see pressure in multifamily loan performance. How do you think sponsors are thinking about the outlook today? I think that multifamily rent growth was about flat this quarter year-over-year. The negative rent growth in Sunbelt is a little bit better than it had been, but still negative. Are investors seeing the light at the end of the tunnel on supply for 2027 and looking to hold through this period of high rates? Are they more worried about rates where they are and ability to cover debt service and kind of value recovery? Just what are your views on multifamily credit risk? Tim Johnson: Yeah, I think we continue to see broadly really good liquidity in multifamily both within our portfolio and more broadly in the markets. I think a good thing to highlight would be that we've received about $5 billion of repayments on multifamily loans originated in 2021 and 2022. There have been repayments recently, and we're expecting repayments in the near term that are pre-2022 vintage multifamily. I think that the diversity of capital sources in that space is a real valuable thing for refinancing activity. You've got a broad base of investor appetite for multifamily loans. As you noted, we are seeing fundamentals generally improve in multifamily. Net absorption nationally in the first half was the strongest in five years, so we are seeing positive trends there. I'd say in our portfolio, we continue to see good fundamentals and good liquidity and repayment activity. Jade Rahmani: Thank you very much. If I could squeeze one more in, it'd just be on special situations in M&A. We've seen a pickup in the real estate space, whether it be equity REITs. Even in the commercial mortgage REIT space, one company selling its portfolio and liquidating, another announcing strategic alternatives. Do you expect to participate in M&A, do you think this could be a source of attractive opportunities? Tim Johnson: Sure, Jade, it's Tim again. I'd say first we're always going to evaluate opportunities to maximize shareholder value, and we see what's going on in the markets. I think we are pursuing some attractive things today, like we've talked about with portfolio turnover, looking to sell a loan portfolio to do some of that redeployment of capital. I really think when we look at things like M&A, we look at it as a build versus a buy concept, and we've generally chosen build in terms of our net lease strategy and our home builder strategy. We think we offer a really compelling investment opportunity to the market broadly, given our $78 billion overall real estate debt platform. We can create some very compelling opportunities that are very difficult to access. We think we have a platform that can deliver something that's really valuable to shareholders, and we're going to continue on that path. We'll always evaluate opportunity as they arise. Jade Rahmani: Thank you. Operator: We will take our next question from Harsh Hemnani with Green Street. Harsh Hemnani: Thank you. As we think through the decision to sell a portion of the office loan portfolio, could you maybe talk through the thinking behind that? I guess on the one hand it makes sense the office market is not great, even though fundamentals are starting to improve. I guess on the one side, the fundamentals are starting to improve and there could be, if you wait for a little bit, recovery might be higher. On the flip side of that, you've talked about this when entering the bank loan portfolio, joint ventures, there's certain accruing and earning assets that may fit better in a REIT wrapper in the public market. It's fair to expect that some of these office loans may be non-accruing and a drag on distributable earnings in the short term. I guess, how do you address the question as to this decision was made more from a perspective of long-term shareholder value creation, than from it being an exercise in near-term earnings management? How do you address investor concerns around that, and how were you thinking of that internally? Tim Johnson: Thanks, Harsh. This is Tim. I'd say, first of all, the loan sale process is early stage and underway, as we noted we're under no obligation to sell, and we may look at selling some, all, or none of it. There are many options here. I think it's really about rotating our portfolio more than something driven by a near-term earnings impact. It's really about rotating our portfolio into the sectors where we see the best fundamentals, the best risk-adjusted return, and the best relative value. What's underpinning it is that, as I noted before, we're very active in the loan trading market, and you noted it as well, both really more as a buyer than a seller, but we see good liquidity in that space. If we can take advantage of an opportunity to rotate out of office into other sectors, we think that is going to be the best outcome for long-term value for our shareholders. Of course, we're going to look at price, and it's got to work for us and make sense relative to the risk of those underlying loans themselves. Harsh Hemnani: Got it. That's helpful. Maybe in terms of the balance sheet. Total leverage has ticked up a little bit in the high fours if you include the CLOs. As you've sort of diversified all the new ventures, the net lease portfolios, the bank loan portfolios that show up as equity interests on the balance sheet have their own leverage added onto it. I guess, how are you thinking about leverage at this point, if and when there are any office asset sales, does part of it get used to de-lever the balance sheet, or are you fairly comfortable with leverage levels where they are? Marcin Urbaszek: Thanks, Harsh. It's Marcin. Thank you for joining us. Thanks for your question. I think as I mentioned in my prepared remarks, the leverage was a little elevated at the end of the quarter, largely driven by the timing of some repayments and obviously the resource service. It's within our 3x-4x debt-to-equity range. Even though the prepayment we've already realized, as I mentioned earlier it takes that leverage down quite a bit in this quarter. I think our overall leverage strategy is not shifting or changing at the moment. It's obviously a function of the market conditions, balance sheet structure, cost, and structure of leverage. We intend to be in that 3x-4x debt-to-equity range going forward. Again, quarter to quarter, there will be some variability depending on the timing of closing of repayments and originations and things like that. Harsh Hemnani: Got it. Thank you. Operator: Thank you. We'll take our next question from Rick Shane with JPMorgan. Rick Shane: Hey, guys. Thanks for taking my question. One quick cleanup question. I just apologize. I forget. Policies diverge across the industry. Do you guys realize losses when you put REO and mark it down, or do you wait until you actually complete the sale for the realization event? Marcin Urbaszek: Hey, Rick. It's Marcin. We realize the loss when we take over when we foreclose or consolidate the asset. That happened in this quarter with that Denver multifamily loan. Obviously, as we own real estate, we are required to assess them for any potential impairments every quarter, which we go through a robust process. That initial charge-off happens when you take ownership. Rick Shane: Got it. Assuming, for example, the San Francisco hotel is sold close to your carrying value, no further realized loss is associated with that. Marcin Urbaszek: Yes. We look at what the net proceeds are vis-à-vis where we carry it, and then if there needs to be an adjustment, there is one. Correct. Rick Shane: Got it. Okay, great. Thank you. Look, Marcin, you alluded to the fact that there's going to be some drag versus distributable X losses in the third quarter. Can you help us think about where that run rate is versus the $0.48 that you guys reported in the second? Marcin Urbaszek: Look, I think it's hard giving all the moving pieces right now, and it's still early in the quarter. Obviously, given some of the impairments we took in Q2 and the pretty substantial repayment volume that we had this quarter, we do expect some impact to the third quarter. Again, it'll take us probably a couple quarters to be fully deployed with the money that we're getting back. It's hard to say exactly where we're going to be right now on a run rate basis. There's a lot of things moving around at the moment. Rick Shane: Got it. Okay. That actually leads to my final question, which is how should we think about that in the context of dividend and dividend policy? If, for example, how far forward do you look in setting that policy? If we are in a situation over the next, for example, two to three quarters where there is a shortfall, does it make sense to recalibrate the dividend that quickly? Or are you looking at a sort of more optimistic dividend run rate once you're fully redeployed? Again, you're sort of saying, "Hey, look, DPS is going to come down." There was a comment about reevaluating dividend. Again, I think that's sort of a generic comment that you do that every quarter. I think everybody really needs to know the interplay between the drag on earnings and the dividend policy in the near term. Tim Johnson: Thanks, Rick. It's Tim. I'd say conceptually, the dividend is really focused around long-term earnings power of the business, and that's how we've always looked at it. Marcin noted there's some short-term impacts and there are a number of moving pieces. Obviously, as Marcin said, we had impairments in the second quarter, and given the initiatives that we're undertaking to drive portfolio turnover, as we noted in the prepared remarks, it's possible we see impacts from that. There's a number of moving pieces that we'll have to evaluate with the board, and it's too early to kind of tell what that's going to look like right now. What we're going to evaluate really is the long-term earnings power of the business. That's what we evaluate when we look at the dividend. Rick Shane: Got it. Okay. Thank you guys very much. Appreciate it. Operator: Thank you. We will take our final question from Marissa Lobo with UBS. Marissa Lobo: Good morning. Thanks for taking my question. You mentioned that nearly half of your performing office loans were three-rated or better, and they're currently in the refi market. With the tenure up, what are you seeing in terms of lender appetite for these processes and what's the contingency if they don't close by year-end? Austin Peña: Thanks, Marissa. It's Austin. I think as we noted, obviously, rates are moving around. What we've seen very recently is, as we noted earlier, is a really liquid debt market. We've gotten a lot of repayments, a lot in the second quarter, another nearly $1.5 billion so far in July. You see an active CMBS market, as Tim mentioned earlier. We really see pretty active capital markets out there and strong demand from lenders to finance good assets. As Tim mentioned, and as you alluded to, that includes a lot of different sectors, including a lot of our office loans. Today we continue to see a lot of activity in the refinance market and the capital markets. Nothing's really changed, I would say, sitting here today. Marissa Lobo: Okay. Thank you. Just shifting to the portfolio rotation, you cited a $200 billion TAM in homebuilder finance. What is the realistic allocation for BXMT in this sector over the next year? How does the credit profile of these loans compare to your transitional lending book? Austin Peña: Thanks. This is Austin. We're really excited about this new opportunity and this sector. We really see a few things that make this what we think a really attractive and compelling opportunity. The first is the overall sector of housing in the U.S. is undersupplied, that creates a good fundamental setup. Secondly, there's been a pretty big pullback in lending to the space, particularly with regional banks that are historically big lenders to this sector. Finally, as Tim mentioned earlier, this is a sector where it's really hard to access these investments without a platform. In terms of the underlying loans, they're very granular, they're very geographically diverse. You really need a national footprint and a presence in this space to access these investments. For those reasons, what we're seeing in the space is really an interesting and pretty compelling yield opportunity. In terms of the underlying loans themselves, they're really well-structured. Typically carry very good recourse to corporate entities, in many cases, individuals. They're often on cross portfolios. From an underlying credit perspective, we really like the credit, of course, the return also we think is attractive. The last thing I would say is we've partnered with the largest private lender to the space. They have a really great product suite that they can offer to this market. We think that really sets us up well to grow in this space. We're just getting started, but we think we have a really good foundation. Marissa Lobo: Got it. Appreciate the answers. Operator: Thank you. With no additional questions in queue, I will turn the call back over to Tim Hayes for any additional or closing remarks. Tim Hayes: Yeah. Thank you, Katie, and to everyone on today's call. Please reach out with any questions. Operator: Goodbye. Thank you. That will conclude today's call. We appreciate your participation. Before you buy stock in Blackstone Mortgage Trust, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Blackstone Mortgage Trust wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $397,081!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,166,221!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of July 30, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Blackstone Mortgage Trust (BXMT) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Blackstone Mortgage Trust, Inc.? Here are five stocks we like better. Q2 results covered the dividend but included significant pressure: BXMT reported a $0.48-per-share GAAP loss, while distributable earnings before realized losses were $0.48 per share versus a $0.47 dividend. Book value fell 4% to $19.31 per share, largely due to higher CECL reserves and real-estate depreciation. BXMT is rotating toward residential, industrial and net lease investments while reducing legacy and office exposure. The company collected $1.2 billion in repayments, invested $1.4 billion, and expects office and pre-2023 legacy exposure to decline by at least 40% by year-end. Credit risks remain concentrated in office loans: The watchlist declined to $2 billion, but roughly $1 billion consists primarily of stressed office assets. BXMT recorded three new impairments, including a $345 million Chicago office loan, and cautioned that third-quarter earnings could be affected by impairments and repayment timing. 6 Mortgage REITS: How Badly Could Rising Rates Hurt Them? Blackstone Mortgage Trust (NYSE:BXMT) reported a second-quarter GAAP net loss of $0.48 per share, while distributable earnings were $0.31 per share. Distributable earnings before realized gains and losses totaled $0.48 per share, covering the company’s $0.47 quarterly dividend. Management said the quarter reflected continued portfolio turnover, with the company collecting $1.2 billion of repayments, nearly all from loans originated before 2023, and deploying $1.4 billion into new investments. Chief Executive Officer Tim Johnson said the new investments were concentrated in residential, industrial and net lease sectors, which have represented about 80% of portfolio deployment over the past year. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now Johnson said Blackstone Mortgage Trust is working to reallocate capital toward sectors with stronger fundamentals and attractive relative value. The company entered the single-family home builder finance market during the quarter through a newly established joint venture, citing a pullback by banks and a fragmented competitive environment. The initial home builder finance portfolio included approximately $130 million of loans at the company’s share, consisting of 36 loans across 10 states with an average loan commitment of about $12 million, President Austin Peña said. Johnson described the addressable market as roughly $200 billion and said the strategy could generate mid- to high-teens levered yields. → Microsoft Just Flipped the AI Spending Narrative Overnight BXMT also continued expanding its net lease strategy, acquiring more than $135 million of properties at its share during the quarter. Its net lease portfolio reached $661 million, or about 3% of the overall portfolio, Peña said. The company had closed or was closing on more than $150 million of additional net lease acquisitions in July. “Our new investments are laying the groundwork for a more diversified, granular BXMT,” Johnson said, noting that the company’s average investment size has declined to approximately $20 million from more than $130 million several years ago. → Carrier Earnings Could Send the Stock to a New All-Time High Management emphasized efforts to reduce exposure to legacy loans and office properties. BXMT’s office allocation has declined to 21% of the portfolio from 36%, supported by approximately $13 billion of repayments over the recovery period outlined by management. The company recently began sales processes for more than $1 billion of loans, mostly office loans, and expects to launch a sale process for a 686-key Hyatt hotel in San Francisco. Johnson said the proposed loan sales were optional and that BXMT could sell some, all or none of the portfolio depending on pricing. “It’s really about rotating our portfolio into the sectors where we see the best fundamentals, the best risk-adjusted return, and the best relative value,” Johnson said in response to an analyst question about the office loan sale process. BXMT said it expects that repayments and proactive asset management could reduce both office exposure and pre-2023 legacy loan exposure by 40% or more by year-end. The company’s watchlist declined 23% sequentially to $2 billion from $2.5 billion. However, Johnson said a subset of approximately $1 billion of watchlist loans, primarily office properties with lower in-place cash flow, has faced greater pressure from elevated interest rates. These loans represent roughly 5% of total investments and are risk-rated four, according to Peña. During the quarter, BXMT recorded three new impairments: two traditional office loans and one mixed-use loan with a substantial office component. Its largest impairment involved a $345 million Chicago office loan originated in 2018. The borrower defaulted in June, though Peña said the company subsequently substantially agreed to restructuring terms under which the borrower intends to contribute significant new capital, receive additional term and accept a reduction in BXMT’s loan balance. Chief Financial Officer Marcin Urbaszek said distributable earnings included $29 million of realized losses, primarily related to the resolution of an impaired Dallas multifamily loan after BXMT foreclosed on the collateral. The company now holds that property as owned real estate. Book value ended the second quarter at $19.31 per share, down 4% from the first quarter. Urbaszek attributed the decrease primarily to an $0.80-per-share increase in CECL reserves and $0.12 per share of depreciation and amortization associated with owned real estate. Total CECL reserves were $2.43 per share at quarter-end. General reserves were $1.13 per share, while asset-specific reserves were $1.30 per share. The reserve increase was largely tied to the Chicago office loan impairment. Liquidity stood at $1.2 billion at quarter-end. Debt-to-equity rose to 3.9x from 3.7x in the first quarter, primarily due to repayment timing and higher CECL reserves. BXMT issued $450 million of senior secured notes in May, largely pre-funding a corporate debt maturity due in the first quarter of 2027. Urbaszek said that following repayment of those 2027 notes, the company expects to have nearly five years of weighted-average remaining term on its corporate debt and no maturities until 2029. Non-mark-to-market borrowings represented about 88% of total debt at quarter-end, and Urbaszek said the company had no capital-mark-to-market provisions throughout its capital structure. Management cautioned that third-quarter distributable earnings could be affected by the quarter’s new impairments and by the timing of large repayments collected in July, including another $1.4 billion of similar-vintage repayments. That amount included a €450 million paydown on BXMT’s Dublin mixed-use loan, previously its largest position. Johnson said the company would assess any effects from asset sales, portfolio turnover, interest rates and the investment environment when discussing the dividend with its board. He said BXMT’s dividend policy is focused on the “long-term earnings power of the business,” rather than short-term fluctuations alone. Blackstone Mortgage Trust, Inc (NYSE: BXMT) is a publicly traded real estate finance company that originates, acquires and manages commercial mortgage loans and other CRE debt investments. As an externally managed real estate investment trust (REIT), it seeks to generate attractive risk-adjusted returns through the deployment of senior floating-rate and fixed-rate loans backed by income-producing properties. The firm's core business activities span the origination of senior mortgage loans, the acquisition of loan portfolios and other real estate debt instruments, and the active management of those investments. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Blackstone Mortgage Trust Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

NEW YORK, July 30, 2026--(BUSINESS WIRE)--Blackstone Mortgage Trust, Inc. (NYSE: BXMT) today reported its second-quarter 2026 results. The net loss attributable to Blackstone Mortgage Trust for the quarter was $81.2 million. Second-quarter EPS, Distributable EPS, Distributable EPS prior to realized gains and losses, and dividends paid per basic share were $(0.48), $0.31, $0.48, and $0.47 respectively. Tim Johnson, Chief Executive Officer said, "BXMT’s second quarter results reflect continued execution of our goal of accelerating portfolio turnover and reallocating capital into high-conviction investment themes. With a well-structured balance sheet and the resources of Blackstone’s global platform, we are well positioned to drive our strategic initiatives forward and capture attractive opportunities in the market today." Blackstone Mortgage Trust issued a full presentation of its second-quarter 2026 results, which can be viewed at www.bxmt.com. An updated investor presentation may also be viewed on the website. Quarterly Investor Call DetailsBlackstone Mortgage Trust will host a conference call today at 9:00 a.m. ET to discuss results. To register for the webcast, please use the following link: https://event.webcasts.com/starthere.jsp?ei=1767706&tp_key=b383988748. For those unable to listen to the live broadcast, a recorded replay will be available on the company's website at www.bxmt.com beginning approximately two hours after the event. About Blackstone Mortgage TrustBlackstone Mortgage Trust (NYSE: BXMT) is a real estate finance company that originates, acquires and manages senior loans and other debt or credit-oriented investments collateralized by or relating to commercial real estate in North America, Europe, and Australia. Our investment objective is to preserve and protect shareholder capital while producing attractive risk-adjusted returns primarily through dividends generated from current income. 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 loans are financed in a variety of ways, depending on our view of the most prudent strategy available for each of our investments. We are externally managed by BXMT Advisors L.L.C., a subsidiary of Blackstone. Further information is available at www.bxmt.com. About BlackstoneBlackstone is the world’s largest alternative asset manager. Blackstone seeks to deliver compelling returns for institutional and individual investors by strengthening the companies in which the firm invests. Blackstone’s over $1.3 trillion in assets under management include global investment strategies focused on real estate, private equity, credit, infrastructure, life sciences, growth equity, secondaries and hedge funds. Further information is available at www.blackstone.com. Follow @blackstone on LinkedIn, X (Twitter), and Instagram. Forward-Looking Statements and Other MattersThis press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which reflect BXMT’s current views with respect to, among other things, its operations and financial performance, its business plans and their impact, and the impact of the current macroeconomic environment, including interest rate changes. You can identify these forward-looking statements by the use of words such as "outlook," "objective," "indicator," "believes," "expects," "potential," "continues," "may," "will," "should," "seeks," "predicts," "intends," "plans," "estimates," "anticipates" or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. BXMT believes these factors include but are not limited to those described under the section entitled "Risk Factors" in its Annual Report on Form 10-K for the fiscal year ended December 31, 2025, as such factors may be updated from time to time in its periodic filings with the Securities and Exchange Commission ("SEC") which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in the filings. BXMT assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events or circumstances. We refer to "Distributable EPS" and "Distributable EPS prior to realized gains and losses," which are non-GAAP financial measures, in this press release. A reconciliation to net income attributable to Blackstone Mortgage Trust, the most directly comparable GAAP measure, is included in our full detailed presentation of second-quarter 2026 results and is available on our website at www.bxmt.com. View source version on businesswire.com: https://www.businesswire.com/news/home/20260729038097/en/ Contacts Investor Relations Blackstone+1 (888) [email protected] Public Affairs Blackstone+1 (212) [email protected]

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management is aggressively driving portfolio turnover to reallocate capital from legacy assets into high-conviction themes like residential, industrial, and net lease sectors. The company entered the $200 billion single-family home builder finance market to capture share from retreating regional banks, targeting mid-to-high teens levered yields. Total office exposure has been reduced from 36% to 21% of the portfolio, with a goal to reduce legacy pre-2023 and office exposure by 40% or more by year-end. Performance remains strong across the vast majority of the portfolio, supported by a 10-quarter trend of improving real estate values and a 20-year high in CMBS issuance. A subset of $1 billion in watchlist office loans is facing increased pressure as elevated interest rates and lagging fundamentals discourage further subordinate capital investment from borrowers. The investment strategy has shifted toward higher granularity, with average investment size decreasing from over $130 million to approximately $20 million. Management expects to launch a sales process for a 686-key Hyatt Hotel in San Francisco and over $1 billion in loans to accelerate capital recycling. Distributable earnings in Q3 are expected to be impacted by new loan impairments and the timing of large repayments collected in July. The company is evaluating its dividend policy in the context of long-term earnings power, acknowledging that portfolio rotation initiatives may cause near-term volatility in book value and earnings. Future growth will prioritize 'building' over 'buying' platforms, as seen in the organic scaling of net lease and home builder finance strategies to capture aggregation premiums. Capital allocation will remain disciplined, with management only transacting on asset sales at levels deemed attractive relative to underlying risk. Recognized three new impairments on loans where borrowers previously provided support but have reached decision points due to prolonged high rates. Watchlist decreased 23% to $2 billion following the successful modification of the company's largest watchlist loan and the resolution of a Dallas multifamily asset. A $345 million Chicago office loan was impaired following a borrower default, though a restructure has been substantially agreed upon with significant new capital committed. Corporate debt maturity profile was extended to 2029 for the earliest maturities following a $450 million senior secured notes issuance. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management clarified that there are currently no specific reserves against the $1 billion of loans targeted for potential sale. The sale is considered optional and intended to take advantage of current market liquidity; bids will be evaluated next quarter to determine if adjustments are necessary. Management reported strong liquidity in multifamily, noting $5 billion in repayments on 2021-2022 vintage loans. Positive absorption trends and a diverse base of capital sources for refinancing provide confidence in the sector's fundamental recovery. Management acknowledged that while the dividend is based on long-term earnings power, near-term results will face pressure from impairments and the timing of redeploying repayment capital. The board will evaluate the dividend by balancing short-term transition impacts against the expected higher-quality earnings of the future diversified portfolio. Approximately half of performing office loans (rated 3 or better) are currently in the market for refinancing. Management observes active debt markets and strong lender demand for well-capitalized assets despite the broader challenges in the office sector.

Blackstone Mortgage Trust (BXMT) came out with quarterly earnings of $0.48 per share, beating the Zacks Consensus Estimate of $0.38 per share. This compares to earnings of $0.19 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +26.32%. A quarter ago, it was expected that this real estate finance company would post earnings of $0.38 per share when it actually produced earnings of $0.49, delivering a surprise of +28.95%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Blackstone Mortgage, which belongs to the Zacks REIT and Equity Trust industry, posted revenues of $82.57 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 0.20%. This compares to year-ago revenues of $94.81 million. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Blackstone Mortgage shares have lost about 14.3% since the beginning of the year versus the S&P 500's gain of 6.9%. While Blackstone Mortgage has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Blackstone Mortgage was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.37 on $86.31 million in revenues for the coming quarter and $1.37 on $342.49 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, REIT and Equity Trust is currently in the bottom 32% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Angel Oak Mortgage (AOMR), has yet to report results for the quarter ended June 2026. The results are expected to be released on August 4. This real estate finance company is expected to post quarterly earnings of $0.36 per share in its upcoming report, which represents a year-over-year change of +227.3%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Angel Oak Mortgage's revenues are expected to be $42.2 million, up 20.3% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Blackstone Mortgage Trust, Inc. (BXMT) : Free Stock Analysis Report Angel Oak Mortgage REIT Inc. (AOMR) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Adamas Trust (ADAM) came out with quarterly earnings of $0.3 per share, beating the Zacks Consensus Estimate of $0.25 per share. This compares to earnings of $0.22 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +20.00%. A quarter ago, it was expected that this real estate investment trust would post earnings of $0.24 per share when it actually produced earnings of $0.29, delivering a surprise of +20.83%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. Adamas Trust, which belongs to the Zacks REIT and Equity Trust industry, posted revenues of $50.21 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 5.70%. This compares to year-ago revenues of $36.45 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Adamas Trust shares have added about 19.3% since the beginning of the year versus the S&P 500's gain of 8.5%. While Adamas Trust has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Adamas Trust was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.25 on $48 million in revenues for the coming quarter and $1.05 on $193.7 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, REIT and Equity Trust is currently in the bottom 33% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Blackstone Mortgage Trust (BXMT), has yet to report results for the quarter ended June 2026. The results are expected to be released on July 30. This real estate finance company is expected to post quarterly earnings of $0.38 per share in its upcoming report, which represents a year-over-year change of +100%. The consensus EPS estimate for the quarter has been revised 15.8% lower over the last 30 days to the current level. Blackstone Mortgage Trust's revenues are expected to be $82.4 million, down 13.1% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Adamas Trust, Inc. (ADAM) : Free Stock Analysis Report Blackstone Mortgage Trust, Inc. (BXMT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Wall Street expects a year-over-year increase in earnings on lower revenues when Blackstone Mortgage Trust (BXMT) reports results for the quarter ended June 2026. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates. The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on July 30. On the other hand, if they miss, the stock may move lower. While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise. This real estate finance company is expected to post quarterly earnings of $0.38 per share in its upcoming report, which represents a year-over-year change of +100%. Revenues are expected to be $82.4 million, down 13.1% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 15.79% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction). The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For Blackstone Mortgage, the Most Accurate Estimate is lower than the Zacks Consensus Estimate, suggesting that analysts have recently become bearish on the company's earnings prospects. This has resulted in an Earnings ESP of -15.05%. On the other hand, the stock currently carries a Zacks Rank of #3. So, this combination makes it difficult to conclusively predict that Blackstone Mortgage will beat the consensus EPS estimate. While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that Blackstone Mortgage would post earnings of $0.38 per share when it actually produced earnings of $0.49, delivering a surprise of +28.95%. Over the last four quarters, the company has beaten consensus EPS estimates three times. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. Blackstone Mortgage doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Another stock from the Zacks REIT and Equity Trust industry, Redwood Trust (RWT), is soon expected to post earnings of $0.26 per share for the quarter ended June 2026. This estimate indicates a year-over-year change of +44.4%. Revenues for the quarter are expected to be $43.5 million, up 215.2% from the year-ago quarter. The consensus EPS estimate for Redwood Trust has been revised 19.7% lower over the last 30 days to the current level. However, an equal Most Accurate Estimate has resulted in an Earnings ESP of 0.00%. When combined with a Zacks Rank of #5 (Strong Sell), this Earnings ESP makes it difficult to conclusively predict that Redwood Trust will beat the consensus EPS estimate. Over the last four quarters, the company surpassed consensus EPS estimates two times. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Blackstone Mortgage Trust, Inc. (BXMT) : Free Stock Analysis Report Redwood Trust, Inc. (RWT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

NEW YORK, July 14, 2026--(BUSINESS WIRE)--Blackstone Mortgage Trust, Inc. (NYSE: BXMT) (the "Company") today announced that it will publish its second-quarter 2026 earnings presentation on its website at www.bxmt.com and file its Form 10-Q pre-market on Thursday, July 30, 2026. The Company will also host a conference call the same day at 9:00 a.m. ET to review results. To register for the webcast, please use the following link: https://event.webcasts.com/starthere.jsp?ei=1767706&tp_key=b383988748 For those unable to listen to the live broadcast, there will be a webcast replay on the Company's website at www.bxmt.com beginning approximately two hours after the event. About Blackstone Mortgage Trust Blackstone Mortgage Trust (NYSE: BXMT) is a real estate finance company that originates, acquires and manages senior loans and other debt or credit-oriented investments collateralized by or relating to commercial real estate in North America, Europe, and Australia. Our investment objective is to preserve and protect shareholder capital while producing attractive risk-adjusted returns primarily through dividends generated from current income. 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 loans are financed in a variety of ways, depending on our view of the most prudent strategy available for each of our investments. We are externally managed by BXMT Advisors L.L.C., a subsidiary of Blackstone. Further information is available at www.bxmt.com. About Blackstone Blackstone is the world’s largest alternative asset manager. Blackstone seeks to deliver compelling returns for institutional and individual investors by strengthening the companies in which the firm invests. Blackstone’s over $1.3 trillion in assets under management include global investment strategies focused on real estate, private equity, credit, infrastructure, life sciences, growth equity, secondaries and hedge funds. Further information is available at www.blackstone.com. Follow @blackstone on LinkedIn, X (Twitter), and Instagram. View source version on businesswire.com: https://www.businesswire.com/news/home/20260713624105/en/ Contacts Investor RelationsBlackstone+1 (888) [email protected] Public AffairsBlackstone+1 (212) [email protected]