CMTG

Interested in Claros Mortgage Trust, Inc.? Here are five stocks we like better. Claros Mortgage Trust reported a difficult second quarter, with a GAAP net loss of $1.81 per share and a distributable loss of $0.63 per share, while book value fell to $8.58 per share after additional loan reserves and REO write-downs. The company completed or announced $482 million of loan and REO resolutions through July, reducing watchlist exposure to $1.1 billion from $2.7 billion at the end of 2024. Proceeds helped increase liquidity to $168 million and reduce pro forma net debt-to-equity to 1.7 times. Management is prioritizing further asset resolutions, REO sales and debt repayment before restarting lending, potentially beginning new originations in late 2026 or early 2027. The timing remains dependent on market conditions and successful asset monetizations. Claros Mortgage Trust (NYSE:CMTG) reported a second-quarter net loss as it continued to reduce watchlist exposure, sell or resolve loans and real estate-owned assets, and deleverage its balance sheet in preparation for eventually resuming new loan originations. The commercial mortgage REIT recorded a GAAP net loss of $1.81 per share for the second quarter of 2026 and a distributable loss of $0.63 per share. Before realized gains and losses, distributable loss was $0.07 per share, President and Chief Financial Officer Mike McGillis said during the company’s earnings call. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now Chief Executive Officer and Chairman Richard Mack described the period as “continued progress, albeit painful progress” toward returning to lending on transitional real estate. He said elevated interest rates, above-target inflation and geopolitical developments have contributed to financial-market volatility, though commercial real estate fundamentals have generally improved amid limited new construction, capital seeking deployment and improving transaction activity. During the second quarter and through July, Claros completed $482 million of loan and REO resolutions, including $223 million of regular-way loan repayments. The proceeds were used to reduce leverage by $346 million, while liquidity rose to $168 million as of July 24 from $116 million on May 5. → Microsoft Just Flipped the AI Spending Narrative Overnight Since the start of the second quarter, the company resolved five loans totaling $435 million of unpaid principal balance before principal charge-offs. Three of those were watchlist loans totaling $212 million. Year to date, Claros has resolved 10 loans totaling $1 billion of UPB, including seven watchlist loans with $647 million of UPB. Watchlist loans have declined from $2.7 billion at the end of 2024 to $1.7 billion at the end of 2025 and $1.1 billion following the July resolutions, McGillis said. The portfolio now includes 23 loans totaling $3.1 billion of UPB and nine REO assets with a combined carrying value of $724 million. Claros foreclosed on a $25 million, risk-rated 5 multifamily loan in the Dallas metropolitan area. The company sold a Dallas multifamily REO asset for approximately $47 million of gross proceeds, slightly above carrying value. After the quarter ended, Claros sold a San Francisco office watchlist loan for $70.7 million in gross proceeds. The loan had been on the watchlist since early 2022. The company resolved a Salt Lake City multifamily loan through a discounted payoff of $70 million, or 94% of its $75 million UPB. Two multifamily loans collateralized by properties in Seattle and Chicago repaid in full, totaling $223 million of UPB. → Carrier Earnings Could Send the Stock to a New All-Time High Claros reported book value of $8.58 per share at June 30, a decline that Mack said was primarily attributable to nine loan and REO positions. The company took additional reserves and asset write-downs as lender-driven sales processes provided updated market pricing for certain office and Sun Belt multifamily positions. Three loans with combined UPB of $372 million were downgraded from risk rating 4 to risk rating 5, primarily because of price discovery from sales processes. Claros recorded $109 million, or $0.75 per share, in specific CECL provisions on those loans. A fourth, $75 million Utah multifamily loan was also downgraded to risk rating 5 after the discounted payoff was negotiated. The company additionally increased reserves on three previously risk-rated 5 loans, taking $74 million, or $0.51 per share, in further specific CECL provisions. Its specific CECL reserve stood at $517 million at quarter-end, equal to 32% of related UPB. Claros’ general CECL reserve was approximately $50 million, with the reserve rising to 2.9% of UPB on loans subject to the general reserve from 2.3% in the prior quarter. Claros also reclassified a mixed-use REO asset and a multifamily REO asset as held for sale, recognizing a $30 million loss, or $0.21 per share, upon reclassification. McGillis said the company expects to transact at the revised carrying values in coming months. Executive Vice President Priyanka Garg said prospective buyers for assets requiring substantial operational work have largely included local general partners partnering with limited-partner capital from family offices and private investors. She said the company has seen less activity from private-equity and hedge-fund buyers. While Claros has seen deep buyer interest in some processes, with Mack saying bid lists can include as many as 20 parties, price outcomes have been volatile. Garg said investors’ return thresholds have increased amid rate volatility and a wider range of investment options for limited partners. “We’re meeting the market,” Garg said, adding that the company believes its reported book value reflects levels it can achieve. Mack said that when bids meet the company’s view of value, Claros intends to transact. When bids are viewed as unusually low, the company may take a CECL reserve, seek to add value to the asset and return to the market later. Net debt to equity rose to 2.0 times at June 30 from 1.7 times at March 31, primarily because reserve additions and REO held-for-sale losses reduced book value. However, following July resolutions and $299 million of additional financing repayments, pro forma net debt to equity declined to 1.7 times. Liquidity totaled $103 million at quarter-end, including $90 million of cash. Claros also had $509 million of unencumbered loan UPB and REO carrying value, and McGillis said asset sales in process could generate about $140 million of additional liquidity. Management said it wants to further reduce watchlist assets, monetize REO positions and repay both asset-level and corporate term financing before evaluating capital allocation alternatives such as new originations, additional deleveraging, REO investments and share repurchases. McGillis said the company expects it could be in a position to begin redeploying capital into new originations in the latter part of 2026 or early 2027, though the timing depends on actions it does not fully control. Mack said the company has “largely turned the corner” but acknowledged that returning to a largely performing portfolio, resuming a dividend and narrowing the gap between book value and the stock price will take time. Claros Mortgage Trust is a specialty finance company structured as a real estate investment trust that acquires and manages a portfolio of newly originated, conventional residential mortgage loans guaranteed or insured by U.S. government‐sponsored enterprises. The company concentrates on Agency collateral, including loans backed by Ginnie Mae, Fannie Mae and Freddie Mac, aiming to generate current income while preserving capital through high‐quality, credit‐enhanced assets. Under an external management agreement with Claros Mortgage Capital Advisors LLC, the firm leverages a seasoned team to source, underwrite and service mortgage assets. 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 "Claros Mortgage Trust Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

This article first appeared on GuruFocus. GAAP Net Loss: $1.81 per share for Q2 2026. Distributable Loss: $0.63 per share for Q2 2026. Distributable Loss (pre-realized gains/losses): $0.07 per share for Q2 2026. Book Value: $8.58 per share as of Q2 2026. Loan and REO Resolutions: $482 million completed in Q2 2026, including $223 million of regular way repayments. Liquidity: $103 million at quarter end, increasing to $168 million as of July 24, 2026. Net Debt-to-Equity Ratio: 2.0x at quarter end, decreasing to 1.7x on a pro forma basis after July resolutions. Specific CECL Provisions: $109 million ($0.75 per share) on three downgraded loans and $74 million ($0.51 per share) on three previously 5-rated loans. Loss on REO Held-for-Sale: $30 million ($0.21 per share) upon reclassification of two REO assets. New York City Hotel Portfolio Distributable Earnings: $0.3 per share for Q2 2026. Watch List Loans: Decreased to $1.1 billion from $1.7 billion at year-end 2025. Portfolio Composition: 23 loans ($3.1 billion UPB) and nine REO assets ($724 million carrying value) after July resolutions. Warning! GuruFocus has detected 4 Warning Signs with CMTG. Is CMTG fairly valued? Test your thesis with our free DCF calculator. Release Date: July 30, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Completed $482 million in loan and REO resolutions during Q2 2026, including three watchlist loans, reducing leverage and increasing liquidity. Year-to-date resolutions total $1 billion, with watchlist loans declining from $2.7 billion at year-end 2024 to $1.1 billion. Liquidity increased to $168 million as of July 24, 2026, up from $116 million in May, providing financial flexibility. Performing loan repayments remain strong, with $464 million in full repayments year-to-date, supported by available refinancing capital. New York City hotel REO portfolio showed improved performance, contributing $0.3 per share in distributable earnings, up from Q1 2026. GAAP net loss of $1.81 per share and distributable loss of $0.63 per share for Q2 2026, reflecting ongoing credit challenges. Book value fell to $8.58 per share due to $109 million in specific CECL provisions on downgraded loans and $30 million in REO held-for-sale losses. Net debt-to-equity ratio increased to 2.0x from 1.7x in Q1 2026, driven by book value declines, though it improved to 1.7x post-quarter. Buyer return thresholds remain elevated due to interest rate volatility, leading to lower-than-expected pricing in lender-driven sales, especially in Sun Belt multifamily. Portfolio size expected to shrink significantly as watchlist loans and REO assets are resolved, delaying new originations until late 2026 or early 2027. Q: What types of investors are buying your loan and REO assets, and how has rate volatility affected buyer behavior and pricing?A: Priyanka Garg, Executive Vice President - Portfolio and Asset Management: We are seeing a lot of local GP players who are going to work out assets, partnering with LP capital from private family offices and private investors. We are seeing less from the private equity hedge fund space. Yes, we are definitely seeing volatility, which informed the additional CECL reserves we took this quarter. Investors simply have higher return thresholds, driven by rate volatility and the availability of LP capital, which is allocating differently and waiting for better opportunities. We are committed to meeting the market, which is reflected in our reported book value. Q: Can you review the timeline for resuming originations in the context of the risk-rated population and the current rate environment? What milestones are you looking for?A: J. Michael McGillis, President, CFO, and Director: To be in a position to evaluate capital allocation opportunities like new originations, we need to reduce the level of watchlist assets, continue REO monetization, and de-leverage the balance sheet, including our corporate term loan. It's hard to pick a timeline as we don't unilaterally control all actions, but we think it will be in the latter part of this year or early next year. Q: How do you feel about multifamily? Do you think higher rates will weigh on valuations, or is there optimism for 2027?A: Richard Mack, CEO and Chairman: This is a very market-specific issue. In the Sun Belt, we will continue to have elevated deliveries through 2027, but we also have strong absorption. However, we see depopulation and reverse migration in lower-quality Sun Belt assets. Markets like L.A. and Seattle are down, while N.Y. is very strong. It is sub-market specific. If interest rates continue to go up, cap rates will likely increase. If rates are stable, there is optimism looking forward to the drop-off in new starts. Q: Relative to your first-quarter expectations, did credit conditions get worse, better, or stay the same during the quarter?A: Priyanka Garg, Executive Vice President - Portfolio and Asset Management: The only thing that got worse is meeting buyer expectations. Their return expectations have increased since the beginning of the year, meaning we have to bring our pricing down to meet the market, which is reflected in our book value. However, the pace of resolutions feels good, with billions of dollars in resolutions year-to-date, and we feel well-positioned to execute on our stated objectives. Q: Regarding the resolution of the San Francisco office loan at $0.63 on the dollar, can you speak to that relative to other office 5-rated credits and the adequacy of reserves?A: Priyanka Garg, Executive Vice President - Portfolio and Asset Management: That was a February 2020 origination with a very high basis and challenging timing. We exhibited patience, as selling a year ago would have yielded half the price. The bid sheet was very deep due to the improving San Francisco market. We took specific additional reserves on two other office buildings based on live market feedback, and we think we are appropriately reserved. The remaining two office assets are very unique and fall into the "have" category. Q: Given the de-leveraging efforts and the dip in net interest income, how could we see net interest income trend toward the end of 2026?A: J. Michael McGillis, President, CFO, and Director: About a third of our interest expense relates to our corporate term loan, which we aim to pay down. Resolving watchlist loans and paying off related financing will improve net interest income by reducing interest expense. Direct de-leveraging from regular repayments will also reduce interest expense. As we resolve assets and de-leverage, it will be a catalyst for improving net investment income over time. Q: How low could the loan portfolio size drop to by the end of 2026 based on your current plans?A: J. Michael McGillis, President, CFO, and Director: The portfolio will shrink significantly as we work through regular way repayments on performing loans and move out of 4 and 5-rated loans. It's hard to pick a number, but it will continue to decline until we are back in origination mode. Priyanka Garg added that there is nearly $1 billion of activity either being sold or refinanced, which could occur by year-end or early 2027, leading to a significant percentage decline. Q: Do you have a range in mind of where book value might trough?A: Richard Mack, CEO and Chairman: We don't want to answer that directly, but we feel we have taken some pretty significant write-downs based on active sale processes. We feel good about getting a good chunk of this behind us, but until these assets are moved out of the portfolio, it's too early to call a bottom. We took some very aggressive steps this quarter. Q: Are you considering providing seller financing on property sales to reduce frictions?A: Priyanka Garg, Executive Vice President - Portfolio and Asset Management: We have found that seller financing isn't necessarily accretive to pricing for our goals. Because we are much lower leveraged than peers, there is a lot of embedded equity on the sale, and the math usually doesn't pencil to provide seller financing. Richard Mack added that they would look at it if it made the present value more attractive for investors. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

NEW YORK, July 29, 2026--(BUSINESS WIRE)--Claros Mortgage Trust, Inc. (NYSE: CMTG) (the "Company" or "CMTG") today reported its financial results for the quarter ended June 30, 2026. The Company reported GAAP net loss of $255.4 million, or $1.81 per share, for the quarter ended June 30, 2026. Distributable Loss (a non-GAAP financial measure defined below) was $90.8 million, or $0.63 per share, and Distributable Loss prior to realized gains and losses was $10.5 million, or $0.07 per share, for the quarter ended June 30, 2026. Second Quarter 2026 Highlights Resolved one watchlist loan with $25.4 million of UPB through a mortgage foreclosure Provision for CECL reserves of $208.8 million, or $1.45 per share, primarily reflecting increased reserves to align with anticipated near-term resolution levels Sold one multifamily REO asset for a gross sales price of $48.0 million, slightly above carrying value Reclassified mixed-use REO asset and one multifamily REO asset to held-for-sale resulting in losses of $29.6 million, or $0.21 per share REO assets generated distributable earnings prior to realized gains and losses of $0.01 per share, net of financing costs; an increase of $0.05 per share from prior quarter’s distributable loss of $0.04 per share At June 30, 2026 $2.8 billion held-for-investment loan portfolio with a weighted average all-in yield of 5.8% (1) Watchlist held-for-investment loans of $1.2 billion (12 loans), representing a $477 million decline from year-end CECL reserves of $567.4 million on UPB, or $3.93 per share; approximately 16.9% of UPB at quarter-end, comprised of (i) specific CECL reserves of 32.0% of UPB of risk rated 5 loans and (ii) general CECL reserves of 2.9% of UPB $723.7 million REO portfolio comprised of nine investments, including two classified as held-for-sale Total liquidity of $103 million, including $90 million of cash Unencumbered assets of $509 million, consisting of $362 million of loan UPB ($301 million of loan carrying value) and $147 million of REO carrying value Net financings outstanding decreased by $66 million from prior quarter-end, including $20 million of deleveraging payments Net debt / equity ratio of 2.0x; including Q3 loan resolutions and deleveraging to-date, ratio declined to 1.7x Total leverage ratio of 2.7x; including Q3 loan resolutions and deleveraging to-date, ratio declined to 2.4x Book value of $8.58 per share Subsequent Events Resolved four loans totaling $409.5 million of UPB Entered into a binding agreement to sell a multifamily REO asset; expected proceeds in-line with held-for-sale carrying value Net financings outstanding decreased by $299 million, including $93 million of deleveraging payments At July 24, 2026, total liquidity of $168 million, including $155 million of cash "We continued to make significant progress resolving watchlist assets, turning over the portfolio and deleveraging the balance sheet, moving us closer to making accretive capital allocation decisions in the coming quarters," said Richard Mack, Chief Executive Officer and Chairman of CMTG. (1) Represents the weighted average annualized yield to initial maturity of each loan held-for-investment, inclusive of coupon and contractual fees, based on the applicable floating benchmark rate/floors (if applicable), in place as of June 30, 2026. For loans placed on non-accrual, the annualized yield to initial maturity used in calculating the weighted average annualized yield to initial maturity is 0%. Teleconference DetailsA conference call to discuss CMTG’s financial results will be held on Thursday, July 30, 2026, at 10:00 a.m. ET. The conference call may be accessed by dialing 1-833-461-5787 and referencing the Claros Mortgage Trust, Inc. teleconference call; access code 150272471. The conference call will also be broadcast live over the internet and may be accessed through the Investor Relations section of CMTG’s website at www.clarosmortgage.com. An earnings presentation accompanying the earnings release and containing supplemental information about the Company’s financial results may also be accessed through this website in advance of the call. For those unable to listen to the live broadcast, a webcast replay will be available on CMTG’s website or by visiting https://events.q4inc.com/attendee/150272471, beginning approximately two hours after the event. About Claros Mortgage Trust, Inc.CMTG is a real estate investment trust that is focused primarily on originating senior and subordinate loans on transitional commercial real estate assets located in major markets across the U.S. CMTG is externally managed and advised by Claros REIT Management LP, an affiliate of Mack Real Estate Credit Strategies, L.P. Additional information can be found on the Company’s website at www.clarosmortgage.com. Forward-Looking StatementsCertain statements contained in this press release may be considered 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. CMTG intends for all such forward-looking statements to be covered by the applicable safe harbor provisions for forward-looking statements contained in those acts. Such forward-looking statements can generally be identified by CMTG’s use of forward-looking terminology such as "may," "will," "expect," "intend," "anticipate," "estimate," "believe," "continue," "seek," "objective," "goal," "strategy," "plan," "focus," "priority," "should," "could," "potential," "possible," "look forward," "optimistic," or other similar words. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Such statements are subject to certain risks and uncertainties, including known and unknown risks, which could cause actual results to differ materially from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of CMTG’s performance in future periods. Except as required by law, CMTG does not undertake any obligation to update or revise any forward-looking statements contained in this release. DefinitionsDistributable Earnings (Loss):Distributable Earnings (Loss) is a non-GAAP measure used to evaluate our performance excluding the effects of certain transactions, non-cash items and GAAP adjustments, as determined by our Manager. Distributable Earnings (Loss) is a non-GAAP measure, which the Company defines as net income (loss) in accordance with GAAP, excluding (i) non-cash stock-based compensation expense, (ii) real estate owned held-for-investment depreciation and amortization, (iii) any unrealized gains or losses from mark-to-market valuation changes (other than permanent impairments) that are included in net income (loss) for the applicable period, (iv) one-time events pursuant to changes in GAAP and (v) certain non-cash items, which in the judgment of our Manager, should not be included in Distributable Earnings (Loss). For both the Company’s entire portfolio and its real estate owned assets, the Company presents Distributable Earnings (Loss) prior to realized gains and losses, which such gains and losses include, as applicable, (i) charge-offs and recoveries of principal, accrued interest receivable, and/or exit fees and (ii) gains, losses, and components thereof recognized in connection with real estate owned assets, as the Company believes this more easily allows our Board, Manager, and investors to compare our operating performance to our peers, to assess our ability to declare and pay dividends, and to determine our compliance with certain financial covenants. Pursuant to the Management Agreement, we use Core Earnings, which is substantially the same as Distributable Earnings (Loss) excluding incentive fees, to determine the incentive fees we pay our Manager. The Company believes that Distributable Earnings (Loss) and Distributable Earnings (Loss) prior to realized gains and losses provide meaningful information to consider in addition to our net income (loss) and cash flows from operating activities in accordance with GAAP. Distributable Earnings (Loss) and Distributable Earnings (Loss) prior to realized gains and losses do not represent net income (loss) or cash flows from operating activities in accordance with GAAP and should not be considered as an alternative to GAAP net income (loss), an indication of our cash flows from operating activities, a measure of our liquidity or an indication of funds available for our cash needs. In addition, the Company’s methodology for calculating these non-GAAP measures may differ from the methodologies employed by other companies to calculate the same or similar supplemental performance measures and, accordingly, the Company’s reported Distributable Earnings (Loss) and Distributable Earnings (Loss) prior to realized gains and losses may not be comparable to the Distributable Earnings (Loss) and Distributable Earnings (Loss) prior to realized gains and losses reported by other companies. In order to maintain the Company’s status as a REIT, the Company is required to distribute at least 90% of its REIT taxable income, determined without regard to the deduction for dividends paid and excluding net capital gain, as dividends. Distributable Earnings (Loss), Distributable Earnings (Loss) prior to realized gains and losses, and other similar measures, have historically been a useful indicator over time of a mortgage REIT’s ability to cover its dividends, and to mortgage REITs themselves in determining the amount of any dividends to declare. Distributable Earnings (Loss) and Distributable Earnings (Loss) prior to realized gains and losses are key factors, among others, considered by our Board in determining the dividend each quarter and as such the Company believes Distributable Earnings (Loss) and Distributable Earnings (Loss) prior to realized gains and losses are also useful to investors. While Distributable Earnings (Loss) excludes the impact of our provision for or reversal of current expected credit loss reserve, charge-offs of principal, accrued interest receivable, exit fees, and gains, losses, and components thereof in connection with real estate owned assets are recognized through Distributable Earnings (Loss) when deemed non-recoverable and/or recognized. Non-recoverability is determined (i) upon the resolution of a loan (i.e., when the loan is repaid, fully or partially, when the Company acquires title in the case of foreclosure, deed-in-lieu of foreclosure, or assignment-in-lieu of foreclosure, or when the loan is sold or anticipated to be sold for an amount less than its carrying value), or (ii) with respect to any amount due under any loan, when such amount is determined to be uncollectible. In determining Distributable Earnings (Loss) per share and Distributable Earnings (Loss) per share prior to realized gains and losses, the dilutive effects of unvested RSUs and warrants outstanding are considered. The weighted average diluted shares outstanding used for Distributable Earnings (Loss) and Distributable Earnings (Loss) per share prior to realized gains and losses have been adjusted from weighted average diluted shares under GAAP to include weighted average unvested RSUs and warrants outstanding, if the exercise price of the warrants exceeds the average share price of our common stock during such period. Net Debt-to-Equity Ratio and Total Leverage Ratio:Net Debt-to-Equity Ratio and Total Leverage Ratio are non-GAAP measures that we use to evaluate our financial leverage, which in the case of our Total Leverage Ratio, makes certain adjustments that we believe provide a more conservative measure of our financial condition. Net Debt-to-Equity Ratio is calculated as the ratio of asset-specific debt (i.e., repurchase agreements, term participation facility, notes payable, net, and debt related to real estate owned hotel portfolio, net) and secured term loan, less cash and cash equivalents to total equity. Total Leverage Ratio is similar to Net Debt-to-Equity Ratio; however, it includes non-consolidated senior interests sold and non-consolidated senior interests held by third parties. Non-consolidated senior interests sold and non-consolidated senior interests held by third parties, as applicable, are secured by the same collateral as our loan and are structurally senior in repayment priority relative to our loan. We believe the inclusion of non-consolidated senior interests sold and non-consolidated senior interests held by third parties provides a meaningful measure of our financial leverage. Pro-forma adjustments to June 30, 2026 ratios reflect deleveraging subsequent to June 30, 2026 of $299 million of UPB and proceeds from the resolution of loans receivable. Book Value per Share:Book Value per share is calculated as (i) total equity divided by (ii) number of shares of common stock outstanding and RSUs at period end. For the three months ended June 30, 2026, amount includes a $0.4 million charge-off of accrued interest receivable related to the mortgage foreclosure on a multifamily property in May 2026. For the three months ended March 31, 2026, amount includes a $12.9 million charge-off of accrued interest receivable and a $0.3 million charge-off of an exit fee related to the sale of a hospitality loan in March 2026. Reflects previously recognized depreciation and amortization on the multifamily real estate owned asset that was sold during the three months ended June 30, 2026. Amounts recorded were not previously recognized in Distributable Earnings (Loss). Reflects previously recognized depreciation and amortization on (i) the mixed-use real estate owned asset and (ii) one of the multifamily real estate owned assets upon reclassification of the respective assets to held-for-sale during the three months ended June 30, 2026. Amounts recorded were not previously recognized in Distributable Earnings (Loss). View source version on businesswire.com: https://www.businesswire.com/news/home/20260729869571/en/ Contacts Investor Relations: Claros Mortgage Trust, Inc. Anh [email protected] Media Relations: Financial Profiles Kelly [email protected]

Interested in Claros Mortgage Trust, Inc.? Here are five stocks we like better. Claros Mortgage Trust reported a Q1 2026 GAAP net loss of $0.39 per share, with distributable loss of $0.52 per share. Management said the company remains focused on reducing risk, resolving watchlist assets and lowering leverage. The company made significant progress on portfolio cleanup, completing about $600 million in loan resolutions during the quarter and seeing held-for-investment loans fall to $3.2 billion from $3.7 billion at year-end. Watchlist loans have also declined substantially over the past year. Deleveraging continued as Claros refinanced its Term Loan B and cut net debt-to-equity to 1.7x from 1.9x in the prior quarter. The company ended the quarter with $132 million in liquidity and said it hopes to pivot toward offense later in 2026. Claros Mortgage Trust (NYSE:CMTG) reported a first-quarter loss as management said it continued to focus on reducing risk in its loan book, resolving watchlist assets and lowering leverage. The company posted a GAAP net loss of $0.39 per share for the first quarter of 2026, while distributable loss was $0.52 per share, President, Chief Financial Officer and Director Mike McGillis said on the earnings call. Distributable loss before realized losses was $0.05 per share. → Uber's Annual Product Showcase Reveals It Is Coming for Airbnb and Booking Chief Executive Officer and Chairman Richard Mack said the company is operating against a backdrop of continued uncertainty in broader financial markets, citing monetary policy, geopolitical events and renewed inflation concerns. Still, Mack said real estate capital markets appear “relatively resilient,” with modestly improved transaction volume compared with a year earlier and tight real estate credit spreads. “We intend to build on the progress and momentum we established in 2025,” Mack said. He added that the company’s strategic priorities remain focused on turning over the portfolio, resolving watchlist loans, repositioning real estate owned assets and deleveraging the balance sheet. → Wells Fargo’s Comeback Is Real—But Not Risk-Free McGillis said Claros completed approximately $600 million of loan resolutions tied to five investments during the quarter, four of which were watchlist loans. Mack cited $609 million of loan resolutions for the period. The resolved loans included two regular-way repayments: a $174 million multifamily construction loan in Salt Lake City, which the company originated in 2022, and a $67 million New York City land loan originated in 2019 that had been rated four on the company’s risk scale. → Rocket Lab Posts Record Q1 Revenue, Raises Q2 Guidance Claros also resolved two five-rated loans during the quarter. A $77 million Dallas multifamily loan was resolved through foreclosure, while a $71 million Seattle office loan was resolved by transferring the company’s rights and interests to the financing counterparty. The fifth resolution was the March sale of a $220 million loan secured by a luxury hotel property in Northern California. McGillis said the loan had matured in August 2025 and was downgraded to a four risk rating after the company and borrower did not agree on modification terms by year-end 2025. Although management viewed the collateral as “a unique, irreplaceable asset” in a desirable submarket, McGillis said Claros negotiated a quick off-market sale of the loan at 90% of par, which approximated carrying value after general reserves allocated to the loan. “We view this as a positive and efficient resolution aligned with our strategic priorities,” McGillis said. After quarter-end, Claros resolved another watchlist loan through foreclosure. The $25 million loan was collateralized by a multifamily property in Dallas and had previously been rated five. McGillis said the company believes it can create more value for shareholders by owning the asset rather than selling the loan. Claros’ held-for-investment loan portfolio declined to $3.2 billion as of March 31, from $3.7 billion at Dec. 31. McGillis said hospitality exposure fell to $592 million from $807 million, while land exposure declined to $120 million from $187 million. Management said the company currently has eight lender-driven sale processes underway across its watchlist loan and REO portfolios. McGillis said those processes could produce additional resolutions of about $861 million, measured by unpaid principal balance for loans and carrying value for REO assets. During the question-and-answer portion of the call, KBW analyst Jade Rahmani asked about non-accrual loans, which he said totaled $1.55 billion across 11 loans, or roughly 44% of the portfolio. McGillis said it was difficult to provide a precise forecast, but said Claros expected to “continue to chip away” at non-earning and sub-earning assets, use proceeds to repay leverage, reduce interest expense and increase liquidity. Priyanka Garg, executive vice president of portfolio and asset management, said four of the eight active sale processes involved loans, accounting for about three-quarters of the roughly $860 million total. She said all four loans are on the watchlist and non-accrual, representing “a good chunk” of the non-accrual balance. Garg said the company’s watchlist loans have declined from $2.7 billion in January 2025 to $1.4 billion. “We’ve demonstrated over five quarters that we’re very committed to bringing that number down,” she said. McGillis said the pace of credit migration slowed meaningfully in the quarter, with only two loans moving. The company downgraded one $127 million loan collateralized by a portfolio of Texas multifamily assets from a three to a four risk rating, citing the borrower’s unwillingness to invest additional equity ahead of a June 2026 maturity. Claros also placed a $155 million loan secured by a Phoenix multifamily property on non-accrual because of continued delinquency and lack of progress on modification terms. As of March 31, the portfolio included 13 loans rated four or five, down from 24 such loans a year earlier, McGillis said. Claros recorded a $31 million provision for current expected credit losses during the quarter. Total CECL reserves on held-for-investment loans decreased to $399 million, or 11.4% of unpaid principal balance, from $443 million, or 10.9% of unpaid principal balance, at Dec. 31. The general CECL reserve declined to $50 million from $78 million. In January, Claros retired its existing Term Loan B, which had been scheduled to mature in August 2026, and replaced it with a $500 million senior secured term loan from HPS. McGillis said the new loan carries a four-year term, matures in January 2030, includes prepayment flexibility and is priced at SOFR plus 675 basis points. The company also aligned financial covenants across its financing facilities. Claros reduced outstanding financings by $489 million during the first quarter, including $142 million of deleveraging payments. Net debt-to-equity fell to 1.7 times at March 31, compared with 1.9 times at Dec. 31 and 2.4 times a year earlier. The company ended the quarter with $132 million in liquidity. Mack said 2026 will be a year of continued execution as Claros seeks to resolve troubled loans and REO, pay down debt and build cash. He said the company hopes to “pivot to offense” by the end of the year, which could include new originations, further deleveraging, reinvestment in select REO assets or share repurchases. Claros Mortgage Trust is a specialty finance company structured as a real estate investment trust that acquires and manages a portfolio of newly originated, conventional residential mortgage loans guaranteed or insured by U.S. government‐sponsored enterprises. The company concentrates on Agency collateral, including loans backed by Ginnie Mae, Fannie Mae and Freddie Mac, aiming to generate current income while preserving capital through high‐quality, credit‐enhanced assets. Under an external management agreement with Claros Mortgage Capital Advisors LLC, the firm leverages a seasoned team to source, underwrite and service mortgage assets. 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 "Claros Mortgage Trust Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for May 2026.

NEW YORK, May 06, 2026--(BUSINESS WIRE)--Claros Mortgage Trust, Inc. (NYSE: CMTG) (the "Company" or "CMTG") today reported its financial results for the quarter ended March 31, 2026. The Company reported GAAP net loss of $54.3 million, or $0.39 per share, for the quarter ended March 31, 2026. Distributable Loss (a non-GAAP financial measure defined below) was $75.2 million, or $0.52 per share, and Distributable Loss prior to realized losses was $7.5 million, or $0.05 per share, for the quarter ended March 31, 2026. First Quarter 2026 Highlights Resolved five loans totaling $608.8 million of UPB. Two full repayments: $240.8 million of UPB – includes one watchlist loan. One loan sale: $220.0 million of UPB – watchlist loan, gross recovery of 90%. One mortgage foreclosure: $76.6 million of UPB – watchlist loan collateralized by a multifamily property in the Dallas MSA. One assignment to lender: $71.4 million of UPB – watchlist loan. Provision for CECL reserves of $31.4 million, or $0.22 per share, for the quarter; as of quarter-end, CECL reserves of $398.9 million on UPB, or $2.76 per share. Approximately 11.4% of UPB at quarter-end, comprised of (i) specific reserves of 26.8% of UPB of risk rated 5 loans and (ii) general reserves of 2.3% of UPB of remaining loans. REO assets generated Distributable Loss of $0.04 per share for the quarter, net of financing costs, primarily due to expected seasonality of REO hotel portfolio. Closed a new $500 million secured term loan maturing in 2030; proceeds used to fully retire prior secured term loan. At March 31, 2026: $3.2 billion loan portfolio with a weighted average all-in yield of 5.6%. (1) Total liquidity of $132 million, including $117 million of cash. Unencumbered assets of $538 million, consisting of $363 million of loan UPB and $175 million of REO carrying value. Net unfunded loan commitments decreased to $5 million. Net financings outstanding decreased by $489 million, including $142 million of deleveraging payments. Net debt / equity ratio of 1.7x. Book value of $10.33 per share. Subsequent Events Resolved one watchlist loan through a mortgage foreclosure of a multifamily property in the Dallas MSA representing $25.4 million of UPB and received $8.0 million in partial loan repayments. Entered into a binding agreement to sell a multifamily REO asset for a gross sales price of $48.0 million; relative carrying value at quarter-end of $46.8 million. At May 5, 2026, total liquidity of $116 million, including $103 million of cash. "We had a productive start to 2026, executing well on our strategic priorities, including making meaningful progress on watchlist loans," said Richard Mack, Chief Executive Officer and Chairman of CMTG. "While uncertainty continues to shape the broader market environment, we are encouraged by signs of resilience across real estate capital markets. Our actions during the quarter further reduced portfolio risk and advanced our deleveraging efforts. We believe this progress positions us to continue turning over the portfolio in order to redeploy capital into more accretive opportunities." (1) Represents the weighted average annualized yield to initial maturity of each loan held-for-investment, inclusive of coupon and contractual fees, based on the applicable floating benchmark rate/floors (if applicable), in place as of March 31, 2026. For loans placed on non-accrual, the annualized yield to initial maturity used in calculating the weighted average annualized yield to initial maturity is 0%. Teleconference Details A conference call to discuss CMTG’s financial results will be held on Thursday, May 7, 2026, at 10:00 a.m. ET. The conference call may be accessed by dialing 1-833-461-5787 and referencing the Claros Mortgage Trust, Inc. teleconference call; access code 565280844. The conference call will also be broadcast live over the internet and may be accessed through the Investor Relations section of CMTG’s website at www.clarosmortgage.com. An earnings presentation accompanying the earnings release and containing supplemental information about the Company’s financial results may also be accessed through this website in advance of the call. For those unable to listen to the live broadcast, a webcast replay will be available on CMTG’s website or by visiting https://events.q4inc.com/attendee/565280844, beginning approximately two hours after the event. About Claros Mortgage Trust, Inc. CMTG is a real estate investment trust that is focused primarily on originating senior and subordinate loans on transitional commercial real estate assets located in major markets across the U.S. CMTG is externally managed and advised by Claros REIT Management LP, an affiliate of Mack Real Estate Credit Strategies, L.P. Additional information can be found on the Company’s website at www.clarosmortgage.com. Forward-Looking Statements Certain statements contained in this press release may be considered 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. CMTG intends for all such forward-looking statements to be covered by the applicable safe harbor provisions for forward-looking statements contained in those acts. Such forward-looking statements can generally be identified by CMTG’s use of forward-looking terminology such as "may," "will," "expect," "intend," "anticipate," "estimate," "believe," "continue," "seek," "objective," "goal," "strategy," "plan," "focus," "priority," "should," "could," "potential," "possible," "look forward," "optimistic," or other similar words. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Such statements are subject to certain risks and uncertainties, including known and unknown risks, which could cause actual results to differ materially from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of CMTG’s performance in future periods. Except as required by law, CMTG does not undertake any obligation to update or revise any forward-looking statements contained in this release. Definitions Distributable Earnings (Loss): Distributable Earnings (Loss) is a non-GAAP measure used to evaluate our performance excluding the effects of certain transactions, non-cash items and GAAP adjustments, as determined by our Manager. Distributable Earnings (Loss) is a non-GAAP measure, which the Company defines as net income (loss) in accordance with GAAP, excluding (i) non-cash stock-based compensation expense, (ii) real estate owned held-for-investment depreciation and amortization, (iii) any unrealized gains or losses from mark-to-market valuation changes (other than permanent impairments) that are included in net income (loss) for the applicable period, (iv) one-time events pursuant to changes in GAAP and (v) certain non-cash items, which in the judgment of our Manager, should not be included in Distributable Earnings (Loss). Furthermore, the Company presents Distributable Earnings (Loss) prior to realized gains and losses, which such gains and losses include charge-offs of principal, accrued interest receivable, and/or exit fees, as the Company believes this more easily allows our Board, Manager, and investors to compare our operating performance to our peers, to assess our ability to declare and pay dividends, and to determine our compliance with certain financial covenants. Pursuant to the Management Agreement, we use Core Earnings, which is substantially the same as Distributable Earnings (Loss) excluding incentive fees, to determine the incentive fees we pay our Manager. The Company believes that Distributable Earnings (Loss) and Distributable Earnings (Loss) prior to realized gains and losses provide meaningful information to consider in addition to our net income (loss) and cash flows from operating activities in accordance with GAAP. Distributable Earnings (Loss) and Distributable Earnings (Loss) prior to realized gains and losses do not represent net income (loss) or cash flows from operating activities in accordance with GAAP and should not be considered as an alternative to GAAP net income (loss), an indication of our cash flows from operating activities, a measure of our liquidity or an indication of funds available for our cash needs. In addition, the Company’s methodology for calculating these non-GAAP measures may differ from the methodologies employed by other companies to calculate the same or similar supplemental performance measures and, accordingly, the Company’s reported Distributable Earnings (Loss) and Distributable Earnings (Loss) prior to realized gains and losses may not be comparable to the Distributable Earnings (Loss) and Distributable Earnings (Loss) prior to realized gains and losses reported by other companies. In order to maintain the Company’s status as a REIT, the Company is required to distribute at least 90% of its REIT taxable income, determined without regard to the deduction for dividends paid and excluding net capital gain, as dividends. Distributable Earnings (Loss), Distributable Earnings (Loss) prior to realized gains and losses, and other similar measures, have historically been a useful indicator over time of a mortgage REIT’s ability to cover its dividends, and to mortgage REITs themselves in determining the amount of any dividends to declare. Distributable Earnings (Loss) and Distributable Earnings (Loss) prior to realized gains and losses are key factors, among others, considered by our Board in determining the dividend each quarter and as such the Company believes Distributable Earnings (Loss) and Distributable Earnings (Loss) prior to realized gains and losses are also useful to investors. While Distributable Earnings (Loss) excludes the impact of our provision for or reversal of current expected credit loss reserve, charge-offs of principal, accrued interest receivable, and/or exit fees are recognized through Distributable Earnings (Loss) when deemed non-recoverable. Non-recoverability is determined (i) upon the resolution of a loan (i.e., when the loan is repaid, fully or partially, when the Company acquires title in the case of foreclosure, deed-in-lieu of foreclosure, or assignment-in-lieu of foreclosure, or when the loan is sold or anticipated to be sold for an amount less than its carrying value), or (ii) with respect to any amount due under any loan, when such amount is determined to be uncollectible. In determining Distributable Earnings (Loss) per share and Distributable Earnings (Loss) per share prior to realized gains and losses, the dilutive effects of unvested RSUs and warrants outstanding are considered. The weighted average diluted shares outstanding used for Distributable Earnings (Loss) and Distributable Earnings (Loss) per share prior to realized gains and losses have been adjusted from weighted average diluted shares under GAAP to include weighted average unvested RSUs and warrants outstanding, if the exercise price exceeds the average share price of our common stock during such period. Book Value per Share: Book Value per share is calculated as (i) total equity divided by (ii) number of shares of common stock outstanding and RSUs at period end. View source version on businesswire.com: https://www.businesswire.com/news/home/20260506050963/en/ Contacts Investor Relations: Claros Mortgage Trust, Inc. Anh Huynh 212-484-0090 [email protected] Media Relations: Financial Profiles Kelly McAndrew 203-613-1552 [email protected]

Management exceeded its 2025 resolution target, completing $2.5 billion of loan resolutions (vs. a $2.0 billion target) and continuing momentum into early 2026 with $389 million of UPB resolved, including a NYC land loan repayment that had been non‑accrual since 2021. Q4 earnings and credit reserves showed pressure from a shrinking portfolio: GAAP net loss of $1.56 per share and a distributable loss of $0.71, while held‑for‑investment loans fell to $3.7 billion (from $6.1 billion a year earlier) and CECL reserves rose to $443 million (10.9% of UPB) after a $212 million provision. Deleveraging and financing actions materially improved liquidity and flexibility — net debt‑to‑equity fell to 1.9x after $2.0 billion of deleveraging (including early‑2026 activity), Claros closed a $500 million senior secured term loan from HPS priced at SOFR+675bp with detachable warrants, and liquidity stood at $153 million. Interested in Claros Mortgage Trust, Inc.? Here are five stocks we like better. Claros Mortgage Trust (NYSE:CMTG) executives said the company made “meaningful” progress in 2025 and into early 2026 as it worked to resolve watch list loans, generate liquidity, and deleverage the balance sheet, while acknowledging that earnings power has been pressured as the loan portfolio shrinks. Chief Executive Officer and Chairman Richard Mack said the company executed on the priorities it laid out at the start of 2025, including resolving watch list loans, enhancing liquidity, and further deleveraging. Mack highlighted that Claros set a $2 billion total resolution target for 2025 and “meaningfully exceeded” it, finishing the year with $2.5 billion of total resolutions. → Corning’s Surprise AI Boom: Is It Already Too Late to Buy? According to Mack, the 2025 activity included the resolution of 11 watch list loans representing an aggregate unpaid principal balance (UPB) of $1.3 billion. He also noted that momentum carried into the new year, citing $389 million of full loan repayments, including a New York City land loan that had been on non-accrual since 2021. Looking ahead, Mack said management does not expect a single catalyst to drive an “overnight recovery” in real estate. Instead, he anticipated gradual improvement supported by reduced new supply, tightening credit spreads, and improving financing costs for new originations, while calling out increased demand for industrial space and investment tied to artificial intelligence and domestic manufacturing. For 2026, he said the company’s focus will remain on asset management and “decisive execution” as it continues to resolve watch list loans and work through REO, with the goal of being positioned to evaluate new lending opportunities toward the end of 2026. → 3 Discount Retail Stocks to Watch as Earnings Put Valuations to the Test President, CFO, and Director Mike McGillis reported a fourth-quarter 2025 GAAP net loss of $1.56 per share and a distributable loss of $0.71 per share. Distributable earnings prior to realized gains and losses were $0.02 per share, he said. McGillis said the held-for-investment loan portfolio continued to decline, ending 2025 at $3.7 billion at December 31 compared with $4.3 billion at September 30 and $6.1 billion at year-end 2024. He attributed the UPB decline over the past year to the company’s strategy to “turn over the portfolio and prepare for an eventual return to originations,” while also noting reduced exposure to certain asset types facing secular headwinds. Standalone life science exposure was eliminated by year-end 2025, McGillis said. Office exposure decreased to $589 million from $859 million. Land exposure decreased to $187 million from $489 million. → Ondas Jumps on German Police and NATO Wins—Can the Rally Hold Into Earnings? In the fourth quarter, McGillis said the quarter-over-quarter UPB decrease was driven primarily by four loan resolutions: two “regular way” repayments (on a multifamily asset and a life science asset in Pennsylvania), plus two additional resolutions via a discounted payoff and a foreclosure. McGillis provided detail on a discounted payoff tied to a $150 million, previously four-rated office loan in Connecticut. Given the collateral valuation, the company agreed to repayment at about 70% of par, which management described as a “good outcome” in a challenging submarket. The transaction generated about $35 million in net liquidity that was used to reduce debt, and it resulted in a $46 million principal charge-off; however, McGillis said the book-value impact was “marginal” because the loss had been contemplated in the company’s general CECL reserve. He also discussed the foreclosure of an $88 million New York City watch list and non-accrual land loan. The collateral is an undeveloped parcel adjacent to Hudson Yards that allows for mixed-use development, McGillis said. Upon foreclosure, the company assigned a $94 million carrying value based on a third-party appraisal—about $6 million above UPB—and said it expects to market the land for sale with an exit “sometime in 2026.” Management said resolutions continued after year-end. McGillis cited $389 million of UPB resolved across four loans in early 2026, including: A $67 million New York City land loan repayment that had been non-accrual since 2021. A $174 million Salt Lake City newly built multifamily loan repayment that generated about $52 million of net cash proceeds. A foreclosure on a Dallas multifamily loan with $77 million of UPB; the carrying value was written down from $49 million to $37 million upon foreclosure. Resolution of a $71 million Seattle office loan, where the company transferred its rights and interests in the loan and underlying collateral to the financing counterparty given the collateral value relative to its position net of non-recourse note-on-note financing. On credit, McGillis said the quarter included upgrades and downgrades. The company downgraded a $220 million luxury hotel loan in Northern California to a four risk rating, citing the loan’s August 2025 maturity and the lack of modification terms, despite what he called meaningful year-over-year improvement in operating performance. McGillis said the company has also commenced foreclosure proceedings to provide additional optionality. McGillis also said three loans were downgraded to a five risk rating, reflecting a more aggressive portfolio turnover approach. He identified: A $170 million Denver multifamily loan, where management is pursuing a near-term resolution and adjusted the carrying value as of year-end to reflect expectations for the anticipated resolution. A $225 million Atlanta office loan maturing in March, where the company is evaluating options amid continued sector challenges. The Seattle office loan, which was resolved after quarter-end. The company recorded a $212 million provision for current expected credit losses (CECL) in the fourth quarter. McGillis said this primarily consisted of a $283 million provision to specific CECL reserves (before principal charge-offs) and a $62 million decrease in the general CECL reserve. Total CECL reserves on held-for-investment loans increased to $443 million, or 10.9% of UPB at year-end, from $308 million, or 6.8% of UPB at September 30. On REO, McGillis said Claros made “significant progress” on a mixed-use New York City asset. As of year-end, the company sold all office floors and a signage component, generating $67 million of gross proceeds that were generally in line with carrying value. Management said it now intends to run a sale process for the fully leased retail component. McGillis said the New York REO hotel portfolio continues to perform well, with results exceeding expectations and annual net operating income (NOI) growth of about 14%. He said the asset has been accretive to earnings and, after refinancing executed last year, the company will monitor the market for an opportune time to sell. McGillis said the company reduced leverage by $1.7 billion during 2025 and by an additional $300 million into early 2026. Net debt-to-equity declined to 1.9x at December 31, 2025 from 2.4x at December 31, 2024. A major corporate financing milestone came in January 2026, when the company retired its Term Loan B and replaced it with a $500 million senior secured term loan from HPS maturing in January 2030. The new loan is priced at SOFR plus 675 basis points, McGillis said. In connection with the financing, Claros issued 10-year detachable warrants to purchase about 7.5 million common shares at an exercise price of $4 per share, which management said represented a 46% premium to the closing price on January 30, 2026. McGillis also said financial covenants were aligned and relaxed across financing facilities to provide additional flexibility. Following the new term loan, McGillis said liquidity stood at $153 million, up $51 million from prior year-end “despite the significant deleveraging” completed in 2025. During Q&A, management also cautioned that net interest income could remain under pressure as the portfolio continues to pay down. McGillis said it was a “fair assumption” that net interest income could be lower in early 2026 because interest income will compress as loans are resolved and the portfolio is delevered, though lower debt levels should reduce interest expense. Executives said the company remains focused on cleaning up and simplifying the portfolio, while evaluating capital allocation options over time, including additional deleveraging and potentially returning to originations. Claros Mortgage Trust is a specialty finance company structured as a real estate investment trust that acquires and manages a portfolio of newly originated, conventional residential mortgage loans guaranteed or insured by U.S. government‐sponsored enterprises. The company concentrates on Agency collateral, including loans backed by Ginnie Mae, Fannie Mae and Freddie Mac, aiming to generate current income while preserving capital through high‐quality, credit‐enhanced assets. Under an external management agreement with Claros Mortgage Capital Advisors LLC, the firm leverages a seasoned team to source, underwrite and service mortgage assets. The article "Claros Mortgage Trust Q4 Earnings Call Highlights" was originally published by MarketBeat.

This article first appeared on GuruFocus. GAAP Net Loss: $1.56 per share for Q4 2025. Distributable Loss: $0.71 per share for Q4 2025. Distributable Earnings (prior to realized gains and losses): $0.02 per share for Q4 2025. Loan Portfolio: Decreased to $3.7 billion at December 31, 2025, from $4.3 billion at September 30, 2025, and $6.1 billion at year-end 2024. Office Exposure: Decreased from $859 million to $589 million by end of 2025. Land Exposure: Decreased from $489 million to $187 million by end of 2025. Total Resolutions: $2.5 billion of UPB resolutions for 2025, exceeding the $2 billion target. Term Loan B: Retired and replaced with a $500 million senior secured loan from HPS, maturing in January 2030. CECL Reserve: Increased to $443 million or 10.9% of UPB at year-end 2025. Net Debt-to-Equity Ratio: Decreased from 2.4x at December 31, 2024, to 1.9x at December 31, 2025. Liquidity: $153 million at the end of 2025, a $51 million increase compared to the prior year-end. Warning! GuruFocus has detected 3 Warning Signs with CMTG. Is CMTG fairly valued? Test your thesis with our free DCF calculator. Release Date: February 19, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Claros Mortgage Trust Inc (NYSE:CMTG) exceeded its $2 billion resolution target for 2025, achieving $2.5 billion in total resolutions. The company successfully resolved 11 watchlist loans, representing an aggregate UPB of $1.3 billion, demonstrating effective portfolio management. CMTG generated significant liquidity throughout the year, which was used to deleverage the portfolio and reduce corporate debt. A new $500 million senior secured loan from HPS extended the maturity of corporate debt to 2030, providing financial flexibility. The company observed encouraging indicators in the real estate market, such as reduced new supply and tightening credit spreads, which could support future growth. CMTG reported a GAAP net loss of $1.56 per share and a distributable loss of $0.71 per share for the fourth quarter of 2025. The held-for-investment loan portfolio continued to decline, decreasing to $3.7 billion at the end of 2025 from $6.1 billion at the end of 2024. The company recorded a provision for current expected credit losses of $212 million during the fourth quarter. CMTG's stock is trading at a significant discount to book value, indicating market concerns about the company's financial health. Net interest income is expected to continue declining in the near term due to ongoing loan resolutions and portfolio deleveraging. Q: Are there opportunities outside of resolving the portfolio to create shareholder value given the stock is trading at a significant discount to book value? A: Richard Mack, CEO and Chairman, stated that while they are open to all possibilities, the current focus is on cleaning up the portfolio to make it more transparent and easier to understand. This clarity is necessary before the market can properly evaluate the business. Q: With net interest income (NII) having been cut in half over the year, is it likely to decrease further in the first and second quarters of 2026? A: Michael McGillis, President and CFO, confirmed that as loans are resolved and the portfolio is deleveraged, top-line interest income will continue to compress. However, deleveraging will help offset interest expenses, though net interest income will remain choppy until the portfolio transitions back to originations. Q: What percentage of the $400 million reserve could realistically translate into losses over the next 12 months? A: Priyanka Garg, Executive Vice President, explained that the reserves are based on current expectations and past resolutions. While they believe they are appropriately reserved, the dynamic environment could lead to changes. The focus is on accelerating resolutions and turning over the book. Q: How are liquidity levels expected to change in 2026 following the Term Loan B refinancing and recent resolutions? A: Michael McGillis noted that liquidity generated over the past year was used to deleverage the balance sheet. With a significant liquidity cushion now in place, the company feels well-positioned. Any additional liquidity will be used to further deleverage or evaluate capital allocation options. Q: Has the improved commercial real estate market changed expectations for the pace of sales from the REO portfolio and watchlist resolutions? A: Richard Mack acknowledged a more constructive environment, which should improve performance on assets held off for resolution. However, transaction volumes are still lower than anticipated. The focus remains on execution and cleaning up the book rather than waiting for a full market recovery. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Image source: The Motley Fool. Thursday, Feb. 19, 2026 at 10 a.m. ET Chief Executive Officer and Chairman — Richard Jay Mack President, Chief Financial Officer, and Director — John Michael McGillis Vice President, Credit Strategies, Mack Real Estate Group — Priyanka Garg Vice President, Investor Relations — Anne Wynn I will be your conference facilitator today. All participants will be in a listen-only mode. After the speakers' remarks, there will be a question-and-answer period. If you wish to ask a question at this time, please press star followed by one on your telephone keypads. I would now like to hand the call over to Anne Wynn, Vice President of Investor Relations at Claros Mortgage Trust, Inc. Please proceed. Thank you. Joined by Richard Jay Mack, Chief Executive Officer and Chairman of Claros Mortgage Trust, Inc. Anne Wynn: And John Michael McGillis, President, Chief Financial Officer, and Director of Claros Mortgage Trust, Inc. We also have Priyanka Garg, Vice President who leads credit strategies for Mack Real Estate Group. Prior to this call, we distributed CMTG's earnings release and supplement. We encourage you to reference these documents in conjunction with the information presented on today's call. If you have any questions, please contact me. I would like to remind everyone that today's call may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those disclosed in our other filings with the SEC. Any forward-looking statements made on this call represent our views only as of today, and we undertake no obligation to update them. We will also be referring to certain non-GAAP financial measures on today's call such as distributable earnings, which we believe may be important to investors to assess our operating performance. For reconciliations of non-GAAP measures to the nearest GAAP equivalent, please refer to the earnings supplement. I will now turn the call over to Richard. Richard Jay Mack: Thank you, Anne, and thank you all for joining us this morning for CMTG's fourth quarter earnings call. CMTG made a meaningful amount of progress last year, executing on several critical path items. In 2025, we accomplished the priorities we established at the start of the year, including resolving watch list loans, enhancing liquidity, and further deleveraging the portfolio. One year ago, we established a $2,000,000,000 total resolution target for 2025, and I am pleased to report that we meaningfully exceeded this target, closing the year with $2,500,000,000 of total resolutions. This included the resolution of 11 watch list loans representing an aggregate UPB of $1,300,000,000. This activity reflects our commitment to repositioning the portfolio by transitioning out of watch list loans through thoughtful and decisive action. We also generated significant liquidity over the course of the year which we used to meaningfully delever the portfolio and to reduce corporate debt. This momentum has carried into the new year, $389,000,000 of full loan repayments happening including a New York City land loan that was a watch list loan that had been on nonaccrual since 2021. More importantly, subsequent to year end, we retired the Term Loan B that was scheduled to mature in August 2026. The term loan had a balance of $718,000,000 in 2025 and was replaced with a new $500,000,000 senior secured loan from HPS. This facility has four years of duration. Mike will provide additional color on this financing later in the call. We view this financing agreement with HPS as a positive for CMTG, as it extends the maturity of our corporate debt to 2030 and provides the necessary flexibility to continue executing our business plan of resolving watch list loans, delevering our balance sheet, and reducing our capital costs over time. Looking ahead to the coming year, we remain optimistic but mindful of the macroeconomic backdrop and the uncertainty that has been a defining theme across the broader financial markets. With regard to real estate, we do not believe there will be a single catalyst that will drive overnight recovery. Rather, we anticipate a period of gradual and steady improvement that will support transaction volume and investor confidence over time, especially if the bond market rally holds and rate cuts continue as expected. As it relates to property market fundamentals, we continue to observe encouraging indicators including a reduction in new supply, tightening credit spreads, and improving financing costs for new originations. We also see increased demand for industrial space and significant investments in areas such as artificial intelligence, and domestic manufacturing. We believe that investments in domestic manufacturing will support job growth and incremental demand for real estate over time. While AI investments are likely to support future productivity gains, the impact on commercial real estate excluding data centers is still quite uncertain. Overall, we see a constructive backdrop for commercial real estate and CMTG in the years ahead. But in 2026, our focus will remain on asset management and decisive execution as we continue to resolve watch list loans and work through our REO assets. Our goal is to position the company to begin to evaluate new lending opportunities towards 2026 and lay the groundwork for portfolio growth subsequent years. Before turning the call over to Mike, I want to acknowledge that the last 24 months have been the most challenging business period of my career and for many others in the real estate industry. And so I want to thank Mike, Priyanka, and our entire team for their dedication and hard work during this difficult time and their commitment to overcoming the remaining challenges that are still ahead. I look forward to providing an update on our continuing progress in the coming quarters. I will now turn the call over to Mike. Thank you, Richard. For 2025, CMTG reported a GAAP net loss of $1.56 per share and a distributable loss of $0.71 per share. Distributable earnings prior to realized gains and losses were $0.02 per share. CMTG's held-for-loan portfolio continued to decline in the fourth quarter, decreasing to $3,700,000,000 at December 31, compared to $4,300,000,000 at September 30, and $6,100,000,000 at year end 2024. Over the course of 2025, we reduced our exposure to select asset types that have generally been experienced secular headwinds. As of 2025, the portfolio no longer includes John Michael McGillis: stand-alone life science. Office exposure decreased from $859,000,000 to $589,000,000, land exposure decreased from $489,000,000 to $187,000,000. It is worth noting, however, that the decline in portfolio UPB over the past year was an inherent result of our strategy to turn over the portfolio and prepare for an eventual return to originations. Specific to the fourth quarter, the quarter-over-quarter decrease in UPB was primarily the result of four loan resolutions, consisting of two regular-way loan repayments, one on a multifamily asset and the other on a life science asset, both in Pennsylvania. The other two were resolved by way of a discounted payoff and a foreclosure. In addition, as previously reported, we executed a sale of a $30,000,000 Boston land loan. This transaction did not impact fourth quarter portfolio UPB because it was previously classified as held for sale at the end of the third quarter. The discounted payoff related to a $150,000,000 previously four-rated office loan in Connecticut. Given the valuation of the collateral, we agreed to repayment at approximately 70% of par which we view as a good outcome given current market values and a challenging submarket and tenancy. The borrower was motivated to arrive at a resolution due to additional credit support that had been provided. This transaction enabled us to resolve a watch list loan, reduce CMTG's office exposure, and generate approximately $35,000,000 in net liquidity for CMTG which was then used to reduce outstanding debt. The discounted payoff resulted in a $46,000,000 principal charge-off. However, it is worth noting that the impact to fourth quarter book value was marginal, as the potential loss had been previously contemplated within our general CECL reserve. Additionally, we resolved an $88,000,000 New York City watch list and nonaccrual land loan through a foreclosure process. The underlying collateral is a well-located, undeveloped land parcel adjacent to Hudson Yards that allows for mixed-use development. After reviewing the facts and circumstances of this loan's history, we concluded that foreclosing and ultimately marketing the land for sale was the best path to resolving the loan. Upon foreclosure, we assigned a carrying value of $94,000,000 based on a third-party appraisal, approximately $6,000,000 greater than our UPB, which further supported our decision to foreclose as a means to optimize recovery. We do not anticipate being long-term holders of this land and expect to seek an exit sometime in 2026. As Richard mentioned, last year we exceeded our $2,000,000,000 loan UPB resolution target, achieving $2,500,000,000 of UPB in resolutions for the year. This progress has continued into the new year with CMTG reporting an additional $389,000,000 in UPB of resolutions across four loans, which include two regular-way repayments. The first repayment was on a $67,000,000 New York City land loan that was previously a four-rated loan that had been on nonaccrual since 2021. The other was a $174,000,000 loan collateralized by a newly built multifamily property in Salt Lake City, which generated net cash proceeds of approximately $52,000,000. This asset delivered last fall, which allowed the borrower to secure refinancing to lower its cost of capital. In addition, in line with our previously mentioned plans, we foreclosed on a multifamily property in Dallas, $77,000,000 of UPB, that was previously five-rated. Previously, the loan had a carrying value of $49,000,000 and was down to $37,000,000 upon foreclosure. And last, we resolved a $71,000,000 loan collateralized by a newly completed but vacant office property located in Seattle. Given the collateral value relative to our equity position, net of nonrecourse note-on-note financing, we determined the most prudent path was to transfer our rights and interests in our loan and the underlying collateral to the financing counterparty. Turning to portfolio credit. During the fourth quarter, the portfolio experienced a mix of ratings upgrades and downgrades. We downgraded a $220,000,000 loan collateralized by a luxury hotel property located in Northern California to a four risk rating. We continue to have conviction in the asset given the exceptional asset quality and highly desirable location and meaningful year-over-year improvement in operating performance. That said, the loan matured in August 2025, and we have not reached terms in a modification with the borrower, which resulted in the downgrade to the loan's risk rating. We have also commenced foreclosure proceedings to provide additional optionality of outcomes. We also downgraded three loans to a five risk rating. In each case, the downgrades primarily reflect our decision to take a more aggressive approach in turning over the portfolio. I would like to provide some color on these loans. The first loan is a $170,000,000 loan collateralized by a multifamily property located in Denver. We are actively pursuing a near-term resolution for this loan and are currently in the process of executing our plans related to the asset. While we are limited in what we can share at this time, we have adjusted the carrying value of the loan as of 12/31/2025 to appropriately reflect our expectations for the anticipated resolution. We look forward to providing an update on this loan in the near future. The second loan is a $225,000,000 loan collateralized by an office property located in Atlanta, Georgia, which matures in March. This asset, similar to other office assets in the area, continues to experience the challenges that have generally weighed on the office sector. We are currently evaluating our options for this loan. The last loan was the Seattle office loan that I just spoke to that we resolved subsequent to the quarter. During the fourth quarter, we recorded a provision for current expected credit losses of $212,000,000 which primarily consisted of a $283,000,000 provision to our specific CECL reserve, prior principal charge-offs, and a $62,000,000 decrease in our general CECL reserve. The $283,000,000 specific CECL reserve provision was primarily attributable to the three loans that were downgraded to a five risk rating during the quarter, changes to collateral values of previously five-rated loans, and the previously mentioned $46,000,000 principal charge-off relating to the Connecticut office loan. It is important to note that of the $283,000,000 specific CECL provision, $75,000,000 was related to loans that were resolved during the fourth quarter or in 2026 year to date. The decrease in general CECL reserve was primarily attributable to a reduction in the UPB of loans subject to general CECL reserves. As a result, our total CECL reserve on loans receivable held for investment increased from $308,000,000 or 6.8% of UPB at September 30, to $443,000,000 or 10.9% of UPB at year end. Our general CECL reserve decreased from $140,000,000 or 3.9% of loans subject to our general CECL reserve to $78,000,000 or 2.9% of UPB of loans subject to our general CECL reserve. Turning to REO assets. We made significant progress with our mixed-use New York City REO asset during the quarter. As a reminder, we completed the commercial condominiumization of the building in May and as of year end, we have sold all of the office floors as well as the signage component, generating total gross proceeds of $67,000,000 which was generally in line with our carrying value. We now intend to conduct a sale process for the fully leased retail component of the property. We believe this asset has served as an example of how we can leverage our sponsors' real estate expertise to creatively execute asset-level strategies and optimize outcomes. The New York REO hotel portfolio continues to perform well with operating results exceeding expectations and annual NOI growth of approximately 14%. This asset has been accretive to earnings and given the refinancing we executed last year, we will continue monitoring the market for an opportune time to pursue an asset sale. Over the course of 2025, we strengthened the balance sheet by focusing on generating liquidity and reducing leverage by $1,700,000,000. We continued this focus into the new year by reducing leverage by an additional $300,000,000 of which $90,000,000 was applied to asset-level deleveraging payments and towards the repayment of the Term Loan B. As Richard mentioned, at the beginning of 2025, the Term Loan B had a balance of $718,000,000 and was scheduled to mature in August 2026. In January 2026, we subsequently retired the Term Loan B and replaced it with a $500,000,000 senior secured term loan from HPS which matures in January 2030. This new senior secured term loan is priced at SOFR plus 675 basis points. And in connection with this financing, CMTG issued ten-year detachable warrants to purchase approximately 7,500,000 shares of its common stock at an exercise price of $4 per share which represents a 46% premium to the closing price for CMTG's common stock on 01/30/2026. In conjunction with the closing of the new term loan, we aligned and relaxed financial covenants across all of our financing facilities which provides additional flexibility to execute our business plan going forward. Over the course of 2025, we decreased our net debt to equity ratio from 2.4x at 12/31/2024 to 1.9x at 12/31/2025. Following the closing of the senior secured term loan, we now have $153,000,000 in liquidity representing a $51,000,000 increase compared to the prior year end, despite the significant deleveraging that occurred in 2025. We accomplished a great deal in 2025, and we recognize there is more work ahead. By resolving watch list loans, generating liquidity, reducing leverage and subsequently addressing the Term Loan B maturity, we have strengthened the balance sheet and positioned the company well for the coming year. We look forward to building on this progress as we continue to execute across the portfolio. We will now open for questions. Operator? Thank you. Anh Huynh: Thank you. Please press star followed by two. When preparing to ask your question, please ensure your device is unmuted locally. Our first question comes from Richard Barry Shane from JPMorgan. Your line is now open. Please go ahead. Anne Wynn: Hey, guys. Thanks for taking my questions this morning. Look, I realize there's John Michael McGillis: a lot of progress both in terms of repayments and loan sales and foreclosures. Obviously, Richard Barry Shane: the significant reserves allow you guys or put you in a position to be able to negotiate resolutions for the loans. But obviously, you know, the stock is trading at an enormous discount to book. It is a very, very long path to earning, you know, generating a return that is anywhere near your hurdle rate. I think you guys know where I am headed, which is we have seen at least one transaction in the space where a REIT who was much further along the path in terms of recovery decided to sell their assets near NAV. Are there opportunities here outside of resolving this portfolio to create shareholder value? Richard Jay Mack: Rick, thank you for that question. We are clearly always open to everything. But our goal right now has to be cleaning the book up so that it is a much more transparent and easier to understand Richard Barry Shane: business. Richard Jay Mack: And I think we have to wait until we are able to deliver that before we can really understand if the market can evaluate our business properly. And so I think that is where we are headed at the moment. John Michael McGillis: Okay. Richard Barry Shane: Thank you. And then to follow that up, you know, NII has been cut in half throughout the year over the course of the year. I am curious as we head into Q1 2026 and you think about the nonaccruals, and the movement in the portfolio, NII is pure net interest income, about $12,500,000 in the fourth quarter. Is it likely that it will be again lower in the first and second quarter of the year given how the portfolio is marked at this point? John Michael McGillis: Yeah. Rick, I think that is this is Mike. I think that is a fair assumption because as we resolve loans and delever the book, and get regular-way payoffs, that top line interest income level is going to continue to compress. Deleveraging will offset that to a degree on the interest expense side. And then further resolutions of the nonaccrual loans or sub-earning assets should give us some capital to delever, which should help further reduce interest expense. But I think that is a reasonable assessment Richard Barry Shane: But John Michael McGillis: you know, we are in a process of transitioning the portfolio, so that net interest income line is going to be choppy until we sort of turn the corner on the book and can get back to originations. Richard Barry Shane: Got it. And then just one last question. I apologize for going first and then asking so many questions. But you know, obviously, you guys are because you have indicated that the reserve levels position you to aggressively start to resolve or continue to resolve loans during 2026. When we look at the reserve levels and over $400,000,000, and I apologize, I will not look up the specific number. Realistically, what percentage of that reserve do you think could be translated into losses over the next 12 months? Is it 25%, 50%, 75%? Just so that we can start to get some sense without knowing specifically what you guys are going to resolve, how quickly you think you are going to start resolving things. Priyanka Garg: Hey, Rick. It is Priyanka. I will take that one, or I will start. We look. We are reserving based on what we think is appropriate at this time. We have resolved a tremendous number of loans in 2025. Half of them were on our watch list, and year to date, we have already resolved three additional loans on our watch list. So we think we have a good sense of the reserves that we need to take in order to accelerate resolutions and turn over the book. And so we think we are appropriately reserved for that now. There can be new information, and we might have changes in this really dynamic environment depending on where negotiations with borrowers or financing counterparties or anything may go. But we think we are appropriately reserved today, and we have a lot of data points in a lot of different ways in terms of, you know, loan sales, which really tapered off throughout 2025, more doing DPOs and other transactions, foreclosures. We think we have a really good sense of where the reserve level should be. Richard Barry Shane: Okay. I appreciate that. The question is more about the timing of those resolutions as opposed to the level of the reserve. Priyanka Garg: Yeah. Yeah. The timing look. I think we John Michael McGillis: Go ahead. Go ahead, Mike. It is okay. I was just going to say, I think we have Go ahead, Anne. Go ahead. I Should I call on somebody? Priyanka Garg: Okay. I am going to start. So I think that the pace, I mean, we are really, really focused on accelerating the pace of dispositions, I mean, both within the loan book as well as in the REO book. We were we realized the value exactly what Richard said earlier, we need to turn over this portfolio and we need to make very clear where to demonstrate our book value. So I cannot I do not want to give you specific time frames, but I would hope that 2025 and our progress in 2025 suggests that we are moving very quickly, and we hope we are continuing to accelerate that. And furthermore, the stability of our balance sheet after the transaction that we just closed in January really helps us do that with even more strength and speed. Richard Barry Shane: Got it. I appreciate the answer. Thank you, guys. John Michael McGillis: Thank you. Anh Huynh: Our next question comes from John Ryan Nickodemus from BTIG. Please go ahead. Richard Barry Shane: Morning, everyone. Thanks for the time. Richard Jay Mack: With the Term Loan B refinancing completed, several more resolutions completed as well since we last spoke, how are you thinking about liquidity levels here in 2026? I know you are looking to improve them, and it is up year over year, but we did see it come down significantly since November, which is to be expected. Doug Harter: Just trying to get a better handle on how we should think about the trajectory there for this year. Thanks. John Michael McGillis: Sure. Thanks for the question. Well, I think a lot of the liquidity that was generated over the course of the year was used to deleverage the balance sheet, which we expect to continue to do as we continue resolving loans and our REO assets over the course of 2026. Given the deleveraging that we have done, we now have a pretty significant level of liquidity cushion over a minimum liquidity requirement, and faced with that and a very de minimis amount of future funding that we expect to occur on our existing loan portfolio, we feel that our liquidity is in a Richard Jay Mack: very good John Michael McGillis: position right now. And to the extent we generate incremental liquidity above those levels, we will continue to look to deleverage the balance sheet. But success for this year, by the end of the year, we are evaluating a variety of capital allocation options for available liquidity whether that is originating new loans, further deleveraging the balance sheet, or other kinds of capital allocation alternatives. Doug Harter: Great. Thanks, Mike. That is really helpful. And then for my second question, kind of goes into what Priyanka was mentioning in response to Rick's last question. But we have heard a lot about improvements for, you know, the greater commercial real estate sort of transaction activity, liquidity, and also seen some of your peers talk about being more aggressive about resolving challenged loans or REO assets during this round of earnings. Given that backdrop, has that changed your for sort of the pace or timing of sales out of both the REO portfolio as well as resolutions from the watch list. Thanks. Richard Jay Mack: So, John, thanks for that. This is Richard. I think we are in a much more constructive environment such that things that we had held off resolving we are going to have much better performance out of. However, I want to say that the market is not fully back. Transaction volume is still lower than we had anticipated we would be by this time. So I think we are trying to both react to the market and make the best execution that we can Richard Barry Shane: while being Richard Jay Mack: mindful that we need to quickly clean up our book. So it is a balance. I think, on the whole, we are more focused on execution and delivering a clean book than we are waiting for the market to recover, but we are getting a little bit of the benefit Doug Harter: of Richard Jay Mack: having waited on some of the assets that we are going to be able to resolve this year. And I think I am sure Priyanka would like to add something to this. Priyanka Garg: Yeah. Yeah. Thanks, Richard. The only thing I would add, I agree with everything Richard said. I would add, though, that because of the healthier capital markets, both CMBS, banks coming back into the mix, we are just we are seeing more regular-way repayments, larger loans. So I think the theme we are going to see in this coming year are fewer extensions and modifications and more repayments on performing loans, which will then have an impact on NII as we talked about during Rick's question, but it will still help turn over the book, getting that excess cash, and then having the decision on how to allocate that capital. John Michael McGillis: Great. Doug Harter: Really appreciate it, Richard and Priyanka, and thanks for the answers. Richard Jay Mack: Thank you. Anh Huynh: Thank you. Our next question comes from Chris Mueller from Citizens Capital Markets. Your line is now open. Please go ahead. John Michael McGillis: I guess, looking at your REO portfolio, most of the properties have some financing against them. And I see your comment that the hotel portfolio is the most profitable than the aggregate contribution to DE. But can you guys Chris Mueller: about some of the individual NOIs within that REO portfolio? Priyanka Garg: Yeah. Hi, Chris. I will take that one. It is Priyanka. We are now the NOI, so in the we have the mixed-use asset, which the only thing we are retaining is the fully leased retail. And so that is 100% leased. Tenants paying rent. So there is, you know, NOI coming off of that. That happens to be one that we are holding unlevered. In the multifamily assets that we have REO, it is a mixed bag. There are some that are generating real NOI, others that are a little bit more challenged from an NOI standpoint, but that is all part of the plan to foreclose. The ones that are now generating NOI were not generating NOI when we foreclosed. So the point is to come in there and make sure that we are spending capital in smart ways accretively to, you know, market the asset appropriately to potential renters, and also be a present owner who is holding the property managers accountable. So I think that to the extent that assets do not have positive NOI or meaningful NOI, it is all part of the plan and certainly was expected. And the last thing I would say is that capital that we are putting in there, you mentioned that these are financed, the financing facilities have structure in them where there is capital being held back for us to spend at the properties, and that is, you know, Chris Mueller: not cash coming off the balance sheet. John Michael McGillis: Got it. And that is a good segue into my follow-up here. Do you guys expect a lot or could you give a ballpark dollar amount of what you are expecting on CapEx for these REO properties? Priyanka Garg: It is not going to be a meaningful amount. I mean, I hesitate to give you a specific number because a lot of that is going to depend on our hold periods. So, again, we are accelerating dispositions. You can see that in our earnings supplement on Page 8. We sort of call out where we are accelerating. And so I think to the extent these are shorter-term holds, we are going to spend less capital. But we want to be prepared to spend more if the hold is longer. John Michael McGillis: Got it. That makes a lot of sense. And just one last Tom Catherwood: quick one, if I could. Does the new term loan allow financing of watch list loans? John Michael McGillis: We have a we already have a facility that allows us to Chris Mueller: finance John Michael McGillis: those loans. The new term loan is more of a corporate debt facility. So even though it is senior secured, it is more of a corporate mezzanine loan kind of structure, as opposed to an asset-specific financing structure, which is what we use at the direct asset level. Got it. Makes a lot of sense. Thanks again for taking the questions. Anh Huynh: Thank you. We currently have no further questions, so I will hand back over to Richard for closing remarks. Tom Catherwood: Well, I want to thank everyone for joining and for the questions. And Richard Jay Mack: maybe summarize some of the things that we have mentioned today. 2025 and 2026 have been about resolving watch list loans, enhancing liquidity, deleveraging the book by $2,000,000,000. In 2025, there was $2,500,000,000 of resolutions. 2026, almost $400,000,000 so far. We got the TLB retired. We now have a relationship with HPS who is part of BlackRock, the largest asset manager in the world. All this amidst a constructive and improving real estate credit market, real estate capital market in general. Anh Huynh: So Richard Jay Mack: while we are not here to declare victory, we are seeing light at the end of the tunnel. And we are getting closer to a clean book that we expect will allow the Street to more appropriately value our stock. And that is really our goal every day when we come to the office. Richard Barry Shane: And so it has been hard. It has been a long road. Richard Jay Mack: But we are really excited to be feeling like we can see the light at the end of the tunnel and that the capital markets are cooperating with us. So we thank you for joining us, and for monitoring our progress and for the questions. And we will look forward to speaking again at the next quarterly call. Thank you all. Anh Huynh: This concludes today's call. Thank you for joining us. You may now disconnect. Before you buy stock in Claros 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 Claros Mortgage Trust wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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