Blackstone Mortgage Trust Posts Q1 Earnings Loss but Exceeds Forecasts

Blackstone Mortgage Trust (BXMT) registered a first-quarter loss of $6.3 million, but exceeded Wall Street expectations.

The publicly traded mortgage real estate investment trust (REIT) reported a net loss of 4 cents per share with a distributable earnings per share of 49 cents, which beat analysts’ estimates of  38 cents. It had $46 million of realized losses during the quarter connected to the impairment of a San Francisco hotel loan. 

First-quarter revenue at BXMT finished at $159.42 million, a 25.6 percent year-over-year increase and well above analysts’ forecasts of $84.8 million. 

“BXMT’s first-quarter results clearly demonstrate the breadth of our platform and our ability to execute on both sides of the balance sheet amidst an ongoing real estate recovery,” Tim Johnson, CEO of the REIT, said on Wednesday morning’s earnings call. “We have a well invested portfolio generating strong in-place current income allowing us to maximize return on new capital deployment.”

BXMT’s $19.7 billion loan portfolio ended the first quarter at 98 percent, with 51 percent of the debt concentrated in the multifamily and industrial sectors. The company closed $500 million of new investments for the quarter, which included $300 million of loan originations and $800 million of gross originations when factoring in loan syndications.

The first quarter saw BXMT execute its first data center loan for a 100 percent-leased asset in Northern Virginia, and the REIT is targeting more deals in the sector by leveraging Blackstone’s equity platform, according to Austin Peña, president of BXMT. 

“Blackstone is the largest financial investor in data centers globally,” Peña said on the earnings call. “As a result, BXMT sits in an extraordinary position to identify and underwrite investments in this space.”

Johnson noted that BXMT has a pipeline of around $1 billion of originations lined up in the second quarter. 

The mortgage REIT had its most active quarter in the net-lease space, according to Peña, with $192 million of investments in the first quarter, and has a pipeline of roughly $120 million in place for the second quarter. Peña said the net-lease platform has potential to grow two years after it established the business.

“We look at risk-adjusted returns when we’re looking at these investments relative to other things that we can do in terms of allocating our capital, but we would be very happy if this could become at least 10 percent of our portfolio over time,” Peña said. “It really complements our floating-rate lending business, adding duration.”

Andrew Coen can be reached at acoen@commercialobserver.com.