Blackstone Mortgage Trust Posts Q2 Net Loss Amid Focus on Portfolio Diversification

Blackstone Mortgage Trust (BXMT) reported a net loss of $81.2 million in the second quarter of 2026, but its executives were optimistic during a Thursday morning earnings call about turning its portfolio around.

The publicly traded mortgage real estate investment trust (REIT) posted a second-quarter loss of 48 cents per share with a distributable earnings per share of 48 cents, still beating analysts’ estimates of 38 cents per share.

BXMT executives attributed the drop in earnings to short-term impacts from several loan impairments during the second quarter, specifically the resolution of a $29 million impaired multifamily loan in Dallas.

“It’s hard given all the moving pieces right now, and it’s still early in the quarter. Obviously, given some of the impairments we took in Q2 and the pretty substantial repayment volume that we had this quarter, we do expect some impact to the third quarter,” Marcin Urbaszek, chief financial officer at BXMT and managing director at Blackstone Real Estate Debt Strategies, said during the call.

“But, again, it’ll take us probably a couple quarters to be fully deployed with the money that we’re getting back,” Urbaszek added. “It’s hard to say exactly where we’re going to be right now on a runway basis. There’s a lot of things moving around at the moment.”

Tim Johnson, BXMT’s CEO, said during the call the REIT is also looking to “take advantage of what we think is a reasonably liquid market to sell loans.” That would include the sale of a Hyatt hotel in San Francisco and most of its office loan portfolio.

The move is part of BXMT’s new strategy to diversify its $20 billion total investment portfolio over the coming years, including its $17 billion loan portfolio, Johnson said.

“The loan sale process is at an early stage and underway,” the CEO said on the call. “We’re under no obligation to sell, and we may look at selling some, all or none of it.

“It’s really about rotating our portfolio into the sectors where we see the best fundamentals, the best risk-adjusted return, and the best relative value,” Johnson added. “So, if we can take advantage of an opportunity to rotate out of office into other sectors, we think that is going to be the best outcome for long-term value for our shareholders.”

The firm’s execs said its office exposure could be reduced by 40 percent by year-end through initiatives like loan sales and repayments.

During the second quarter, BXMT closed $1.4 billion in investments across multiple strategies, and originated $1.1 billion in loans, mostly secured by residential and industrial properties. Eighty percent of its lending took place in the U.S., while the rest was focused in Europe.

The REIT’s second-quarter total net revenue finished at $158.1 million, a slight drop from $159.4 million during the first quarter but an increase from $133.6 million during the second quarter of 2025.

Moving forward, Johnson said BXMT is “well positioned to drive [its] strategic initiatives forward and capture attractive opportunities in the market today” all while maintaining a “well-structured balance sheet.”

Isabelle Durso can be reached at idurso@commercialobserver.com.