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Mar 31, 2025
Blackstone Mortgage Trust Q1 2025 Earnings Report
Estimated Revenue:$105M
-27.5% YoY
Estimated EPS:$0.36
33.5% YoY
Key Takeaways
Blackstone Mortgage Trust, Inc. reported a net loss of $351 thousand for the three months ended March 31, 2025, a significant decrease compared to a net income of $123,170 thousand in the same period last year. This was primarily driven by a decrease in income from loans and other investments and a substantial increase in expenses from real estate owned, partially offset by an increase in current expected credit loss reserve.
Net loss for the quarter was $351 thousand, a significant decline from a net income of $123,170 thousand in the prior year period.
Income from loans and other investments, net, decreased by $52,568 thousand, from $142,392 thousand in Q1 2024 to $89,824 thousand in Q1 2025.
Expenses from real estate owned increased significantly by $46,302 thousand, from $0 in Q1 2024 to $46,302 thousand in Q1 2025.
The company recorded a $49,505 thousand increase in current expected credit loss reserve, compared to a $234,868 thousand increase in the prior year period.
Revenue by Geographic Location
Forward Guidance
The company's business model is such that rising interest rates will generally increase net income, while declining interest rates will decrease net income. The company expects to fund its loan commitments over the remaining term of the related loans, which have a weighted-average future funding period of 2.3 years. The company may be required to record further increases to CECL reserves in the future, depending on portfolio performance and broader market conditions, particularly for loans secured by office buildings.
Positive Outlook
- Rising interest rates are expected to positively correlate with net income due to the floating rate nature of assets and liabilities.
- The company maintains a robust asset management relationship with borrowers to maximize portfolio performance.
- The company benefits from Blackstone's real estate platform expertise in credit and underwriting processes.
- The company's business model of originating senior loans collateralized by large assets in major markets with experienced sponsors provides stability.
- The company has access to further liquidity through public and private offerings of equity and debt securities, and a shelf registration statement is effective until July 2025.
Challenges Ahead
- A prolonged period of policy-driven uncertainty and continued market volatility could impact the U.S. and global economies, adversely affecting the company, its borrowers, their tenants, and real estate asset values.
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