Blackstone Mortgage Trust (NYSE:BXMT) reported fourth-quarter and full-year 2025 results that management said reflected improving earnings power and stronger credit performance, supported by portfolio rotation, loan resolutions, and financing activity over the past year.
Quarterly earnings, dividend, and charge-offs
For the fourth quarter, the company reported GAAP net income of $0.24 per share. Distributable earnings (DE) were -$2.07 per share, reflecting $434 million of reserve charge-offs tied largely to the resolution of five impaired loans and the write-off of three subordinate loans that were previously impaired and deemed unrecoverable after a quarterly assessment.
Portfolio performance improves; impaired loans reduced
Management said the loan portfolio ended the year 99% performing, with no new impaired loans or watchlist additions in the fourth quarter and one watchlist loan repaid in full. The company resolved $575 million of impaired loans during the quarter, reducing the impaired loan balance to just under $90 million. Most of the remaining impaired balance relates to a loan secured by a San Francisco hotel, which management expects to take ownership of in the first quarter.
The company also upgraded six loans during the quarter, including one impaired office loan and one watchlist office loan, citing leasing progress and cash flow growth. Office exposure continued to decline, down about 50% since year-end 2021, and management said it had collected over $300 million of additional office repayments so far in the first quarter.
Investment activity and shift toward multifamily, industrial, and new strategies
Blackstone Mortgage Trust closed $1.5 billion of investments in the fourth quarter, including $1.4 billion of new loan originations and about $100 million of net lease acquisitions at share. The quarter’s loan originations were 100% secured by multifamily and industrial assets, with roughly 80% backed by diversified portfolios. Management highlighted a $419 million loan on a 94% leased, 11-asset industrial portfolio across the U.S.
For full-year 2025, the company said it closed approximately $7 billion of investments, with nearly 85% allocated to multifamily and industrial loans, its growing net lease strategy, and two bank loan portfolios acquired at discounts. Management described this as a strategic broadening of BXMT’s investment channels to add diversification and duration alongside its core floating-rate lending.
At quarter end, the company’s investment portfolio totaled $20 billion, up from $19.5 billion the prior quarter, including:
- $18 billion loan portfolio
- $1.3 billion of owned real estate
- Over $900 million of investments at share held in bank loan portfolio and net lease joint ventures
Management said net lease assets and acquired bank loans now represent 5% of the portfolio, up from zero at the start of 2025. The company’s net lease portfolio ended the year at over $300 million at share, with another $200 million in closing. It is focused on “essential-use retail,” with management citing over three times rent coverage, 2% annual rent escalators, and average lease terms of over 15 years.
The company also discussed discounted bank loan portfolio acquisitions completed in 2025, representing roughly $600 million of principal balance at its share. Management said the thesis has played out with strong credit performance and that the portfolios have generated $80 million of repayments since acquisition, benefiting returns as discounted loans repay at par.
In a separate item raised during Q&A, management confirmed a $75 million investment disclosed in its 10-K in a new Blackstone-managed real estate credit fund focused on high-quality core-plus real estate in the U.S. and Canada, adding that BXMT pays no fees for the commitment and that the investments will be sourced, underwritten, and managed by its team.
Owned real estate, book value, and reserves
Distributable earnings benefited from $18 million of net operating income from owned real estate in the fourth quarter, up from $6 million in the prior quarter, reflecting a full-quarter contribution from properties taken onto the balance sheet in the third quarter. The owned real estate portfolio ended the quarter at $1.3 billion across 12 properties, with hotels representing about one-third of the portfolio. Management expects cash flows from owned real estate to decline in the first quarter due to seasonal softness, but said it expects the portfolio to consistently generate positive DE over time and provide support to earnings and dividend coverage as assets are eventually sold and capital is redeployed.
Book value ended the year at $20.75 per share. Management noted book value includes $0.47 per share of accumulated depreciation and amortization and $1.76 per share of total CECL reserves, including $1.24 attributable to the general reserve and $0.52 to asset-specific reserves. Total CECL reserves declined nearly 60% quarter over quarter due to the reserve charge-offs, which management said had a de minimis impact on book value because they were executed largely in line with carrying values. Over 2025, management said book value benefited from a net $33 million CECL recovery from resolutions executed above carrying values and that this, alongside stock buybacks, added $0.30 per share to book value.
On owned real estate strategy, management said it carries these assets at a 50% discount to values at loan origination and sees improving fundamentals and investor demand in markets such as New York and San Francisco. It said one multifamily property in Texas is under contract to sell and that several other assets may be positioned for potential sale during the year. In response to a question on a New York office REO asset taken in December 2025, management said the loan was originated before COVID, is held at a significant discount to origination value, and is “pretty well leased,” with potential capital spending evaluated based on whether leasing opportunities would be accretive.
Funding, liquidity, buybacks, and leadership changes
On funding and capital markets, management said it executed over $5 billion of corporate and securitized debt transactions in the past 12 months, including $2.8 billion of corporate term loan repricings and extensions that reduced the weighted average borrowing spread by nearly 90 basis points year over year. The company ended the year with $1 billion of liquidity, weighted average corporate debt maturities of 4.3 years, and no maturities until 2027.
The company said it priced a $1 billion CLO in January (its sixth CLO) and completed its inaugural European CMBS issuance in December. It ended the year with 15 bank counterparties providing $19 billion of total borrowing capacity, adding one new counterparty in 2025 and another in February. Management also said it converted or added nearly $6 billion of credit facilities to a non-mark-to-market structure, increasing non-mark-to-market borrowings from 67% at the start of the year to nearly 85%.
Blackstone Mortgage Trust also continued share repurchases, with management citing $60 million of buybacks during the quarter and about $140 million since the program began in July 2024. Management said shares continue to trade below book value and discussed the stock’s dividend yield relative to the 10-year Treasury as part of its view on valuation.
The call also included leadership updates. Tim Johnson thanked Tony Marone, who is stepping down as BXMT’s CFO to focus on other responsibilities within Blackstone. Marcin Urbaszek, who joined the company in 2024, is set to become CFO as part of a transition the company said was already underway.
About Blackstone Mortgage Trust (NYSE:BXMT)
Blackstone Mortgage Trust, Inc (NYSE: BXMT) is a publicly traded real estate finance company that originates, acquires and manages commercial mortgage loans and other CRE debt investments. As an externally managed real estate investment trust (REIT), it seeks to generate attractive risk-adjusted returns through the deployment of senior floating-rate and fixed-rate loans backed by income-producing properties.
The firm’s core business activities span the origination of senior mortgage loans, the acquisition of loan portfolios and other real estate debt instruments, and the active management of those investments.
