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HomeMarketBlackstone Mortgage Trust swings to a loss as it builds up reserves

Blackstone Mortgage Trust swings to a loss as it builds up reserves

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Blackstone Mortgage Trust Co. stock fell nearly 5% Wednesday as it swung to a fourth-quarter loss while hiking reserves for potential credit losses, but its distributable earnings beat estimates.

Blackstone Mortgage Trust
reported a net loss of $47.54 million, or 28 cents a share in the three months ended Dec. 31, after it earned $123.94 million, or 76 cents a share, in the year-ago quarter. The stock dropped 4.8% on Wednesday, but is up 8.6% in 2023, compared to an 8.2% rise by the S&P 500
Blackstone Inc.
stock rose 0.1%.

Distributable earnings rose to 87 cents a share in the fourth quarter from 78 cents a share in the year-ago period, and ahead of the analyst estimate of 72 cents a share, according to FactSet data.

The commercial-real-estate finance company and senior loan originator’s loss stemmed from a $189 million buildup of its expected credit loss reserve, up from less than $10 million in the year-ago quarter.

The figure reflects more challenging economic conditions compared to a year ago, as the commercial real estate sector faces potential headwinds.

At the same time, the firm benefitted from rising interest rates on its floating-rate loan portfolio.

With a $26.8 billion portfolio of senior loans secured by institutional real estate, Blackstone Mortgage Trust said it shifted its new loan originations in the second half of 2022 to focus on inflation-resistant sectors in the industrial and multifamily markets.

Blackstone Inc., which has a real estate portfolio of $326 billion, is the sponsor of Blackstone Mortgage Trust.

Blackstone also controls Blackstone Real Estate Income Trust Fund, or B-Reit, which has been under scrutiny as investors stepped up cash redemptions from its $69 billion Blackstone Real Estate Income Trust Fund, or B-Reit late last year.

Also Read: Blackstone draws upgrade on recession readiness despite jitters around real estate fund


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