Blackstone Mortgage Trust Cuts Dividend to $0.30 After Q3 Loss
Blackstone Mortgage Trust lost $327 million in Q3 as six loans, five on office buildings, were impaired, and cut its quarterly dividend to $0.30 from $0.47.
Why it matters
- Blackstone Mortgage Trust reported a third-quarter net loss of $327 million, or $1.95 a share, and declared a fourth-quarter dividend of $0.30 a share, down from the $0.47 it paid for the third quarter.
- Six loans with an amortized cost of $787.8 million were newly impaired in the quarter, five of them on office properties. Loan loss reserves rose $199.5 million to $597.3 million.
- The lender shrank fast. Repayments and sales of $2.3 billion far outran $366.3 million of fundings, and borrowings under its secured credit facilities fell to $7.19 billion from $10.13 billion at the end of 2025.
Blackstone Mortgage Trust lost $327 million in the third quarter and lowered its quarterly dividend by about 36%, to $0.30 a share from $0.47, after marking down six loans, five of them on office buildings, the commercial real estate lender said on Thursday, Oct. 29. The company (NYSE: BXMT) filed its results and its quarterly report with the Securities and Exchange Commission before the market opened.
The net loss came to $1.95 a share, against a loss of $81.2 million, or $0.48 a share, in the second quarter. Distributable earnings, the non-GAAP measure the company uses when it sets its dividend, rose to $0.38 a share from $0.31. Before realized gains and losses, distributable earnings fell to $0.42 from $0.48. Book value dropped to $17.06 a share on Sept. 30 from $19.31 on June 30.
The new dividend is payable on Jan. 15 to holders of record on Dec. 31. Chief Executive Tim Johnson said in the release that the board believes the $0.30 dividend "can be sustained through a range of rate and credit environments."
Why did Blackstone Mortgage Trust cut its dividend?
The release does not tie the cut to one cause. It came in a quarter of large credit charges. Six loans with an amortized cost of $787.8 million were impaired during the quarter, five secured by office properties and one by a hotel, the 10-Q says. The company said the office recovery "in certain markets has continued to lag" and that weak performance has affected "some borrowers' willingness and ability to continue to support their assets." It stopped accruing interest on the six loans.
| Credit measure | Q3 2026 |
|---|---|
| Net loss | $327.0 million |
| Increase in CECL reserves (income statement) | $264.8 million |
| Loss on loans moved to held for sale | $63.9 million |
| Impairment of owned real estate | $36.4 million |
| Total loan loss reserve, Sept. 30 | $597.3 million |
| Impaired loans (risk rating 5) | 12 loans, $1.33 billion amortized cost |
Source: Blackstone Mortgage Trust Form 10-Q for the quarter ended Sept. 30, 2026.
The impaired loans make up 7% of the portfolio by net loan exposure. The asset-specific reserve on them is $444.5 million. One other loan of $149.8 million was more than 90 days past due on interest but not impaired, because the company expects to recover all amounts due.
The company also agreed to sell eight loans, six on office buildings and two on apartments, for about $615.6 million and wrote them down by $63.9 million. That sale closed after Sept. 30. It also held 15 owned real estate assets, carried at $1.5 billion, and took title to a mixed-use property in Richmond, California, through a deed in lieu of foreclosure during the quarter.
How is the lender funded?
Mostly with bank credit lines and CLOs. Borrowings under secured credit facilities from 16 lenders totaled $7.19 billion on Sept. 30, at a weighted average cost of 1.80 percentage points over benchmark rates, against a 3.17-point yield on the loans pledged. Securitization debt rose to $2.65 billion from $2.15 billion at the end of 2025. Those facilities work much like the bank lines described in our warehouse line of credit guide, on a larger scale.
The loan book is 96% floating rate, mostly tied to SOFR, so the lender's income moves with short-term rates. See hard money and private lending rates today for current SOFR, prime and Treasury levels.
Is Blackstone Mortgage Trust still lending?
Yes, but far less than it is getting back. It originated or acquired $264.2 million of loans in the quarter. Repayments and sales totaled $2.3 billion, so the portfolio of 114 loans ended at a $14.61 billion principal balance. Liquidity was $1.3 billion, including $511.5 million of cash. Other commercial mortgage REITs have reported office and foreclosure losses this month, including TPG RE Finance's Plano multifamily loss.
Sources
- Blackstone Mortgage Trust, Inc., Third-quarter 2026 results release, Exhibit 99.1 to Form 8-K (Oct. 29, 2026)
- Blackstone Mortgage Trust, Inc., Form 8-K, Items 2.02 and 9.01 (Oct. 29, 2026)
- Blackstone Mortgage Trust, Inc., Form 10-Q for the quarter ended Sept. 30, 2026 (Oct. 29, 2026)
