Claros Mortgage Trust Q3 Loss Narrows as It Sells Watchlist Loans

Claros Mortgage Trust lost $14.3 million, or $0.10 a share, in the third quarter, down from a $255.4 million loss in the second quarter, the commercial real estate lender said after the market close on Tuesday, Nov. 3. It resolved four loans totaling $409.5 million of unpaid principal and cut its financings by $330.1 million, according to the results it furnished to the Securities and Exchange Commission with a Form 8-K.

Claros (NYSE: CMTG) makes senior and subordinate loans on transitional commercial real estate in major U.S. markets. Its distributable loss, a non-GAAP measure, was $12.1 million, or $0.08 a share, against $90.8 million, or $0.63 a share, in the second quarter. Before realized gains and losses, the distributable loss was $7.9 million, or $0.05 a share.

How did Claros resolve its troubled loans?

Through repayments, a sale and a discounted payoff. Two loans totaling $223.1 million repaid in full. The company sold one watchlist loan with $111.5 million of principal and accepted a discounted payoff on another with $74.9 million. It also sold a multifamily property it had taken back for $22.5 million. No loans were added to the watchlist or placed on non-accrual in the quarter, the company said.

Measure	Sept. 30, 2026	June 30, 2026
Book value per share	$8.49	$8.58
Loan carrying value	$2.5 billion	$2.8 billion
Loan count	23	26
Weighted average yield to maturity	5.7%	5.8%
Weighted average adjusted LTV	80.6%	80.3%
Net debt-to-equity ratio	1.7x	2.0x

Source: Claros Mortgage Trust third-quarter 2026 earnings presentation.

Watchlist loans totaled $1.1 billion of carrying value across 11 loans, down $547.2 million from the end of 2025. The 10 loans rated 5, its riskiest grade, carry $1.55 billion of principal and specific reserves of 33.4% of that amount. Five of them are multifamily loans in Arizona, California, Colorado and Texas, with $996.2 million of principal reserved at 37.6%. Multifamily made up 36% of the loan book, hotels 23% and office 16%. Book value was $10.69 a share at the end of 2025.

What is Claros selling after the quarter?

In October, agreements to sell two loans rated 5 became binding with nonrefundable deposits, the company said. An unencumbered office loan is set to sell for $65.7 million, or 92% of its carrying value, for an expected loss of about $5.4 million. A multifamily loan is set to sell for $245.0 million, or 98% of carrying value, for an expected loss of about $5.0 million. Both are expected to close in the fourth quarter. Two of its seven foreclosed hotels are under contract for $44.5 million.

Borrowers also repaid two more loans totaling $268.7 million after Sept. 30, and financings fell by the same amount, including $131.5 million of deleveraging payments. Claros said net debt to equity would be 1.5x after those moves. Our warehouse line of credit guide explains how the repurchase facilities that fund lenders like Claros work. For the benchmarks behind floating-rate loans, see hard money and private lending rates today.

"The actions we have already taken and the progress we have made better position CMTG to face the most recent rate moves," Chief Executive Richard Mack said in the release. Total liquidity was $146.9 million on Sept. 30, including $133.8 million of cash. The results follow Blackstone Mortgage Trust's dividend cut and KKR Real Estate Finance's loan write-offs last week. Claros will hold its earnings call at 10 a.m. ET on Wednesday, Nov. 4.