Claros Books $208.8 Million CECL Provision

The Tip Desk · October 27, 2026 · 4 min read

GAAP net loss widened to $255.4 million, or $1.81 a share, as the REIT booked a $208.8 million current expected credit loss provision.

Claros Mortgage Trust (CMTG), a real estate investment trust that originates senior and subordinate loans on transitional commercial real estate, reported a GAAP net loss of $255.4 million, or $1.81 a share, for the quarter ended June 30, 2026, compared with a $54.3 million loss, or $0.39 a share, in the prior quarter.

The company said the $208.8 million provision for current expected credit loss reserves, or $1.45 a share, primarily reflected increased reserves to align with anticipated near-term resolution levels. Distributable loss was $90.8 million, or $0.63 a share. Distributable loss prior to realized gains and losses was $10.5 million, or $0.07 a share.

Claros downgraded four loans totaling $447 million of unpaid principal balance to risk rated 5 and recorded specific CECL reserves of $114 million, or $0.79 a share, on those loans. It also increased specific CECL reserves by $74 million, or $0.51 a share, on three existing risk rated 5 loans. At June 30, 2026, CECL reserves were $567.4 million on UPB, or $3.93 a share, approximately 16.9% of UPB, versus $398.9 million, or $2.76 a share, and about 11.4% of UPB at March 31. Specific reserves on risk rated 5 loans were 32.0% of UPB; general reserves were 2.9% of UPB.

The held-for-investment loan portfolio’s carrying value declined to $2.8 billion from $3.2 billion. Loan UPB was $3.4 billion and the count was 26 loans. Weighted average all-in yield rose to 5.8% from 5.6%. Adjusted LTV increased to 80.3% from 77.2%.

Watchlist held-for-investment loans were $1.2 billion across 12 loans at June 30, a $477 million decline from year-end. During the quarter the company resolved one watchlist loan with $25.4 million of UPB through a mortgage foreclosure and received $20.9 million in partial loan repayments. It reclassified a watchlist loan with $111.5 million of UPB to held-for-sale; that office loan was sold in July 2026. Year-to-date loan resolutions were $1.0 billion of UPB, including seven watchlist loans totaling $646.8 million of UPB.

The REO portfolio was $723.7 million, comprised of nine investments, including two classified as held-for-sale. Claros sold one multifamily REO asset for a gross sales price of $48.0 million, slightly above carrying value. It reclassified a mixed-use REO asset and one multifamily REO asset to held-for-sale, resulting in losses of $29.6 million, or $0.21 a share. REO assets generated distributable earnings prior to realized gains and losses of $0.01 a share, net of financing costs, an increase of $0.05 a share from the prior quarter’s distributable loss of $0.04 a share.

Net financings outstanding decreased by $66 million from prior quarter-end, including $20 million of deleveraging payments. The net debt/equity ratio was 2.0x at June 30, versus 1.7x at March 31. Total leverage was 2.7x. Book value declined to $8.58 a share from $10.33. Total liquidity was $103 million, including $90 million of cash. Unencumbered assets were $509 million.

Subsequent to quarter-end, Claros resolved four loans totaling $409.5 million of UPB: two full repayments of $223.1 million, a discounted payoff of $74.9 million recovering 94% of UPB on a watchlist multifamily loan, and a loan sale of $111.5 million recovering 63% of UPB on a watchlist office loan classified as held-for-sale at June 30. Net financings outstanding decreased by $299 million, including $93 million of deleveraging payments. Including third-quarter loan resolutions and deleveraging to date, the company said the net debt/equity ratio declined to 1.7x and total leverage to 2.4x. At July 24, 2026, total liquidity was $168 million, including $155 million of cash.

Chief Executive Officer and Chairman Richard Mack said the company continued to make significant progress resolving watchlist assets, turning over the portfolio and deleveraging the balance sheet, moving it closer to making accretive capital allocation decisions in the coming quarters.