Blackstone Mortgage Trust Widens Loss on Credit Charges

The Tip Desk · October 31, 2026 · 3 min read

The real estate finance company posted a $327 million net loss, or $(1.95) a share, as it booked a $264.8 million CECL reserve increase.

Blackstone Mortgage Trust, Inc. (BXMT), a real estate finance company that originates and holds commercial real estate loans, reported a net loss attributable to the company of $327 million for the third quarter of 2026, or $(1.95) a share, after an $81.2 million loss, or $(0.48) a share, in the second quarter.

The widening GAAP loss tracked a $264.8 million increase in the current expected credit loss reserve in the three months ended September 30, 2026, versus a $0.99 million increase a year earlier. The company also recorded a $36.4 million impairment of owned real estate and a $63.9 million valuation adjustment on loans receivable held-for-sale, charges that were not present a year earlier.

Distributable earnings, a non-GAAP measure that excludes unrealized credit-loss reserves, depreciation and other non-cash items, were $0.38 a share. Distributable earnings prior to realized gains and losses were $0.42 a share, down from $0.48 in the second quarter and $0.49 in the first quarter. The company paid a dividend of $0.47 a share for the third quarter.

Total net revenue was $141.9 million, up from $132.6 million a year earlier. Interest and related income fell to $280.6 million from $346.0 million, while revenue from owned real estate more than doubled to $77.5 million from $33.7 million. Income from loans and other investments, net, declined to $64.4 million from $98.9 million a year earlier.

The company said robust loan repayments and portfolio turnover were driving a reduction in watchlist and office loans. Watchlist loans decreased to $0.9 billion, down 56% from the prior quarter, and were described as the lowest since the fourth quarter of 2019. The loan portfolio was 93% performing. Six new impaired loans were added, and one resolution of a Bay Area mixed-use office loan was transferred to owned real estate.

Loan repayments and sales totaled $2.3 billion in the quarter, including $0.5 billion of multifamily, with 88% of the volume from pre-2023 vintages. Investment activity was $0.5 billion, including $0.3 billion of loan originations, $0.1 billion of net lease properties at share, $0.1 billion of debt securities, and $50 million of single-family homebuilder finance loans at share. The company said it sold nearly $1.0 billion of loans in the third quarter and fourth quarter to date at $0.93 of carrying value, including $0.5 billion of office and $0.2 billion of multifamily loans previously on the watchlist.

The investment portfolio shrank to $17.0 billion from $19.7 billion at the end of the second quarter. Book value per share fell to $17.06 from $19.31, including $3.64 a share of CECL reserves. CECL reserves stood at $606 million, including $444 million asset-specific and $162 million general.

Liquidity was $1.3 billion, with 89% of debt non-mark-to-market and no capital markets mark-to-market provisions. The company repurchased $36 million of class A common stock in the quarter at a weighted average $14.09 a share.

Chief Executive Officer Tim Johnson said the board declared a fourth-quarter dividend of $0.30 a share of class A common stock, payable January 15, 2027, to stockholders of record as of December 31, 2026, and that the company believes the payout can be sustained through a range of rate and credit environments.