Claros Narrows Loss After CECL Provision Recedes

The Tip Desk · November 3, 2026 · 3 min read

GAAP net loss was $14.3 million, or $0.10 a share, as the current expected credit loss provision fell to $0.4 million from $208.8 million.

Claros Mortgage Trust (CMTG), a real estate investment trust focused on transitional commercial real estate loans, reported a GAAP net loss of $14.3 million, or $0.10 a share, for the quarter ended September 30, 2026, a sharp narrowing from a $255.4 million loss, or $1.81 a share, in the prior quarter.

The swing tracked the current expected credit loss provision, which fell to $0.4 million from $208.8 million, or $1.45 a share, in the second quarter. Distributable loss narrowed to $12.1 million, or $0.08 a share, from $90.8 million, or $0.63 a share. Distributable loss prior to realized gains and losses was $7.9 million, or $0.05 a share.

The company resolved four loans totaling $409.5 million of unpaid principal balance and received $8.0 million of partial loan repayments. Two full repayments covered $223.1 million of UPB. A watchlist loan sale recovered 63% of UPB on $111.5 million, and a discounted watchlist payoff recovered 94% of UPB on $74.9 million. It sold one multifamily REO asset for gross proceeds of $22.5 million. No loans were added to the watchlist and none were placed on non-accrual.

At September 30, the held-for-investment loan portfolio stood at $2.5 billion of carrying value across 23 loans, with UPB of $3.1 billion, down from $2.8 billion of carrying value, $3.4 billion of UPB and 26 loans at June 30. Weighted average yield to maturity was 5.7%. Watchlist loans were $1.1 billion of carrying value across 11 loans. CECL reserves were $566.2 million on UPB, or 18.5%. The REO portfolio was $700.7 million across eight investments.

Financings outstanding decreased by $330.1 million in the quarter, including $99.9 million of deleveraging payments. Net debt-to-equity was 1.7x and the total leverage ratio was 2.4x. Total liquidity was $146.9 million, including $133.8 million of cash. Unencumbered assets were $664.5 million. Book value was $8.49 a share, net of $3.93 a share of CECL reserves on UPB.

Subsequent to quarter-end, the company received two full loan repayments totaling $268.7 million of UPB and $0.6 million of partial repayments. Financings outstanding decreased by $268.7 million, including $131.5 million of deleveraging payments. After adjusting for those resolutions and deleveraging, net debt-to-equity and total leverage were 1.5x and 2.2x.

In October, binding agreements with nonrefundable purchaser deposits covered a risk-rated 5 unencumbered office loan receivable for gross proceeds of $65.7 million, or 92% of current carrying value, with an incremental loss of approximately $5.4 million, or about $0.04 a share, expected upon a fourth-quarter 2026 closing, and a risk-rated 5 multifamily loan receivable for $245.0 million, or 98% of carrying value, with an incremental loss of approximately $5.0 million, or about $0.03 a share, expected upon a fourth-quarter closing. Agreements also covered two of seven hotels in the REO hotel portfolio for $44.5 million, a slight premium to current allocated carrying value, with closing expected by the first quarter of 2027. At November 2, total liquidity was $142.7 million, including $136.8 million of cash.

Chief Executive Officer and Chairman Richard Mack said that over the past seven quarters the team has focused on resolving and liquidating watchlist loans, repositioning REO assets for disposition, and deleveraging the balance sheet, and that actions already taken better position the company to face the most recent rate moves.