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What changed in BLACKSTONE MORTGAGE TRUST, INC.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of BLACKSTONE MORTGAGE TRUST, INC.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+633 added−609 removedSource: 10-K (2024-02-14) vs 10-K (2023-02-08)

Top changes in BLACKSTONE MORTGAGE TRUST, INC.'s 2023 10-K

633 paragraphs added · 609 removed · 469 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

35 edited+10 added−10 removed33 unchanged
Biggest change(5) Based on LTV as of the dates loans were originated or acquired by us. 5 The charts below detail the geographic distribution and types of properties securing our investment portfolio, as of December 31, 2022: (1) States comprising less than 1% of total loan portfolio are excluded.
Biggest change(5) Based on LTV as of the dates loans were originated or acquired by us, excluding any junior participations sold. 5 The charts below detail the geographic distribution and types of properties securing our investment portfolio, as of December 31, 2023: Geographic Diversification (Net Loan Exposure) (1)(2) Collateral Diversification (Net Loan Exposure) (1)(3) (1) Net loan exposure reflects the amount of each loan that is subject to risk of credit loss to us as of December 31, 2023, which is our total loan exposure net of (i) $1.1 billion of non-consolidated senior interests, (ii) $1.0 billion of asset-specific debt, (iii) $236.8 million of senior loan participations sold, (iv) $53.0 million of cost-recovery proceeds, and (v) our total loans receivable current expected credit loss, or CECL, reserve of $576.9 million.
Financing Strategy To maintain an adequate amount of available liquidity and execute our business plan, we look to a variety of sources. In addition to raising capital through public offerings of our equity and debt securities, our financing strategy includes secured debt, securitizations, and asset-specific financings, as well as corporate term loans, senior secured notes, and convertible notes.
Financing Strategy To maintain an adequate amount of available liquidity and execute our business plan, we look to a variety of capital sources. In addition to raising capital through public offerings of our equity and debt securities, our financing strategy includes secured debt, securitizations, and asset-specific financings, as well as corporate term loans, senior secured notes, and convertible notes.
However, we may not be able to achieve our business goals or expectations due to the competitive risks that we face. For additional information concerning these competitive risks, see Item 1A—“Risk Factors—Risks Related to Our Lending and Investment Activities.” Environmental, Social and Governance We are committed to responsibly managing risk and preserving value for our shareholders.
However, we may not be able to achieve our business goals or expectations due to the competitive risks that we face. For additional information concerning these competitive risks, see Item 1A—“Risk Factors—Risks Related to Our Lending and Investment Activities.” Environmental, Social and Governance (“ESG”) We are committed to responsibly managing risk and preserving value for our shareholders.
Although originating senior, floating rate mortgage loans is our primary area of focus, we may also originate and acquire fixed rate loans and subordinate loans, including subordinate mortgage interests and mezzanine loans. This focused lending strategy is designed to generate attractive current income while protecting investors’ capital.
Although originating senior, floating rate mortgage loans is our primary area of focus, we may also originate or acquire fixed rate loans and subordinate loans, including subordinate mortgage interests and mezzanine loans. This focused lending strategy is designed to generate attractive current income while protecting investors’ capital.
Through our website, we make available, free of charge, our annual proxy statement, annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after we electronically file such material with, or furnish them to, the Securities and Exchange Commission, or the SEC.
Through our website, we make available, free of charge, our annual proxy statement, annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after we electronically file such material with, or furnish them to, the SEC.
None of our Manager, our executive officers, or other personnel supplied to us by our Manager is obligated to dedicate any specific amount of time to our business. Our Manager is subject to the supervision and oversight of our board of directors 3 and has only such functions and authority as our board of directors delegates to it.
None of our Manager, our executive officers, or other personnel supplied to us by our Manager are obligated to dedicate any specific amount of time to our business. Our Manager is subject to the supervision and oversight of our board of directors and has only such functions and authority as our board of directors delegates to it.
For additional information regarding our loan portfolio as of December 31, 2022, see Item 7 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations – II. Loan Portfolio” and – “VI. Loan Portfolio Details” in this Annual Report on Form 10-K.
For additional information regarding our loan portfolio as of December 31, 2023, see Item 7 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations – II. Loan Portfolio” and – “VI. Loan Portfolio Details” in this Annual Report on Form 10-K.
See Notes 14 and 19 to our consolidated financial statements and the information disclosed pursuant to Item 13 “Certain Relationships and Related Transactions, and Director Independence” in our definitive proxy statement with respect to our 2023 annual meeting of shareholders, which is incorporated by reference into this Annual Report on Form 10-K, for more detail on the terms of the Management Agreement.
See Notes 14 and 19 to our consolidated financial statements and the information required to be disclosed pursuant to Item 13 “Certain Relationships and Related Transactions, and Director Independence” in our definitive proxy statement with respect to our 2024 annual meeting of shareholders, which is incorporated by reference into this Annual Report on Form 10-K, for more detail on the terms of the Management Agreement.
We are externally managed by BXMT Advisors L.L.C., or our Manager, a subsidiary of Blackstone Inc., or Blackstone, and are a REIT, traded on the New York Stock Exchange, or NYSE, under the symbol “BXMT.” Our principal executive offices are located at 345 Park Avenue, 24th Floor, New York, New York 10154.
We are externally managed by BXMT Advisors L.L.C., or our Manager, a subsidiary of Blackstone Inc., or Blackstone, and are a real estate investment trust, or REIT, traded on the New York Stock Exchange, or NYSE, under the symbol “BXMT.” Our principal executive offices are located at 345 Park Avenue, 24th Floor, New York, New York 10154.
These senior loans are capitalized by accessing a variety of financing options, including borrowing under our credit facilities, issuing CLOs or single-asset securitizations, and syndicating senior loan participations, depending on our view of the most prudent financing option available for each of our investments.
These senior loans are capitalized by accessing a variety of financing options, including borrowing under our credit facilities, issuing CLOs or single-asset securitizations, and corporate financing, depending on our view of the most prudent financing option available for each of our investments.
Our Manager We are externally managed and advised by our Manager, which is responsible for administering our business activities, day-to-day operations, and providing us the services of our executive management team, investment team, and appropriate support personnel. Our Manager is a part of Blackstone’s alternative asset management business, which is the world's largest alternative asset manager.
Our Manager We are externally managed and advised by our Manager, which is responsible for administering our business activities, our day-to-day operations, and providing us the services of our executive management team, investment team, and other personnel. Our Manager is a part of Blackstone, which is the world's largest alternative asset manager.
As of December 31, 2022, substantially all of our investments by total loan exposure earned a floating rate of interest and were financed with liabilities that pay interest at floating rates, which resulted in an amount of net equity that is positively correlated to rising interest rates, subject to the impact of interest rate floors on certain of our floating rate loans.
As of December 31, 2023, 99% of our loans by total loan exposure earned a floating rate of interest and were financed with liabilities that pay interest at floating rates, which resulted in an amount of net equity that is positively correlated to rising interest rates, subject to the impact of interest rate floors on certain of our floating rate loans.
Government, that are not available to us. Many of our competitors are not subject to the operating constraints associated with REIT compliance or maintenance of an exclusion from regulation under the Investment Company Act.
Many of our competitors are not subject to the operating constraints associated with REIT tax compliance or maintenance of an exclusion from regulation under the Investment Company Act.
Blackstone's assets under management include investment vehicles focused on private equity, real estate, public debt and equity, infrastructure, life sciences, growth equity, opportunistic, non-investment grade credit, real assets and secondary funds, all on a global basis. Through its different businesses, Blackstone had total assets under management of $974.7 billion as of December 31, 2022.
Blackstone's assets under management include investment vehicles focused on private equity, real estate, public debt and equity, infrastructure, life sciences, growth equity, opportunistic, non-investment grade credit, real assets and secondary funds, all on a global basis. Through its different businesses, Blackstone had total assets under management of over $1.0 trillion as of December 31, 2023.
Key ESG initiatives we share with Blackstone include the consideration of ESG in the investment process, dedicated resources to ESG governance and oversight, industry engagement on ESG matters, corporate sustainability and environmental performance improvements at our office locations, and certain employee and community engagement and diversity, equity and inclusion (“DEI”) programs. Human Capital We do not have any employees.
Key ESG initiatives we share with Blackstone include the consideration of ESG in the investment process where applicable, dedicated resources to ESG governance and oversight, industry engagement on ESG matters, corporate sustainability and environmental performance improvements at our office locations, and certain employee and community engagement and diversity, equity and inclusion programs.
In our lending and investing activities, we compete for opportunities with a variety of institutional lenders and investors, including other REITs, specialty finance companies, public and private funds (including other funds managed by Blackstone and its affiliates), commercial and investment banks, commercial finance and insurance companies and other financial institutions.
In originating or acquiring our investments, we compete for opportunities with a variety of institutional lenders and investors, including other REITs, specialty finance companies, public and private funds, commercial and investment banks, commercial finance and insurance companies and other financial institutions (including investment vehicles managed by affiliates of Blackstone).
These investment guidelines may be amended, restated, modified, supplemented or waived upon the approval of a majority of our board of directors, which must include a majority of the independent directors, without the approval of our stockholders. Competition We are engaged in a competitive business.
These investment guidelines may be amended, restated, modified, supplemented or waived upon the approval of a majority of our board of directors, which must include a majority of the independent directors, without the approval of our stockholders. Competition We operate in a competitive market for lending and investment opportunities, which may intensify.
In addition, some of our competitors may have higher risk tolerances or different risk assessments, which could allow them to consider a wider variety of loans and investments and offer more attractive pricing or other terms and establish more relationships than us.
In addition, some of our competitors may have higher risk tolerances or different risk assessments, which could allow them to consider a wider variety of loans and investments, offer more attractive pricing or other terms, and establish more relationships than us. Furthermore, competition for investments may lead to decreasing yields, which may further limit our ability to generate desired returns.
We are externally managed by our Manager pursuant to our Management Agreement. Our executive officers serve as officers of our Manager, and are employed by an affiliate of our Manager.
Human Capital Management We do not have any employees. We are externally managed by our Manager pursuant to our Management Agreement. Our executive officers serve as officers of our Manager, and are employed by an affiliate of our Manager.
In connection with the performance of its duties, our Manager benefits from the resources, relationships, and expertise of the 787 professionals in Blackstone’s global real estate group. Blackstone has built the world's preeminent global real estate business with $326.1 billion of investor capital under management as of December 31, 2022.
Our Manager benefits from the resources, relationships, and expertise of the 782 professionals in Blackstone’s global real estate group. Blackstone has built the world's preeminent global real estate business with $336.9 billion of investor capital under management as of December 31, 2023.
Several other REITs and other investment vehicles have raised, or are expected to raise, significant amounts of capital, and may have investment objectives that overlap with ours, which may create additional competition for lending and investment opportunities. Some competitors may have a lower cost of funds and access to funding sources, such as the U.S.
Some of our competitors have raised, and may in the future raise, significant amounts of capital, and may have investment objectives that overlap with ours, which may create additional competition for lending and investment opportunities. Some competitors may have a lower cost of capital and access to funding sources that are not available to us, such as the U.S. government.
Kenneth Caplan and Kathleen McCarthy, who are the global co-heads of Blackstone’s real estate group, are members of our Manager’s investment committee. Blackstone Real Estate Debt Strategies, or BREDS, was launched in 2008 within Blackstone’s global real estate group to pursue opportunities relating to real estate debt investments globally, with a focus primarily on North America and Europe.
Blackstone Real Estate Debt Strategies, or BREDS, was launched in 2008 within Blackstone’s global real estate group to pursue opportunities relating to real estate debt investments globally, with a focus primarily on North America and Europe.
Pollack also serves as one of our directors. As of December 31, 2022, 136 dedicated BREDS professionals, including 31 investment professionals based in London and Australia, managed $58.8 billion of investor capital. Our chief executive officer, chief financial officer, and other officers are senior Blackstone real estate professionals.
As of December 31, 2023, 133 dedicated BREDS professionals, including 28 investment professionals based in London and Australia, managed $84.2 billion of investor capital. 3 Our chief executive officer, chief financial officer, and other officers are senior Blackstone real estate professionals.
These commitments will generally be funded over the term of each loan, subject in certain cases to an expiration date. (3) The weighted-average cash coupon and all-in yield are expressed as a spread over the relevant floating benchmark rates, which include USD LIBOR, SOFR, SONIA, EURIBOR, and other indices as applicable to each investment.
(3) The weighted-average cash coupon and all-in yield are expressed as a spread over the relevant floating benchmark rates, which include SOFR, SONIA, EURIBOR, and other indices as applicable to each investment.
In addition to our current mix of financing sources, we also may access additional forms of financings including resecuritizations and public and private, secured and unsecured debt issuances by us or our subsidiaries.
In addition to our current mix of financing sources, we also may access additional forms of financings including resecuritizations and public and private, secured and unsecured debt issuances by us or our subsidiaries. As of December 31, 2023, we had total liquidity of $1.7 billion with no corporate debt maturities until 2026.
We are organized as a holding company and conduct our business primarily through our various subsidiaries. We operate our business as one segment, which originates and acquires commercial mortgage loans and related investments.
We also operate our business in a manner that permits us to maintain an exclusion from registration under the Investment Company Act. We are organized as a holding company and conduct our business primarily through our various subsidiaries. We operate our business as one segment, which originates and acquires commercial mortgage loans and related investments.
We generally will not be subject to U.S. federal income taxes on our taxable income to the extent that we annually distribute all of our net taxable income to stockholders and maintain our qualification as a REIT. We also operate our business in a manner that permits us to maintain an exclusion from registration under the Investment Company Act.
We conduct our operations as a REIT for U.S. federal income tax purposes. We generally will not be subject to U.S. federal income taxes on our taxable income to the extent that we annually distribute all of our net taxable income to stockholders and maintain our qualification as a REIT.
Michael Nash, the global chairman of BREDS, serves as the executive chairman of our board of directors and is a member of our Manager’s investment committee. In addition, Jonathan Pollack, the global head of Structured Finance, which includes BREDS, and Tim Johnson, global head of BREDS, each serve as members of our Manager’s investment committee and Mr.
Jonathan Pollack, the global head of Blackstone Real Estate Credit, which includes BREDS, is a member of our Manager’s investment committee and is a member of our board of directors. Tim Johnson, the global head of BREDS, serves as the chairperson of our board of directors and is a member of our Manager’s investment committee.
Total loan exposure encompasses the entire loan we originated and financed, including $1.6 billion of such non-consolidated senior interests that are not included in our balance sheet portfolio. (2) Unfunded commitments will primarily be funded to finance our borrowers’ construction or development of real estate-related assets, capital improvements of existing assets, or lease-related expenditures.
We have retained an aggregate $289.4 million of subordinate mezzanine loans, as of December 31, 2023, related to non-consolidated senior interests that are included in our balance sheet portfolio. (2) Unfunded commitments will primarily be funded to finance our borrowers’ construction or development of real estate-related assets, capital improvements of existing assets, or lease-related expenditures.
As of December 31, 2022, 53% of our loans by total loan exposure were subject to yield maintenance or other prepayment restrictions and 47% were open to repayment by the borrower without penalty.
(4) Maximum maturity assumes all extension options are exercised by the borrower, however our loans and other investments may be repaid prior to such date. As of December 31, 2023, 16% of our loans by total loan exposure were subject to yield maintenance or other prepayment restrictions and 84% were open to repayment by the borrower without penalty.
We make capital allocation decisions with the environmental, social and governance (“ESG”) factors of our potential collateral and borrowers in mind, and incorporate diligence practices as part of our investment process to identify material ESG matters related to a given asset. Our day-to-day operations are externally managed by our Manager, a subsidiary of Blackstone.
We strive to consider ESG factors relevant to our potential collateral and borrowers when making capital allocation decisions and incorporate ESG diligence practices as part of our investment process where applicable. Our day-to-day operations are externally managed by our Manager, a subsidiary of Blackstone. As such, many of the ESG initiatives undertaken by Blackstone impact or apply to us.
The amount of leverage we employ for particular assets will depend upon our assessment of the credit, liquidity, price volatility, and other risks of those assets and the related financing structure, the availability of particular types of financing at the time, and the financial covenants under our credit facilities.
The following table details our outstanding portfolio financing arrangements as of December 31, 2023 ($ in thousands): Portfolio Financing Outstanding Principal Balance December 31, 2023 Secured debt $ 12,697,058 Securitizations 2,507,514 Asset-specific debt 1,004,097 Total portfolio financing $ 16,208,669 The amount of leverage we employ for particular assets will depend upon our assessment of the credit, liquidity, price volatility, and other risks of those assets and the related financing structure, the availability of particular types of financing at the time, and the financial covenants under our credit facilities.
As of December 31, 2022, substantially all of our loans by total loan exposure earned a floating rate of interest, primarily indexed to USD LIBOR and SOFR. In addition to cash coupon, all-in yield includes the amortization of deferred origination and extension fees, loan origination costs, and purchase discounts, as well as the accrual of exit fees.
In addition to cash coupon, all-in yield includes the amortization of deferred origination and extension fees, loan origination costs, and purchase discounts, as well as the accrual of exit fees. Excludes loans accounted for under the cost-recovery method.
Loan fundings during the year totaled $7.2 billion, with repayments of $3.7 billion, for net fundings of $3.4 billion. 4 The following table details overall statistics for our investment portfolio as of December 31, 2022 ($ in thousands): Balance Sheet Portfolio Loan Exposure (1) Number of investments 203 203 Principal balance $25,160,343 $26,810,281 Net book value $24,691,743 $24,691,743 Unfunded loan commitments (2) $3,806,153 $4,511,975 Weighted-average cash coupon (3) + 3.44% + 3.37% Weighted-average all-in yield (3) + 3.84% + 3.76% Weighted-average maximum maturity (years) (4) 3.1 3.1 Origination loan to value (LTV) (5) 64.1% 63.9% (1) In certain instances, we finance our loans through the non-recourse sale of a senior loan interest that is not included in our consolidated financial statements.
During the year ended December 31, 2023, loan fundings totaled $1.6 billion, with loan repayments and sales of $3.8 billion, for net repayments of $2.2 billion. 4 The following table details overall statistics for our loan portfolio as of December 31, 2023 ($ in thousands): Balance Sheet Portfolio Loan Exposure (1) Number of loans 178 178 Principal balance $ 23,923,719 $ 24,971,028 Net book value $ 23,210,076 $ 23,210,076 Unfunded loan commitments (2) $ 2,430,664 $ 2,430,664 Weighted-average cash coupon (3) + 3.37 % + 3.31 % Weighted-average all-in yield (3) + 3.71 % + 3.66 % Weighted-average maximum maturity (years) (4) 2.4 2.4 Origination loan to value (LTV) (5) 63.6 % 63.6 % (1) Total loan exposure reflects our aggregate exposure to each loan investment.
During the year ended December 31, 2022, we (i) borrowed an additional $825.0 million under our term loan facilities with an interest rate of SOFR plus 3.50% and maturity in 2029, (ii) issued $300.0 million aggregate principal amount of 5.50% convertible senior notes due 2027, and (iii) issued 2.3 million shares of our class A common stock, providing aggregate net proceeds of $70.7 million.
During the year ended December 31, 2023, we (i) repaid the aggregate $220.0 million principal amount of our 4.75% convertible senior notes due 2023, (ii) repurchased an aggregate principal amount of $33.9 million of our 3.750% senior secured notes due 2027, or Senior Secured Notes, at a weighted-average price of 85%, resulting in a gain on 6 extinguishment of debt of $4.6 million, and (iii) repaid a net $1.2 billion under our portfolio financings, resulting in an aggregate $1.4 billion reduction in our portfolio and corporate financings during the year.
Removed
We were incorporated in Maryland in 1998, when we reorganized from a California common law business trust into a Maryland corporation. We conduct our operations as a REIT for U.S. federal income tax purposes.
Added
Kathleen McCarthy and Nadeem Meghji, who are the global co-heads of Blackstone’s real estate group, are members of our Manager’s investment committee. Kenneth Caplan, who is Blackstone’s co-chief investment officer overseeing business areas including real estate, is also a member of our Manager’s investment committee.
Removed
During the year ended December 31, 2022, we originated or acquired $7.1 billion of loans.
Added
Katharine Keenan, the global chief operating officer of Blackstone Real Estate Credit and a member of our Manager’s investment committee, serves as our chief executive officer and is a member of our board of directors.
Removed
Excludes loans accounted for under the cost-recovery method. (4) Maximum maturity assumes all extension options are exercised by the borrower, however our loans and other investments may be repaid prior to such date.
Added
In addition, Michael Nash, who served as chair of BREDS until his retirement from Blackstone and also served as the executive chairman of our board of directors until recently, remains a member of our board of directors.
Removed
Additionally, during the year ended December 31, 2022, we (i) entered into two new secured credit facilities providing an aggregate $2.2 billion of credit capacity and (ii) increased the size of six existing secured credit facilities providing an aggregate $1.4 billion of additional credit capacity. 6 The following table details our outstanding portfolio financing arrangements as of December 31, 2022 ($ in thousands): Portfolio Financing Outstanding Principal Balance December 31, 2022 Secured debt $ 13,549,748 Securitizations 2,673,541 Asset-specific financings (1) 2,824,961 Total portfolio financing $ 19,048,250 (1) Includes our asset-specific debt of $950.3 million, our loan participations sold of $224.7 million, and our non-consolidated senior interests of $1.6 billion, each as of December 31, 2022.
Added
As of December 31, 2023, total loan exposure, includes (i) loans with an outstanding principal balance of $23.9 billion that are included in our consolidated financial statements, (ii) $1.1 billion of non-consolidated senior interests in loans we have sold, which are not included in our consolidated financial statements, and excludes (iii) $100.9 million of junior loan interests that we have sold, but that remain included in our consolidated financial statements.
Removed
The loan participations sold and non-consolidated senior interests are non-debt financings that provide structural leverage for our whole loan investments.
Added
These commitments will generally be funded over the term of each loan, subject in certain cases to an expiration date. Excludes $381.2 million of unfunded loan commitments related to our non-consolidated senior interests, as these commitments will not require cash outlays from us.
Removed
We could face increased competition from banks due to future legislative developments, such as amendments to key provisions of the Dodd-Frank Act, including provisions setting forth capital and risk retention requirements.
Added
As of December 31, 2023, 99% of our loans by total loan exposure earned a floating rate of interest, primarily indexed to SOFR, and the remaining 1% of our loans earn a fixed rate of interest.
Removed
Furthermore, competition for originations of and investments in assets we target may lead to decreasing yields, which may further limit our ability to generate targeted returns.
Added
Floating rate exposure includes an interest rate swap we entered into with a notional amount of $229.9 million that effectively converts certain of our fixed rate loan exposure to floating rate exposure.
Removed
As such, many of the ESG initiatives undertaken by Blackstone impact or apply to us.
Added
Our non-consolidated senior interests, asset-specific debt, and loan participations sold are structurally non-recourse and term-matched to the corresponding collateral loans. (2) States comprising less than 1% of net loan exposure are excluded. (3) Assets with multiple components are proportioned into the relevant collateral types based on the allocated value of each collateral type.
Removed
The SEC maintains a website that contains these reports at www.sec.gov . 9 Website Disclosure We use our website (www.blackstonemortgagetrust.com) as a channel of distribution of company information. The information we post through this channel may be deemed material. Accordingly, investors should monitor this channel, in addition to following our press releases, SEC filings and public conference calls, and webcasts.
Added
We also maintained the cost of our portfolio financings throughout the year, with a weighted-average spread of +1.89% on our $12.7 billion of secured debt, as of December 31, 2023, relative to +1.85% as of December 31, 2022.
Removed
In addition, you may automatically receive email alerts and other information about Blackstone Mortgage Trust when you enroll your email address by visiting the “Contact Us & E-mail Alerts” section of our website at http://ir.blackstonemortgagetrust.com. The contents of our website and any alerts are not, however, a part of this report. 10
Added
The SEC maintains a website that contains these reports at www.sec.gov . 9

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

271 edited+86 added−59 removed434 unchanged
Biggest changeSome of the factors that could negatively affect the market price of our class A common stock include: • our actual or projected operating results, financial condition, cash flows and liquidity, or changes in business strategy or prospects; • actual or perceived conflicts of interest with our Manager or other affiliates of Blackstone and individuals, including our executives; • equity issuances by us, or share resales by our stockholders, or the perception that such issuances or resales may occur; • loss of a major funding source; • increases in market interest rates, which may lead investors to demand a higher distribution yield for our class A common stock, and would result in increased interest expenses on our certain of our indebtedness; • actual or anticipated accounting problems; • publication of research reports about us or the real estate industry; • changes in market valuations of similar companies; • adverse market reaction to the level of leverage we employ; • additions to or departures of our Manager’s or Blackstone’s key personnel; • speculation in the press or investment community; • our failure to meet, or the lowering of, our earnings estimates or those of any securities analysts; • a compression of the yield on our investments and an increase in the cost of our liabilities; 51 • failure to maintain our REIT qualification or exclusion from Investment Company Act regulation; • price and volume fluctuations in the overall stock market from time to time; • general market and economic conditions, and trends including inflationary concerns, and the current state of the credit and capital markets; • significant volatility in the market price and trading volume of securities of publicly traded REITs or other companies in our sector, including us, which is not necessarily related to the operating performance of these companies; • changes in law, regulatory policies or tax guidelines, or interpretations thereof, particularly with respect to REITs; • changes in the value of our portfolio; • any shortfall in revenue or net income or any increase in losses from levels expected by investors or securities analysts; • operating performance of companies comparable to us; • short-selling pressure with respect to shares of our class A common stock or REITs generally; and • uncertainty surrounding the strength of the U.S. economy particularly in light of budget deficit concerns and other U.S. and international political and economic affairs.
Biggest changeThe market price and liquidity of the market for shares of our class A common stock has been, and may in the future be, significantly affected by numerous factors, some of which are beyond our control and may not be directly related to our operating performance. 52 Some of the factors that could negatively affect the market price of our class A common stock include: • our actual or projected operating results, financial condition, cash flows and liquidity, or changes in business strategy or prospects; • actual or perceived conflicts of interest with our Manager or other affiliates of Blackstone and individuals, including our executives; • equity issuances by us, or share resales by our stockholders, or the perception that such issuances or resales may occur; • loss of a major funding source; • increases in market interest rates, which may lead investors to demand a higher distribution yield for our class A common stock, and would result in increased interest expenses on our certain of our indebtedness; • actual or anticipated accounting problems; • publication of research reports, including by short sellers, or speculation in the press or the investment community, about us or the real estate industry; • changes in market valuations of similar companies; • adverse market reaction to the level of leverage we employ; • additions to or departures of our Manager’s or Blackstone’s key personnel; • speculation in the press or investment community; • our failure to meet, or the lowering of, our earnings estimates or those of any securities analysts; • a compression of the yield on our investments and an increase in the cost of our liabilities; • failure to maintain our REIT qualification or exclusion from Investment Company Act regulation; • price and volume fluctuations in the overall stock market from time to time; • general market and economic conditions, and trends including inflationary concerns, and the current state of the credit and capital markets; • significant volatility in the market price and trading volume of securities of publicly traded REITs or other companies in our sector, including us, which is not necessarily related to the operating performance of these companies; • changes in law, regulatory policies or tax guidelines, or interpretations thereof, particularly with respect to REITs; • changes in the value of our portfolio; • any shortfall in revenue or net income or any increase in losses from levels expected by investors or securities analysts; • operating performance of companies comparable to us; • short-selling pressure with respect to shares of our class A common stock or REITs generally; and • uncertainty surrounding the strength of the U.S. economy particularly in light of budget deficit concerns and other U.S. and international political and economic affairs. 53 As noted above, market factors unrelated to our performance could also negatively impact the market price of our class A common stock.
The discovery of such unknown defects, deficiencies and liabilities could affect the ability of our borrowers to make payments to us or could affect our ability to foreclose and sell the underlying properties, which could adversely affect our results of operations and financial condition.
The discovery of such unknown defects, deficiencies and liabilities could affect the ability of our borrowers to make payments to us or could affect our ability to foreclose and/or sell the underlying properties, which could adversely affect our results of operations and financial condition.
There has been an increase in the frequency and sophistication of the cyber and security threats Blackstone faces, with attacks ranging from those common to businesses generally to those that are more advanced and persistent, which may target Blackstone because Blackstone holds a significant amount of confidential and sensitive information about its and our investors, its portfolio companies and potential investments.
There has been an increase in the frequency and sophistication of the cyber and security threats Blackstone faces, with attacks ranging from those common to businesses generally to those that are more advanced and persistent, which may target Blackstone because Blackstone holds a significant amount of confidential and sensitive information about its and our investors, its and our portfolio companies and potential investments.
See “-Risks Related to Our Lending and Investment Activities-Our investments in CMBS, CLOs, CDOs and other similar structured finance investments, as well as those we structure, sponsor or arrange, pose additional risks, including the risks of the securitization process and the risk that the special servicer, CT Investment Management Co., LLC, or CTIMCO, a subsidiary of Blackstone, may take actions that could adversely affect our interests.” The inability to consummate securitizations of our portfolio to finance our loans and investments on a long-term basis could require us to seek other forms of potentially less attractive financing or to liquidate assets at an inopportune time or price, which could adversely affect our performance and our ability to grow our business.
See “–Risks Related to Our Lending and Investment Activities-Our investments in CMBS, CLOs, CDOs and other similar structured finance investments, as well as those we structure, sponsor or arrange, pose additional risks, including the risks of the securitization process and the risk that the special servicer, CT Investment Management Co., LLC, or CTIMCO, a subsidiary of Blackstone, may take actions that could adversely affect our interests.” The inability to consummate securitizations of our portfolio to finance our loans and investments on a long-term basis could require us to seek other forms of potentially less attractive financing or to liquidate assets at an inopportune time or an unfavorable price, which could adversely affect our performance and our ability to grow our business.
Furthermore, if regulatory capital requirements-whether under the Dodd-Frank Act, Basel III (i.e., the framework for a comprehensive set of capital and liquidity standards for internationally active banking organizations, which was adopted in June 2011 by the Basel Committee on Banking Supervision, an international body comprised of senior representatives of bank supervisory authorities and central banks from 27 countries, including the 41 United States) or other regulatory action-are imposed on private lenders that provide us with funds, or were to be imposed on us, they or we may be required to limit, or increase the cost of, financing they provide to us or that we provide to others.
Furthermore, if regulatory capital requirements-whether under the Dodd-Frank Act, Basel III (i.e., the framework for a comprehensive set of capital and liquidity standards for internationally active banking organizations, which was adopted in June 2011 by the Basel Committee on Banking Supervision, an international body comprised of senior representatives of bank supervisory authorities and central banks from 27 countries, including the United States) or other regulatory action-are imposed on private lenders that provide us with funds, or were to be imposed on us, they or we may be required to limit, or increase the cost of, financing they provide to us or that we provide to others.
Interest rate and currency hedging may fail to protect or could adversely affect us because, among other things: 29 • interest rate, currency and/or credit hedging can be expensive and may result in us generating less net income; • available interest rate or currency hedges may not correspond directly with the interest rate or currency risk for which protection is sought; • due to a credit loss, prepayment or asset sale, the duration of the hedge may not match the duration of the related asset or liability; • the amount of income that a REIT may earn from hedging transactions (other than hedging transactions that satisfy certain requirements of the Internal Revenue Code or that are done through a TRS (as defined below)) to offset interest rate losses is limited by U.S. federal income tax provisions governing REITs; • the credit quality of the hedging counterparty owing money on the hedge may be downgraded to such an extent that it impairs our ability to sell or assign our side of the hedging transaction; • the hedging counterparty owing money in the hedging transaction may default on its obligation to pay; • we may fail to recalculate, readjust and execute hedges in an efficient manner; and • legal, tax and regulatory changes could occur and may adversely affect our ability to pursue our hedging strategies and/or increase the costs of implementing such strategies.
Interest rate and currency hedging may fail to protect or could adversely affect us because, among other things: • interest rate, currency and/or credit hedging can be expensive and may result in us generating less net income; • available interest rate or currency hedges may not correspond directly with the interest rate or currency risk for which protection is sought; • due to a credit loss, prepayment or asset sale, the duration of the hedge may not match the duration of the related asset or liability; • the amount of income that a REIT may earn from hedging transactions (other than hedging transactions that satisfy certain requirements of the Internal Revenue Code or that are done through a TRS (as defined below)) to offset interest rate losses is limited by U.S. federal income tax provisions governing REITs; 30 • the credit quality of the hedging counterparty owing money on the hedge may be downgraded to such an extent that it impairs our ability to sell or assign our side of the hedging transaction; • the hedging counterparty owing money in the hedging transaction may default on its obligation to pay; • we may fail to recalculate, readjust and execute hedges in an efficient manner; and • legal, tax and regulatory changes could occur and may adversely affect our ability to pursue our hedging strategies and/or increase the costs of implementing such strategies.
While our Manager shall seek to engage in a marketed process, or otherwise benchmark the price and terms of any such transaction, there can be no assurance that any assets sold by us to another Blackstone Vehicle will not be valued or allocated a price that is lower than might otherwise have been the case if such asset was acquired by a third-party rather than another Blackstone Vehicle . • Loan Refinancings .
While our Manager will seek to engage in a marketed process, or otherwise benchmark the price and terms of any such transaction, there can be no assurance that any assets sold by us to another Blackstone Vehicle will not be valued or allocated a price that is lower than might otherwise have been the case if such asset was acquired by a third party rather than another Blackstone Vehicle. • Loan Refinancings .
As a publicly offered REIT, if at least 20% of the total dividend is available to be paid in cash and certain other requirements are satisfied, the IRS will treat the stock distribution as a dividend (to the extent applicable rules treat such distribution as being made out of our current or accumulated earnings and profits, as determined for U.S. federal income tax purposes).
As we are a publicly offered REIT, if at least 20% of the total distribution is available to be paid in cash and certain other requirements are satisfied, the IRS will treat the stock distribution as a dividend (to the extent applicable rules treat such distribution as being made out of our current or accumulated earnings and profits, as determined for U.S. federal income tax purposes).
In connection with any such investment, Blackstone or other Blackstone Vehicles (or their respective portfolio companies/entities) may make referrals or introductions to other portfolio companies/entities in an effort, in part, to increase the customer base of such companies or businesses, and therefore the value of the investment, or because such referrals or introductions may result in financial incentives (including additional equity ownership) and/or milestones benefitting the referring or introducing party that are tied or related to participation by portfolio companies/entities.
In connection 37 with any such investment, Blackstone or other Blackstone Vehicles (or their respective portfolio companies/entities) may make referrals or introductions to other portfolio companies/entities in an effort, in part, to increase the customer base of such companies or businesses, and therefore the value of the investment, or because such referrals or introductions may result in financial incentives (including additional equity ownership) and/or milestones benefitting the referring or introducing party that are tied or related to participation by portfolio companies/entities.
With certain exceptions, the Maryland General Corporation Law provides that a holder of “control shares” of a Maryland corporation acquired in a “control share acquisition” has no voting rights with respect to those shares except to the extent approved by a vote of two-thirds of the votes entitled to be cast on the matter, excluding shares owned by the acquiring person or by our officers or by our directors who are our employees.
With certain exceptions, the Maryland General Corporation Law provides that a holder of “control shares” of a Maryland corporation acquired in a “control share acquisition” has no voting rights with respect to those shares except to the extent approved by a vote of two-thirds of the votes entitled to be cast on the matter, excluding shares owned by the acquiring person or by our officers or by our 54 directors who are our employees.
For example, if a company goes into bankruptcy or reorganization, becomes insolvent or otherwise experiences financial distress or is unable to meet its payment obligations or comply with covenants relating to securities held by us or by Blackstone or its affiliates, Blackstone or its affiliates may have an interest that conflicts with our interests or Blackstone or its affiliates may have information regarding the company that we do not have access to.
For example, if a company goes into bankruptcy or reorganization, becomes insolvent or otherwise experiences financial distress or is unable to meet its payment obligations or comply with covenants relating to securities held by us or by Blackstone or its 39 affiliates, Blackstone or its affiliates may have an interest that conflicts with our interests or Blackstone or its affiliates may have information regarding the company that we do not have access to.
The remainder of our investments in securities cannot include more than 10% of the outstanding voting securities of any one issuer or 10% of the 46 total value of the outstanding securities (other than securities that qualify for the straight debt safe harbor) of any one issuer unless we and such issuer jointly elect for such issuer to be treated as a “taxable REIT subsidiary”, or TRS, under the Internal Revenue Code.
The remainder of our investments in securities cannot include more than 10% of the outstanding voting securities of any one issuer or 10% of the total value of the outstanding securities (other than securities that qualify for the straight debt safe harbor) of any one issuer unless we and such issuer jointly elect for such issuer to be treated as a “taxable REIT subsidiary”, or TRS, under the Internal Revenue Code.
Our investments in certain debt instruments may cause us to recognize “phantom income” for U.S. federal income tax purposes even though no cash payments have been received on the debt instruments, and certain modifications of such 48 debt by us could cause the modified debt to not qualify as a good REIT asset, thereby jeopardizing our REIT qualification.
Our investments in certain debt instruments may cause us to recognize “phantom income” for U.S. federal income tax purposes even though no cash payments have been received on the debt instruments, and certain modifications of such debt by us could cause the modified debt to not qualify as a good REIT asset, thereby jeopardizing our REIT qualification.
Certain of our investments may include properties that are highly leveraged, with significant burdens on cash flow and, therefore, involve a high degree of financial risk. During an economic downturn or recession, loans or securities of financially or operationally troubled borrowers or issuers are more likely to go into default than loans or securities of other borrowers or issuers.
Certain of our investments may include properties that are highly leveraged, with significant burdens on cash flow and, therefore, involve a high degree of risk. During an economic downturn or recession, loans or securities of financially or operationally troubled borrowers or issuers are more likely to go into default than loans or securities of other borrowers or issuers.
Certain inherent conflicts of interest arise from the fact that Blackstone and its affiliates, including our Manager, will provide investment management and other services both to us and to any other person or entity, whether or not the investment objectives or guidelines of any such other person or entity are similar to ours, including, without limitation, the sponsoring, closing and/or managing of any investment funds, vehicles, REITs, accounts, products and/or other similar arrangements sponsored, advised, and/or managed 33 by Blackstone or its affiliates, whether currently in existence or subsequently established (in each case, including any related successor funds, alternative vehicles, supplemental capital vehicles, surge funds, over-flow funds, co-investment vehicles, other entities formed in connection with Blackstone or its affiliates side-by-side or additional general partner investments with respect thereto, and portfolio companies/entities), which we refer to as the Blackstone Vehicles.
Certain inherent conflicts of interest arise from the fact that Blackstone and its affiliates, including our Manager, will provide investment management and other services both to us and to any other person or entity, whether or not the investment objectives or guidelines of any such other person or entity are similar to ours, including, without limitation, the sponsoring, closing and/or managing of any investment funds, vehicles, REITs, accounts, products and/or other similar arrangements sponsored, advised, and/or managed by Blackstone or its affiliates, whether currently in existence or subsequently established (in each case, including any related successor funds, alternative vehicles, supplemental capital vehicles, surge funds, over-flow funds, co-investment vehicles, other entities formed in connection with Blackstone or its affiliates side-by-side or additional 34 general partner investments with respect thereto, and portfolio companies/entities), which we refer to as the Blackstone Vehicles.
Consequently, 39 we will be unable to prevent any damage to goodwill that may occur as a result of the activities of the Licensor, Blackstone or others. Furthermore, in the event that the Trademark License Agreement is terminated, we would be required to, among other things, change our name and NYSE ticker symbol.
Consequently, we will be unable to prevent any damage to goodwill that may occur as a result of the activities of the licensor, Blackstone or others. Furthermore, in the event that the trademark license agreement is terminated, we would be required to, among other things, change our name and NYSE ticker symbol.
These floating rate loans are insulated from changes in value specifically due to changes in interest rates; however, the coupons they earn fluctuate based upon interest rates (again, typically one-month LIBOR or SOFR) and, in a declining and/or low interest rate environment, these loans will earn lower rates of interest and this will impact our operating performance.
These floating rate loans are insulated from changes in value specifically due to changes in interest rates; however, the coupons they earn fluctuate based upon interest rates (again, typically one-month SOFR) and, in a declining and/or low interest rate environment, these loans will earn lower rates of interest and this will impact our operating performance.
In addition, as regulatory capital requirements imposed on our lenders are increased, they may be required to limit, or increase the cost of, financing they provide to us. In general, this could potentially increase our financing costs and reduce our liquidity or require us to sell assets at an inopportune time or price.
In addition, as regulatory capital requirements imposed on our lenders are increased, they may be required to limit, or increase the cost of, financing they provide to us. In general, this could potentially increase our financing costs and reduce our liquidity or require us to sell assets at an inopportune time or an unfavorable price.
If we fail to qualify as a REIT in any tax year, then: • we would be taxed as a regular domestic corporation, which under current laws, among other things, means being unable to deduct distributions to stockholders in computing taxable income and being subject to U.S. federal income tax on our taxable income at regular corporate income tax rates; • any resulting tax liability could be substantial and could have a material adverse effect on our book value; • unless we were entitled to relief under applicable statutory provisions, we would be required to pay taxes, and therefore, our cash available for distribution to stockholders would be reduced for each of the years during which we did not qualify as a REIT and for which we had taxable income; and • we generally would not be eligible to requalify as a REIT for the subsequent four full taxable years.
If we fail to qualify as a REIT in any tax year, then: • we would be taxed as a regular domestic corporation, which under current laws, among other things, means being unable to deduct dividends to stockholders in computing taxable income and being subject to U.S. federal income tax on our taxable income at regular corporate income tax rates; • any resulting tax liability could be substantial and could have a material adverse effect on our book value; • unless we were entitled to relief under applicable statutory provisions, we would be required to pay taxes, and therefore our cash available for distribution to stockholders would be reduced for each of the years during which we did not qualify as a REIT and for which we had taxable income; and • we generally would not be eligible to requalify as a REIT for the subsequent four full taxable years.
Such governmental, investor and societal attention to ESG matters, including expanding mandatory and voluntary reporting, diligence, and disclosure on topics such as climate change, human capital, labor and risk oversight, could expand the nature, scope, and complexity of matters that we are required to manage, assess and report.
Such governmental, investor and societal attention to ESG matters, including expanding mandatory and voluntary reporting, diligence, and disclosure on topics such as climate change, human capital management, labor and risk oversight, could expand the nature, scope, and complexity of matters that we are required to manage, assess and report.
These transactions generally involve creating a special-purpose entity, contributing a pool of our assets to the entity, and selling interests in the entity on a non-recourse 28 basis to purchasers (whom we would expect to be willing to accept a lower interest rate to invest in investment-grade loan pools).
These transactions generally involve creating a special-purpose entity, contributing a pool of our assets to the entity, and selling interests in the entity on a non-recourse basis to purchasers (whom we would expect to be willing to accept a lower interest rate to invest in investment-grade loan pools).
In addition, increases in our portfolio of assets and/or changes in the mix of our assets 13 or lines of business may place significant demands on our Manager’s administrative, operational, asset management, financial and other resources. Any failure to manage increases in size effectively could adversely affect our results of operations and financial condition.
In addition, increases in our portfolio of assets and/or changes in the mix of our assets or lines of business may place significant demands on our Manager’s administrative, operational, asset management, financial and other resources. Any failure to manage increases in our size effectively could adversely affect our results of operations and financial condition.
We may need to periodically access the capital markets to, among other things, raise cash to fund new loans and investments. Unfavorable economic conditions or capital market conditions may increase our funding costs, limit our access to the capital markets or could result in a decision by our potential lenders not to extend credit.
We may need to periodically access the capital markets to, among other things, raise cash to fund new loans and investments. Unfavorable economic or capital markets conditions may increase our funding costs, limit our access to the capital markets or could result in a decision by our potential lenders not to extend credit.
We may from time to time obtain financing from other Blackstone Vehicles (including the BREDS Debt Funds). We and/or Blackstone may face conflicts of interest in connection with any borrowings or disputes related to such financing agreement(s) which may adversely impact us. • Pursuit of Differing Strategies .
We may from time to time obtain financing from other Blackstone Vehicles (including the BREDS Debt Funds). We and/or Blackstone may face conflicts of interest in connection with any borrowings or disputes related to such financing agreement(s) which may adversely impact us. 36 • Pursuit of Differing Strategies .
Breaches such as those involving covertly introduced malware, impersonation of authorized users and industrial or other espionage may not be identified even with sophisticated prevention and detection systems, potentially resulting in further harm and preventing them from being addressed appropriately.
Breaches such as those involving covertly introduced malware, impersonation of authorized users and industrial or 45 other espionage may not be identified even with sophisticated prevention and detection systems, potentially resulting in further harm and preventing them from being addressed appropriately.
REITs, in certain circumstances, may incur tax liabilities that would reduce our cash available for distribution to our stockholders. Even if we qualify and maintain our status as a REIT, we may become subject to U.S. federal income taxes and related state, local and foreign taxes.
In certain circumstances we may incur tax liabilities that would reduce our cash available for distribution to our stockholders. Even if we qualify and maintain our status as a REIT, we may become subject to U.S. federal income taxes and related state, local and foreign taxes.
We have entered into financing arrangements that are structured as sale and repurchase agreements pursuant to which we would nominally sell certain of our assets to a counterparty and simultaneously enter into an agreement to repurchase these assets at a later date in exchange for a purchase price.
We have entered into financing arrangements that are structured as sale and repurchase agreements pursuant to which we nominally sell certain of our assets to a counterparty and simultaneously enter into an agreement to repurchase these assets at a later date in exchange for a purchase price.
If general interest rates or credit 12 spreads decline at the same time, the proceeds of such prepayments received during such periods may not be reinvested for some period of time or may be reinvested by us in assets with lower yields than the assets that were prepaid.
If general interest rates or credit spreads decline at the same time, the proceeds of such prepayments received during such periods may not be reinvested for some period of time or may be reinvested by us in assets with lower yields than the assets that were prepaid.
Hedging transactions involve certain additional risks such as counterparty risk, leverage risk, the legal enforceability of hedging contracts, the early repayment of hedged transactions and the risk that unanticipated and significant changes in interest rates may cause a significant loss of basis in the contract and a change in current period expense.
Hedging transactions also involve certain additional risks such as counterparty risk, leverage risk, the legal enforceability of hedging contracts, the early repayment of hedged transactions and the risk that unanticipated and significant changes in interest rates may cause a significant loss of basis in the contract and a change in current period expense.
Various laws and regulations currently exist that restrict the investment activities of banks and certain other financial institutions but do not apply to us, which we believe creates opportunities for us to participate in certain investments that are not available to these more regulated institutions.
Various laws and regulations currently exist that restrict the investment activities of banks and certain other financial institutions but do not apply to us, which we believe creates opportunities for us to participate in certain investments that 42 are not available to these more regulated institutions.
Transition risks, such as government restrictions, standards or regulations intended to reduce greenhouse gas emissions and potential climate change impacts, are emerging and may increase in the future in the form of restrictions or additional requirements on the 22 development of commercial real estate.
Transition risks, such as government restrictions, standards or regulations intended to reduce greenhouse gas emissions and potential climate change impacts, are emerging and may increase in the future in the form of restrictions or additional requirements on the development of commercial real estate.
In determining whether to invest in a particular transaction on our behalf, our Manager may consider those 36 relationships (subject to its obligations under the Management Agreement), which may result in certain transactions that our Manager will not undertake on our behalf in view of such relationships. • Service Providers .
In determining whether to invest in a particular transaction on our behalf, our Manager may consider those relationships (subject to its obligations under the Management Agreement), which may result in certain transactions that our Manager will not undertake on our behalf in view of such relationships. • Service Providers .
Any sustained period of increased payment delinquencies, foreclosures or losses could adversely affect our Manager’s ability to invest in, sell and securitize loans, which would materially and adversely affect our results of operations, financial condition, liquidity and business and our ability to pay dividends to stockholders.
Any sustained period of increased payment delinquencies, foreclosures or 18 losses could adversely affect our Manager’s ability to invest in, sell and securitize loans, which would materially and adversely affect our results of operations, financial condition, liquidity and business and our ability to pay dividends to stockholders.
Statements about our ESG related initiatives and goals, and progress against those goals, may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.
Statements about our ESG-related initiatives, commitments and goals, and progress against those goals, may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.
While it is expected that our participation in connection with such refinancing transactions will be at arms’ length and on market/contract terms, such transactions may give rise to potential or actual conflicts of interest and there can be no assurance that such financing will not be valued or allocated a price that is lower than might otherwise have been the case if such financing was provided by a third-party rather than to another Blackstone Vehicle (or that the pricing and terms of any financing provided by another Blackstone Vehicle will be as favorable as those provided by third parties). • Other Affiliate Transactions .
While it is expected that any such participation by another Blackstone Vehicle or us in connection with refinancing transactions will be at arms’ length and on market/contract terms, such transactions may give rise to potential or actual conflicts of interest and there can be no assurance that such financing will not be valued or allocated a price that is lower than might otherwise have been the case if such financing was provided by a third party rather than another Blackstone Vehicle or us (or that the pricing and terms of any financing provided by another Blackstone Vehicle or us will be as favorable as those provided by third parties). • Other Affiliate Transactions .
We depend on our Manager and its affiliates to develop the appropriate systems and procedures to control operational risk. We rely heavily on our financial, accounting and other data processing systems. The ability of our systems to accommodate transactions could also constrain our ability to properly manage our portfolio.
We depend on our Manager and its affiliates to develop the appropriate systems and procedures to control operational risk. We rely heavily on our financial, accounting and other data processing systems. The ability of our systems to accommodate 44 transactions could also constrain our ability to properly manage our portfolio.
These laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release of such hazardous substances. In addition, we could be subject to similar liabilities in applicable foreign jurisdictions.
These laws often impose liability without regard to whether the owner or operator knew of, or was responsible 21 for, the release of such hazardous substances. In addition, we could be subject to similar liabilities in applicable foreign jurisdictions.
For instance, the so- 42 called “Volcker Rule” provisions of the Dodd-Frank Act impose significant restrictions on the proprietary trading activities of banking entities and on their ability to sponsor or invest in private equity and hedge funds.
For instance, the so-called “Volcker Rule” provisions of the Dodd-Frank Act impose significant restrictions on the proprietary trading activities of banking entities and on their ability to sponsor or invest in private equity and hedge funds.
Stockholders are urged to consult with their tax advisors 50 with respect to the impact of recent legislation on investments in our shares and the status of legislative, regulatory or administrative developments and proposals and their potential effect on an investment in our shares.
Stockholders are urged to consult with their tax advisors with respect to the impact of recent legislation on investments in our shares and the status of legislative, regulatory or administrative developments and proposals and their potential effect on an investment in our shares.
In addition, any dislocation or weakness in the capital and credit markets could adversely affect our lenders and could cause one or more of our lenders to be unwilling or unable to provide us with financing or to increase the costs of that financing.
In addition, any dislocation or weakness in the capital and credit markets could adversely affect our lenders and could cause one or more of our lenders to be unwilling or unable to provide us with financing or to increase 28 the costs of that financing.
We may also suffer losses if the value of the mortgage loans we acquire declines prior to securitization. Declines in the value of a mortgage loan can be due to, among other things, changes in interest rates and changes in the credit quality of the loan.
We may also suffer losses if the value of the mortgage loans we acquire declines prior to securitization. Declines in the value of a mortgage loan can be due 29 to, among other things, changes in interest rates and changes in the credit quality of the loan.
In addition, we are required to reimburse our Manager or its affiliates for documented costs and expenses incurred by it and its affiliates on our behalf, except those specifically required to be borne by our Manager under our Management 32 Agreement.
In addition, we are required to reimburse our Manager or its affiliates for documented costs and expenses incurred by it and its affiliates on our behalf, except those specifically required to be borne by our Manager under our Management Agreement.
Cyberattacks, ransomware and other security threats could originate from a wide variety of sources, including cyber criminals, nation state hackers, hacktivists and other outside parties. Cyberattacks and other security threats could also originate from the malicious or accidental acts of insiders.
Cyberattacks, ransomware and other security threats could originate from a wide variety of external sources, including cyber criminals, nation state hackers, hacktivists and other outside parties. Cyberattacks and other security threats could also originate from the malicious or accidental acts of insiders.
We may employ various hedging strategies to limit the effects of changes in interest rates (and in some cases credit spreads), including engaging in interest rate swaps, caps, floors and other interest rate derivative products.
We may employ various hedging strategies to limit the effects of changes in interest rates (and in some cases credit spreads), including engaging in interest rate swaps, caps, collars, floors and other interest rate derivative products.
These complexities could lead to a delay in preparation of financial information and the delivery of this information to our stockholders. Changes in accounting interpretations or assumptions could impact our consolidated financial statements and 45 our ability to timely prepare our consolidated financial statements.
These complexities could lead to a delay in preparation of financial information and the delivery of this information to our stockholders. Changes in accounting interpretations or assumptions could impact our consolidated financial statements and our ability to timely prepare our consolidated financial statements.
For any period during which our investments are not match-funded, the income earned on such investments may respond more slowly to interest rate fluctuations than the cost of our borrowings.
For any period during which our investments are not match- 11 funded, the income earned on such investments may respond more slowly to interest rate fluctuations than the cost of our borrowings.
Among other things, this could potentially increase our financing costs, reduce our ability to originate or acquire loans and reduce our liquidity or require us to sell assets at an inopportune time or price.
Among other things, this could potentially increase our financing costs, reduce our ability to originate or acquire loans and reduce our liquidity or require us to sell assets at an inopportune time or an unfavorable price.
In particular, while our primary investment strategies differ from those of Blackstone’s latest flagship real estate debt fund, Blackstone Real Estate Debt Strategies IV L.P. and potential successor funds and related separately managed accounts, or, collectively, BREDS Debt Funds, and Blackstone Real Estate Income Trust, Inc., or BREIT, in that we generally seek to invest primarily in senior mortgage loans and other similar interests, BREDS Debt Funds generally seeks to invest primarily in real estate-related debt with a high-yield risk profile such as junior mortgage debt, mezzanine debt, and other subordinate structured debt investments, BREIT generally seeks to invest primarily in real estate equity with a minority of its portfolio invested in liquid debt securities, a significant portion of the capital of BREDS Debt Funds and BREIT (and/or other Blackstone Vehicles) may nonetheless be invested in investments that would also be appropriate for us.
In particular, while our primary investment strategies differ from those of Blackstone’s latest flagship real estate debt fund, Blackstone Real Estate Debt Strategies V L.P. and potential successor funds and related separately managed accounts, or, collectively, BREDS Debt Funds, and Blackstone Real Estate Income Trust, or BREIT, in that we generally seek to invest primarily in senior mortgage loans and other similar interests, BREDS Debt Funds generally seeks to invest primarily in real estate-related debt with a high-yield risk profile such as junior mortgage debt, mezzanine debt, and other subordinate structured debt investments, BREIT generally seeks to invest primarily in real estate equity with a minority of its portfolio invested in liquid debt securities, a significant portion of the capital of BREDS Debt Funds and BREIT (and/or other Blackstone Vehicles) may nonetheless be invested in investments that would also be appropriate for us.
In addition, seeking to maintain our exemption from registration under the Investment Company Act may cause us and/or our subsidiaries to acquire or hold additional assets that we might not otherwise have acquired or held or dispose of investments that we and/or our subsidiaries might not have otherwise disposed of, which could result in higher costs or lower proceeds to us than we would have paid or received if we were not seeking to comply with such requirements.
In addition, seeking to maintain our exclusion from registration under the Investment Company Act may cause us and/or our subsidiaries to acquire or hold additional assets that we might not otherwise have acquired or held or dispose of investments that we and/or our subsidiaries might not have otherwise disposed of, which could result in higher costs or lower proceeds to us than we would have paid or received if we were not seeking to comply with such requirements.
A return of capital is not taxable, but has the effect of reducing the basis of a stockholder’s investment in our class A common stock. Investing in our class A common stock may involve a high degree of risk.
A return of capital is not taxable, but has the effect of reducing the basis of a stockholder’s investment in our class A common stock. 55 Investing in our class A common stock may involve a high degree of risk.
In addition, in connection with such investments, Blackstone will generally seek to implement certain procedures to mitigate conflicts of interest which typically involve us maintaining a non-controlling interest in any such investment and a forbearance of rights, including certain non-economic rights, relating to the Blackstone Vehicles, such as where Blackstone may cause us to decline to exercise certain control- and/or foreclosure-related rights with respect to a portfolio entity (including following the vote of other third party lenders generally or otherwise recusing ourselves with respect to decisions), including with respect to both normal course ongoing matters (such as consent rights with respect to loan modifications in intercreditor agreements) and also defaults, foreclosures, workouts, restructurings and/or exit opportunities, subject to certain limitations.
In addition, in connection with such investments, Blackstone will generally seek to implement certain procedures to mitigate conflicts of interest which typically involve us maintaining a non-controlling interest in any such investment and a forbearance of 35 rights, including certain non-economic rights, relating to the Blackstone Vehicles, such as where Blackstone may cause us to decline to exercise certain control- and/or foreclosure-related rights with respect to a portfolio company (including following the vote of other third-party lenders generally or otherwise recusing ourselves with respect to decisions), including with respect to both normal course ongoing matters (such as consent rights with respect to loan modifications in intercreditor agreements) and also defaults, foreclosures, workouts, restructurings and/or exit opportunities, subject to certain limitations.
As a result, U.S. stockholders may be required to pay income taxes with respect to such distributions in excess of the cash portion of the distribution received.
As a result, U.S. stockholders may be required to pay income taxes with respect to such cash/stock distributions in excess of the cash portion of the distribution received.
Such investments may conflict with the interests of such Blackstone Vehicles in related investments, and the potential for any such conflicts of interests may be heightened in the event of a default or restructuring of any such 34 investments.
Such investments may conflict with the interests of such Blackstone Vehicles in related investments, and the potential for any such conflicts of interests may be heightened in the event of a default or restructuring of any such investments.
We, Blackstone or a portfolio entity could be required to make a significant investment to remedy the effects of any such failures, harm to their reputations, legal claims that they and their respective affiliates may be subjected to, regulatory action or enforcement arising out of applicable privacy and other laws, adverse publicity and other events that may affect their business and financial performance.
We, Blackstone or a portfolio company could be required to make a significant investment to remedy the effects of any such failures, harm to their reputations, legal claims that they and their respective affiliates may be subjected to, regulatory action or enforcement arising out of applicable privacy and other laws, adverse publicity and other events that may affect their business and financial performance.
Lexington National Land Services, or LNLS, is a Blackstone affiliate that (i) acts as a title agent in facilitating and issuing title insurance, (ii) provides title support services for title insurance underwriters and (iii) acts as escrow agent in connection with investments by us, other Blackstone Vehicles and their portfolio entities, affiliates and related parties, and third parties, including, from time to time, our borrowers.
Lexington National Land Services, or LNLS, is a Blackstone affiliate that (i) acts as a title agent in facilitating and issuing title insurance, (ii) provides title support services for title insurance underwriters and (iii) acts as escrow agent in connection with investments by us, other Blackstone Vehicles and their affiliates and related parties, and third parties, including, from time to time, our borrowers.
Our Manager is authorized to follow broad investment guidelines that have been approved by our board of directors. Those investment guidelines, as well as our financing strategy or hedging policies with respect to investments, originations, acquisitions, growth, operations, indebtedness, capitalization and distributions, may be changed at any time without notice to, or the consent of, our stockholders.
Our Manager is authorized to follow broad investment guidelines that have been approved by our board of directors. Those investment guidelines, as well as our financing strategy or hedging policies with respect to investments, originations, acquisitions, growth, operations, indebtedness, capitalization and dividends, may be changed at any time without notice to, or the consent of, our stockholders.
However, in 2018, then-President Trump signed into law a bill easing the regulation and oversight of certain banks under the Dodd-Frank Act. Efforts by the current administration could have further impacts on our industry if previously enacted laws are amended or if new legislative or regulatory reforms are adopted.
However, in 2018, then-President Trump signed into law a bill easing the regulation and oversight of certain banks under the Dodd-Frank Act. Efforts by the current administration or future administrations could have further impacts on our industry if previously enacted laws are amended or if new legislative or regulatory reforms are adopted.
We and the Blackstone Vehicles have made and in the future will likely make investments at different levels of an issuer’s or borrower’s capital structure (e.g., an investment by a Blackstone Vehicle in an equity, debt or mezzanine interest with respect to the same portfolio entity in which we own a debt interest or vice versa) or otherwise in different classes of the same issuer’s securities.
We and the Blackstone Vehicles have made and in the future will likely make investments at different levels of an issuer’s or borrower’s capital structure (e.g., an investment by a Blackstone Vehicle in an equity, debt or mezzanine interest with respect to the same portfolio company in which we own a debt interest or vice versa) or otherwise in different classes of the same issuer’s securities.
We may not have the funds available to repay our debt at that time, which would likely result in defaults unless we are able to raise the funds from alternative sources, including by selling assets at a time when we might not otherwise choose to do so, which we may not be able to achieve on favorable terms or at all.
We may not have the funds available to repay our debt at that time, which would likely result in defaults unless we are able to raise the funds from alternative sources, including by selling assets at a time when we might not otherwise choose to do so and when we may not be able to do so on favorable terms or at all.
We operate in a competitive market for lending and investment opportunities, which may intensify, and competition may limit our ability to originate or acquire desirable loans and investments or dispose of assets we target, and could also affect the yields of these assets and have a material adverse effect on our business, financial condition and results of operations.
We operate in a competitive market for lending and investment opportunities, which may intensify, and competition may limit our ability to originate or acquire desirable loans and investments or dispose of investments, and could also affect the yields of these investments and have a material adverse effect on our business, financial condition and results of operations.
Also, as a result of this competition, desirable loans and investments in our target assets may be limited in the future and we may not be able to take advantage of attractive lending and investment opportunities from time to time, thereby limiting our ability to identify and originate or acquire loans or make investments that are consistent with our investment objectives.
Also, as a result of this competition, desirable loans and investments may be limited in the future and we may not be able to take advantage of attractive lending and investment opportunities from time to time, thereby limiting our ability to identify and originate or acquire loans or make investments that are consistent with our investment objectives.
Incurring substantial debt could subject us to many risks that, if realized, would materially and adversely affect us, including the risk that: • our cash flow from operations may be insufficient to make required payments of principal of and interest on our debt or we may fail to comply with covenants contained in our debt agreements, which is likely to result in (i) acceleration of such debt (and any other debt containing a cross-default or cross-acceleration provision), which we then may be unable to repay from internal funds or to refinance on favorable terms, or at all, (ii) our inability to borrow undrawn amounts under our financing arrangements, even if we are current in payments on borrowings under those arrangements, which would result in a decrease in our liquidity, and/or (iii) the loss of some or all of our collateral assets to foreclosure or sale; • our debt may increase our vulnerability to adverse economic and industry conditions with no assurance that investment yields will increase in an amount sufficient to offset the higher financing costs; • we may be required to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing funds available for operations, future business opportunities, stockholder distributions or other purposes; and • we may not be able to refinance any debt that matures prior to the maturity (or realization) of an underlying investment it was used to finance on favorable terms or at all.
Incurring substantial debt could subject us to many risks that, if realized, would materially and adversely affect us, including the risk that: • our cash flow from operations may be insufficient to make required payments of principal of and interest on our debt or we may fail to comply with covenants contained in our debt agreements, which, if we are unable to obtain amendments or waivers to such covenants from financing counterparties, is likely to result in (i) acceleration of such debt (and any other debt containing a cross-default or cross-acceleration provision), which we then may be unable to repay from internal funds or to refinance on favorable terms, or at all, (ii) our inability to borrow undrawn amounts under our financing arrangements, even if we are current in payments on borrowings under those arrangements, which would result in a decrease in our liquidity, and/or (iii) the loss of some or all of our collateral assets to foreclosure or sale; • our debt may increase our vulnerability to adverse economic and industry conditions with no assurance that investment yields will increase in an amount sufficient to offset the higher financing costs; • we may be required to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing funds available for operations, future business opportunities, stockholder dividends or other purposes; and • we may not be able to refinance any debt that matures prior to the maturity (or realization) of an underlying investment it was used to finance on favorable terms or at all.
Our ability to fund our loans and investments may be impacted by our ability to secure bank credit facilities (including term loans and revolving facilities), warehouse facilities and structured financing arrangements, public and private debt issuances (including through securitizations) and derivative instruments, in addition to transaction or asset specific funding arrangements and additional repurchase agreements on acceptable terms.
Our ability to fund our loans and investments may be impacted by our ability to secure bank credit facilities (including term loans and revolving facilities), warehouse facilities and structured financing arrangements, public and private debt issuances (including through securitizations) and derivative instruments, in addition to transaction or asset specific funding arrangements and additional repurchase agreements on acceptable terms or at all.
For example, in the case of a loan extended to a Blackstone portfolio entity by a financing syndicate in which we have agreed to participate on terms negotiated by a third party participant in the syndicate, it may have been necessary for the Blackstone portfolio entity to offer better or worse terms to lenders to fully subscribe the syndicate than if we had not participated.
For example, in the case of a loan extended to a Blackstone portfolio company by a financing syndicate in which we have agreed to participate on terms negotiated by a third-party participant in the syndicate, it may have been necessary for the Blackstone portfolio company to offer better or worse terms to lenders to fully subscribe the syndicate than if we had not participated.
As a consequence of our seeking to maintain our exemption from registration under the Investment Company Act on an ongoing basis, we and/or our subsidiaries may be restricted from making certain investments or may structure investments in a manner that would be less advantageous to us than would be the case in the absence of such requirements.
As a consequence of our seeking to maintain our exclusion from registration under the Investment Company Act on an ongoing basis, we and/or our subsidiaries may be restricted from making certain investments or may structure investments in a manner that would be less advantageous to us than would be the case in the absence of such requirements.
We are generally required to distribute to our stockholders at least 90% of our REIT taxable income each year for us to qualify as a REIT under the Internal Revenue Code, which requirement we currently intend to satisfy through quarterly distributions of all or substantially all of our REIT taxable income in such year, subject to certain adjustments.
We are generally required to distribute to our stockholders at least 90% of our REIT taxable income each year for us to qualify as a REIT under the Internal Revenue Code, which requirement we currently intend to satisfy through quarterly dividends of all or substantially all of our REIT taxable income in such year, subject to certain adjustments.
In addition, in circumstances where we originate or acquire loans relating to borrowers that are owned in whole or part by Blackstone-advised investment vehicles, we often forgo all non-economic rights under the loan, including voting rights, so long as Blackstone-advised investment vehicles own such borrowers above a certain threshold.
In addition, in circumstances where we originate or acquire loans relating to borrowers that are owned in whole or part by Blackstone-advised investment vehicles, we generally forgo all non-economic rights under the loan, including voting rights, so long as Blackstone-advised investment vehicles own such borrowers above a certain threshold.
To the extent we suffer such losses with respect to these transitional loans, it could adversely affect our results of operations and financial condition. Risks of cost overruns and noncompletion of renovations of properties in transition may result in significant losses. The renovation, refurbishment or expansion of a property by a borrower involves risks of cost overruns and noncompletion.
To the extent we suffer such losses with respect to our loans, it could adversely affect our results of operations and financial condition. Risks of cost overruns and noncompletion of renovations of properties in transition may result in significant losses. The renovation, refurbishment or expansion of a property in transition by a borrower involves risks of cost overruns and noncompletion.
With respect to ESG, the nature and scope of our Manager’s diligence will vary based on the investment, but may include a review of, among other things: energy management, air and water pollution, land contamination, diversity, human rights, employee health and safety, accounting standards and bribery and corruption.
With respect to ESG, the nature and scope of our Manager’s diligence will vary based on the investment, but may include a review of, among other things: energy management, air and water pollution, land contamination, human capital management, human rights, employee health and safety, accounting standards and bribery and corruption.
If a U.S. stockholder sells the stock that it receives as part of the distribution in order to pay this tax, the sales proceeds may be less than the amount it must include in income with respect to the distribution, depending on the market price of our stock at the time of the sale.
If a U.S. stockholder sells the shares that it receives as part of the distribution in order to pay this tax, the sales proceeds may be less than the amount it must include in income with respect to the cash/stock distribution, depending on the market price of our stock at the time of the sale.
We 53 believe that a change in any one of the following factors could adversely affect our results of operations and impair our ability to pay distributions to our stockholders: • our ability to make profitable investments; • margin calls or other expenses that reduce our cash flow; • defaults in our asset portfolio or decreases in the value of our portfolio; • the impact of changes in interest rates on our net interest income; and • the fact that anticipated operating expense levels may not prove accurate, as actual results may vary from estimates.
We believe that a change in any one of the following factors could adversely affect our results of operations and impair our ability to pay dividends to our stockholders: • our ability to make profitable investments; • margin calls or other expenses that reduce our cash flow; • defaults in our asset portfolio or decreases in the value of our portfolio; • the impact of changes in interest rates on our net interest income; and • the fact that anticipated operating expense levels may not prove accurate, as actual results may vary from estimates.
However, a portion of our distributions may be designated by us as long-term capital gains to the extent that they are attributable to capital gain income recognized by us or may constitute a return of capital to the extent that they exceed our earnings and profits as determined for U.S. federal income tax purposes.
However, a portion of our dividends may be designated by us as long-term capital gains to the extent that they are attributable to capital gain income recognized by us or may constitute a return of capital to the extent that they exceed our earnings and profits as determined for U.S. federal income tax purposes.
We may use our net operating losses, to the extent available, carried forward to offset future REIT taxable income, and therefore reduce our dividend requirements. In addition, some of our distributions may include a return of capital, which would reduce the amount of capital available to operate our business.
We may use our net operating losses, to the extent available, carried forward to offset future REIT taxable income, and therefore reduce our dividend requirements. In addition, some of our dividends may include a return of capital, which would reduce the amount of capital available to operate our business.
For example, we may acquire assets, including debt securities requiring us to accrue original issue discount, or OID, or recognize market discount income, that generate taxable income in excess of economic income or in advance of the corresponding cash flow from the assets referred to as “phantom income.” Moreover, we are generally required to take account of certain amounts in taxable income no later than the time such amounts are reflected on certain financial statements.
For example, we may acquire assets, including debt securities, requiring us to accrue original issue discount, or OID, or recognize market discount income, that generate taxable income in excess of economic income or in advance of the corresponding cash flow from the assets, referred to as “phantom income.” Moreover, we are generally required to include certain amounts in taxable income no later than the time such amounts are reflected on certain financial statements.
Changes in general economic conditions will affect the creditworthiness of borrower entities and/or the value of underlying real estate collateral relating to our investments and may include economic and/or market fluctuations, changes in environmental, zoning and other laws, casualty or condemnation losses, regulatory limitations on rents, decreases in property values, changes in the appeal of properties to tenants, changes in supply and demand of real estate products, fluctuations in real estate fundamentals, the financial resources of borrower entities, energy supply shortages, various uninsured or uninsurable risks, natural disasters, pandemics or outbreaks of contagious disease, political events, terrorism and acts of war, changes in government regulations, changes in monetary policy, changes in real property tax rates and/or tax credits, changes in operating expenses, changes in interest rates, changes in inflation rates, changes in the availability of debt financing and/or mortgage funds which may render the sale or refinancing of properties difficult or impracticable, increased mortgage defaults, increases in borrowing rates, changes in consumer spending, negative developments in the economy and/or adverse changes in real estate values generally and other factors that are beyond our control.
Changes in general economic conditions will affect the creditworthiness of borrower entities and/or the value of underlying real estate collateral relating to our investments and may include economic and/or market fluctuations, changes in building, environmental, zoning and other laws, casualty or condemnation losses, regulatory limitations on rents, decreases in property values, changes in the appeal of properties to tenants, changes in supply and demand of real estate products, fluctuations in real estate fundamentals, the financial resources of borrower entities, energy supply shortages, various uninsured or uninsurable risks, natural disasters, pandemics or outbreaks of contagious disease, political events, terrorism and acts of war, changes in government regulations, changes in monetary policy, changes in real property tax rates and/or tax credits, changes in operating expenses, changes in capital expenditure costs, changes in interest rates, changes in inflation rates, changes in foreign exchange rates, changes in the availability of debt financing and/or mortgage funds which may render the sale or refinancing of properties difficult or impracticable, increased mortgage defaults, increases in borrowing rates, changes in consumer spending, negative developments in the economy and/or adverse changes in real estate values generally and other factors that are beyond our control.
Fluctuations in interest rates and credit spreads could reduce our ability to generate income on our loans and other investments, which could lead to a significant decrease in our results of operations, cash flows and the market value of our investments and may limit our ability to pay distributions to our stockholders.
Fluctuations in interest rates and credit spreads could reduce our ability to generate income on our loans and other investments, which could lead to a significant decrease in our results of operations, cash flows and the market value of our investments and may limit our ability to pay dividends to our stockholders.
All distributions will be made at the discretion of our board of directors and will depend on our earnings, our financial condition, liquidity, debt covenants, maintenance of our REIT qualification, applicable law and such other factors as our board of directors may deem relevant from time to time.
All dividends will be made at the discretion of our board of directors and will depend on our earnings, our financial condition, liquidity, debt covenants, maintenance of our REIT qualification, applicable law and such other factors as our board of directors may deem relevant from time to time.
While many of the direct impacts of the COVID-19 pandemic have eased, the longer-term macroeconomic effects on global supply chains, inflation, labor shortages and wage increases continue to impact many industries, including the collateral underlying certain of our loans.
While many of the direct impacts of the COVID-19 pandemic have eased, the longer-term macroeconomic effects on global supply chains, inflation, labor shortages and wage increases continue to impact many industries, including the industries associated with the collateral underlying certain of our loans.
Because Blackstone has many different businesses, including the Blackstone Capital Markets Group, which Blackstone investment teams and portfolio entities may engage to advise on and to execute debt and equity financings, it is subject to a number of actual and potential conflicts of interest, greater regulatory oversight and more legal and contractual restrictions than that to which it would otherwise be subject if it had just one line of business.
Because Blackstone has many different businesses, including the Blackstone Capital Markets Group, which Blackstone investment teams and portfolio companies may engage to advise on and to execute debt and equity financings, Blackstone is subject to a number of actual and potential conflicts of interest, greater regulatory oversight and more legal and contractual restrictions than it would otherwise be subject to if it had just one line of business.
Thus, maintaining our exemption from registration under the Investment Company Act may hinder our ability to operate solely on the basis of maximizing profits. There can be no assurance that we and our subsidiaries will be able to successfully maintain our exemption from registration under the Investment Company Act.
Thus, maintaining our exclusion from registration under the Investment Company Act may hinder our ability to operate solely on the basis of maximizing profits. There can be no assurance that we and our subsidiaries will be able to successfully maintain our exclusion from registration under the Investment Company Act.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES Our principal executive and administrative offices are located in leased space at 345 Park Avenue, 24 th Floor, New York, New York 10154. We do not own any real property. We consider these facilities to be suitable and adequate for the management and operations of our business. ITEM 3.
Biggest changeITEM 2. PROPERTIES Our principal executive and administrative offices are located in leased space at 345 Park Avenue, 24 th Floor, New York, New York 10154. As of December 31, 2023, we did not own any real property. We consider these facilities to be suitable and adequate for the management and operations of our business. ITEM 3.
LEGAL PROCEEDINGS From time to time, we may be involved in various claims and legal actions arising in the ordinary course of business. As of December 31, 2022, we were not involved in any material legal proceedings. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 57 PART II.
LEGAL PROCEEDINGS From time to time, we may be involved in various claims and legal actions arising in the ordinary course of business. As of December 31, 2023, we were not involved in any material legal proceedings. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 60 PART II.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our class A common stock is listed for trading on the NYSE under the symbol “BXMT.” As of February 1, 2023 there were 235 holders of record of our class A common stock.
Biggest changeITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our class A common stock is listed for trading on the NYSE under the symbol “BXMT.” As of February 7, 2024 there were 257 holders of record of our class A common stock.
Issuer Purchases of Equity Securities We did not purchase any shares of our class A common stock during the three months or year ended December 31, 2022. ITEM 6. [RESERVED] 58
Issuer Purchases of Equity Securities We did not purchase any shares of our class A common stock during the three months or year ended December 31, 2023. ITEM 6. [RESERVED] 61

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeLoan Portfolio Details The following table provides details of our loan portfolio, on a loan-by-loan basis, as of December 31, 2022 ($ in millions): Loan Type (1) Origination Date (2) Total Loan (3)(4) Principal Balance (4) Net Book Value Cash Coupon (5) All-in Yield (5) Maximum Maturity (6) Location Property Type Loan Per SQFT / Unit / Key Origination LTV (2) Risk Rating 1 Senior Loan 8/14/2019 $ 1,171 $ 1,033 $ 1,029 +3.06 % +3.78 % 12/23/2024 Dublin - IE Mixed-Use $386 / sqft 74 % 2 2 Senior Loan 4/9/2018 1,487 905 899 +4.49 % +5.72 % 6/9/2025 New York Office $525 / sqft 48 % 2 3 Senior Loan 6/24/2022 901 901 893 +4.75 % +5.07 % 6/21/2029 Diversified - AU Hospitality $410 / sqft 59 % 3 4 Senior Loan (4) 12/9/2021 770 710 408 +2.65 % +2.82 % 12/9/2026 New York Mixed-Use $219 / sqft 50 % 2 5 Senior Loan (4) 8/7/2019 746 668 135 +3.12 % +3.61 % 9/9/2025 Los Angeles Office $451 / sqft 59 % 3 6 Senior Loan 3/22/2018 655 655 654 +3.25 % +3.31 % 3/15/2026 Diversified - Spain Mixed-Use n / a 71 % 4 7 Senior Loan 3/30/2021 477 477 473 +3.20 % +3.41 % 5/15/2026 Diversified - SE Industrial $88 / sqft 76 % 2 8 Senior Loan (4) 12/17/2021 448 440 88 +3.95 % +4.35 % 1/9/2026 Diversified - US Other $13,716 / unit 61 % 2 9 Senior Loan 7/23/2021 500 401 396 +4.00 % +4.42 % 8/9/2027 New York Multi $538,046 / unit 58 % 3 10 Senior Loan 8/22/2018 363 363 363 +3.42 % +3.42 % 8/9/2023 Maui Hospitality $471,391 / key 61 % 1 11 Senior Loan (4) 11/22/2019 470 353 70 +3.70 % +4.15 % 12/9/2025 Los Angeles Office $622 / sqft 69 % 3 12 Senior Loan 9/23/2019 375 346 344 +3.00 % +3.23 % 8/15/2024 Diversified - Spain Hospitality $122,667 / key 62 % 4 13 Senior Loan 4/11/2018 355 345 344 +2.85 % +3.10 % 5/1/2023 New York Office $437 / sqft 71 % 4 14 Senior Loan 10/25/2021 307 307 304 +4.30 % +4.62 % 10/25/2024 Diversified - AU Hospitality $151,102 / key 56 % 3 15 Senior Loan 2/27/2020 303 302 302 +2.70 % +3.04 % 3/9/2025 New York Multi $795,074 / unit 59 % 2 16 Senior Loan 5/6/2022 297 297 295 +3.50 % +3.79 % 5/6/2027 Diversified - UK Industrial $92 / sqft 53 % 2 17 Senior Loan 1/11/2019 290 290 289 +4.40 % +4.75 % 1/11/2026 Diversified - UK Other $286 / sqft 74 % 4 18 Senior Loan 9/29/2021 312 288 286 +2.70 % +2.91 % 10/9/2026 Washington, DC Office $375 / sqft 66 % 2 19 Senior Loan 11/30/2018 286 286 285 +2.35 % +2.35 % 8/9/2025 New York Hospitality $306,870 / key 73 % 5 20 Senior Loan 12/11/2018 310 284 285 +2.55 % +3.24 % 12/9/2023 Chicago Office $239 / sqft 78 % 4 21 Senior Loan 3/25/2022 281 281 279 +4.50 % +4.86 % 3/25/2027 Diversified - UK Hospitality $123,867 / key 65 % 3 22 Senior Loan 10/23/2018 290 281 280 +2.86 % +3.01 % 11/9/2024 Atlanta Mixed-Use $261 / sqft 64 % 2 23 Senior Loan 9/30/2021 280 273 271 +2.50 % +2.77 % 9/30/2026 Dallas Multi $143,960 / unit 74 % 3 24 Senior Loan 4/26/2021 264 264 262 +2.56 % +2.75 % 5/9/2026 Diversified - US Multi $156,393 / unit 75 % 3 25 Senior Loan 11/30/2018 262 260 259 +2.80 % +3.04 % 12/9/2024 San Francisco Hospitality $379,015 / key 73 % 4 26 Senior Loan 7/15/2021 301 256 253 +4.25 % +4.68 % 7/16/2026 Diversified - EUR Hospitality $195,728 / key 53 % 3 27 Senior Loan 9/14/2021 259 255 254 +2.50 % +2.76 % 9/14/2026 Dallas Multi $206,310 / unit 72 % 3 28 Senior Loan 9/16/2021 247 235 234 +3.80 % +4.51 % 4/9/2024 San Francisco Office $285 / sqft 53 % 3 29 Senior Loan 6/8/2022 272 234 232 +3.65 % +4.01 % 6/9/2027 New York Office $1,312 / sqft 75 % 3 30 Senior Loan 2/23/2022 245 230 228 +2.60 % +2.84 % 3/9/2027 Reno Multi $213,047 / unit 74 % 3 continued… 84 Loan Type (1) Origination Date (2) Total Loan (3)(4) Principal Balance (4) Net Book Value Cash Coupon (5) All-in Yield (5) Maximum Maturity (6) Location Property Type Loan Per SQFT / Unit / Key Origination LTV (2) Risk Rating 31 Senior Loan 4/23/2021 $ 219 $ 209 $ 209 +3.65 % +3.65 % 5/9/2024 Washington, DC Office $234 / sqft 57 % 5 32 Senior Loan 7/16/2021 221 205 203 +3.25 % +3.81 % 2/15/2027 London - UK Multi $228,087 / unit 69 % 3 33 Senior Loan 10/1/2019 248 204 203 +3.75 % +4.28 % 10/9/2025 Atlanta Office $380 / sqft 68 % 1 34 Senior Loan 8/31/2017 203 203 203 +2.50 % +2.50 % 9/9/2023 Orange County Office $238 / sqft 64 % 5 35 Senior Loan 6/28/2019 198 198 197 +3.82 % +4.49 % 6/26/2024 London - UK Office $647 / sqft 71 % 3 36 Senior Loan 6/27/2019 205 197 197 +2.80 % +2.80 % 8/15/2026 Berlin - DEU Office $423 / sqft 62 % 3 37 Senior Loan 9/30/2021 195 195 194 +3.75 % +4.10 % 10/9/2026 Boca Raton Multi $532,787 / unit 77 % 3 38 Senior Loan 12/22/2016 202 194 195 +2.00 % +2.00 % 12/9/2023 New York Office $286 / sqft 64 % 5 39 Senior Loan 9/30/2021 237 188 186 +4.00 % +4.49 % 9/30/2026 Diversified - Spain Hospitality $132,783 / key 60 % 3 40 Senior Loan 6/4/2018 183 183 183 +3.50 % +3.76 % 6/9/2024 New York Hospitality $301,071 / key 52 % 4 41 Senior Loan 9/30/2021 256 179 177 +3.00 % +3.35 % 10/9/2028 Chicago Office $197 / sqft 74 % 3 42 Senior Loan 9/25/2019 178 178 177 +4.47 % +4.99 % 9/26/2024 London - UK Office $811 / sqft 72 % 3 43 Senior Loan 2/15/2022 191 177 176 +2.90 % +3.14 % 3/9/2027 Denver Office $353 / sqft 61 % 3 44 Senior Loan 11/23/2018 177 177 176 +2.68 % +2.92 % 2/15/2024 Diversified - UK Office $1,092 / sqft 50 % 3 45 Senior Loan 12/21/2021 182 175 174 +2.82 % +3.11 % 4/29/2027 London - UK Industrial $359 / sqft 67 % 3 46 Senior Loan 7/23/2021 244 168 167 +5.00 % +5.41 % 8/9/2027 New York Office $545 / sqft 53 % 3 47 Senior Loan 12/17/2021 168 165 164 +3.95 % +4.33 % 1/9/2026 Diversified - US Other $5,601 / unit 48 % 1 48 Senior Loan 3/9/2022 163 163 162 +2.95 % +3.17 % 8/15/2027 Various Retail $140 / sqft 55 % 2 49 Senior Loan 1/27/2022 178 163 162 +3.10 % +3.44 % 2/9/2027 Dallas Multi $106,318 / unit 71 % 3 50 Senior Loan 7/29/2022 266 162 158 +4.60 % +5.78 % 7/27/2027 London - UK Industrial $228 / sqft 52 % 3 51 Senior Loan 5/27/2021 205 160 159 +2.70 % +2.99 % 6/9/2026 Atlanta Office $134 / sqft 66 % 3 52 Senior Loan 10/7/2021 165 160 159 +3.25 % +3.58 % 10/9/2025 Los Angeles Office $326 / sqft 68 % 3 53 Senior Loan 5/13/2021 199 156 155 +3.55 % +3.99 % 6/9/2026 Boston Office $793 / sqft 64 % 3 54 Senior Loan 3/7/2022 156 156 155 +3.45 % +3.63 % 6/9/2026 Los Angeles Hospitality $624,000 / key 64 % 3 55 Senior Loan 8/24/2021 179 156 155 +3.10 % +3.41 % 9/9/2026 San Jose Office $371 / sqft 65 % 3 56 Senior Loan 8/31/2021 150 150 149 +3.15 % +3.42 % 9/9/2026 Diversified - US Retail $299 / sqft 65 % 2 57 Senior Loan 9/4/2018 163 150 149 +4.25 % +4.50 % 9/9/2024 Las Vegas Hospitality $181,054 / key 70 % 3 58 Senior Loan 1/7/2022 155 146 145 +3.70 % +3.97 % 1/9/2027 Fort Lauderdale Office $377 / sqft 55 % 1 59 Senior Loan 1/17/2020 203 146 145 +2.75 % +3.16 % 2/9/2025 New York Mixed-Use $120 / sqft 43 % 3 60 Senior Loan 11/18/2021 137 137 136 +3.25 % +3.51 % 11/18/2026 London - UK Other $174 / sqft 65 % 2 continued… 85 Loan Type (1) Origination Date (2) Total Loan (3)(4) Principal Balance (4) Net Book Value Cash Coupon (5) All-in Yield (5) Maximum Maturity (6) Location Property Type Loan Per SQFT / Unit / Key Origination LTV (2) Risk Rating 61 Senior Loan 12/20/2019 $ 136 $ 136 $ 135 +3.22 % +3.44 % 12/18/2026 London - UK Office $688 / sqft 75 % 3 62 Senior Loan 2/25/2022 135 135 134 +4.05 % +4.43 % 2/25/2027 Copenhagen - DK Industrial $91 / sqft 69 % 2 63 Senior Loan 3/10/2020 140 132 132 +3.10 % +3.10 % 10/11/2024 New York Mixed-Use $806 / sqft 53 % 3 64 Senior Loan 6/30/2022 129 129 129 +3.75 % +3.93 % 9/30/2025 Canberra - AU Hospitality $251,353 / key 60 % 3 65 Senior Loan 9/14/2021 132 128 128 +2.70 % +2.95 % 10/9/2026 San Bernardino Multi $258,709 / unit 75 % 3 66 Senior Loan 6/28/2022 675 127 121 +4.60 % +5.04 % 7/9/2029 Austin Mixed-Use $106 / sqft 53 % 3 67 Senior Loan 3/28/2022 150 126 125 +3.05 % +3.35 % 4/9/2027 Miami Office $341 / sqft 69 % 3 68 Senior Loan 4/3/2018 126 125 125 +2.86 % +3.03 % 4/9/2024 Dallas Retail $761 / sqft 64 % 3 69 Senior Loan 4/6/2021 123 121 120 +3.20 % +3.52 % 4/9/2026 Los Angeles Office $510 / sqft 65 % 3 70 Senior Loan 6/1/2021 120 120 120 +2.96 % +3.17 % 6/9/2026 Miami Multi $298,507 / unit 61 % 2 71 Senior Loan 4/29/2022 118 118 117 +3.50 % +3.77 % 2/18/2027 Napa Valley Hospitality $1,240,799 / key 66 % 2 72 Senior Loan 3/29/2021 123 118 117 +4.02 % +4.61 % 3/29/2026 Diversified - UK Multi $51,680 / unit 61 % 3 73 Senior Loan 5/20/2021 150 118 117 +3.76 % +4.19 % 6/9/2026 San Jose Office $302 / sqft 65 % 3 74 Senior Loan 6/28/2019 125 117 117 +2.75 % +2.91 % 2/1/2024 Los Angeles Office $591 / sqft 48 % 3 75 Senior Loan 7/15/2019 138 117 116 +3.01 % +3.43 % 8/9/2024 Houston Office $211 / sqft 58 % 3 76 Senior Loan 8/27/2021 122 115 114 +3.00 % +3.29 % 9/9/2026 San Diego Retail $434 / sqft 58 % 3 77 Senior Loan 10/21/2021 114 114 114 +3.01 % +3.26 % 11/9/2025 Fort Lauderdale Multi $334,311 / unit 64 % 1 78 Senior Loan 2/20/2019 163 111 111 +4.07 % +6.12 % 2/19/2024 London - UK Office $545 / sqft 61 % 3 79 Senior Loan 12/21/2021 120 111 110 +2.70 % +3.00 % 1/9/2027 Washington, DC Office $380 / sqft 68 % 3 80 Senior Loan 3/17/2022 262 110 108 +3.87 % +4.63 % 6/30/2025 London - UK Office $494 / sqft 62 % 3 81 Senior Loan 3/13/2018 123 108 108 +3.00 % +3.27 % 4/9/2027 Honolulu Hospitality $167,020 / key 50 % 3 82 Senior Loan 11/8/2022 107 107 106 +3.88 % +4.53 % 11/8/2027 London - UK Multi $166,047 / unit 60 % 3 83 Senior Loan 11/27/2019 109 107 106 +2.86 % +3.20 % 12/9/2024 Minneapolis Office $107 / sqft 64 % 3 84 Senior Loan 2/15/2022 106 104 104 +2.85 % +3.19 % 3/9/2027 Tampa Multi $239,117 / unit 73 % 3 85 Senior Loan (4) 11/10/2021 362 104 20 +4.00 % +4.68 % 12/9/2026 San Francisco Office $198 / sqft 66 % 3 86 Senior Loan 12/29/2021 110 102 101 +2.85 % +3.06 % 1/9/2027 Phoenix Multi $174,662 / unit 64 % 3 87 Senior Loan 3/29/2022 103 101 100 +2.70 % +2.96 % 4/9/2027 Miami Multi $280,418 / unit 75 % 3 88 Senior Loan 7/1/2021 104 99 99 +3.10 % +3.35 % 7/9/2026 Diversified - US Retail $281 / sqft 61 % 2 89 Senior Loan 10/1/2021 101 99 99 +2.86 % +3.13 % 10/1/2026 Phoenix Multi $229,212 / unit 77 % 3 90 Senior Loan 6/18/2021 99 99 98 +2.60 % +2.83 % 7/9/2026 New York Industrial $51 / sqft 55 % 1 continued… 86 Loan Type (1) Origination Date (2) Total Loan (3)(4) Principal Balance (4) Net Book Value Cash Coupon (5) All-in Yield (5) Maximum Maturity (6) Location Property Type Loan Per SQFT / Unit / Key Origination LTV (2) Risk Rating 91 Senior Loan 12/15/2021 $ 146 $ 98 $ 96 +3.44 % +4.52 % 12/9/2026 Dublin - IE Multi $245,972 / unit 79 % 3 92 Senior Loan 12/10/2021 135 98 97 +3.00 % +3.35 % 1/9/2027 Miami Office $327 / sqft 49 % 3 93 Senior Loan 3/28/2019 97 97 97 +3.25 % +3.25 % 1/9/2024 New York Hospitality $249,463 / key 63 % 4 94 Senior Loan 10/28/2021 96 96 95 +3.00 % +3.35 % 11/9/2026 Philadelphia Multi $353,704 / unit 79 % 3 95 Senior Loan 3/25/2020 114 95 95 +2.40 % +2.78 % 3/31/2025 Diversified - NL Multi $116,103 / unit 65 % 2 96 Senior Loan 6/14/2021 100 93 93 +3.70 % +4.04 % 7/9/2024 Miami Office $196 / sqft 65 % 3 97 Senior Loan 10/27/2021 93 93 92 +2.61 % +2.81 % 11/9/2026 Orlando Multi $155,612 / unit 75 % 3 98 Senior Loan 3/3/2022 92 92 91 +3.45 % +3.76 % 3/9/2027 Boston Hospitality $418,182 / key 64 % 3 99 Senior Loan 12/21/2018 98 91 91 +2.60 % +2.85 % 1/9/2024 Chicago Office $176 / sqft 72 % 3 100 Senior Loan 12/22/2021 91 91 90 +3.18 % +3.44 % 1/9/2027 Las Vegas Multi $205,682 / unit 65 % 3 101 Senior Loan 10/16/2018 99 90 90 +3.36 % +3.64 % 11/9/2024 San Francisco Hospitality $196,325 / key 72 % 4 102 Senior Loan 12/15/2021 91 89 88 +2.85 % +3.10 % 1/9/2027 Charlotte Multi $253,585 / unit 76 % 3 103 Senior Loan 12/10/2018 87 87 87 +4.57 % +5.28 % 12/3/2024 London - UK Office $416 / sqft 72 % 3 104 Senior Loan 6/25/2021 85 85 85 +2.75 % +3.10 % 7/1/2026 St.
Biggest changeLoan Portfolio Details The following table provides details of our loan portfolio, on a loan-by-loan basis, as of December 31, 2023 ($ in millions): Loan Type (1) Origination Date (2) Total Loan (3)(4) Principal Balance (4) Net Book Value Cash Coupon (5) All-in Yield (5) Maximum Maturity (6) Location Property Type Loan Per SQFT / Unit / Key Origination LTV (2) Risk Rating 1 Senior Loan 4/9/2018 $ 1,487 $ 1,156 $ 1,155 +4.29 % +4.60 % 6/9/2025 New York Office $408 / sqft 48 % 2 2 Senior Loan 8/14/2019 1,086 1,000 996 +3.03 % +3.78 % 12/23/2024 Dublin - IE Mixed-Use $332 / sqft 74 % 3 3 Senior Loan 6/24/2022 901 901 895 +4.75 % +5.07 % 6/21/2029 Diversified - AU Hospitality $410 / sqft 59 % 3 4 Senior Loan 3/22/2018 612 612 611 +3.25 % +3.31 % 3/15/2026 Diversified - Spain Mixed-Use n / a 71 % 4 5 Senior Loan (4) 8/7/2019 571 571 116 +3.22 % +3.46 % 9/9/2025 Los Angeles Office $712 / sqft 59 % 2 6 Senior Loan 3/30/2021 477 477 474 +3.20 % +3.41 % 5/15/2026 Diversified - SE Industrial $91 / sqft 76 % 2 7 Senior Loan 7/23/2021 480 462 459 +3.60 % +4.04 % 8/9/2027 New York Multi $619,756 / unit 58 % 2 8 Senior Loan (4) 11/22/2019 470 385 77 +3.78 % +4.13 % 12/9/2025 Los Angeles Office $705 / sqft 69 % 4 9 Senior Loan 12/9/2021 385 368 367 +2.76 % +3.00 % 12/9/2026 New York Mixed-Use $127 / sqft 50 % 2 10 Senior Loan 9/23/2019 386 361 361 +3.00 % +3.27 % 8/16/2024 Diversified - Spain Hospitality $128,685 / key 62 % 3 11 Senior Loan 4/11/2018 345 338 338 +2.25 % +2.28 % 5/1/2025 New York Office $429 / sqft 71 % 4 12 Senior Loan 10/25/2021 307 307 306 +4.00 % +4.32 % 10/25/2024 Diversified - AU Hospitality $151,079 / key 56 % 2 13 Senior Loan 7/15/2021 316 304 301 +4.25 % +4.75 % 7/16/2026 Diversified - EUR Hospitality $232,169 / key 53 % 3 14 Senior Loan 5/6/2022 303 303 301 +3.50 % +3.79 % 5/6/2027 Diversified - UK Industrial $96 / sqft 53 % 2 15 Senior Loan 2/27/2020 303 302 302 +2.70 % +2.94 % 3/9/2025 New York Multi $795,074 / unit 59 % 3 16 Senior Loan 3/25/2022 296 296 295 +4.50 % +4.86 % 3/25/2027 Diversified - UK Hospitality $130,510 / key 65 % 2 17 Senior Loan 12/11/2018 356 294 296 +1.75 % +1.76 % 12/9/2026 Chicago Office $249 / sqft 78 % 4 18 Senior Loan 9/29/2021 312 294 293 +2.81 % +3.03 % 10/9/2026 Washington, DC Office $383 / sqft 66 % 2 19 Senior Loan 11/30/2018 286 286 270 7.90 % 7.90 % 8/9/2025 New York Hospitality $306,870 / key 73 % 5 20 Senior Loan 10/23/2018 290 284 283 +2.86 % +3.01 % 11/9/2024 Atlanta Mixed-Use $265 / sqft 64 % 2 21 Senior Loan 9/30/2021 280 276 276 +2.61 % +2.88 % 9/30/2026 Dallas Multi $145,940 / unit 74 % 3 22 Senior Loan 1/11/2019 265 265 265 +5.04 % +5.06 % 6/14/2028 Diversified - UK Other $262 / sqft 74 % 3 23 Senior Loan 6/8/2022 272 264 262 +3.65 % +4.00 % 6/9/2027 New York Office $1,475 / sqft 75 % 3 24 Senior Loan 11/30/2018 260 260 260 +4.80 % +4.80 % 12/9/2024 San Francisco Hospitality $378,454 / key 73 % 5 25 Senior Loan 9/14/2021 259 255 255 +2.61 % +2.87 % 9/14/2026 Dallas Multi $206,610 / unit 72 % 3 26 Senior Loan 2/23/2022 245 232 231 +2.60 % +2.84 % 3/9/2027 Reno Multi $215,210 / unit 74 % 3 27 Senior Loan (7) 9/16/2021 229 229 229 +1.63 % +1.63 % 11/9/2025 San Francisco Office $277 / sqft 53 % 4 28 Senior Loan 6/28/2022 675 223 216 +4.60 % +5.07 % 7/9/2029 Austin Mixed-Use $185 / sqft 53 % 3 29 Senior Loan 7/16/2021 233 221 219 +3.25 % +3.51 % 2/15/2027 London - UK Multi $227,951 / unit 69 % 2 30 Senior Loan (4) 11/10/2021 362 218 43 +4.11 % +4.93 % 12/9/2026 San Francisco Life Sciences $414 / sqft 66 % 3 continued… 87 Loan Type (1) Origination Date (2) Total Loan (3)(4) Principal Balance (4) Net Book Value Cash Coupon (5) All-in Yield (5) Maximum Maturity (6) Location Property Type Loan Per SQFT / Unit / Key Origination LTV (2) Risk Rating 31 Senior Loan 12/22/2016 $ 252 $ 212 $ 206 +10.50 % +10.50 % 6/9/2028 New York Office $299 / sqft 64 % 5 32 Senior Loan 6/27/2019 212 211 210 +2.80 % +2.94 % 8/15/2026 Berlin - DEU Office $442 / sqft 62 % 3 33 Senior Loan 4/23/2021 219 209 203 +3.65 % +3.65 % 5/9/2024 Washington, DC Office $234 / sqft 57 % 5 34 Senior Loan 6/28/2019 208 208 208 +3.82 % +4.08 % 6/26/2024 London - UK Office $502 / sqft 71 % 3 35 Senior Loan 8/31/2017 203 203 188 +2.62 % +2.62 % 1/9/2024 Orange County Office $236 / sqft 64 % 5 36 Senior Loan 9/30/2021 256 203 202 +3.11 % +3.50 % 10/9/2028 Chicago Office $224 / sqft 74 % 4 37 Senior Loan 7/29/2022 255 196 193 +4.60 % +5.92 % 7/27/2027 London - UK Industrial $259 / sqft 52 % 3 38 Senior Loan 9/25/2019 187 187 187 +4.47 % +4.84 % 9/26/2024 London - UK Office $873 / sqft 72 % 3 39 Senior Loan 11/23/2018 186 186 186 +2.68 % +2.92 % 2/15/2024 Diversified - UK Office $1,151 / sqft 50 % 3 40 Senior Loan 12/21/2021 192 186 185 +2.82 % +3.11 % 4/29/2027 London - UK Industrial $377 / sqft 67 % 3 41 Senior Loan (8) 7/23/2021 244 184 183 -1.30 % -0.92 % 8/9/2028 New York Office $596 / sqft 53 % 4 42 Senior Loan 2/15/2022 191 180 179 +2.90 % +3.14 % 3/9/2027 Denver Office $358 / sqft 61 % 4 43 Senior Loan 1/27/2022 178 177 176 +3.10 % +3.40 % 2/9/2027 Dallas Multi $115,406 / unit 71 % 3 44 Senior Loan 5/13/2021 199 176 175 +3.66 % +4.11 % 6/9/2026 Boston Life Sciences $890 / sqft 64 % 3 45 Senior Loan 3/9/2022 172 172 171 +2.95 % +3.17 % 8/15/2027 Diversified - UK Retail $146 / sqft 55 % 2 46 Senior Loan 12/17/2021 168 165 165 +3.95 % +4.33 % 1/9/2026 Diversified - US Other $5,601 / unit 48 % 1 47 Senior Loan 10/7/2021 165 161 160 +3.25 % +3.49 % 10/9/2025 Los Angeles Office $327 / sqft 68 % 4 48 Senior Loan 3/7/2022 156 156 156 +3.45 % +3.63 % 6/9/2026 Los Angeles Hospitality $624,000 / key 64 % 3 49 Senior Loan (4) 3/17/2022 225 156 205 +2.52 % +4.38 % 6/30/2025 London - UK Office $700 / sqft 50 % 3 50 Senior Loan 1/17/2020 203 154 154 +2.86 % +3.00 % 2/9/2025 New York Mixed-Use $128 / sqft 43 % 3 51 Senior Loan 5/27/2021 184 154 153 +2.31 % +2.63 % 6/9/2026 Atlanta Office $129 / sqft 66 % 3 52 Senior Loan 6/4/2018 153 153 153 +3.50 % +3.74 % 6/9/2025 New York Hospitality $251,647 / key 52 % 3 53 Senior Loan 1/7/2022 155 152 151 +3.70 % +3.97 % 1/9/2027 Fort Lauderdale Office $392 / sqft 55 % 1 54 Senior Loan 12/23/2021 329 150 145 +4.25 % +5.22 % 6/24/2028 London - UK Multi $165,256 / unit 59 % 3 55 Senior Loan 9/30/2021 189 148 146 +4.00 % +4.51 % 9/30/2026 Diversified - Spain Hospitality $127,539 / key 60 % 3 56 Senior Loan 2/20/2019 172 146 146 +4.07 % +4.53 % 2/19/2024 London - UK Office $587 / sqft 61 % 3 57 Senior Loan (4) 9/30/2021 145 145 195 +2.96 % +3.38 % 10/9/2026 Boca Raton Multi $396,175 / unit 58 % 3 58 Senior Loan 11/18/2021 144 144 144 +3.25 % +3.51 % 11/18/2026 London - UK Other $181 / sqft 65 % 2 59 Senior Loan 12/20/2019 143 143 143 +3.22 % +3.44 % 12/18/2026 London - UK Office $729 / sqft 75 % 3 60 Senior Loan 3/10/2020 140 140 140 +3.10 % +3.10 % 10/11/2024 New York Mixed-Use $854 / sqft 53 % 5 continued… 88 Loan Type (1) Origination Date (2) Total Loan (3)(4) Principal Balance (4) Net Book Value Cash Coupon (5) All-in Yield (5) Maximum Maturity (6) Location Property Type Loan Per SQFT / Unit / Key Origination LTV (2) Risk Rating 61 Senior Loan 2/25/2022 $ 139 $ 139 $ 138 +4.05 % +4.43 % 2/25/2027 Copenhagen - DK Industrial $79 / sqft 69 % 2 62 Senior Loan 1/26/2022 338 137 134 +4.10 % +4.70 % 2/9/2027 Seattle Office $286 / sqft 56 % 3 63 Senior Loan 8/24/2021 156 133 133 +2.71 % +3.03 % 9/9/2026 San Jose Office $317 / sqft 65 % 3 64 Senior Loan (4) 3/29/2022 224 132 26 +4.50 % +5.67 % 4/9/2027 Miami Multi $224,248 / unit 72 % 3 65 Senior Loan 9/14/2021 132 129 129 +2.81 % +3.07 % 10/9/2026 San Bernardino Multi $260,871 / unit 75 % 3 66 Senior Loan 6/30/2022 129 129 129 +3.75 % +3.93 % 9/30/2025 Canberra - AU Hospitality $251,317 / key 60 % 2 67 Senior Loan 12/15/2021 150 127 126 +2.96 % +4.12 % 12/9/2026 Dublin - IE Multi $319,129 / unit 79 % 3 68 Senior Loan 5/20/2021 150 126 123 +3.76 % +3.76 % 6/9/2026 San Jose Office $322 / sqft 65 % 5 69 Senior Loan 3/29/2021 130 125 125 +4.02 % +4.61 % 3/29/2026 Diversified - UK Multi $54,881 / unit 61 % 3 70 Senior Loan 4/6/2021 123 122 122 +3.31 % +3.60 % 4/9/2026 Los Angeles Office $508 / sqft 65 % 3 71 Senior Loan 6/1/2021 120 120 120 +2.96 % +3.17 % 6/9/2026 Miami Multi $298,507 / unit 61 % 2 72 Senior Loan 3/28/2022 130 119 118 +2.55 % +2.85 % 4/9/2027 Miami Office $322 / sqft 69 % 3 73 Senior Loan 4/29/2022 118 118 118 +3.50 % +3.77 % 2/18/2027 Napa Valley Hospitality $1,240,799 / key 66 % 3 74 Senior Loan 8/27/2021 122 118 118 +3.11 % +3.41 % 9/9/2026 San Diego Retail $447 / sqft 58 % 3 75 Senior Loan 6/28/2019 125 117 117 +2.87 % +3.13 % 2/1/2024 Los Angeles Studio $591 / sqft 48 % 3 76 Senior Loan 12/21/2021 120 117 117 +2.70 % +3.00 % 1/9/2027 Washington, DC Office $401 / sqft 68 % 3 77 Senior Loan 7/15/2019 138 117 116 +3.01 % +3.43 % 8/9/2024 Houston Office $211 / sqft 58 % 4 78 Senior Loan 10/21/2021 114 114 114 +3.01 % +3.26 % 11/9/2025 Fort Lauderdale Multi $334,311 / unit 64 % 2 79 Senior Loan 12/10/2021 135 111 110 +3.11 % +3.42 % 1/9/2027 Miami Office $370 / sqft 49 % 3 80 Senior Loan 3/13/2018 123 108 108 +3.11 % +3.34 % 4/9/2027 Honolulu Hospitality $167,735 / key 50 % 3 81 Senior Loan 12/29/2021 110 106 105 +2.85 % +3.06 % 1/9/2027 Phoenix Multi $181,512 / unit 64 % 3 82 Senior Loan 2/15/2022 106 105 104 +2.85 % +3.19 % 3/9/2027 Tampa Multi $239,655 / unit 73 % 2 83 Senior Loan 3/29/2022 103 102 102 +2.70 % +2.96 % 4/9/2027 Miami Multi $284,656 / unit 75 % 3 84 Senior Loan 11/27/2019 104 102 101 +2.86 % +3.12 % 12/9/2024 Minneapolis Office $102 / sqft 64 % 3 85 Senior Loan 1/30/2020 104 101 101 +2.96 % +3.11 % 2/9/2026 Honolulu Hospitality $274,466 / key 63 % 3 86 Senior Loan 10/1/2021 101 100 100 +2.86 % +3.13 % 10/1/2026 Phoenix Multi $231,021 / unit 77 % 3 87 Senior Loan 4/3/2018 100 99 99 +2.86 % +3.03 % 4/9/2024 Dallas Retail $601 / sqft 64 % 3 88 Senior Loan 6/18/2021 99 99 98 +2.71 % +2.95 % 7/9/2026 New York Industrial $51 / sqft 55 % 1 89 Senior Loan 6/14/2021 100 96 92 +3.81 % +3.81 % 7/9/2024 Miami Office $203 / sqft 65 % 5 90 Senior Loan 10/28/2021 96 96 95 +3.00 % +3.35 % 11/9/2026 Philadelphia Multi $352,399 / unit 79 % 3 continued… 89 Loan Type (1) Origination Date (2) Total Loan (3)(4) Principal Balance (4) Net Book Value Cash Coupon (5) All-in Yield (5) Maximum Maturity (6) Location Property Type Loan Per SQFT / Unit / Key Origination LTV (2) Risk Rating 91 Senior Loan 12/21/2018 $ 98 $ 94 $ 92 +2.71 % +2.71 % 1/9/2024 Chicago Office $182 / sqft 72 % 5 92 Senior Loan 3/25/2020 94 94 93 +2.40 % +2.67 % 3/31/2025 Diversified - NL Multi $114,143 / unit 65 % 2 93 Senior Loan 10/27/2021 93 93 92 +2.61 % +2.81 % 11/9/2026 Orlando Multi $155,612 / unit 75 % 3 94 Senior Loan 4/1/2021 102 93 90 +7.41 % +7.41 % 4/9/2026 San Jose Office $621 / sqft 67 % 5 95 Senior Loan 3/3/2022 92 92 92 +3.45 % +3.76 % 3/9/2027 Boston Hospitality $418,182 / key 64 % 2 96 Senior Loan 12/22/2021 91 91 90 +3.18 % +3.44 % 1/9/2027 Las Vegas Multi $205,682 / unit 65 % 3 97 Senior Loan 12/15/2021 91 90 90 +2.96 % +3.22 % 1/9/2027 Charlotte Multi $256,393 / unit 76 % 4 98 Senior Loan 12/15/2021 89 89 88 +4.00 % +4.29 % 12/15/2026 Melbourne - AU Multi $64,829 / unit 38 % 2 99 Senior Loan 10/16/2018 88 88 88 +3.36 % +3.36 % 11/9/2024 San Francisco Hospitality $191,807 / key 72 % 5 100 Senior Loan 6/25/2021 85 85 86 +2.86 % +3.31 % 7/1/2026 St.
We maintain a robust asset management relationship with our borrowers and utilize these relationships to maximize the performance of our portfolio, including during periods of volatility. We believe that we will benefit from these relationships and from our long-standing core business model of originating senior loans collateralized by large assets in major markets with experienced, well-capitalized institutional sponsors.
We maintain a robust asset management relationship with our borrowers and utilize these relationships to maximize the performance of our portfolio, including during periods of volatility. We believe that we benefit from these relationships and from our long-standing core business model of originating senior loans collateralized by large assets in major markets with experienced, well-capitalized institutional sponsors.
We believe this CMBS data, which includes month-over-month loan and property performance, is the most relevant, available, and comparable dataset to our portfolio. • Expected timing and amount of future loan fundings and repayments: Expected credit losses are estimated over the contractual term of each loan, adjusted for expected prepayments.
We believe this CMBS data, which includes month-over-month loan and property performance, is the most relevant, available, and comparable dataset to our portfolio. • Expected timing and amount of future loan fundings and repayments : Expected credit losses are estimated over the contractual term of each loan, adjusted for expected repayments.
We estimate our CECL reserve primarily using the Weighted Average Remaining Maturity, or WARM method, which has been identified as an acceptable loss-rate method for estimating CECL reserves in the Financial Accounting Standards Board Staff Q&A Topic 326, No. 1.
We estimate our CECL reserves primarily using the Weighted-Average Remaining Maturity, or WARM method, which has been identified as an acceptable loss-rate method for estimating CECL reserves in the Financial Accounting Standards Board Staff Q&A Topic 326, No. 1.
This process requires significant judgments about future events that, while based on the information available to us as of the balance sheet date, are ultimately indeterminate and the actual economic condition impacting our portfolio could vary significantly from the estimates we made as of December 31, 2022. • Impairment: impairment is indicated when it is deemed probable that we will not be able to collect all amounts due to us pursuant to the contractual terms of the loan.
This process requires significant judgments about future events that, while based on the information available to us as of the balance sheet date, are ultimately indeterminate and the actual economic condition impacting our portfolio could vary significantly from the estimates we made as of December 31, 2023. • Impairment : impairment is indicated when it is deemed probable that we will not be able to collect all amounts due to us pursuant to the contractual terms of the loan.
I. Key Financial Measures and Indicators As a real estate finance company, we believe the key financial measures and indicators for our business are earnings per share, dividends declared, Distributable Earnings, and book value per share.
Key Financial Measures and Indicators As a real estate finance company, we believe the key financial measures and indicators for our business are earnings per share, dividends declared, Distributable Earnings, and book value per share.
Estimating the CECL reserve requires judgment, including the following assumptions: • Historical loan loss reference data: To estimate the historic loan losses relevant to our portfolio, we have augmented our historical loan performance with market loan loss data licensed from Trepp LLC. This database includes commercial mortgage-backed securities, or CMBS, issued since January 1, 1999 through November 30, 2022.
Estimating the CECL reserve requires judgment, including the following assumptions: • Historical loan loss reference data : To estimate the historic loan losses relevant to our portfolio, we have augmented our historical loan performance with market loan loss data licensed from Trepp LLC. This database includes commercial mortgage-backed securities, or CMBS, issued since January 1, 1999 through November 30, 2023.
Other than a few narrow exceptions, GAAP requires that all financial instruments subject to the CECL model have some amount of loss reserve to reflect the GAAP principle underlying the CECL model that all loans, debt securities, and similar assets have some inherent risk of loss, regardless of credit quality, subordinate capital, or other mitigating factors.
Other than a few narrow exceptions, GAAP requires that all financial instruments subject to the CECL model have some amount of loss reserve to reflect the principle underlying the CECL model that all loans and similar assets have some inherent risk of loss, regardless of credit quality, subordinate capital, or other mitigating factors.
The preparation of these financial statements requires our Manager to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Actual results could differ from these estimates. During 2022, our Manager reviewed and evaluated our critical accounting policies and believes them to be appropriate.
The preparation of these financial statements requires our Manager to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Actual results could differ from these estimates. During 2023, our Manager reviewed and evaluated our critical accounting policies and believes them to be appropriate.
As part of our quarterly review of our loan portfolio, we assess the expected repayment date of each loan, which is used to determine the contractual term for purposes of computing our CECL reserve. Additionally, the expected credit losses over the contractual period of our loans are subject to the obligation to extend credit through our unfunded loan commitments.
As part of our quarterly review of our loan portfolio, we assess the expected repayment date of each loan, which is used to determine the contractual term for purposes of computing our CECL reserves. Additionally, the expected credit losses over the contractual period of our loans are subject to the obligation to extend credit through our unfunded loan commitments.
This is generally at the time a loan is repaid, or in the case of foreclosure, when the underlying asset is sold, but non-recoverability may also be concluded if, in our determination, it is nearly certain that all amounts due will not be collected.
This is generally at the time a loan is repaid, or in the case of foreclosure, when the underlying asset is sold, but realization and non-recoverability may also be concluded if, in our determination, it is nearly certain that all amounts due will not be collected.
(4) Represents the weighted-average all-in cost as of December 31, 2022 and is not necessarily indicative of the spread applicable to recent or future borrowings. (5) Represents the principal balance of the collateral assets. (6) Represents the difference between the weighted-average all-in yield and weighted-average all-in cost.
(4) Represents the weighted-average all-in cost as of December 31, 2023 and is not necessarily indicative of the spread applicable to recent or future borrowings. (5) Represents the principal balance of the collateral assets. (6) Represents the difference between the weighted-average all-in yield and weighted-average all-in cost.
Refer to Note 15 to our consolidated financial statements for additional discussion of our income taxes. 81 Critical Accounting Policies Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with GAAP.
Refer to Note 15 to our consolidated financial statements for additional discussion of our income taxes. 84 Critical Accounting Policies Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with GAAP.
Future interest payment obligations are estimated assuming the interest rates in effect as of December 31, 2022 will remain constant into the future. This is only an estimate as actual amounts borrowed and interest rates will vary over time.
Future interest payment obligations are estimated assuming the interest rates in effect as of December 31, 2023 will remain constant into the future. This is only an estimate as actual amounts borrowed and interest rates will vary over time.
These assumptions vary from quarter to quarter as our loan portfolio changes and market and economic conditions evolve. The sensitivity of each assumption and its impact on the CECL reserve may change over time and from period to period.
These assumptions vary from quarter-to-quarter as our loan portfolio changes and market and economic conditions evolve. The sensitivity of each assumption and its impact on the CECL reserves may change over time and from period to period.
As of December 31, 2022 and 2021, we were in compliance with all REIT requirements. Furthermore, our taxable REIT subsidiaries are subject to federal, state, and local income tax on their net taxable income.
As of December 31, 2023 and 2022, we were in compliance with all REIT requirements. Furthermore, our taxable REIT subsidiaries are subject to federal, state, and local income tax on their net taxable income.
Refer to Note 13 to our consolidated financial statements for additional details. Liquidity Needs In addition to our loan origination and funding activity and general operating expenses, our primary liquidity needs include interest and principal payments under our $13.5 billion of outstanding borrowings under secured debt, our asset-specific debt, our Term Loans, our Senior Secured Notes, and our Convertible Notes.
Refer to Note 13 to our consolidated financial statements for additional details. Liquidity Needs In addition to our loan origination and funding activity and general operating expenses, our primary liquidity needs include interest and principal payments under our $12.7 billion of outstanding borrowings under secured debt, our asset-specific debt, our Term Loans, our Senior Secured Notes, and our Convertible Notes.
In limited instances, the maturity date of the respective debt agreement is used. (4) The Term Loans are partially amortizing, with an amount equal to 1.0% per annum of the initial principal balance due in quarterly installments. Refer to Note 9 for further details on our term loans.
In limited instances, the maturity date of the respective debt agreement is used. (4) The Term Loans are partially amortizing, with an amount equal to 1.0% per annum of the initial principal balance due in quarterly installments. Refer to Note 9 to our consolidated financial statements for further details on our Term Loans.
In addition to cash coupon, yield/cost includes the amortization of deferred origination fees and financing costs. (2) The weighted-average term is determined based on the maximum maturity of the corresponding loans, assuming all extension options are exercised by the borrower. Our asset-specific debt is term-matched in each case to the corresponding collateral loans.
In addition to cash coupon, yield/cost includes the amortization of deferred origination fees and financing costs. (3) The weighted-average term is determined based on the maximum maturity of the corresponding loans, assuming all extension options are exercised by the borrower. Our non-recourse, asset-specific debt is term-matched in each case to the corresponding collateral loans.
As discussed in Note 2 to our consolidated financial statements, we perform a quarterly review of our loan portfolio, assesses the performance of each loan, and assigns it a risk rating between “1” and “5,” from less risk to greater risk.
As discussed in Note 2 to our consolidated financial statements, we perform a quarterly review of our loan portfolio, assesses the performance of each loan, and assigns it a risk rating between “1” and “5”, from less risk to greater risk.
Revenue Recognition Interest income from our loans receivable portfolio and debt securities is recognized over the life of each investment using the effective interest method and is recorded on the accrual basis. Recognition of fees, premiums, and discounts associated with these investments is deferred and recorded over the term of the loan or debt security as an adjustment to yield.
Revenue Recognition Interest income from our loans receivable portfolio is recognized over the life of each investment using the effective interest method and is recorded on the accrual basis. Recognition of fees, premiums, and discounts associated with these investments is deferred and recorded over the term of the loan as an adjustment to yield.
These senior loans are capitalized by accessing a variety of financing options, including borrowing under our credit facilities, issuing CLOs or single-asset securitizations, and syndicating senior loan participations, depending on our view of the most prudent financing option available for each of our investments.
These senior loans are capitalized by accessing a variety of financing options, including borrowing under our credit facilities, issuing CLOs or single-asset securitizations, and corporate financing, depending on our view of the most prudent financing option available for each of our investments.
We may also incorporate information from other sources, including information and opinions available to our Manager, to further inform these estimations.
We generally also incorporate information from other sources, including information and opinions available to our Manager, to further inform these estimations.
We perform a quarterly risk review of our portfolio of loans, and assigns each loan a risk rating based on a variety of factors, including, without limitation, LTV, debt yield, property type, geographic and local market dynamics, physical condition, cash flow volatility, leasing and tenant profile, loan structure and exit plan, and project sponsorship. • Expectations of performance and market conditions: Our CECL reserve is adjusted to reflect our estimation of the current and future economic conditions that impact the performance of the commercial real estate assets securing our loans.
We perform a quarterly risk review of our portfolio of loans and assign each loan a risk rating based on a variety of factors, including, without limitation, origination LTV, debt yield, property type, geographic and local market dynamics, physical condition, cash flow volatility, leasing and tenant profile, loan structure and exit plan, and project sponsorship. • Expectations of performance and market conditions : Our CECL reserves are adjusted to reflect our estimation of the current and future economic conditions that impact the performance of the commercial real estate assets securing our loans.
Distributable Earnings mirrors the terms of our management agreement between our Manager and us, or our Management Agreement, for purposes of calculating our incentive fee expense. Our CECL reserve has been excluded from Distributable Earnings consistent with other unrealized gains (losses) pursuant to our existing policy for reporting Distributable Earnings.
Distributable Earnings mirrors the terms of our management agreement between our Manager and us, or our Management Agreement, for purposes of calculating our incentive fee expense. Our CECL reserves have been excluded from Distributable Earnings consistent with other unrealized gains (losses) pursuant to our existing policy for reporting Distributable Earnings.
These estimations include unemployment rates, interest rates, inflation, and other macroeconomic factors impacting the likelihood and magnitude of potential credit losses for our loans during their anticipated term.
These estimations include unemployment rates, interest rates, expectations of inflation and/or recession, and other macroeconomic factors impacting the likelihood and magnitude of potential credit losses for our loans during their anticipated term.
If a loan is determined to be impaired, we record the impairment as a component of our CECL reserve by applying the practical expedient for collateral 82 dependent loans.
If a loan is determined to be impaired, we record the impairment as a component of our CECL reserves by applying the practical expedient for collateral dependent loans.
We are also required to settle our foreign exchange derivatives with our derivative counterparties upon maturity which, depending on exchange rate movements, may result in cash received from or due to the respective counterparty. The table above does not include these amounts as they are not fixed and determinable.
We are also required to settle our foreign exchange and interest rate derivatives with our derivative counterparties upon maturity which, depending on foreign currency exchange and interest rate movements, may result in cash received from or due to such counterparties. The table above does not include these amounts as they are not fixed and determinable.
(7) Total does not include $2.7 billion of consolidated securitized debt obligations, $1.6 billion of non-consolidated senior interests, and $224.7 million of loan participations sold, as the satisfaction of these liabilities will not require cash outlays from us.
(7) Total does not include $2.5 billion of consolidated securitized debt obligations, $1.1 billion of non-consolidated senior interests, and $337.7 million of loan participations sold, as the satisfaction of these liabilities will not require cash outlays from us.
The Federal Reserve, in conjunction with the Alternative Reference Rates Committee, or ARRC, a steering committee composed of large U.S. financial institutions, identified SOFR, a new index calculated using short-term repurchase agreements backed by U.S. Treasury securities, as its preferred alternative rate for USD LIBOR.
The Federal Reserve, in conjunction with the Alternative Reference 62 Rates Committee, a steering committee composed of large U.S. financial institutions, identified SOFR, an index calculated using short-term repurchase agreements backed by U.S. Treasury securities, as its preferred alternative rate for USD LIBOR.
Other expenses increased by $30.9 million during the year ended December 31, 2022 compared to the year ended December 31, 2021 due to an increase of (i) $13.0 million of incentive fees payable to our Manager, primarily due to an increase in Distributable Earnings, (ii) $8.8 million of management fees payable to our Manager, primarily as a result of net proceeds received from the sale of shares of our class A common stock during 2022 and 2021, (iii) $7.3 million of general operating expenses, and (iv) $1.7 million of non-cash restricted stock amortization related to shares issued under our long-term incentive plans.
Other expenses increased by $30.9 million during the year ended December 31, 2022 compared to the year ended December 31, 2021 due to an increase of (i) $13.0 million of incentive fees payable to our Manager, primarily due to an increase in Distributable Earnings, (ii) $8.8 million of management fees payable to our Manager, primarily as a result of an increase in equity, (iii) $7.3 million of general operating expenses, and (iv) $1.7 million of non-cash restricted stock amortization related to shares issued under our long-term incentive plans.
The increase was primarily due to (i) an increase in USD LIBOR, SOFR, SONIA, and other floating rate indices during 2022 and (ii) an increase in the weighted-average principal balance of our loan portfolio by $5.7 billion for the year ended December 31, 2022, as compared to the year ended December 31, 2021.
The increase was primarily due to (i) an increase in floating rate indices during 2022 and (ii) an increase in the weighted-average principal balance of our loan portfolio by $5.7 billion for the year ended December 31, 2022, as compared to the year ended December 31, 2021.
We may also access liquidity through our dividend reinvestment plan and direct stock purchase plan, under which 9,981,548 shares of class A common stock were available for issuance as of December 31, 2022, and our at the market stock offering program, pursuant to which we may sell, from time to time, up to $480.9 million of additional shares of our class A common stock as of December 31, 2022.
We may also access liquidity through our dividend reinvestment plan and direct stock purchase plan, under which 9,974,961 shares of class A common stock were available for issuance as of December 31, 2023, and our at the market stock offering program, pursuant to which we may sell, from time to time, up to $480.9 million of additional shares of our class A common stock as of December 31, 2023.
(3) Represents, in each case at period end, (i) total outstanding secured debt, securitizations, asset-specific financings, term loans, senior secured notes, and convertible notes, less cash, to (ii) total equity.
(2) Represents, in each case at period end, (i) total outstanding secured debt, asset-specific debt, Term Loans, Senior Secured Notes, and convertible notes, less cash, to (ii) total equity. (3) Represents, in each case at period end, (i) total outstanding secured debt, asset-specific debt, Term Loans, Senior Secured Notes, and convertible notes, less cash, to (ii) Adjusted Equity.
As of December 31, 2022, we have $1.8 billion of liquidity that can be used to satisfy our short-term cash requirements and as working capital for our business.
As of December 31, 2023, we have $ 1.7 billion of liquidity that can be used to satisfy our short-term cash requirements and as working capital for our business.
Our $19.0 billion of asset-level financings includes $13.5 billion of secured debt, $2.7 billion of securitizations, and $2.8 billion of asset-specific financings, all of which are structured to produce term, currency, and index matched funding with no margin call provisions based upon capital markets events.
Our $16.2 billion of asset-level financings includes $12.7 billion of secured debt, $2.5 billion of securitizations, and $1.0 billion of asset-specific debt, all of which are structured to produce term, currency, and index matched funding with no margin call provisions based upon capital markets events.
As of December 31, 2022, substantially all of our investments by total loan exposure earned a floating rate of interest and were financed with liabilities that pay interest at floating rates, which resulted in an amount of net equity that is positively correlated to rising interest rates, subject to the impact of interest rate floors on certain of our floating rate investments.
As of December 31, 2023, 99% of our loans by total loan exposure earned a floating rate of interest and were financed with liabilities that pay interest at floating rates, which resulted in an amount of net equity that is positively correlated to rising interest rates, subject to the impact of interest rate floors on certain of our floating rate loans.
We have access to further liquidity through public offerings of debt and equity securities. To facilitate such offerings, in July 2022, we filed a shelf registration statement with the SEC that is effective for a term of three years and expires in July 2025.
We have access to further liquidity through public and private offerings of equity and debt securities, syndicated term loans, and similar transactions. To facilitate public offerings, in July 2022, we filed a shelf registration statement with the SEC that is effective for a term of three years and expires in July 2025.
In addition, our methodology for calculating Distributable Earnings may differ from the methodologies employed by other companies to calculate the same or similar supplemental performance measures, and accordingly, our reported Distributable Earnings may not be comparable to the Distributable Earnings reported by other companies.
In addition, our methodology for calculating Adjusted Equity may differ from methodologies employed by other companies to calculate the same or similar supplemental measures, and accordingly, our reported Adjusted Equity may not be comparable to the Adjusted Equity reported by other companies.
We expect to only recognize such potential credit losses in Distributable Earnings if and when such amounts are deemed nonrecoverable upon a realization event.
We expect to only recognize such potential credit losses in Distributable Earnings if and when such amounts are realized and deemed non-recoverable upon a realization event.
The following table details our securitized debt obligations and the underlying collateral assets that are financed ($ in thousands): December 31, 2022 Securitized Debt Obligations Count Principal Balance Book Value Wtd. Avg.
The following table details our securitized debt obligations and the underlying collateral assets that are financed by our CLOs ($ in thousands): December 31, 2023 Securitized Debt Obligations Count Principal Balance Book Value (1) Wtd. Avg.
In addition, for loans we originate, the related origination expenses are deferred and recognized as a component of interest income, however expenses related to loans we acquire are included in general and administrative expenses as incurred. 83 VI.
In addition, for loans we originate, the related origination expenses are deferred and recognized as a reduction to interest income, however expenses related to loans we acquire are included in general and administrative expenses as incurred. 86 VI.
The CECL reserve is assessed on an individual basis for these loans by comparing the estimated fair value of the underlying collateral, less costs to sell, to the book value of the respective loan.
The CECL reserves are assessed on an individual basis for these loans by comparing the 85 estimated fair value of the underlying collateral, less costs to sell, to the book value of the respective loan.
The considerations in estimating our CECL reserve for unfunded loan commitments are similar to those used for the related outstanding loan receivables. • Current credit quality of our portfolio: Our risk rating is our primary credit quality indicator in assessing our current expected credit loss reserve.
The considerations in estimating our CECL reserve for unfunded loan commitments are similar to those used for the related outstanding loans receivable. • Current credit quality of our portfolio : Our risk rating is our primary credit quality indicator in assessing our CECL reserves.
(5) The weighted-average cash coupon and all-in yield are expressed as a spread over the relevant floating benchmark rates, which include USD LIBOR, SOFR, SONIA, EURIBOR, and other indices as applicable to each loan.
(3) The weighted-average cash coupon and all-in yield are expressed as a spread over the relevant floating benchmark rates, which include SOFR, SONIA, EURIBOR, and other indices as applicable to each investment.
This was offset by an increase in the weighted-average principal balance of our outstanding financing arrangements by $1.9 billion for the year ended December 31, 2021, as compared to the year ended December 31, 2020. Other expenses Other expenses include management and incentive fees payable to our Manager and general and administrative expenses.
This was primarily offset by an increase in 77 the weighted-average principal balance of our outstanding financing arrangements by $5.0 billion for the year ended December 31, 2022, as compared to the year ended December 31, 2021. Other expenses Other expenses include management and incentive fees payable to our Manager and general and administrative expenses.
Risk Factors—Risks Related to Our Lending and Investment Activities—The transition away from reference rates and the use of alternative replacement reference rates may adversely affect net interest income related to our loans and investments or otherwise adversely affect our results of operations, cash flows and the market value of our investments.” of this Annual Report on Form 10-K. 2022 Highlights Operating results: • Net income of $248.6 million, or $1.46 per share, and Distributable Earnings of $489.8 million, or $2.87 per share, with dividends declared of $423.6 million, or $2.48 per share.
Risk Factors—Risks Related to Our Lending and Investment Activities—The transition away from reference rates and the use of alternative replacement reference rates may adversely affect net interest income related to our loans and investments or otherwise adversely affect our results of operations, cash flows and the market value of our investments.” of this Annual Report on Form 10-K. 2023 Highlights Operating results: • Net income of $246.6 million, or $1.43 per share, and Distributable Earnings of $526.3 million, or $3.05 per share, with dividends declared of $427.9 million, or $2.48 per share.
Acquisition Facility We have a $250.0 million full recourse secured credit facility that is designed to finance eligible first mortgage originations for up to nine months as a bridge to term financing without obtaining discretionary lender approval. The maturity date of the facility is April 4, 2023.
Acquisition Facility We have a $100.0 million full recourse secured credit facility that is designed to finance eligible first mortgage originations for up to nine months as a bridge to term financing without obtaining discretionary lender approval.
Liquidity and Capital Resources Capitalization We have capitalized our business to date primarily through the issuance and sale of shares of our class A common stock, corporate debt, and asset-level financings. As of December 31, 2022, our capitalization structure included $4.5 billion of common equity, $3.1 billion of corporate debt, and $19.0 billion of asset-level financings.
Liquidity and Capital Resources Capitalization We have capitalized our business to date primarily through the issuance and sale of shares of our class A common stock, corporate debt, and asset-level financings. As of December 31, 2023, our capitalization structure included $4.4 billion of common equity, $2.8 billion of corporate debt, and $16.2 billion of asset-level financings.
(2) Date loan was originated or acquired by us, and the LTV as of such date. Origination dates are subsequently updated to reflect material loan modifications. (3) Total loan amount reflects outstanding principal balance as well as any related unfunded loan commitment.
(2) Date loan was originated or acquired by us, and the LTV as of such date, excluding any junior participations sold. Origination dates are subsequently updated to reflect material loan modifications. (3) Total loan amount reflects outstanding principal balance as well as any related unfunded loan commitment. (4) Total loan exposure reflects our aggregate exposure to each loan investment.
During the year ended December 31, 2022, we recorded an aggregate $211.5 million increase in the CECL reserve related to our loans receivable, debt securities, and unfunded loan commitments, bringing our total reserve to $342.5 million as of December 31, 2022. See Notes 2 and 3 to our consolidated financial statements for further discussion of our CECL reserve.
During the year ended December 31, 2023, we recorded an aggregate $249.8 million increase in the CECL reserve related to our loans receivable and unfunded loan commitments, bringing our total reserve to $592.3 million as of December 31, 2023. See Notes 2 and 3 to our consolidated financial statements for further discussion of our CECL reserves.
Refer to Note 13 to our consolidated financial statements for the calculation of diluted net income per share. II. Loan Portfolio During the year ended December 31, 2022, we originated or acquired $7.1 billion of loans. Loan fundings during the year totaled $7.2 billion and loan repayments and sales during the year totaled $3.7 billion.
Refer to Note 13 to our consolidated financial statements for the calculation of diluted net income per share. II. Loan Portfolio During the year ended December 31, 2023, loan fundings totaled $1.6 billion and loan repayments and sales totaled $3.8 billion, for net repayments of $2.2 billion.
Our taxable income does not necessarily equal our net income as calculated in accordance with GAAP, or our Distributable Earnings as described above. 80 Cash Flows The following table provides a breakdown of the net change in our cash and cash equivalents ($ in thousands): For the years ended December 31, 2022 2021 2020 Cash flows provided by operating activities $ 396,825 $ 382,483 $ 336,607 Cash flows used in investing activities (3,253,535) (5,627,461) (88,251) Cash flows provided by (used in) financing activities 2,607,224 5,508,224 (110,769) Net (decrease) increase in cash and cash equivalents $ (249,486) $ 263,246 $ 137,587 We experienced a net decrease in cash and cash equivalents of $249.5 million for the year ended December 31, 2022, compared to a net increase of $263.2 million for the year ended December 31, 2021.
Our taxable income does not necessarily equal our net income as calculated in accordance with GAAP, or our Distributable Earnings as described above. 83 Cash Flows The following table provides a breakdown of the net change in our cash and cash equivalents ($ in thousands): For the years ended December 31, 2023 2022 2021 Cash flows provided by operating activities $ 458,841 $ 396,825 $ 382,483 Cash flows provided by (used in) investing activities 1,444,077 (3,253,535) (5,627,461) Cash flows (used in) provided by financing activities (1,847,943) 2,607,224 5,508,224 Net increase (decrease) in cash and cash equivalents $ 54,975 $ (249,486) $ 263,246 We experienced a net increase in cash and cash equivalents of $55.0 million for the year ended December 31, 2023, compared to a net decrease of $249.5 million for the year ended December 31, 2022.
We experienced a net increase in cash and cash equivalents of $263.2 million for the year ended December 31, 2021, compared to a net increase of $137.6 million for the year ended December 31, 2020.
We experienced a net decrease in cash and cash equivalents of $249.5 million for the year ended December 31, 2022, compared to a net increase of $263.2 million for the year ended December 31, 2021.
Our loan portfolio’s low weighted-average origination LTV of 63.9% as of December 31, 2022 reflects significant equity value that we expect our sponsors will be motivated to protect through periods of cyclical disruption.
Our loan portfolio’s low weighted-average origination LTV of 63.6%, excluding any junior participations sold, as of December 31, 2023 reflects significant equity value that we expect our 69 sponsors will be motivated to protect through periods of cyclical disruption.
Income from loans and other investments, net increased $82.3 million during the year ended December 31, 2021 compared to the year ended December 31, 2020.
Income from loans and other investments, net increased $113.6 million during the year ended December 31, 2022 compared to the year ended December 31, 2021.
Our $3.1 billion of corporate debt includes $2.2 billion of term loan borrowings, $400.0 million of senior secured notes, and $520.0 million of convertible notes.
Our $2.8 billion of corporate debt includes $2.1 billion of Term Loan borrowings, $366.1 million of Senior Secured Notes, and $300.0 million of Convertible Notes.
Changes in current expected credit loss reserve During the year ended December 31, 2022, we recorded a $211.5 million increase in the CECL reserve, as compared to a $39.9 million decrease during the year ended December 31, 2021.
Changes in current expected credit loss reserve During the year ended December 31, 2023, we recorded a $249.8 million increase in our CECL reserves, as compared to a $211.5 million increase during the year ended December 31, 2022.
These amounts were not included in GAAP net income, but rather as a component of Other Comprehensive Income in our consolidated financial statements. (4) The weighted-average shares outstanding, basic, exclude shares issuable from a potential conversion of our Convertible Notes.
(2) Represents realized losses on the repatriation of unhedged foreign currency. These amounts were not included in GAAP net (loss) income, but rather as a component of other comprehensive income in our consolidated financial statements. (3) The weighted-average shares outstanding, basic, exclude shares issuable from a potential conversion of our convertible notes then outstanding.
(3) As of December 31, 2022, the weighted-average index rate floor of our loan portfolio was 0.38%. Excluding 0.0% index rate floors and loans with no floor, the weighted-average index rate floor was 0.65%. As of December 31, 2021, the weighted-average index rate floor of our loan portfolio was 0.42%.
Excluding 0.0% index rate floors and loans with no floor, the weighted-average index rate floor was 1.02%. As of December 31, 2022, the weighted-average index rate floor of our total loan exposure was 0.38%.
Louis Multi $80,339 / unit 70 % 3 105 Senior Loan 3/31/2017 89 84 84 +4.30 % +4.54 % 4/9/2023 New York Office $403 / sqft 64 % 4 106 Senior Loan 4/1/2021 102 83 83 +3.30 % +3.74 % 4/9/2026 San Jose Office $558 / sqft 67 % 3 107 Senior Loan 7/30/2021 87 83 83 +2.50 % +2.84 % 8/9/2026 Los Angeles Multi $164,314 / unit 70 % 3 108 Senior Loan 7/29/2021 82 82 81 +2.65 % +3.02 % 6/9/2026 Charlotte Multi $222,630 / unit 78 % 3 109 Senior Loan 3/9/2022 92 80 80 +2.90 % +3.43 % 3/9/2025 Boston Office $211 / sqft 68 % 3 110 Senior Loan 6/14/2022 106 80 79 +2.95 % +3.30 % 7/9/2027 San Francisco Mixed-Use $166 / sqft 76 % 3 111 Senior Loan 12/15/2021 89 80 79 +5.25 % +6.19 % 12/15/2026 Melbourne - AU Multi $58,341 / unit 38 % 3 112 Senior Loan 6/27/2019 88 79 79 +2.75 % +3.04 % 7/9/2024 West Palm Beach Office $274 / sqft 70 % 2 113 Senior Loan 1/30/2020 104 79 79 +2.96 % +3.41 % 2/9/2026 Honolulu Hospitality $254,250 / key 63 % 3 114 Senior Loan 8/27/2021 79 77 77 +3.85 % +4.43 % 9/9/2026 Diversified - US Hospitality $114,079 / key 67 % 3 115 Senior Loan 11/23/2021 92 77 76 +2.75 % +3.08 % 12/9/2026 Los Angeles Industrial $219 / sqft 66 % 3 116 Senior Loan 12/23/2021 312 73 69 +4.25 % +5.37 % 6/24/2028 London - UK Multi $81,145 / unit 59 % 3 117 Senior Loan (4) 12/30/2021 228 73 14 +4.35 % +5.29 % 1/9/2028 Los Angeles Multi $209,770 / unit 50 % 3 118 Senior Loan 12/21/2021 74 72 71 +2.70 % +3.06 % 1/9/2027 Tampa Multi $210,663 / unit 77 % 2 119 Senior Loan 10/28/2021 69 69 69 +2.66 % +2.86 % 11/9/2026 Tacoma Multi $209,864 / unit 70 % 3 120 Senior Loan 1/26/2022 338 69 66 +4.10 % +4.56 % 2/9/2027 Seattle Office $145 / sqft 56 % 3 continued… 87 Loan Type (1) Origination Date (2) Total Loan (3)(4) Principal Balance (4) Net Book Value Cash Coupon (5) All-in Yield (5) Maximum Maturity (6) Location Property Type Loan Per SQFT / Unit / Key Origination LTV (2) Risk Rating 121 Senior Loan 8/17/2022 $ 76 $ 68 $ 67 +3.35 % +3.83 % 8/17/2027 Dublin - IE Industrial $107 / sqft 72 % 3 122 Senior Loan 9/22/2021 67 67 67 +3.00 % +3.16 % 4/1/2024 Jacksonville Multi $181,081 / unit 62 % 2 123 Senior Loan 3/24/2022 65 65 65 +3.50 % +3.59 % 4/1/2027 Fairfield Multi $406,250 / unit 70 % 3 124 Senior Loan 3/31/2022 70 64 63 +2.80 % +3.14 % 4/9/2027 Las Vegas Multi $139,394 / unit 71 % 3 125 Senior Loan 8/14/2019 70 62 62 +2.56 % +2.78 % 9/9/2024 Los Angeles Office $606 / sqft 57 % 3 126 Senior Loan 3/31/2021 62 62 62 +3.73 % +3.86 % 4/1/2024 Boston Multi $316,327 / unit 75 % 3 127 Senior Loan 7/30/2021 62 62 62 +2.86 % +3.06 % 8/9/2026 Salt Lake City Multi $224,185 / unit 73 % 3 128 Senior Loan 12/23/2021 61 61 61 +2.18 % +2.99 % 9/1/2023 New York Office $240 / sqft 71 % 3 129 Senior Loan 6/30/2021 65 59 59 +2.90 % +3.19 % 7/9/2026 Nashville Office $244 / sqft 71 % 3 130 Senior Loan 4/15/2021 66 59 59 +3.00 % +3.30 % 5/9/2026 Austin Office $286 / sqft 73 % 3 131 Senior Loan 12/17/2021 66 58 58 +4.35 % +4.83 % 1/9/2026 Diversified - US Other $4,404 / unit 37 % 1 132 Senior Loan 9/29/2021 62 58 58 +2.85 % +3.02 % 10/1/2025 Houston Multi $52,968 / unit 61 % 3 133 Senior Loan 12/17/2021 58 58 58 +2.65 % +2.85 % 1/9/2027 Phoenix Multi $209,601 / unit 69 % 3 134 Senior Loan 7/16/2021 58 58 58 +2.75 % +3.03 % 8/1/2025 Orlando Multi $195,750 / unit 74 % 2 135 Senior Loan 8/22/2019 57 57 56 +2.66 % +3.01 % 9/9/2024 Los Angeles Office $317 / sqft 63 % 3 136 Senior Loan 12/10/2020 61 56 56 +3.25 % +3.54 % 1/9/2026 Fort Lauderdale Office $193 / sqft 68 % 3 137 Senior Loan 12/22/2021 55 55 54 +2.82 % +2.96 % 1/1/2027 Los Angeles Multi $272,500 / unit 68 % 3 138 Senior Loan 6/28/2021 54 54 53 +3.60 % +4.86 % 2/15/2023 Diversified - Spain Hospitality $122,727 / key 56 % 3 139 Senior Loan 12/14/2018 60 53 53 +2.90 % +3.14 % 1/9/2024 Diversified - US Industrial $39 / sqft 57 % 1 140 Senior Loan 7/30/2021 59 53 52 +2.86 % +3.07 % 8/9/2026 Tampa Multi $129,859 / unit 71 % 2 141 Senior Loan 1/21/2022 68 52 52 +3.70 % +4.11 % 2/9/2027 Denver Office $308 / sqft 65 % 3 142 Senior Loan 8/16/2022 64 52 51 +4.75 % +5.35 % 8/16/2027 London - UK Hospitality $382,807 / key 64 % 3 143 Senior Loan 11/11/2021 54 51 51 +4.07 % +4.86 % 8/12/2026 London - UK Hospitality $183,403 / key 40 % 3 144 Senior Loan 12/9/2021 51 51 51 +2.75 % +2.89 % 1/1/2027 Portland Multi $241,825 / unit 65 % 3 145 Senior Loan 8/5/2021 57 51 51 +2.90 % +3.04 % 8/9/2026 Denver Office $193 / sqft 70 % 3 146 Senior Loan 2/17/2021 53 51 51 +3.55 % +3.75 % 3/9/2026 Miami Multi $290,985 / unit 64 % 2 147 Senior Loan 2/20/2019 49 49 49 +3.50 % +3.72 % 3/9/2024 Calgary - CAN Office $136 / sqft 52 % 2 148 Senior Loan 9/23/2021 49 49 49 +2.75 % +2.86 % 10/1/2026 Portland Multi $232,938 / unit 65 % 3 149 Senior Loan 11/30/2016 57 49 48 +3.18 % +3.40 % 12/9/2023 Chicago Retail $946 / sqft 54 % 4 150 Senior Loan 7/20/2021 48 48 47 +2.75 % +3.09 % 8/9/2026 Los Angeles Multi $366,412 / unit 60 % 3 continued… 88 Loan Type (1) Origination Date (2) Total Loan (3)(4) Principal Balance (4) Net Book Value Cash Coupon (5) All-in Yield (5) Maximum Maturity (6) Location Property Type Loan Per SQFT / Unit / Key Origination LTV (2) Risk Rating 151 - 203 Senior Loan (4) Various 2,099 1,719 1,668 +3.06 % +3.46 % 3.0 yrs Various Various Various 63 % 2.6 CECL reserve (326) Loans receivable, net $ 31,322 $ 26,810 $ 24,692 + 3.37 % + 3.76 % 3.1 yrs 64 % 2.8 (1) Senior loans include senior mortgages and similar credit quality loans, including related contiguous subordinate loans and pari passu participations in senior mortgage loans.
Louis Multi $80,339 / unit 70 % 3 101 Senior Loan 6/27/2019 88 85 85 +2.75 % +2.99 % 7/9/2024 West Palm Beach Office $294 / sqft 70 % 2 102 Senior Loan 6/14/2022 106 85 84 +2.95 % +3.30 % 7/9/2027 San Francisco Mixed-Use $175 / sqft 76 % 3 103 Senior Loan 3/9/2022 92 84 84 +2.90 % +3.43 % 3/9/2025 Boston Office $222 / sqft 68 % 4 104 Senior Loan 3/31/2017 84 84 84 +9.41 % +9.41 % 4/9/2024 New York Office $403 / sqft 64 % 5 105 Senior Loan 7/29/2021 82 82 81 +2.76 % +3.08 % 8/9/2026 Charlotte Multi $222,786 / unit 78 % 3 106 Senior Loan 8/27/2021 79 78 78 +4.10 % +4.35 % 9/9/2026 Diversified - US Hospitality $116,059 / key 67 % 3 107 Senior Loan 11/23/2021 92 77 77 +2.85 % +3.17 % 12/9/2026 Los Angeles Industrial $219 / sqft 66 % 3 108 Senior Loan (4) 12/30/2021 228 73 14 +4.00 % +5.07 % 1/9/2028 Los Angeles Multi $209,770 / unit 50 % 3 109 Senior Loan 12/21/2021 74 72 72 +2.70 % +3.06 % 1/9/2027 Tampa Multi $212,382 / unit 77 % 2 110 Senior Loan 8/14/2019 70 70 70 +2.56 % +2.80 % 9/9/2024 Los Angeles Office $684 / sqft 57 % 3 111 Senior Loan 8/17/2022 78 70 70 +3.35 % +3.83 % 8/17/2027 Dublin - IE Industrial $109 / sqft 72 % 3 112 Senior Loan 10/28/2021 69 69 69 +2.66 % +2.86 % 11/9/2026 Tacoma Multi $209,864 / unit 70 % 3 113 Senior Loan 8/16/2022 68 67 66 +4.75 % +5.19 % 8/16/2027 London - UK Hospitality $494,061 / key 64 % 3 114 Senior Loan 3/24/2022 65 65 65 +3.50 % +3.59 % 4/1/2027 Fairfield Multi $406,250 / unit 70 % 3 115 Senior Loan 7/30/2021 67 65 65 +2.61 % +2.87 % 8/9/2026 Los Angeles Multi $169,297 / unit 70 % 2 116 Senior Loan 3/31/2022 70 65 64 +2.80 % +3.14 % 4/9/2027 Las Vegas Multi $141,534 / unit 71 % 3 117 Senior Loan 12/17/2021 66 65 65 +4.35 % +4.42 % 1/9/2026 Diversified - US Other $4,886 / unit 37 % 1 118 Senior Loan 3/31/2021 62 62 62 +4.14 % +4.45 % 4/1/2024 Boston Multi $316,327 / unit 75 % 3 119 Senior Loan 7/30/2021 62 62 62 +2.86 % +3.06 % 8/9/2026 Salt Lake City Multi $224,185 / unit 73 % 3 120 Senior Loan 4/15/2021 66 61 61 +3.06 % +3.34 % 5/9/2026 Austin Office $296 / sqft 73 % 4 continued… 90 Loan Type (1) Origination Date (2) Total Loan (3)(4) Principal Balance (4) Net Book Value Cash Coupon (5) All-in Yield (5) Maximum Maturity (6) Location Property Type Loan Per SQFT / Unit / Key Origination LTV (2) Risk Rating 121 Senior Loan 6/30/2021 $ 65 $ 61 $ 61 +2.95 % +3.23 % 7/9/2026 Nashville Office $250 / sqft 71 % 3 122 Senior Loan (4) 3/23/2020 59 59 12 +3.82 % +4.60 % 4/9/2025 Nashville Office $90 / sqft 60 % 1 123 Senior Loan 12/17/2021 58 58 58 +2.65 % +2.85 % 1/9/2027 Phoenix Multi $209,601 / unit 69 % 3 124 Senior Loan 7/16/2021 58 58 58 +2.75 % +3.03 % 8/1/2025 Orlando Multi $195,750 / unit 74 % 2 125 Senior Loan 12/10/2020 61 56 56 +3.30 % +3.56 % 1/9/2026 Fort Lauderdale Office $195 / sqft 68 % 3 126 Senior Loan 11/11/2021 55 55 56 +6.07 % +6.81 % 8/12/2026 London - UK Hospitality $197,559 / key 40 % 3 127 Senior Loan 1/21/2022 68 55 55 +3.70 % +4.09 % 2/9/2027 Denver Office $327 / sqft 65 % 4 128 Senior Loan 12/22/2021 55 55 54 +2.82 % +2.96 % 1/1/2027 Los Angeles Multi $272,500 / unit 68 % 3 129 Senior Loan 8/22/2019 54 54 54 +2.66 % +2.89 % 9/9/2024 Los Angeles Office $310 / sqft 63 % 3 130 Senior Loan 12/14/2018 54 54 54 +3.01 % +3.27 % 1/9/2025 Diversified - US Industrial $40 / sqft 57 % 1 131 Senior Loan 8/5/2021 57 53 53 +2.96 % +3.24 % 8/9/2026 Denver Office $202 / sqft 70 % 3 132 Senior Loan 12/9/2021 51 51 51 +2.75 % +2.89 % 1/1/2027 Portland Multi $241,825 / unit 65 % 3 133 Senior Loan 2/17/2021 53 51 51 +3.66 % +3.86 % 3/9/2026 Miami Multi $290,985 / unit 64 % 2 134 Senior Loan 2/1/2022 80 51 50 +4.50 % +6.37 % 2/1/2027 Diversified - UK Life Sciences $391 / sqft 45 % 3 135 Senior Loan 7/28/2021 53 50 50 +2.75 % +3.07 % 8/9/2026 Los Angeles Multi $285,420 / unit 71 % 3 136 Senior Loan 9/23/2021 49 49 49 +2.75 % +2.86 % 10/1/2026 Portland Multi $232,938 / unit 65 % 3 137 Senior Loan 7/20/2021 48 48 48 +2.86 % +3.21 % 8/9/2026 Los Angeles Multi $366,412 / unit 60 % 3 138 Senior Loan 10/21/2022 48 48 48 +4.14 % +4.51 % 10/18/2027 Diversified - DEU Industrial $68 / sqft 74 % 3 139 Senior Loan 4/7/2022 57 48 47 +3.25 % +3.54 % 4/9/2027 Denver Office $140 / sqft 59 % 3 140 Senior Loan 12/29/2021 47 47 46 +2.85 % +2.96 % 1/1/2027 Dallas Multi $155,000 / unit 73 % 3 141 Senior Loan 11/30/2016 55 46 46 +3.33 % +3.40 % 12/9/2025 Chicago Retail $804 / sqft 54 % 4 142 Senior Loan 7/30/2021 45 45 45 +2.75 % +2.86 % 8/1/2026 Portland Multi $62,378 / unit 64 % 3 143 Senior Loan 12/8/2021 48 43 43 +2.75 % +2.96 % 12/9/2026 Columbus Multi $140,343 / unit 69 % 3 144 Senior Loan 7/29/2021 42 42 42 +2.86 % +3.06 % 8/9/2026 Las Vegas Multi $167,113 / unit 72 % 2 145 Senior Loan 3/11/2014 41 41 41 1.50 % 1.50 % 11/9/2028 New York Multi $464,425 / unit 65 % 5 146 Senior Loan 11/3/2021 41 41 41 +2.71 % +3.05 % 11/9/2026 Washington, DC Multi $137,788 / unit 68 % 2 147 Senior Loan 12/23/2021 42 41 41 +3.30 % +3.45 % 1/1/2027 Dallas Multi $110,522 / unit 65 % 3 148 Senior Loan 10/1/2019 38 38 38 +3.80 % +4.05 % 10/9/2025 Atlanta Hospitality $216,005 / key 74 % 3 149 Senior Loan 3/31/2022 42 37 37 +2.80 % +3.15 % 4/9/2027 Las Vegas Multi $148,187 / unit 72 % 3 150 Senior Loan 12/23/2021 36 36 36 +1.71 % +2.61 % 11/15/2025 New York Multi $176,496 / unit 68 % 2 continued… 91 Loan Type (1) Origination Date (2) Total Loan (3)(4) Principal Balance (4) Net Book Value Cash Coupon (5) All-in Yield (5) Maximum Maturity (6) Location Property Type Loan Per SQFT / Unit / Key Origination LTV (2) Risk Rating 151 - 178 Senior Loan Various 829 799 797 +3.11 % +3.57 % 1.9 yrs Various Various Various 62 % 2.2 CECL reserve (577) Loans receivable, net $ 27,783 $ 24,971 $ 23,210 +3.31 % +3.66 % 2.4 yrs 64 % 3.0 (1) Senior loans include senior mortgages and similar credit quality loans, including related contiguous subordinate loans and pari passu participations in senior mortgage loans.
(3) In addition to cash coupon, all-in yield includes the amortization of deferred origination and extension fees, loan origination costs, and purchase discounts, as well as the accrual of exit fees. Excludes loans accounted for under the cost-recovery method. (4) As of December 31, 2022, $10.4 billion and $8.0 billion of loans were indexed to USD LIBOR and SOFR, respectively.
(3) In addition to cash coupon, all-in yield includes the amortization of deferred origination and extension fees, loan origination costs, and purchase discounts, as well as the accrual of exit fees. Excludes loans accounted for under the cost-recovery method.
(2) Loan fundings during the three months and year ended December 31, 2022, include $90.5 million and $344.9 million, respectively, of additional fundings under related non-consolidated senior interests. (3) Loan repayments and sales during the year ended December 31, 2022 include $441.6 million of additional repayments or reduction of loan exposure under related non-consolidated senior interests.
(2) Loan fundings during the three months and year ended December 31, 2023, include $36.1 million and $294.1 million, respectively, of additional fundings under related non-consolidated senior interests. (3) Loan repayments and sales during the year ended December 31, 2023, include $795.8 million of additional repayments or reduction of loan exposure under related non-consolidated senior interests.
(2) Represents borrowings outstanding as of December 31, 2022 for new financings during the year ended December 31, 2022, based on the date collateral was initially pledged to each credit facility. (3) In addition to spread, the cost includes the associated deferred fees and expenses related to the respective borrowings.
(2) Represents borrowings outstanding as of December 31, 2023 for new financings closed during the year ended December 31, 2023. (3) In addition to spread, the cost includes the associated deferred fees and expenses related to the respective borrowings.
Although our business model is such that rising interest rates will, all else being equal, correlate to increases in our net income, increases in interest rates may adversely affect our existing borrowers. Additionally, rising rates and increasing costs may dampen consumer spending and slow corporate profit growth, which may negatively impact the collateral underlying certain of our loans.
Although our business model is such that higher interest rates will, all else equal, correlate to higher net income, interest rates remaining elevated for an extended period of time may adversely affect our existing borrowers and lead to non-performance, as higher costs may dampen consumer spending and slow corporate profit growth, which may negatively impact the collateral underlying certain of our loans.
During the year ended December 31, 2022, we recorded an increase of $201.5 million in the CECL reserve against our loans receivable portfolio, bringing our total loans receivable CECL reserve to $326.1 million as of December 31, 2022.
During the year ended December 31, 2023, we recorded an aggregate increase of $250.8 million in the CECL reserve against our loans receivable portfolio, bringing our total loans receivable CECL reserve to $576.9 million as of December 31, 2023.
For the three months ended December 31, 2022, we recorded a net loss per share of $0.28, declared a dividend of $0.62 per share, and reported $0.87 per share of Distributable Earnings. In addition, our book value as of December 31, 2022 was $26.26 per share, which is net of a $1.99 per share cumulative CECL reserve.
For the three months ended December 31, 2023, we recorded a basic net loss per share of $0.01, declared a dividend of $0.62 per share, and reported $0.69 per share of Distributable Earnings. In addition, our book value as of December 31, 2023 was $25.16 per share, which is net of cumulative CECL reserves of $3.41 per share.
Changes in current expected credit loss reserve During the three months ended December 31, 2022, we recorded a $188.8 million increase in the CECL reserve, as compared to a $12.2 million increase during the three months ended September 30, 2022.
Changes in current expected credit loss reserve During the three months ended December 31, 2023, we recorded a $115.3 million increase in our CECL reserves, as compared to a $96.9 million increase during the three months ended September 30, 2023.
Repayments of securitized debt obligations are tied to timing of the related collateral loan asset repayments. The term of these obligations represents the rated final distribution date of the securitizations. (4) During the year ended December 31, 2022, we recorded $87.6 million of interest expense related to our securitized debt obligations.
The term of these obligations represents the rated final distribution date of the securitizations. (5) During the year ended December 31, 2023, we recorded $171.4 million of interest expense related to our securitized debt obligations.
Other expenses increased by $9.5 million during the three months ended December 31, 2022 compared to the three months ended September 30, 2022 primarily due to an increase of (i) $7.8 million of incentive fees payable to our Manager, primarily due to an increase in Distributable Earnings, and (ii) $1.7 million of general operating expenses.
Other expenses increased by $7.7 million during the year ended December 31, 2023 compared to the year ended December 31, 2022 due to an increase of (i) $6.9 million of incentive fees payable to our Manager, due to an increase in Distributable Earnings, (ii) $1.9 million of management fees payable to our Manager, primarily as a result of an increase in equity, and (iii) $1.7 million of other operating expenses.
The following is a summary of our significant accounting policies that we believe are the most affected by our Manager’s judgments, estimates, and assumptions: Current Expected Credit Losses The current expected credit loss, or CECL, reserve required under Accounting Standard Update, or ASU, 2016-13 “Financial Instruments – Credit Losses – Measurement of Credit Losses on Financial Instruments (Topic 326),” or ASU 2016-13, reflects our current estimate of potential credit losses related to our loans and debt securities included in our consolidated balance sheets.
The following is a summary of our significant accounting policies that we believe are the most affected by our Manager’s judgments, estimates, and assumptions: Current Expected Credit Losses The current expected credit loss, or CECL, reserve required under the FASB Accounting Standards Codification, or ASC, Topic 326 “Financial Instruments – Credit Losses,” or ASC 326, reflects our current estimate of potential credit losses related to our loans receivable portfolio.
We generally must distribute annually at least 90% of our net taxable income, subject to certain adjustments and excluding any net capital gain, in order for U.S. federal income tax not to apply to our earnings.
Other Items Income Taxes We have elected to be taxed as a REIT under the Internal Revenue Code for U.S. federal income tax purposes. We generally must distribute annually at least 90% of our net taxable income, subject to certain adjustments and excluding any net capital gain, in order for U.S. federal income tax not to apply to our earnings.
Dividends per share During the year ended December 31, 2022, we declared aggregate dividends of $2.48 per share, or $423.6 million. During 2021, we declared aggregate dividends of $2.48 per share, or $383.9 million.
During 2022, we declared aggregate dividends of $2.48 per share, or $423.6 million.
The realized loss amount reflected in Distributable Earnings will equal the difference between the cash received, or expected to be received, and the book value of the asset, and is reflective of our economic experience as it relates to the ultimate realization of the loan. 61 We believe that Distributable Earnings provides meaningful information to consider in addition to our net income (loss) and cash flow from operating activities determined in accordance with GAAP.
The realized loss amount reflected in Distributable Earnings will equal the difference between the cash received, or expected to be received, and the book value of the asset, and is reflective of our economic experience as it relates to the ultimate realization of the loan.
Our Results of Operations Operating Results The following table sets forth information regarding our consolidated results of operations for the years ended December 31, 2022, 2021 and 2020 ($ in thousands, except per share data): Year Ended December 31, 2022 vs 2021 Year Ended December 31, 2021 vs 2020 2022 2021 $ 2021 2020 $ Income from loans and other investments Interest and related income $ 1,338,954 $ 854,690 $ 484,264 $ 854,690 $ 779,648 $ 75,042 Less: Interest and related expenses 710,904 340,223 370,681 340,223 347,471 (7,248) Income from loans and other investments, net 628,050 514,467 113,583 514,467 432,177 82,290 Other expenses Management and incentive fees 110,292 88,467 21,825 88,467 77,916 10,551 General and administrative expenses 52,193 43,168 9,025 43,168 45,871 (2,703) Total other expenses 162,485 131,635 30,850 131,635 123,787 7,848 (Increase) decrease in current expected credit loss reserve (211,505) 39,864 (251,369) 39,864 (167,653) 207,517 Income before income taxes 254,060 422,696 (168,636) 422,696 140,737 281,959 Income tax provision 3,003 423 2,580 423 323 100 Net income 251,057 422,273 (171,216) 422,273 140,414 281,859 Net income attributable to non-controlling interests (2,415) (3,080) 665 (3,080) (2,744) (336) Net income attributable to Blackstone Mortgage Trust, Inc. $ 248,642 $ 419,193 $ (170,551) $ 419,193 $ 137,670 $ 281,523 Net income per share of common stock basic and diluted $ 1.46 $ 2.77 $ (1.31) $ 2.77 $ 0.97 $ 1.80 Weighted-average shares of common stock outstanding, basic and diluted 170,631,410 151,521,941 19,109,469 151,521,941 141,795,977 9,725,964 Dividends declared per share $ 2.48 $ 2.48 $ — $ 2.48 $ 2.48 $ — Income from loans and other investments, net Income from loans and other investments, net increased $113.6 million during the year ended December 31, 2022 compared to the year ended December 31, 2021.
Our Results of Operations Operating Results The following table sets forth information regarding our consolidated results of operations for the years ended December 31, 2023, 2022 and 2021 ($ in thousands, except per share data): Year Ended December 31, 2023 vs 2022 Year Ended December 31, 2022 vs 2021 2023 2022 $ 2022 2021 $ Income from loans and other investments Interest and related income $ 2,037,621 $ 1,338,954 $ 698,667 $ 1,338,954 $ 854,690 $ 484,264 Less: Interest and related expenses 1,366,956 710,904 656,052 710,904 340,223 370,681 Income from loans and other investments, net 670,665 628,050 42,615 628,050 514,467 113,583 Other expenses Management and incentive fees 119,089 110,292 8,797 110,292 88,467 21,825 General and administrative expenses 51,143 52,193 (1,050) 52,193 43,168 9,025 Total other expenses 170,232 162,485 7,747 162,485 131,635 30,850 (Increase) decrease in current expected credit loss reserve (249,790) (211,505) (38,285) (211,505) 39,864 (251,369) Gain on extinguishment of debt 4,616 — 4,616 — — — Income before income taxes 255,259 254,060 1,199 254,060 422,696 (168,636) Income tax provision 5,362 3,003 2,359 3,003 423 2,580 Net income 249,897 251,057 (1,160) 251,057 422,273 (171,216) Net income attributable to non-controlling interests (3,342) (2,415) (927) (2,415) (3,080) 665 Net income attributable to Blackstone Mortgage Trust, Inc. $ 246,555 $ 248,642 $ (2,087) $ 248,642 $ 419,193 $ (170,551) Net income per share of common stock basic and diluted $ 1.43 $ 1.46 $ (0.03) $ 1.46 $ 2.77 $ (1.31) Weighted-average shares of common stock outstanding basic and diluted 172,672,038 170,631,410 2,040,628 170,631,410 151,521,941 19,109,469 Dividends declared per share $ 2.48 $ 2.48 $ — $ 2.48 $ 2.48 $ — Income from loans and other investments, net Income from loans and other investments, net increased $42.6 million during the year ended December 31, 2023 compared to the year ended December 31, 2022.
Interest received is then recorded as a reduction in the outstanding principal balance until accrual is resumed when the loan becomes contractually current and performance is demonstrated to be resumed.
Interest received is then recorded as income or as a reduction in the amortized cost basis, based on the specific facts and circumstances, until accrual is resumed when the loan becomes contractually current and performance is demonstrated to be resumed.
As of December 31, 2022, we had unfunded commitments of $3.8 billion related to 121 loans receivable and $2.4 billion of committed or identified financing for those commitments resulting in net unfunded commitments of $1.4 billion.
As of December 31, 2023, we had unfunded commitments of $2.4 billion related to 99 loans receivable and $1.3 billion of committed or identified financing for those commitments resulting in net unfunded commitments of $1.2 billion. The unfunded loan commitments comprise funding for capital expenditures and construction, leasing costs, and interest and carry costs.
As of December 31, 2022, substantially all of our loans by total loan exposure earned a floating rate of interest, primarily indexed to USD LIBOR and SOFR. In addition to cash coupon, all-in yield includes the amortization of deferred origination and extension fees, loan origination costs, and purchase discounts, as well as the accrual of exit fees.
The remaining 1% of our loans by total loan exposure earned a fixed rate of interest. In addition to cash coupon, all-in yield includes the amortization of deferred origination and extension fees, loan origination costs, and purchase discounts, as well as the accrual of exit fees. Excludes loans accounted for under the cost-recovery method.
Our portfolio is composed primarily of loans secured by high-quality, institutional assets in major markets, sponsored by experienced, well-capitalized real estate investment owners and operators.
Introduction Blackstone Mortgage Trust is a real estate finance company that originates senior loans collateralized by commercial real estate in North America, Europe, and Australia. Our portfolio is composed primarily of loans secured by high-quality, institutional assets in major markets, sponsored by experienced, well-capitalized real estate investment owners and operators.
As of December 31, 2022, the income accrual was suspended on these four loans as recovery of income and principal was doubtful. During the three months ended December 31, 2022, we recorded $11.3 million of interest income on these loans.
The increase was primarily driven by three additional loans that were impaired during the three months ended December 31, 2023. As of December 31, 2023, the income accrual was suspended on these loans as recovery of income and principal was doubtful. During the three months ended December 31, 2023, we recorded $5.9 million of interest income on these three loans.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe year ended December 31, 2022 has been characterized by steep declines and significant volatility in global markets, driven by investor concerns over inflation, rising interest rates, slowing economic growth and geopolitical uncertainty. Inflation across many key economies reached generational highs, prompting central banks to take monetary policy tightening actions that are likely to create headwinds to economic growth.
Biggest changeThe year ended December 31, 2023 has been characterized by continued volatility in global markets, driven by investor concerns over inflation, rising interest rates, slowing economic growth, political and regulatory uncertainty and geopolitical conditions. Events affecting financial institutions during the year also contributed to volatility in global markets and diminished liquidity and credit availability.
We seek to manage this risk through a comprehensive credit analysis prior to making a loan and active monitoring of the asset portfolios that serve as our collateral, as further discussed above. 91 Currency Risk Our loans that are denominated in a foreign currency are also subject to risks related to fluctuations in currency rates.
We seek to manage this risk through a comprehensive credit analysis prior to making a loan and active monitoring of the asset portfolios that serve as our collateral, as further discussed above. Currency Risk Our loans that are denominated in a foreign currency are also subject to risks related to fluctuations in currency rates.
As a REIT, we are required to distribute a significant portion of our taxable income annually, which constrains our ability to accumulate operating cash flow and therefore requires us to utilize debt or equity capital to finance our business.
As a REIT, we are required to distribute a significant portion of our taxable income annually, which constrains our ability to 94 accumulate operating cash flow and therefore requires us to utilize debt or equity capital to finance our business.
In addition, substantially all of our net asset exposure to foreign currencies has been hedged with foreign currency forward contracts as of December 31, 2022.
In addition, substantially all of our net asset exposure to foreign currencies has been hedged with foreign currency forward contracts as of December 31, 2023.
As of December 31, 2022, substantially all of our investments by total loan exposure earned a floating rate of interest and were financed with liabilities that pay interest at floating rates, which resulted in an amount of net equity that is positively correlated to rising interest rates, subject to the impact of interest rate floors on certain of our floating rate loans.
As of December 31, 2023, 99% of our loans by total loan exposure earned a floating rate of interest and were financed with liabilities that pay interest at floating rates, which resulted in an amount of net equity that is positively correlated to rising interest rates, subject to the impact of interest rate floors on certain of our floating rate loans.
The following tables outline our assets and liabilities that are denominated in a foreign currency (amounts in thousands): December 31, 2022 EUR GBP All Other (2) Foreign currency assets € 2,825,694 £ 2,827,531 $ 2,138,380 Foreign currency liabilities (2,080,867) (2,120,269) (1,614,464) Foreign currency contracts – notional (722,311) (690,912) (515,512) Net exposure to exchange rate fluctuations € 22,516 £ 16,350 $ 8,404 Net exposure to exchange rate fluctuations in USD (1) $ 24,102 $ 19,756 $ 8,404 (1) Represents the U.S.
December 31, 2022 EUR GBP All Other (2) Foreign currency assets € 2,825,694 £ 2,827,531 $ 2,138,380 Foreign currency liabilities (2,080,867) (2,120,269) (1,614,464) Foreign currency contracts – notional (722,311) (690,912) (515,512) Net exposure to exchange rate fluctuations € 22,516 £ 16,350 $ 8,404 Net exposure to exchange rate fluctuations in USD (1) $ 24,102 $ 19,756 $ 8,404 (1) Represents the U.S.
This risk is partially mitigated by our consideration of rising rate stress-testing during our underwriting process, which generally includes a requirement for our borrower to purchase an interest rate cap contract with an unaffiliated third-party, provide an interest reserve deposit, and/or provide other structural guarantees. Credit Risks Our loans are also subject to credit risk.
This risk is partially mitigated by our consideration of rising rate 93 stress-testing during our underwriting process, which generally includes a requirement for our borrower to purchase an interest rate cap contract with an unaffiliated third party, provide an interest reserve deposit, and/or provide interest or other structural protections.
Investment Portfolio Value As of December 31, 2022, substantially all of our portfolio earned a floating rate of interest, and so the value of our investments is generally not impacted by changes in market interest rates.
Investment Portfolio Value As of December 31, 2023, 99% of our portfolio earned a floating rate of interest, so the value of such investments is generally not impacted by changes in market interest rates.
Our loan portfolio’s low origination weighted-average LTV of 63.9% as of December 31, 2022 reflects significant equity value that we expect our sponsors will be motivated to protect through periods of cyclical disruption.
Our loan portfolio’s low weighted-average origination LTV of 63.6%, excluding any junior participations sold, as of December 31, 2023 reflects significant equity value that we expect our sponsors will be motivated to protect through periods of cyclical disruption.
Dollar equivalent as of December 31, 2021. (4) Includes Swedish Krona, Australian Dollar, Canadian Dollar, and Swiss Franc currencies.
Dollar equivalent as of December 31, 2023. (2) Includes Swedish Krona, Australian Dollar, Canadian Dollar, Swiss Franc, and Danish Krone currencies.
Although our business model is such that rising interest rates will, all else being equal, correlate to increases in our net income, increases in interest rates may adversely affect our existing borrowers Additionally, rising rates and increasing costs may dampen consumer spending and slow corporate profit growth, which may negatively impact the collateral underlying certain of our loans.
Although our business model is such that higher interest rates will, all else equal, correlate to higher net income, interest rates remaining elevated for an extended period of time may adversely affect our existing borrowers and lead to non-performance, as higher costs may dampen consumer spending and slow corporate profit growth, which may negatively impact the collateral underlying certain of our loans.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Interest Rate Risk Investment Portfolio Net Interest Income Generally, our business model is such that rising interest rates will increase our net income, while declining interest rates will decrease net income.
Investment Portfolio Net Interest Income Generally, our business model is such that rising interest rates will increase our net income, while declining interest rates will decrease net income.
(2) Increases (decreases) in interest income and expense are presented net of incentive fees. Refer to Note 14 to our consolidated financial statements for additional details of our incentive fee calculation. (3) Includes amounts outstanding under secured debt, securitizations, asset-specific financings, and term loans.
(2) Increases (decreases) in interest income and expense are presented net of incentive fees. Refer to Note 14 to our consolidated financial statements for additional details of our incentive fee calculation. (3) Excludes income from loans accounted for under the cost-recovery method.
We believe that we will benefit from these relationships and from our long-standing core business model of originating senior loans collateralized by large assets in major markets with experienced, well-capitalized institutional sponsors.
We maintain a robust asset management relationship with our borrowers and utilize these relationships to maximize the performance of our portfolio, including during periods of volatility. We believe that we benefit from these relationships and from our long-standing core business model of originating senior loans collateralized by large assets in major markets with experienced, well-capitalized institutional sponsors.
The following table projects the earnings impact on our interest income and expense, net of incentive fees, for the twelve-month period following December 31, 2022 , of an increase in the various floating-rate indices referenced by our portfolio, assuming no change in credit spreads, portfolio composition, or asset performance, relative to the average indices during the year ended December 31, 2022 ($ in thousands): Assets (Liabilities) Sensitive to Changes in Interest Rates (1) Interest Rate Sensitivity as of December 31, 2022 (2) Increase in Rates Decrease in Rates 50 Basis Points 100 Basis Points 50 Basis Points 100 Basis Points Floating rate assets $ 26,772,122 $ 103,521 $ 207,042 $ (102,042) $ (203,889) Floating rate liabilities (3) (21,205,467) (84,822) (169,644) 84,342 168,644 Net exposure $ 5,566,655 $ 18,699 $ 37,398 $ (17,700) $ (35,245) (1) Reflects the USD equivalent value of floating rate assets and liabilities denominated in foreign currencies.
The following table projects the earnings impact on our interest income and expense, net of incentive fees, for the twelve-month period following December 31, 2023 , of an increase in the various floating-rate indices referenced by our portfolio, assuming no change in credit spreads, portfolio composition, or asset performance, relative to the average indices during the three months ended December 31, 2023 ($ in thousands): Assets (Liabilities) Sensitive to Changes in Interest Rates (1) Interest Rate Sensitivity as of December 31, 2023 (2)(3) Increase in Rates Decrease in Rates 50 Basis Points 100 Basis Points 50 Basis Points 100 Basis Points Floating rate assets (4)(5)(6)(7) $ 21,654,625 $ 86,619 $ 173,237 $ (86,619) $ (173,237) Floating rate liabilities (6)(8) (18,343,890) (73,576) (147,151) 73,576 147,151 Net exposure $ 3,310,735 $ 13,043 $ 26,086 $ (13,043) $ (26,086) (1) Reflects the USD equivalent value of floating rate assets and liabilities denominated in foreign currencies.
Blackstone has built the world's preeminent global real estate business, with a proven track record of successfully navigating market cycles and emerging stronger through periods of volatility.
Our portfolio monitoring and asset management operations benefit from the deep knowledge, experience, and information advantages derived from our position as part of Blackstone’s real estate platform. Blackstone has built the world's preeminent global real estate business, with a proven track record of successfully navigating market cycles and emerging stronger through periods of volatility.
While we believe the principal amounts of our loans are generally adequately protected by underlying collateral value, there is a risk that we will not realize the entire principal value of certain loans. Our portfolio monitoring and asset management operations benefit from the deep knowledge, experience, and information advantages derived from our position as part of Blackstone’s real estate platform.
While we believe the principal amounts of our loans are generally adequately protected by underlying collateral value, there is a risk that we will not realize the entire principal value of certain loans.
To monitor this risk, our asset management team reviews our loan portfolios and, in certain instances, is in regular contact with our borrowers, monitoring performance of the collateral and enforcing our rights as necessary. 90 In addition, we are exposed to the risks generally associated with the commercial real estate market, including variances in occupancy rates, capitalization rates, absorption rates, and other macroeconomic factors beyond our control.
To monitor this risk, our asset management team reviews our loan portfolios and, in certain instances, is in regular contact with our borrowers, monitoring performance of the collateral and enforcing our rights as necessary.
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We seek to manage these risks through our underwriting and asset management processes. We maintain a robust asset management relationship with our borrowers and utilize these relationships to maximize the performance of our portfolio, including during periods of volatility.
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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Interest Rate Risk For information on financial reference rate reforms, refer to “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Reference Rate Reform” of this report and “Part I. Item 1A.
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The ongoing war between Russia and Ukraine is also contributing to economic and geopolitical uncertainty. Inflation continues to rise and has caused the Federal Reserve to raise interest rates with indications of future increases, which has created further uncertainty for the economy and for our borrowers.
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(4) Includes an interest rate swap we entered into with a notional amount of $229.9 million that effectively converts certain of our fixed rate loan exposure to floating rate exposure. (5) Excludes $1.6 billion of floating rate loans accounted for under the cost-recovery method.
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While there is debate among economists as to whether such factors, coupled with recent periods of economic contraction in the U.S. indicate that the U.S. has entered, or in the near term will enter, a recession, it remains difficult to predict the full impact of recent changes and any future changes in interest rates or inflation.
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(6) Excludes $1.1 billion of non-consolidated senior interests and $337.7 million of loan participations sold, as of December 31, 2023. Our non-consolidated senior interests and loan participations sold are structurally non-recourse and term-matched to the corresponding loans, and have no impact on our net floating rate exposure.
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December 31, 2021 EUR GBP All Other (4) Foreign currency assets (1)(2) € 2,845,833 £ 1,789,220 $ 1,168,242 Foreign currency liabilities (1) (2,097,126) (1,293,241) (890,386) Foreign currency contracts – notional (731,182) (489,204) (270,555) Net exposure to exchange rate fluctuations € 17,525 £ 6,775 $ 7,301 Net exposure to exchange rate fluctuations in USD (3) $ 19,926 $ 9,168 $ 7,301 (1) Balances include non-consolidated senior interests of £196.8 million.
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(7) Our loan agreements generally require our borrowers to purchase interest rate caps, which mitigates our borrowers’ exposure to an increase in interest rates. (8) Includes amounts outstanding under secured debt, securitizations, asset-specific debt, and Term Loans.
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(2) British Pound Sterling balance includes a loan denominated in Euro, with an outstanding principal balance of £8.3 million as of December 31, 2021, that is hedged to British Pound Sterling exposure through a foreign currency forward contract. Refer to Note 11 to our consolidated financial statements for additional discussion of our foreign currency derivatives. (3) Represents the U.S.
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As of December 31, 2023, the remaining 1% of our portfolio earned a fixed rate of interest and as such, the values of such loans are sensitive to changes in interest rates.
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As of December 31, 2023, 97% of our performing loans have interest rate caps with a weighted-average strike price of 3.3% or interest guarantees.
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During the year ended December 31, 2023, interest rate caps on $14.7 billion of loans, with a 3.1% weighted-average strike price, expired and 93% were replaced with new interest rate caps, with a weighted-average strike price of 3.7%, or interest guarantees. Credit Risks Our loans are also subject to credit risk, including the risk of default.
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In addition, we are exposed to the risks generally associated with the commercial real estate market, including changes in occupancy rates, capitalization rates, absorption rates, and other macroeconomic factors beyond our control. We seek to manage these risks through our underwriting and asset management processes.
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As of December 31, 2023, we had an aggregate $417.7 million asset-specific CECL reserve related to 13 of our loans receivable, with an aggregate amortized cost basis of $1.9 billion, net of cost-recovery proceeds. This CECL reserve was recorded based on our estimation of the fair value of each of the loan’s underlying collateral as of December 31, 2023.
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During 2023, inflation began to moderate as a result of the monetary policy tightening actions taken by central banks, including raising interest rates. While it is anticipated that central banks may begin to lower interest rates in 2024, interest rates may remain at or near recent highs, which creates further uncertainty for the economy and for our borrowers.
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Additionally, higher interest rates could adversely affect commercial real estate property values. It remains difficult to predict the full impact of recent events and any future changes in interest rates or inflation.
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The following table outlines our assets and liabilities that are denominated in a foreign currency (amounts in thousands): December 31, 2023 GBP EUR All Other (2) Foreign currency assets £ 2,790,247 € 2,569,672 $ 2,124,007 Foreign currency liabilities (2,084,493) (1,887,172) (1,659,790) Foreign currency contracts – notional (696,919) (673,644) (457,035) Net exposure to exchange rate fluctuations £ 8,835 € 8,856 $ 7,182 Net exposure to exchange rate fluctuations in USD (1) $ 11,249 $ 9,776 $ 7,182 (1) Represents the U.S.

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