Blackstone Mortgage Trust reported a net loss of $81.2 million for the second quarter of 2026, yet executives said the REIT remains focused on reshaping its loan portfolio.
Quarterly results show loss but earnings beat expectations
The publicly traded mortgage REIT posted a loss of 48 cents per share, while distributable earnings were 48 cents per share, surpassing analyst forecasts of 38 cents. Total net revenue slipped slightly to $158.1 million from $159.4 million in the prior quarter, though it was higher than the $133.6 million recorded a year earlier.
Chief financial officer Marcin Urbaszek told investors that the short‑term dip stemmed from several loan impairments, including the resolution of a $29 million multifamily loan in Dallas. “It’s hard given all the moving pieces right now, and it’s still early in the quarter,” he said, adding that repayment volume also weighed on earnings.
Urbaszek cautioned that the impact could linger into the third quarter, noting that the REIT will need a few quarters to redeploy the cash it is receiving back.
Strategic shift toward portfolio diversification
CEO Tim Johnson said the firm is looking to “take advantage of what we think is a reasonably liquid market to sell loans,” citing the pending sale of a Hyatt hotel in San Francisco and a significant portion of its office‑loan portfolio. The move aligns with a broader strategy to diversify the $20 billion total investment portfolio, including the $17 billion loan segment.
Johnson emphasized that the loan‑sale process is “at an early stage and underway” and that the REIT is not obligated to sell any particular assets. “It’s really about rotating our portfolio into the sectors where we see the best fundamentals, the best risk‑adjusted return, and the best relative value,” he explained.
The company aims to cut its office‑loan exposure by about 40 percent by year‑end, using a mix of loan sales and repayments. During the quarter, BXMT closed $1.4 billion in investments and originated $1.1 billion in new loans, primarily secured by residential and industrial properties. Roughly 80 percent of lending activity took place in the United States, with the remainder focused on Europe.
For borrowers, this shift could mean more flexibility in obtaining financing for non‑office assets, as the REIT reallocates capital toward sectors it deems more resilient.
Looking ahead, Johnson said BXMT is “well positioned to drive its strategic initiatives forward and capture attractive opportunities in the market today,” while maintaining a “well‑structured balance sheet.” The firm’s ability to execute loan sales and manage repayments will be key to achieving its diversification goals.
