What changed in this filing

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Item 1. Financial Statements

2023-10-25 compared with 2023-07-26 · 289 added, 225 removed, 1242 unchanged (29% of the section changed)

3 unchanged sentences

(in thousands, except share data)

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Cash and cash equivalents $ 421,495 $ 291,340

15 unchanged sentences

Commitments and contingencies — —

Class A common stock, $ 0.01 par value, 400,000,000 shares authorized, 172,310,062 and 171,695,985 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively

Class A common stock, $ 0.01 par value, 400,000,000 shares authorized, 172,296,051 and 171,695,985 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively

Additional paid-in capital 5,499,491 5,475,804

6 unchanged sentences

Total Liabilities and Equity $ 24,043,419 $ 25,353,985

The consolidated balance sheets as of June 30, 2023 and December 31, 2022 include assets of consolidated variable interest entities, or VIEs, that can only be used to settle obligations of each respective VIE, and liabilities of consolidated VIEs for which creditors do not have recourse to Blackstone Mortgage Trust, Inc.

As of both June 30, 2023 and December 31, 2022, assets of the consolidated VIEs totaled $ 3.2 billion and liabilities of the consolidated VIEs totaled $ 2.7 billion.

The consolidated balance sheets as of September 30, 2023 and December 31, 2022 include assets of consolidated variable interest entities, or VIEs, that can only be used to settle obligations of each respective VIE, and liabilities of consolidated VIEs for which creditors do not have recourse to Blackstone Mortgage Trust, Inc.

As of September 30, 2023 and December 31, 2022, assets of the consolidated VIEs totaled $ 3.0 billion and $ 3.2 billion, respectively and liabilities of the consolidated VIEs totaled $ 2.5 billion and $ 2.7 billion, respectively.

Refer to Note 18 for additional discussion of the VIEs.

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

8 unchanged sentences

Increase in current expected credit loss reserve ( 96,900 ) ( 12,248 ) ( 134,530 ) ( 22,694 )

Gain on extinguishment of debt 4,541 — 4,541 —

Income before income taxes 32,128 105,091 256,276 300,111

15 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Net income $ 30,560 $ 103,919 $ 251,613 $ 298,047

Other comprehensive income

Unrealized gain (loss) on foreign currency translation 28,469 ( 130,207 ) 50,328 ( 175,429 )

Realized and unrealized (loss) gain on derivative financial instruments ( 25,557 ) 128,685 ( 49,609 ) 174,199

Other comprehensive income (loss) 2,912 ( 1,522 ) 719 ( 1,230 )

Other comprehensive (loss) income

Unrealized loss on foreign currency translation

( 71,782 ) ( 158,097 ) ( 21,455 ) ( 333,526 )

Realized and unrealized gain on derivative financial instruments

71,648 154,849 22,039 329,048

Other comprehensive (loss) income

( 134 ) ( 3,248 ) 584 ( 4,478 )

Comprehensive income 30,426 100,671 252,197 293,569

34 unchanged sentences

$ 1,723 $ 5,491,640 $ 10,740 $ ( 963,441 ) $ 4,540,662 $ 25,527 $ 4,566,189

See accompanying notes to consolidated financial statements.

Restricted class A common stock earned — 7,434 — — 7,434 — 7,434

Dividends reinvested — 245 — — 245 — 245

Deferred directors’ compensation — 172 — — 172 — 172

Net income — — — 29,524 29,524 1,036 30,560

Other comprehensive loss — — ( 134 ) — ( 134 ) — ( 134 )

Dividends declared on common stock and deferred stock units, $ 0.62 per share

— — — ( 107,033 ) ( 107,033 ) — ( 107,033 )

Distributions to non-controlling interests — — — — — ( 3,912 ) ( 3,912 )

Balance at September 30, 2023

$ 1,723 $ 5,499,491 $ 10,606 $ ( 1,040,950 ) $ 4,470,870 $ 22,651 $ 4,493,521

Blackstone Mortgage Trust, Inc.

10 unchanged sentences

Adoption of ASU 2020-06, See Note 2 — ( 2,431 ) — 1,954 ( 477 ) — ( 477 )

— ( 2,431 ) — 1,954 ( 477 ) — ( 477 )

Shares of class A common stock issued, net 16 52,138 — — 52,154 — 52,154

20 unchanged sentences

$ 1,703 $ 5,440,364 $ 7,078 $ ( 811,554 ) $ 4,637,591 $ 25,396 $ 4,662,987

Shares of class A common stock issued, net 6 18,490 $ — $ — 18,496 $ — $ 18,496

Restricted class A common stock earned — 8,046 — — 8,046 — 8,046

Dividends reinvested — 299 — — 299 — 299

Deferred directors’ compensation — 173 — — 173 — 173

Net income — — — 103,246 103,246 673 103,919

Other comprehensive loss — — ( 3,248 ) — ( 3,248 ) — ( 3,248 )

Dividends declared on common stock and deferred stock units, $ 0.62 per share

— — — ( 106,197 ) ( 106,197 ) — ( 106,197 )

Distributions to non-controlling interests — — — — — ( 568 ) ( 568 )

Balance at September 30, 2022

$ 1,709 $ 5,467,372 $ 3,830 $ ( 814,505 ) $ 4,658,406 $ 25,501 $ 4,683,907

See accompanying notes to consolidated financial statements.

2 unchanged sentences

(in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities

5 unchanged sentences

Increase in current expected credit loss reserve 134,530 22,694

Gain on extinguishment of debt ( 4,541 ) —

Unrealized gain on assets denominated in foreign currencies, net — ( 31 )

7 unchanged sentences

Principal fundings of loans receivable ( 1,068,853 ) ( 6,210,880 )

Principal collections and sales proceeds from loans receivable and debt securities 1,491,158 2,004,323

Principal collections, sales proceeds, and cost-recovery proceeds from loans receivable and debt securities 2,325,690 2,670,902

Origination and other fees received on loans receivable 11,046 67,950

Receipts under derivative financial instruments 25,176 129,010

Payments under derivative financial instruments ( 224,367 ) ( 7,385 )

Receipts under derivative financial instruments 40,466 279,343

Collateral deposited under derivative agreements ( 230,620 ) ( 56,330 )

5 unchanged sentences

(in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from financing activities

1 unchanged sentence

Repayments under secured debt ( 2,162,706 ) ( 3,090,429 )

Repayment of securitized debt obligations ( 1,807 ) —

Repayments of securitized debt obligations

( 161,030 ) —

Borrowings under asset-specific debt 223,357 654,578

3 unchanged sentences

Repayments of term loans ( 16,497 ) ( 11,554 )

Repurchases of senior secured notes

Net proceeds from issuance of convertible notes — 294,000

62 unchanged sentences

Income accrual is generally suspended for loans at the earlier of the date at which payments become 90 days past due or when, in our opinion, recovery of income and principal becomes doubtful.

Interest received is then recorded as income or as a reduction in the outstanding principal balance, based on the specific facts and circumstances, until accrual is resumed when the loan becomes contractually current and performance is demonstrated to be resumed.

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.

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.

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.

Cash and Cash Equivalents

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We have not experienced, and do not expect, any losses on our cash or cash equivalents.

As of both June 30, 2023 and December 31, 2022, we had no restricted cash on our consolidated balance sheets.

Through our subsidiaries, we have oversight of certain servicing accounts held with third-party servicers, or Servicing Accounts, which relate to borrower escrows and other cash balances aggregating $ 505.9 million and $ 459.6 million as of June 30, 2023 and December 31, 2022, respectively.

As of both September 30, 2023 and December 31, 2022, we had no restricted cash on our consolidated balance sheets.

Through our subsidiaries, we have oversight of certain servicing accounts held with third-party servicers, or Servicing Accounts, which relate to borrower escrows and other cash balances aggregating $ 634.7 million and $ 459.6 million as of September 30, 2023 and December 31, 2022, respectively.

This cash is maintained in segregated bank accounts, and these amounts are not included in the assets and liabilities presented in our consolidated balance sheets.

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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 May 31, 2023.

This database includes commercial mortgage-backed securities, or CMBS, issued since January 1, 1999 through August 31, 2023.

Within this database, we focused our historical loss reference calculations on the most relevant subset of available CMBS data, which we determined based on loan metrics that are most comparable to our loan portfolio including asset type, geography, and origination loan-to-value, or LTV.

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Our risk rating is our primary credit quality indicator in assessing our current expected credit loss reserve.

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, 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.

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.

Based on a 5-point scale, our loans are rated “l” through “5,” from less risk to greater risk, relative to our loan portfolio in the aggregate, which ratings are defined as follows:

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In addition to the CMBS data we have licensed from Trepp LLC, we have also licensed certain macroeconomic financial forecasts to inform our view of the potential future impact that broader economic conditions may have on our loan portfolio’s performance.

We may also incorporate information from other sources, including information and opinions available to our Manager, to further inform these estimations.

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 June 30, 2023.

We generally also incorporate information from other sources, including information and opinions available to our Manager, to further inform these estimations.

Derivative Financial Instruments

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Interest income earned on the investments and interest expense incurred on the secured debt or asset-specific debt are reported separately on our consolidated statements of operations.

Senior Loan Participations

In certain instances, we have executed a syndication of a non-recourse senior loan interest to a third-party.

Depending on the particular structure of the syndication, the senior loan interest may remain on our GAAP balance sheet or, in other cases, the sale will be recognized and the senior loan interest will no longer be included in our consolidated financial statements.

When these sales are not recognized under GAAP we reflect the transaction by recording a loan participations sold liability on our consolidated balance sheet, however this gross presentation does not impact stockholders’ equity or net income.

When the sales are recognized, our balance sheet only includes our remaining subordinate loan, and excludes the non-consolidated senior interest in the loan that we sold.

Loan Participations Sold

In certain instances, we have executed a syndication of a non-recourse loan interest to a third-party.

Depending on the particular structure of the syndication, the loan interest may remain on our GAAP balance sheet or, in other cases, the sale will be recognized and the loan interest will no longer be included in our consolidated financial statements.

When these sales are not recognized under GAAP we reflect the transaction by recording a loan participation sold liability on our consolidated balance sheet, however this gross presentation does not impact stockholders’ equity or net income.

When the sales are recognized, our balance sheet only includes our remaining loan interest, and excludes the interest in the loan that we sold.

We record our term loans as liabilities on our consolidated balance sheets.

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These valuations require significant judgments, which include assumptions regarding capitalization rates, discount rates, leasing, creditworthiness of major tenants, occupancy rates, availability and cost of financing, exit plan, loan sponsorship, actions of other lenders, and other factors.

As of June 30, 2023, we had an aggregate $ 214.4 million asset-specific CECL reserve related to seven of our loans receivable with an aggregate outstanding principal balance of $ 1.1 billion, net of cost-recovery proceeds.

The CECL reserve was recorded based on our estimation of the fair value of the loans' aggregate underlying collateral as of June 30, 2023.

As of September 30, 2023, we had an aggregate $ 322.6 million asset-specific CECL reserve related to ten of our loans receivable with an aggregate amortized cost basis of $ 1.4 billion, net of cost-recovery proceeds.

The CECL reserve was recorded based on our estimation of the fair value of the loans' aggregate underlying collateral as of September 30, 2023.

These loans receivable are therefore measured at fair value on a nonrecurring basis using significant unobservable inputs, and are classified as Level 3 assets in the fair value hierarchy.

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Treasury securities, as its preferred alternative rate for USD LIBOR.

As of June 30, 2023, one-month term SOFR is utilized as the floating benchmark rate on substantially all of our floating rate U.S.

As of September 30, 2023, one-month term SOFR is utilized as the floating benchmark rate on all of our floating rate U.S.

dollar loans and related financings.

Additionally, market participants have continued to transition from GBP LIBOR to the Sterling Overnight Index Average, or SONIA, in line with guidance from the U.K.

As of June 30, 2023, daily compounded SONIA is utilized as the floating benchmark rate for all of our floating rate British Pound Sterling loans and related financings.

As of June 30, 2023, substantially all of our floating rate loans and related financings have transitioned to the applicable replacement benchmark rate, or reference a benchmark rate that is not expected to be replaced.

As of September 30, 2023, daily compounded SONIA is utilized as the floating benchmark rate for all of our floating rate British Pound Sterling loans and related financings.

As of September 30, 2023, all of our floating rate loans and related financings have transitioned to the applicable replacement benchmark rate, or reference a benchmark rate that is not expected to be replaced.

Blackstone Mortgage Trust, Inc.

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The following table details overall statistics for our loans receivable portfolio ($ in thousands):

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Number of loans 185 203

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(2) The weighted-average cash coupon and all-in yield are expressed as a spread over the relevant floating benchmark rates, which include SOFR, USD LIBOR, SONIA, EURIBOR, and other indices, as applicable to each loan.

As of June 30, 2023 and December 31, 2022, substantially all of our loans by principal balance earned a floating rate of interest, primarily indexed to SOFR and USD LIBOR.

As of September 30, 2023 99 % of our loans by principal balance earned a floating rate of interest, primarily indexed to SOFR, and the remaining 1 % of our loans earned a fixed rate of interest.

As of December 31, 2022, substantially all of our loans by principal balance earned a floating rate of interest, primarily indexed to SOFR and USD LIBOR.

Floating rate exposure includes an interest rate swap with a notional amount of $ 229.9 million that effectively converts our fixed rate loan exposure to floating rate exposure.

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(3) Maximum maturity assumes all extension options are exercised by the borrower, however our loans may be repaid prior to such date.

As of June 30, 2023, 28 % of our loans by principal balance were subject to yield maintenance or other prepayment restrictions and 72 % were open to repayment by the borrower without penalty.

As of September 30, 2023, 18 % of our loans by principal balance were subject to yield maintenance or other prepayment restrictions and 82 % were open to repayment by the borrower without penalty.

As of December 31, 2022, 50 % of our loans by principal balance were subject to yield maintenance or other prepayment restrictions and 50 % were open to repayment by the borrower without penalty.

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Notes to Consolidated Financial Statements (continued) (Unaudited)

The following table details the index rate floors for our loans receivable portfolio as of June 30, 2023 ($ in thousands):

The following table details the index rate floors for our loans receivable portfolio as of September 30, 2023 ($ in thousands):

Loans Receivable Principal Balance

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(2) Includes an interest rate swap with a notional amount of $ 229.9 million that effectively converts our fixed rate loan exposure to floating rate exposure.

(3) As of June 30, 2023, the weighted-average index rate floor of our loan portfolio was 0.43 %.

(3) As of September 30, 2023, the weighted-average index rate floor of our loans receivable principal balance was 0.42 %.

Excluding 0.0% index rate floors and loans with no floor, the weighted-average index rate floor was 0.78 %.

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Loan fundings 1,068,853 — 1,068,853

Loan repayments and sales ( 1,471,756 ) — ( 1,471,756 )

Unrealized gain (loss) on foreign currency translation 186,811 ( 1,302 ) 185,509

Loan repayments, sales, and cost-recovery proceeds ( 2,280,034 ) ( 40,733 ) ( 2,320,767 )

Unrealized (loss) gain on foreign currency translation

( 99,665 ) 313 ( 99,352 )

Deferred fees and other items — ( 11,046 ) ( 11,046 )

Amortization of fees and other items — 60,333 60,333

Loans Receivable, as of June 30, 2023

Loans Receivable, as of September 30, 2023

$ 23,849,497 $ ( 133,596 ) $ 23,715,901

CECL reserve ( 463,423 )

Loans Receivable, net, as of June 30, 2023

(1) Other items primarily consist of purchase and sale discounts or premiums, exit fees, and deferred origination expenses.

Loans Receivable, net, as of September 30, 2023

(1) Other items primarily consist of purchase and sale discounts or premiums, exit fees, deferred origination expenses, and cost-recovery proceeds.

Blackstone Mortgage Trust, Inc.

1 unchanged sentence

The tables below detail the property type and geographic distribution of the properties securing the loans in our portfolio ($ in thousands):

June 30, 2023

September 30, 2023

Property Type Number of

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Loans receivable, net $ 23,252,478

(1) In certain instances, we have executed a sale of a non-recourse senior loan interest that is not included in our consolidated financial statements.

Total loan exposure encompasses the entire loan we originated and sold, including $ 1.2 billion of such non-consolidated senior interests as of June 30, 2023.

See Note 2 for further discussion.

(2) Net loan exposure reflects the amount of each loan that is subject to risk of credit loss to us as of June 30, 2023, which is our total loan exposure net of (i) $ 1.2 billion of non-consolidated senior interests, (ii) $ 875.6 million of asset-specific debt, (iii) $ 236.3 million of loan participations sold, and (iv) our aggregate CECL reserve of $ 363.9 million.

(1) Total loan exposure reflects our aggregate exposure to each loan investment.

As of September 30, 2023, total loan exposure, includes (i) loans with an outstanding principal balance of $ 23.8 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) $ 48.8 million of junior loan interests that we have sold, but that remain included in our consolidated financial statements.

See Note 2 for further discussion of loan participations sold.

(2) Net loan exposure reflects the amount of each loan that is subject to risk of credit loss to us as of September 30, 2023, which is our total loan exposure net of (i) $ 1.1 billion of non-consolidated senior interests, (ii) $ 935.4 million of asset-specific debt, (iii) $ 226.9 million of senior loan participations sold, (iv) $ 40.7 million of cost-recovery proceeds, and (v) our total loans receivable CECL reserve of $ 463.4 million.

Our non-consolidated senior interests, asset-specific debt, and loan participations sold are structurally non-recourse and term-matched to the corresponding collateral loans.

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Loans receivable, net $ 24,691,743

(1) In certain instances, we have executed a sale of a non-recourse senior loan interest that is not included in our consolidated financial statements.

Total loan exposure encompasses the entire loan we originated and sold, including $ 1.6 billion of such non-consolidated senior interests as of December 31, 2022.

See Note 2 for further discussion.

(2) Net loan exposure reflects the amount of each loan that is subject to risk of credit loss to us as of December 31, 2022, which is our total loan exposure net of (i) $ 1.6 billion of non-consolidated senior interests, (ii) $ 950.3 million of asset-specific debt, (iii) $ 224.7 million of loan participations sold, and (iv) our aggregate CECL reserve of $ 326.1 million.

(1) Total loan exposure reflects our aggregate exposure to each loan investment.

As of December 31, 2022, total loan exposure, includes (i) loans with an outstanding principal balance of $ 25.2 billion that are included in our consolidated financial statements and (ii) $ 1.6 billion of non-consolidated senior interests in loans we have sold, which are not included in our consolidated financial statements.

See Note 2 for further discussion of loan participations sold.

(2) Net loan exposure reflects the amount of each loan that is subject to risk of credit loss to us as of December 31, 2022, which is our total loan exposure net of (i) $ 1.6 billion of non-consolidated senior interests, (ii) $ 950.3 million of asset-specific debt, (iii) $ 224.7 million of senior loan participations sold, and (iv) our total loans receivable CECL reserve of $ 326.1 million.

Our non-consolidated senior interests, asset-specific debt, and loan participations sold are structurally non-recourse and term-matched to the corresponding collateral loans.

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In conjunction with our quarterly loan portfolio review, we assess the risk factors of each loan, and assign a risk rating based on several factors.

Factors considered in the assessment include, but are not limited to, risk of loss, current LTV, debt yield, collateral performance, structure, exit plan, and sponsorship.

Factors considered in the assessment include, but are not limited to, risk of loss, origination LTV, debt yield, collateral performance, structure, exit plan, and sponsorship.

Loans are rated “1” (less risk) through “5” (greater risk), which ratings are defined in Note 2.

The following table allocates the net book value, total loan exposure, and net loan exposure of our loans receivable based on our internal risk ratings ($ in thousands):

June 30, 2023

The following table allocates the net book value, total loan exposure, and net loan exposure balances based on our internal risk ratings ($ in thousands):

September 30, 2023

1 15 $ 763,494 $ 812,060 $ 764,174

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Loans receivable, net $ 24,691,743

(1) In certain instances, we have executed a sale of a non-recourse senior loan interest that is not included in our consolidated financial statements.

Total loan exposure encompasses the entire loan we originated and sold, including $ 1.2 billion and $ 1.6 billion of such non-consolidated senior interests as of June 30, 2023 and December 31, 2022, respectively.

See Note 2 for further discussion.

Our net loan exposure as of December 31, 2022 is our total loan exposure net of (i) $ 1.6 billion of non-consolidated senior interests, (ii) $ 950.3 million of asset-specific debt, (iii) $ 224.7 million of loan participations sold, and (iv) our aggregate CECL reserve of $ 326.1 million.

(1) Total loan exposure reflects our aggregate exposure to each loan investment.

See Note 2 for further discussion of loan participations sold.

Our net loan exposure as of December 31, 2022 is our total loan exposure net of (i) $ 1.6 billion of non-consolidated senior interests, (ii) $ 950.3 million of asset-specific debt, (iii) $ 224.7 million of senior loan participations sold, and (iv) our total loans receivable CECL reserve of $ 326.1 million.

Our non-consolidated senior interests, asset-specific debt, and loan participations sold are structurally non-recourse and term-matched to the corresponding collateral loans.

Our loan portfolio had a weighted-average risk rating of 2.9 as of both June 30, 2023 and December 31, 2022.

Our loan portfolio had a weighted-average risk rating of 2.9 as of both September 30, 2023 and December 31, 2022.

Blackstone Mortgage Trust, Inc.

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Refer to Note 2 for further discussion of our CECL reserve.

The following table presents the activity in our loans receivable CECL reserve by investment pool for the three and six months ended June 30, 2023 and 2022 ($ in thousands):

The following table presents the activity in our loans receivable CECL reserve by investment pool for the three and nine months ended September 30, 2023 and 2022 ($ in thousands):

Loans Receivable, Net

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$ 74,393 $ 28,992 $ 46,089 $ 214,401 $ 363,875

(Decrease) increase in CECL reserve ( 5,639 ) ( 2,336 ) ( 627 ) 108,150 99,548

CECL reserve as of September 30, 2023

$ 68,754 $ 26,656 $ 45,462 $ 322,551 $ 463,423

CECL reserve as of December 31, 2021

6 unchanged sentences

$ 33,311 $ 11,344 $ 33,495 $ 54,874 $ 133,024

Increase in CECL reserve

8,280 45 3,082 — 11,407

CECL reserve as of September 30, 2022

$ 41,591 $ 11,389 $ 36,577 $ 54,874 $ 144,431

(1) Includes Canadian loans, which have similar risk characteristics as U.S.

During the three months ended June 30, 2023, we recorded an increase of $ 27.3 million in the CECL reserve against our loans receivable portfolio, bringing our total loans receivable CECL reserve to $ 363.9 million as of June 30, 2023.

During the three months ended September 30, 2023, we recorded an increase of $ 99.5 million in the CECL reserve against our loans receivable portfolio, bringing our total loans receivable CECL reserve to $ 463.4 million as of September 30, 2023.

This CECL reserve reflects certain loans assessed for impairment in our portfolio, as well as macroeconomic conditions.

During the three months ended June 30, 2023, we recorded an aggregate net increase of $ 17.1 million in the asset-specific CECL reserve related to our impaired loans.

The increase was primarily driven by one additional loan that was impaired during the three months ended June 30, 2023.

As of June 30, 2023, the income accrual was suspended on this loan as recovery of income and principal was doubtful.

During the three months ended June 30, 2023, we recorded $ 2.1 million of interest income on this loan.

As of June 30, 2023, we had an aggregate $ 214.4 million asset-specific CECL reserve related to seven of our loans receivable, with an aggregate amortized cost basis of $ 1.1 billion.

This CECL reserve was recorded based on our estimation of the fair value of each of the loan's underlying collateral as of June 30, 2023.

No income was recorded on each of our impaired loans subsequent to determining that they were impaired.

As of June 30, 2023, all borrowers were compliant with all contractual terms of each respective loan, including payment of interest.

During the three months ended June 30, 2023, we received an aggregate $ 12.3 million of cash proceeds from such loans that were applied as a reduction to the principal balance of each respective loan.

During the three months ended September 30, 2023, we recorded an aggregate net increase of $ 108.2 million in the asset-specific CECL reserve related to our impaired loans.

The increase was primarily driven by three additional loans that were impaired during the three months ended September 30, 2023.

As of September 30, 2023, the income accrual was suspended on these loans as recovery of income and principal was doubtful.

During the three months ended September 30, 2023, we recorded $ 7.2 million of interest income on these three loans.

As of September 30, 2023, we had an aggregate $ 322.6 million asset-specific CECL reserve related to ten of our loans receivable, with an aggregate amortized cost basis of $ 1.4 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 September 30, 2023.

No income was recorded on our impaired loans subsequent to determining that they were impaired.

As of September 30, 2023, all such borrowers were compliant with the contractual terms of each respective loan, including any required payment of interest.

During the three months ended September 30, 2023, we received an aggregate $ 10.2 million of cash proceeds from such loans that were applied as a reduction to the amortized cost basis of each respective loan.

Refer to Note 2 for further discussion of our revenue recognition and CECL reserve policies.

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Our primary credit quality indicator is our risk ratings, which are further discussed above.

The following tables present the net book value of our loan portfolio as of June 30, 2023 and December 31, 2022, respectively, by year of origination, investment pool, and risk rating ($ in thousands):

The following tables present the net book value of our loan portfolio as of September 30, 2023 and December 31, 2022, respectively, by year of origination, investment pool, and risk rating ($ in thousands):

Net Book Value of Loans Receivable by Year of Origination (1)

As of June 30, 2023

As of September 30, 2023

2023 2022 2021 2020 2019 Prior Total

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Loan Modifications Pursuant to ASC 326

In the second quarter of 2023, we entered into three loan modifications, which require disclosure pursuant to ASC 326.

During the nine months ended September 30, 2023, we entered into four loan modifications that require disclosure pursuant to ASC 326.

All such loans were collateralized by office assets.

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The other modification included an additional 4.00 % exit fee.

As of June 30, 2023, the aggregate amortized cost basis of the loans was $ 286.7 million, or 1.2 % of our aggregate loans receivable portfolio, and they had an aggregate $ 10.0 million of unfunded commitments.

The loans paid all contractual interest due as of June 30, 2023, had risk ratings of 5 as of June 30, 2023, and have asset-specific CECL reserves.

The third loan modification included a term extension of nineteen months , a rate reduction of 2.74 % and conversion to fixed rate, with a portion of the interest paid in-kind.

As of September 30, 2023, the aggregate amortized cost basis of these loans was $ 286.7 million, or 1.2 % of our aggregate loans receivable portfolio, with an aggregate $ 10.0 million of unfunded commitments.

The loans were performing pursuant to their contractual terms as of September 30, 2023, had risk ratings of 5 as of September 30, 2023, and have asset-specific CECL reserves.

The other two loan modifications included a combination of changes to the contractual terms of the loans, including term extensions, other-than-insignificant payment delays, and/or interest rate reductions.

The first loan modification included a term extension of nineteen months , a rate reduction of 2.74 % and conversion to fixed rate, with a portion of the interest paid in-kind.

The borrower repaid $ 4.9 million of the loan at the time of modification, with an additional $ 2.5 million of repayment due during the initial maturity period.

As of June 30, 2023, the amortized cost basis of the loan was $ 229.9 million, or 0.9 % of our aggregate loans receivable portfolio, and it had no unfunded commitment.

The loan has paid all contractual interest due as of June 30, 2023, had a risk rating of 4 as of June 30, 2023, and its modified terms were included in the determination of our general CECL reserve .

The second loan modification included a term extension of 4.5 years, a rate increase of 8.50 % with interest paid in-kind, a borrower contribution of $ 2.0 million of additional reserves, and a $ 50.0 million increase in our total loan commitment.

As of September 30, 2023, the aggregate amortized cost basis of these loans was $ 435.1 million, or 1.8 % of our aggregate loans receivable portfolio, with an aggregate $ 40.0 million of unfunded commitments.

The loans were performing pursuant to their contractual terms as of September 30, 2023.

As of September 30, 2023, one of these loans had a risk rating of 4, and its modified terms were included in the determination of our general CECL reserve, and the other loan had a risk rating of 5 and has an asset-specific CECL reserve .

Multifamily Joint Venture

As discussed in Note 2, we entered into a Multifamily Joint Venture in April 2017.

As of June 30, 2023 and December 31, 2022, our Multifamily Joint Venture held $ 798.6 million and $ 795.6 million of loans, respectively, which are included in the loan disclosures above.

As of September 30, 2023 and December 31, 2022, our Multifamily Joint Venture held $ 639.2 million and $ 795.6 million of loans, respectively, which are included in the loan disclosures above.

Refer to Note 2 for additional discussion of our Multifamily Joint Venture.

1 unchanged sentence

The following table details the components of our other assets ($ in thousands):

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Accrued interest receivable $ 189,609 $ 189,569

Derivative assets 114,558 7,349

Loan portfolio payments held by servicer (1)

63,566 68,489

Derivative assets 12,689 7,349

Collateral deposited under derivative agreements 9,020 103,110

Accounts receivable and other assets 1,595 1,318

Prepaid expenses 118 1,067

Collateral deposited under derivative agreements — 103,110

Total $ 369,446 $ 370,902

4 unchanged sentences

The following table details the components of our other liabilities ($ in thousands):

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Accrued dividends payable $ 106,824 $ 106,455

3 unchanged sentences

Accrued management and incentive fees payable 28,882 33,830

Derivative liabilities 19,962 119,665

Current expected credit loss reserve for unfunded loan commitments (2)

1 unchanged sentence

Accounts payable and other liabilities 7,742 9,726

Derivative liabilities 328 119,665

Total $ 278,027 $ 426,904

3 unchanged sentences

Current Expected Credit Loss Reserve for Unfunded Loan Commitments

As of June 30, 2023, we had unfunded commitments of $ 3.0 billion related to 105 loans receivable.

As of September 30, 2023, we had unfunded commitments of $ 2.7 billion related to 101 loans receivable.

The expected credit losses over the contractual period of our loans is impacted by our obligation to extend further credit through our unfunded loan commitments.

See Note 2 for further discussion of the CECL reserve related to our unfunded loan commitments, and Note 20 for further discussion of our unfunded loan commitments.

The following table presents the activity in the CECL reserve related to our unfunded loan commitments by investment pool for the three and six months ended June 30, 2023 and 2022 ($ in thousands):

The following table presents the activity in the CECL reserve related to our unfunded loan commitments by investment pool for the three and nine months ended September 30, 2023 and 2022 ($ in thousands):

Loans Non-U.S.

7 unchanged sentences

$ 11,196 $ 5,076 $ — $ — $ 16,272

Decrease in CECL reserve ( 1,614 ) ( 1,034 ) — — ( 2,648 )

CECL reserve as of September 30, 2023

$ 9,582 $ 4,042 $ — $ — $ 13,624

CECL reserve as of December 31, 2021

6 unchanged sentences

$ 6,323 $ 2,111 $ — $ — $ 8,434

Increase in CECL reserve 527 314 — — 841

CECL reserve as of September 30, 2022

$ 6,850 $ 2,425 $ — $ — $ 9,275

Blackstone Mortgage Trust, Inc.

2 unchanged sentences

Our secured debt includes our secured credit facilities and our acquisition facility.

During the six months ended June 30, 2023, we obtained approval for $ 73.9 million of new borrowings against $ 92.4 million of collateral assets.

During the nine months ended September 30, 2023, we obtained approval for $ 73.9 million of new borrowings against $ 92.4 million of collateral assets.

The following table details our secured debt ($ in thousands):

Borrowings Outstanding

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Secured credit facilities $ 12,809,913 $ 13,549,748

9 unchanged sentences

Our credit facilities are diversified across 15 counterparties, primarily consisting of top global financial institutions to minimize our counterparty risk exposure.

The following table details our secured credit facilities by spread over the applicable base rates as of June 30, 2023 ($ in thousands):

June 30, 2023

The following table details our secured credit facilities by spread over the applicable base rates as of September 30, 2023 ($ in thousands):

September 30, 2023

Recourse Limitation

2 unchanged sentences

Loan Count Collateral (3)

USD 14 $ 7,269,836 April 2026 138 $ 11,207,372 April 2026 36 % 25 % - 100 %

USD 14 $ 6,876,591 May 2026 131 $ 10,791,188 May 2026 36 % 25 % - 100 %

GBP 7 2,391,449 June 2026 22 3,193,290 July 2026 27 % 25 % - 50 %

EUR 7 2,092,802 August 2025 11 2,813,367 August 2025 41 % 25 % - 100 %

EUR 7 1,983,520 September 2025 11 2,661,250 September 2025 41 % 25 % - 100 %

4 1,558,353 July 2027 7 1,967,503 July 2027 25 % 25 %

Total 15 $ 13,451,427 May 2026 178 $ 19,350,114 May 2026 34 % 25 % - 100 %

Total 15 $ 12,809,913 May 2026 171 $ 18,613,231 June 2026 34 % 25 % - 100 %

(1) Represents the number of lenders with fundings advanced in each respective currency, as well as the total number of facility lenders.

9 unchanged sentences

Notes to Consolidated Financial Statements (continued) (Unaudited)

The following tables detail the spread of our secured debt as of June 30, 2023 and December 31, 2022 ($ in thousands):

Six Months Ended June 30, 2023 June 30, 2023

The following tables detail the spread of our secured debt as of September 30, 2023 and December 31, 2022 ($ in thousands):

Nine Months Ended September 30, 2023 September 30, 2023

New Financings (2)

18 unchanged sentences

(1) The spread, all-in cost, and all-in yield are expressed over the relevant floating benchmark rates, which include SOFR, USD LIBOR, SONIA, EURIBOR, and other indices as applicable.

(2) Represents borrowings outstanding as of June 30, 2023 and December 31, 2022 for new financings closed during the six months ended June 30, 2023 and year ended December 31, 2022, respectively.

(2) Represents borrowings outstanding as of September 30, 2023 and December 31, 2022 for new financings closed during the nine months ended September 30, 2023 and year ended December 31, 2022, respectively.

(3) In addition to spread, the cost includes the associated deferred fees and expenses related to the respective borrowings.

1 unchanged sentence

Excludes loans accounted for under the cost-recovery method.

(4) Represents the weighted-average all-in cost as of June 30, 2023 and December 31, 2022, respectively, and is not necessarily indicative of the spread applicable to recent or future borrowings.

(4) Represents the weighted-average all-in cost as of September 30, 2023 and December 31, 2022, respectively, and is not necessarily indicative of the spread applicable to recent or future borrowings.

(5) Represents the principal balance of the collateral assets.

1 unchanged sentence

Our secured credit facilities generally permit us to increase or decrease the amount advanced against the pledged collateral in our discretion within certain maximum/minimum amounts and frequency limitations.

As of June 30, 2023, there was an aggregate $ 1.3 billion available to be drawn at our discretion under our credit facilities.

As of September 30, 2023, there was an aggregate $ 1.3 billion available to be drawn at our discretion under our credit facilities.

Acquisition Facility

1 unchanged sentence

The cost of borrowing under the facility is variable, dependent on the type of loan collateral, and its maturity date is April 3, 2024.

During the six months ended June 30, 2023, we had no borrowings under the acquisition facility and we recorded interest expense of $ 447,000 , including $ 136,000 of amortization of deferred fees and expenses.

During the nine months ended September 30, 2023, we had no borrowings under the acquisition facility and we recorded interest expense of $ 599,000 , including $ 199,000 of amortization of deferred fees and expenses.

During the year ended December 31, 2022, we had no borrowings under the acquisition facility and we recorded interest expense of $ 1.2 million, including $ 333,000 of amortization of deferred fees and expenses.

4 unchanged sentences

(i) our ratio of earnings before interest, taxes, depreciation, and amortization, or EBITDA, to fixed charges, as defined in the agreements, shall be not less than 1.4 to 1.0;

(ii) our tangible net worth, as defined in the agreements, shall not be less than $ 3.6 billion as of each measurement date plus 75 % to 85 % of the net cash proceeds of future equity issuances subsequent to June 30, 2023;

(iii) cash liquidity shall not be less than the greater of (x) $ 10.0 million or (y) no more than 5 % of our recourse indebtedness;

and (iv) our indebtedness shall not exceed 83.33 % of our total assets.

As of June 30, 2023 and December 31, 2022, we were in compliance with these covenants.

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued) (Unaudited)

As of September 30, 2023 and December 31, 2022, we were in compliance with these covenants.

SECURITIZED DEBT OBLIGATIONS, NET

3 unchanged sentences

The following tables detail our securitized debt obligations and the underlying collateral assets that are financed by our CLOs ($ in thousands):

June 30, 2023

September 30, 2023

Securitized Debt Obligations Count Principal

2 unchanged sentences

Senior CLO Securities Outstanding 1 $ 803,750 $ 801,392 + 1.69 % May 2038

Underlying Collateral Assets 28 1,000,000 1,000,000 + 3.46 % August 2025

Underlying Collateral Assets 27 1,000,000 1,000,000 + 3.35 % December 2025

2020 FL3 Collateralized Loan Obligation

Senior CLO Securities Outstanding 1 716,342 716,284 + 2.18 % November 2037

Underlying Collateral Assets 16 1,000,000 1,000,000 + 3.07 % January 2025

Underlying Collateral Assets 15 907,592 907,592 + 3.04 % May 2025

2020 FL2 Collateralized Loan Obligation

Senior CLO Securities Outstanding 1 992,419 991,578 + 1.57 % February 2038

Underlying Collateral Assets 17 1,316,109 1,316,109 + 3.25 % November 2024

Underlying Collateral Assets 16 1,249,294 1,249,294 + 3.25 % May 2025

Senior CLO Securities Outstanding (4)

7 unchanged sentences

The term of these obligations represents the rated final distribution date of the securitizations.

(4) During the three and six months ended June 30, 2023, we recorded $ 43.3 million and $ 83.1 million, respectively, of interest expense related to our securitized debt obligations.

(4) During the three and nine months ended September 30, 2023, we recorded $ 44.5 million and $ 127.6 million, respectively, of interest expense related to our securitized debt obligations.

Blackstone Mortgage Trust, Inc.

22 unchanged sentences

The term of these obligations represents the rated final distribution date of the securitizations.

(4) During the three and six months ended June 30, 2022, we recorded $ 15.5 million and $ 26.5 million, respectively, of interest expense related to our securitized debt obligations.

(4) During the three and nine months ended September 30, 2022, we recorded $ 26.1 million and $ 52.6 million, respectively, of interest expense related to our securitized debt obligations.

ASSET-SPECIFIC DEBT, NET

The following table details our asset-specific debt ($ in thousands):

June 30, 2023

September 30, 2023

Asset-Specific Debt Count Principal

16 unchanged sentences

LOAN PARTICIPATIONS SOLD, NET

The sale of a non-recourse senior interest in a loan through a participation agreement generally does not qualify for sale accounting under GAAP.

The sale of a non-recourse interest in a loan through a participation agreement generally does not qualify for sale accounting under GAAP.

For such transactions, we therefore present the whole loan as an asset and the loan participation sold as a liability on our consolidated balance sheet until the loan is repaid.

The obligation to pay principal and interest on these liabilities is generally based on the performance of the related loan obligation, and does not require an actual cash outlay from us.

The gross presentation of loan participations sold does not impact stockholders’ equity or net income.

We generally have no obligation to pay principal and interest under these liabilities, and the gross presentation of loan participations sold does not impact our stockholders’ equity or net income.

The following table details our loan participations sold ($ in thousands):

June 30, 2023

September 30, 2023

Loan Participations Sold Count Principal

1 unchanged sentence

Yield/Cost (1)

Senior Participation (3)

Senior Participations

Loan Participation

1 $ 226,901 $ 226,557 + 3.22 % March 2027

Total Loan 1 283,627 282,227 + 4.86 % March 2027

Junior Participations

Loan Participation

1 $ 48,796 $ 48,627 + 8.35 % June 2025

1 174,690 172,890 + 5.23 % June 2025

Loan Participation (3)

2 $ 275,697 $ 275,184

2 $ 458,317 $ 455,117

December 31, 2022

Loan Participations Sold Count Principal

Book Value Wtd.

Balance Book Value Wtd.

Yield/Cost (1)

Senior Participation (3)

Senior Participations

Loan Participation

1 $ 224,744 $ 224,232 + 3.22 % March 2027

Total Loan 1 280,930 278,843 + 4.86 % March 2027

Loan Participation (3)

1 $ 224,744 $ 224,232

1 $ 280,930 $ 278,843

(1) This non-debt participation sold structure is inherently matched in terms of currency and interest rate.

1 unchanged sentence

(2) The term is determined based on the maximum maturity of the loan, assuming all extension options are exercised by the borrower.

Our loan participation sold is inherently non-recourse and term-matched to the corresponding collateral loan.

(3) During the three and six months ended June 30, 2023, we recorded $ 4.2 million and $ 8.0 million, respectively, of interest expense related to our loan participations sold.

During the three and six months ended June 30, 2022 we recorded $ 2.2 million and $ 2.4 million, respectively, of interest expense related to our loan participations sold.

Our loan participations sold are inherently non-recourse and term-matched to the corresponding loan.

(3) During the three and nine months ended September 30, 2023, we recorded $ 5.3 million and $ 13.3 million, respectively, of interest expense related to our loan participations sold.

During the three and nine months ended September 30, 2022 we recorded $ 2.4 million and $ 4.8 million, respectively, of interest expense related to our loan participations sold.

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued) (Unaudited)

TERM LOANS, NET

As of June 30, 2023, the following senior term loan facilities, or Term Loans, were outstanding ($ in thousands):

As of September 30, 2023, the following senior term loan facilities, or Term Loans, were outstanding ($ in thousands):

Term Loans Face Value Interest Rate (1)

12 unchanged sentences

These discounts and expenses are amortized into interest expense over the life of each Term Loan.

During the three and six months ended June 30, 2023, we recorded $ 44.9 million and $ 86.8 million, respectively, of interest expense related to our Term Loans, including $ 2.3 million and $ 4.6 million, respectively, of amortization of deferred fees and expenses.

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued) (Unaudited)

During the three and nine months ended September 30, 2023, we recorded $ 47.0 million and $ 133.8 million, respectively, of interest expense related to our Term Loans, including $ 2.3 million and $ 6.9 million, respectively, of amortization of deferred fees and expenses.

The following table details the net book value of our Term Loans on our consolidated balance sheets ($ in thousands):

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Face value $ 2,140,720 $ 2,157,218

2 unchanged sentences

The Term Loans contain the financial covenant that our indebtedness shall not exceed 83.33 % of our total assets.

As of June 30, 2023 and December 31, 2022, we were in compliance with this covenant.

As of September 30, 2023 and December 31, 2022, we were in compliance with this covenant.

Refer to Note 2 for additional discussion of our accounting policies for the Term Loans.

SENIOR SECURED NOTES, NET

As of June 30, 2023, the following Senior Secured Notes, were outstanding ($ in thousands):

As of September 30, 2023, the following Senior Secured Notes, were outstanding ($ in thousands):

Senior Secured Notes Face Value Interest Rate All-in Cost (1)

2 unchanged sentences

The transaction expenses on the Senior Secured Notes were $ 6.3 million, which are amortized into interest expense over the life of the Senior Secured Notes.

During the three and six months ended June 30, 2023, we recorded $ 4.0 million and $ 8.1 million, respectively, of interest expense related to our Senior Secured Notes, including $ 299,000 and $ 594,000 , respectively, of amortization of deferred fees and expenses.

During the three and nine months ended September 30, 2023, we recorded $ 3.9 million and $ 12.0 million, respectively, of interest expense related to our Senior Secured Notes, including $ 288,000 and $ 882,000 , respectively, of amortization of deferred fees and expenses.

During the three months ended September 30, 2023, we repurchased an aggregate principal amount of $ 33.4 million of the Senior Secured Notes at a weighted-average price of 85 %.

This resulted in a gain on extinguishment of debt of $ 4.5 million during both the three and nine months ended September 30, 2023.

There was no repurchase activity in the three and nine months ended September 30, 2022.

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued) (Unaudited)

The following table details the net book value of our Senior Secured Notes on our consolidated balance sheets ($ in thousands):

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Face value $ 366,590 $ 400,000

2 unchanged sentences

The Senior Secured Notes contain the financial covenant that our indebtedness shall not exceed 83.33 % of our total assets.

As of June 30, 2023 and December 31, 2022, we were in compliance with this covenant.

As of September 30, 2023 and December 31, 2022, we were in compliance with this covenant.

Under certain circumstances, we may, at our option, release all of the collateral securing our Senior Secured Notes, in which case we would also be required to maintain a total unencumbered assets to total unsecured indebtedness ratio of 1.20 or greater.

This covenant is not currently in effect as the collateral securing our Senior Secured Notes has not been released.

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued) (Unaudited)

CONVERTIBLE NOTES, NET

During the six months ended June 30, 2023, we repaid the aggregate $ 220.0 million principal amount of our March 2018 convertible senior notes at maturity on March 15, 2023.

As of June 30, 2023, the following convertible senior notes, or Convertible Notes, were outstanding ($ in thousands):

During the nine months ended September 30, 2023, we repaid the aggregate $ 220.0 million principal amount of our March 2018 convertible notes at maturity on March 15, 2023.

As of September 30, 2023, the following convertible senior notes, or Convertible Notes, were outstanding ($ in thousands):

Convertible Notes Issuance Face Value Interest Rate All-in Cost (1)

4 unchanged sentences

The conversion rate represents the number of shares of class A common stock issuable per $ 1,000 principal amount of Convertible Notes.

The cumulative dividend threshold as defined in the March 2022 convertible notes supplemental indenture has not been exceeded as of June 30, 2023.

The cumulative dividend threshold as defined in the March 2022 convertible notes supplemental indenture has not been exceeded as of September 30, 2023.

Other than as provided by the optional redemption provisions with respect to our March 2022 convertible notes, we may not redeem the Convertible Notes prior to maturity.

1 unchanged sentence

Thereafter, the March 2022 convertible notes are convertible at the option of the holder at any time until the second scheduled trading day immediately preceding the maturity date.

The last reported sale price of our class A common stock of $ 20.81 on June 30, 2023 was less than the per share conversion price of the March 2022 convertible notes.

The last reported sale price of our class A common stock of $ 21.75 on September 29, 2023, the last trading day in the quarter ended September 30, 2023, was less than the per share conversion price of the March 2022 convertible notes.

The following table details the net book value of our Convertible Notes on our consolidated balance sheets ($ in thousands):

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Face value $ 300,000 $ 520,000

1 unchanged sentence

Net book value $ 295,527 $ 514,257

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued) (Unaudited)

The following table details our interest expense related to the Convertible Notes ($ in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

2 unchanged sentences

Total interest expense $ 4,444 $ 7,381 $ 15,784 $ 24,344

Accrued interest payable for the Convertible Notes was $ 4.9 million and $ 7.9 million as of June 30, 2023 and December 31, 2022, respectively.

Accrued interest payable for the Convertible Notes was $ 733,000 and $ 7.9 million as of September 30, 2023 and December 31, 2022, respectively.

Refer to Note 2 for additional discussion of our accounting policies for the Convertible Notes.

5 unchanged sentences

To mitigate this risk, we only enter into derivative financial instruments with counterparties that have appropriate credit ratings and are major financial institutions with which we and our affiliates also have other financial relationships.

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued) (Unaudited)

Net Investment Hedges of Foreign Currency Risk

4 unchanged sentences

The following table details our outstanding foreign exchange derivatives that were designated as net investment hedges of foreign currency risk (notional amounts in thousands):

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Foreign Currency Derivatives Number of

1 unchanged sentence

Buy USD / Sell SEK Forward 2 kr 1,004,551 Buy USD / Sell SEK Forward 2 kr 1,003,626

Buy USD / Sell GBP Forward 5 £ 706,195 Buy USD / Sell GBP Forward 6 £ 690,912

Buy USD / Sell EUR Forward 7 € 684,078 Buy USD / Sell EUR Forward 8 € 722,311

Buy USD / Sell GBP Forward 8 £ 722,576 Buy USD / Sell EUR Forward 8 € 722,311

Buy USD / Sell EUR Forward 7 € 676,126 Buy USD / Sell GBP Forward 6 £ 690,912

Buy USD / Sell AUD Forward 9 A$ 464,016 Buy USD / Sell AUD Forward 8 A$ 541,813

1 unchanged sentence

195,728 Buy USD / Sell DKK Forward 3 kr.

Buy USD / Sell CAD Forward 2 C$ 22,189 Buy USD / Sell CAD Forward 2 C$ 22,187

Buy USD / Sell CHF Forward 4 CHF 7,116 Buy USD / Sell CHF Forward 2 CHF 5,263

Buy USD / Sell CHF Forward 3 CHF 7,873 Buy USD / Sell CAD Forward 2 C$ 22,187

Buy USD / Sell CHF Forward 2 CHF 5,263

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued) (Unaudited)

Non-designated Hedges of Foreign Currency Risk

The following table details our outstanding foreign exchange derivatives that were non-designated hedges of foreign currency risk (notional amounts in thousands):

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Non-designated Hedges Number of

2 unchanged sentences

Buy USD / Sell GBP Forward 1 £ 14,300 Buy USD / Sell GBP Forward 2 £ 109,076

Buy EUR / Sell USD Forward 2 € 17,500 Buy AUD / Sell USD Forward 1 A$ 23,600

Buy USD / Sell EUR Forward 2 € 17,500 Buy USD / Sell AUD Forward 1 A$ 23,600

Buy AUD / Sell USD Forward 1 A$ 23,600

Buy USD / Sell AUD Forward 1 A$ 23,600

Cash Flow Hedges of Interest Rate Risk

2 unchanged sentences

The following table details our outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk (notional amount in thousands):

June 30, 2023

September 30, 2023

Interest Rate Derivatives Number of Instruments Notional Amount Fixed Rate Index Wtd.

3 unchanged sentences

Amounts reported in accumulated other comprehensive income (loss) related to derivatives will be reclassified to interest expense as interest payments are made on our floating rate debt.

During the twelve months following June 30, 2023, we estimate that an additional $ 1.4 million will be reclassified from accumulated other comprehensive income (loss) as a decrease to interest expense.

During the twelve months following September 30, 2023, we estimate that an additional $ 1.6 million will be reclassified from accumulated other comprehensive income (loss) as a decrease to interest expense.

Blackstone Mortgage Trust, Inc.

3 unchanged sentences

Increase (Decrease) to Net Interest Income Recognized from Derivatives

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

in Hedging Relationships

19 unchanged sentences

Fair Value of Derivatives in a Liability Position (2) as of

June 30, 2023 December 31, 2022 June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022 September 30, 2023 December 31, 2022

Derivatives designated as hedging instruments:

11 unchanged sentences

Notes to Consolidated Financial Statements (continued) (Unaudited)

The following table presents the effect of our derivative financial instruments on our consolidated statements of operations ($ in thousands):

The following table presents the effect of our derivative financial instruments on our consolidated statements of comprehensive income and operations ($ in thousands):

Derivatives in Hedging Relationships

2 unchanged sentences

from Accumulated OCI into Income Amount of

Loss Reclassified from

Gain Reclassified from

Accumulated OCI into Income

Three Months Ended June 30, 2023 Six Months Ended June 30, 2023 Three Months Ended June 30, 2023 Six Months Ended June 30, 2023

Three Months Ended September 30, 2023 Nine Months Ended September 30, 2023 Three Months Ended September 30, 2023 Nine Months Ended September 30, 2023

Net Investment Hedges

4 unchanged sentences

Total $ 72,032 $ 22,498 $ 384 $ 459

(1) During the three and six months ended June 30, 2023, we paid net cash settlements of $ 7.8 million and $ 139.2 million, respectively, on our foreign currency forward contracts, respectively.

(1) During the three and nine months ended September 30, 2023, we paid net cash settlements of $ 44.7 million and $ 183.9 million, respectively, on our foreign currency forward contracts.

Those amounts are included as a component of accumulated other comprehensive income on our consolidated balance sheets.

(2) During the three and nine months ended September 30, 2023, we recorded total interest and related expenses of $ 354.0 million and $ 1.0 billion, respectively, which were reduced by $ 384,000 and $ 459,000 , respectively, related to income generated by our cash flow hedges.

Credit-Risk Related Contingent Features

1 unchanged sentence

In addition, certain of our agreements with our derivative counterparties require that we post collateral to secure net liability positions.

As of June 30, 2023, we were in a net liability position with one of our counterparties and in a net asset position with our other counterparty.

As of June 30, 2023, we had collateral posted with our counterparties of $ 9.0 million.

As of September 30, 2023, we were in a net asset position with our counterparties.

As of September 30, 2023, we had no collateral posted with our counterparties.

As of December 31, 2022, we were in a net liability position with one of our counterparties and in a net asset position with our other counterparty.

2 unchanged sentences

Authorized Capital

As of June 30, 2023, we had the authority to issue up to 500,000,000 shares of stock, consisting of 400,000,000 shares of class A common stock and 100,000,000 shares of preferred stock.

As of September 30, 2023, we had the authority to issue up to 500,000,000 shares of stock, consisting of 400,000,000 shares of class A common stock and 100,000,000 shares of preferred stock.

Subject to applicable NYSE listing requirements, our board of directors is authorized to cause us to issue additional shares of authorized stock without stockholder approval.

In addition, to the extent not issued, currently authorized stock may be reclassified between class A common stock and preferred stock.

We did no t have any shares of preferred stock issued and outstanding as of June 30, 2023 and December 31, 2022.

We did no t have any shares of preferred stock issued and outstanding as of September 30, 2023 and December 31, 2022.

Class A Common Stock and Deferred Stock Units

7 unchanged sentences

The following table details the movement in our outstanding shares of class A common stock, including restricted class A common stock and deferred stock units:

Six Months Ended June 30,

Nine Months Ended September 30,

Common Stock Outstanding (1)

6 unchanged sentences

Ending balance 172,645,283 171,295,780

(1) Includes 339,702 and 391,027 deferred stock units held by members of our board of directors as of June 30, 2023 and 2022, respectively.

(2) Includes 3,613 and 3,420 shares issued under our dividend reinvestment program during the six months ended June 30, 2023 and 2022, respectively.

(3) Includes 25,482 and 13,197 restricted shares issued to our board of directors during the six months ended June 30, 2023 and 2022, respectively.

(4) Net of 4,000 shares of restricted class A common stock forfeited under our stock-based incentive plans during the six months ended June 30, 2022.

No shares were forfeited during the six months ended June 30, 2023.

(1) Includes 349,232 and 399,512 deferred stock units held by members of our board of directors as of September 30, 2023 and 2022, respectively.

(2) Includes 5,079 and 5,420 shares issued under our dividend reinvestment program during the nine months ended September 30, 2023 and 2022, respectively.

(3) Includes 25,482 and 13,197 restricted shares issued to our board of directors during the nine months ended September 30, 2023 and 2022, respectively.

(4) Net of 15,477 and 33,250 shares of restricted class A common stock forfeited under our stock-based incentive plans during the nine months ended September 30, 2023 and 2022, respectively.

Dividend Reinvestment and Direct Stock Purchase Plan

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The direct stock purchase component allows stockholders and new investors, subject to our approval, to purchase shares of class A common stock directly from us.

During the six months ended June 30, 2023 and 2022, we issued 3,613 shares and 3,420 shares, respectively, of class A common stock under the dividend reinvestment component of the plan.

As of June 30, 2023, a total of 9,977,935 shares of class A common stock remained available for issuance under the dividend reinvestment and direct stock purchase plan.

During the nine months ended September 30, 2023 and 2022, we issued 5,079 shares and 5,420 shares, respectively, of class A common stock under the dividend reinvestment component of the plan.

As of September 30, 2023, a total of 9,976,469 shares of class A common stock remained available for issuance under the dividend reinvestment and direct stock purchase plan.

At the Market Stock Offering Program

As of June 30, 2023, we are party to seven equity distribution agreements, or ATM Agreements, pursuant to which we may sell, from time to time, up to an aggregate sales price of $ 699.1 million of our class A common stock.

As of September 30, 2023, we are party to seven equity distribution agreements, or ATM Agreements, pursuant to which we may sell, from time to time, up to an aggregate sales price of $ 699.1 million of our class A common stock.

Sales of class A common stock made pursuant to our ATM Agreements may be made in negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act of 1933, as amended.

Actual sales depend on a variety of factors including market conditions, the trading price of our class A common stock, our capital needs, and our determination of the appropriate sources of funding to meet such needs.

During the six months ended June 30, 2023, we did no t issue any shares of our class A common stock under ATM Agreements.

During the six months ended June 30, 2022, we issued and sold 1,675,000 shares of class A common stock under ATM Agreements, generating net proceeds totaling $ 52.2 million.

As of June 30, 2023, sales of our class A common stock with an aggregate sales price of $ 480.9 million remained available for issuance under our ATM Agreements.

During the nine months ended September 30, 2023, we did no t issue any shares of our class A common stock under ATM Agreements.

During the nine months ended September 30, 2022, we issued and sold 2,303,469 shares of class A common stock under ATM Agreements, generating net proceeds totaling $ 70.7 million.

As of September 30, 2023, sales of our class A common stock with an aggregate sales price of $ 480.9 million remained available for issuance under our ATM Agreements.

We generally intend to distribute substantially all of our taxable income, which does not necessarily equal net income as calculated in accordance with GAAP, to our stockholders each year to comply with the REIT provisions of the Internal Revenue Code of 1986, as amended, or the Internal Revenue Code.

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All distributions will be made at the discretion of our board of directors and will depend upon our taxable income, our financial condition, our maintenance of REIT status, applicable law, and other factors as our board of directors deems relevant.

On June 15, 2023, we declared a dividend of $ 0.62 per share, or $ 106.8 million in aggregate, that was paid on July 14, 2023 to stockholders of record as of June 30, 2023.

On September 15, 2023, we declared a dividend of $ 0.62 per share, or $ 106.8 million in aggregate, that was paid on October 13, 2023 to stockholders of record as of September 29, 2023.

Blackstone Mortgage Trust, Inc.

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The following table details our dividend activity ($ in thousands, except per share data):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

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The following table sets forth the calculation of basic and diluted net income per share of class A common stock based on the weighted-average of both restricted and unrestricted class A common stock outstanding ($ in thousands, except per share data):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

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(2) Represents the interest expense on our Convertible Notes, net of incentive fees.

(3) For the three and six months ended June 30, 2023, represents 8.3 million of weighted average shares, using the if-converted method, related to our March 2022 Convertible Notes.

For the three and six months ended June 30, 2022, represents 8.3 million and 6.1 million of weighted-average shares, using the if-converted method, related to our March 2022 and March 2018 Convertible Notes, respectively.

Our March 2018 Convertible Notes were repaid during the six months ended June 30, 2023.

(3) For the three months ended September 30, 2023, our Convertible Notes were not included in the calculation of diluted earnings per share, as the impact is antidilutive.

For the nine months ended September 30, 2023, represents 8.3 million of weighted-average shares, using the if-converted method, related to our March 2022 convertible notes.

For the three and nine months ended September 30, 2022, represents 8.3 million and 6.1 million of weighted-average shares, using the if-converted method, related to our March 2022 and March 2018 convertible notes, respectively.

Our March 2018 convertible notes were repaid during the nine months ended September 30, 2023.

Refer to Note 11 for additional discussion on our Convertible Notes.

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Accumulated Other Comprehensive Income

As of June 30, 2023, total accumulated other comprehensive income was $ 10.7 million, primarily representing $ 210.1 million of net realized and unrealized gains related to changes in the fair value of derivative instruments offset by $ 199.4 million of cumulative unrealized currency translation adjustments on assets and liabilities denominated in foreign currencies.

As of September 30, 2023, total accumulated other comprehensive income was $ 10.6 million, primarily representing $ 281.8 million of net realized and unrealized gains related to changes in the fair value of derivative instruments offset by $ 271.2 million of cumulative unrealized currency translation adjustments on assets and liabilities denominated in foreign currencies.

As of December 31, 2022, total accumulated other comprehensive income was $ 10.0 million, primarily representing $ 259.8 million of net realized and unrealized gains related to changes in the fair value of derivative instruments offset by $ 249.8 million of cumulative unrealized currency translation adjustments on assets and liabilities denominated in foreign currencies.

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A portion of our Multifamily Joint Venture’s consolidated equity and results of operations are allocated to these non-controlling interests based on their pro rata ownership of our Multifamily Joint Venture.

As of June 30, 2023, our Multifamily Joint Venture’s total equity was $ 170.2 million, of which $ 144.7 million was owned by us, and $ 25.5 million was allocated to non-controlling interests.

As of September 30, 2023, our Multifamily Joint Venture’s total equity was $ 151.0 million, of which $ 128.3 million was owned by us, and $ 22.7 million was allocated to non-controlling interests.

As of December 31, 2022, our Multifamily Joint Venture’s total equity was $ 169.4 million, of which $ 144.0 million was owned by us, and $ 25.4 million was allocated to non-controlling interests.

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Core Earnings, as defined in our Management Agreement, is generally equal to our GAAP net income (loss), including realized gains and losses not otherwise recognized in current period GAAP net income (loss), and excluding (i) non-cash equity compensation expense, (ii) depreciation and amortization, (iii) unrealized gains (losses), (iv) net income (loss) attributable to our legacy portfolio, (v) certain non-cash items, and (vi) incentive management fees.

During the three and six months ended June 30, 2023, we incurred $ 18.6 million and $ 37.2 million, respectively, of management fees payable to our manager, compared with $ 18.2 million and $ 36.3 million, respectively, during the same period in 2022.

In addition, during the three and six months ended June 30, 2023, we incurred $ 14.2 million and $ 26.7 million, respectively, of incentive fees payable to our Manager, compared with $ 8.8 million and $ 14.3 million, respectively, during the same period in 2022.

As of June 30, 2023 and December 31, 2022 we had accrued management and incentive fees payable to our Manager of $ 32.8 million and $ 33.8 million, respectively.

During the three and nine months ended September 30, 2023, we incurred $ 18.8 million and $ 56.0 million, respectively, of management fees payable to our manager, compared with $ 18.3 million and $ 54.6 million, respectively, during the same periods in 2022.

In addition, during the three and nine months ended September 30, 2023, we incurred $ 10.1 million and $ 36.8 million, respectively, of incentive fees payable to our Manager, compared with $ 7.6 million and $ 21.9 million, respectively, during the same periods in 2022.

As of September 30, 2023 and December 31, 2022 we had accrued management and incentive fees payable to our Manager of $ 28.9 million and $ 33.8 million, respectively.

General and Administrative Expenses

General and administrative expenses consisted of the following ($ in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

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Total general and administrative expenses $ 12,001 $ 12,932 $ 37,888 $ 37,701

(1) During the three and six months ended June 30, 2023, we recognized an aggregate $ 288,000 and $ 596,000 , respectively, of expenses related to our Multifamily Joint Venture.

During the three and six months ended June 30, 2022, we recognized an aggregate $ 227,000 and $ 544,000 , respectively, of expenses related to our Multifamily Joint Venture.

(1) During the three and nine months ended September 30, 2023, we recognized an aggregate $ 230,000 and $ 826,000 , respectively, of expenses related to our Multifamily Joint Venture.

During the three and nine months ended September 30, 2022, we recognized an aggregate $ 239,000 and $ 783,000 , respectively, of expenses related to our Multifamily Joint Venture.

We have elected to be taxed as a REIT under the Internal Revenue Code for U.S.

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If we fail to maintain our qualification as a REIT for any taxable year, we may be subject to material penalties as well as federal, state, and local income tax on our taxable income at regular corporate rates and we would not be able to qualify as a REIT for the subsequent four full taxable years.

As of June 30, 2023 and December 31, 2022, we were in compliance with all REIT requirements.

As of September 30, 2023 and December 31, 2022, we were in compliance with all REIT requirements.

Securitization transactions could result in the creation of taxable mortgage pools for federal income tax purposes.

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We have not made UBTI distributions to our common stockholders and do not intend to make such UBTI distributions in the future.

During the three and six months ended June 30, 2023, we recorded a current income tax provision of $ 1.2 million and $ 3.1 million, respectively, primarily related to activities of our taxable REIT subsidiaries and various state and local taxes.

During the three and six months ended June 30, 2022, we recorded a current income tax provision of $ 746,000 and $ 892,000 , respectively.

We did not have any deferred tax assets or liabilities as of June 30, 2023 or December 31, 2022.

During the three and nine months ended September 30, 2023, we recorded a current income tax provision of $ 1.6 million and $ 4.7 million, respectively, primarily related to activities of our taxable REIT subsidiaries and various state and local taxes.

During the three and nine months ended September 30, 2022, we recorded a current income tax provision of $ 1.2 million and $ 2.1 million, respectively.

We did not have any deferred tax assets or liabilities as of September 30, 2023 or December 31, 2022.

We have net operating losses, or NOLs, generated by our predecessor business that may be carried forward and utilized in current or future periods.

As a result of our issuance of 25,875,000 shares of class A common stock in May 2013, the availability of our NOLs is generally limited to $ 2.0 million per annum by change of control provisions promulgated by the Internal Revenue Service with respect to the ownership of Blackstone Mortgage Trust.

As of June 30, 2023, we had estimated NOLs of $ 159.0 million that will expire in 2029, unless they are utilized by us prior to expiration.

As of September 30, 2023, we had estimated NOLs of $ 159.0 million that will expire in 2029, unless they are utilized by us prior to expiration.

Previously, we recorded a full valuation allowance against such NOLs as we expected that they would expire unutilized.

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We have recorded a full valuation allowance against such NOLs as it is probable that they will expire unutilized.

As of June 30, 2023, tax years 2019 through 2022 remain subject to examination by taxing authorities.

As of September 30, 2023, tax years 2019 through 2022 remain subject to examination by taxing authorities.

STOCK-BASED INCENTIVE PLANS

We are externally managed by our Manager and do not currently have any employees.

However, as of June 30, 2023, our Manager, certain individuals employed by an affiliate of our Manager, and certain members of our board of directors were compensated, in part, through our issuance of stock-based instruments.

However, as of September 30, 2023, our Manager, certain individuals employed by an affiliate of our Manager, and certain members of our board of directors were compensated, in part, through our issuance of stock-based instruments.

Under our two current stock incentive plans, a maximum of 10,400,000 shares of our class A common stock may be issued to our Manager, our directors and officers, and certain employees of affiliates of our Manager.

As of June 30, 2023, there were 8,671,307 shares available under our current stock incentive plans.

As of September 30, 2023, there were 8,677,254 shares available under our current stock incentive plans.

Prior to the adoption and shareholder approval of our new stock incentive plans in June 2022, we had stock-based incentive awards outstanding under nine stock incentive plans.

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As such, no new awards may be issued under these expired plans, although our 2018 plans will continue to govern outstanding awards, other than DSUs, previously issued thereunder until such awards become vested or expire.

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued) (Unaudited)

The following table details the movement in our outstanding shares of restricted class A common stock and the weighted-average grant date fair value per share:

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Vested ( 834,264 ) 27.34

Balance as of June 30, 2023

Forfeited ( 15,477 ) 24.55

Balance as of September 30, 2023

1,539,475 $ 26.09

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued) (Unaudited)

These shares generally vest in installments over a period of three years , pursuant to the terms of the respective award agreements and the terms of our current benefit plans.

The 1,826,571 shares of restricted class A common stock outstanding as of June 30, 2023 will vest as follows:

The 1,539,475 shares of restricted class A common stock outstanding as of September 30, 2023 will vest as follows:

271,668 shares will vest in 2023;

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and 423,698 shares will vest in 2025.

As of June 30, 2023, total unrecognized compensation cost relating to unvested share-based compensation arrangements was $ 46.3 million based on the grant date fair value of shares granted.

This cost is expected to be recognized over a weighted-average period of 1.1 years from June 30, 2023.

As of September 30, 2023, total unrecognized compensation cost relating to unvested share-based compensation arrangements was $ 38.4 million based on the grant date fair value of shares granted.

This cost is expected to be recognized over a weighted-average period of 1.0 years from September 30, 2023.

Assets and Liabilities Measured at Fair Value

The following table summarizes our assets and liabilities measured at fair value on a recurring basis ($ in thousands):

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

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As discussed in Note 2, GAAP requires disclosure of fair value information about financial instruments, whether or not recognized at fair value in the statement of financial position, for which it is practicable to estimate that value.

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued) (Unaudited)

The following table details the book value, face amount, and fair value of the financial instruments described in Note 2 ($ in thousands):

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Financial assets

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See Note 2 for further discussion regarding fair value measurement of certain of our assets and liabilities.

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued) (Unaudited)

VARIABLE INTEREST ENTITIES

2 unchanged sentences

The following table details the assets and liabilities of our consolidated VIEs ($ in thousands):

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Loans receivable $ 3,155,701 $ 3,317,316

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We are not obligated to provide, have not provided, and do not intend to provide financial support to these consolidated VIEs.

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued) (Unaudited)

TRANSACTIONS WITH RELATED PARTIES

We are managed by our Manager pursuant to the Management Agreement, the current term of which expires on December 19, 2023, and will be automatically renewed for a one year term upon such date and each anniversary thereafter unless earlier terminated.

As of June 30, 2023 and December 31, 2022, our consolidated balance sheets included $ 32.8 million and $ 33.8 million of accrued management and incentive fees payable to our Manager, respectively.

During the three and six months ended June 30, 2023, we paid aggregate management and incentive fees of $ 31.1 million and $ 64.9 million, respectively, to our Manager, compared to $ 23.5 million and $ 51.9 million, respectively, during the same period of 2022.

In addition, during the three and six months ended June 30, 2023, we incurred expenses of $ 1.5 million and $ 1.9 million, respectively, that were paid by our Manager and will be reimbursed by us, compared to $ 367,000 and $ 560,000 of such expenses during the same period of 2022.

As of June 30, 2023, our Manager held 901,515 shares of unvested restricted class A common stock, which had an aggregate grant date fair value of $ 24.5 million, and vest in installments over three years from the date of issuance.

During the three and six months ended June 30, 2023 and 2022, we recorded non-cash expenses related to shares held by our Manager of $ 3.9 million and $ 7.8 million, respectively, compared to $ 4.2 million and $ 8.4 million during the same period in 2022.

As of September 30, 2023 and December 31, 2022, our consolidated balance sheets included $ 28.9 million and $ 33.8 million of accrued management and incentive fees payable to our Manager, respectively.

During the three and nine months ended September 30, 2023, we paid aggregate management and incentive fees of $ 32.8 million and $ 97.7 million, respectively, to our Manager, compared to $ 27.1 million and $ 78.9 million, respectively, during the same period of 2022.

In addition, during the three and nine months ended September 30, 2023, we incurred expenses of $ 325,000 and $ 2.3 million, respectively, that were paid by our Manager and will be reimbursed by us, compared to $ 163,000 and $ 723,000 , respectively, of such expenses during the same period of 2022.

As of September 30, 2023, our Manager held 762,845 shares of unvested restricted class A common stock, which had an aggregate grant date fair value of $ 20.6 million, and vest in installments over three years from the date of issuance.

During the three and nine months ended September 30, 2023, we recorded non-cash expenses related to shares held by our Manager of $ 3.9 million and $ 11.7 million, respectively, compared to $ 4.1 million and $ 12.5 million during the same period in 2022.

Refer to Note 16 for further details on our restricted class A common stock.

An affiliate of our Manager is the special servicer of the CLOs.

This affiliate did not earn any special servicing fees related to the CLOs during the years ended June 30, 2023 and 2022.

During the three and six months ended June 30, 2023, we incurred $ 242,000 and $ 480,000 , respectively, of expenses for various administrative and operations services to third-party service providers that are affiliates of our Manager, compared to $ 95,000 and $ 192,000 , respectively, during the same period of 2022.

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued) (Unaudited)

This affiliate did not earn any special servicing fees related to the CLOs during the nine months ended September 30, 2023 and 2022.

During the three and nine months ended September 30, 2023, we incurred $ 320,000 and $ 800,000 , respectively, of expenses for various administrative and operations services to third-party service providers that are affiliates of our Manager, compared to $ 88,000 and $ 280,000 , respectively, during the same period of 2022.

In the first quarter of 2019, we originated £ 240.1 million of a total £ 490.0 million senior loan to a borrower that is wholly owned by a Blackstone-advised investment vehicle.

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Unfunded Commitments Under Loans Receivable

As of June 30, 2023, we had aggregate unfunded commitments of $ 3.0 billion across 105 loans receivable, and $ 1.8 billion of committed or identified financings for those commitments, resulting in net unfunded commitments of $ 1.2 billion.

As of September 30, 2023, we had aggregate unfunded commitments of $ 2.7 billion across 101 loans receivable, and $ 1.5 billion of committed or identified financings 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, and their fundability varies depending on the progress of capital projects, leasing, and cash flows at the properties securing our loans.

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We expect to fund our loan commitments over the remaining term of the related loans, which have a weighted-average future funding period of 2.6 years.

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued) (Unaudited)

Principal Debt Repayments

Our contractual principal debt repayments as of June 30, 2023 were as follows ($ in thousands):

Our contractual principal debt repayments as of September 30, 2023 were as follows ($ in thousands):

Asset-Specific Debt (1)

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Board of Directors’ Compensation

As of June 30, 2023, of the ten members of our board of directors, our six independent directors are entitled to annual compensation of $ 210,000 each, of which $ 95,000 is paid in cash and $ 115,000 is paid in the form of deferred stock units or, at their election, shares of restricted common stock.

As of September 30, 2023, of the ten members of our board of directors, our six independent directors are entitled to annual compensation of $ 210,000 each, of which $ 95,000 is paid in cash and $ 115,000 is paid in the form of deferred stock units or, at their election, shares of restricted common stock.

The other four board members, including our chairman and our chief executive officer, are not compensated by us for their service as directors.

In addition, (i) the chairs of our audit, compensation, and corporate governance committees receive additional annual cash compensation of $ 20,000 , $ 15,000 , and $ 10,000 , respectively and (ii) the members of our audit and investment risk management committees receive additional annual cash compensation of $ 10,000 and $ 7,500 , respectively.

Blackstone Mortgage Trust, Inc.

Notes to Consolidated Financial Statements (continued) (Unaudited)

From time to time, we may be involved in various claims and legal actions arising in the ordinary course of business.

As of June 30, 2023, we were not involved in any material legal proceedings.

As of September 30, 2023, we were not involved in any material legal proceedings.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements