What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2025-02-12 compared with 2024-02-14 · 43 added, 41 removed, 150 unchanged (36% of the section changed)

References herein to “Blackstone Mortgage Trust,” “company,” “we,” “us,” or “our” refer to Blackstone Mortgage Trust, Inc., a Maryland corporation, and its subsidiaries unless the context specifically requires otherwise.

Blackstone Mortgage Trust is a real estate finance company that originates senior loans collateralized by commercial real estate in North America, Europe, and Australia.

Our portfolio is composed primarily of loans secured by high-quality, institutional assets in major markets, sponsored by experienced, well-capitalized real estate investment owners and operators.

These senior loans are capitalized by accessing a variety of financing options, including borrowing under our credit facilities, issuing CLOs or single-asset securitizations, and corporate financing, depending on our view of the most prudent financing option available for each of our investments.

We are not in the business of buying or trading securities, and the only securities we own are the retained interests from our securitization financing transactions, which we have not financed.

Blackstone Mortgage Trust is a real estate finance company that originates, acquires, and manages senior loans and other debt or credit-oriented investments collateralized by or relating to commercial real estate in North America, Europe, and Australia.

Our portfolio is composed primarily of senior loans secured by high-quality, institutional assets located in major markets, and sponsored by experienced, well-capitalized real estate investment owners and operators.

We finance our investments in a variety of ways, including borrowing under our credit facilities, issuing collateralized loan obligations, or CLOs, or single-asset securitizations, asset-specific financings, syndicating senior loan participations, and corporate financing, depending on our view of the most prudent financing option available for each of our investments.

We are externally managed by BXMT Advisors L.L.C., or our Manager, a subsidiary of Blackstone Inc., or Blackstone, and are a real estate investment trust, or REIT, traded on the New York Stock Exchange, or NYSE, under the symbol “BXMT.” Our principal executive offices are located at 345 Park Avenue, 24th Floor, New York, New York 10154.

8 unchanged sentences

Our Manager is a part of Blackstone, which is the world's largest alternative asset manager.

Blackstone's assets under management include investment vehicles focused on private equity, real estate, public debt and equity, infrastructure, life sciences, growth equity, opportunistic, non-investment grade credit, real assets and secondary funds, all on a global basis.

Blackstone's assets under management includes global investment strategies focused on real estate, private equity, infrastructure, life sciences, growth equity, credit, real assets, secondaries and hedge funds.

Through its different businesses, Blackstone had total assets under management of over $1.1 trillion as of December 31, 2024.

Our Manager benefits from the resources, relationships, and expertise of the 839 professionals in Blackstone’s global real estate group.

Blackstone has built the world's preeminent global real estate business with $336.9 billion of investor capital under management as of December 31, 2023.

Blackstone’s real estate group is the largest owner of commercial real estate globally with over 12,500 commercial assets and $315.4 billion of investor capital under management as of December 31, 2024.

Kathleen McCarthy and Nadeem Meghji, who are the global co-heads of Blackstone’s real estate group, are members of our Manager’s investment committee.

1 unchanged sentence

Blackstone Real Estate Debt Strategies, or BREDS, was launched in 2008 within Blackstone’s global real estate group to pursue opportunities relating to real estate debt investments globally, with a focus primarily on North America and Europe.

Jonathan Pollack, the global head of Blackstone Real Estate Credit, which includes BREDS, is a member of our Manager’s investment committee and is a member of our board of directors.

Tim Johnson, the Global Head of BREDS, serves as the chairperson of our board of directors and is a member of our Manager’s investment committee.

Katharine Keenan, the global chief operating officer of Blackstone Real Estate Credit and a member of our Manager’s investment committee, serves as our chief executive officer and is a member of our board of directors.

In addition, Michael Nash, who served as chair of BREDS until his retirement from Blackstone and also served as the executive chairman of our board of directors until recently, remains a member of our board of directors.

Katharine Keenan, the Global Co-Chief Investment Officer of BREDS and a member of our Manager’s investment committee, serves as our chief executive officer and is a member of our board of directors.

In addition, one of our other directors, Michael Nash, who served for periods of time prior to his retirement from Blackstone in 2023 as chair of BREDS and as the executive chairman of our board of directors, remains a member of our board of directors.

As of December 31, 2024, 172 dedicated BREDS professionals, including 30 investment professionals based in London and Australia, managed $77.2 billion of investor capital.

2 unchanged sentences

Our Manager is subject to the supervision and oversight of our board of directors and has only such functions and authority as our board of directors delegates to it.

Pursuant to a management agreement between our Manager and us, or our Management Agreement, our Manager is entitled to receive a base management fee, an incentive fee, and expense reimbursements.

See Notes 14 and 19 to our consolidated financial statements and the information required to be disclosed pursuant to Item 13 “Certain Relationships and Related Transactions, and Director Independence” in our definitive proxy statement with respect to our 2024 annual meeting of shareholders, which is incorporated by reference into this Annual Report on Form 10-K, for more detail on the terms of the Management Agreement.

Pursuant to a management agreement between our Manager and us, or our Management Agreement, our Manager is entitled to receive a base management fee,

an incentive fee, and expense reimbursements.

See Notes 16 and 21 to our consolidated financial statements and the information required to be disclosed pursuant to Item 13.

“Certain Relationships and Related Transactions, and Director Independence” in our definitive proxy statement with respect to our 2025 annual meeting of shareholders, which is incorporated by reference into this Annual Report on Form 10-K, for more detail on the terms of the Management Agreement.

Our Investment Strategy

Our investment strategy is to originate loans and invest in debt and related instruments supported by institutional quality commercial real estate in attractive locations.

Through our Manager, we draw on Blackstone’s extensive real estate debt investment platform and its established sourcing, underwriting, and structuring capabilities in order to execute our investment strategy.

In addition, we have access to Blackstone’s extensive network and Blackstone’s substantial real estate and other investment holdings, which provide our Manager access to market data on a scale generally not available to others in the market.

We directly originate, co-originate, and acquire debt instruments in conjunction with acquisitions, refinancings, and recapitalizations of commercial real estate in North America, Europe, and Australia, with a focus on performing loans that are supported by well-capitalized properties and borrowers.

Our investment strategy is to originate loans and invest in debt or credit-related instruments supported by institutional quality commercial real estate in attractive locations.

Through our Manager, we draw on Blackstone’s extensive real estate investment platform and its established sourcing, underwriting, and structuring capabilities in order to execute our investment strategy.

In addition, we have access to Blackstone’s extensive network and operational information from Blackstone’s substantial real estate and other investment holdings, which provide our Manager access to market data on a scale generally not available to others in the market.

We directly originate, co-originate, and acquire real estate credit investments in conjunction with acquisitions, refinancings, and recapitalizations of commercial real estate in North America, Europe, and Australia, with a focus on performing loans that are supported by well-capitalized properties and borrowers.

We believe that the scale and flexibility of our capital, as well as our Manager’s and Blackstone’s relationships, enables us to target opportunities with strong sponsorship and invest in large loans or other debt that is collateralized by high-quality assets and portfolios.

1 unchanged sentence

We believe our current investment strategy will produce significant opportunities to make investments with attractive risk-return profiles.

However, to capitalize on the investment opportunities that may be present at various other points of an economic cycle, we may expand or change our investment strategy by targeting other credit-oriented investments secured by commercial or residential real estate.

We believe that the diversification of our investment portfolio, our ability to actively manage those investments, and the flexibility of our strategy positions us to generate attractive returns for our stockholders in a variety of market conditions over the long term.

During 2024, we entered into (i) an agreement, or our Agency Multifamily Lending Partnership, with M&T Realty Capital Corporation, or MTRCC, a subsidiary of M&T Bank, to earn a portion of origination, servicing, and other fees for multifamily agency loans we refer to MTRCC for origination, and (ii) a joint venture, or our Net Lease Joint Venture, with a Blackstone-advised investment vehicle to invest in triple net lease properties.

We believe that the diversification of our investment portfolio, our ability to actively manage those investments, and the flexibility of our strategy positions us to generate attractive risk-adjusted returns for our stockholders in a variety of market conditions over the long term.

Our Portfolio

3 unchanged sentences

This focused lending strategy is designed to generate attractive current income while protecting investors’ capital.

During the year ended December 31, 2023, loan fundings totaled $1.6 billion, with loan repayments and sales of $3.8 billion, for net repayments of $2.2 billion.

During the year ended December 31, 2024, we originated or acquired $431.9 million of loans.

Loan fundings during the year totaled $1.6 billion, with loan repayments and sales of $5.2 billion, for net repayments of $3.6 billion.

The following table details overall statistics for our loan portfolio as of December 31, 2024 ($ in thousands):

14 unchanged sentences

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

As of December 31, 2023, total loan exposure, includes (i) loans with an outstanding principal balance of $23.9 billion that are included in our consolidated financial statements, (ii) $1.1 billion of non-consolidated senior interests in loans we have sold, which are not included in our consolidated financial statements, and excludes (iii) $100.9 million of junior loan interests that we have sold, but that remain included in our consolidated financial statements.

As of December 31, 2024, total loan exposure, includes (i) loans with an outstanding principal balance of $19.2 billion that are included in our consolidated financial statements, (ii) $817.5 million of non-consolidated senior interests in loans we have sold, which are not included in our consolidated financial statements, and excludes (iii) $100.1 million of junior loan interests that we have sold, but that remain included in our consolidated financial statements.

We have retained an aggregate $228.1 million of subordinate mezzanine loans, as of December 31, 2024, related to non-consolidated senior interests that are included in our balance sheet portfolio.

3 unchanged sentences

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

As of December 31, 2023, 99% of our loans by total loan exposure earned a floating rate of interest, primarily indexed to SOFR, and the remaining 1% of our loans earn a fixed rate of interest.

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

As of December 31, 2024, substantially all of our loans by total loan exposure earned a floating rate of interest, primarily indexed to SOFR.

In addition to cash coupon, all-in yield includes the amortization of deferred origination and extension fees, loan origination costs, and purchase discounts, as well as the accrual of exit fees.

Excludes loans accounted for under the cost-recovery method.

Excludes loans accounted for under the cost-recovery and nonaccrual methods, if any.

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

Excludes loans accounted for under the cost-recovery and nonaccrual methods, if any.

As of December 31, 2024, 10% of our loans by total loan exposure were subject to yield maintenance or other prepayment restrictions and 90% were open to repayment by the borrower without penalty.

(5) Based on LTV as of the dates loans were originated or acquired by us, excluding any junior participations sold.

The charts below detail the geographic distribution and types of properties securing our investment portfolio, as of December 31, 2023:

(5) Based on LTV as of the dates loans were originated or acquired by us, excluding any loans that are impaired and any junior participations sold.

The charts below detail the geographic distribution and types of properties securing our loan portfolio, as of December 31, 2024:

Geographic Diversification

2 unchanged sentences

(Net Loan Exposure) (1)(3)

(1) Net loan exposure reflects the amount of each loan that is subject to risk of credit loss to us as of December 31, 2023, which is our total loan exposure net of (i) $1.1 billion of non-consolidated senior interests, (ii) $1.0 billion of asset-specific debt, (iii) $236.8 million of senior loan participations sold, (iv) $53.0 million of cost-recovery proceeds, and (v) our total loans receivable current expected credit loss, or CECL, reserve of $576.9 million.

(1) Net loan exposure reflects the amount of each loan that is subject to risk of credit loss to us as of December 31, 2024, which is our total loan exposure net of (i) $817.5 million of non-consolidated senior interests, (ii) $1.2 billion of asset-specific debt, (iii) $106.7 million of cost-recovery proceeds, and (iv) our total loans receivable current expected credit loss, or CECL, reserve of $733.9 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.

(2) States comprising less than 1% of net loan exposure are excluded.

(2) States and countries comprising less than 1% of net loan exposure are excluded.

(3) Assets with multiple components are proportioned into the relevant collateral types based on the allocated value of each collateral type.

2 unchanged sentences

Loan Portfolio Details” in this Annual Report on Form 10-K.

Real Estate Owned

As part of our portfolio management strategy to maximize economic outcomes, from time to time, we may hold certain real estate owned, or REO, investments resulting from us acquiring title to or taking control of a loan’s underlying real estate collateral.

As of December 31, 2024, we had seven REO assets with an aggregate carrying value of $640.4 million.

Financing Strategy

To maintain an adequate amount of available liquidity and execute our business plan, we look to a variety of capital sources.

In addition to raising capital through public offerings of our equity and debt securities, our financing strategy includes secured debt, securitizations, and asset-specific financings, as well as corporate term loans, senior secured notes, and convertible notes.

In addition to raising capital through public offerings of our equity and debt securities, our financing strategy includes secured debt, securitizations, and asset-specific financings, as well as senior term loan facilities, senior secured notes, and convertible notes.

In addition to our current mix of financing sources, we also may access additional forms of financings including resecuritizations and public and private, secured and unsecured debt issuances by us or our subsidiaries.

During the year ended December 31, 2024, we (i) borrowed an additional $650.0 million under our term loan facilities with an interest rate of SOFR plus 3.75% and maturity in 2028, (ii) issued $450.0 million of 7.75% senior secured notes due 2029, or the senior secured notes due 2029, (iii) increased the size of one of our existing secured credit facilities by $100.0 million, (iv) terminated two of our existing credit facilities, resulting in a reduction in our aggregate borrowing capacity by $650.0 million, and (v) repaid a net $3.3 billion under our portfolio financings, resulting in an aggregate $3.7 billion reduction in our portfolio and corporate financings during the year.

We also maintained the cost of our portfolio financings throughout the year, with a weighted-average spread of +1.92% over respective benchmark rates on our $9.7 billion of secured debt, as of December 31, 2024, relative to +1.89% as of December 31, 2023.

As of December 31, 2024, we had total liquidity of $1.5 billion with no corporate debt maturities until 2026.

During the year ended December 31, 2023, we (i) repaid the aggregate $220.0 million principal amount of our 4.75% convertible senior notes due 2023, (ii) repurchased an aggregate principal amount of $33.9 million of our 3.750% senior secured notes due 2027, or Senior Secured Notes, at a weighted-average price of 85%, resulting in a gain on

extinguishment of debt of $4.6 million, and (iii) repaid a net $1.2 billion under our portfolio financings, resulting in an aggregate $1.4 billion reduction in our portfolio and corporate financings during the year.

We also maintained the cost of our portfolio financings throughout the year, with a weighted-average spread of +1.89% on our $12.7 billion of secured debt, as of December 31, 2023, relative to +1.85% as of December 31, 2022.

The following table details our outstanding portfolio financing arrangements as of December 31, 2024 ($ in thousands):

11 unchanged sentences

We will also seek to limit the risks associated with recourse borrowing.

From time to time, we engage in hedging transactions that seek to mitigate the effects of fluctuations in currencies or interest rates on our cash flows.

From time to time, we engage in hedging transactions that seek to mitigate the effects of fluctuations in currencies or interest rates on our cash flows and asset values.

These hedging transactions could take a variety of forms, including swaps or cap agreements, options, futures contracts, forward rate or currency agreements, or similar financial instruments.

1 unchanged sentence

Generally, our business model is such that rising interest rates will increase our net income, while declining interest rates will decrease net income.

As of December 31, 2023, 99% of our loans by total loan exposure earned a floating rate of interest and were financed with liabilities that pay interest at floating rates, which resulted in an amount of net equity that is positively correlated to rising interest rates, subject to the impact of interest rate floors on certain of our floating rate loans.

Refer to “Part I.

Risk Factors—Risks Related to Our Lending and Investment Activities—The transition away from reference rates and the use of alternative replacement reference rates may adversely affect net interest income related to our loans and investments or otherwise adversely affect our results of operations, cash flows and the market value of our investments." of this Annual Report on Form 10-K.

As of December 31, 2024, substantially all of our loans by total loan exposure earned a floating rate of interest and were financed with liabilities that pay interest at floating rates, which resulted in an amount of net equity that is positively correlated to changing interest rates, subject to the impact of interest rate floors on certain of our floating rate loans.

Investment Guidelines

Our board of directors has approved the following investment guidelines:

• we shall seek to invest our capital in a broad range of investments in, or relating to, public and/or private debt, non-controlling equity, loans and/or other interests (including “mezzanine” interests and/or options or derivatives related thereto) relating to real estate assets (including pools thereof), real estate companies, and/or real estate-related holdings;

• we shall seek to invest our capital in a broad range of investments in, or relating to, public and/or private debt, non-controlling equity, loans and/or other interests (including “mezzanine” interests and/or options or derivatives related thereto) relating to real estate assets (including pools thereof and equity interests in net lease assets), real estate companies, and/or real estate-related holdings;

• prior to the deployment of capital into investments, we may cause our capital to be invested in any short-term investments in money market funds, bank accounts, overnight repurchase agreements with primary federal reserve bank dealers collateralized by direct U.S.

government obligations and other instruments or investments reasonably determined to be of high quality;

• not more than 25% of our equity, as defined in the Management Agreement, will be invested in any individual investment without the approval of a majority of the investment risk management committee of our board of directors (it being understood, however, that for purposes of the foregoing concentration limit, in the case of any investment that is comprised (whether through a structured investment vehicle or other arrangement) of securities,

instruments or assets of multiple portfolio issuers, such investment for purposes of the foregoing limitation shall be deemed to be multiple investments in such underlying securities, instruments and assets and not such particular vehicle, product or other arrangement in which they are aggregated);

investment that is comprised (whether through a structured investment vehicle or other arrangement) of securities, instruments or assets of multiple portfolio issuers, such investment for purposes of the foregoing limitation shall be deemed to be multiple investments in such underlying securities, instruments and assets and not such particular vehicle, product or other arrangement in which they are aggregated);

• any investment in excess of $350.0 million shall require the approval of a majority of the investment risk management committee of our board of directors;

13 unchanged sentences

For additional information concerning these competitive risks, see Item 1A—“Risk Factors—Risks Related to Our Lending and Investment Activities.”

Environmental, Social and Governance (“ESG”)

Sustainability

We are committed to responsibly managing risk and preserving value for our shareholders.

We strive to consider ESG factors relevant to our potential collateral and borrowers when making capital allocation decisions and incorporate ESG diligence practices as part of our investment process where applicable.

We strive to consider environmental, social and governance (“ESG”), or sustainability, factors relevant to our potential collateral and borrowers when making capital allocation decisions and incorporate sustainability diligence practices as part of our investment process where applicable.

Our day-to-day operations are externally managed by our Manager, a subsidiary of Blackstone.

As such, many of the ESG initiatives undertaken by Blackstone impact or apply to us.

Key ESG initiatives we share with Blackstone include the consideration of ESG in the investment process where applicable, dedicated resources to ESG governance and oversight, industry engagement on ESG matters, corporate sustainability and environmental performance improvements at our office locations, and certain employee and community engagement and diversity, equity and inclusion programs.

As such, many of the sustainability initiatives undertaken by Blackstone impact or apply to us.

Key sustainability initiatives we share with Blackstone include the consideration of sustainability in the investment process where applicable, dedicated resources to sustainability governance and oversight, industry engagement on sustainability matters, programs at our office locations, and certain employee and community engagement and diversity and inclusion programs.

Human Capital Management

45 unchanged sentences

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-K

Item 1. Business