Blackstone Mortgage Trust (BXMT) announced a net loss of $81.2 million for the second quarter of 2026. Despite this result, executives expressed optimism during a conference call regarding a re-alignment of the portfolio. The publicly traded mortgage REIT reported a loss of 48 cents per share in the second quarter, while distributable earnings per share were also 48 cents, exceeding analyst estimates of 38 cents per share.
BXMT executives attributed the decline in earnings to short-term impacts from several loan impairments in the second quarter, particularly the resolution of a $29 million multi-family loan in Dallas. Marcin Urbaszek, BXMT's Chief Financial Officer and Managing Director at Blackstone Real Estate Debt Strategies, explained that given the current dynamics and the early stage of the quarter, it was difficult to make accurate forecasts.
He pointed out that the impairments in the second quarter, as well as the significant volume of repayments, will have an impact on the third quarter. Urbaszek added that it is expected to take a few quarters for the recovered funds to be fully reinvested. An accurate assessment of future developments is currently difficult, as many factors are in motion.
Strategic Portfolio Re-alignment
Tim Johnson, CEO of BXMT, stated during the conference call that the REIT intends to "utilise a market considered liquid for loan sales". This includes the sale of a Hyatt hotel in San Francisco as well as the majority of its office loan portfolio. This step is part of BXMT's new strategy to diversify its $17 billion loan portfolio in the coming years, according to Johnson.
The loan divestment process is in an early stage. Johnson emphasised that there is no obligation to sell, and both the sale of a part, the entire portfolio, or no sale at all are being considered. According to him, the goal is to reposition the portfolio into sectors where the best fundamentals, risk-adjusted returns, and relative value are expected. Should the opportunity arise to shift from the office sector into other sectors, this would be considered the best outcome for shareholders' long-term value.
Investments and Financial Performance
In the second quarter, BXMT made investments totalling $1.4 billion across various strategies and originated new loans amounting to $1.1 billion, primarily secured by residential and industrial properties. 80 per cent of the loan origination took place in the US, with the remainder focused on Europe.
BXMT's total revenue in the second quarter amounted to $158.1 million, a slight decrease from $159.4 million in the first quarter, but an increase compared to $133.6 million in the second quarter of 2025. Johnson reaffirmed that BXMT is well-positioned to advance strategic initiatives and capitalise on attractive market opportunities, whilst maintaining a "well-structured balance sheet".
