Blackstone Mortgage Trust Reduces Debt Issues, Maintains 9.6% Dividend Yield

Blackstone Mortgage Trust, Inc. (NYSE: BXMT) reported fourth-quarter and full-year 2025 results Wednesday, highlighting a sharp decline in nonperforming loans and a strategic shift toward industrial and multifamily properties. The real estate finance company recorded net income of $110 million for the year, while navigating a macroeconomic environment marked by interest rate fluctuations and office sector volatility.

Strategic Portfolio Realignment and Credit Performance

The firm’s performance in the last quarter of 2025 was explained by a 96% reduction in the balance of bad loans from its collection in late 2024. This improvement was driven by a $0.6 billion resolution of nonperforming loans in the fourth quarter alone. At the end of the year, 99% of the company’s loans were performing, up from 96% in the third quarter.

Management attributed these results to a strong focus on “balance sheet improvement” and a focus on sectors with stronger credit profiles. Specifically, 100% of the $1.4 billion in new loans originating during the fourth quarter were secured by multifamily or industrial mortgages.

Summary of Financial Performance

BXMT’s quarterly and full-year financial metrics reflect both the cost of loan decisions and the earning power of its diversified portfolio:

GAAP Net Income: $0.24 per share for Q4; $0.64 per share for the full year 2025.

Non-distributable benefits: It reported a loss of $(2.07) per share in Q4 after the charge, while Distributable Profit before the charge stood at $0.51 per share.

Assignments: The company paid a Q4 dividend last time with an annual yield of 0.47%.

Book Value: It ended the year at $20.75 per share, which includes $1.76 per share in CECL’s reserves (Current Credit Losses).

Investment and Export Activity

Total investment activity for 2025 reached $6.8 billion, which includes $5.7 billion in new loans. The company also expanded its joint venture reach, acquiring a $0.7 billion share in the bank’s discount loan portfolio and a $0.3B share in the acquisition of whole lease assets.

The location of the portfolio remains globally diversified, with 48% of investments located internationally, including significant concentrations in the United Kingdom (21%) and Western Europe.

Executive Commentary

Tim Johnson, Chief Executive Officer of Blackstone Mortgage Trust, said the results of the fourth quarter show good momentum for the company. He noted that the company’s capital deployment and improved credit performance strengthened dividend coverage and earnings potential. Johnson also emphasized that the size of Blackstone’s platform allows the trust to identify and capture unique market opportunities for its investors.

Capitalization and Large Content

BXMT maintained a $1.0 billion cash position at year-end, supported by more than $7.0 billion in liquidity from 15 other banks. The company also worked on the capital markets to reduce its financing costs, and extended or extended $2.8 billion of its Term Loan B through the end of 2024, which reduced the interest spread by 89 basis points.

The broader context of these results includes the ongoing effort to reduce exposure to the US office market. In 2025, the company saw $6.1 billion in total loan disbursements, office loans accounted for $2.3 billion, or 37% of that volume. As of December 31, US office loans comprised 20% of the total portfolio, while industrial and multifamily assets combined to represent 50%.

Key Data Points at a Glance

Blackstone Mortgage Trust is scheduled to discuss these results on a conference call on February 11, 2026, providing additional details on its 2026 outlook and the continued adaptation of the real estate financial markets.

Reasons to Pass BXMT

• Loss of distributable profit in Q4: The company reported a distributable loss of $(2.07) per share in the fourth quarter following the charge, highlighting earnings volatility.
• Exposure to credit loss: The results included significant charges and CECL’s higher cash reserves of $1.76 per share, underscoring continued credit risk.
• Office sector exposure: US office loans still represent 20% of the portfolio, maintaining exposure to the structurally challenged segment.
• Dividend sustainability questions: paid a dividend of $0.47 per share over GAAP EPS for the quarter, raising potential concerns.
• Greater sensitivity: Operations remain exposed to interest rate fluctuations and real estate market volatility.
• High yield risk profile: The proposed dividend yield reflects high perceived risk in the current market environment.
• Foreign exposure: About half of the portfolio is invested outside the US, introducing currency and regional economic risk.
• Dependence on capital markets: The continued financing activity and confidence of the banking partners highlights the sensitivity to the conditions of the credit market.