bxmt-20251231
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
For the fiscal year ended December 31, 2025 or
Commission file number 1-14788
Blackstone Mortgage Trust, Inc.
(Exact name of Registrant as specified in its charter)
345 Park Avenue
New York, New York10154
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (212) 655-0220
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading symbol(s) Name of each exchange on which registered
Class A common stock, par value $0.01 per share BXMT New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-
T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging
growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of
the Exchange Act:
Large accelerated filer ☒ Accelerated filer ☐
Non-accelerated filer ☐ Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over
financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit
report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect
the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of
the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
The aggregate market value of the outstanding class A common stock held by non-affiliates of the registrant was approximately$3.2 billion as of June 30,2025 (the
last business day of the registrant’s most recently completed second fiscal quarter) based on the closing sale price on the New York Stock Exchange on that date.
As ofFebruary 4, 2026, there were 168,738,642 outstanding shares of class A common stock.
DOCUMENTS INCORPORATED BY REFERENCE
Part III of this annual report on Form 10-K incorporates information by reference from the registrant’s definitive proxy statement with respect to its 2026 annual
meeting of stockholders to be filed with the Securities and Exchange Commission within 120 days after the close of the registrant’s fiscal year.
Table of Contents
Page
PART I.
ITEM 1. BUSINESS 3
ITEM 1A. RISK FACTORS 9
ITEM 1B. UNRESOLVED STAFF COMMENTS 81
ITEM 1C. CYBERSECURITY 82
ITEM 2. PROPERTIES 83
ITEM 3. LEGAL PROCEEDINGS 83
ITEM 4. MINE SAFETY DISCLOSURES 83
PART II.
ITEM 6. [Reserved] 84
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 120
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 122
ITEM 9A. CONTROLS AND PROCEDURES 122
ITEM 9B. OTHER INFORMATION 123
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 123
PART III.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 124
ITEM 11. EXECUTIVE COMPENSATION 124
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES 124
PART IV.
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES 125
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES F-1
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Forward-Looking Information; Risk Factor Summary
This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as
amended, or the Exchange Act, which involve certain known and unknown risks and uncertainties. Forward-looking
statements predict or describe our future operations, business plans, business and investment strategies and portfolio
management and the performance of our investments. These forward-looking statements are generally identified by their
use of such terms and phrases as “intend,” “goal,” “estimate,” “expect,” “project,” “projections,” “plans,” “seeks,”
“anticipates,” “will,” “should,” “could,” “may,” “designed to,” “foreseeable future,” “believe,” “scheduled” and similar
expressions. Our actual results or outcomes may differ materially from those anticipated. You are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of the date the statement was made. We assume
no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future
events or otherwise, except as required by law.
Our actual results may differ significantly from any results expressed or implied by these forward-looking statements.A
summary of the principal risk factors that make investing in our securities risky and might cause our actual results to differ
is set forth below.The following is only a summary of the principal risks that may materially adversely affect our business,
financial condition, results of operations and cash flows.This summary should be read in conjunction with the more
complete discussion of the risk factors we face, which are set forth in the section entitled “Risk Factors” in this report.
•Fluctuations in interest rates and credit spreads have reduced and in the future could reduce our ability to generate
income on our loans and other investments, which could lead to a significant decrease in our results of operations,
cash flows and the market value of our investments and may limit our ability to pay dividends to our stockholders.
•Adverse changes in the real estate and real estate capital markets, in North America, Europe, and Australia in
particular, could negatively impact our performance by making it more difficult for borrowers and tenants to
satisfy their debt and lease obligations, which could result in losses on our investments and/or make it more
difficult for us to generate consistent or attractive risk-adjusted returns.
•Our results of operations, financial condition, liquidity position, and business could be materially adversely
affected if we experience (i) difficulty accessing funding or raising capital, including due to a significant
dislocation in or weakness in the capital markets, (ii) a reduction in the yield on our investments, (iii) an increase
in the cost of our financing, (iv) an inability to borrow incremental amounts or an obligation to repay amounts
under our financing arrangements, or (v) defaults by borrowers in paying debt service on outstanding loans.
•Events giving rise to increases in our current expected credit loss reserve, including the impact of the current
economic environment, have had an adverse effect on our business and results of operations and could in the
future have a material adverse effect on our business, financial condition and results of operations.
•If we are unable to successfully integrate new assets or businesses and manage our growth, our results of
operations and financial condition may suffer.
•We have in the past and may in the future foreclose on certain of the loans we originate or acquire, which could
result in losses that negatively impact our results of operations and financial condition.
•We are subject to risks inherent in the ownership and operation of real estate.
•Our lending and investment activities subject us to the general political, economic, capital markets, competitive
and other conditions in the United States and foreign jurisdictions where we invest, including with respect to any
events that markedly impact United States or foreign financial markets.
•Adverse legislative or regulatory developments, including with respect to tax laws, securities laws, and the laws
governing financial and lending institutions, could increase our cost of doing business and/or reduce our operating
flexibility and the price of our class A common stock.
•Acts of God such as hurricanes, earthquakes, floods and other natural disasters, pandemics or outbreaks of
infectious disease, acts of war and/or terrorism and other events that can markedly impact financial markets may
cause unanticipated and uninsured performance declines and/or losses to us or the owners and operators of the real
estate securing our investments.
•Deterioration in the performance of properties securing our investments may cause deterioration in the
performance of our investments, instances of default or foreclosure on such properties and, potentially, principal
losses to us.
•Adverse developments in the availability of desirable investment opportunities whether they are due to
competition, regulation or otherwise, could adversely affect our results of operations.
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•Increased competition from entities engaged in mortgage lending and/or investing in assets similar to ours may
limit our ability to originate or acquire desirable loans and investments or dispose of investments, and could also
affect the yields of these investments and have a material adverse effect on our business, financial condition and
results of operations.
•Joint venture investments could be adversely affected by our lack of sole decision-making authority, our reliance
on joint venture partners’ financial condition and liquidity and disputes between us and our joint venture partners.
•We are subject to conflicts of interest, or conflicting loyalties, arising out of our relationship with Blackstone and
these conflicts may not be identified or resolved in a manner favorable to us.
•We compete with and enter into transactions with existing and future private and public investment vehicles
established and/or managed by Blackstone or its affiliates, which may present various conflicts of interest that
restrict our ability to pursue certain investment opportunities or take other actions that are beneficial to our
business and/or result in decisions that are not in the best interests of our stockholders.
•Loans or investments involving international real estate-related assets are subject to special risks that we may not
manage effectively, including currency exchange risk, the burdens of complying with international regulatory
requirements, risks related to taxation and certain economic and political risks, which could have a material
adverse effect on our results of operations and financial condition and our ability to make distributions to our
stockholders.
•If we do not maintain our qualification as a REIT, we will be subject to tax as a regular corporation and could face
a substantial tax liability. Our taxable REIT subsidiaries are subject to income tax.
•If we do not maintain our exclusion from registration under the Investment Company Act of 1940, as amended, or
the Investment Company Act, we will be subject to significant regulation and restrictions on our business and
investments.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee
future results, levels of activity, performance, or achievements. We caution you not to place undue reliance on these
forward-looking statements. All written and oral forward-looking statements attributable to us or persons acting on our
behalf are qualified in their entirety by these cautionary statements. Moreover, unless we are required by law to update
these statements, we will not necessarily update or revise any forward-looking statements included or incorporated by
reference in this Annual Report after the date hereof, either to conform them to actual results or to changes in our
expectations. We urge you to carefully consider the foregoing summary together with the risks discussed in Part I., Item
1A. Risk Factors and Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations.
Website Disclosure
We use our website (www.blackstonemortgagetrust.com) as a channel of distribution of company information. The
information we post through this channel may be deemed material. Accordingly, investors should monitor this channel, in
addition to following our press releases, Securities and Exchange Commission, or SEC, filings and public conference calls,
and webcasts. In addition, you may automatically receive email alerts and other information about Blackstone Mortgage
Trust when you enroll your email address by visiting the “Contact Us and Email Alerts” section of our website at http://
ir.blackstonemortgagetrust.com. The contents of our website and any alerts are not, however, a part of this report.
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PART I.
ITEM 1.BUSINESS
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.
Our Company
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 secured credit facilities, issuing collateralized loan obligations,
or CLOs, other securitization transactions, syndicating senior loans and/or participations, and other forms of asset-level
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, New York, New York 10154.
We conduct our operations as a REIT for U.S. federal income tax purposes. We generally will not be subject to U.S. federal
income taxes on our taxable income to the extent that we annually distribute all of our net taxable income to stockholders
and maintain our qualification as a REIT. We also operate our business in a manner that permits us to maintain an
exclusion from registration under the Investment Company Act. We are organized as a holding company and conduct our
business primarily through our various subsidiaries. We operate our business as one segment, which originates and
acquires commercial mortgage loans and related investments.
Our Manager
We are externally managed and advised by our Manager, which is responsible for our business and investment activities,
our day-to-day operations, and providing us the services of our executive management team, investment team, and other
personnel.
Our Manager is an affiliate of Blackstone, a leading global investment manager with $1.3 trillion of total assets under
management as of December 31, 2025.
We benefit from the deep knowledge, experience and information advantages of our Manager, which is a part of
Blackstone Real Estate. Blackstone Real Estate was founded in 1991 and is the world’s largest owner of commercial real
estate, with$319.3 billion of investor capital under management as of December 31, 2025. Blackstone Real Estate operates
as one globally integrated business with 787 real estate professionals globally as of December 31, 2025 and investments in
North America, Europe, Asia and Latin America. In the United States, Blackstone Real Estate is one of the largest owners
of rental housing, industrial, office, hospitality and retail assets.
Blackstone Real Estate Debt Strategies, or BREDS, was launched in 2008 within Blackstone Real Estate to pursue
opportunities relating to real estate debt investments globally, with a focus primarily on North America and Europe. Our
Manager’s Investment Committee is composed of some of the most senior and experienced investment professionals at
Blackstone, including Kenneth Caplan (Global Co-Chief Investment Officer of Blackstone), Nadeem Meghji (Global Head
of Blackstone Real Estate), Timothy S. Johnson (Global Head of BREDS and our Chief Executive Officer and Chairperson
of our board of directors), and Giovanni Cutaia (President of Blackstone Real Estate). As of December 31, 2025, 176
dedicated BREDS professionals, including 27 investment professionals based in London and Australia, managed
$77.5 billion of investor capital. The market-leading real estate expertise derived from the strength of the Blackstone
platform deeply informs our credit and underwriting process, and we believe it gives us the tools to manage the assets in
our portfolio and work with our borrowers throughout periods of economic stress and uncertainty.
Our chief executive officer, chief financial officer, president and other officers are senior Blackstone Real Estate
professionals. None of our Manager, our executive officers, or other personnel supplied to us by our Manager are obligated
to dedicate any specific amount of time to our business. 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
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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 2026 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, acquire, and manage senior loans and other debt or credit-oriented investments
collateralized by or relating to commercial real estate in North America, Europe and Australia. 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.
Our primary strategy is to directly originate, co-originate, and acquire senior loans 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 secured by high-quality, institutional assets located in major markets, and sponsored by
experienced, well-capitalized real estate investment owners and operators. We believe that the scale and flexibility of our
capital, as well as our Manager’s and Blackstone’s relationships, enable us to target opportunities with strong sponsorship
and invest in large loans or other debt that is collateralized by high-quality assets and portfolios and, as market conditions
evolve over time, to adapt as appropriate.
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 are present at various points of an economic
cycle and/or to further diversify our earnings composition, we have in the past expanded or changed our investment
strategy by targeting other real estate debt or credit-oriented investments and may continue to do so.
We believe that the diversification of our investment portfolio, our ability to actively manage those investments, and the
flexibility of our strategy position us to generate a compelling risk-adjusted return for our stockholders in a variety of
market conditions over the long term.
Our Investment Portfolio
Our investment portfolio is primarily comprised of senior, floating rate mortgage loans that are secured by a first priority
mortgage on commercial real estate assets in North America, Europe, and Australia. These investments may be in the form
of whole loans, pari passu participations within mortgage loans, or other similar structures. Although originating senior,
floating rate mortgage loans is our primary area of focus, we may also originate or acquire fixed rate loans and subordinate
loans, including subordinate mortgage interests and mezzanine loans, as well as other real estate, real estate debt or real
estate credit-oriented investments.
Loan Portfolio
Our Loan Portfolio consists of 131 loans with a total principal balance of $18.2 billion. During the year ended
December 31, 2025, we originated or acquired $5.7 billion of loans. Loan fundings during the year totaled $5.6 billion,
with loan repayments and sales of $6.1 billion, for net repayments of $452.8 million.
Owned Real Estate
As part of our portfolio management strategy to maximize economic outcomes, from time to time, we may hold certain
owned real estate investments, in some cases resulting from us acquiring title to or taking control of a loan’s underlying
real estate collateral. During the year endedDecember 31, 2025, we acquired or otherwise consolidated five owned real
estate assets with an aggregate acquisition date fair value of $654.3 million. As of December 31, 2025, we held 12 owned
real estate assets with an aggregate carrying value of $1.3 billion, for which we were previously the lender on an associated
mortgage loan.
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Bank Loan Portfolio Joint Venture
In the second quarter of 2025, we entered into a joint venture, or our Bank Loan Portfolio Joint Venture, with a Blackstone-
advised investment vehicle to acquire portfolios of performing commercial mortgage loans. Our Bank Loan Portfolio Joint
Venture is recorded as an investment in unconsolidated entities on our consolidated balance sheets. During the year ended
December 31, 2025, our Bank Loan Portfolio Joint Venture acquired two bank loan portfolios totaling $2.0 billion across
593 performing senior commercial mortgage loans from regional banks, our share of which is $719.4 million. Our
aggregate ownership interest in our Bank Loan Portfolio Joint Venture was 35% as of December 31, 2025.
Net Lease Joint Venture
In the fourth quarter of 2024, we entered into a joint venture, or our Net Lease Joint Venture, with a Blackstone-advised
investment vehicle to invest in triple net lease properties. Our Net Lease Joint Venture is recorded as an investment in
unconsolidated entities on our consolidated balance sheets. During the year endedDecember 31, 2025, the Net Lease Joint
Venture acquired 178 properties with an aggregate purchase price of $421.8 million. Our aggregate ownership interest in
our Net Lease Joint Venture was 75% as of December 31, 2025.
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 senior term loan facilities, senior secured
notes, and convertible notes. We finance our investments in a variety of ways, including borrowing under secured credit
facilities, issuing CLOs, other securitization transactions, syndicating senior loans and/or participations, and other forms of
asset-level financing, depending on our view of the most prudent financing option available for each of our investments. 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 endedDecember 31, 2025, we (i) issued a $1.0 billion CLO securitization, (ii) increased our aggregate
borrowing capacity by $414.0 million as a result of closing two new secured credit facilities, increasing the size of one of
our existing secured credit facilities, and terminating one of our existing secured credit facilities, and (iii) borrowed an
additional $91.0 million under our term loan facilities while reducing the weighted-average spread and extending the
weighted-average maturity. We also lowered the cost of our portfolio financings throughout the year, with a weighted-
average spread of+1.83% over respective benchmark rates on our $10.1 billion of secured debt, as of December 31, 2025,
relative to +1.92% as of December 31, 2024.
As of December 31, 2025, we had total liquidity of $1.0 billion with no corporate debt maturities until 2027.
The following table details our outstanding portfolio financing arrangements as of December 31, 2025 ($ in thousands):
Portfolio FinancingOutstanding Principal Balance
The amount of leverage we employ for particular assets will depend upon our assessment of the credit, liquidity, price
volatility, and other risks of those assets and the related financing structure, the availability of particular types of financing
at the time, and the financial covenants under our credit facilities. Our decision to use leverage to finance our assets will be
at our discretion and will not be subject to the approval of our stockholders. We currently expect that our leverage, on a
debt-to-equity basis, which is defined as the ratio of (i) total outstanding secured debt, asset-specific debt, term loans,
senior secured notes, and convertible notes, less cash, to (ii) total equity, will generally be below a ratio of 4-to-1. We will
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endeavor to match the tenor, currency, and indices of our assets and liabilities, including in certain instances through the
use of derivatives. 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 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.
Floating Rate Loan Portfolio
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, 2025, 97% of our Loan Portfolio, by principal balance, earned a floating rate
of interest and was 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 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);
•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;
•no investment shall be made that would cause us to fail to qualify as a REIT under the Internal Revenue Code of
1986, as amended, or the Internal Revenue Code; and
•no investment shall be made that would cause us or any of our subsidiaries to be regulated as an investment
company under the Investment Company Act.
These investment guidelines may be amended, restated, modified, supplemented or waived upon the approval of a majority
of our board of directors, which must include a majority of the independent directors, without the approval of our
stockholders.
Competition
We operate in a competitive market for lending and investment opportunities, which may intensify. In originating or
acquiring our investments, we compete for opportunities with a variety of institutional lenders and investors, including
other REITs, specialty finance companies, public and private funds, commercial and investment banks, commercial finance
and insurance companies and other financial institutions (including investment vehicles managed by affiliates of
Blackstone). Some of our competitors have raised, and may in the future raise, significant amounts of capital, and may
have investment objectives that overlap with ours, which may create additional competition for lending and investment
opportunities. Some competitors may have a lower cost of capital and access to funding sources that are not available to us,
such as the U.S. government. Many of our competitors are not subject to the operating constraints associated with REIT tax
compliance or maintenance of an exclusion from regulation under the Investment Company Act. In addition, some of our
competitors may have higher risk tolerances or different risk assessments, which could allow them to consider a wider
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variety of loans and investments, offer more attractive pricing or other terms, and establish more relationships than us.
Furthermore, competition for investments may lead to decreasing yields, which may further limit our ability to generate
desired returns.
In the face of this competition, we have access to Blackstone’s professionals and their industry expertise and relationships,
which we believe provides us with a competitive advantage and helps us assess risks and determine appropriate pricing for
potential investments. We believe these relationships enable us to compete more effectively for attractive investment
opportunities. However, we may not be able to achieve our business goals or expectations due to the competitive risks that
we face. For further information concerning these competitive risks, see Item 1A—“Risk Factors—Risks Related to Our
Lending and Investment Activities.”
Sustainability
We are externally managed and advised by our Manager, which is responsible for our business and investment activities,
our day-to-day operations, and providing us the services of our executive management team, investment team, and other
personnel.
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
We do not have any employees. We are externally managed by our Manager pursuant to our Management Agreement. Our
executive officers serve as officers of our Manager, and are employed by an affiliate of our Manager. See “Item 1—Our
Manager.”
Government Regulation
Our operations in North America, Europe, and Australia are subject, in certain instances, to supervision and regulation by
U.S. and other governmental authorities, and may be subject to various laws and judicial and administrative decisions
imposing various requirements and restrictions, which, among other things: (i) regulate credit-granting activities; (ii)
establish maximum interest rates, finance charges and other charges; (iii) require disclosures to customers; (iv) govern
secured transactions; and (v) set collection, foreclosure, repossession and claims-handling procedures and other trade
practices. We are also required to comply with certain provisions of the Equal Credit Opportunity Act that are applicable to
commercial loans. We intend to continue to conduct our business so that neither we nor any of our subsidiaries are required
to register as an investment company under the Investment Company Act.
In our judgment, existing statutes and regulations have not had a material adverse effect on our business. In recent years,
legislators in the United States and in other countries have said that greater regulation of financial services firms is needed,
particularly in areas such as risk management, leverage, and disclosure. While we expect that additional new regulations in
these areas will be adopted and existing ones may change in the future, it is not possible at this time to forecast the exact
nature of any future legislation, regulations, judicial decisions, orders or interpretations, nor their impact upon our future
business, financial condition, or results of operations or prospects.
For more information on government regulation, refer to “Part I—Item 1A. Risk Factors—Risks Related to Our
Company.”
Taxation of the Company
We have elected to be taxed as a REIT under the Internal Revenue Code for U.S. federal income tax purposes. We
generally must distribute annually at least 90% of our net taxable income, subject to certain adjustments and excluding any
net capital gain, in order for U.S. federal income tax not to apply to our earnings. To the extent that we satisfy this
distribution requirement, but distribute less than 100% of our net taxable income, we will be subject to U.S. federal income
tax on our undistributed taxable income. In addition, we will be subject to a 4% nondeductible excise tax if the actual
amount that we pay out to our stockholders in a calendar year is less than a minimum amount specified under U.S. federal
tax laws.
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Our qualification as a REIT also depends on our ability to meet various other requirements imposed by the Internal
Revenue Code, which relate to organizational structure, diversity of stock ownership, and certain restrictions with regard to
the nature of our assets and the sources of our income. Even if we qualify as a REIT, we may be subject to certain U.S.
federal income and excise taxes and state and local taxes on our income and assets. 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.
Furthermore, our taxable REIT subsidiaries, or TRSs, are subject to federal, state, and local income tax on their net taxable
income. See Item 1A—“Risk Factors—Risks Related to our REIT Status and Certain Other Tax Items” for additional tax
status information.
Taxation of REIT Dividends
REIT dividends (other than capital gain dividends) received by non-corporate taxpayers may be eligible for a 20%
deduction. This deduction is only applicable to investors in BXMT that receive dividends and does not have any impact on
us. Investors should consult their own tax advisors regarding the effect of this change on their effective tax rate with
respect to REIT dividends.
Website Access to Reports
We maintain a website at www.blackstonemortgagetrust.com. We are providing the address to our website solely for the
information of investors. The information on our website is not a part of, nor is it incorporated by reference into this report.
Through our website, we make available, free of charge, our annual proxy statement, annual reports on Form 10-K,
quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant
to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after we electronically file such material
with, or furnish them to, the SEC. The SEC maintains a website that contains these reports at www.sec.gov.
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ITEM 1A.RISK FACTORS
Risks Related to Our Investments
Our investments expose us to risks associated with debt or credit-oriented real estate investments generally.
We seek to originate, acquire, and manage senior loans and other debt or credit-oriented investments collateralized by or
relating to commercial real estate in North America, Europe, and Australia. As such, we are subject to, among other things,
risk of defaults by borrowers in paying debt service on outstanding indebtedness and to other impairments of our loans and
investments. A deterioration of real estate fundamentals generally, and in North America, Europe, and Australia in
particular, could negatively impact our performance by making it more difficult for our borrowers to satisfy their debt
payment obligations, increasing the default risk applicable to our borrowers and/or making it more difficult for us to
generate attractive risk-adjusted returns. Changes in general economic conditions have and will continue to affect the
creditworthiness and/or performance of our borrowers and/or the value of underlying real estate collateralizing or relating
to our investments and may include economic and/or market fluctuations, changes in building, environmental, zoning and
other laws, casualty or condemnation losses, regulatory limitations on rents, decreases in property values, changes in the
appeal of properties to tenants, changes in supply of and demand for real estate products, fluctuations in real estate
fundamentals, the financial resources of our borrowers, energy supply shortages, various uninsured or uninsurable risks,
natural disasters, pandemics or outbreaks of contagious disease, political events, terrorism and acts of war, trade tensions
resulting from U.S. tariff implementation and retaliatory tariffs by other countries, changes in government regulations,
changes in monetary policy, changes in real property tax rates and/or tax credits, changes in operating expenses, changes in
capital expenditure costs, changes in interest rates, changes in inflation rates, changes in foreign exchange rates, changes in
the availability of debt financing and/or mortgage funds that may render the sale or refinancing of properties difficult or
impracticable, increased mortgage defaults, increases in borrowing rates, changes in consumer spending, negative
developments in the economy and/or adverse changes in real estate values generally and other factors that are beyond our
control. Concerns about the real estate market, high interest rates, inflation, energy costs, geopolitical issues, and other
global events outside of our control have contributed, and may in the future contribute, to increased volatility and
diminished expectations for the economy and markets going forward, which could materially and adversely affect our
business, financial condition, and results of operations.
We cannot predict the degree to which economic conditions generally, and the conditions for real estate investing in
particular, will improve or decline. Any declines in the performance of the U.S. and global economies or in the real estate
markets could have a material adverse effect on our business, financial condition, and results of operations.
Commercial real estate-related investments that are secured, directly or indirectly, by real property are subject to
delinquency, foreclosure and loss, which have resulted and in the future could result in losses to us.
We invest in commercial real estate debt instruments (e.g., mortgages, mezzanine loans and preferred equity) that are
secured, directly or indirectly, by commercial properties. The ability of a borrower to repay a loan secured by an income-
producing property typically is dependent primarily upon the successful operation of the property rather than upon the
existence of independent income or assets of the borrower. If the net operating income of the property is reduced, the
borrower’s ability to repay the loan may be impaired. Net operating income of an income-producing property can be
affected by, among other things:
•tenant mix and tenant bankruptcies;
•success of tenant businesses;
•property management decisions, including with respect to capital improvements, particularly in older building
structures;
•renovations or repositionings during which operations may be limited or halted completely;
•property location and condition, including without limitation, any need to address climate-related risks or
environmental contamination at a property;
•competition from other properties offering the same or similar services;
•changes in laws that increase operating expenses or limit rents that may be charged;
•changes in interest rates, foreign exchange rates, and in the state of the credit and securitization markets and the
debt and equity capital markets, including diminished availability or lack of debt financing for commercial real
estate;
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•global trade disruption or conflict, trade tensions resulting from U.S. tariff implementation and retaliatory tariffs
by other countries, other changes to trade policy in the U.S. and other jurisdictions and supply chain issues;
•labor shortages and increasing wages;
•higher rates of inflation;
•changes in global, national, regional or local economic conditions and/or the conditions of specific industry
segments;
•declines in global, national, regional or local real estate values;
•declines in global, national, regional or local rental and/or occupancy rates;
•changes in real estate tax rates, tax credits and other operating expenses;
•changes in governmental rules, regulations and fiscal policies, including income tax regulations and
environmental legislation;
•any liabilities relating to environmental matters at the property;
•acts of God, natural disasters, pandemics or other severe public health events, climate-related risks, terrorism or
other hostilities, social unrest and civil disturbances, which may decrease the availability of or increase the cost of
insurance or result in uninsured losses; and
•adverse changes in zoning laws.
In addition, we are exposed to the risk of judicial proceedings with our borrowers and entities we invest in, including
bankruptcy or other litigation, as a strategy to avoid foreclosure or enforcement of other rights by us as a lender or investor.
In the event that any of the properties or entities underlying or collateralizing our loans or investments experiences or
continues to experience any of the other foregoing events or occurrences, the value of, and return on, such investments
could be reduced, which would adversely affect our results of operations and financial condition.
Fluctuations in interest rates and credit spreads have reduced and in the future could reduce our ability to generate
income on our loans and other investments, which could lead to a significant decrease in our results of operations, cash
flows and the market value of our investments and may limit our ability to pay dividends to our stockholders.
Our primary interest rate exposures relate to the yield on our loans and other investments and the financing cost of our
debt, as well as our interest rate swaps that we may utilize for hedging purposes. Changes in interest rates and credit
spreads have affected and may in the future affect our net income from loans and other investments, which is the difference
between the interest and related income we earn on our interest-earning investments and the interest and related expense we
incur in financing these investments. Interest rate and credit spread fluctuations resulting in our interest and related expense
exceeding interest and related income would result in operating losses for us. Changes in the level of interest rates and
credit spreads also may affect our ability to make loans or investments, the value of our loans and investments and our
ability to realize gains from the disposition of assets. Increases in interest rates and credit spreads have had and may in the
future also have negative effects on demand for loans and could result in higher borrower default rates. Despite recent
decreases in interest rates, inflation has remained above the U.S. Federal Reserve’s target level and interest rates remain
elevated. It presents a challenge to real estate valuations if interest rates remain elevated, or if higher inflation or other
factors lead to increases in interest rates. Higher interest rates have been particularly challenging for the traditional office
properties, as well as other property types with long-term leases that were entered into in a lower interest rate environment
and that may not allow near-term rent increases to offset increases in expenses. Interest rate increases also have had and
may in the future have adverse effects on commercial real estate property values, and, for certain of our borrowers have
contributed, and may continue to contribute, to loan non-performance, modifications, defaults, foreclosures, and/or
property sales, which has resulted and could continue to result in us realizing losses on our investments.
Our operating results depend, in part, on differences between the income earned on our investments, net of credit losses,
and our financing costs. The yields we earn on our floating-rate assets and our borrowing costs tend to move in the same
direction in response to changes in interest rates. However, one can rise or fall faster than the other, causing our net interest
margin to expand or contract. In addition, we could experience reductions in the yield on our investments and an increase
in the cost of our financing. Although we seek to match the terms of our liabilities to the expected lives of loans that we
acquire or originate, circumstances may arise in which our liabilities are shorter in duration than our assets, resulting in
their adjusting faster in response to changes in interest rates. For any period during which our investments are not match-
funded, the income earned on such investments may respond more slowly to interest rate fluctuations than the cost of our
borrowings. Consequently, changes in interest rates, particularly short-term interest rates, may immediately and
significantly decrease our results of operations and cash flows and the market value of our investments, and any such
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change may limit our ability to pay dividends to our stockholders. In addition, unless we enter into hedging or similar
transactions with respect to the portion of our assets that we fund using our balance sheet, returns we achieve on such
assets will generally increase as interest rates for those assets rise and decrease as interest rates for those assets decline.
The timing of loan repayment is difficult to predict and may adversely affect our financial performance, liquidity and
cash flows.
Our floating-rate mortgage loans are secured by commercial real estate assets. Generally, our mortgage loan borrowers may
repay their loans prior to their stated maturities. In periods of declining interest rates and/or credit spreads, prepayment
rates on loans will generally increase. If general interest rates or credit spreads decline at the same time, the proceeds of
such prepayments received during such periods may not be reinvested for some period of time or may be reinvested by us
in assets with lower yields than the assets that were prepaid. In periods of increasing interest rates and/or credit spreads,
prepayment rates on loans will generally decrease, which could impact our liquidity, or increase our potential exposure to
loan non-performance.
Prepayment rates on loans may be affected by a number of factors including, but not limited to, the then-current level of
interest rates and credit spreads, fluctuations in asset values, the availability of mortgage credit, the relative economic
vitality of the area in which the related properties are located, the servicing of the loans, possible changes in tax laws, other
opportunities for investment, and other economic, social, geographic, demographic and legal and other factors beyond our
control. Consequently, such prepayment rates can vary significantly from period to period and cannot be predicted with
certainty. No strategy can completely insulate us from prepayment or other such risks and faster or slower prepayments
may adversely affect our profitability and cash available for distribution to our stockholders.
Our loans often contain call protection or yield maintenance provisions that require a certain minimum amount of interest
due to us regardless of when the loan is repaid. These include prepayment fees expressed as a percentage of the unpaid
principal balance, or the amount of foregone net interest income due us from the date of repayment through a date that is
frequently 12 or 18 months after the origination date. Loans that are outstanding beyond the end of the call protection or
yield maintenance period can be repaid with no prepayment fees or penalties. The absence of call protection or yield
maintenance provisions may expose us to the risk of early repayment of loans, and the inability to redeploy capital
accretively.
Difficulty in redeploying the proceeds from repayments of our existing loans and investments may cause our financial
performance and returns to investors to suffer.
As our loans and investments are repaid, we seek to redeploy the proceeds we receive into new loans and investments
(which can include future fundings associated with our existing loans) or other alternative uses of capital, such as repaying
borrowings or repurchasing outstanding shares of our class A common stock. It is possible that we will fail to identify
reinvestment options that would provide returns or a risk profile that is comparable to the asset that was repaid. If we fail to
redeploy the proceeds we receive from repayment of a loan in equivalent or better alternatives, our financial performance
and returns to investors could suffer.
We operate in a competitive market for lending and investment opportunities, which may intensify, and competition may
limit our ability to originate or acquire desirable loans and investments or dispose of investments, and could also affect
the yields of these investments and have a material adverse effect on our business, financial condition and results of
operations.
We operate in a competitive market for lending and investment opportunities, which may intensify. Our profitability
depends, in large part, on our ability to originate or acquire our investments on attractive terms. In originating or acquiring
our investments, we compete for opportunities with a variety of institutional lenders and investors, including other REITs,
specialty finance companies, public and private funds, commercial and investment banks, commercial finance and
insurance companies and other financial institutions (including Blackstone-advised investment vehicles). Some of our
competitors have raised, and may in the future raise, significant amounts of capital, and may have investment objectives
that overlap with ours, which may create additional competition for lending and investment opportunities. Some
competitors may have a lower cost of funds and access to funding sources that are not available to us, such as the U.S.
government. Many of our competitors are not subject to the operating constraints associated with REIT tax compliance or
maintenance of an exclusion from regulation under the Investment Company Act. In addition, some of our competitors may
have higher risk tolerances or different risk assessments, which could allow them to consider a wider variety of loans and
investments, offer more attractive pricing or other terms and establish more relationships than us.
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Furthermore, competition for originations of investments may lead to decreasing yields, which may further limit our ability
to generate desired returns. Also, as a result of this competition, desirable loans and investments may be limited in the
future, and we may not be able to take advantage of attractive lending and investment opportunities from time to time,
thereby limiting our ability to identify and originate or acquire loans or make investments that are consistent with our
investment objectives. There can be no assurance that the competitive pressures we face will not have a material adverse
effect on our business, financial condition and results of operations.
If we are unable to successfully integrate new assets or businesses and manage our growth, our results of operations
and financial condition may suffer.
We have in the past and may in the future significantly increase the size and/or change the mix of our portfolio of assets or
acquire or otherwise enter into new lines of business, including through joint ventures. We may be unable to successfully
and efficiently integrate newly-acquired assets or businesses into our existing operations or otherwise effectively manage
our assets or our growth effectively. In addition, increases in our portfolio of assets and/or changes in the mix of our assets
or lines of business may place significant demands on our Manager’s administrative, operational, asset management,
financial and other resources. Any failure to manage increases in our size effectively could adversely affect our results of
operations and financial condition.
Our Manager manages our portfolio pursuant to very broad investment guidelines and is not required to seek the
approval of our board of directors for each investment, financing, asset allocation or hedging decision made by it, which
may result in our making riskier loans and investments and which could adversely affect our results of operations and
financial condition.
Our Manager is authorized to follow very broad investment guidelines that provide it with broad discretion over
investment, financing, asset allocation and hedging decisions. Our board of directors will periodically review our
investment guidelines and our loan and investment portfolio but will not, and will not be required to, review and approve in
advance all of our proposed loans and investments or our financing, asset allocation or hedging decisions. In addition, in
conducting periodic reviews, our directors rely primarily on information provided to them by our Manager or its affiliates.
Subject to maintaining our REIT qualification and our exclusion from regulation under the Investment Company Act, our
Manager has significant latitude within the broad investment guidelines in determining the types of loans and investments
it makes for us, and how such loans and investments are financed or hedged, which could result in investment returns that
are substantially below expectations or that result in losses, which could adversely affect our results of operations and
financial condition, or may otherwise not be in our best interests.
Acquiring or attempting to acquire multiple investments in a single transaction may adversely affect our operations.
We have in the past and may in the future acquire multiple investments in a single transaction. To the extent we share the
acquisition of large portfolios of investments with other Blackstone-advised investment vehicles through joint ventures or