Blackstone Mortgage Trust shakes off debt market turbulence

Lending REIT has issued $1.5B in new loans this year

New York /
Apr.April 27, 2016 02:55 PM

Turmoil in global capital markets during the first months of 2016 left many commercial real estate lenders licking their wounds, but not Blackstone Mortgage Trust. The commercial mortgage REIT originated $861 million worth of new loans in the first quarter, while increasing its net income by 61 percent year-over-year to $57.2 million.

Since the end of the first quarter, the REIT has closed or agreed on another $625 million worth of loans, CEO Stephen Plavin said in an earnings call Thursday morning. He did not specify whether any of those loans are on New York properties.

Plavin attributed some of the lending volume to decreased competition from other lenders. As The Real Deal recently reported, CMBS lending all but dried up in the first two months of 2016 as a global bond market slide made it harder to price new loans. Blackstone Mortgage Trust, in contrast, doesn’t securitize its loans. “Our business model insulates us form CMBS market volatility,” Plavin said, adding that less competition meant Blackstone Mortgage Trust could increase the rates it charges on loans in the first quarter.

But Blackstone’ mortgage REIT wasn’t entirely immune to the CMBS market. Plavin acknowledged that the number of repaid loans fell, primarily because borrowers were unable to refinance in the face of tightened CMBS lending. “In order for our loans to be repaid a new loan needs to be closed,” he said. “We had a couple of loans that we thought were going to repay that didn’t.”

Echoing other market observers, Plavin said that debt markets improved in March, and that he expects repayment to get back on track.

Blackstone Mortgage Trust, a public company managed by the Blackstone Group, issues senior loans on commercial real estate properties. It borrows around 75 percent of the money it lends to real estate companies from banks, and makes a profit off the spread between the interest rates.

In the first quarter, the new loans it issued carried an average floating interest rate of 4.4 percentage points over the benchmark London Interbank Overnight Rate (Libor), while its revolving credit facilities with major U.S. banks like Wells Fargo carried an average rate of 2 percentage points over Libor.


Related Articles

arrow_forward_ios
Matt Lauer exposes Hamptons estate to the market
Matt Lauer exposes Hamptons estate to the market
Matt Lauer exposes Hamptons estate to the market
Gordon Ramsey and his Lucky Cat restaurant (Lucky Cat)
Gordon Ramsay to open first South Florida restaurant in Miami Beach
Gordon Ramsay to open first South Florida restaurant in Miami Beach
(Image by Wolfgang & Hite via Dezeen)
Hudson Yards megadevelopment inspires a new line of sex toys
Hudson Yards megadevelopment inspires a new line of sex toys
(iStock)
CoStar Q2 net income down 17%
CoStar Q2 net income down 17%
214 West 109th Street and Isaac Chetrit (Google Maps)
Chetrits to invest $200M in Manhattan apartment portfolio
Chetrits to invest $200M in Manhattan apartment portfolio
Proptech revolution grows as landlords turn to big data to manage properties
Proptech revolution grows as landlords turn to big data to manage properties
Proptech revolution grows as landlords turn to big data to manage properties
The Birch Group CEO Mark Meisner and 700 Alexander Park Drive (LinkedIn)
Birch Group buys Princeton office portfolio from BentallGreenOak
Birch Group buys Princeton office portfolio from BentallGreenOak
PHE at 51 Jay Street and 4 Hunts Lane (Compass)
Dumbo penthouse leads Brooklyn’s luxury market
Dumbo penthouse leads Brooklyn’s luxury market
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...