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“We imagine stockholder return is nicely served by balancing present return with optimization of e-book worth and long-term earnings potential by our strategic capital allocation selections,” BXMT chief govt Katie Keenan mentioned in an announcement.
The dividend reduce, from 62 cents to 47 cents per share, is predicted to avoid wasting roughly $100 million yearly, which will be redirected to new loans or different investments.
This transfer follows comparable actions by different business actual property mortgage REITs, resembling KKR Actual Property Finance Belief Inc. and Ares Industrial Actual Property Corp., which lowered their dividends by 42% and 24% respectively earlier this yr.
Nearly all of BXMT’s troubled loans are tied to US workplace buildings, which comprise a couple of quarter of its excellent loans. Workplace values have dropped 37% from their early 2022 peak, in comparison with a 20% decline for all business property, in response to the Inexperienced Avenue Industrial Property Value Index.
BXMT reported decreasing its web publicity to workplaces by $1.4 billion over the previous two years. Roughly 13% of the workplace portfolio was given a threat score of “3”, primarily related to European properties. About 7% of the portfolio acquired the worst threat score, with BXMT contemplating these loans impaired.
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