2024-05-27 23:43:57 ET
Summary
- Blackstone Mortgage Trust's shares hit a 1-year low last week as the market's attitude towards the REIT turned sour amid ongoing loan problems.
- BXMT's balance sheet quality deteriorated in the last quarter, particularly in the office loan portfolio.
- The increase in the CECL reserve led to a decrease in distributable earnings, causing the REIT to underearn its dividend by 47%. A dividend cut now seems likely.
Shares of Blackstone Mortgage Trust ( BXMT ) just hit a fresh 1-year low as the market seems to come to terms with the shock that the mortgage REIT could lower its dividend due to continual loan problems in its portfolio. Blackstone Mortgage Trust's loan problems, especially in the office segment, have been the key reason why the REIT did not support its dividend with distributable earnings in the last quarter. I believe that Blackstone Mortgage Trust is now headed for a dividend cut in the next several quarters. Given that shares are already priced at a large discount to book value, I believe the price impact of a dividend announcement could be relatively small, however!...
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Blackstone Mortgage Trust: A Dividend Cut Is Likely