Blackstone Mortgage Trust (NYSE: BXMT) lost $327 million in the third quarter and cut its quarterly dividend by more than a third. The board declared $0.30 a share for the fourth quarter, down from the $0.47 it paid for the third. That is a reset for the Blackstone-managed commercial mortgage REIT, which has spent much of 2026 trying to work its way out of older office and multifamily loans.
The net loss attributable to the company came to $1.95 a share, according to the earnings release BXMT filed with the SEC on Oct. 29, 2026. A year earlier it earned $63.4 million, or $0.37 a share. Distributable earnings, the non-GAAP measure the company uses to set its dividend, were $0.38 a share. Before realized gains and losses they were $0.42, down from $0.48 in the second quarter and $0.51 at the end of 2025.
A new dividend level
The fourth-quarter dividend is payable Jan. 15, 2027, to shareholders of record on Dec. 31, 2026. Chief Executive Officer Tim Johnson framed the cut as a level the company can hold. “We assess the dividend with our Board each quarter, considering a variety of factors, and our Board has declared a fourth quarter dividend of $0.30 per share, which we believe can be sustained through a range of rate and credit environments,” he said in the release.
The arithmetic behind the decision shows in the company’s own figures. Its third-quarter results presentation shows distributable earnings before realized gains and losses falling every quarter of 2026. By the third quarter they were $0.42 a share, well short of the $0.47 payout. Net interest income from loans and other investments fell to $64.4 million from $98.9 million a year earlier. The loan book has been shrinking: interest and related income fell to $280.6 million from $346.0 million.
Where the loss came from
The income statement shows the loss came from reserves and write-downs. Before those charges, net revenue of $141.9 million exceeded expenses of $108.7 million. BXMT added $264.8 million to its current expected credit loss (CECL) reserve in the quarter. That reserve is the accounting estimate of future loan losses, and the quarter’s addition was nearly double the $134.4 million it added in the second quarter. The company also took a $63.9 million valuation adjustment on loans it moved to held-for-sale and a $36.4 million impairment on real estate it owns.
Total CECL reserves stood at $606 million at Sept. 30: $444 million tied to specific loans and $162 million general. The presentation reported six newly impaired loans in the quarter. It also reported one resolution: a Bay Area mixed-use office loan was transferred into owned real estate. Book value fell to $17.06 a share from $19.31 at the end of June. That figure includes $3.64 a share of CECL reserves.
The release does not tie the reserve build to particular loans. In the second quarter, when BXMT lost $81.2 million, most of the reserve increase came from a $345 million Chicago office loan, as RealtyWire reported in July. A Chicago office loan with a $356 million commitment, originated in December 2018 and with a maximum maturity of Dec. 9, 2026, still appears among the 15 largest loans in the third-quarter appendix.
Selling the problem loans
The quarter’s other story is how quickly BXMT is shedding loans. The company said it sold nearly $1.0 billion of loans in the third quarter and the fourth quarter to date, at 93 cents per dollar of carrying value. That total included $0.5 billion of office loans and $0.2 billion of multifamily loans that had been on its watchlist. Counting $251 million of those sales, it collected $2.3 billion of loan repayments in the quarter. Eighty-eight percent came from loans originated before 2023.
As a result, watchlist loans fell to $0.9 billion. The company said that is down 56% since the second quarter and the lowest level since the fourth quarter of 2019. BXMT ended September with $0.9 billion of impaired loans and $1.5 billion of owned real estate. Combined with the watchlist, those troubled categories fell 17% from the prior quarter. The company said 93% of its loan portfolio is performing.
The portfolio is smaller as a result. Investments totaled $17.0 billion at Sept. 30, down from $19.7 billion at the end of June and $20.0 billion at the end of 2025. Multifamily was the largest category at 22%, followed by industrial at 20% and U.S. office at 15%. Non-U.S. office added another 5%.
Where the money is going
BXMT put $0.5 billion to work in the quarter. That included $0.3 billion of loan originations, $0.1 billion of net-lease properties through a joint venture, $0.1 billion of debt securities and $50 million of single-family homebuilder construction loans. By property type, 44% of the new money went to multifamily. Net lease took 20%, homebuilder finance 16%, industrial 10% and data centers 10%.
The company reported $1.3 billion of liquidity and a debt-to-equity ratio of 3.9 times. It said 89% of its debt carries no capital-markets mark-to-market provisions, Under those agreements, the presentation says, lenders may adjust valuations only if a pledged loan defaults, not because market values fall. It also bought back $36 million of its class A stock in the quarter, at a weighted average of $14.09 a share. That is well below the $17.06 book value.
On our reading, the filings show a lender choosing to absorb losses now in order to get rid of loans it made before rates rose. The cost is a lower payout and a smaller balance sheet. Whether $0.30 holds will depend on how much of the remaining pre-2023 book, including the office loans still in the top 15, can be resolved near carrying value. Coverage of other lenders and landlords working through the same cycle is on RealtyWire’s commercial real estate page, including Blackstone’s own third-quarter real estate results.
