Blackstone Mortgage Trust, Inc.

Good day and welcome to the Blackstone Mortgage Trust second quarter 2026 investor call. Today's call is being recorded. At this time, all participants are in a listen-only mode. If you require operator assistance at any time, please press star zero. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. At this time, I'd like to turn the call over to Tim Hayes, Vice President, Shareholder Relations. Please go ahead.

Good morning and welcome everyone to Blackstone Mortgage Trust's second quarter 2026 earnings conference call. I'm joined today by Tim Johnson, Chief Executive Officer, Austin Pena, President, and Marcin Urbaszek, Chief Financial Officer. This morning, we filed our 10-Q and issued a press release in the presentation of our results, which are available on our website and have been filed with the SEC. I'd like to remind everyone that today's call may include forward-looking statements which are subject to risks, uncertainties, and other factors outside of the company's control. Actual results may differ materially. For discussion of some of the risks that could affect results, please see the risk factor section of our most recent 10-K. We do not undertake any duty to update forward-looking statements. We will also refer to certain non-GAAP measures on this call. And for reconciliations, you should refer to the press release in 10-Q. This audio cast is copyrighted material. Blackstone Mortgage Trust may not be duplicated without our consent. For the second quarter, we reported a GAAP net loss of $0.48 per share. While distributable earnings were $0.31 per share, and Distributable Earnings prior to realized gains and losses were $0.48 per share. A few weeks ago, we paid a dividend of $0.47 per share with respect to the second quarter. With that, I'll now turn the call over to Tim. Thanks, Tim.

DX&C's second quarter results reflect continued execution of our goal of driving portfolio turnover and reallocating our capital into high conviction investment teams. We received $1.2 billion of repayments in the second quarter. nearly all of which were seasoned loans originated before 2023. We reinvested our capital into $1.4 billion of new investments concentrated in sectors with strong underlying fundamentals such as residential, industrial, and net lease. Over the past year, these sectors have accounted for approximately 80% of our total portfolio deployment and we've leveraged our global platform to source investments offering highly compelling relative value. Thank you for joining us. Investments in this sector help to further diversify BXMC's portfolio with granular, well-structured loans, delivering some of the most attractive risk-adjusted returns we see today, with mid- to high-teens levered yields. This strategy is reflective of our intentional approach to invest in high-conviction sectors, increase the granularity and diversity of our portfolio, and leverage our franchise to capture the best relative value opportunities across global markets. Another component of our portfolio turnover strategy is working our way through our legacy investments. On that front, we continued to make progress, resolving an impaired multifamily loan and completing a modification of our largest watch list loan, contributing to a 23% reduction in our overall watch list from last quarter. We are also taking advantage of current market liquidity to strategically sell certain assets. This week, we expect to launch a sales process for one of our largest assets, a 686-key Hyatt Hotel in San Francisco, capitalizing on the sharp fundamental recovery and increasing investor demand in that market. And we recently initiated sales processes for over $1 billion of loans, mostly office. We are disciplined, strategic sellers and expect only to transact at levels that we deem attractive. but at the right price, we believe reallocating this capital into our highest conviction investment themes is in the best long-term interest of our shareholders. Turning to portfolio performance, the overall trends we see are consistent with prior quarters with the exception being that we're seeing higher rates impact some of our legacy watch list assets. We saw the pillars of the real estate recovery beginning to emerge in 2024 and they remain in place today. CMBS issuance is tracking a near 20-year high. New supply is down approximately 60% to 90% across major asset classes, and values have steadily improved for 10 consecutive quarters. These market tailwinds have supported strong performance in the vast majority of our portfolio, driving approximately $13 billion of repayments over the period and bringing back capital that we've reinvested into new investments that reflect today's fundamental backdrop. As a result, we've reduced our total office exposure from 36% of our portfolio to just 21% today, significantly enhancing the composition of our $20 billion portfolio. Recently, we've observed increased pressure on a subset of our portfolio, approximately $1 billion of watchlist loans, or about 5% of our total investments. These loans are predominantly secured by office assets with lower in-place cash flow and where fundamentals have lagged the broader real estate market, making them more sensitive to changes in the rate environment. These loans are on our watch list precisely for these reasons, but have been performing and supported by our institutional borrowers who have invested nearly $800 million of subordinate capital into these assets since the end of 2023. These borrowers have been playing through a challenging environment with the expectation that a recovery in fundamentals and lower rates were on the horizon. But given headwinds in these specific sectors and markets, performance has taken longer to recover and rates, of course, have remained elevated, with the 10-year up more than 60 basis points since early March. This dynamic was at play this quarter as we took three new impairments on loans where borrowers had previously been supporting them. As we engage with borrowers on this $1 billion subset of loans as they approach upcoming maturities or other decision points, some may be similarly less willing to invest subordinate capital than they have been in the past. We think addressing these watch list assets is critical to driving BX&T's long-term performance. Importantly, we believe the profile of these assets is different from what we see in the rest of our office portfolio. All of our other office watch list loans have been modified or restructured with significant new equity invested at a basis that reflects today's environment. And we've seen recent leasing momentum across these assets further supporting performance. And for our other performing office loans with risk rating 3 or better, nearly half are currently in the market for refinancing, while the remainder have strong in-place cash flow with an average debt yield of 10%. As we execute these strategies to accelerate portfolio turnover and address our watch list, we may see some impact on both value and earnings, which, as always, we will take into account, along with other factors such as interest rates and the investment environment, as we discuss our dividend with the Board. We expect these initiatives to produce tangible near-term results. Between increased repayment activity and our proactive asset management approach, We see a path to reducing our exposure to both office loans and to legacy pre-2023 loans by 40% or more by year end. And our new investments are laying the groundwork for a more diversified granular BXMT as evidenced by our average investment size declining from over $130 million just a few years ago to approximately $20 million today. This is our path forward. address the tail of our portfolio and complete the transition to a more diversified business. We believe this best positions us to deliver strong, long-term performance for our shareholders, and we are well on our way. I'll now turn it over to Austin to discuss our investments and portfolio in greater detail. Thanks, Tim.