Blackstone Mortgage Trust, Inc.: Form 10-Q for the period ended Sep 30, 2026

RESULTS OF OPERATIONS

References herein to “Blackstone Mortgage Trust,” “Company,” “we,” “us,” or “our” refer to Blackstone Mortgage

Trust, Inc. and its subsidiaries unless the context specifically requires otherwise.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction

with the unaudited consolidated financial statements and notes thereto appearing elsewhere in this Quarterly Report on

Form 10-Q and with our Annual Report on Form 10-K for the year ended December 31, 2025. In addition to historical

data, this discussion and analysis contains forward-looking statements within the meaning of Section 27A of the Securities

Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the

Exchange Act, which reflect our current views with respect to, among other things, our business, operations and financial

performance. You can identify these forward-looking statements by the use of words such as “intend,” “goal,” “estimate,”

“expect,” “project,” “projections,” “plans,” “seeks,” “anticipates,” “should,” “could,” “may,” “designed to,”

“foreseeable future,” “believe,” “scheduled,” and similar expressions. Such forward-looking statements are subject to

various risks, uncertainties and assumptions. Our actual results or outcomes may differ materially from those in this

discussion and analysis as a result of various factors, including but not limited to those discussed in Item 1A. Risk Factors

in our Annual Report on Form 10-K for the year ended December 31, 2025 and elsewhere in this Quarterly Report on

Form 10-Q.

Introduction

Blackstone Mortgage Trust is a real estate finance company that originates, acquires, and manages senior loans and other

debt or credit-oriented investments collateralized by or relating to commercial real estate in North America, Europe, and

Australia. Our portfolio is composed primarily of senior loans secured by high-quality, institutional assets located in major

markets, and sponsored by experienced, well-capitalized real estate investment owners and operators. We finance our

investments in a variety of ways, including borrowing under secured credit facilities, issuing collateralized loan obligations,

or CLOs, other securitization transactions, syndicating senior loans and/or participations, and other forms of asset-level

financing, depending on our view of the most prudent financing option available for each of our investments. We are

externally managed by BXMT Advisors L.L.C., or our Manager, a subsidiary of Blackstone Inc., or Blackstone, and are a

real estate investment trust, or REIT, traded on the New York Stock Exchange, or NYSE, under the symbol “BXMT.”

We benefit from the deep knowledge, experience and information advantages of our Manager, which is a part of

Blackstone Real Estate. Blackstone Real Estate was founded in 1991 and is the world’s largest owner of commercial real

estate. Blackstone Real Estate operates as one globally integrated business with investments in North America, Europe,

Asia and Latin America. In the United States, Blackstone Real Estate is one of the largest owners of rental housing,

industrial, office, hospitality and retail assets. The market-leading real estate expertise derived from the strength of the

Blackstone platform deeply informs our credit and underwriting process, and we believe it gives us the tools to manage the

assets in our portfolio and work with our borrowers throughout periods of economic stress and uncertainty.

We conduct our operations as a REIT for U.S. federal income tax purposes. We generally will not be subject to U.S. federal

income taxes on our taxable income to the extent that we annually distribute all of our net taxable income to stockholders

and maintain our qualification as a REIT. We also operate our business in a manner that permits us to maintain an

exclusion from registration under the Investment Company Act of 1940, as amended. We are organized as a holding

company and conduct our business primarily through our various subsidiaries.

Recent Developments

Loan Portfolio Sale

During the three months ended September 30, 2026, we entered into an agreement to sell eight whole mortgage loans to an

unaffiliated third party for total estimated net sales proceeds of $615.6 million, which resulted in these loans being

classified as loans receivable, held-for-sale on our consolidated balance sheets as of September 30, 2026. This resulted in a

$63.9 million valuation adjustment recognized to reduce the carrying value of these loans, which was $679.5 million prior

to the adjustment. Two of the whole loans consisted of both a performing senior loan and an impaired subordinate loan.

The two subordinate loans carried $61.9 million of previously recorded asset-specific CECL reserves. Six of the loans were

collateralized by office assets and two were collateralized by multifamily assets, all of which were located in the United

States. The valuation adjustment was included in valuation adjustment on loans receivable, held-for-sale on our

consolidated statements of operations during the three months ended September 30, 2026. The sale of these loans closed

subsequent to September 30, 2026.

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Fourth Quarter Dividend

In October 2026, we declared a dividend of $0.30 per share of common stock for the fourth quarter of 2026, which is

payable on January 15, 2027 to stockholders of record as of December 31, 2026.

I. Key Financial Measures and Indicators

As a real estate finance company, we believe the key financial measures and indicators for our business are earnings per

share, dividends declared, Distributable Earnings, Distributable Earnings prior to realized gains and losses, and book value

per share. For the three months ended September 30, 2026, we recorded basic net loss per share of $1.95, declared a

dividend of $0.47 per share, reported $0.38 per share of Distributable Earnings, and reported $0.42 per share of

Distributable Earnings prior to realized gains and losses. In addition, our book value as of September 30, 2026 was $17.06

per share, which is net of cumulative CECL reserves of $3.64 per share, and accumulated depreciation and amortization of

owned real estate assets, including our share related to unconsolidated entities, of $0.93 per share.

As further described below, Distributable Earnings and Distributable Earnings prior to realized gains and losses are

measures that are not prepared in accordance with accounting principles generally accepted in the United States of

America, or GAAP. Distributable Earnings and Distributable Earnings prior to realized gains and losses help us to evaluate

our performance, excluding the effects of certain transactions and GAAP adjustments that we believe are not necessarily

indicative of our current investments and operations. In addition, Distributable Earnings and Distributable Earnings prior to

realized gains and losses are performance metrics we consider when declaring our dividends.

Earnings Per Share and Dividends Declared

The following table sets forth the calculation of basic net loss per share and dividends declared per share ($ in thousands,

except per share data):

(1) Represents net loss attributable to Blackstone Mortgage Trust, Inc. Refer to Note 14 to our consolidated financial

statements for the calculation of diluted net loss per share.

Distributable Earnings and Distributable Earnings Prior to Realized Gains and Losses

Distributable Earnings and Distributable Earnings prior to realized gains and losses are non-GAAP measures. We define

Distributable Earnings as GAAP net income (loss), including realized gains and losses not otherwise recognized in current

period GAAP net income (loss), and excluding (i) non-cash equity compensation expense, (ii) depreciation and

amortization, (iii) unrealized gains (losses), and (iv) certain non-cash items. Distributable Earnings may also be adjusted

from time to time to exclude one-time events pursuant to changes in GAAP and certain other non-cash charges as

determined by our Manager, subject to approval by a majority of our independent directors. Distributable Earnings mirrors

the terms of our management agreement between our Manager and us, or our Management Agreement, for purposes of

calculating our incentive fee expense. Therefore, Distributable Earnings prior to realized gains and losses is calculated net

of the incentive fee expense that would have been recognized if such realized gains or losses had not occurred.

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Our CECL reserves have been excluded from Distributable Earnings consistent with other unrealized gains (losses)

pursuant to our existing policy for reporting Distributable Earnings. We expect to only recognize such potential credit

losses in Distributable Earnings if and when such amounts are realized and deemed non-recoverable upon a realization

event. This is generally at the time a loan is repaid, or in the case of foreclosure, when the underlying asset is sold, but

realization and non-recoverability may also be concluded if, in our determination, it is nearly certain that all amounts due

will not be collected. The timing of any such credit loss realization in our Distributable Earnings may differ materially from

the timing of CECL reserves or charge-offs in our consolidated financial statements prepared in accordance with GAAP.

The realized loss amount reflected in Distributable Earnings will equal the difference between the cash received, or

expected to be received, and the book value of the asset, and is reflective of our economic experience as it relates to the

ultimate realization of the loan.

We believe that Distributable Earnings provides meaningful information to consider in addition to our net income (loss)

and cash flow from operating activities determined in accordance with GAAP. We believe Distributable Earnings is a

useful financial metric for existing and potential future holders of our class A common stock as historically, over time,

Distributable Earnings has been a strong indicator of our dividends per share. As a REIT, we generally must distribute

annually at least 90% of our net taxable income, subject to certain adjustments, and therefore we believe our dividends are

one of the principal reasons stockholders may invest in our class A common stock. Refer to Note 16 to our consolidated

financial statements for further discussion of our distribution requirements as a REIT. Further, Distributable Earnings helps

us to evaluate our performance, excluding the effects of certain transactions and GAAP adjustments that we believe are not

necessarily indicative of our current investment portfolio and operations, and is a performance metric we consider when

declaring our dividends.

Furthermore, we believe it is useful to present Distributable Earnings prior to realized gains and losses, which include but

are not limited to charge-offs of CECL reserves, to reflect our direct operating results and help existing and potential future

holders of our class A common stock assess the performance of our business excluding such realized gains or losses. We

may make similar adjustments with respect to other types of investments, if and when applicable transactions occur. During

the period from the first quarter of 2024 to the fourth quarter of 2025, we reported this metric as Distributable Earnings

prior to charge-offs of CECL reserves, as the only applicable realized gains or losses during such period were charge-offs

of CECL reserves. We utilize Distributable Earnings prior to realized gains and losses as an additional performance metric

to consider when declaring our dividends. Distributable Earnings mirrors the terms of our Management Agreement for

purposes of calculating our incentive fee expense. Therefore, Distributable Earnings prior to realized gains and losses is

calculated net of the incentive fee expense that would have been recognized if such realized gains or losses had not

occurred.

Distributable Earnings and Distributable Earnings prior to realized gains and losses do not represent net income (loss) or

cash generated from operating activities and should not be considered as alternatives to GAAP net income (loss), or

indicators of our GAAP cash flows from operations, measures of our liquidity, or indicators of funds available for our cash

needs. In addition, our methodology for calculating Distributable Earnings and Distributable Earnings prior to realized

gains and losses may differ from the methodologies employed by other companies to calculate the same or similar

supplemental performance measures, and accordingly, our reported Distributable Earnings and Distributable Earnings prior

to realized gains and losses may not be comparable to similar metrics reported by other companies.

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The following table provides a reconciliation of Distributable Earnings and Distributable Earnings prior to realized gains

and losses to GAAP net loss ($ in thousands, except per share data):

(1) Represents net loss attributable to Blackstone Mortgage Trust, Inc.

(2) Represents unrealized losses recognized on loans that were classified as held-for-sale to reduce them to their fair

value.

(3) Represents realized losses related to loan principal amounts deemed non-recoverable.

(4) Represents depreciation of owned real estate assets and amortization of intangible real estate assets and liabilities.

(5) Represents non-cash valuation adjustments recognized to reduce the carrying values of owned real estate assets to

their estimated fair value.

(6) Represents realized losses on the repatriation of unhedged foreign currency. These amounts were not included in

GAAP net loss, but rather as a component of other comprehensive income in our consolidated financial statements.

(7) Allocable share of adjustments related to unconsolidated entities for the three months ended September 30, 2026

reflects our share of non-cash items such as (i) $2.1 million of unrealized losses recorded by such unconsolidated

entities, (ii) $5.2 million of depreciation and amortization, and (iii) $(0.3) million of related adjustments for realized

gains. For the three months ended June 30, 2026, reflects our share of non-cash items such as (i) $(3.8) million of

unrealized gains recorded by such unconsolidated entities, (ii) $4.3 million of depreciation and amortization, and

(iii) related adjustments for realized gains, if any.

(8) Represents (i) the non-cash income recognized under GAAP related to our Agency Multifamily Lending

Partnership, in which we receive a portion of origination, servicing, and other fees for loans we refer to MTRCC for

origination, offset by the related loss-sharing obligation accruals, and (ii) the cash received related to such income

previously recognized under GAAP. Refer to Note 2 to our consolidated financial statements for further information

on our Agency Multifamily Lending Partnership.

(9) The weighted-average shares outstanding, basic, exclude shares issuable from a potential conversion of our

Convertible Notes then outstanding. Consistent with the treatment of other unrealized adjustments to Distributable

Earnings, these potentially issuable shares are excluded until a conversion occurs. Refer to Note 14 to our

consolidated financial statements for the calculation of diluted net income per share.

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Book Value Per Share

The following table calculates our book value per share ($ in thousands, except per share data):

(1) The book value per share excludes shares issuable from a potential conversion of our Convertible Notes then

outstanding. Refer to Note 14 to our consolidated financial statements for the calculation of diluted net income per

share.

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II. Investments

Investment Portfolio

Our Investment Portfolio consists of our Loan Portfolio, our investments in our Bank Loan Portfolio Joint Venture, Net

Lease Joint Venture and Homebuilder Finance Joint Venture, our owned real estate assets, and our investments in debt

securities. The chart below details the composition of our Investment Portfolio as of September 30, 2026:

Investment Portfolio(1)(2)

Included in our Loan Portfolio(3)

(1) Our Investment Portfolio reflects the gross amount of our investments as of September 30, 2026, which consists of

(i) our Loan Portfolio, which represents net book value of loans held-for-investment, which reflects our total loans

receivable CECL reserves, (ii) our share of the carrying value of investments held by our Net Lease Joint Venture,

(iii) our share of the fair value of the loans held by both our Bank Loan Portfolio Joint Venture and Homebuilder

Finance Joint Venture, (iv) the aggregate carrying value of our owned real estate assets, and (v) the fair value of our

investments in debt securities.

(2) Assets in our Loan Portfolio with multiple components are proportioned into the relevant property types based on

the allocated value of each property type.

(3) Represents the types of properties securing the loans in our Loan Portfolio.

Refer to section VII of this Item 2 for details of our Loan Portfolio, on a loan-by-loan basis.

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Loan Portfolio

Loan Originations

During the three months ended September 30, 2026, we originated or acquired $264.2 million of loans, inclusive of

additional commitments made under existing loans.

Loan Portfolio Activity

During the three months ended September 30, 2026, loan fundings totaled $366.3 million and loan repayments and sales

totaled $2.3 billion.

The following table details our Loan Portfolio activity ($ in thousands):

(1) Excludes amounts for loans held by our Bank Loan Portfolio Joint Venture and Homebuilder Finance Joint Venture,

which are included in investments in unconsolidated entities on our consolidated balance sheets.

(2) Included in these amounts are sales of $251.5 million of pari passu participations in two loans collateralized by

properties located in the United Kingdom.

The following table details overall statistics for our Loan Portfolio as of September 30, 2026 ($ in thousands):

(1) Unfunded commitments will primarily be funded to finance our borrowers’ construction or development of real

estate-related assets, capital improvements of existing assets, or lease-related expenditures. These commitments will

generally be funded over the term of each loan, subject in certain cases to an expiration date.

(2) The weighted-average cash coupon and all-in yield are expressed as a spread over the relevant floating benchmark

rates, which include SOFR, SONIA, EURIBOR, CORRA, and other indices as applicable to each loan. As of

September 30, 2026, 96% of our loans by principal balance earned a floating rate of interest, primarily indexed to

SOFR. The remaining 4% of our loans by principal balance earned a fixed rate of interest.

(3) Maximum maturity assumes all extension options are exercised by the borrower; however, our loans and other

investments may be repaid prior to such date. Excludes loans accounted for under the cost-recovery and nonaccrual

methods, if any. As of September 30, 2026, 44% of our loans by principal balance were subject to yield maintenance

or other prepayment restrictions and 56% were open to repayment by the borrower without penalty.

(4) Based on LTV as of the dates loans were originated or acquired by us, excluding any loans that are impaired.

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The following table details the index rate floors for our Loan Portfolio as of September 30, 2026 ($ in thousands):

(1) Includes Euro, British Pound Sterling, Australian Dollar, and Canadian Dollar currencies.

(2) Includes all impaired loans.

(3) As of September 30, 2026, the weighted-average index rate floor of our floating-rate Loan Portfolio principal

balance was 1.73%. Excluding 0.00% index rate floors and loans with no floor, the weighted-average index rate

floor was 2.28%.

The following table details the floating benchmark rates for our Loan Portfolio as of September 30, 2026 (Loan Portfolio

principal balance amounts in thousands):

(1) We use foreign currency forward contracts to protect the value or fix the amount of certain investments or cash

flows in terms of the U.S. dollar. We earn forward points on our forward contracts that reflect the interest rate

differentials between the applicable base rate for our foreign currency investments and prevailing U.S. interest rates.

These forward contracts effectively convert the foreign currency rate exposure for such investments to USD-

equivalent interest rates.

(2) In addition to cash coupon, all-in yield includes the amortization of deferred origination and extension fees, loan

origination costs, and purchase discounts, as well as the accrual of exit fees. Excludes loans accounted for under the

cost-recovery and nonaccrual methods, if any.

(3) Includes floating rate loans indexed to CORRA and BBSY indices.

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The charts below detail the geographic distribution and types of properties securing our Loan Portfolio, as of

September 30, 2026:

Geographic Diversification

(Net Loan Exposure)(1)

Collateral Diversification

(Net Loan Exposure)(1)(2)

(1) Net loan exposure reflects the amount of each loan that is subject to risk of credit loss to us as of September 30,

2026, which is our principal balance of loans receivable, held-for-investment, net of (i) $989.5 million of asset-

specific debt, (ii) $4.6 million of cost-recovery proceeds, and (iii) our total loans receivable CECL reserve of

$597.3 million. Our asset-specific debt is structurally non-recourse and term-matched to the corresponding collateral

loans. Geographic locations that represent less than 1% of net loan exposure are excluded from the chart.

(2) Assets with multiple components are proportioned into the relevant property types based on the allocated value of

each property type.

Refer to section VII of this Item 2 for details of our Loan Portfolio, on a loan-by-loan basis.

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Portfolio Management

As of September 30, 2026, 93% of our loans, based on net loan exposure, were performing with risk ratings of “1” through

“4,” and the remaining 7% were impaired with a risk rating of “5.” As of September 30, 2026, one of our performing loans

with an amortized cost basis of $149.8 million was in payment default, was greater than 90 days past due on its interest

payment, and had a risk rating of “4.” This loan was not impaired as of September 30, 2026 as we expect to fully recover

all contractual principal and interest amounts due under the loan agreement. All other borrowers under performing loans

were in compliance with the applicable contractual terms of each respective loan, including any required payment of

interest. We believe this demonstrates the overall strength of our loan portfolio and the commitment and financial

wherewithal of our borrowers generally, which are primarily affiliated with large real estate private equity funds and other

strong, well-capitalized, and experienced sponsors.

We maintain a robust asset management relationship with our borrowers and utilize these relationships to maximize the

performance of our portfolio, including during periods of volatility. We believe that we benefit from these relationships and

from our long-standing core business model of originating senior loans collateralized by large assets in major markets with

experienced, well-capitalized institutional sponsors. While we believe the principal amounts of our loans are generally

adequately protected by underlying collateral value, there is a risk that we will not realize the entire principal value of

certain investments. As of September 30, 2026, we had an aggregate $444.5 million asset-specific CECL reserve related to

12 of our loans receivable, with an aggregate amortized cost basis of $1.3 billion, net of cost-recovery proceeds. This

CECL reserve was recorded based on our estimation of the fair value of each of the loan's underlying collateral as of

September 30, 2026.

We benefit from the deep knowledge, experience and information advantages of our Manager, which is a part of

Blackstone Real Estate. Blackstone Real Estate was founded in 1991 and is the world’s largest owner of commercial real

estate with investments in North America, Europe, Asia and Latin America. In the United States, Blackstone Real Estate is

one of the largest owners of rental housing, industrial, office, hospitality and retail assets.

As discussed in Note 2 to our consolidated financial statements, we perform a quarterly review of our loan portfolio, assess

the performance of each loan, and assign it a risk rating between “1” and “5,” from less risk to greater risk. As of

September 30, 2026, our loan portfolio had a weighted-average risk rating of 3.1, based on net loan exposure.

The following table allocates the amortized cost basis and net loan exposure balances of our Loan Portfolio based on our

internal risk ratings as of September 30, 2026 ($ in thousands):

(1) Net loan exposure reflects the amount of each loan that is subject to risk of credit loss to us as of September 30,

2026, which is our principal balance of loans receivable, held-for-investment, net of (i) $989.5 million of asset-

specific debt, (ii) $4.6 million of cost-recovery proceeds, and (iii) our total loans receivable CECL reserve of

$597.3 million. Our asset-specific debt is structurally non-recourse and term-matched to the corresponding collateral

loans.

Current Expected Credit Loss Reserve

The CECL reserves required by GAAP reflect our current estimate of potential credit losses related to our loans included in

our consolidated balance sheets. Other than a few narrow exceptions, GAAP requires that all financial instruments subject

to the CECL model have some amount of loss reserve to reflect the principle underlying the CECL model that all loans and

similar assets have some inherent risk of loss, regardless of credit quality, subordinate capital, or other mitigating factors.

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During the three months ended September 30, 2026, the CECL reserves against our loans receivable, held-for-investment

portfolio increased by $199.5 million. This increase was primarily driven by a $293.8 million increase in our asset-specific

CECL reserve, partially offset by a $25.5 million decrease in our general CECL reserve. The increase in our asset-specific

reserve was primarily driven by six additional loans with an aggregate amortized cost basis of $787.8 million that were

impaired during the three months ended September 30, 2026, of which five are secured by office properties, and one is

secured by a hospitality asset. The office sector recovery in certain markets has continued to lag other commercial real

estate sectors, which has, in certain cases, extended business plans on transitional properties and impacted their

performance, affecting some borrowers’ willingness and ability to continue to support their assets. During the three months

ended September 30, 2026, we recorded $8.7 million of interest income on these loans. Upon determining that the six loans

were impaired, the income accrual was suspended, as the recovery of interest income and principal was doubtful. The

decrease in our general CECL reserve was primarily driven by changes in risk ratings, including the impact of the six

newly impaired loans moving out of the general CECL reserve pool, and a decrease in our loans receivable, held-for-

investment balance, partially offset by an increase in the historical loss rate used in reserve calculations related to the

additional reserve charge-offs.

The increase in our asset-specific reserve was reduced by (i) the transfer of $61.9 million of CECL reserves related to two

previously impaired subordinate loans that were transferred to held-for-sale as of September 30, 2026, which were sold

subsequent to September 30, 2026, and (ii) charge-offs of $6.9 million primarily related to the resolution of one previously

impaired loan as a result of our acquisition of title through a deed-in-lieu of foreclosure of a mixed-use collateral property

located in Richmond, CA, which is now included on our consolidated balance sheet as an owned real estate asset. As a

result of these changes, our total loans receivable CECL reserves increased to $597.3 million as of September 30, 2026.

As of September 30, 2026, we had an aggregate $444.5 million asset-specific CECL reserve related to 12 of our loans

receivable, held-for-investment, with an aggregate amortized cost basis of $1.3 billion, net of cost-recovery proceeds.

During the three months ended September 30, 2026, we received $4.4 million of cash proceeds from previously impaired

loans that were applied as a reduction to the amortized cost basis of each respective loan. Impairments are each determined

individually as a result of changes in the specific credit quality factors for each such loan. These factors included, among

others, (i) the underlying collateral performance, (ii) discussions with the borrower, (iii) borrower events of default, and

(iv) other facts that impact the borrower’s ability to pay the contractual amounts due under the terms of the loan. This asset-

specific CECL reserve was recorded based on our estimation of the fair value of each loan’s underlying collateral as of

September 30, 2026.

Refer to Note 2 to our consolidated financial statements for further discussion of our policies on revenue recognition and

our CECL reserves.

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Owned Real Estate

As part of our portfolio management strategy to maximize economic outcomes, we may hold certain owned real estate

assets, resulting from transactions in which we assume legal title, physical possession, or control of the collateral

underlying a loan through a foreclosure, a deed-in-lieu of foreclosure transaction, or a loan modification in which we

receive an equity interest in and/or control over decision-making at the property. As of September 30, 2026, we had 15

owned real estate assets with an aggregate carrying value of $1.5 billion.

The following table provides details of our owned real estate assets as of September 30, 2026 ($ in thousands):

Bank Loan Portfolio Joint Venture

In the second quarter of 2025, we entered into a joint venture with a Blackstone-advised investment vehicle to acquire

portfolios of performing commercial mortgage loans, or our Bank Loan Portfolio Joint Venture. In the second quarter of

2025, the Bank Loan Portfolio Joint Venture acquired a $1.4 billion portfolio of 171 performing senior commercial real

estate loans from a regional bank. The loans are secured primarily by retail and multifamily properties located across

various markets in the Mid-Atlantic region, are primarily fixed rate, and were acquired at a discount to par. In the third

quarter of 2025, the Bank Loan Portfolio Joint Venture acquired a $606.0 million portfolio of 425 performing senior

commercial real estate loans from a regional bank. The loans are secured primarily by net lease retail assets located

throughout the United States, are fixed rate, and were acquired at a discount to par. We have an aggregate 35% ownership

interest in the joint venture as of September 30, 2026. As of September 30, 2026, our share of the fair value of the loans

held by our Bank Loan Portfolio Joint Venture was $451.9 million.

Our Bank Loan Portfolio Joint Venture is recorded on our consolidated balance sheets in investments in unconsolidated

entities. As of September 30, 2026, our investment in the joint venture totaled $92.3 million. During the nine months ended

September 30, 2026, we did not make any contributions to the joint venture, received $29.6 million of distributions, and

recorded $10.9 million of income from unconsolidated entities in our consolidated statements of operations.

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Net Lease Joint Venture

In the fourth quarter of 2024, we entered into a joint venture with a Blackstone-advised investment vehicle to invest in

triple net lease properties, or our Net Lease Joint Venture. Our investment in the joint venture is recorded on our

consolidated balance sheets in investments in unconsolidated entities. As of September 30, 2026, our investment in the

joint venture totaled $219.3 million. During the nine months ended September 30, 2026, we contributed $129.6 million to

the joint venture, received $29.2 million of distributions, and recorded $2.0 million of income from unconsolidated entities

in our consolidated statements of operations, inclusive of $12.7 million of depreciation and amortization expense. We have

an aggregate 75% ownership interest in the joint venture as of September 30, 2026. As of September 30, 2026, our share of

the carrying value of investments held by our Net Lease Joint Venture was $747.2 million.

The following table details the tenant industries and the geographic location of the assets held by our Net Lease Joint

Venture as of September 30, 2026:

As of September 30, 2026, our Net Lease Joint Venture’s leases had a weighted-average remaining lease term of over 15

years (based on annualized base rent), with weighted-average annual rent increases of approximately 2%, and a rent

coverage ratio of approximately 3x.

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Homebuilder Finance Joint Venture

In the second quarter of 2026, we entered into a joint venture with an unaffiliated third party, alongside a Blackstone-

advised investment vehicle, to originate, acquire, and fund construction loans collateralized by single family homes located

in various markets across the United States, which we refer to as our Homebuilder Finance Joint Venture. Our aggregate

ownership interest in our Homebuilder Finance Joint Venture was 45% as of September 30, 2026. Our Homebuilder

Finance Joint Venture initially acquired a seed portfolio of 36 loans with an aggregate outstanding balance of

$286.7 million, and has since originated and acquired additional loans. As of September 30, 2026, our share of fair value of

the loans held by this joint venture was $191.2 million.

Our Homebuilder Finance Joint Venture is recorded on our consolidated balance sheets in investments in unconsolidated

entities. As of September 30, 2026, our investment in the joint venture totaled $59.1 million. During the nine months ended

September 30, 2026, we made $56.6 million of contributions to the joint venture, did not receive any distributions, and

recorded $2.6 million of income from unconsolidated entities in our consolidated statements of operations.

Core+ Real Estate Debt Fund Investment

In the fourth quarter of 2025, we made a $75.0 million capital commitment at the initial closing of a new BREDS-advised

private fund formed to invest in Core+ real estate debt investments in the U.S. and Canada. Blackstone affiliates, including

us, do not pay management fees or carried interest with respect to their investments in the BREDS-advised private fund.

Our capital commitment represented a minority of the total capital commitments the BREDS-advised private fund had

received as of September 30, 2026. As of September 30, 2026, the BREDS-advised private fund had not called any capital.

To fund its investments, the BREDS-advised private fund will draw down on capital commitments made by its investors,

including us, on a pro rata basis.

Investments in Debt Securities

The following table details our investments in debt securities ($ in thousands):

(1) The UK Bank Loan Portfolio SRT is indexed to SONIA and the Home Building senior secured notes are indexed to

one-month SOFR.

(2) Represents an investment in a significant risk transfer, or SRT, transaction with a UK financial institution structured

as a credit-linked note, or the UK Bank Loan Portfolio SRT. The investment constitutes the first-loss tranche of a

reference portfolio comprising a diversified, granular portfolio of low-leverage commercial real estate loans held by

the UK financial institution. As of September 30, 2026, no realized credit losses have been incurred with respect to

the underlying reference loan portfolio.

(3) These senior secured notes were issued at 97.5% of par.

(4) In connection with this investment, we entered into an interest rate swap to effectively convert our fixed-rate

exposure to floating-rate exposure, indexed to one-month SOFR. Refer to Note 13 to our consolidated financial

statements for additional information.

Agency Multifamily Lending Partnership

In the second quarter of 2024, we entered into an agreement with M&T Realty Capital Corporation, or MTRCC, a

subsidiary of M&T Bank, that allows our borrowers to access multifamily agency financing through MTRCC’s Fannie

Mae DUS and Freddie Mac Optigo lending platforms, or our Agency Multifamily Lending Partnership. We will receive a

portion of origination, servicing, and other fees for loans that we refer to MTRCC for origination under both the Fannie

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Mae and Freddie Mac programs. Additionally, we will share in losses with MTRCC and Fannie Mae on loans that we refer

to MTRCC for origination under the Fannie Mae program. During the nine months ended September 30, 2026, we did not

refer any loans to MTRCC.

III. Financings

Loan Portfolio Financings

Our loan portfolio financing consists of secured debt, securitizations, and asset-specific debt. The following table details

our portfolio financing ($ in thousands):

Secured Debt

The following table details our secured credit facilities by currency as of September 30, 2026 ($ in thousands):

(1) Represents the number of lenders with fundings advanced in each respective currency, as well as the total number of

facility lenders.

(2) Our secured debt agreements are generally term-matched to their underlying collateral. Therefore, the weighted-

average maturity is generally allocated based on the maximum maturity date of the collateral loans, assuming all

extension options are exercised by the borrower. In limited instances, the maturity date of the respective secured

credit facility is used.

(3) The spread, all-in cost, and all-in yield are expressed over the relevant floating benchmark rates, which include

SOFR, SONIA, EURIBOR, CORRA, and other indices as applicable.

(4) In addition to spread, the cost includes the associated deferred fees and expenses related to the respective

borrowings. In addition to cash coupon, all-in yield includes the amortization of deferred origination and extension

fees, loan origination costs, and purchase discounts, as well as the accrual of exit fees. All-in yield excludes loans

accounted for under the cost-recovery and nonaccrual methods, if any, and owned real estate assets.

(5) Represents the weighted-average all-in cost as of September 30, 2026 and is not necessarily indicative of the spread

applicable to recent or future borrowings.

(6) Represents the principal balance of the collateral loans receivable, held-for-investment and the carrying value of the

collateral owned real estate assets and loans receivable, held-for-sale.

(7) Includes Australian Dollar and Canadian Dollar currencies.

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Securitizations

We have financed certain pools of our loans through CLOs and have also financed one of our loans through a securitization

vehicle, or the European Loan Securitization. The following table details our securitized debt obligations and the

underlying collateral assets that are financed by our CLOs and the European Loan Securitization ($ in thousands):

(1) The book value of underlying collateral assets excludes any applicable CECL reserves.

(2) In addition to cash coupon, all-in yield includes the amortization of deferred origination and extension fees, loan

origination costs, purchase discounts, and accrual of exit fees, while all-in cost includes the amortization of deferred

origination fees and financing costs. The weighted-average all-in yield and cost are expressed as a spread over the

relevant floating benchmark rates, which is SOFR for the CLOs and EURIBOR for the European Loan

Securitization. All-in yield excludes loans accounted for under the cost-recovery and nonaccrual methods, if any,

owned real estate assets, and cash from repayment proceeds held in certain of our CLOs that may be used to add

new eligible collateral assets.

(3) Underlying collateral assets term represents the weighted-average final maturity of such loans, assuming all

extension options are exercised by the borrower, and excludes owned real estate assets. Repayments of securitized

debt obligations are tied to timing of the related collateral loan asset repayments. The term of these obligations

represents the rated final distribution date of the securitizations.

(4) We financed our $55.8 million retained interests in the securitization under a repurchase agreement structured

without capital markets-based mark-to-market provisions. The amount of the financing is included in other liabilities

on our consolidated balance sheets.

(5) During the nine months ended September 30, 2026, we recorded $114.1 million of interest expense related to our

securitized debt obligations.

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Refer to Note 8 and Note 19 to our consolidated financial statements for additional details of our securitized debt

obligations.

Asset-Specific Debt

The following table details our asset-specific debt ($ in thousands):

(1) The book value of underlying collateral assets excludes any applicable CECL reserves.

(2) The weighted-average all-in yield and cost are expressed as a spread over the relevant floating benchmark rates,

which include SOFR and CORRA, as applicable. These floating rate loans and related liabilities are currency and

index-matched to the applicable benchmark rate relevant in each arrangement. In addition to cash coupon, yield/cost

includes the amortization of deferred origination fees and financing costs.

(3) The weighted-average term is determined based on the maximum maturity of the corresponding loans, assuming all

extension options are exercised by the borrower. Our non-recourse, asset-specific debt is term-matched in each case

to the corresponding collateral loans.

Corporate Financing

The following table details our outstanding corporate financing ($ in thousands):

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The following table details our outstanding senior term loan facilities, or Term Loans, our outstanding senior secured notes,

or Senior Secured Notes, and convertible senior notes, or Convertible Notes, as of September 30, 2026 ($ in thousands):

(1) The B-7 Term Loan and B-9 Term Loan borrowings are subject to a benchmark interest rate floor of 0.50%.

(2) For certain of the Senior Secured Notes, we have entered into interest rate swaps that effectively convert our fixed

rate exposure to floating rate exposure. Refer to Note 11 and Note 13 to our consolidated financial statements for

further information.

(3) Includes issue discounts, transaction expenses, and/or issuance costs, as applicable, that are amortized through

interest expense over the life of each respective financing.

(4) The conversion price of the Convertible Notes is $36.27, which represents the price of class A common stock per

share based on a conversion rate of 27.5702. The conversion rate represents the number of shares of class A

common stock issuable per $1,000 principal amount of Convertible Notes. The cumulative dividend threshold has

not been exceeded as of September 30, 2026.

Refer to Notes 2, 10, 11, and 12 to our consolidated financial statements for further discussion of our Term Loans, Senior

Secured Notes, and Convertible Notes.

Floating Rate Loan Portfolio

Generally, our business model is such that rising interest rates will increase our net income, while declining interest rates

will decrease net income. However, in periods in which our floating rate liabilities exceed our floating rate assets, including

as a result of floating rate corporate debt or a greater concentration in owned real estate, loans on nonaccrual status, or

similar assets that do not generate floating rate interest income, rising interest rates may decrease our net income. As of

September 30, 2026, 96% of our loans by principal balance earned a floating rate of interest, primarily indexed to SOFR,

and were financed with liabilities that pay interest at floating rates, which resulted in an amount of net equity that is

positively correlated to rising interest rates, subject to the impact of interest rate floors on certain of our floating rate loans.

Our liabilities are generally currency and index-matched to each collateral asset, resulting in a net exposure to movements

in benchmark rates that varies by currency silo based on the relative proportion of floating rate assets and liabilities.

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The following table details our investment portfolio’s exposure to interest rates by currency as of September 30, 2026

(amounts in thousands):

(1) Includes Australian Dollar and Canadian Dollar currencies.

(2) Our floating rate loans and related liabilities are currency and index-matched to the applicable benchmark rate

relevant in each arrangement.

(3) Excludes $1.3 billion of principal balance on floating rate impaired loans.

(4) Our loan agreements generally require our borrowers to purchase interest rate caps, which mitigates our borrowers’

exposure to an increase in interest rates.

(5) Excludes amounts related to our investments in unconsolidated entities and investments in debt securities.

(6) Includes amounts outstanding under secured debt, securitizations, and asset-specific debt. Excludes amounts related

to the indebtedness of unconsolidated entities.

(7) Excludes an interest rate swap with a $35.6 million notional amount that effectively converts our floating rate

liability to a fixed rate liability to align with the financed fixed rate loan exposure.

(8) Includes amounts outstanding under Term Loans, the Senior Secured Notes due 2029, and the Senior Secured Notes

due 2031. In connection with the issuance of the Senior Secured Notes due 2029 and Senior Secured Notes due

2031, we entered into interest rate swaps with an aggregate notional amount of $900.0 million to effectively convert

our fixed rate exposure to floating rate exposure for such notes.

(9) Represents the U.S. dollar equivalent as of September 30, 2026.

In addition to the risks related to fluctuations in cash flows and asset values associated with movements in interest rates,

there is also the risk of non-performance on floating rate assets. In the case of a significant increase in interest rates, the

cash flows of the collateral real estate assets may not be sufficient to pay debt service due under our loans, which may

contribute to non-performance or, in severe cases, default. This risk is partially mitigated by our consideration of rising rate

stress-testing during our underwriting process, which generally includes a requirement for our borrower to purchase an

interest rate cap contract with an unaffiliated third party, provide an interest reserve deposit, and/or provide interest

guarantees or other structural protections.

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IV. Our Results of Operations

Operating Results

The following table sets forth information regarding our consolidated results of operations for the three months ended

September 30, 2026 and June 30, 2026 ($ in thousands, except per share data):

Income from loans and other investments, net

Income from loans and other investments, net decreased $18.1 million during the three months ended September 30, 2026

compared to the three months ended June 30, 2026. The decrease was primarily driven by (i) a decrease in interest income

due to a $1.9 billion decrease in the weighted-average principal balance of our loan portfolio, and (ii) a decline in interest

income related to additional loans accounted for under the cost-recovery method during the three months ended

September 30, 2026. These decreases were partially offset by a decrease in interest expense due to a $1.5 billion decrease

in the weighted-average principal balance of our outstanding financing arrangements during the three months ended

September 30, 2026.

Revenue from owned real estate

Revenue from owned real estate increased by $2.0 million during the three months ended September 30, 2026 compared to

the three months ended June 30, 2026. The increase was primarily due to the three months ended September 30, 2026

representing the first full quarter of revenue from one additional owned real estate asset that was acquired during the three

months ended June 30, 2026. This increase was partially offset by the seasonality of the operations at our hospitality assets.

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Expenses

Expenses include management and incentive fees payable to our Manager, general and administrative expenses, and

expenses from owned real estate. Expenses decreased by $2.3 million during the three months ended September 30, 2026

compared to the three months ended June 30, 2026, primarily due to (i) a $1.9 million decrease in general and

administrative expenses driven by costs incurred in connection with the formation of our Homebuilder Finance Joint

Venture during the three months ended June 30, 2026, and (ii) a $0.2 million decrease in expenses from owned real estate,

primarily due to a $6.1 million decrease in tax expense from the benefit of a property tax abatement received by one of our

owned real estate assets during the three months ended September 30, 2026, which was mostly offset by the three months

ended September 30, 2026 representing the first full quarter of expenses from one additional owned real estate asset that

was acquired during the three months ended June 30, 2026.

Changes in current expected credit loss reserve

During the three months ended September 30, 2026, we recorded a $264.8 million increase in our CECL reserves, as

compared to a $134.4 million increase during the three months ended June 30, 2026. The increase during the three months

ended September 30, 2026 was primarily due to an increase in our asset-specific CECL reserves, driven by six additional

loans that were impaired during the three months ended September 30, 2026. This was partially offset by a decrease in our

general CECL reserves driven by changes in risk ratings, including the impact of the six newly impaired loans moving out

of the general CECL reserve pool, and a decrease in our loans receivable, held-for-investment balance, partially offset by

an increase in the historical loss rate used in reserve calculations related to the additional reserve charge-offs.

We may be required to record further increases to our CECL reserves in the future, depending on the performance of our

loan portfolio and changes in broader market conditions, and there may be volatility in the level of our CECL reserves.

Any such reserve increases are difficult to predict, but are expected to be primarily the result of incremental loan

impairments resulting from changes in the specific credit quality factors of such loans and to be concentrated in our loans

receivable with a risk rating of “4” as of September 30, 2026.

Income from unconsolidated entities

During the three months ended September 30, 2026, we recorded income from unconsolidated entities of $5.5 million

compared to $8.6 million during the three months ended June 30, 2026. This decrease was primarily due to lower income

from our Bank Loan Portfolio Joint Venture as a result of unrealized losses on the fair value adjustment of the portfolio

during the three months ended September 30, 2026, compared to unrealized gains during the three months ended June 30,

Impairment of owned real estate

During the three months ended September 30, 2026, we recognized an aggregate $36.4 million of impairment charges

related to three owned real estate assets as a result of updated undiscounted cash flow assumptions, primarily to account for

shorter expected hold periods. We did not recognize impairment charges during the three months ended June 30, 2026.

Valuation adjustment on loans receivable, held-for-sale

During the three months ended September 30, 2026, we recognized a $63.9 million valuation adjustment on loans

receivable, held-for-sale related to eight whole loans that were transferred to held-for-sale as of September 30, 2026. The

adjustment reflects the difference between the loans’ carrying value and fair value. We did not recognize such a valuation

adjustment during the three months ended June 30, 2026.

Income tax provision

The income tax provision decreased by $1.2 million during the three months ended September 30, 2026 compared to the

three months ended June 30, 2026, primarily due to a decrease in the income tax provisions related to our taxable REIT

subsidiaries.

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Dividends per share

During the three months ended September 30, 2026, we declared dividends of $0.47 per share, or $78.0 million in

aggregate. During the three months ended June 30, 2026, we declared dividends of $0.47 per share, or $79.2 million in

aggregate.

The following table sets forth information regarding our consolidated results of operations for the nine months ended

September 30, 2026 and 2025 ($ in thousands, except per share data):

Income from loans and other investments, net

Income from loans and other investments, net decreased $51.7 million during the nine months ended September 30, 2026

compared to the nine months ended September 30, 2025. The decrease was primarily due to (i) a $1.8 billion decrease in

the weighted-average principal balance of our loan portfolio, and (ii) a decline in interest income related to additional loans

accounted for under the cost-recovery method or loans that are now accounted for as owned real estate assets during the

nine months ended September 30, 2026. These decreases were partially offset by a decrease in interest expense due to (i) a

$261.9 million decrease in the weighted-average principal balance of our outstanding financing arrangements, and (ii)

declines in floating-rate indices.

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Revenue from owned real estate

Revenue from owned real estate increased by $118.0 million during the nine months ended September 30, 2026 compared

to the nine months ended September 30, 2025, primarily due to the acquisition or consolidation of five additional owned

real estate assets.

Expenses

Expenses include management and incentive fees payable to our Manager, general and administrative expenses, and

expenses from owned real estate. Expenses increased by $103.3 million during the nine months ended September 30, 2026

compared to the nine months ended September 30, 2025 primarily due to (i) a $107.4 million increase in expenses from

owned real estate due to the acquisition or consolidation of five additional owned real estate assets, and (ii) a $3.0 million

increase in general and administrative expenses due to an increase in professional service fees, partially offset by lower

restricted stock amortization. These increases were partially offset by a $7.2 million decrease in management fees payable

to our Manager, due to lower Equity, as defined in our Management Agreement, primarily resulting from charge-offs of

CECL reserves and repurchases of class A common shares.

Changes in current expected credit loss reserve

During the nine months ended September 30, 2026, we recorded a $454.2 million increase in our CECL reserves, as

compared to a $94.1 million increase during the nine months ended September 30, 2025. The increase during the nine

months ended September 30, 2026 was primarily due to an increase in our asset-specific CECL reserves, driven by 11

additional loans that were impaired during the nine months ended September 30, 2026. This was partially offset by a

decrease in our general CECL reserves driven by changes in risk ratings, including the impact of the 11 newly impaired

loans moving out of the general CECL reserve, partially offset by an increase in the historical loss rate used in reserve

calculations related to the additional CECL charge-offs.

We may be required to record further increases to our CECL reserves in the future, depending on the performance of our

loan portfolio and changes in broader market conditions, and there may be volatility in the level of our CECL reserves.

Any such reserve increases are difficult to predict, but are expected to be primarily the result of incremental loan

impairments resulting from changes in the specific credit quality factors of such loans and to be concentrated in our loans

receivable with a risk rating of “4” as of September 30, 2026.

Income from unconsolidated entities

During the nine months ended September 30, 2026, we recorded income from unconsolidated entities of $15.4 million

compared to income of $1.0 million during the nine months ended September 30, 2025. The increase was primarily due to

(i) higher earnings from our Bank Loan Portfolio Joint Venture, primarily due to realized gains on loan repayments within

the portfolio, (ii) higher earnings from our Net Lease Joint Venture reflecting growth in the portfolio, and (iii) earnings

generated by our Homebuilder Finance Joint Venture, which was formed during the nine months ended September 30,

Impairment of owned real estate

During the nine months ended September 30, 2026, we recognized an aggregate $36.4 million of impairment charges

related to three owned real estate assets as a result of updated undiscounted cash flow assumptions, primarily to account for

shorter expected hold periods. We did not recognize impairment charges during the nine months ended September 30,

Valuation adjustment on loans receivable, held-for-sale

During the nine months ended September 30, 2026, we recognized a $63.9 million valuation adjustment on loans

receivable, held-for-sale related to eight whole loans that were transferred to held-for-sale as of September 30, 2026. The

adjustment reflects the difference between the loans’ carrying value and fair value. We did not recognize such a valuation

adjustment during the nine months ended September 30, 2025.

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Income tax provision

The income tax provision increased by $1.8 million during the nine months ended September 30, 2026 as compared to the

nine months ended September 30, 2025, due to an increase in the income tax provisions related to our taxable REIT

subsidiaries.

Dividends per share

During the nine months ended September 30, 2026, we declared dividends of $1.41 per share, or $236.5 million in

aggregate. During the nine months ended September 30, 2025, we declared dividends of $1.41 per share, or $241.5 million

in aggregate.

V. Liquidity and Capital Resources

Capitalization

We have capitalized our business to date primarily through the issuance and sale of shares of our class A common stock,

corporate debt, and asset-level financings. As of September 30, 2026, our capitalization structure included $2.8 billion of

common equity, $3.4 billion of corporate debt, and $10.8 billion of asset-level financings. Our $3.4 billion of corporate

debt includes $1.9 billion of Term Loan borrowings, $1.2 billion of Senior Secured Notes, and $266.2 million of

Convertible Notes. Our $10.8 billion of asset-level financings includes $7.2 billion of secured debt, $2.7 billion of

securitizations, and $989.5 million of asset-specific debt. Our asset-level financings are generally structured to provide

currency, index and term-matched financing without capital markets-based mark-to-market provisions.

As of September 30, 2026, we had $1.3 billion of liquidity that can be used to satisfy our short-term cash requirements and

as working capital for our business.

Refer to Notes 6, 7, 8, 9, 10, 11, and 12 to our consolidated financial statements for additional details regarding our other

secured debt, secured debt, securitized debt obligations, asset-specific debt, Term Loans, Senior Secured Notes, and

Convertible Notes, respectively.

Debt-to-Equity Ratio and Total Leverage Ratio

The following table presents our debt-to-equity ratio and total leverage ratio:

(1) The debt and leverage amounts included in the calculations above use gross outstanding principal balances,

excluding any unamortized deferred financing costs and discounts.

(2) Represents, in each case at period end, the ratio of (i) total outstanding secured debt, other secured debt, asset-

specific debt, Term Loans, Senior Secured Notes, and convertible notes, less cash, to (ii) total equity.

(3) Represents, in each case at period end, the ratio of (i) total outstanding secured debt, other secured debt,

securitizations, asset-specific debt, Term Loans, Senior Secured Notes, and convertible notes, less cash, to (ii) total

equity.

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Sources of Liquidity

Our primary sources of liquidity include cash and cash equivalents, available borrowings under our secured debt facilities,

and net receivables from servicers related to loan repayments, which are set forth in the following table ($ in thousands):

(1) Represents loan principal payments held by our third-party servicers as of the balance sheet date, which were

remitted to us during the subsequent remittance cycle, net of the related secured debt balance.

During the nine months ended September 30, 2026, we generated cash flow from operating activities of $216.5 million and

received $4.0 billion from loan principal collections, sales proceeds, and cost-recovery proceeds. Furthermore, we are able

to generate incremental liquidity through provisions of certain of our CLOs, which allow us to effectively replace, for a

period of time, a repaid loan in the CLO with additional eligible CLO collateral to maintain the aggregate amount of

collateral assets in the CLO, and the related financing outstanding.

We have access to further liquidity through public and private offerings of equity and debt securities, syndicated term

loans, asset sales, and similar transactions. To facilitate public offerings of securities, in July 2025, we filed a shelf

registration statement with the SEC that is effective for a term of three years and expires in July 2028. The amount of

securities to be issued pursuant to this shelf registration statement was not specified when it was filed and there is no

specific dollar limit on the amount of securities we may issue. The securities covered by this registration statement include:

(i) class A common stock; (ii) preferred stock; (iii) depositary shares representing preferred stock; (iv) debt securities; (v)

warrants; (vi) subscription rights; (vii) purchase contracts; and (viii) units consisting of one or more of such securities or

any combination of these securities. The specifics of any future offerings, along with the use of proceeds of any securities

offered, will be described in detail in a prospectus supplement, or other offering materials, at the time of any offering.

We may also access liquidity through our dividend reinvestment plan and direct stock purchase plan, under which

9,938,472 shares of class A common stock were available for issuance as of September 30, 2026, and our “at the market”

common stock offering program, pursuant to which we may sell, from time to time, up to $480.9 million of additional

shares of our class A common stock as of September 30, 2026. Refer to Note 14 to our consolidated financial statements

for additional details.

Uses of Liquidity

In addition to funding our lending and other investment activity and our general operating expenses, our primary uses of

liquidity include interest and principal payments with respect to our outstanding borrowings under secured debt, our asset-

specific debt, our Term Loans, our Senior Secured Notes, and our Convertible Notes. From time to time, we have

repurchased and may continue to repurchase our outstanding debt or shares of our class A common stock. Such

repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, and

other factors. The amounts involved in any such purchase transactions, individually or in the aggregate, may be material.

In October 2025, our board of directors authorized the repurchase of up to $150.0 million of shares of our class A common

stock under our repurchase program. Repurchases may be made from time to time in open market transactions, in privately

negotiated transactions, in agreements and arrangements structured in a manner consistent with Rules 10b-18 and 10b5-1

under the Exchange Act or otherwise. The timing and the actual amounts repurchased will depend on a variety of factors,

including legal requirements, price and economic and market conditions. The repurchase program may be changed,

suspended or discontinued at any time and does not have a specified expiration date.

During the nine months ended September 30, 2026, we repurchased 2,766,237 shares of class A common stock at a

weighted-average price per share of $14.39, for a total cost of $39.8 million. As of September 30, 2026, the amount

remaining available for repurchases under the program was $109.8 million.

As of September 30, 2026, we had unfunded commitments of $951.0 million related to 47 loans receivable and $539.6

million of committed or identified financing for those commitments resulting in net unfunded commitments of $411.4

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million. The unfunded loan commitments comprise funding for capital expenditures and construction, leasing costs, and

interest and carry costs. Loan funding commitments are generally subject to certain conditions, including, without

limitation, the progress of capital projects, leasing, and cash flows at the properties securing our loans. Therefore, the exact

timing and amounts of such future loan fundings are uncertain and will depend on the current and future performance of

the underlying collateral assets. We expect to fund our loan commitments over the remaining term of the related loans,

which have a weighted-average future funding period of 1.6 years.

Contractual Obligations and Commitments

Our contractual obligations and commitments as of September 30, 2026 were as follows ($ in thousands):

(1) Represents known and estimated short-term cash requirements related to our contractual obligations and

commitments. Refer to “Sources of Liquidity” above for information about our sources of funds to satisfy our short-

term cash requirements.

(2) The allocation of our unfunded loan commitments is based on the earlier of the commitment expiration date or the

final loan maturity date; however, we may be obligated to fund these commitments earlier than such date.

(3) Our secured debt and asset-specific debt agreements are generally term-matched to their underlying collateral.

Therefore, the allocation of both principal and interest payments under such agreements is generally allocated based

on the maximum maturity date of the collateral loans, assuming all extension options are exercised by the borrower.

In limited instances, the maturity date of the respective debt agreement is used.

(4) The Term Loans are partially amortizing, with an amount equal to 1.0% per annum of the initial principal balance

due in quarterly installments. Refer to Note 10 to our consolidated financial statements for further details on our

Term Loans.

(5) Reflects the outstanding principal balance of Convertible Notes, excluding any potential conversion premium. Refer

to Note 12 to our consolidated financial statements for further details on our Convertible Notes.

(6) Amounts are included in other liabilities on our consolidated balance sheets.

(7) Represents interest payments on our secured debt, asset-specific debt, Term Loans, Senior Secured Notes,

Convertible Notes, and other secured debt. Future interest payment obligations are estimated assuming the interest

rates in effect as of September 30, 2026 will remain constant into the future. This is only an estimate as actual

amounts borrowed and interest rates will vary over time.

(8) Total does not include $2.7 billion of consolidated securitized debt obligations, as the satisfaction of these liabilities

will not require cash outlays from us.

We are also required to settle our foreign exchange and interest rate derivatives with our derivative counterparties upon

maturity which, depending on foreign currency exchange and interest rate movements, may result in cash received from or

due to such counterparties. The table above does not include these amounts as they are not fixed and determinable. Refer to

Note 13 to our consolidated financial statements for details regarding our derivative contracts.

We are required to pay our Manager a base management fee, an incentive fee, and reimbursements for certain expenses

pursuant to our Management Agreement. The table above does not include the amounts payable to our Manager under our

Management Agreement as they are not fixed and determinable. Refer to Note 15 to our consolidated financial statements

for additional terms and details of the fees payable under our Management Agreement.

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As a REIT, we generally must distribute substantially all of our net taxable income to stockholders in the form of dividends

to comply with the REIT provisions of the Internal Revenue Code. Our taxable income does not necessarily equal our net

income as calculated in accordance with GAAP, or our Distributable Earnings as described above.

Cash Flows

The following table provides a breakdown of the net change in our cash and cash equivalents ($ in thousands):

We experienced a net increase in cash and cash equivalents of $61.9 million for the nine months ended September 30,

2026, compared to a net increase of $47.0 million for the nine months ended September 30, 2025. During the nine months

ended September 30, 2026, we (i) received $4.0 billion from loan principal collections, sales proceeds, and cost-recovery

proceeds, (ii) received $880.0 million of net proceeds from the issuance of a securitized debt obligation, (iii) received

$450.0 million of net proceeds from the issuance of Senior Secured Notes, (iv) received a net $72.1 million under our

secured term loan borrowings, and (v) received aggregate distributions of $58.8 million from unconsolidated entities, from

both our Bank Loan Portfolio Joint Venture as a result of repayments, and our Net Lease Joint Venture as a result of

refinancing its portfolio through an asset-backed securitization transaction. Also, during the nine months ended

September 30, 2026, we (i) funded $1.8 billion of loans, (ii) repaid a net $2.8 billion of secured debt borrowings and asset-

specific financings, (iii) repaid $371.3 million of securitized debt obligations, (iv) paid $237.6 million of dividends on our

class A common stock, and (v) invested $186.2 million in unconsolidated entities.

Refer to Note 3 to our consolidated financial statements for further discussion of our loan activity. Refer to Notes 5, 7, 8,

and 14 to our consolidated financial statements for further discussion of our investments in unconsolidated entities, secured

debt, securitized debt obligations, and equity, respectively.

VI. Other Items

Income Taxes

We have elected to be taxed as a REIT under the Internal Revenue Code for U.S. federal income tax purposes. We

generally must distribute annually at least 90% of our net taxable income, subject to certain adjustments and excluding any

net capital gain, in order for U.S. federal income tax not to apply to our earnings. To the extent that we satisfy this

distribution requirement, but distribute less than 100% of our net taxable income, we will be subject to U.S. federal income

tax on our undistributed taxable income. In addition, we will be subject to a 4% nondeductible excise tax if the actual

amount that we pay out to our stockholders in a calendar year is less than a minimum amount specified under U.S. federal

tax laws.

Our qualification as a REIT also depends on our ability to meet various other requirements imposed by the Internal

Revenue Code, which relate to organizational structure, diversity of stock ownership, and certain restrictions with regard to

the nature of our assets and the sources of our income. Even if we qualify as a REIT, we may be subject to certain U.S.

federal income and excise taxes and state and local taxes on our income and assets. If we fail to maintain our qualification

as a REIT for any taxable year, we may be subject to material penalties as well as federal, state, and local income tax on

our taxable income at regular corporate rates and we would not be able to qualify as a REIT for the subsequent four full

taxable years. As of September 30, 2026 and December 31, 2025, we were in compliance with all REIT requirements.

Furthermore, our taxable REIT subsidiaries are subject to federal, state, and local income tax on their net taxable income.

Refer to Note 16 to our consolidated financial statements for further discussion of our income taxes.

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Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial

statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us

to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related

disclosure of contingent assets and liabilities. Actual results could differ from these estimates. We evaluated our critical

accounting policies and believe them to be appropriate. The following is a summary of our significant accounting policies

that we believe are the most affected by our judgments, estimates, and assumptions:

Current Expected Credit Losses

The current expected credit loss, or CECL, reserve required under the FASB Accounting Standards Codification, or ASC,

Topic 326 “Financial Instruments – Credit Losses,” or ASC 326, reflects our current estimate of potential credit losses

related to our portfolio. We estimate our CECL reserves primarily using the Weighted-Average Remaining Maturity, or

WARM method, which has been identified as an acceptable loss-rate method for estimating CECL reserves in the Financial

Accounting Standards Board Staff Q&A Topic 326, No. 1. Estimating the CECL reserve requires judgment, including the

following assumptions:

• Historical loan loss reference data: To estimate the historical loan losses relevant to our portfolio, we have

augmented our historical loan performance with market loan loss data licensed from Trepp LLC. This database

includes commercial mortgage-backed securities, or CMBS, issued since January 1, 1999 through August 31,

2026. Within this database, we focused our historical loss reference calculations on the most relevant subset of

available CMBS data, which we determined based on loan metrics that are most comparable to our loan portfolio,

including asset type, geography, and origination loan-to-value, or LTV. We believe this CMBS data, which

includes month-over-month loan and property performance, is the most relevant, available, and comparable

dataset to our portfolio.

• Expected timing and amount of future loan fundings and repayments: Expected credit losses are estimated over

the contractual term of each loan, adjusted for expected repayments. As part of our quarterly review of our loan

portfolio, we assess the expected repayment date of each loan, which is used to determine the contractual term for

purposes of computing our CECL reserves. Additionally, the expected credit losses over the contractual period of

our loans are subject to the obligation to extend credit through our unfunded loan commitments. The CECL

reserve for unfunded loan commitments is adjusted quarterly, as we consider the expected timing of future

funding obligations over the estimated life of the loan. The considerations in estimating our CECL reserve for

unfunded loan commitments are similar to those used for the related outstanding loans receivable.

• Current credit quality of our portfolio: Our risk rating is our primary credit quality indicator in assessing our

CECL reserves. We perform a quarterly risk review of our portfolio of loans and assign each loan a risk rating

based on a variety of factors, including, without limitation, origination LTV, debt yield, property type, geographic

and local market dynamics, physical condition, cash flow volatility, leasing and tenant profile, loan structure and

exit plan, and project sponsorship.

• Expectations of performance and market conditions: Our CECL reserves are adjusted to reflect our estimation of

the current and future economic conditions that impact the performance of the commercial real estate assets

securing our loans. These estimations include unemployment rates, interest rates, expectations of inflation and/or

recession, and other macroeconomic factors impacting the likelihood and magnitude of potential credit losses for

our loans during their anticipated term. In addition to the CMBS data we have licensed from Trepp LLC, we have

also licensed certain macroeconomic financial forecasts to inform our view of the potential future impact that

broader economic conditions may have on our loan portfolio’s performance. We generally also incorporate

information from other sources, including information and opinions available to our Manager, to further inform

these estimations. This process requires significant judgments about future events that, while based on the

information available to us as of the balance sheet date, are ultimately indeterminate and the actual economic

condition impacting our portfolio could vary significantly from the estimates we made as of September 30, 2026.

• Impairment: Impairment is indicated when it is deemed probable that we will not be able to collect all amounts

due to us pursuant to the contractual terms of the loan. Determining that a loan is impaired requires significant

judgment from management and is based on several factors including (i) the underlying collateral performance,

(ii) discussions with the borrower, (iii) borrower events of default, and (iv) other facts that impact the borrower’s

ability to pay the contractual amounts due under the terms of the loan. If a loan is determined to be impaired, we

record the impairment as a component of our CECL reserves by applying the practical expedient for collateral

dependent loans. The CECL reserves are assessed on an individual basis for these loans by comparing the

estimated fair value of the underlying collateral to the book value of the respective loan. These valuations require

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significant judgments, which include assumptions regarding capitalization rates, discount rates, leasing,

creditworthiness of major tenants, occupancy rates, availability and cost of financing, exit plan, loan sponsorship,

actions of other lenders, and other factors deemed relevant by us. Actual losses, if any, could ultimately differ

materially from these estimates. We only expect to charge off the impairment losses in our consolidated financial

statements prepared in accordance with GAAP if and when such amounts are deemed non-recoverable. This is

generally at the time a loan is repaid or foreclosed, or the underlying collateral assets are otherwise consolidated.

However, non-recoverability may also be concluded if, in our determination, it is nearly certain that all amounts

due will not be collected.

These assumptions vary from quarter-to-quarter as our loan portfolio changes and market and economic conditions evolve.

The sensitivity of each assumption and its impact on the CECL reserves may change over time and from period to period.

During the nine months ended September 30, 2026, our CECL reserves increased by $310.3 million, bringing our total

reserves to $606.4 million as of September 30, 2026. Refer to Notes 2, 3, and 6 to our consolidated financial statements for

further discussion of our CECL reserves.

Revenue Recognition

Interest income from our loans receivable portfolio is recognized over the life of each loan using the effective interest

method and is recorded on the accrual basis. Recognition of fees, premiums, and discounts associated with these

investments is deferred and recorded over the term of the loan as an adjustment to yield. Income accrual is generally

suspended for loans at the earlier of the date at which payments become 90 days past due or when, in our opinion, recovery

of income and principal becomes doubtful. Interest received is then recorded as income or as a reduction in the amortized

cost basis, based on the specific facts and circumstances, until accrual is resumed when the loan becomes contractually

current and performance is demonstrated to be resumed. In addition, for loans we originate, the related origination expenses

are deferred and recognized as a reduction to interest income; however, expenses related to loans we acquire are included

in general and administrative expenses as incurred.

The sources of revenue from our owned real estate assets, which are included in revenue from owned real estate on our

consolidated statements of operations, and the related revenue recognition policies are as follows:

Rental income primarily consists of base rent income arising from tenant leases at our office and multifamily properties.

We determine if an arrangement is a lease at contract inception, which is subject to the provisions of Financial Accounting

Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 842 “Leases.” Base rent is recognized on a

straight-line basis over the life of the lease, including any rent steps or abatement provisions. We begin to recognize

revenue upon the acquisition of the related property or when a tenant takes possession of the leased space.

Other operating income primarily consists of income from our hospitality properties and tenant reimbursement income.

Revenue from our hospitality properties consists primarily of room revenue and food and beverage revenue. Room revenue

is recognized when the related room is occupied and other hospitality revenue is recognized when the service is rendered.

Tenant reimbursement income primarily consists of amounts due from tenants for costs related to common area

maintenance, real estate taxes, and other recoverable costs included in lease agreements.

We evaluate the collectability of receivables related to rental revenue on an individual lease basis and exercise judgment in

assessing collectability considering the length of time a receivable has been outstanding, tenant creditworthiness, payment

history, available information about the financial condition of the tenant, and current economic trends, among other factors.

Tenant receivables that are deemed uncollectible are recognized as a reduction to rental revenue.

Owned Real Estate

We may assume legal title, physical possession, or control of the collateral underlying a loan through a foreclosure, a deed-

in-lieu of foreclosure transaction, or a loan modification in which we receive an equity interest in and/or control over

decision-making at the property, resulting in us consolidating the real estate assets as VIEs. These real estate acquisitions

are classified as owned real estate on our consolidated balance sheet and are initially recognized at fair value on the

acquisition date in accordance with the ASC Topic 805, “Business Combinations,” or ASC 805.

Upon acquisition of owned real estate assets, we assess the fair value of acquired tangible and intangible assets, which may

include land, buildings, tenant improvements, “above-market” and “below-market” leases, acquired in-place leases, other

identified intangible assets and assumed liabilities, as applicable, and allocate the fair value to the acquired assets and

assumed liabilities. We assess and consider fair value based on estimated cash flow projections that utilize discount and/or

capitalization rates that we deem appropriate, as well as other available market information. Estimates of future cash flows

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are based on a number of factors, including the historical operating results, known and anticipated trends, and market and

economic conditions. We capitalize acquisition-related costs associated with asset acquisitions.

Real estate assets held for investment, except for land, are depreciated using the straight-line method over the assets’

estimated useful lives of up to 40 years for buildings, 15 years for land improvements, and 10 years for building and tenant

improvements. Renovations and/or replacements that improve or extend the life of the asset are capitalized and depreciated

over their estimated useful lives. Lease intangibles are amortized over the remaining term of applicable leases on a straight-

line basis. The cost of ordinary repairs and maintenance is expensed as incurred.

Real estate assets held for investment are assessed for impairment on a quarterly basis. If the depreciated cost basis of the

asset exceeds the undiscounted cash flows over the remaining holding period, the asset is considered for impairment. The

impairment loss is recognized when the carrying value of the real estate assets exceeds their fair value. The evaluation of

anticipated future cash flows is highly subjective and is based in part on assumptions regarding future occupancy, rental

rates, capital requirements and anticipated holding periods that could differ materially from actual results.

Real estate assets are classified as held-for-sale in the period when they meet the criteria under the ASC Topic 360

“Property, Plant, and Equipment.” Once a real estate asset is classified as held-for-sale, depreciation is suspended and the

asset is reported at the lower of its carrying value or fair value less costs to sell. If circumstances arise and we decide not to

sell a real estate asset previously classified as held-for-sale, the real estate asset is reclassified as held for investment. Upon

reclassification, the real estate asset is measured at the lower of (i) its carrying amount prior to classification as held-for-

sale, adjusted for depreciation expense that would have been recognized had the real estate been classified as held for

investment, and (ii) its estimated fair value at the time of reclassification.

As of September 30, 2026, we had 15 owned real estate assets that were all classified as held for investment.

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VII. Loan Portfolio Details

The following table provides details of our loan portfolio, on a loan-by-loan basis, as of September 30, 2026 ($ in millions):

Senior Loan Portfolio, Held-For-Investment(1)

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Senior Loan Portfolio, Held-For-Investment(1)

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Senior Loan Portfolio, Held-For-Investment(1)

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Senior Loan Portfolio, Held-For-Investment(1)

Subordinate Loan Portfolio, Held-For-Investment(8)

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Loans Held-For-Sale

(1) Senior loans include senior mortgages and similar credit quality loans, including related contiguous subordinate loans and pari passu participations in senior mortgage

loans.

(2) Date loan was originated or acquired by us, and the LTV as of such date, excluding any loans that are impaired.

(3) Total commitment reflects outstanding principal balance as well as any related unfunded loan commitment.

(4) Amortized cost basis represents outstanding principal balance, net of purchase and sale discounts or premiums, exit fees, deferred origination expenses, and cost-recovery

proceeds.

(5) The weighted-average cash coupon and all-in yield are expressed as a spread over the relevant floating benchmark rates, which include SOFR, SONIA, EURIBOR,

CORRA, and other indices as applicable to each loan. As of September 30, 2026, 96% of our loans by principal balance earned a floating rate of interest, primarily

indexed to SOFR. The remaining 4% of our loans by principal balance earned a fixed rate of interest. In addition to cash coupon, all-in yield includes the amortization of

deferred origination and extension fees, loan origination costs, and purchase discounts, as well as the accrual of exit fees. Excludes loans accounted for under the cost-

recovery and nonaccrual methods, if any.

(6) Maximum maturity assumes all extension options are exercised; however, our loans may be repaid prior to such date. Excludes loans accounted for under the cost-

recovery and nonaccrual methods, if any.

(7) This loan has an interest rate of SOFR plus 0.00% with a SOFR floor of 3.50%, for an all-in rate of 3.91% as of September 30, 2026.

(8) Subordinate loans include: (i) loans in which we have previously originated a whole loan and sold a senior mortgage interest to a third party, resulting in these subordinate

interests in mortgages, (ii) mezzanine loans, and (iii) the subordinate portion of loans that have been modified that have resulted in a restructured senior loan and a

subordinate loan.

(9) These subordinate loans are the result of a loan modification which resulted in a restructured senior loan and a subordinate loan. Each of the subordinate loans is

accounted for under the cost-recovery method.

(10) The cash coupon, all-in yield, and maximum maturity of held-for-sale loans represent the weighted-average of all loans classified as held-for-sale as of September 30,

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Interest Rate Risk

Loan Portfolio Net Interest Income

Generally, our business model is such that rising interest rates will increase our net income, while declining interest rates

will decrease net income. However, in periods in which our floating rate liabilities exceed our floating rate assets, including

as a result of floating rate corporate debt or a greater concentration in owned real estate, loans on nonaccrual status, or

similar assets that do not generate floating rate interest income, rising interest rates may decrease our net income. As of

September 30, 2026, 96% of our loans by principal balance earned a floating rate of interest, primarily indexed to SOFR,

and were financed with liabilities that pay interest at floating rates, which resulted in an amount of net equity that is

positively correlated to changing interest rates, subject to the impact of interest rate floors on certain of our floating rate

loans.

The following table projects the impact on our net interest income, presented net of implied changes in incentive fees, for

the twelve-month period following September 30, 2026, of an increase or decrease in the various floating-rate indices

referenced by our portfolio, assuming no change in credit spreads, portfolio composition, or asset performance, relative to

the average indices during the three months ended September 30, 2026 ($ in thousands):

(1) Reflects the USD equivalent value of floating rate assets and liabilities denominated in foreign currencies.

(2) Increases (decreases) in interest income and expense are presented net of theoretical impact of incentive fees. Refer

to Note 15 to our consolidated financial statements for additional details of our incentive fee calculation.

(3) Excludes income from loans accounted for under the cost-recovery method.

(4) Excludes $1.3 billion of principal balance on floating rate impaired loans.

(5) Our loan agreements generally require our borrowers to purchase interest rate caps, which mitigates our borrowers’

exposure to an increase in interest rates.

(6) Excludes amounts related to our investments in unconsolidated entities.

(7) Excludes amounts related to our investments in debt securities.

(8) Includes amounts outstanding under our secured debt, securitizations, asset-specific debt, Term Loans, Senior

Secured Notes due 2029, and Senior Secured Notes due 2031. We entered into interest rate swaps with an aggregate

notional amount of $900.0 million that effectively convert our fixed rate exposure to floating rate exposure for the

Senior Secured Notes due 2029 and Senior Secured Notes due 2031. Excludes amounts related to the indebtedness

of our unconsolidated entities.

Loan Portfolio Value

As of September 30, 2026, 96% of our loans by principal balance earned a floating rate of interest, so the value of such

investments is generally not impacted by changes in market interest rates. Additionally, we generally intend to hold all of

our loans to maturity and so do not generally expect to realize gains or losses resulting from any mark-to-market valuation

adjustments on our loan portfolio.

Risk of Non-Performance

In addition to the risks related to fluctuations in cash flows and asset values associated with movements in interest rates,

there is also the risk of non-performance on floating rate assets. In the case of a significant increase in interest rates, the

cash flows of the collateral real estate assets may not be sufficient to pay debt service due under our loans, which may

contribute to non-performance or, in severe cases, default. This risk is partially mitigated by our consideration of rising rate

stress-testing during our underwriting process, which generally includes a requirement for our borrower to purchase an

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interest rate cap contract with an unaffiliated third party, provide an interest reserve deposit, and/or provide interest

guarantees or other structural protections.

Credit Risks

Our loans are subject to credit risk, including the risk of default. The performance and value of our loans depend upon the

borrowers’ ability to operate the properties that serve as our collateral so that they produce cash flows adequate to pay

interest and principal due to us. To monitor this risk, our asset management team reviews our loan portfolios and, in certain

instances, is in regular contact with our borrowers, monitoring performance of the collateral and enforcing our rights as

necessary.

In addition, we are exposed to the risks generally associated with the commercial real estate market, including changes in

occupancy rates, capitalization rates, absorption rates, and other macroeconomic factors beyond our control. We seek to

manage these risks through our underwriting and asset management processes.

We maintain a robust asset management relationship with our borrowers and utilize these relationships to maximize the

performance of our portfolio, including during periods of volatility. We believe that we benefit from these relationships and

from our long-standing core business model of originating senior loans collateralized by large assets in major markets with

experienced, well-capitalized institutional sponsors. While we believe the principal amounts of our loans are generally

adequately protected by underlying collateral value, there is a risk that we will not realize the entire principal value of

certain loans. As of September 30, 2026, we had an aggregate $444.5 million asset-specific CECL reserve related to 12 of

our loans receivable, with an aggregate amortized cost basis of $1.3 billion, net of cost-recovery proceeds. This CECL

reserve was recorded based on our estimation of the fair value of each of the loan’s underlying collateral as of

September 30, 2026.

Our portfolio monitoring and asset management operations benefit from the deep knowledge, experience, and information

advantages derived from our position as part of Blackstone’s real estate platform. Blackstone has built the world's

preeminent global real estate business, with a proven track record of successfully navigating market cycles and emerging

stronger through periods of volatility. The market-leading real estate expertise derived from the strength of the Blackstone

platform deeply informs our credit and underwriting process, and we believe gives us the tools to expertly asset manage

our portfolio and work with our borrowers throughout periods of economic stress and uncertainty.

Capital Market Risks

We are exposed to risks related to the equity capital markets, and our related ability to raise capital through the issuance of

our class A common stock or other equity instruments. We are also exposed to risks related to the debt capital markets, and

our related ability to finance our business through borrowings under credit facilities or other debt instruments. As a REIT,

we are required to distribute a significant portion of our taxable income annually, which constrains our ability to

accumulate operating cash flow and therefore requires us to utilize debt or equity capital to finance our business. We seek

to mitigate these risks by monitoring the debt and equity capital markets to inform our decisions on the amount, timing, and

terms of capital we raise.

Our master repurchase agreements and secured credit facilities are generally structured without capital markets-based

mark-to-market provisions, which means the margin call provisions do not permit valuation adjustments based on capital

markets events. The majority of our master repurchase agreements and secured credit facilities are non-mark-to-market,

which means the margin call provisions only permit valuation adjustments if the loan or collateral pledged or sold by us

becomes defaulted, and the margin call provisions for the remainder are limited to collateral-specific credit marks generally

determined on a commercially reasonable basis. There can be no assurance we will not experience margin calls under any

asset-level financing that contains margin call provisions.

Counterparty Risk

The nature of our business requires us to hold our cash and cash equivalents and obtain financing from various financial

institutions. This exposes us to the risk that these financial institutions may not fulfill their obligations to us under these

various contractual arrangements. We mitigate this exposure by depositing our cash and cash equivalents and entering into

financing agreements with high credit-quality institutions.

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The nature of our loans also exposes us to the risk that our counterparties do not make required interest and principal

payments on scheduled due dates. We seek to manage this risk through a comprehensive credit analysis prior to making a

loan and active monitoring of the asset portfolios that serve as our collateral, as further discussed above.

Currency Risk

Our loans that are denominated in a foreign currency are also subject to risks related to fluctuations in currency rates. We

generally mitigate this exposure by matching the currency of our assets to the currency of the financing for our assets. As a

result, we substantially reduce our exposure to changes in portfolio value related to changes in foreign currency rates. In

addition, substantially all of our net asset exposure to foreign currencies has been hedged with foreign currency forward

contracts as of September 30, 2026.

The following table outlines our assets and liabilities that are denominated in a foreign currency (amounts in thousands):

(1) Includes Australian Dollar, Canadian Dollar, Swedish Krona, Swiss Franc, and Danish Krone currencies.

(2) Represents the U.S. Dollar equivalent as of September 30, 2026.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as that term is defined in Rules 13a–15(e) and 15d–15(e) under the

Exchange Act) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act

is recorded, processed, and summarized and reported within the time periods specified in the SEC’s rules and forms, and

that such information is accumulated and communicated to our management, including our Chief Executive Officer and

Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. Any controls and

procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired

control objectives. An evaluation of the effectiveness of the design and operation of our disclosure controls and procedures

as of the end of the period covered by this Quarterly Report on Form 10-Q was made under the supervision and with the

participation of our management, including our Chief Executive Officer and Chief Financial Officer. Based upon this

evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and

procedures (a) are effective to ensure that information required to be disclosed by us in reports filed or submitted under the

Exchange Act is recorded, processed, summarized and reported within the time periods specified by SEC rules and forms

and (b) include, without limitation, controls and procedures designed to ensure that information required to be disclosed by

us in reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including

our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required

disclosure.

Changes in Internal Control Over Financial Reporting

There have been no changes in our “internal control over financial reporting” (as defined in Rule 13a–15(f) of the

Exchange Act) that occurred during our most recent quarter that have materially affected, or are reasonably likely to

materially affect, our internal control over financial reporting.

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There have been no material changes to the risk factors previously disclosed under “Part I, Item 1A. Risk Factors” of our

Annual Report on Form 10-K for the year ended December 31, 2025.

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