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New words:
advisory, affirmative, Anthony, behalf, bifurcated, borne, broker, BTIG, CA, capacity, captive, Certification, chair, challenging, claim, CT, CTIMCO, defense, disaggregated, duly, EQ, Equipment, factual, Fargo, Finco, FL, formatted, fourth, Gryphon, hospitality, implied, improve, inclusive, inline, intangible, interactive, Jr, Katharine, Keenan, land, Linkbase, lower, Marone, Master, member, Miami, mix, Mountain, NY, Page, Parlex, percentage, Plant, possession, purpose, recipient, rely, rental, REO, resolved, Restated, Revantage, Schema, Segment, shown, size, strike, Taxonomy, thereunto, title, tranche, undersigned, undiscounted, unknown, upcoming, vacant, withholding, XBRL
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affecting, backed, broadly, chairman, characterized, committee, compounded, consumer, correlate, created, cyclical, daily, dampen, difficult, diminished, disruption, enhanced, experiencing, fundability, GBP, generating, indenture, lead, monetary, motivated, negatively, nonperformance, nonrecoverable, Overnight, predict, profit, prompted, reform, spending, steering, syndicating, tightening, transitioned, Treasury, troubled, Vintage
Financial report summary
?Risks
- Our loans and investments expose us to risks associated with debt-oriented real estate investments generally.
- Commercial real estate-related investments that are secured, directly or indirectly, by real property are subject to delinquency, foreclosure and loss, which could result in losses to us.
- Fluctuations in interest rates and credit spreads could reduce our ability to generate income on our loans and other investments, which could lead to a significant decrease in our results of operations, cash flows and the market value of our investments and may limit our ability to pay dividends to our stockholders.
- Difficulty in redeploying the proceeds from repayments of our existing loans and investments may cause our financial performance and returns to investors to suffer.
- If we are unable to successfully integrate new assets or businesses and manage our growth, our results of operations and financial condition may suffer.
- The illiquidity of certain of our assets may adversely affect our business.
- B-Notes, mezzanine loans, and other investments that are subordinated or otherwise junior in an issuer’s capital structure and that involve privately negotiated structures will expose us to greater risk of loss.
- Loans or investments involving international real estate-related assets are subject to special risks that we may not manage effectively, which could have a material adverse effect on our results of operations and financial condition and our ability to pay dividends to our stockholders.
- A prolonged economic slowdown, a lengthy or severe recession or declining real estate values could impair our investments and harm our operations.
- The transition away from reference rates and the use of alternative replacement reference rates may adversely affect net interest income related to our loans and investments or otherwise adversely affect our results of operations, cash flows and the market value of our investments.
- Our success depends on the availability of attractive investments and our Manager’s ability to identify, structure, consummate, leverage, manage and realize returns on our investments.
- Real estate valuation is inherently subjective and uncertain, and is subject to change, especially during periods of volatility.
- The due diligence process that our Manager undertakes in regard to investment opportunities may not reveal all facts that may be relevant in connection with an investment, and if our Manager incorrectly evaluates the risks of our investments we may experience losses.
- Insurance on loans and real estate securities collateral may not cover all losses.
- The impact of any future terrorist attacks and the availability of affordable terrorism insurance expose us to certain risks.
- The properties underlying our investments may be subject to unknown liabilities, including environmental liabilities, that could affect the value of these properties and as a result, our investments.
- We may be subject to lender liability claims, and if we are held liable under such claims, we could be subject to losses.
- Some of our portfolio investments may be recorded at fair value and, as a result, there will be uncertainty as to the value of these investments.
- Our significant amount of debt may subject us to increased risk of loss and could adversely affect our results of operations and financial condition.
- Interest rate fluctuations could increase our financing costs, which could lead to a significant decrease in our results of operations, cash flows and the market value of our investments.
- Our secured debt agreements impose, and additional lending facilities may impose, restrictive covenants, which may restrict our flexibility to determine our operating policies and investment strategy.
- Our master repurchase agreements, credit facilities, or other financing that we may use in the future to finance our assets currently require, or in the future may require, us to provide additional collateral or pay down debt.
- Our use of leverage may create a mismatch with the duration and interest rate of the investments that we are financing.
- Our loans and investments may be subject to fluctuations in interest rates that may not be adequately protected, or protected at all, by our hedging strategies.
- Inability to access funding could have a material adverse effect on our results of operations, financial condition and business.
- We have utilized and may continue to utilize in the future non-recourse securitizations to finance our loans and investments, which may expose us to risks that could result in losses.
- We may be subject to losses arising from current and future guarantees of debt and contingent obligations of our subsidiaries or joint venture or co-investment partners.
- Hedging against interest rate or currency exposure may adversely affect our earnings, which could reduce our cash available for distribution to our stockholders.
- We are subject to counterparty risk associated with our hedging activities.
- If we enter into certain hedging transactions or otherwise invest in certain derivative instruments, failure to obtain and maintain an exemption from being regulated as a commodity pool operator could subject us to additional regulation and compliance requirements which could materially adversely affect our business and financial condition.
- We depend on our Manager and its personnel for our success. We may not find a suitable replacement for our Manager if the Management Agreement is terminated, or if key personnel cease to be employed by our Manager or Blackstone or otherwise become unavailable to us.
- The personnel of our Manager, as our external manager, are not required to dedicate a specific portion of their time to the management of our business.
- Our Manager manages our portfolio pursuant to very broad investment guidelines and is not required to seek the approval of our board of directors for each investment, financing, asset allocation or hedging decision made by it, which may result in our making riskier loans and investments and which could adversely affect our results of operations and financial condition.
- Our Manager’s fee structure may not create proper incentives or may induce our Manager and its affiliates to make certain loans or investments, including speculative investments, which increase the risk of our loan and investment portfolio.
- We and the Blackstone Vehicles have and in the future will likely compete with or enter into transactions with existing and future private and public investment vehicles established and/or managed by Blackstone or its affiliates, which may present various conflicts of interest that restrict our ability to pursue certain investment opportunities or take other actions that are beneficial to our business and/or result in decisions that are not in the best interests of our stockholders.
- Termination of our Management Agreement would be costly.
- If we do not maintain our qualification as a REIT, we will be subject to tax as a regular corporation and could face a substantial tax liability. Our taxable REIT subsidiaries are subject to income tax.
- Complying with REIT requirements may force us to borrow to pay dividends to stockholders.
- Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends.
- We are largely dependent on external sources of capital to finance our growth.
- The “taxable mortgage pool” rules may increase the taxes that we or our stockholders may incur, and may limit the manner in which we effect future securitizations.
- The failure of assets subject to repurchase agreements to qualify as real estate assets could adversely affect our ability to qualify as a REIT.
- Liquidation of assets may jeopardize our REIT qualification or create additional tax liability for us.
- Our ownership of and relationship with any TRS will be restricted, and a failure to comply with the restrictions would jeopardize our REIT status and may result in the application of a 100% excise tax.
- We have not established a minimum distribution payment level and we cannot assure you of our ability to pay dividends in the future.
- Investing in our class A common stock may involve a high degree of risk.
- Future issuances of equity or debt securities, which may include securities that would rank senior to our class A common stock, may adversely affect the market price of the shares of our class A common stock.
- The long-term macroeconomic effects of the COVID-19 pandemic and any future pandemic or epidemic could have an adverse impact on our financial performance and results of operations.
Management Discussion
- •Net income of $246.6 million, or $1.43 per share, and Distributable Earnings of $526.3 million, or $3.05 per share, with dividends declared of $427.9 million, or $2.48 per share. During the year we had dividend coverage of 58% and 123% based on our GAAP net income and Distributable Earnings, respectively. Net income includes a $249.8 million increase to the current expected credit loss, or CECL, reserve that is excluded from Distributable Earnings, as further described below.
- •Book value per share of $25.16 as of December 31, 2023, which is net of cumulative CECL reserves of $3.41 per share.
- •Portfolio of 178 investments as of December 31, 2023, with a weighted-average origination loan-to-value ratio of 63.6% and weighted-average all-in yield of + 3.66%.