BLACKSTONE MORTGAGE TRUST, INC. (BXMT) Business

ITEM 1.BUSINESS

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

Inc., a Maryland corporation, and its subsidiaries unless the context specifically requires otherwise.

Our Company

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.” Our

principal executive offices are located at 345 Park Avenue, New York, New York 10154.

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. We are organized as a holding company and conduct our

business primarily through our various subsidiaries. We operate our business as one segment, which originates and

acquires commercial mortgage loans and related investments.

Our Manager

We are externally managed and advised by our Manager, which is responsible for our business and investment activities,

our day-to-day operations, and providing us the services of our executive management team, investment team, and other

personnel.

Our Manager is an affiliate of Blackstone, a leading global investment manager with $1.3 trillion of total assets under

management as of December 31, 2025.

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 $319.3 billion of investor capital under management as of December 31, 2025. Blackstone Real Estate operates

as one globally integrated business with 787 real estate professionals globally as of December 31, 2025 and 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.

Blackstone Real Estate Debt Strategies, or BREDS, was launched in 2008 within Blackstone Real Estate to pursue

opportunities relating to real estate debt investments globally, with a focus primarily on North America and Europe. Our

Manager’s Investment Committee is composed of some of the most senior and experienced investment professionals at

Blackstone, including Kenneth Caplan (Global Co-Chief Investment Officer of Blackstone), Nadeem Meghji (Global Head

of Blackstone Real Estate), Timothy S. Johnson (Global Head of BREDS and our Chief Executive Officer and Chairperson

of our board of directors), and Giovanni Cutaia (President of Blackstone Real Estate). As of December 31, 2025, 176

dedicated BREDS professionals, including 27 investment professionals based in London and Australia, managed

$77.5 billion of investor capital. 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.

Our chief executive officer, chief financial officer, president and other officers are senior Blackstone Real Estate

professionals. None of our Manager, our executive officers, or other personnel supplied to us by our Manager are obligated

to dedicate any specific amount of time to our business. Our Manager is subject to the supervision and oversight of our

board of directors and has only such functions and authority as our board of directors delegates to it. Pursuant to a

management agreement between our Manager and us, or our Management Agreement, our Manager is entitled to receive a

4

base management fee, an incentive fee, and expense reimbursements. See Notes 16 and 21 to our consolidated financial

statements and the information required to be disclosed pursuant to Item 13. “Certain Relationships and Related

Transactions, and Director Independence” in our definitive proxy statement with respect to our 2026 annual meeting of

shareholders, which is incorporated by reference into this Annual Report on Form 10-K, for more detail on the terms of the

Management Agreement.

Our Investment Strategy

Our investment strategy is to originate, acquire, and manage senior loans and other debt or credit-oriented investments

collateralized by or relating to commercial real estate in North America, Europe and Australia. Through our Manager, we

draw on Blackstone’s extensive real estate investment platform and its established sourcing, underwriting, and structuring

capabilities in order to execute our investment strategy. In addition, we have access to Blackstone’s extensive network and

operational information from Blackstone’s substantial real estate and other investment holdings, which provide our

Manager access to market data on a scale generally not available to others in the market.

Our primary strategy is to directly originate, co-originate, and acquire senior loans in conjunction with acquisitions,

refinancings, and recapitalizations of commercial real estate in North America, Europe, and Australia, with a focus on

performing loans that are secured by high-quality, institutional assets located in major markets, and sponsored by

experienced, well-capitalized real estate investment owners and operators. We believe that the scale and flexibility of our

capital, as well as our Manager’s and Blackstone’s relationships, enable us to target opportunities with strong sponsorship

and invest in large loans or other debt that is collateralized by high-quality assets and portfolios and, as market conditions

evolve over time, to adapt as appropriate.

We believe our current investment strategy will produce significant opportunities to make investments with attractive risk-

return profiles. However, to capitalize on the investment opportunities that are present at various points of an economic

cycle and/or to further diversify our earnings composition, we have in the past expanded or changed our investment

strategy by targeting other real estate debt or credit-oriented investments and may continue to do so.

We believe that the diversification of our investment portfolio, our ability to actively manage those investments, and the

flexibility of our strategy position us to generate a compelling risk-adjusted return for our stockholders in a variety of

market conditions over the long term.

Our Investment Portfolio

Our investment portfolio is primarily comprised of senior, floating rate mortgage loans that are secured by a first priority

mortgage on commercial real estate assets in North America, Europe, and Australia. These investments may be in the form

of whole loans, pari passu participations within mortgage loans, or other similar structures. Although originating senior,

floating rate mortgage loans is our primary area of focus, we may also originate or acquire fixed rate loans and subordinate

loans, including subordinate mortgage interests and mezzanine loans, as well as other real estate, real estate debt or real

estate credit-oriented investments.

Loan Portfolio

Our Loan Portfolio consists of 131 loans with a total principal balance of $18.2 billion. During the year ended

December 31, 2025, we originated or acquired $5.7 billion of loans. Loan fundings during the year totaled $5.6 billion,

with loan repayments and sales of $6.1 billion, for net repayments of $452.8 million.

Owned Real Estate

As part of our portfolio management strategy to maximize economic outcomes, from time to time, we may hold certain

owned real estate investments, in some cases resulting from us acquiring title to or taking control of a loan’s underlying

real estate collateral. During the year ended December 31, 2025, we acquired or otherwise consolidated five owned real

estate assets with an aggregate acquisition date fair value of $654.3 million. As of December 31, 2025, we held 12 owned

real estate assets with an aggregate carrying value of $1.3 billion, for which we were previously the lender on an associated

mortgage loan.

5

Bank Loan Portfolio Joint Venture

In the second quarter of 2025, we entered into a joint venture, or our Bank Loan Portfolio Joint Venture, with a Blackstone-

advised investment vehicle to acquire portfolios of performing commercial mortgage loans. Our Bank Loan Portfolio Joint

Venture is recorded as an investment in unconsolidated entities on our consolidated balance sheets. During the year ended

December 31, 2025, our Bank Loan Portfolio Joint Venture acquired two bank loan portfolios totaling $2.0 billion across

593 performing senior commercial mortgage loans from regional banks, our share of which is $719.4 million. Our

aggregate ownership interest in our Bank Loan Portfolio Joint Venture was 35% as of December 31, 2025.

Net Lease Joint Venture

In the fourth quarter of 2024, we entered into a joint venture, or our Net Lease Joint Venture, with a Blackstone-advised

investment vehicle to invest in triple net lease properties. Our Net Lease Joint Venture is recorded as an investment in

unconsolidated entities on our consolidated balance sheets. During the year ended December 31, 2025, the Net Lease Joint

Venture acquired 178 properties with an aggregate purchase price of $421.8 million. Our aggregate ownership interest in

our Net Lease Joint Venture was 75% as of December 31, 2025.

Financing Strategy

To maintain an adequate amount of available liquidity and execute our business plan, we look to a variety of capital

sources. In addition to raising capital through public offerings of our equity and debt securities, our financing strategy

includes secured debt, securitizations, and asset-specific financings, as well as senior term loan facilities, senior secured

notes, and convertible notes.  We finance our investments in a variety of ways, including borrowing under secured credit

facilities, issuing 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. In

addition to our current mix of financing sources, we also may access additional forms of financings including

resecuritizations and public and private, secured and unsecured debt issuances by us or our subsidiaries.

During the year ended December 31, 2025, we (i) issued a $1.0 billion CLO securitization, (ii) increased our aggregate

borrowing capacity by $414.0 million as a result of closing two new secured credit facilities, increasing the size of one of

our existing secured credit facilities, and terminating one of our existing secured credit facilities, and (iii) borrowed an

additional $91.0 million under our term loan facilities while reducing the weighted-average spread and extending the

weighted-average maturity. We also lowered the cost of our portfolio financings throughout the year, with a weighted-

average spread of +1.83% over respective benchmark rates on our $10.1 billion of secured debt, as of December 31, 2025,

relative to +1.92% as of December 31, 2024.

As of December 31, 2025, we had total liquidity of $1.0 billion with no corporate debt maturities until 2027.

The following table details our outstanding portfolio financing arrangements as of December 31, 2025 ($ in thousands):

The amount of leverage we employ for particular assets will depend upon our assessment of the credit, liquidity, price

volatility, and other risks of those assets and the related financing structure, the availability of particular types of financing

at the time, and the financial covenants under our credit facilities. Our decision to use leverage to finance our assets will be

at our discretion and will not be subject to the approval of our stockholders. We currently expect that our leverage, on a

debt-to-equity basis, which is defined as the ratio of (i) total outstanding secured debt, asset-specific debt, term loans,

senior secured notes, and convertible notes, less cash, to (ii) total equity, will generally be below a ratio of 4-to-1. We will

6

endeavor to match the tenor, currency, and indices of our assets and liabilities, including in certain instances through the

use of derivatives. We will also seek to limit the risks associated with recourse borrowing.

From time to time, we engage in hedging transactions that seek to mitigate the effects of fluctuations in currencies or

interest rates on our cash flows and asset values. These hedging transactions could take a variety of forms, including swaps

or cap agreements, options, futures contracts, forward rate or currency agreements, or similar financial instruments.

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. As of December 31, 2025, 97% of our Loan Portfolio, by principal balance, earned a floating rate

of interest and was 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.

Investment Guidelines

Our board of directors has approved the following investment guidelines:

•we shall seek to invest our capital in a broad range of investments in, or relating to, public and/or private debt,

non-controlling equity, loans and/or other interests (including “mezzanine” interests and/or options or derivatives

related thereto) relating to real estate assets (including pools thereof and equity interests in net lease assets), real

estate companies, and/or real estate-related holdings;

•prior to the deployment of capital into investments, we may cause our capital to be invested in any short-term

investments in money market funds, bank accounts, overnight repurchase agreements with primary federal reserve

bank dealers collateralized by direct U.S. government obligations and other instruments or investments reasonably

determined to be of high quality;

•not more than 25% of our equity, as defined in the Management Agreement, will be invested in any individual

investment without the approval of a majority of the investment risk management committee of our board of

directors (it being understood, however, that for purposes of the foregoing concentration limit, in the case of any

investment that is comprised (whether through a structured investment vehicle or other arrangement) of securities,

instruments or assets of multiple portfolio issuers, such investment for purposes of the foregoing limitation shall

be deemed to be multiple investments in such underlying securities, instruments and assets and not such particular

vehicle, product or other arrangement in which they are aggregated);

•any investment in excess of $350.0 million shall require the approval of a majority of the investment risk

management committee of our board of directors;

•no investment shall be made that would cause us to fail to qualify as a REIT under the Internal Revenue Code of

1986, as amended, or the Internal Revenue Code; and

•no investment shall be made that would cause us or any of our subsidiaries to be regulated as an investment

company under the Investment Company Act.

These investment guidelines may be amended, restated, modified, supplemented or waived upon the approval of a majority

of our board of directors, which must include a majority of the independent directors, without the approval of our

stockholders.

Competition

We operate in a competitive market for lending and investment opportunities, which may intensify. In originating or

acquiring our investments, we compete for opportunities with a variety of institutional lenders and investors, including

other REITs, specialty finance companies, public and private funds, commercial and investment banks, commercial finance

and insurance companies and other financial institutions (including investment vehicles managed by affiliates of

Blackstone). Some of our competitors have raised, and may in the future raise, significant amounts of capital, and may

have investment objectives that overlap with ours, which may create additional competition for lending and investment

opportunities. Some competitors may have a lower cost of capital and access to funding sources that are not available to us,

such as the U.S. government. Many of our competitors are not subject to the operating constraints associated with REIT tax

compliance or maintenance of an exclusion from regulation under the Investment Company Act. In addition, some of our

competitors may have higher risk tolerances or different risk assessments, which could allow them to consider a wider

7

variety of loans and investments, offer more attractive pricing or other terms, and establish more relationships than us.

Furthermore, competition for investments may lead to decreasing yields, which may further limit our ability to generate

desired returns.

In the face of this competition, we have access to Blackstone’s professionals and their industry expertise and relationships,

which we believe provides us with a competitive advantage and helps us assess risks and determine appropriate pricing for

potential investments. We believe these relationships enable us to compete more effectively for attractive investment

opportunities. However, we may not be able to achieve our business goals or expectations due to the competitive risks that

we face. For further information concerning these competitive risks, see Item 1A—“Risk Factors—Risks Related to Our

Lending and Investment Activities.”

Sustainability

We are externally managed and advised by our Manager, which is responsible for our business and investment activities,

our day-to-day operations, and providing us the services of our executive management team, investment team, and other

personnel.

As such, many of the sustainability initiatives undertaken by Blackstone impact or apply to us. Key sustainability initiatives

we share with Blackstone include the consideration of sustainability in the investment process where applicable, dedicated

resources to sustainability governance and oversight, industry engagement on sustainability matters, programs at our office

locations, and certain employee and community engagement and diversity and inclusion programs.

Human Capital Management

We do not have any employees. We are externally managed by our Manager pursuant to our Management Agreement. Our

executive officers serve as officers of our Manager, and are employed by an affiliate of our Manager. See “Item 1—Our

Manager.”

Government Regulation

Our operations in North America, Europe, and Australia are subject, in certain instances, to supervision and regulation by

U.S. and other governmental authorities, and may be subject to various laws and judicial and administrative decisions

imposing various requirements and restrictions, which, among other things: (i) regulate credit-granting activities; (ii)

establish maximum interest rates, finance charges and other charges; (iii) require disclosures to customers; (iv) govern

secured transactions; and (v) set collection, foreclosure, repossession and claims-handling procedures and other trade

practices. We are also required to comply with certain provisions of the Equal Credit Opportunity Act that are applicable to

commercial loans. We intend to continue to conduct our business so that neither we nor any of our subsidiaries are required

to register as an investment company under the Investment Company Act.

In our judgment, existing statutes and regulations have not had a material adverse effect on our business. In recent years,

legislators in the United States and in other countries have said that greater regulation of financial services firms is needed,

particularly in areas such as risk management, leverage, and disclosure. While we expect that additional new regulations in

these areas will be adopted and existing ones may change in the future, it is not possible at this time to forecast the exact

nature of any future legislation, regulations, judicial decisions, orders or interpretations, nor their impact upon our future

business, financial condition, or results of operations or prospects.

For more information on government regulation, refer to “Part I—Item 1A. Risk Factors—Risks Related to Our

Company.”

Taxation of the Company

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.

8

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.

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

income. See Item 1A—“Risk Factors—Risks Related to our REIT Status and Certain Other Tax Items” for additional tax

status information.

Taxation of REIT Dividends

REIT dividends (other than capital gain dividends) received by non-corporate taxpayers may be eligible for a 20%

deduction. This deduction is only applicable to investors in BXMT that receive dividends and does not have any impact on

us. Investors should consult their own tax advisors regarding the effect of this change on their effective tax rate with

respect to REIT dividends.

Website Access to Reports

We maintain a website at www.blackstonemortgagetrust.com. We are providing the address to our website solely for the

information of investors. The information on our website is not a part of, nor is it incorporated by reference into this report.

Through our website, we make available, free of charge, our annual proxy statement, annual reports on Form 10-K,

quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant

to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after we electronically file such material

with, or furnish them to, the SEC. The SEC maintains a website that contains these reports at www.sec.gov.