February 2018 4Q 2017 Earnings Release & Company Supplemental - - PowerPoint PPT Presentation

February 2018 4Q 2017 Earnings Release & Company Supplemental

Blackstone Mortgage Trust 1

Forward-Looking Statements and Other Matters

This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E

• f the Securities Exchange Act of 1934, as amended, which reflect Blackstone Mortgage Trust, Inc. (“BXMT”) current views with respect to, among
• ther things, BXMT’s operations and financial performance. You can identify these forward-looking statements by the use of words such as “outlook,”

“indicator,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. BXMT believes these factors include but are not limited to those described under the section entitled “Risk Factors” in its Annual Report on Form 10-K for the fiscal year ended December 31, 2017, as such factors may be updated from time to time in its periodic filings with the Securities and Exchange Commission (“SEC”) which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this presentation and in the

• filings. BXMT assumes no obligation to update or supplement forward‐looking statements that become untrue because of subsequent events or

circumstances. Slide 22 of this presentation references numerical data relating to Blackstone that includes activities of Blackstone Real Estate’s public and private portfolio companies unless otherwise noted. Slide 30 of this presentation includes a reference to imputed core return on equity (“Imputed Core ROE”) and other economic terms relating to an illustrative BXMT loan transaction that are presented solely for purposes of illustrating the impact of using floating rate financing to finance the

• rigination of a floating rate loan and should not be viewed as indicative of the results that will be achieved for any particular loan in BXMT’s

portfolio or of BXMT’s results as a whole. The loan economics presented are hypothetical and based upon a number of assumptions, including no defaults on the loan, and are subject to various risks and uncertainties. Accordingly, there are or will be important factors, including those referred to above, that could cause the actual economics that are achieved on any loan in BXMT’s loan portfolio to differ materially from those indicated in this

• illustration. In particular, it should be noted that as a result of such factors the net spread between whole loan yields and the cost of related leverage,

the leverage multiple applicable to any particular loan and allocable overhead may vary materially from period to period and across BXMT’s loan

• portfolio. Imputed Core ROE also excludes potential incentive management fees and is presented before any tax effects.

Information included in this presentation is as of or for the period ended December 31, 2017, unless otherwise indicated.

Blackstone Mortgage Trust 2

BXMT Highlights

8.2%

dividend yield(b) Blackstone Real Estate platform provides expert management 100% performing loan portfolio generates current cash income Stable assets financed with long- term, match-funded liabilities Portfolio positioned for yield and value protection in changing rate environment

Information included in this presentation is as of or for the period ended December 31, 2017, unless otherwise indicated. (a) See Appendix for a definition and reconciliation to GAAP net income (b) Based on annualized dividend and BXMT closing price as of February 12, 2018 (c) Reflects LTV as of the date loans were originated or acquired by BXMT (d) Changes in interest rates and credit spreads may affect our net interest income from loans and other investments. See Appendix for important disclosures.

$0.62

4Q dividend

61%

Loan-to-Value(c)

$11.1B

senior loan portfolio

94%

floating rate

+$0.29

net interest income per 1% increase in LIBOR(d)

$115B

BX Real Estate investor capital under management

$4.8B

2017 originations

BXMT originated $1.2 billion of senior commercial real estate loans and grew its portfolio to $11.1 billion in 4Q, generating $0.59 of GAAP EPS and $0.65 of Core EPS(a)

Expertise Income Stability Protection

Blackstone Mortgage Trust 3

Loan Originations

 4Q originations of $1.2 billion; 2017 volume of $4.8 billion up 37% from prior year  44% of loans originated in 4Q were secured by multifamily assets

Earnings & Dividends

 4Q EPS of $0.59 and Core Earnings(a) of $0.65 per share ($2.27 and $2.55,

respectively for full year 2017)

 Book value per share of $26.93, up $0.41 as a result of share issuance at $31.90 or

1.20x P/B

Fourth Quarter and Full Year 2017 Results

Portfolio Composition Financing Interest Rates

 Portfolio grew 14% from prior year, ending with an $11.1 billion outstanding balance(b)  Weighted average origination LTV(c) of 61%  $1.0 billion CLO issuance represents non-recourse, term-matched financing with an

82% advance rate and a weighted average coupon of L+1.21%

 Debt-to-Equity ratio(d) of 2.0x, down 0.6x quarter over quarter

(a) See Appendix for a definition and reconciliation to GAAP net income (b) Includes $985 million of Non-Consolidated Senior Interests; see Appendix for definition (c) Reflects LTV as of the date loans were originated or acquired by BXMT (d) Represents (i) total outstanding secured debt agreements and convertible notes, less cash, to (ii) total equity (e) Changes in interest rates and credit spreads may affect our net interest income from loans and other investments. See Appendix for important disclosures.

 94% of the portfolio is floating rate, up 5% from 2016  1.0% increase in LIBOR would increase annual net interest income by $0.29 per share(e)

Blackstone Mortgage Trust 4

$0.61 $0.60 $0.69 $0.65 1Q'17 2Q'17 3Q'17 4Q'17

Dividends Per Share

2017 Dividend Coverage(c) Earnings & Dividends

 4Q GAAP earnings of $0.59 per share ($58 million) and Core Earnings(a) of $0.65 per share ($65 million)  2017 GAAP earnings of $2.27 per share ($218 million) and Core Earnings(a) of $2.55 per share ($245 million)  $0.62 per share dividend equates to an 8.2% dividend yield(b)

(a) See Appendix for a definition and reconciliation to GAAP net income (b) Based on annualized dividend and BXMT closing price as of February 12, 2018 (c) GAAP EPS of $0.54, $0.53, $0.61 and $0.59 as of 1Q’17, 2Q’17, 3Q’17 and 4Q’17, respectively

Book Value Per Share Growth

$0.62

Quarterly Dividend

103%

Dividend Coverage Core Earnings Per Share

$24.67 $26.93 Re-IPO 2Q'13 4Q'17

9.2%

Accretion

Blackstone Mortgage Trust 5

2016 Originations 2017 Originations

Loan Originations

 Originated $1.2 billion in 4Q bringing total 2017 originations to $4.8 billion, up 37% from prior year  Portfolio growth of $1.2 billion, including $486 million of fundings under previously originated commitments in 2017

100% floating rate, senior loans

  Weighted average LTV(a) of 62%

22% multifamily; 0% retail



(a) Reflects LTV as of the date loans were originated or acquired by BXMT (b) Excludes loans originated in the BXMT-Walker & Dunlop joint venture

Large loans: $142 million avg. size(b)



($ in billions)

Origination Growth 2017 Originations

$3.5

$4.8

37%

YoY growth Office Multi Hotel Retail Other

Blackstone Mortgage Trust 6

53% 17% 11% 8% 2% 9%

Portfolio Composition

 $11.1 billion portfolio comprising 110 senior loans secured by institutional quality real estate concentrated in major markets;

63% of loans secured by assets located in coastal markets Office Retail Hotel Condo Other Multi

Geographic Diversification(a) Collateral Diversification(a)

(a) In certain instances, we finance our loans through the non-recourse sale of a senior loan interest that is not included in our consolidated financial statements. See Note 2 in our Form 10-K for further discussion. Total loan exposure encompasses the entire loan we originated and financed, including $985 million of such Non-Consolidated Senior Interests as of December 31, 2017. (b) Reflects LTV as of the date loans were originated or acquired by BXMT

Weighted Average LTV(b)

61%

TX 1% MA 3% CAN 4% CA 19% WA 2% HI 5% DC 3% GA 4% IL 8% FL 7% VA 7% NY 22% States that comprise less than 1% of total loan portfolio NL 1% DEU 1% BE 1% UK 7%

$11.1B

portfolio

Blackstone Mortgage Trust 7

A2 A2 A2 A2 A1 A1 A1 A1

Financing

 Closed $1.0 billion collateralized loan obligation (CLO), the largest commercial real estate CLO issued post financial crisis  Innovative structural features maximize economic efficiency and maintain asset management flexibility

BXMT 2017-FL1(b) Structure

(a) Mark to market (b) This information is not intended to, and does not constitute, represent or form part of any offer, invitation or solicitation of any offer to purchase, or otherwise acquire, subscribe for, sell or otherwise dispose of, any securities NR $100 B- $38 BB- $45 BBB- $83 A- $59 AA- $61 AAA $85 AAA $530

$3.4B

Total Loans

$1.0B

CLO Securitization

31

• No. of Loans

31

Pari Passu A2 Participations

Finances $1.0 billion of BXMT

• riginated senior mortgages

  Non-recourse

Non-MTM(a) term financing



Innovative structural flexibility



Highlights

$817M

Notes Sold

82%

Advance Rate

L+1.21%

Average Coupon

Blackstone Mortgage Trust 8

CLO $818 Securitization $475 A-note $375 Convert $403 Common Equity $392

Financing

 Grew capacity by $4.2 billion in 2017 through diversified funding sources including new credit facilities, upsizes of existing

facilities, BXMT’s first CLO and large loan securitization, convertible debt issuances, and issuance of common stock

 Total asset-level financing capacity of $10.9 billion was 70% utilized at quarter end

Financing

($ in billions, outstanding balance)

(a) In addition to $33 million of loan participations sold, includes $985 million of Non-Consolidated Senior Interests, which result from non-recourse sales of senior loan interests in loans BXMT originates. BXMT’s net investments in these loans are reflected in the form of mezzanine or other subordinate loans on BXMT’s balance sheet. (b) Represents (i) total outstanding secured debt agreements and convertible notes, less cash, to (ii) total equity

$4.2B

2017 New Capital Sources

($ in millions, except as noted otherwise)

2.0x

Debt-to-Equity Ratio(b)

Credit Facilities

10 Credit Providers

Corporate Debt

Convertible Notes and Secured Facility

Corporate Obligations Senior Loan Interests(a)

Senior Syndications

Total Leverage

$5.3 $0.6 $1.0 $5.8 $8.1

Securitized Debt

$1.3

CLO and Single Asset Securitization

Credit Facilities $1,600 Secured Facility $125

Blackstone Mortgage Trust 9

6% 94%

$0.00 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 $0.80 1.56% 2.06% 2.56% 3.06% 3.56% 4.06%

Interest Rates

 Core Earnings are positively correlated to changes in LIBOR, the benchmark index for 94% of BXMT’s loans  A 1.0% increase in USD LIBOR would increase net interest income per share by $0.29 per annum(a)

(a) Changes in interest rates and credit spreads may affect our net interest income from loans and other investments. See Appendix for important disclosures.

Portfolio Income Sensitivity to USD LIBOR(a)

(Annual Dollars of Net Interest Income Per Share)

Net Interest Income Per Share USD LIBOR

Portfolio Fixed vs. Floating

(% of Total Loan Exposure)

Floating Fixed

Blackstone Mortgage Trust 10

8% 9% REIT Dividend Yield Fully Taxable Equivalent Yield

Tax Reform

 The Tax Cuts and Jobs Act of 2017 includes provisions entitling individual recipients of REIT dividends to a 20% deduction

• n ordinary dividends, effectively reducing the maximum individual tax rate on REIT dividends from 37.0% to 29.6%(a)

 An 8% REIT dividend results in an after-tax yield equivalent to a 9% bond yield for individual investors

  

Tax Reform Impact Illustration

After-Tax Yield

29.6%

• Max. Tax Rate

37.0%

• Max. Tax Rate

(a) This does not constitute tax advice to, and should be not relied upon by, potential investors, who should consult their own tax advisors regarding the matters discussed herein and the tax consequences of an investment in BXMT. This presentation is included for illustrative purposes only. The dividend yields included herein are not guaranteed and are not reflective of BXMT’s historical performance.

Appendix

Blackstone Mortgage Trust 12

3Q'17 Loans Outstanding Fundings Repayments 4Q'17 Loans Outstanding

GAAP Net Income Adjustments Core Earnings

Interest Income 146.1 $ (0.5) $ 145.6 $ Interest Expense (66.0) 0.5 (65.5) Management and Incentive Fees (14.3) — (14.3) G&A / Other (1.5) 0.4 (1.1) Non-Cash Compensation (6.2) 6.2 — Net income attributable to non-controlling interests (0.2) — (0.2) Total 57.9 $ 6.6 $ 64.5 $

— —

Appendix – Fourth Quarter 2017 Operating Results & Net Funding

$420 million(b)

Net Fundings

Net Funding

($ in billions)

Operating Results

($ in millions)

$10.7 $1.3 $(0.9) $11.1

(a) Includes $988 million and $985 million of Non-Consolidated Senior Interests as of September 30, 2017 and December 31, 2017, respectively; see Appendix for definition (b) Excludes the impact of changes in foreign currency rates and hedges for non-USD loans and financings

$0.65

Core Earnings Per Share

$0.59

Net Income Per Share

(a) (a)

Blackstone Mortgage Trust 13

Loan Type Origination Date(a) Total Loan(b) Principal Balance(b) Net Book Value Cash Coupon All-In Yield Maximum Maturity(c) Location Property Type Loan Per SQFT / Unit / Key Origination LTV(a) Loan 1 Senior Loan 5/11/2017 753 $ 656 $ 653 $ L + 3.40% L + 3.60% 6/10/2023 Northern Virginia Office 321 / sqft 62% Loan 2 Senior Loan(b) 5/15/2015 590 545 92 L + 4.25% L + 4.69% 5/15/2020 Miami Retail 691 / sqft 36% Loan 3 Senior Loan(b) 8/6/2015 499 499 91 4.49% 5.82% 10/29/2022 Diversified - EUR Other n/a 71% Loan 4 Senior Loan 1/7/2015 315 295 294 L + 3.50% L + 3.71% 1/9/2021 New York Office 252 / sqft 53% Loan 5 Senior Loan 5/1/2015 320 295 294 L + 3.45% L + 3.83% 5/1/2020 New York Office 375 / sqft 68% Loan 6 Senior Loan 3/31/2017 258 242 240 L + 4.15% L + 4.54% 4/9/2022 Maui Hotel 318,182 / key 75% Loan 7 Senior Loan 6/4/2015 230 230 232 L + 4.20% L + 4.22% 3/18/2021 Diversified - CAN Hotel 38,623 / key 54% Loan 8 Senior Loan 12/22/2017 225 225 223 L + 2.80% L + 3.16% 1/9/2023 Chicago Multi 326,087 / unit 65% Loan 9 Senior Loan 6/23/2015 222 215 215 L + 3.65% L + 3.98% 5/8/2022 Washington DC Office 241 / sqft 72% Loan 10 Senior Loan 2/25/2014 210 210 209 L + 4.25% L + 4.70% 3/9/2021 Diversified - US Hotel 110,352 / key 58% Loan 11 Senior Loan 8/3/2016 276 200 198 L + 4.66% L + 5.22% 8/9/2021 New York Office 275 / sqft 57% Loan 12 Senior Loan 8/19/2016 200 190 190 L + 3.64% L + 4.10% 9/9/2021 New York Office 580 / sqft 69% Loan 13 Senior Loan 4/15/2016 200 189 188 L + 4.25% L + 4.86% 5/9/2021 New York Office 176 / sqft 40% Loan 14 Senior Loan 12/22/2016 205 175 174 L + 3.50% L + 4.07% 1/9/2022 New York Office 246 / sqft 66% Loan 15 Senior Loan 8/17/2016 187 169 168 L + 3.75% L + 4.13% 9/9/2021 San Francisco Office 498 / sqft 65% Loans 16-110 Senior Loans Various 8,016 6,759 6,596 5.47% (d) 5.88% (d) Various Various Various Various 62% Total/Wtd. Avg. 12,706 $ 11,094 $ 10,057 $ 5.38% 5.83% 3.5 years 61%

(a) Date loan was originated or acquired by BXMT, and the LTV as of such date (b) In certain instances, loans are financed through the non-recourse sale of a senior loan interest that is not included in the consolidated financial statements. As of December 31, 2017, three loans in the portfolio have been financed with an aggregate $985 million of Non-Consolidated Senior Interests, which are included in the table above. (c) Maximum maturity assumes all extension options are exercised; however, floating rate loans generally may be repaid prior to their final maturity without penalty (d) Consists of both floating and fixed rates. Coupon and all-in yield assume applicable floating benchmark rates for weighted-average calculation.

Loan Portfolio Details

($ in millions)

Blackstone Mortgage Trust 14

December 31, 2017 December 31, 2016 Assets Cash and cash equivalents 69,654 $ 75,567 $ Restricted Cash 32,864 — Loans receivable, net 10,056,732 8,692,978 Other assets 99,575 44,070 Total assets 10,258,825 $ 8,812,615 $ Liabilities and equity Secured debt agreements, net 5,273,855 $ 5,716,354 $ Loan participations sold, net 80,415 348,077 Securitized debt obligations, net 1,282,412 — Convertible notes, net 563,911 166,762 Other liabilities 140,826 87,819 Total liabilities 7,341,419 6,319,012 Commitments and contingencies — — Equity Class A common stock, $0.01 par value 1,079 945 Additional paid-in capital 3,506,861 3,089,997 Accumulated other comprehensive loss (29,706) (56,202) Accumulated deficit (567,168) (541,137) Total Blackstone Mortgage Trust, Inc. stockholdersʼ equity 2,911,066 2,493,603 Non-controlling interests 6,340 — Total equity 2,917,406 2,493,603 Total liabilities and equity 10,258,825 $ 8,812,615 $

Consolidated Balance Sheets

($ in thousands, except per share data)

Blackstone Mortgage Trust 15

Three Months Ended December 31, Year Ended December 31, 2017 2016 2017 2016 Income from loans and other investments Interest and related income 146,127 $ 116,288 $ 537,915 $ 497,974 $ Less: Interest and related expenses 65,953 44,451 234,870 184,270 Income from loans and other investments, net 80,174 71,837 303,045 313,704 Other expenses Management and incentive fees 14,284 12,798 54,841 55,959 General and administrative expenses 7,702 6,726 29,922 27,716 Total other expenses 21,986 19,524 84,763 83,675 Gain on investments at fair value — 6 — 13,420 Income from equity investment in unconsolidated subsidiary — 995 — 3,187 Income before income taxes 58,188 53,314 218,282 246,636 Income tax provision (benefit) 48 (85) 314 196 Net income 58,140 $ 53,399 $ 217,968 $ 246,440 $ Net income attributable to non-controlling interests (249) (24) (337) (8,143) Net income attributable to Blackstone Mortgage Trust, Inc. 57,891 $ 53,375 $ 217,631 $ 238,297 $ Per share information (basic and diluted) Weighted-average shares of common stock outstanding 98,810,617 94,455,518 95,963,616 94,165,351 Net income per share of common stock 0.59 $ 0.57 $ 2.27 $ 2.53 $

Consolidated Statements of Operations

($ in thousands, except per share data)

Blackstone Mortgage Trust 16

Three Months Ended December 31, 2017 September 30, 2017 Net income(a) 57,891 $ 57,722 $ Weighted-average shares outstanding, basic and diluted 98,811 95,013 Earnings per share, basic and diluted 0.59 $ 0.61 $ December 31, 2017 September 30, 2017 Stockholdersʼ equity 2,911,066 $ 2,519,614 $ Shares Class A common stock 107,884 94,828 Deferred stock units 197 190 Total outstanding 108,081 95,018 Book value per share 26.93 $ 26.52 $ Three Months Ended December 31, 2017 September 30, 2017 Net income(a) 57,891 $ 57,722 $ Non-cash compensation expense 6,221 5,944 GE purchase discount accretion adjustment(b) (483) (138) Other items 874 1,610 Core Earnings 64,503 $ 65,138 $ Weighted-average shares outstanding, basic and diluted 98,811 95,013 Core Earnings per share, basic and diluted 0.65 $ 0.69 $

Per Share Calculations

(Amounts in thousands, except per share data)

(a) Represents net income attributable to Blackstone Mortgage Trust, Inc. (b) Adjustment in respect of the deferral in Core Earnings of the accretion of a total $9.1 million of purchase discount attributable to a certain pool of GE portfolio loans pending the repayment of those loans

Core Earnings Reconciliation Book Value per Share Earnings per Share

Blackstone Mortgage Trust 17

Reconciliation of Net Income to Core Earnings

(a) Represents net income attributable to Blackstone Mortgage Trust, Inc. (b) Adjustment in respect of the deferral in Core Earnings of the accretion of a total $9.1 million of purchase discount attributable to a certain pool of GE portfolio loans pending the repayment of those loans

(Amounts in thousands, except per share data)

Mar 31, 2017 Jun 30, 2017 Sep 30, 2017 Dec 31, 2017 Net income(a) 51,405 $ 50,613 $ 57,722 $ 57,891 $ Non-cash compensation expense 5,907 5,959 5,944 6,221 GE purchase discount accretion adjustment(b) (216) (198) (138) (483) Other items 1,024 1,001 1,610 874 Core Earnings 58,120 $ 57,375 $ 65,138 $ 64,503 $ Weighted-average shares outstanding, basic and diluted 94,993 95,006 95,013 98,811 Net income per share, basic and diluted 0.54 $ 0.53 $ 0.61 $ 0.59 $ Core Earnings per share, basic and diluted 0.61 $ 0.60 $ 0.69 $ 0.65 $

Blackstone Mortgage Trust 18

Definitions

Core Earnings: Blackstone Mortgage Trust, Inc. (“BXMT”) discloses Core Earnings in this presentation. Core Earnings is a financial measure that is calculated and presented on the basis of methodologies other than in accordance with generally accepted accounting principles in the United States of America (“GAAP”). Core Earnings is an adjusted measure that helps BXMT evaluate its performance excluding the effects of certain transactions and GAAP adjustments that it believes are not necessarily indicative of its current loan origination portfolio and operations. Although according to its management agreement BXMT calculates the incentive and base management fees due to its Manager using Core Earnings before incentive fees expense, BXMT reports Core Earnings after incentive fees expense, as BXMT believes this is a more meaningful presentation of the economic performance of its class A common stock. Core Earnings is defined as GAAP net income (loss), including realized gains and losses not otherwise included in GAAP net income (loss), and excluding (i) net income (loss) attributable to the CT Legacy Portfolio, (ii) non-cash equity compensation expense, (iii) depreciation and amortization, (iv) unrealized gains (losses), and (v) certain non-cash items. Core 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 BXMT’s manager, subject to approval by a majority of its independent directors. Core Earnings does not represent net income or cash generated from operating activities and should not be considered as an alternative to GAAP net income, or an indication of BXMT’s GAAP cash flows from operations, a measure of BXMT’s liquidity, or an indication of funds available for its cash needs. In addition, BXMT’s methodology for calculating Core Earnings may differ from the methodologies employed by other companies to calculate the same or similar supplemental performance measures, and accordingly, its reported Core Earnings may not be comparable to the Core Earnings reported by other companies. Non-Consolidated Senior Interests: Senior interests in loans originated and syndicated to third parties. These non-recourse loan participations, which are excluded from the GAAP balance sheet, constitute additional financing capacity and are included in discussions of the loan portfolio. Net Interest Income Sensitivity to LIBOR: Reflects the impact on net interest income, assuming no changes in credit spreads, portfolio composition, or asset performance. Excludes other components of net income, such as management and incentive fees, which ultimately impact earnings and dividends per share.

Company Supplemental

Blackstone Mortgage Trust 20

Blackstone Mortgage Trust, Inc. Overview

 Blackstone Mortgage Trust, Inc. (NYSE: BXMT) is a REIT that originates senior commercial mortgage loans in North

America and Europe

Large-Scale Portfolio



Institutional quality real estate located in major markets

Superior Sponsorship



Affiliation with BX, largest real estate private equity business in the world

Senior Lending Focused Floating Rate Business



Returns increase with rising short- term USD interest rates



Attractive current income, conservative credit and efficient leverage to drive returns

Blackstone Mortgage Trust 21

Superior Real Estate Platform

 Blackstone Real Estate is a premier debt and equity investment and asset management platform

Investor Capital Under Management

110 professionals

$15 billion AUM

• Senior loans
• $11.1B(a) of assets
• $3.5B equity market

capitalization

• Mezzanine debt
• $8.6B strategy

$115B

• CMBS strategy
• $2.5B equity under

management

Blackstone

BREDS Drawdown BREDS Liquid

Mortgage Trust Funds Funds

Note: There can be no assurance that any Blackstone Fund or investment will be able to implement its investment strategy, achieve its objectives or avoid losses (a) Includes $985 million of non-consolidated senior interests

BREP Global 35% BREP Europe 17% BREP Asia 10% BPP Core 23% BREDS 13%

Blackstone Mortgage Trust 22

Superior Real Estate Platform

 Global portfolio drives proprietary insight, leasing advantage and value creation

Office

230M

Square Feet One of the largest owners in India and the U.S.

Residential

Major investor globally

242k

Units

Retail

Active global investor since 2011

82M

Square Feet

Hotel

178k

Owned Keys(a) One of the largest

• wners in the U.S.

(a) Represents owned, leased, and joint venture hotel rooms at 100%.

Blackstone Mortgage Trust 23

Superior Real Estate Platform

 450+ people, 12 offices, 3 business units but one fully integrated real estate platform

Blackstone Advantage

Global Business

• 43% of RE partners have

international experience Scale Capital

• $115 billion RE AUM
• $22 billion raised in 2017

Long View

• Long term capital

commitments

• Never a forced seller

Regular Meetings Single Perspective

1

Global Real Estate Platform

28

Partners average 12 years at Blackstone Weekly

• Partners’ Meeting
• Global ICMs
• Investment Review

Committees Quarterly

• Board Meetings
• Portfolio Asset Review

Annual

• Global Asset Reviews
• Strategy Sessions

Blackstone Mortgage Trust 24

Kathleen McCarthy

Global Co-Head of Real Estate Senior Managing Director of Blackstone Real Estate

Kenneth Caplan

Global C0-Head of Real Estate Senior Managing Director of Blackstone Real Estate

Superior Real Estate Platform

 Blackstone’s unique investment process is complemented by fully-integrated corporate infrastructure

BREDS Investment Committee

Jonathan Gray

President and Chief Operating Officer of Blackstone Member of Blackstone Board of Directors

Jonathan Pollack

Global Head of BREDS Senior Managing Director of BREDS

Stephen Plavin

President and CEO of BXMT Senior Managing Director of BREDS

Michael Nash

Executive Chairman of BXMT Global Chairman of BREDS

Tim Johnson

Global Head of Originations Senior Managing Director of BREDS

Rob Harper

Head of US Asset Management Senior Managing Director of Blackstone Real Estate

Originations (US. & Europe)

32 professionals

Michael Nagelberg

Managing Director of BREDS (U.S.)

Michael Eglit

Managing Director of BREDS (U.S.)

Katie Keenan

Managing Director of BREDS (U.S.)

Asset Management

12 professionals

Thomas Ruffing

Managing Director of BREDS

Leon Volchyok

Managing Director of BREDS

Capital Markets / IR / Finance

21 professionals

Douglas Armer

Managing Director of BREDS, Head of BXMT Capital Markets

Weston Tucker

Managing Director of Blackstone External Relations

Anthony Marone

CFO and Managing Director of BREDS

Legal / Compliance

3 professionals

Jimmy Yung

Managing Director of BREDS (U.S.)

Nicholas Menzies

Managing Director of BREDS, Head of BREDS Capital Markets

Michael Zerda

Managing Director of BREDS (Europe)

Blackstone Mortgage Trust 25

Target Investments

$50 million to $500+ million

Loan Size

First mortgages on stabilized or transitional assets

Collateral

All commercial property types

Property Type

North America and Europe

Geographies

LIBOR + 3.50% and higher, scaled to risk

Rate

Last dollar 50% to 80%

Loan to Value

3 to 5 years

Term

Typically interest only

Amortization

Typically 1.0% origination fee and 0.25% to 0.50% extension fees

Fees

12 to 24 months of spread maintenance

Prepayment

Blackstone Mortgage Trust 26

Sample Transaction: 123 Mission

 $187 million floating rate, first mortgage loan secured by 123 Mission in San Francisco

• Well located class A office building undergoing value-enhancing repositioning; 65% LTV
• Initial funding of $169 million with $18 million future funding commitment for building improvements and leasing

 Blackstone offered a one-stop solution for a repeat borrower in a major transaction 123 Mission

Blackstone Mortgage Trust 27

Sample Transaction: Westin Maui

 $258 million floating rate, first mortgage loan secured by Westin Hotel in Maui, Hawaii

• Well located in beachfront Ka’anapali surrounded by retail, dining and golf courses; 75% LTV; $488k per key
• Initial funding of $241 million with $17 million future funding commitment for hotel improvements

 Located in a core hospitality market where Blackstone has been an active investor Westin Maui

Airport

Blackstone Mortgage Trust 28

Sample Transaction: Woolworth Building

 $320 million floating rate, first mortgage loan secured by the Woolworth Building, an iconic office tower located in

Downtown Manhattan

• Adjacent to City Hall with convenient access to transportation hubs
• 789k sf, including 12k sf of retail; 68% LTV

Woolworth Building

Blackstone Mortgage Trust 29

Sample Transaction: Aldwych House

 £78 million floating rate, first mortgage loan secured by Aldwych House in central London

• Well located 162k sf prime office building undergoing £28.0 million, value-enhancing, refurbishment; 50% LTV

 Transaction sourced through existing Blackstone relationship with local operating partner paired with a well capitalized

institutional sponsor

Aldwych House

Blackstone Mortgage Trust 30

Illustrative Loan Economics(a)

 BXMT’s senior loans are supported by significant owner’s equity  Prudent use of balance sheet leverage drives attractive risk adjusted returns for BXMT stockholders

LTV Capital Structure $ Cum. Credit Facility Advance $80.0 million 53.3% $80.0 million BXMT Equity $20.0 million 66.7% $100.0 million Owner Equity $50.0 million 100.0% $150.0 million

L+4.0%

Return on Assets(b)

L+12.0%

Gross ROI

L+8.7%

Imputed Core ROE

L+2.0% All-in Cost(b) 80% Advance Rate 4x Leverage Multiple 2.0% Spread 1.5% Management Fee 0.4% G&A 1.0% Working Capital 0.4% Incentive Fee

Overhead(c) Leverage

(a) This illustration is presented solely for demonstrating our business model and should not be viewed as indicative of the results that will be achieved for any particular loan in BXMT’s portfolio or of BXMT’s aggregate results. The loan economics presented are hypothetical and are subject to various risks and uncertainties. See “Forward‐Looking Statements and Other Matters” at the beginning of the presentation for further discussion of such risks and uncertainties. (b) Whole loan yield and all-in cost of leverage include amortization of fees and expenses pursuant to GAAP in addition to current pay rates, and assume no defaults (c) Overhead allocations are illustrative, actual allocations vary materially and depend on expenses incurred, working capital and defensive liquidity needs, overall capital deployment and performance among other factors

Blackstone Mortgage Trust 31

BXMT Relative Value

 Blackstone provides compelling relative value compared to other listed real estate products

Note: The composition of the various categories of REITs being compared with BXMT, as well as the characteristics compared, reflect our current views as of the date appearing in this material

• nly and are not based on any index or other established categorization

Resi mREITs Other Comm mREITs Equity REITs

           

Yield

• Sr. Strategy

   

Dividend Yield Senior Loans Floating Rate Low Earnings Volatility