October 2018 3Q 2018 Earnings Release & Company Supplemental - - PowerPoint PPT Presentation

October 2018 3Q 2018 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 20 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 28 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 September 30, 2018, unless otherwise indicated.

Blackstone Mortgage Trust 2

$11.1 $13.8 YE 2017 3Q'18

BXMT Highlights

Information included in this presentation is as of or for the period ended September 30, 2018, 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 October 22, 2018 (c) Reflects weighted average LTV as of the date investments were originated or acquired by BXMT (d) Includes $467 million of Non-Consolidated Senior Interests and investment exposure to the $1.0 billion 2018 Single Asset Securitization through a $99 million subordinate risk retention interest

BXMT generated 3Q EPS of $0.67 and Core EPS(a) of $0.75 through continued growth in its first mortgage origination business

+24%

($ in billions)

Portfolio Growth(d)

Loan-to-Value(c)(d) Dividend Yield(b)

62% 7.5% 100% 95%

Performing

Floating Rate(d)

Blackstone Mortgage Trust 3

Originations

 $1.4 billion of originations in 3Q and record YTD originations of $7.2 billion, more

than doubling 1Q-3Q 2017 volume

 Continued international growth: originated $316 million of loans in Australia

bringing YTD non-US originations to $1.9 billion Earnings & Dividends

 EPS of $0.67 and Core Earnings(a) per share of $0.75  Book value per share increased to $27.53, up 12% since 2013 re-IPO; paid $0.62 per

share dividend

Third Quarter 2018 Results

Portfolio Composition Capitalization Interest Rates

 Portfolio grew 24% YTD to $13.8 billion(b)  100% performing portfolio with a weighted average origination LTV(b)(c) of 62%  Issued 8.2 million shares at 1.21x P/B, generating $270 million of gross proceeds and

adding $0.38 to book value per share through accretive issuance levels

 Grew credit capacity by $2.2 billion YTD and expanded multi-currency funding

capabilities

(a) See Appendix for a definition and reconciliation to GAAP net income (b) Includes $467 million of Non-Consolidated Senior Interests and investment exposure to the $1.0 billion 2018 Single Asset Securitization through a $99 million subordinate risk retention interest (c) Reflects weighted average LTV as of the date investments were originated or acquired by BXMT

 95% of the portfolio(b) is floating rate  Floating rate assets and matched liabilities support book value and earnings stability

Blackstone Mortgage Trust 4

$2.48 $0.40

Earnings & Dividends

 3Q GAAP EPS of $0.67 and Core Earnings(a) of $0.75 per share, $0.62 per share dividend equates to a 7.5% dividend yield(b)  Earnings in excess of $0.62 quarterly dividend contributed to book value, which has grown 12% since 2013 re-IPO

(a) See Appendix for a definition and reconciliation to GAAP net income (b) Based on annualized dividend and BXMT closing price as of October 22, 2018 (c) TTM GAAP EPS was $2.49; retained Core Earnings refers to the amount of Core Earnings in excess of dividends paid for the periods presented

   

$0.62

Quarterly Dividend

$24.67 $27.53 Re-IPO 2Q'13 3Q'18

+12%

Dividends Paid Retained Core Earnings

Book Value Per Share Growth TTM Core Earnings Per Share(c)

116%

TTM Dividend Coverage

Blackstone Mortgage Trust 5

$3.5 $5.3 $0.1 $1.6 $0.3 1Q'17 - 3Q'17 1Q'18 - 3Q'18

Originations

 Origination volume of $1.4 billion in 3Q; $7.2 billion YTD volume is more than double 1Q-3Q 2017 volume  Blackstone Real Estate’s scale and reach provide opportunities to access attractive investments in a wide range of markets

($ in billions)

Origination Volume 100% performing

  100% floating rate

$286 million average loan size(b)



YTD 2018 Origination Highlights

 59% LTV(a)

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

$7.2 $3.6

North America Europe Australia

+102%

Blackstone Mortgage Trust 6

44% 23% 14% 8% 2% 1% 8%

Condo Spanish Assets Retail

Portfolio Composition

 $13.8 billion portfolio(a) (113 assets) secured by institutional quality real estate, with 54% in gateway markets  High quality 100% performing portfolio with low weighted average LTV(a)(b) of 62%

Office Hotel Other Multi

Major Market Focus(a) Collateral Diversification(a)

(a) Includes $467 million of Non-Consolidated Senior Interests and investment exposure to the $1.0 billion 2018 Single Asset Securitization through a $99 million subordinate risk retention interest (b) Reflects weighted average LTV as of the date investments were originated or acquired by BXMT

Weighted Average LTV(a)(b)

62%

$13.8B

portfolio AU 2% 1% BE ES 8% AZ CO 1% 1% DC 2% LA 1% NC 1% OH 1% 1% OR PA 1% TN 1% 1% WA GA 2% NV 2% TX 2% 2% CAN FL 4% HI 5% IL 6% U.K. 6% VA 6% CA 15% MD 1% MA 2% NY 25% States that comprise less than 1% of total portfolio

Blackstone Mortgage Trust 7

$8.6 $10.4 $1.4 $0.9 $1.3 $2.2 YE 2017 3Q'18

Capitalization

 Increased credit capacity by $2.2 billion YTD and expanded multi-currency funding capabilities  Total asset-level financing capacity of $13.5 billion was 72% utilized at quarter-end  $270 million of equity raised at 1.21x P/B resulting in $0.38 per share of book value accretion

Credit Capacity Growth

(a) Includes $1.3 billion of consolidated securitized debt obligation as well as $0.9 billion of securitized debt held by third-parties in the $1.0 billion 2018 Single Asset Securitization, which is not consolidated on BXMT’s balance sheet. Refer to our consolidated financial statements for further discussion of the subordinated risk retention interest related to the 2018 Single Asset Securitization. (b) Includes $81 million of loan participations sold and $467 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. (c) Represents (i) total outstanding secured debt agreements and convertible notes, less cash, to (ii) total equity

Credit Facilities 11 Credit Providers Corporate Debt Convertible Notes and Secured Facility Corporate Obligations Senior Loan Interests(b)

$6.9 $0.8 $0.5 $7.7

Securitized Debt(a)

$2.2

CLO and Single Asset Securitizations

2.3x

Debt-to-Equity Ratio(c)

Senior Syndications

Financing

(Outstanding Balance)

+19%

$13.5 $11.3

($ in billions)

Credit Facilities Syndications Securitizations

Blackstone Mortgage Trust 8

$0.00 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 2.26% 2.76% 3.26% 3.76% 4.26% 4.76% 5% 95%

Interest Rates

 95% of the portfolio(a) is floating rate  A 1.0% increase in USD LIBOR would increase earnings per share by $0.24 per annum(b)

(a) Includes $467 million of Non-Consolidated Senior Interests and investment exposure to the $1.0 billion 2018 Single Asset Securitization through a $99 million subordinate risk retention interest (b) Changes in interest rates and credit spreads may affect our net interest income from loans and other investments. Reflects impact on net income, net of incentive fees. See Appendix for important disclosures.

Earnings Sensitivity to USD LIBOR(b)

(Annual Dollars of Earnings per Share)

Earnings Per Share USD LIBOR

Portfolio Fixed vs. Floating(a)

(% of Total Portfolio Exposure)

Floating Fixed

Appendix

Blackstone Mortgage Trust 10

GAAP Net Income Adjustments Core Earnings

Interest Income 203.1 $ $— 203.1 $ Interest Expense (98.0) 0.6 (97.4) Management and Incentive Fees (18.4) — (18.4) General and Administrative Expenses (1.7) — (1.7) Non-Cash Compensation (6.7) 6.7 — Realized Foreign Currency Gain, net(a) — 1.9 1.9 Net Income Attributable to Non-controlling Interests (0.1) — (0.1) Total 78.2 $ 9.2 $ 87.4 $ ($0.2) $1.2 $2.3 2016 2017 2018 YTD

— —

Appendix – Third Quarter 2018 Operating Results & Net Funding

$2.3 billion

YTD 2018 Net Fundings

Net Funding(b)

($ in billions)

Operating Results

($ in millions)

(a) Primarily represents the forward points earned on our foreign currency forward contracts, which reflect the interest rate differentials between the applicable base rate for our foreign currency investments and USD LIBOR. These forward contracts effectively convert the rate exposure to USD LIBOR, resulting in additional interest income earned in U.S. dollar terms. These amounts are not included in GAAP net income, but rather as a component of Other Comprehensive Income in our consolidated financial statements. (b) Excludes the impact of changes in foreign currency rates and related hedges for non-USD investments

$0.75

Core Earnings per Share

$0.67

Net Income per Share

Fundings Repayments

$466 million

3Q’18 Net Fundings

Blackstone Mortgage Trust 11

Origination Total Principal Net Book Maximum Property Loan Per Origination Loan Type Date (a) Loan (b)(c) Balance (b)(c) Value Maturity (d) Location Type SQFT / Unit / Key LTV (a) Loan 1 Senior loan 3/22/2018 $ 1,160 $ 1,160 $ 1,153 L + 3.15 % L + 3.40 % 3/15/23 Diversified - Spain Spanish Assets n/a 71 % Loan 2 Senior loan 5/11/2017 753 679 675 L + 3.40 % L + 3.60 % 6/10/2023 Northern Virginia Office $332 / sqft 62 % Loan 3 Senior loan (b) 8/6/2015 481 481 88 4.48 % 5.82 % 10/29/2022 Diversified - EUR Other n/a 71 % Loan 4 Senior loan 5/1/2015 355 340 339 L + 2.85 % L + 3.02 % 5/1/2023 New York Office $431 / sqft 68 % Loan 5 Senior loan 2/13/2018 330 312 312 L + 3.42 % L + 3.54 % 3/9/2023 New York Multi $756,199 / unit 62 % Loan 6 Senior loan 1/7/2015 315 309 309 L + 3.50 % L + 3.71 % 1/9/2021 New York Office $264 / sqft 53 % Loan 7 Senior loan 3/31/2017 339 267 264 L + 3.50 % L + 3.88 % 8/9/2023 Maui Hotel $351,479 / key 61 % Loan 8 Senior loan 8/3/2016 276 229 228 L + 4.66 % L + 5.25 % 8/9/2021 New York Office $314 / sqft 57 % Loan 9 Senior loan 12/22/2017 225 225 223 L + 2.80 % L + 3.16 % 1/9/2023 Chicago Multi $326,087 / unit 65 % Loan 10 Senior loan 5/9/2018 219 219 217 L + 3.00 % L + 3.24 % 5/9/2023 New York Industrial $62 / sqft 70 % Loan 11 Senior loan 6/23/2015 221 214 214 L + 3.65 % L + 3.78 % 5/8/2022 Washington DC Office $239 / sqft 72 % Loan 12 Senior loan 6/4/2015 208 208 210 L + 4.19 % L + 4.14 % 5/21/2021 Diversified - CAN Hotel $43,920 / key 54 % Loan 13 Senior loan 4/15/2016 225 200 198 L + 3.25 % L + 3.84 % 4/9/2023 New York Office $186 / sqft 40 % Loan 14 Senior loan 2/25/2014 195 195 195 L + 4.01 % L + 4.46 % 3/9/2021 Diversified - US Hotel $102,470 / key 55 % Loan 15 Senior loan 6/4/2018 190 190 188 L + 3.50 % L + 3.86 % 6/9/2024 New York Hotel $313,015 / key 52 % Loans 16 - 112 Senior loans Various 10,352 7,499 7,365 5.87 % (e) 6.22 % (e) Various Various Various Various 63 % Total/Wtd. avg. $ 15,844 $ 12,727 $ 12,177 5.52 % 5.89 % 3.8 yrs 63 % Cash All-in Coupon Yield

(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 September 30, 2018, three loans in the portfolio have been financed with an aggregate $467 million of Non-Consolidated Senior Interests, which are included in the table above. (c) Portfolio excludes our $99 million subordinate risk retention interest in the $1.0 billion 2018 Single Asset Securitization (d) Maximum maturity assumes all extension options are exercised; however, floating rate loans generally may be repaid prior to their final maturity without penalty (e) Consists of both floating and fixed rates. Coupon and all-in yield assume applicable floating benchmark rates for weighted-average calculation.

Portfolio Details

($ in millions)

Blackstone Mortgage Trust 12

September 30, 2018 December 31, 2017 Assets Cash and cash equivalents 86,987 $ 69,654 $ Restricted cash — 32,864 Loans receivable, net 12,176,516 10,056,732 Other assets 155,972 99,575 Total assets 12,419,475 $ 10,258,825 $ Liabilities and equity Secured debt agreements, net 6,841,759 $ 5,273,855 $ Loan participations sold, net 81,044 80,415 Securitized debt obligations, net 1,284,362 1,282,412 Convertible notes, net 780,951 563,911 Other liabilities 123,366 140,826 Total liabilities 9,111,482 7,341,419 Commitments and contingencies — — Equity Class A common stock, $0.01 par value 1,197 1,079 Additional paid-in capital 3,898,841 3,506,861 Accumulated other comprehensive loss (32,849) (29,706) Accumulated deficit (566,417) (567,168) Total Blackstone Mortgage Trust, Inc. stockholdersʼ equity 3,300,772 2,911,066 Non-controlling interests 7,221 6,340 Total equity 3,307,993 2,917,406 Total liabilities and equity 12,419,475 $ 10,258,825 $

Consolidated Balance Sheets

($ in thousands, except per share data)

Blackstone Mortgage Trust 13

Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Income from loans and other investments Interest and related income 203,107 $ 146,446 $ 550,011 $ 391,787 $ Less: Interest and related expenses 97,955 67,891 255,677 168,917 Income from loans and other investments, net 105,152 78,555 294,334 222,870 Other expenses Management and incentive fees 18,368 13,243 56,248 40,557 General and administrative expenses 8,443 7,419 25,897 22,219 Total other expenses 26,811 20,662 82,145 62,776 Income before income taxes 78,341 57,893 212,189 160,094 Income tax provision 48 83 272 265 Net income 78,293 $ 57,810 $ 211,917 $ 159,829 $ Net income attributable to non-controlling interests (128) (88) (481) (88) Net income attributable to Blackstone Mortgage Trust, Inc. 78,165 $ 57,722 $ 211,436 $ 159,741 $ Per share information (basic and diluted) Weighted-average shares of common stock outstanding 116,203,140 95,013,087 111,251,864 95,004,188 Net income per share of common stock 0.67 $ 0.61 $ 1.90 $ 1.68 $

Consolidated Statements of Operations

($ in thousands, except per share data)

Blackstone Mortgage Trust 14

Three Months Ended September 30, 2018 June 30, 2018 Net income(a) 78,165 $ 72,312 $ GE purchase discount accretion adjustment(b)

—

8,723 Non-cash compensation expense 6,734 6,778 Realized foreign currency gain, net(c) 1,930 1,998 Other items 590 565 Core Earnings 87,419 $ 90,376 $ Weighted-average shares outstanding, basic and diluted 116,203 109,069 Core Earnings per share, basic and diluted 0.75 $ 0.83 $ Three Months Ended September 30, 2018 June 30, 2018 Net income(a) 78,165 $ 72,312 $ Weighted-average shares outstanding, basic and diluted 116,203 109,069 Earnings per share, basic and diluted 0.67 $ 0.66 $ Three Months Ended September 30, 2018 June 30, 2018 Stockholdersʼ equity 3,300,772 $ 3,023,480 $ Shares Class A common stock 119,669 111,442 Deferred stock units 221 213 Total outstanding 119,890 111,655 Book value per share 27.53 $ 27.08 $

Per Share Calculations

(a) Represents net income attributable to Blackstone Mortgage Trust, Inc. (b) Historically, we have deferred in Core Earnings the accretion of purchase discount attributable to a certain pool of GE portfolio investments acquired in May 2015, until repayment in full of the remaining investments in the pool was substantially assured. During the three months ended June 30, 2018, it was determined that repayment of the remaining loans in the deferral pool was substantially assured. As such, the $8.7 million of deferred purchase discount, which has been previously recognized in GAAP net income, was realized in Core Earnings during the three months ended June 30, 2018. (c) Primarily represents the forward points earned on our foreign currency forward contracts, which reflect the interest rate differentials between the applicable base rate for our foreign currency investments and USD LIBOR. These forward contracts effectively convert the rate exposure to USD LIBOR, resulting in additional interest income earned in U.S. dollar terms. These amounts are not included in GAAP net income, but rather as a component of Other Comprehensive Income in our consolidated financial statements.

Core Earnings Reconciliation Book Value per Share Earnings per Share

(Amounts in thousands, except per share data)

Blackstone Mortgage Trust 15

TTM Ended Sept 30, 2018 Sept 30, 2018 June 30, 2018 Mar 31, 2018 Dec 31, 2017 Net income(a) 269,326 $ 78,165 $ 72,312 $ 60,958 $ 57,891 $ GE purchase discount accretion adjustment(b) 8,223 — 8,723 (17) (483) Non-cash compensation expense 26,709 6,734 6,778 6,976 6,221 Realized foreign currency gain, net(c) 5,137 1,930 1,998 854 355 Other items 2,208 590 565 534 519 Core Earnings 311,603 $ 87,419 $ 90,376 $ 69,305 $ 64,503 $ Weighted-average shares outstanding, basic and diluted 108,116 116,203 109,069 108,398 98,811 Net income per share, basic and diluted 2.49 $ 0.67 $ 0.66 $ 0.56 $ 0.59 $ Core Earnings per share, basic and diluted 2.88 $ 0.75 $ 0.83 $ 0.64 $ 0.65 $ Three Months Ended

Reconciliation of Net Income to Core Earnings

(a) Represents net income attributable to Blackstone Mortgage Trust, Inc. (b) Historically, we have deferred in Core Earnings the accretion of purchase discount attributable to a certain pool of GE portfolio investments acquired in May 2015, until repayment in full of the remaining investments in the pool was substantially assured. During the three months ended June 30, 2018, it was determined that repayment of the remaining loans in the deferral pool was substantially assured. As such, the $8.7 million of deferred purchase discount, which has been previously recognized in GAAP net income, was realized in Core Earnings during the three months ended June 30, 2018. (c) Primarily represents the forward points earned on our foreign currency forward contracts, which reflect the interest rate differentials between the applicable base rate for our foreign currency investments and USD LIBOR. These forward contracts effectively convert the rate exposure to USD LIBOR, resulting in additional interest income earned in U.S. dollar terms. These amounts are not included in GAAP net income, but rather as a component of Other Comprehensive Income in our consolidated financial statements.

(Amounts in thousands, except per share data)

Blackstone Mortgage Trust 16

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. Earnings Sensitivity to LIBOR: Reflects the impact on net income, net of incentive fees, assuming no changes in credit spreads, portfolio composition, or asset performance. Assumes no change in general and administrative expenses, management fees, or

• ther non-interest expenses relative to those incurred for the quarter ended September 30, 2018.

Company Supplemental

Blackstone Mortgage Trust 18

Blackstone Mortgage Trust, Inc. Overview

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

America, Europe and Australia

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 19

Superior Real Estate Platform

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

Investor Capital Under Management

115 professionals

$17 billion AUM

• Senior loans
• $12.8B(a) of assets
• $4.0B equity market

capitalization

• Mezzanine debt
• $7.7B strategy

$120B

• CMBS strategy
• $4.0B 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 $467 million of Non-Consolidated Senior Interests and investment exposure to the $1.0 billion 2018 Single Asset Securitization through a $99 million subordinate risk retention interest

BREP Global 32% BREP Europe 15% BREP Asia 11% BPP Core 28% BREDS 14%

Blackstone Mortgage Trust 20

Superior Real Estate Platform(a)

 One of the largest real estate owners and operators in every sector and geography

(a) As of June 30, 2018. In addition to wholly-owned assets, figures include leased assets, collateral, assets managed through stakes in publicly-traded companies and assets owned through joint-ventures (reflected at 100%), as applicable.

Residential

300k

Units

Hospitality

152k

Owned Keys

Office

226M

Square Feet

Industrial

383M

Square Feet

Current Holdings

Blackstone Mortgage Trust 21

Superior Real Estate Platform

 500+ people, 12 offices, 3 distinct strategies but one fully integrated real estate platform

Blackstone Advantage

Global Business

• 41% of RE partners have

international experience Scale Capital

• $120 billion RE AUM
• $10 billion raised YTD ‘18(a)

Long View

• Long term capital

commitments

• Never a forced seller

Regular Meetings Single Perspective

1

Global Real Estate Platform

27

Partners average 13 years at Blackstone Weekly

• Partners’ Meeting
• Global ICMs
• Investment Review

Committees Quarterly

• Board Meetings
• Portfolio Asset Review

Annual

• Global Asset Reviews
• Strategy Sessions

(a) Represents gross fundraising as of September 30, 2018

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Nadeem Meghji

Head of Real Estate Americas Senior Managing Director of Blackstone Real Estate

Kathleen McCarthy

Global Co-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

Kenneth Caplan

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

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

David Fawer

Senior Managing Director of BREDS

Originations (US. & Europe)

38 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

10 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)

Rob Harper

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

Blackstone Mortgage Trust 23

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

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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 25

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 26

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

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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

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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

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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

Agency Resi mREITs Other Comm mREITs Equity REITs

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Yield

• Sr. Strategy

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Dividend Yield Senior Loans Floating Rate Low Earnings Volatility