Kkr Real Estate Finance Trust Inc. · NYSE:KREF
Kkr Real Estate Finance Trust — Q3 2021 Earnings Presentation
27 slides from Kkr Real Estate Finance Trust's earnings presentation, Oct 26, 2021
Slide 1: Third Quarter 2021 Supplemental Information
KKR Real Estate Finance Trust Inc. Third Quarter 2021 Supplemental Information October 25, 2021
Slide 2: Legal Disclosures
Legal Disclosures This presentation has been prepared for KKR Real Estate Finance Trust Inc. (NYSE: KREF) for the benefit of its stockholders. This presentation is solely for informational purposes in connection with evaluating the business, operations and financial results of KKR Real Estate Financ
Slide 3: KKR Real Estate Finance Trust Inc. Overview
KKR Real Estate Finance Trust Inc. Overview Best In Class Conservative KREF’s Manager Fully Portfolio Balance Sheet Integrated with KKR $5.8 Billion $6.7 Billion 26% Investment Portfolio Financing Capacity KKR Ownership in KREF 98% 71% 81% $429 Billion $24 Billion Senior Loans Multifamily & Office F
Slide 4: Third Quarter 2021 Highlights
Third Quarter 2021 Highlights • 3Q Net income(1) of $0.57 per diluted share and Distributable Earnings(2) of $0.62 per diluted share; 144% dividend coverage in 3Q • $6.4 million, or $0.09 per diluted share benefit from acceleration of loan and prepayment fees in connection with loan repayments Finan
Slide 5: 3Q'21 Financial Summary
3Q'21 Financial Summary Income Statement Balance Sheet ($ in Millions) 3Q21 ($ in Millions) 3Q21 Net Interest Income $45.5 Total Portfolio $5,513.7(2) Other Income 2.3 Term Credit Facilities 847.0 Operating Expenses and Other (10.9) Term Lending Agreements 1,008.3 Preferred stock dividends and redem
Slide 6: Recent Operating Performance
Recent Operating Performance Net Income(1) and Distributable Earnings(2) Dividends and Book Value Per Share 3Q'20 2Q'21 3Q'21 ($ in Millions) 3Q'20 2Q'21 3Q'21 Net income: Dividend per share: $31.4 $29.3 $32.0 $0.43 $0.43 $0.43 Distributable earnings: Dividend yield on book value per share: $32.5 $3
Slide 7: Conservative Portfolio Construction
Conservative Portfolio Construction Investment Portfolio Property Type <1% <2% 100% 100% 83% 27% 80% 80% 71% 6% Senior Loan 62% Multifamily 60% 60% and Office Non-Senior/ 99% 98% Other Loan Hospitality and 40% 40% 31% Retail Securities 67% 20% 20% 8% 8% 0% 0% At IPO 3Q'20 3Q'21 At IPO 3Q'20 3Q'21 Av
Slide 8: Last Twelve Months Loan Activity
Last Twelve Months Loan Activity Portfolio Funding Activity – Outstanding Principal(1) ($ in Millions) Future Funding Obligations(2) $7,051 $6,466 $1,225 $1,143 $935 $5,784 $848 $5,497 $5,470 $271 $454 $559 $244 $462 $498 $535 $472 $576 $5,618 $5,618 $5,618 $5,826 $5,826 $5,330 $5,035 $4,998 3Q'20 4
Slide 9: 3Q'21 Loan Originations – Case Studies
3Q’21 Loan Originations – Case Studies Investment Mountain View Office Brisbane Life Science Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Loan Size $250.0 million(1) $95.0 million Location Mountain View, CA Brisbane, CA Collateral Five Class-A Office Buildings totaling 446k SF Class
Slide 10: 3Q'21 Loan Originations – Case Studies
3Q’21 Loan Originations – Case Studies Investment Multifamily Portfolio Bronx Industrial Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Loan Size $68.2 million $228.8 million(1) Plano, TX Location Bronx, NY Arlington, TX Collateral 360-unit Class-A Multifamily Portfolio Class-A Indust
Slide 11: 3Q'21 Loan Originations – Case Studies
3Q’21 Loan Originations – Case Studies Investment Bellevue Office Denver Multifamily Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Loan Size $260.4 million(1) $70.3 million Location Bellevue, WA Denver, CO Collateral Class-A Office totaling 609k SF 242-unit Class-A Multifamily Loan P
Slide 12: 3Q'21 Loan Originations – Case Studies
3Q’21 Loan Originations – Case Studies Investment Hospitality Portfolio Arlington Multifamily Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Loan Size $168.1 million $381.0 million Location The Woodlands, TX Arlington, VA Collateral 909-key Full Service Hotel Portfolio 912-unit Class-
Slide 13: KREF Loan Portfolio by the Numbers
KREF Loan Portfolio by the Numbers Total Portfolio Growth Investment Type(3) Interest Rate Type ($ in Millions) Mezz/Other Current Portfolio: 0.9% Fixed 0.1% $6.0 billion(1) $5,826 Including net funding and repayment $5,221 $5,035 activity subsequent to quarter-end $3,383 Senior Floating Loans 99.9%
Slide 14: Portfolio Credit Quality Remains Strong
Portfolio Credit Quality Remains Strong • Collected 97.4% of interest payments due on loan portfolio and 100% on loans rated 4 or better Loan-to-Value(1,2) Risk Rating Distribution (% of total loan portfolio) (% of loan portfolio) Weighted Average Weighted Average 2Q'21 LTV(3): 67% 2Q'21 87% Risk Ra
Slide 15: Case Studies: Watch List Loans (Risk Rating 4 & 5)
Case Studies: Watch List Loans(1) (Risk Rating 4 & 5) Investment Portland Retail(2) New York Condo Brooklyn Hotel Queens Industrial New York Condo Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Investment Da
Slide 16: Financing Overview: 81% Non-Mark-To-Market
Financing Overview: 81% Non-Mark-To-Market • Diversified financing sources totaling $6.7 billion with $2.2 billion of undrawn capacity Summary of Outstanding Financing Leverage Ratios ($ in Millions) Maximum Outstanding Weighted Avg. Advance Non- Capacity Face Amount Coupon Rate MTM (1) 3.4x Term Cr
Slide 17: Financing Overview: Term Credit Facilities
Financing Overview: Term Credit Facilities ($ in Millions) Counterparty Total / Weighted Average Drawn $495 $260 $92 $847 Capacity $1,000 $600 $240 $1,840 Collateral: Loans / Principal 7 Loans / $753 5 Loans / $360 5 Loans / $157 17 Loans / $1,270 Balance Final Stated Maturity(1) September 2026 Dece
Slide 18: Liquidity Overview
Liquidity Overview • In addition to the available liquidity below, KREF had $373.7 million of unencumbered senior loans that can be pledged to financing facilities subject to lender approval, as of September 30, 2021. Sources of Available Liquidity ($ in Millions) $600.0 $5.4 $516.2 $500.0 $18.1 $40
Slide 19: Portfolio Benefits from Attractive in the Money LIBOR Floors
Portfolio Benefits from Attractive in the Money LIBOR Floors • 99.9% of the loan portfolio is indexed to one-month USD LIBOR • Portfolio benefits from current low rate environment given in-place LIBOR floors 50% of the portfolio is subject to a LIBOR floor of at least 0.75% Portfolio weighted av
Slide 20: Appendix
Appendix 20
Slide 21: Portfolio Details
Portfolio Details Investment Total Whole Committed Current Net Future Max Remaining Loan Per Risk # Investment Location Property Type Coupon(5)(6) LTV(5)(8) Loan(2) (2) Date Principal Amount Principal Amount Equity(3) Funding(4) Term (Yrs)(5)(7) SF / Unit / Key Rating Senior Loans(1) 1 Senior Loan A
Slide 22: Portfolio Details
Portfolio Details (1) Senior loans include senior mortgages and similar credit quality investments, including junior participations in our originated senior loans for which we have syndicated the senior participations and retained the junior participations for our portfolio and excludes vertical loa
Slide 23: Fully Extended Loan Maturities
Fully Extended Loan Maturities • Fully extended weighted average loan maturity of 3.3 years(1) Fully Extended Loan Maturities(1) ($ in Millions) $2,500 $2,108.9 $2,000 $1,772.0 $1,500 $1,000 $835.4 $613.5 $500 $261.5 $152.0 $47.3 $0 2021 2022 2023 2024 2025 2026 2027 (1) Excludes RECOP I CMBS B-Piec
Slide 24: Consolidated Balance Sheets
Consolidated Balance Sheets (in thousands - except share and per share data) September 30, 2021 December 31, 2020 Assets Cash and cash equivalents $ 307,731 $ 110,832 Commercial real estate loans, held-for-investment 5,442,734 4,844,534 Less: Allowance for credit losses (58,807) (59,801) Commercial
Slide 25: Consolidated Statements of Income
Consolidated Statements of Income (in thousands - except share and per share data) Three Months Ended Nine Months Ended September 30, 2021 June 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 Net Interest Income Interest income $ 75,320 $ 67,149 $ 67,689 $ 207,235 $ 205,987 Interes
Slide 26: Reconciliation of GAAP Net Income to Distributable Earnings
Reconciliation of GAAP Net Income to Distributable Earnings (in thousands - except share and per share data) Three Months Ended September 30, 2021 June 30, 2021 September 30, 2020 Net Income (Loss) Attributable to Common Stockholders $ 31,989 $ 29,264 $ 31,351 Adjustments Non-cash equity compensatio
Slide 27: Key Definitions
Key Definitions “Distributable Earnings": Commencing for all periods ending on or after December 31, 2020, the Company has elected to present Distributable Earnings, a measure that is not prepared in accordance with GAAP, as a supplemental basis to KREF’s net income as determined in accordance with
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