Kkr Real Estate Finance Trust Inc. · NYSE:KREF
Kkr Real Estate Finance Trust — Q4 2024 Earnings Presentation
39 slides from Kkr Real Estate Finance Trust's earnings presentation, February 2025
Slide 1: Investor Presentation
Investor Presentation FEBRUARY 2025
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 KREF’s Manager Fully Best In Class Portfolio Conservative Balance Sheet Integrated with KKR $5.9 B $8.0 B 15% Loan Portfolio Financing Capacity KKR Ownership in KREF 100% 60% 79% $638 B Senior Loans Multifamily & Fully Non-Mark-to-Market(2) Global AUM(4) I
Slide 4: Investment Highlights
Investment Highlights 4 3 5 Differentiated Best in Class Investment Conservative Investment Portfolio 2 Liability Cycle Tested, Strategy Management Experienced Leadership Team 6 1 KKR Strong Levels of Sponsorship Liquidity KKR Real Estate Finance Trust (“KREF”) benefits from its integration within K
Slide 5: KKR Sponsorship
KKR Sponsorship
Slide 6: KKR Platform – A Leading Global Asset Manager
KKR Platform – A Leading Global Asset Manager Founded 1976 $638 B 770 26 / 19 Assets Under Management Investment Professionals Cities / Countries KKR Real Estate Attributes KKR operates with a single culture that ~$80 billion in AUM in Real Estate strategies globally(1) rewards investment discipline
Slide 7: Integrated Global Real Estate Platform
Integrated Global Real Estate Platform Founded in 2011 and fully integrated across both Real Estate Debt and Equity, as well as the Americas, Europe, and Asia Real Estate Loans $58B of Collateral Value(1) Integrated Real Estate Platform Own or lend on Real Estate $261B RE assets Real Estate Equity C
Slide 8: KREF Integration with KKR
KREF Integration with KKR KREF differentiates itself by seeking opportunities where it has sourcing, underwriting and execution advantages through KKR’s brand, industry knowledge, relationships and deep bench of investment professionals KKR Private Equity $107B of AUM, 200 KKR Credit Integration Dri
Slide 9: Experienced Leadership Team
Experienced Leadership Team
Slide 10: KKR Real Estate Credit Investment Committee
KKR Real Estate Credit Investment Committee Diversity of Manager’s Investment Committee creates a thorough vetting process US Investment Committee Matt Salem Patrick Mattson Ralph Rosenberg Chris Lee CEO KREF President & COO KREF Chairman of KREF Board Vice Chairman of KREF Board Member of KREF Boar
Slide 11: KKR Real Estate Finance Trust Team
KKR Real Estate Finance Trust Team Leadership Team Ralph Rosenberg Chris Lee Matt Salem Patrick Mattson Kendra Decious Chairman of the Board Vice Chairman of the Board Chief Executive Officer President Chief Financial Officer Member of the Board Chief Operating Officer Treasurer Senior Investment Te
Slide 12: Differentiated Investment Strategy
Differentiated Investment Strategy
Slide 13: Differentiated, Conservative Investment Strategy
Differentiated, Conservative Investment Strategy Lending on institutional quality real estate owned by high-quality sponsors in top markets Institutional Quality Top Markets with High-Quality, Experienced & Commercial Real Estate Strong Underlying Fundamentals Well-Capitalized Sponsors Select Exampl
Slide 14: Best In Class Investment Portfolio
Best In Class Investment Portfolio
Slide 15: KREF Loan Portfolio by the Numbers
KREF Loan Portfolio by the Numbers Total Portfolio(1) Investment Type Interest Rate Type ($ in Millions) Property Type (3) Geography (2) 4% 4% 13% 5% 5% Washington, D.C. Office(4) Multifamily 9% 17% 5% 15% 100% 9% Other <4%: 14% (1) Includes loans, real estate owned and equity method investments (2)
Slide 16: Multifamily and Office Loan Overview
Multifamily and Office Loan Overview Multifamily: 47% of Loan Portfolio Office: 19% of Loan Portfolio $104 M 70% 0% $150 M 62% 1.4% Average Loan Size(1) W.A. LTV(2) Construction Loans Average Loan Size(1) W.A. LTV(2) Co-Working Exposure 83% 92% 2014 57% 85% 8.5 years W.A. Occupancy W.A. Occupancy Me
Slide 17: KREF Office Loan Portfolio Overview
KREF Office Loan Portfolio Overview KREF Office Loan Portfolio Office Portfolio Breakdown Current Current Loan Investment Loan Commitment Principal per SF Max Term 5-Rated Location Date Purpose ($ Millions) ($ Millions) ($) (Years) Office 17% Minneapolis, MN Nov-17 Refinance 199.4 194.4 182 0.5 Risk
Slide 18: KREF Life Science Loan Portfolio Overview
KREF Life Science Loan Portfolio Overview 100% of KREF’s loan exposure is located in the top two Life Science markets KREF Life Science Loan Portfolio Life Science Portfolio Breakdown Current Current Loan Investment Loan Commitment Principal per SF Max Term Location Date Purpose ($ Millions) ($ Mill
Slide 19: Portfolio Credit Quality Overview
Portfolio Credit Quality Overview Collected 100% of interest payments due on the loan portfolio in 4Q'24 Loan-to-Value(1) Risk Rating Distribution Loan 51 Count 0 1 2 3 3Q '24 < Weighted Average LTV(2): 65% Weighted Average Risk Rating(2): 3.2 Loan Count 0 0 47 2 2 4Q '24 Weighted Average LTV(2): 65
Slide 20: Watch List Migrations Quarter-over-Quarter
Watch List Migrations Quarter-over-Quarter In 4Q'24, KREF had one risk rating upgrade 3Q'24 Watch List Intra-Quarter Activity 4Q'24 Watch List Total Principal: $408 million Risk Rating: 5 Total Principal: $306 million Minneapolis Office Minneapolis Office West Hollywood Multifamily West Hollywood Mu
Slide 21: Case Studies: Watch List Loans
Case Studies: Watch List Loans Investment Minneapolis Office West Hollywood Multifamily San Diego Multifamily Raleigh Multifamily Loan Type Floating-Rate Senior Loan(1) Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Investment Date November 2017 January 2022 October 20
Slide 22: Overview of Real Estate Assets
Overview of Real Estate Assets As of December 31, 2024, equity(1) of approximately $295 million ($4.28 per share) was held in our Real Estate Assets Real Estate Owned Location Property Type Acquisition Date Square Footage Investment Amount(2) Investment Amount ($ in millions) per Square Foot Mountai
Slide 23: Conservative Liability Management
Conservative Liability Management
Slide 24: Financing Overview: 79% Non-Mark-To-Market
Financing Overview: 79% Non-Mark-To-Market Diversified financing sources totaling $8.0 billion with $3.1 billion of undrawn capacity Summary of Outstanding Financing Leverage Ratios Outstanding Maximum Weighted Avg. Advance Non- ($ in Millions) Capacity Principal Coupon(1) Rate MTM Amount (2) Term C
Slide 25: KREF Debt Maturities
KREF Debt Maturities No final facility maturities until 2026 and no corporate debt due until 2027 The table below may display estimated earlier repayments based on the maturity dates of underlying loan collateral Upcoming Debt Maturities by Year ($ in Millions) $1,856 Note: Does not include collater
Slide 26: Financing Overview: Term Credit Facilities
Financing Overview: Term Credit Facilities ($ in Millions) Counterparty Total or Weighted Average Drawn $652 $277 $109 $1,038 Capacity $1,000 $600 $400 $2,000 Collateral: Loans / Principal 9 Loans / $943 7 Loans / $405 4 Loans / $210 20 Loans / $1,558 Balance Final Stated Maturity(1) September 2029
Slide 27: Liquidity Overview
Liquidity Overview In addition to the available liquidity below, KREF had $247 million of total unencumbered assets(1) as of December 31, 2024 Sources of Available Liquidity (4) ($ in Millions) (2) (1) Unencumbered assets includes $209 million of real estate owned assets and $36 million of investmen
Slide 28: Earnings Sensitivity to Change in SOFR
Earnings Sensitivity to Change in SOFR 99% floating-rate loan portfolio indexed to Term SOFR Quarterly Net Interest Income Per Share Sensitivity to Change in Market Rates(1) Term SOFR = 4.33% ($ Impact Per Share) As of December 31, 2024 Change in SOFR Note: Based on portfolio as of December 31, 2024
Slide 29: Recent Operating Performance
Recent Operating Performance Net Income and Distributable Earnings Dividends and Book Value Per Share ($ in Millions) 1Q'24 2Q'24 3Q'24 4Q'24 1Q'24 2Q'24 3Q'24 4Q'24 Net income (loss): Dividend per share: ($8.7) $20.2 ($13.0) $14.6 $0.25 $0.25 $0.25 $0.25 Distributable earnings (loss): Dividend yiel
Slide 30: Key Highlights
Key Highlights Best in class investment portfolio – 60% Fully integrated with KKR; aligned with Multifamily and Industrial shareholders – 15% ownership; ~$80B of real estate AUM Scaled investment portfolio – $5.9 billion senior Experienced leadership & asset management loan portfolio team – 75+ year
Slide 31: Appendix
Appendix
Slide 32: Portfolio Details
Portfolio Details ($ in Millions) Committed Outstanding Investment Total Whole Net Max Remaining Loan / Investment Origination Risk # Investment(1) Location Property Type Principal / Principal / Coupon(4)(5) Date Loan(2) Equity(3) Term (Yrs)(4)(6) Per LTV(4)(8) Rating Investment Investment SF / Unit
Slide 33: Portfolio Details
Portfolio Details Committed Outstanding Loan / Investment Investment Total Whole Principal / Principal / Net Max Remaining Origination Risk ($ in# Millions)Investment (1) Location Property Type Date Loan(2) Investment Investment Equity(3) Coupon(4)(5) Term (Yrs)(4)(6) Per LTV(4)(8) Rating SF / Unit
Slide 34: Portfolio Details
Portfolio Details 1. Our total portfolio represents the current principal amount or investment amount on senior and mezzanine loans, real estate assets and other investments. Excludes loans that were fully written off. For Senior Loan 8, the total whole loan is $199.4 million, including (i) a fully
Slide 35: Fully Extended Loan Maturities
Fully Extended Loan Maturities Fully extended weighted average loan maturity of 2.0 years Fully Extended Loan Maturities ($ in Millions) Note: Based on current principal amount. Excludes real estate owned and equity method investments. Plano, TX loan extended post year-end 35
Slide 36: Consolidated Balance Sheets
Consolidated Balance Sheets (in thousands - except share and per share data) December 31, 2024 December 31, 2023 Assets Cash and cash equivalents $ 104,933 $ 135,898 Commercial real estate loans, held-for-investment 5,888,622 7,343,548 Less: Allowance for credit losses (117,103) (210,470) Commercial
Slide 37: Consolidated Statements of Income
Consolidated Statements of Income (in thousands - except share and per share data) Three Months Ended Year Ended December 31, 2024 September 30, 2024 December 31, 2023 December 31, 2024 December 31, 2023 Net Interest Income Interest income $ 123,610 $ 140,150 $ 165,024 $ 564,629 $ 640,412 Interest e
Slide 38: Reconciliation of GAAP Net Income (Loss) to Distributable Earnings (Loss)
Reconciliation of GAAP Net Income (Loss) to Distributable Earnings (Loss) (in thousands - except share and per share data) Three Months Ended September 30, December 31, 2024 Per Diluted Share(1) 2024 Per Diluted Share(1) December 31, 2023 Per Diluted Share(1) Net Income (Loss) Attributable to Common
Slide 39: Key Definitions
Key Definitions “Distributable Earnings (Loss)": The Company defines Distributable Earnings as net income (loss) attributable to common stockholders or, without duplication, owners of the Company's subsidiaries, computed in accordance with GAAP, including realized losses not otherwise included in GA
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