Kkr Real Estate Finance Trust Inc. · NYSE:KREF
Kkr Real Estate Finance Trust — Q2 2021 Earnings Presentation
27 slides from Kkr Real Estate Finance Trust's earnings presentation, Jul 26, 2021
Slide 1: Second Quarter 2021 Supplemental Information
KKR Real Estate Finance Trust Inc. Second Quarter 2021 Supplemental Information July 26, 2021
Slide 2: Legal Disclosures
Legal Disclosures 2 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 Fina
Slide 3: KKR Real Estate Finance Trust Inc. Overview
3 KKR Real Estate Finance Trust Inc. Overview Best In Class Portfolio Conservative Balance Sheet Fully Integrated with KKR $5.6 Billion Investment Portfolio 98.3% Senior Loans 83% Multifamily & Office $132 Million Average Loan Commitment 13.0% Unfunded Purpose built portfolio of senior loans secured
Slide 4: Second Quarter 2021 Highlights
Second Quarter 2021 Highlights 4 • 2Q Net income(1) of $0.52 per diluted share and Distributable Earnings(2) of $0.54 per diluted share; 126% dividend coverage in 2Q • Book value(3) of $18.91 per share, compared to $18.89 per share in 1Q’21 • Earnings benefited from portfolio performance and in-plac
Slide 5: 2Q'21 Financial Summary
2Q'21 Financial Summary 5 (1) See Appendix for definition and reconciliation to financial results prepared in accordance with GAAP. (2) Represents the GAAP principal amount on senior and mezzanine/other loans, and net equity in RECOP I. (3) Represents (i) total debt less cash to (ii) total permanent
Slide 6: Recent Operating Performance
$18.57 $18.89 $18.91 $1.16 $1.06 $1.05 2Q'20 1Q'21 2Q'21 BVPS Post-CECL CECL Impact $19.73 Recent Operating Performance 6 (1) Represents Net Income attributable to common stockholders. (2) See Appendix for definition and reconciliation to financial results prepared in accordance with GAAP. Net Incom
Slide 7: Conservative Portfolio Construction
67% 99% 98% 6% 27% 0% 20% 40% 60% 80% 100% At IPO 2Q'20 2Q'21 Senior Loan Non-Senior/ Other Loan Securities <2%<1% Conservative Portfolio Construction 7 $62 $147 $132 $0 $50 $100 $150 At IPO 2Q'20 2Q'21 Average Loan Commitment 62% 81% 83% 31% 8% 6% 0% 20% 40% 60% 80% 100% At IPO 2Q'20 2Q'21 Multifam
Slide 8: Last Twelve Months Loan Activity
$5,257 $5,035 $4,998 $5,330 $5,618 $512 $52 $462 $498 $472 $576 $454 $559 $848 $274 $535 $244 $271 2Q'20 Portfolio 3Q'20 Fundings 3Q'20 Repayments 3Q'20 Portfolio 4Q'20 Fundings 4Q'20 Repayments 4Q'20 Portfolio 1Q'21 Fundings 1Q'21 Repayments 1Q'21 Portfolio 2Q'21 Fundings 2Q'21 Repayments 2Q'21 Por
Slide 9: 2Q'21 Loan Originations – Case Studies
2Q’21 Loan Originations – Case Studies 9 Investment Irving Multifamily Phoenix Single Family Rental Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Loan Size $117.6 million $72.1 million Location Irving, TX Phoenix, AZ Collateral 908-unit Class-B Multifamily 460-Unit Two-Property Portf
Slide 10: 2Q'21 Loan Originations – Case Studies
2Q’21 Loan Originations – Case Studies 10 Investment Boston Office Mesa Industrial Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Loan Size $166.2 million(1) $77.8 million Location Boston, MA Mesa, AZ Collateral One 237k SF Class-A Office Building and One 244k SF Class-B Office Buildi
Slide 11: 2Q'21 Loan Originations – Case Studies
2Q’21 Loan Originations – Case Studies 11 Investment Fontana Industrial Pittsburgh Student Housing Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Loan Size $119.9 million $112.5 million Location Fontana, CA Pittsburgh, PA Collateral Class-A Building totaling 1.2 million RSF 329-unit S
Slide 12: 2Q'21 Loan Originations – Case Studies
2Q’21 Loan Originations – Case Studies 12 Investment Denver Multifamily Industrial Portfolio Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loans Facility Loan Size $88.5 million $212.5 million(1) Location Denver, CO Various Collateral 300-unit Class-A Multifamily Class-A Industrial Portfo
Slide 13: KREF Loan Portfolio by the Numbers
Multifamily 50% Office 33% Condo (Residential) 5% Hospitality 4% Student Housing 3% Industrial 3% Retail 2% Single Family Rental <1% Floating 99.9% Fixed 0.1% Senior Loans 98.9% Mezz/Other 1.1% Class-A 85% Class-B 15% Multifamily Class-A 76% Class-B 24% Office KREF Loan Portfolio by the Numbers 13 G
Slide 14: Portfolio Credit Quality Remains Strong
0% 4% 87% 7% 1 2 3 4 5 0% 4% 86% 8% 2% 1 2 3 4 5 Portfolio Credit Quality Remains Strong • Collected 97.3% of interest payments due on loan portfolio 14 Loan-to-Value(1,2) Risk Rating Distribution Weighted Average Risk Rating(3): 3.1 Weighted Average LTV(3): 68% (1) LTV is generally based on the ini
Slide 15: Case Studies: Watch List Loans
Case Studies: Watch List Loans(1) (Risk Rating 4 & 5) 15 Investment Portland Retail(2) New York Condo Brooklyn Hotel New York Condo Queens Industrial Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Investment
Slide 16: Financing Overview: 76% Non-Mark-To-Market
Term Loan Facility 23% Term Lending Agreement 21% Collateralized Loan Obligation 17% Senior Loan Interests 7% Secured Term Loan 7% Asset Specific Financing 1% Term Credit Facilities 24% 1.8x 3.2x 0.1x 0.1x Debt-to-Equity Ratio Total Leverage Ratio CECL Impact Pre-CECL Financing Overview: 76% Non-Mar
Slide 17: Financing Overview: Term Credit Facilities
Financing Overview: Term Credit Facilities 17 Counterparty Total / Weighted Average Drawn $498 $449 $101 $1,048 Capacity $1,000 $600 $240 $1,840 Collateral: Loans / Principal Balance 6 Loans / $918 8 Loans / $615 4 Loans / $183 18 Loans / $1,716 Final Stated Maturity(1) November 2023 December 2022 O
Slide 18: Liquidity Overview
Liquidity Overview $119.2 $335.0 $138.8 $40.5 $633.5 $0.0 $100.0 $200.0 $300.0 $400.0 $500.0 $600.0 $700.0 Cash Undrawn Corporate Revolver Approved and Undrawn Credit Capacity Loan Repayment Receivable Total Available Liquidity(2) 18 ($ in Millions) (1) Represents under-levered amounts under financi
Slide 19: Portfolio Benefits from Attractive in the Money LIBOR Floors
Portfolio Benefits from Attractive in the Money LIBOR Floors 19 • 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 57% of the portfolio is subject to a LIBOR floor of at least 1.0% Portfolio weighted
Slide 20: Appendix
Appendix 20
Slide 21: Loan Portfolio Details
# Investment Location Property Type Investment Date Total Whole Loan (2) Committed Principal Amount (2) Current Principal Amount Net Equity (3) Future Funding (4) Coupon (5)(6) Max Remaining Term (Yrs) (5)(7) Loan Per SF / Unit / Key LTV (5)(8) Risk Rating Senior Loans (1) 1 Senior Loan Chicago, IL
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 23 Fully Extended Loan Maturities(1) ($ in Millions) (1) Excludes RECOP I CMBS B-Piece investment. • Fully extended weighted average loan maturity of 3.2 years(1) $181.2 $261.3 $1,084.2 $2,052.2 $598.6 $1,404.8 $0 $500 $1,000 $1,500 $2,000 $2,500 2021 2022 2023 2024 20
Slide 24: Consolidated Balance Sheets
24 Consolidated Balance Sheets (1) Includes $99.8 million of loan repayment proceeds held by the servicer, including $59.3 million receivable by the CLO and $40.5 million receivable by KREF, as of June 30, 2021. Includes $15.9 million of loan repayment proceeds held by the servicer and receivable by
Slide 25: Consolidated Statements of Income
25 Consolidated Statements of Income (in thousands - except share and per share data) June 30, 2021 March 31, 2021 June 30, 2020 June 30, 2021 June 30, 2020 Net Interest Income Interest income $ 67,149 $ 64,766 $ 67,219 $ 131,915 $ 138,298 Interest expense 26,958 27,383 30,563 54,341 69,645 Total ne
Slide 26: Reconciliation of GAAP Net Income to Distributable Earnings
Reconciliation of GAAP Net Income to Distributable Earnings 26 (1) Includes ($0.2) million, $0.7 million, and $0.2 million non-cash redemption value adjustment of our SNVPS during 2Q'21, 1Q'21 and 2Q'20, respectively. (2) Includes ($0.1) million, $0.0 million, and $0.8 million of unrealized loss (ga
Slide 27: Key Definitions
Key Definitions 27 “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 wi
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