Kkr Real Estate Finance Trust Inc. · NYSE:KREF
Kkr Real Estate Finance Trust — Q3 2024 Earnings Presentation
26 slides from Kkr Real Estate Finance Trust's earnings presentation, Oct 22, 2024
Slide 1: Third Quarter 2024 Supplemental Information
Third Quarter 2024 Supplemental Information OCTOBER 21, 2024
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 $6.3 B $8.3 B 14% Loan Portfolio Financing Capacity KKR Ownership in KREF 100% 60% 79% $601 B (2) Senior Loans Multifamily & Fully Non-Mark-to-Market Global AUM(4)
Slide 4: Third Quarter 2024 Highlights
Third Quarter 2024 Highlights • 3Q 2024 Net Loss(1) of ($0.19) per diluted share (includes a CECL provision of $38 million, or ($0.55) per diluted share) • 3Q 2024 Distributable Earnings(2) of $0.37 per diluted share Financials • Book Value per Share (“BVPS”) of $14.84 per share (includes a CECL all
Slide 5: 3Q'24 Financial Summary
3Q'24 Financial Summary Income Statement Balance Sheet ($ in Millions) 3Q'24 ($ in Millions) 3Q'24 Net interest income $37.0 Commercial real estate loans, net $6,178.6 (2) Real estate assets 401.3 Other income 10.0 Cash 108.8 Provision for credit losses (38.2) (3) Cash held by servicer 10.0 Operatin
Slide 6: Recent Operating Performance
Recent Operating Performance Net Income and Distributable Earnings Dividends and Book Value Per Share ($ in Millions) 3Q'23 2Q'24 3Q'24 3Q'23 2Q'24 3Q'24 Net income (loss): Dividend per share: $21.4 $20.2 ($13.0) $0.43 $0.25 $0.25 Distributable earnings (loss): Dividend yield on book value per share
Slide 7: KREF Loan Portfolio by the Numbers
KREF Loan Portfolio by the Numbers Total Portfolio(1) Investment Type Interest Rate Type ($ in Millions) $7,916 Fixed $7,752 1% $6,792 $6,711 Senior $4,998 Loans 100% Floating 99% Property Type 4Q'20 4Q'21 4Q'22 4Q'23 3Q'24 Other (3) Hospitality Geography 4% 5% Life Science (2) 4% 11% Multifamily 45
Slide 8: Portfolio Credit Quality Overview
Portfolio Credit Quality Overview Collected 100% of interest payments due on the loan portfolio Loan-to-Value(1) Risk Rating Distribution Loan 0 2 54 4 1 Count 90% 30% 25% 20% 21% 2Q '24 4% 1% 6% 3% 0% 0 - 60% 60 - 65% 65 - 70% 70 - 75% 75 - 80% 1 2 3 4 5 (2) (2) Weighted Average LTV : 65% Weighted
Slide 9: Watch List Migrations Quarter-over-Quarter
Watch List Migrations Quarter-over-Quarter In 3Q'24, KREF had two risk rating downgrades 2Q’24 Watch List Intra-Quarter Activity 3Q’24 Watch List Total Principal: $194 million Risk Rating: 5 Total Principal: $408 million Minneapolis Office Minneapolis Office San Carlos Life Science West Hollywood Mu
Slide 10: Case Studies: Watch List Loans
Case Studies: Watch List Loans West Hollywood Investment Minneapolis Office San Carlos Life Science San Diego Multifamily Raleigh Multifamily Multifamily Loan Type Floating-Rate Senior Loan(1) Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Inv
Slide 11: Overview of Real Estate Assets
Overview of Real Estate Assets As of September 30, 2024, equity(1) of approximately $264 million ($3.80 per share) was held in our Real Estate Assets Real Estate Owned Investment Amount(2) Investment Amount Location Property Type ($ in millions) per Square Foot Mountain View, CA Class A Office Campu
Slide 12: Financing Overview: 79% Non-Mark-To-Market
Financing Overview: 79% Non-Mark-To-Market Diversified financing sources totaling $8.3 billion with $3.0 billion of undrawn capacity Summary of Outstanding Financing Leverage Ratios Outstanding Maximum Weighted Avg. Advance Non- ($ in Millions) Principal Capacity Coupon(1) Rate MTM Amount (2) Term C
Slide 13: Financing Overview: Term Credit Facilities
Financing Overview: Term Credit Facilities ($ in Millions) Total or Counterparty Weighted Average Drawn $609 $321 $209 $1,139 Capacity $1,000 $600 $400 $2,000 Collateral: Loans / Principal 8 Loans / $879 8 Loans / $469 6 Loans / $339 22 Loans / $1,687 Balance Final Stated Maturity(1) September 2029
Slide 14: Liquidity Overview
Liquidity Overview In addition to the available liquidity below, KREF had $337 million of total unencumbered assets, including $93 million of unencumbered senior loans and $244 million of additional unencumbered assets(1) as of September 30, 2024 Sources of Available Liquidity (4) ($ in Millions) $7
Slide 15: Earnings Sensitivity to Change in SOFR
Earnings Sensitivity to Change in SOFR 99% floating-rate loan portfolio indexed to Term SOFR Quarterly Net Interest Income Per Share Sensitivity to Change in Market Rates(1) Term SOFR = 4.85% ($ Impact Per Share) As of September 30, 2024 $0.05 $0.04 $0.03 $0.03 $0.02 $0.02 $0.01 $0.00 $0.00 ($0.01)
Slide 16: Appendix
Appendix KREF
Slide 17: 3Q'24 Portfolio Details
3Q'24 Portfolio Details ($ in Millions) Committed Outstanding Loan / Investment Investment Total Whole Principal / Principal / Net Max Remaining Origination Risk # Investment(1) Location Property Type Coupon(4)(5) Per Date Loan(2) Investment Investment Equity(3) Term (Yrs)(4)(6) LTV(4)(8) Rating SF
Slide 18: 3Q'24 Portfolio Details
3Q'24 Portfolio Details ($ in Millions) Committed Outstanding Loan / Investment Investment Total Whole Principal / Principal / Net Max Remaining Origination Risk # Investment(1) Location Property Type Coupon(4)(5) Per Date Loan(2) Investment Investment Equity(3) Term (Yrs)(4)(6) LTV(4)(8) Rating SF
Slide 19: 3Q'24 Portfolio Details
3Q'24 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 $199.4 million, including (i) a
Slide 20: 3Q'24 Portfolio Activity
3Q'24 Portfolio Activity Portfolio Funding Activity ($ in Millions) (1) Future Funding Obligations(2) REO & Equity Method Investments (1) Includes a $2 million write-off on a repaid senior loan (2) Future funding obligations are generally contingent upon certain events and may not result in investme
Slide 21: Fully Extended Loan Maturities
Fully Extended Loan Maturities Fully extended weighted average loan maturity of 2.2 years Fully Extended Loan Maturities ($ in Millions) $3,500 $3,000 $3,123 $2,500 $2,000 $2,106 $1,500 $1,000 $500 $689 $391 $30 $0 $0 2024 2025 2026 2027 2028 2029 Note: Based on current principal amount. Excludes re
Slide 22: KREF Debt Maturities
KREF Debt Maturities No final facility maturities until 2026 and no corporate debt due until 2027 The table below may display estimated earlier repayments based on the maturity dates of underlying loan collateral Upcoming Debt Maturities by Year ($ in Millions) $2,500 $2,000 $1,910 $1,435 $1,500 $1,
Slide 23: Consolidated Balance Sheets
Consolidated Balance Sheets (in thousands - except share and per share data) September 30, 2024 December 31, 2023 Assets Cash and cash equivalents $ 108,795 $ 135,898 Commercial real estate loans, held-for-investment 6,188,679 7,343,548 Less: Allowance for credit losses (148,013) (210,470) Commercia
Slide 24: Consolidated Statements of Income
Consolidated Statements of Income (in thousands - except share and per share data) Three Months Ended Nine Months Ended September 30, 2024 June 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023 Net Interest Income Interest income $ 140,150 $ 149,249 $ 163,229 $ 441,019 $ 475,388 Inte
Slide 25: 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 Month Ended September 30, Per Diluted Per Diluted September 30, Per Diluted 2024 Share(1) June 30, 2024 Share(1) 2023 Share(1) Net Income (Loss) Attributable to Common Sto
Slide 26: 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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