Financial Data and Key Metrics Changes - For Q2 2025, the company reported a GAAP net loss of $1.3 per share and a distributable loss of $0.77 per share, with distributable earnings prior to realized losses at $0.10 per share [13] - The held for investment loan portfolio decreased to $5 billion at June 30 from $5.9 billion at March 31, primarily due to loan resolutions [13][14] - Total liquidity increased to $323 million as of August 5, representing a $221 million increase compared to December 31 [9][29] Business Line Data and Key Metrics Changes - The company resolved eight loans totaling $873 million of UPB during the second quarter, including four loans paid off in full and four watch list loans [6][7] - Year-to-date resolutions total $1.9 billion of UPB, consisting of $1.55 billion of loan repayments and sales, and $305 million of multifamily property foreclosures [17][29] - The watch list loans decreased to 17 loans and $2.1 billion of UPB, a net decline of $758 million of UPB and seven loans from the first quarter [7][17] Market Data and Key Metrics Changes - The elevated rate environment remains a headwind for commercial real estate, but investor sentiment has improved and transaction volumes have been recovering [5] - The company has seen significant turnover in its loan portfolio, with a higher percentage of resolutions compared to peers [65] Company Strategy and Development Direction - The company outlined three strategic priorities for 2025: resolving watch list loans, improving liquidity, and redeploying capital [5] - The management believes that their experience as a value-add owner and operator of real estate assets provides a competitive advantage in evaluating opportunities [10] - The company is optimistic about monetizing multifamily REO assets in the coming quarters [11][29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the healing of the real estate capital markets and the potential for continued loan resolutions and liquidity generation [5][32] - The company is focused on addressing the upcoming maturity of its Term Loan B in August 2026, with potential uses for liquidity including partial paydowns or replacement financing [28][29] Other Important Information - The total CECL reserve on loans increased to $333 million or 6.4% of UPB at June 30, compared to $243 million or 4.1% at March 31, reflecting a conservative outlook amidst market uncertainty [22] - The company completed the commercial condomization of a mixed-use building in New York City, generating $29 million in gross proceeds [10] Q&A Session Summary Question: Does the liquidity number reflect the discounted payoff of the New York City multifamily? - Yes, the $323 million amount reflects the liquidity generated by the New York multifamily loan in July [31] Question: What is the outlook for continued resolutions and liquidity generation in the second half? - The capital markets are healing, and additional payoffs are expected, but the company will rely more on regular repayments moving forward [32][34] Question: What are the signposts for deploying liquidity? - The company will continue to focus on deleveraging the balance sheet and may consider stock buybacks, but will prioritize resolving watch list assets [35][36] Question: Can you provide an update on the REO balance and strategies for the assets? - The REO balance is approximately $525 million, and the company is pursuing various strategies for asset sales and operational improvements [40][41] Question: How is the term loan refinancing process progressing? - The company is engaging with private credit providers and expects to reduce the size of the financing, while also considering preferred equity in the future [72]

Financial Performance - GAAP net loss was $181.7 million, or $1.30 per share; distributable loss was $110.1 million, or $0.77 per share; distributable earnings prior to realized losses was $14.8 million, or $0.10 per share[2, 16] - Provision for CECL reserves was $189.5 million, or $1.33 per share, primarily driven by specific reserves[2] - Book value was $12.27 per share[2] Loan Portfolio and Resolutions - Loan portfolio totaled $5.0 billion, with 98% floating-rate and 98% senior loans[2, 3] - Year-to-date loan resolutions amounted to $1.9 billion of UPB, including $1.0 billion during the quarter[2] - Loans with a risk rating of 4 or 5 were 42% of the loan portfolio ($2.1 billion of UPB, 17 loans), compared to 48% as of June 30, 2025 ($2.6 billion of UPB, 20 loans)[2] - CECL reserves on loans receivable were $332.7 million, or $2.32 per share, approximating 6.4% of UPB[2] Liquidity and Capitalization - Total liquidity was $224 million, including $209 million of cash as of June 30, 2025, increasing to $323 million, including $310 million of cash by August 5, 2025[2, 9] - Unencumbered assets included $398 million of loan UPB and $115 million of REO carrying value[2] - Net unfunded loan commitments declined to $123 million[2] - Outstanding financings decreased by $652 million during the quarter, including $188 million of deleveraging payments[2] - Net debt / equity ratio declined to 2.2x, and total leverage ratio declined to 2.6x[2] Real Estate Owned (REO) - Mixed-use REO generated $29 million of gross proceeds primarily related to the sale of five floors of office space[2, 38] - Refinanced debt related to the real estate owned hotel portfolio with a $235 million non-recourse loan[2, 38]

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) For the second quarter of 2025, Claros Mortgage Trust reported a significant GAAP net loss of $181.7 million, or $1.30 per share, with a non-GAAP Distributable Loss of $110.1 million, or $0.77 per share, primarily due to a substantial $189.5 million provision for CECL reserves, while Distributable Earnings prior to realized losses remained positive at $14.8 million, or $0.10 per share, and the company's book value stood at $12.27 per share Financial Performance Summary | Metric | Q2 2025 | Per Share | | :--- | :--- | :--- | | GAAP Net Loss | $(181.7) million | $(1.30) | | Distributable Loss (Non-GAAP) | $(110.1) million | $(0.77) | | Distributable Earnings prior to realized losses | $14.8 million | $0.10 | - A provision for CECL reserves of **$189.5 million**, or **$1.33 per share**, was recorded for the quarter, bringing total CECL reserves to **$332.7 million**, representing approximately **6.4%** of the loan portfolio's Unpaid Principal Balance (UPB)[3](index=3&type=chunk) - Book value was reported at **$12.27 per share** as of June 30, 2025[3](index=3&type=chunk) [Operational and Portfolio Highlights](index=1&type=section&id=Operational%20and%20Portfolio%20Highlights) The company demonstrated significant progress in managing its portfolio during the second quarter and year-to-date, resolving $1.0 billion and $1.9 billion of loans, respectively, which substantially improved liquidity from $224 million at quarter-end to $323 million by early August 2025 - Key loan resolution activities in Q2 2025 totaled **$1.0 billion** of UPB, comprising: - Four full repayments (**$480.0 million**) - Two discounted payoffs (**$88.6 million**) - Two loan sales (**$303.9 million**) - Two mortgage foreclosures (**$146.7 million**)[3](index=3&type=chunk) - Year-to-date 2025, the company resolved fifteen loans totaling **$1.9 billion** of UPB, an amount exceeding the total resolution activity from each of the prior three full years[3](index=3&type=chunk) - Total liquidity significantly improved, standing at **$224 million** at quarter-end (June 30, 2025) and increasing further to **$323 million** by August 5, 2025[3](index=3&type=chunk) Key Portfolio Metrics | Portfolio Metric | Value | | :--- | :--- | | Loan Portfolio Size | $5.0 billion | | Weighted Average All-in Yield | 7.0% | | Unencumbered Loan UPB | $398 million | | Unencumbered REO Carrying Value | $115 million | [Management Commentary](index=2&type=section&id=Management%20Commentary) CEO Richard Mack expressed optimism, citing signs of a more constructive capital markets environment in commercial real estate despite elevated interest rates, emphasizing the significant increase in portfolio resolution activity during the quarter, which has more than doubled the company's liquidity since the end of 2024 and positions CMTG for continued positive progress in the second half of 2025 - Management is observing signs of a "more constructive capital markets environment in commercial real estate," despite the prolonged period of high interest rates[4](index=4&type=chunk) - The second quarter saw a "meaningful uptick in portfolio activity," including the resolution of eight loans[4](index=4&type=chunk) - As a result of recent activities, the company has more than doubled its liquidity position since year-end 2024 and is well-positioned for the second half of 2025[4](index=4&type=chunk) [Reconciliation of GAAP Net Loss to Non-GAAP Distributable Loss](index=3&type=section&id=Reconciliation%20of%20GAAP%20Net%20Loss%20to%20Non-GAAP%20Distributable%20Loss) The company provides a detailed reconciliation from its GAAP Net Loss of $181.7 million to its non-GAAP Distributable Loss of $110.1 million for Q2 2025, with primary adjustments including adding back the $189.5 million provision for credit losses and other non-cash items, partially offset by $120.8 million in principal charge-offs and other realized losses, as Distributable Earnings (Loss) is a key non-GAAP metric used by management to evaluate performance and assess the ability to pay dividends GAAP Net Loss to Non-GAAP Distributable Loss Reconciliation (Q2 2025) | Reconciliation Item (Q2 2025) | Amount (in thousands) | | :--- | :--- | | **Net loss (GAAP)** | **$ (181,707)** | | Provision for current expected credit loss reserve | $ 189,489 | | Non-cash stock-based compensation expense | $ 4,762 | | Other Adjustments | $ 2,305 | | **Distributable Earnings prior to realized losses** | **$ 14,849** | | Principal charge-offs | $ (120,817) | | Other Realized Losses | $ (4,093) | | **Distributable Loss (Non-GAAP)** | **$ (110,061)** | - Distributable Earnings (Loss) is a non-GAAP measure defined as GAAP net income excluding non-cash items like stock-based compensation, depreciation, unrealized gains/losses, and the provision for credit losses[10](index=10&type=chunk) - While the provision for credit losses is excluded from Distributable Earnings, actual charge-offs of principal and interest are recognized through this metric when a loan is resolved or an amount is deemed non-recoverable[13](index=13&type=chunk) [Corporate Information](index=2&type=section&id=Corporate%20Information) Claros Mortgage Trust, Inc. (CMTG) is a real estate investment trust (REIT) focused on originating senior and subordinate loans for transitional commercial real estate in major U.S. markets, externally managed by an affiliate of Mack Real Estate Credit Strategies, L.P., with an earnings conference call scheduled for August 7, 2025, to discuss these results - CMTG is a REIT primarily focused on originating loans on transitional commercial real estate assets in major U.S. markets[8](index=8&type=chunk) - The company will host a conference call to discuss its financial results on Thursday, August 7, 2025, at 9:00 a.m. ET[5](index=5&type=chunk)

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited consolidated financial statements show a significant increase in net loss, driven by a substantial provision for credit losses, alongside decreased total assets and equity [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Summary (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$5,823,122** | **$6,966,955** | | Loans receivable held-for-investment, net | $4,881,446 | $5,947,262 | | Current expected credit loss reserve | ($326,072) | ($243,030) | | Real estate owned held-for-investment, net | $218,503 | $127,140 | | **Total Liabilities** | **$4,066,092** | **$4,958,869** | | Repurchase agreements | $2,440,057 | $3,190,339 | | Secured term loan, net | $708,378 | $709,777 | | **Total Equity** | **$1,757,030** | **$2,008,086** | - Total assets decreased by approximately **$1.14 billion** from December 31, 2024, to June 30, 2025, primarily due to a reduction in net loans receivable[9](index=9&type=chunk) - Total equity declined by approximately **$251 million** over the same period, largely as a result of the accumulated deficit increasing from net losses[9](index=9&type=chunk) [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Consolidated Statement of Operations Summary (in thousands, except per share data) | Account | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net interest income | $26,143 | $41,906 | $54,954 | $86,820 | | Total net revenue | $51,632 | $64,487 | $95,007 | $123,312 | | Provision for current expected credit loss reserve | ($189,489) | ($33,928) | ($230,612) | ($103,888) | | **Net loss** | **($181,707)** | **($11,554)** | **($260,330)** | **($64,349)** | | **Net loss per share (Basic and diluted)** | **($1.30)** | **($0.09)** | **($1.86)** | **($0.48)** | - The net loss for the six months ended June 30, 2025, increased significantly to **$260.3 million** from $64.3 million in the prior-year period[12](index=12&type=chunk) - This was primarily driven by a more than doubling of the provision for current expected credit loss reserve to **$230.6 million** and a decrease in net interest income[12](index=12&type=chunk) [Consolidated Statements of Changes in Equity](index=5&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Equity) - Total equity decreased from **$2,008.1 million** at December 31, 2024, to **$1,757.0 million** at June 30, 2025[15](index=15&type=chunk) - The primary driver of this decrease was a net loss of **$260.3 million** for the six-month period, partially offset by stock-based compensation[15](index=15&type=chunk) - The company did not declare any dividends during the six months ended June 30, 2025, in contrast to the same period in 2024 when dividends of **$71.2 million** were declared[15](index=15&type=chunk) [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Statement of Cash Flows Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | ($41,633) | $27,013 | | Net cash provided by investing activities | $1,023,971 | $367,046 | | Net cash used in financing activities | ($887,918) | ($439,551) | | **Net increase (decrease) in cash** | **$94,420** | **($45,492)** | - Cash from investing activities was primarily driven by **$767.7 million** in loan repayments and **$302.5 million** from loan sales[18](index=18&type=chunk) - Cash used in financing activities was mainly due to **$1.5 billion** in repayments of secured financings, which exceeded the **$675.9 million** in proceeds from new secured financings[21](index=21&type=chunk) [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) - The company is a Maryland corporation externally managed by Claros REIT Management LP, and it has elected to be taxed as a Real Estate Investment Trust (REIT)[24](index=24&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk) - The preparation of financial statements requires significant management estimates, particularly concerning the current expected credit loss (CECL) reserve, fair value of real estate assets, and impairment assessments[30](index=30&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a significant net loss driven by credit loss provisions, a reduction in the loan portfolio, an increase in high-risk loans, and several property acquisitions via foreclosure Key Financial Indicators | Metric | Q2 2025 | As of June 30, 2025 | | :--- | :--- | :--- | | Net Loss per Share | ($1.30) | N/A | | Distributable Loss per Share | ($0.77) | N/A | | Dividends Declared per Share | $0.00 | N/A | | Book Value per Share | N/A | $12.27 | | Adjusted Book Value per Share | N/A | $13.27 | | Net Debt-to-Equity Ratio | N/A | 2.2x | - The company's primary business is originating senior and subordinate loans on transitional commercial real estate (CRE) assets in major U.S. markets[193](index=193&type=chunk)[194](index=194&type=chunk) [Our Portfolio](index=40&type=section&id=Our%20Portfolio) Loan Portfolio Summary as of June 30, 2025 | Metric | Value | | :--- | :--- | | Number of Loans | 42 | | Unpaid Principal Balance | $5.21 billion | | Carrying Value | $5.01 billion | | Weighted Average Yield to Maturity | 7.0% | | Weighted Average Risk Rating | 3.8 | - During the first six months of 2025, the company sold three loans with a total unpaid principal balance of **$405.0 million**, resulting in a cumulative principal charge-off/valuation allowance of **$101.2 million**[213](index=213&type=chunk) - The company acquired legal title to two multifamily properties through mortgage foreclosures, which were previously senior loans with combined unpaid principal of **$146.7 million**[225](index=225&type=chunk)[226](index=226&type=chunk) - The total CECL reserve was **$378.5 million** as of June 30, 2025, with a provision of **$230.6 million** for the first six months driven by changes in loss rates, risk ratings, and collateral values[232](index=232&type=chunk) [Results of Operations](index=49&type=section&id=Results%20of%20Operations) - Comparing Q2 2025 to Q1 2025, the net loss increased from **$78.6 million** to **$181.7 million**, primarily due to a significantly higher provision for credit losses[261](index=261&type=chunk)[268](index=268&type=chunk)[270](index=270&type=chunk) - For the six months ended June 30, 2025, compared to the same period in 2024, total net revenue decreased by **$28.3 million** due to a smaller loan portfolio and more non-accrual loans[271](index=271&type=chunk)[272](index=272&type=chunk) - The net loss widened from **$64.3 million** to **$260.3 million**, largely due to the increased credit loss provision[280](index=280&type=chunk) [Liquidity and Capital Resources](index=54&type=section&id=Liquidity%20and%20Capital%20Resources) Leverage Ratios | Ratio | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Net Debt-to-Equity Ratio | 2.2x | 2.4x | | Total Leverage Ratio | 2.6x | 2.8x | - Total sources of liquidity increased to **$223.8 million** at June 30, 2025, from **$101.7 million** at year-end 2024, primarily due to an increase in cash and cash equivalents[292](index=292&type=chunk) - As of June 30, 2025, the company had **$394.8 million** in unfunded loan commitments and expects to fund its net commitment of **$122.5 million** over a weighted average period of 1.7 years[302](index=302&type=chunk)[306](index=306&type=chunk) - The company established a **$150.0 million** at-the-market (ATM) stock offering program in May 2024, but had not issued any shares under it as of June 30, 2025[298](index=298&type=chunk)[299](index=299&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=61&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks include interest rate, credit, capital markets, financing, and counterparty risk, with a notable sensitivity of net interest income to SOFR changes Interest Rate Sensitivity Analysis (Annual Impact) | Change in SOFR | Impact on Net Interest Income (in thousands) | | :--- | :--- | | -100 bps | $3,268 | | -50 bps | $1,526 | | +50 bps | ($1,526) | | +100 bps | ($3,052) | - Credit risk is managed through extensive due diligence, conservative loan-to-value ratios, and proactive asset management, leveraging its Sponsor platform for workout scenarios[336](index=336&type=chunk)[339](index=339&type=chunk) - Financing risk is mitigated by diversifying financing sources to counter potential unwillingness from lenders or increased costs, though no margin calls have been received to date[341](index=341&type=chunk)[342](index=342&type=chunk) [Item 4. Controls and Procedures](index=64&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation as of June 30, 2025, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level[355](index=355&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls[354](index=354&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=65&type=section&id=Item%201.%20Legal%20Proceedings) The company and its Manager are not currently subject to any legal proceedings expected to have a material financial impact - The company and its Manager are not currently party to any legal proceedings that are expected to have a material financial impact[358](index=358&type=chunk) [Item 1A. Risk Factors](index=65&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the principal risk factors from those disclosed in the 2024 Annual Report on Form 10-K - There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024[359](index=359&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=65&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None[360](index=360&type=chunk) [Item 3. Defaults Upon Senior Securities](index=65&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon its senior securities - None[361](index=361&type=chunk) [Item 4. Mine Safety Disclosures](index=65&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[362](index=362&type=chunk) [Item 5. Other Information](index=65&type=section&id=Item%205.%20Other%20Information) The company reported no other material information and no adoption or termination of Rule 10b5-1 trading arrangements by directors or officers - During the three months ended June 30, 2025, no director or officer adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement[363](index=363&type=chunk) [Item 6. Exhibits](index=66&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including financing agreement amendments and officer certifications - The report includes several exhibits, such as amendments to repurchase agreements with Wells Fargo and JPMorgan Chase Bank, and required certifications from the Principal Executive Officer and Principal Financial Officer[364](index=364&type=chunk)

Core Viewpoint - Claros Mortgage Trust, Inc. (CMTG) has experienced a bearish trend, losing 12.3% in the past week, but a hammer chart pattern suggests a potential trend reversal as buying interest may be emerging [1][2]. Technical Analysis - The hammer chart pattern indicates a potential bottom in the stock price, suggesting that selling pressure may be exhausting [2][5]. - A hammer pattern forms when there is a small candle body with a long lower wick, signaling that bears may be losing control [4][5]. - This pattern can occur across various timeframes and is utilized by both short-term and long-term investors [5]. Fundamental Analysis - Recent upward revisions in earnings estimates for CMTG serve as a bullish indicator, correlating strongly with near-term stock price movements [7]. - The consensus EPS estimate for the current year has increased by 3.9% over the last 30 days, indicating analysts' optimism about the company's earnings potential [8]. - CMTG holds a Zacks Rank of 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, which typically outperform the market [9][10].

Group 1 - The article discusses the author's journey into investing, starting in high school in 2011, focusing on REITs, preferred stocks, and high-yield bonds, indicating a long-standing interest in markets and the economy [1] - The author has recently adopted a strategy that combines long stock positions with covered calls and cash secured puts, emphasizing a fundamental long-term investment approach [1] - The author primarily covers REITs and financials on Seeking Alpha, with occasional articles on ETFs and other stocks influenced by macro trade ideas [1] Group 2 - There is a disclosure stating that the author has no stock, option, or similar derivative position in any of the companies mentioned, nor plans to initiate any such positions within the next 72 hours [2] - The article expresses the author's own opinions and is not compensated for it, aside from contributions to Seeking Alpha [2] - Seeking Alpha clarifies that past performance does not guarantee future results and that the views expressed may not reflect those of the platform as a whole [3]

Financial Data and Key Metrics Changes - For Q1 2025, the company reported a GAAP net loss of $0.56 per share and a distributable loss of $0.25 per share [11] - Distributable earnings prior to realized losses were $0.08 per share, with earnings from REO investments contributing a distributable loss of $0.03 per share [11] - The held for investment loan portfolio decreased to $5.9 billion at March 31 from $6.1 billion at December 31, primarily due to loan resolutions [12] Business Line Data and Key Metrics Changes - The company fully realized five loans, receiving $7 million in proceeds from repayments and resolutions, which improved liquidity and reduced leverage [8] - Hospitality exposure was reduced by $326 million, reflecting a strategic move in light of economic headwinds [9] - A $214 million facility was closed to finance non-performing loans through the REO stage, indicating progress in the multifamily REO strategy [9][15] Market Data and Key Metrics Changes - The company noted widening spreads in the real estate capital markets and a pause in transactions by institutional participants due to heightened uncertainty from U.S. tariff and foreign policy volatility [6][7] - The economic and political climate is impacting capital markets and investor sentiment, which may affect the company's operational strategies [10][16] Company Strategy and Development Direction - The company is focused on enhancing liquidity, reducing leverage, and optimizing outcomes on watch list loans, with strategies including loan sales and discounted payoffs [11][12] - Management is considering various paths for loan resolutions, including divesting, extending, recapitalizing, or taking assets over as REO, depending on market conditions [10] - The company aims to achieve $2 billion in realizations over the year, with $600 million already completed [60] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the ongoing higher rate environment and its headwinds to broader real estate recovery, while expressing optimism about achieving strategic goals [7][10] - The company is navigating a period of uncertainty and volatility, with plans to remain pragmatic and proactive in its approach [16] - Management believes that fundamentals at the property level remain strong, despite the challenges in the broader market [59] Other Important Information - The company reported total liquidity of $136 million as of March 31, which includes cash and undrawn credit capacity [16] - The company has extended repo facilities with Wells Fargo and Goldman Sachs, indicating constructive relationships with repo counterparties [35] Q&A Session Summary Question: Update on two large multifamily loans - Management is still anticipating payoffs for the two loans maturing on July 31 and August 1, but may need to evaluate other options due to market volatility [18][19] Question: Current thoughts on term loan B - The term loan matures in August 2026, and management is evaluating options including amending and extending the loan or exploring private credit solutions [21] Question: Update on repo counterparties - The company has extended its repo facilities with Wells Fargo and Goldman Sachs, and is evaluating capacity size based on current financing needs [34][35] Question: Summary statistics for the overall portfolio - The portfolio is transitioning, with a significant reduction in construction assets and an increase in cash-flowing multifamily exposure [41][45] Question: Total REO expected this year and liquidity implications - The company is actively working on monetizing current REO assets and expects to take on additional multifamily assets, with no initial liquidity outflow anticipated from the new financing facility [50][51] Question: Consideration of splitting the company into separate entities - Management is considering various strategies for REO but currently has no plans to split the company into separate entities focused on development and mortgage REIT operations [55]

Financial Data and Key Metrics Changes - For Q1 2025, the company reported a GAAP net loss of $0.56 per share and a distributable loss of $0.25 per share [10] - Distributable earnings prior to realized losses were $0.08 per share, with earnings from REO investments contributing a distributable loss of $0.03 per share [10] - The held for investment loan portfolio decreased to $5.9 billion at March 31 from $6.1 billion at December 31, primarily due to loan resolutions [11] Business Line Data and Key Metrics Changes - The company fully realized five loans, receiving $67 million in proceeds from repayments and resolutions, which improved liquidity and reduced leverage [7] - Hospitality exposure was reduced by $326 million, reflecting a strategic move in light of economic headwinds [8] - A $214 million facility was closed to finance non-performing loans through the REO stage, indicating progress in the multifamily REO strategy [8][14] Market Data and Key Metrics Changes - The company noted widening spreads in the real estate capital markets and a pause in transactions by institutional participants due to heightened uncertainty [6] - The economic and political climate is impacting capital markets and investor sentiment, which may affect the company's operational momentum [9] Company Strategy and Development Direction - The company is focused on enhancing liquidity, reducing leverage, and optimizing outcomes on watch list loans through various strategies including loan sales and discounted payoffs [10] - The management is considering various paths for loan resolutions, including divesting, extending, recapitalizing, or taking assets over as REO depending on market conditions [9] - The company aims to manage liquidity effectively while preparing for future liability maturities and seeking to improve asset performance [58] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the ongoing volatility in U.S. tariffs and foreign policy, which has created uncertainty in the economy and commercial real estate [5] - Despite the challenges, management expressed optimism about achieving strategic goals and improving liquidity through realizations [6][58] - The company is preparing for potential economic headwinds and recessionary fears while remaining proactive in its strategies [9] Other Important Information - The company reported total liquidity of $136 million as of March 31, which includes cash and undrawn credit capacity [15] - The company has a target of $2 billion in realizations for the year, with $600 million achieved so far [58] Q&A Session Summary Question: Update on large multifamily loans - Management confirmed that two large multifamily loans are still in process, with maturities approaching [17][18] Question: Thoughts on term loan B - Management is evaluating options for the term loan B, including amending and extending the existing loan or exploring private credit solutions [19][20] Question: Repo counterparties update - Management extended the Wells Fargo facility for another year and the Goldman Sachs repo facility for two years, indicating constructive relationships with repo lenders [31][32] Question: Portfolio statistics and liquidity implications - Management discussed the transitional nature of the portfolio, with a focus on improving liquidity and managing funding commitments [40][41] Question: Total REO expected this year - Management indicated that the REO strategy is fluid, with potential monetization of assets in the near term and ongoing evaluations of additional REO acquisitions [48][49]

Financial Performance - The company reported a GAAP net loss of $78.6 million, or $0.56 per share, and a distributable loss of $35.7 million, or $0.25 per share, for Q1 2025[2] - Distributable earnings prior to realized losses were $11.6 million, or $0.08 per share[2] - A provision for CECL reserves of $41.1 million, or $0.29 per share, was recorded for the quarter, bringing total CECL reserves to $260.8 million, or $1.83 per share, as of quarter end[2] - A valuation adjustment for a loan receivable held-for-sale of ($42.6) million, or ($0.30) per share, was recorded for the quarter[2] - The book value per share stood at $13.60[2] Loan Portfolio - The held-for-investment loan portfolio totaled $5.9 billion, with 98% being floating-rate and 98% being senior loans[2,4] - $316 million of loan repayment and sale proceeds were received during the quarter, while $42 million was funded on existing loan commitments[2] - Subsequent to quarter-end, $291 million of loan repayment proceeds were received[2] - Loans with a risk rating of 4 or higher constituted 46% of the loan portfolio as of March 31, 2025, compared to 45% at December 31, 2024[2] - The CECL reserve stood at 4.4% of UPB at March 31, 2025, with specific reserves of 16.4% on risk rated 5 loans and general reserves of 2.7%[2] Liquidity and Capitalization - Total liquidity was $136 million, including $128 million of cash, as of March 31, 2025[2] - Unencumbered loan UPB was $468 million, including $223 million classified as held-for-sale[2] - Net unfunded loan commitments decreased to $132 million[2] - Warehouse financing capacity totaled $5.1 billion, with $3.0 billion outstanding at March 31, 2025[2] - Outstanding financings decreased by $216 million during the quarter, including $35 million of deleveraging payments[2] - The net debt / equity ratio was 2.4x and the total leverage ratio was 2.8x as of March 31, 2025[2]

Core Viewpoint - Claros Mortgage Trust, Inc. reported a quarterly loss of $0.25 per share, which was better than the Zacks Consensus Estimate of a loss of $0.32, indicating an earnings surprise of 21.88% [1]. Financial Performance - The company posted revenues of $43.38 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 25.94%, and a decline from $58.83 million in the same quarter last year [2]. - Over the last four quarters, the company has surpassed consensus EPS estimates four times but has only topped consensus revenue estimates once [2]. Stock Performance - Claros Mortgage Trust, Inc. shares have declined approximately 43.8% since the beginning of the year, contrasting with the S&P 500's decline of 4.7% [3]. - The current consensus EPS estimate for the upcoming quarter is $0.02 on revenues of $61.93 million, and for the current fiscal year, it is -$0.23 on revenues of $244.84 million [7]. Industry Outlook - The REIT and Equity Trust industry, to which Claros Mortgage Trust belongs, is currently ranked in the bottom 37% of over 250 Zacks industries, suggesting potential challenges ahead [8]. - The performance of Claros Mortgage Trust may be influenced by the overall outlook of the industry, as historical data shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8]. Future Expectations - The sustainability of the stock's price movement will largely depend on management's commentary during the earnings call and the revisions of earnings estimates in the near future [3][4]. - The estimate revisions trend for Claros Mortgage Trust is currently mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6].