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Core Insights - KKR Real Estate Finance Trust (KREF) reported a fourth-quarter 2025 GAAP net loss of $32 million, or $0.49 per share, while distributable earnings were $14 million, or $0.22 per share, and a cash dividend of $0.25 was paid for the fourth quarter [4][3][5] Financing and Liquidity - The company has a total financing capacity of $8.2 billion, including $3.5 billion of undrawn capacity, with 74% of financing remaining non-mark-to-market [1] - KREF ended Q4 with near-record liquidity of over $880 million, having increased its corporate revolver to $700 million from $610 million [7][2] - The company has no facility maturities until 2027 and no corporate debt due until 2030 [1][7] Portfolio Performance - The weighted average risk rating on the portfolio was 3.2 at year-end, with a debt-to-equity ratio of 2.2x and a total leverage ratio of 3.9x [9] - In Q4, KREF downgraded certain loans, resulting in total incremental CECL provisions of $44 million [8][6] - New originations in 2025 totaled $1.1 billion, with over 75% concentrated in multifamily and industrial loans, while Q4 new originations were $424 million, exceeding repayments of $380 million [10] Geographic Expansion and Strategy - KREF closed its first loan in Europe and made subsequent investments, marking a milestone for geographic diversification [11] - The company plans to pursue an aggressive resolution strategy for its watchlist assets and REO portfolio in 2026, aiming to unlock approximately $0.13 per share of value [12][11] Dividend and Share Repurchase - The board is actively evaluating the dividend as part of broader capital allocation discussions, particularly in light of the transitional year [15] - KREF repurchased over $9 million of common stock in Q4 at a weighted average share price of $8.24, totaling $43 million for the full year 2025 [16]

Financial Data and Key Metrics Changes - For Q4 2025, the company reported a GAAP net loss of $32 million or $0.49 per share, with a book value of $13.04 as of December 31 [3] - Distributable earnings were $14 million or $0.22 per share, and a cash dividend of $0.25 was paid for Q4 [3] Business Line Data and Key Metrics Changes - New originations in Q4 totaled $424 million, surpassing repayments of $380 million, indicating a positive trend in loan origination [8] - Over 75% of new originations during the year were concentrated in multifamily and industrial loans, sectors with resilient fundamentals [5] Market Data and Key Metrics Changes - The company ended the year with over $880 million in liquidity, including $85 million in cash and $700 million in undrawn capacity on the corporate revolver [9] - Total financing capacity was $8.2 billion, with a debt-to-equity ratio of 2.2 times and a total leverage ratio of 3.9 times, consistent with target ranges [9] Company Strategy and Development Direction - The company aims to strengthen its liquidity position and has closed a $650 million Term Loan B, reducing the coupon to SOFR plus 250 basis points [4] - A focus on geographic diversification was highlighted, with the first loan in Europe closed, positioning the company to capitalize on relative value across the U.S. and Europe [5] - The company plans to implement an aggressive resolution strategy for watchlist assets and select office assets to compress the discount of stock price to book value [6] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the market improving and highlighted the importance of executing business plans to unlock value in the REO portfolio [6][7] - The dividend policy is under active evaluation as part of broader capital allocation discussions, balancing near-term earnings visibility with long-term shareholder value [7] Other Important Information - The company downgraded certain loans to risk rating 5, resulting in total incremental CECL provisions of $44 million during the quarter [8] - The weighted average risk rating on the portfolio is 3.2, indicating a moderate level of risk across the loan portfolio [9] Q&A Session All Questions and Answers Question: Discussion on accelerating resolutions on watchlist and REO assets - Management acknowledged progress on REO and emphasized the goal of liquidating assets to create a cleaner portfolio, which could lead to better market recognition [12][14] Question: What does success look like by the end of 2026? - Success is defined as monetizing or liquidating the majority of the watchlist and addressing office portfolio issues, with a focus on clarity and resolution [16][18] Question: Concerns about loans that are under-earning in 2026 - Management indicated that while some assets are underperforming, contractual payments are being made, and there is potential upside from resolving REO assets [25][27] Question: Dividend policy and financial analysis - Management confirmed that dividend decisions will be based on empirical financial analysis rather than market sentiment [28][29] Question: Insights on commercial real estate credit demand - Management noted increased allocations to real estate credit and equity, with a shift towards opportunistic and value-add investments [48][50] Question: Impact of rate cuts on REO assets - Management observed that rate cuts are helping liquidity in the market, although the overall sentiment for real estate remains positive [54][55] Question: View on the office sector and attractive loan characteristics - Management emphasized a high bar for office loans, focusing on newer, high-quality assets with stable cash flows [58][59] Question: Expectations for originations and repayments - Management indicated that originations will align with repayments as they execute their resolution strategy, with REO sales potentially increasing portfolio size [60][61]

Financial Data and Key Metrics Changes - For Q4 2025, the company reported a GAAP net loss of -$32 million or -$0.49 per share, with a book value of $13.04 as of December 31 [3] - Distributable earnings were $14 million or -$0.22 per share, and a cash dividend of $0.25 was paid for the quarter [3] Business Line Data and Key Metrics Changes - New originations in Q4 totaled $424 million, surpassing repayments of $380 million, indicating a positive trend in loan origination [8] - Over 75% of new originations were concentrated in multifamily and industrial loans, which are showing resilient fundamentals [5] Market Data and Key Metrics Changes - The company ended the year with over $880 million in liquidity, including $85 million in cash and $700 million in undrawn capacity on the corporate revolver [9] - The weighted average risk rating on the portfolio is 3.2, with a debt-to-equity ratio of 2.2 times and a total leverage ratio of 3.9 times, consistent with target ranges [9] Company Strategy and Development Direction - The company aims to strengthen its liquidity position and has successfully closed a $650 million term loan B, reducing the coupon to SOFR plus 250 basis points [4] - A focus on geographic diversification was highlighted, with the company closing its first loan in Europe, which is part of a strategic effort to build its real estate credit platform [4][5] - The company plans to implement an aggressive resolution strategy for watchlist assets and select office assets to compress the discount of its stock price to book value [6] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the market improving and highlighted the importance of engaging with tenants to optimize asset monetization [7] - The dividend policy is under active evaluation as part of a broader capital allocation discussion, balancing near-term earnings visibility with long-term shareholder value [7] Other Important Information - The company downgraded certain loans to risk rating 5, resulting in total incremental CECL provisions of $44 million during the quarter [8] - The company repurchased over $9 million of common stock at a weighted average share price of $8.24 during the quarter, with a total of $43 million repurchased for the full year [10] Q&A Session Summary Question: Will KREF consider a complete overhaul of its business if the stock does not recover? - Management indicated that they are focused on executing their current business plan and believe that progress on REO will lead to better market recognition [12][13] Question: What does success look like for the company by the end of 2026? - Success is defined as monetizing or liquidating the majority of the watchlist and REO assets, with a focus on clarity in the office portfolio [16][18] Question: Will there be a significant portion of the portfolio under-earning in 2026? - Management noted that while some assets are underperforming, they expect contractual payments to continue and see potential upside from resolving REO assets [25][27] Question: How is the dividend policy being evaluated? - The company is taking a rational financial approach to the dividend, focusing on empirical data rather than market sentiment [28][29] Question: What is the outlook for commercial real estate credit demand? - There is an increasing allocation to real estate credit, with institutional investors shifting focus back to the sector, particularly in opportunistic and value-add areas [48][50] Question: How have recent rate cuts affected interest in REO assets? - Management believes that rate cuts are helping liquidity in the market, although the overall sentiment for real estate is positive due to a lack of sellers [54][55] Question: What makes an office loan attractive today? - The company is focused on lending to newer, high-quality assets with stabilized cash flows and long-term leases, minimizing leasing risk [58][59]

Financial Data and Key Metrics Changes - For Q4 2025, the company reported a GAAP net loss of $32 million or $0.49 per share, with a book value of $13.04 as of December 31 [3] - Distributable earnings were $14 million or $0.22 per share, and a cash dividend of $0.25 was paid for the quarter [3] Business Line Data and Key Metrics Changes - The company experienced $1.5 billion in repayments, consistent with 2024 levels, and $1.1 billion in new originations, with over 75% of new originations concentrated in multifamily and industrial loans [5] - The company is focused on maintaining and selectively growing the portfolio within on-theme asset classes and top-tier MSAs [6] Market Data and Key Metrics Changes - The company ended the year with over $880 million in liquidity, including $85 million in cash and $700 million in undrawn capacity on the corporate revolver [10] - The weighted average risk rating on the portfolio is 3.2, with a debt-to-equity ratio of 2.2 times and a total leverage ratio of 3.9 times [10] Company Strategy and Development Direction - The company aims to execute an aggressive resolution strategy for a significant portion of its watchlist assets and select office assets to compress the discount of its stock price to book value [6] - The company is strategically building its real estate credit platform in Europe, having closed its first loan in the region [4] Management's Comments on Operating Environment and Future Outlook - Management noted that 2026 will be a year of transition, with a focus on repositioning the loan portfolio for improved earnings [6] - The market is improving, and management remains engaged with tenants, particularly regarding the Mountain View asset [7] Other Important Information - The company repurchased over $9 million of common stock at a weighted average share price of $8.24 during the quarter, with a total of $43 million repurchased for the full year [10][11] - The board is actively evaluating the dividend as part of a broader capital allocation discussion [8] Q&A Session Summary Question: Will KREF consider a complete business revamp if the stock does not pull to par? - Management expressed optimism about the portfolio's recognition and emphasized the importance of executing their business plan [13][15] Question: What does success look like by the end of 2026? - Management indicated the goal is to liquidate the vast majority of the watchlist and clarify the office portfolio, with significant progress expected on REO assets [16][18] Question: Will there be a significant portion of the portfolio under-earning in 2026? - Management acknowledged some assets are dragging down earnings but emphasized the potential for near-term opportunities to convert REO assets into performing loans [24][25] Question: How is the company viewing the demand for commercial real estate credit? - Management noted increased allocations to real estate credit and equity, with a shift back into the sector observed among institutional allocators [46][48] Question: Have recent rate cuts increased interest in REO assets? - Management indicated that rate cuts are helping liquidity in the market, with a noted lack of sellers at opportunistic prices [53][54] Question: What makes an office loan attractive today? - Management stated that lending on newer, high-quality assets with stabilized cash flows is where they see attractive opportunities [56][57]

Fourth Quarter & Full Year 2025 Supplemental Information FEBRUARY 3, 2026 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 Finance Trust Inc. and its subsidiaries (collectively, "KREF" or the "Company"). This presentation is not and shall not be construed as an offer ...

Core Insights - KKR Real Estate Finance (KREF) reported a revenue of $25.79 million for Q4 2025, reflecting a year-over-year decline of 26.6% and an EPS of $0.22, down from $0.31 a year ago [1] - The revenue fell short of the Zacks Consensus Estimate of $25.81 million by 0.07%, while the EPS exceeded the consensus estimate of $0.13 by 69.23% [1] Financial Performance Metrics - Total net interest income was reported at $25.79 million, slightly below the average estimate of $25.81 million from two analysts, marking a year-over-year decline of 26.6% [4] - Total other income was $1.3 million, compared to the average estimate of $1.38 million, showing a year-over-year increase of 9.1% [4] - Revenue from real estate owned operations was $4.87 million, below the average estimate of $5.21 million, but represented a significant year-over-year increase of 36.5% [4] - Total other income reached $6.85 million, exceeding the average estimate of $6.58 million, with a year-over-year change of 47.1% [4] Stock Performance - KKR Real Estate shares have returned +2.9% over the past month, outperforming the Zacks S&P 500 composite, which saw a +1.8% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

分组1 - KKR Real Estate Finance (KREF) reported quarterly earnings of $0.22 per share, exceeding the Zacks Consensus Estimate of $0.13 per share, but down from $0.31 per share a year ago, representing an earnings surprise of +69.23% [1] - The company posted revenues of $25.79 million for the quarter ended December 2025, missing the Zacks Consensus Estimate by 0.07%, and down from $35.13 million year-over-year [2] - KKR Real Estate shares have increased by approximately 1.1% since the beginning of the year, compared to the S&P 500's gain of 1.9% [3] 分组2 - The earnings outlook for KKR Real Estate is uncertain, with current consensus EPS estimates at $0.14 for the coming quarter and $0.60 for the current fiscal year, with revenues expected to be $25.96 million and $106.55 million respectively [7] - The Zacks Industry Rank indicates that the REIT and Equity Trust sector is currently in the bottom 25% of over 250 Zacks industries, suggesting potential underperformance compared to higher-ranked industries [8] - The estimate revisions trend for KKR Real Estate was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expectations of underperformance in the near future [6]

Capital Structure and Investment Portfolio - Total committed capital base reached $838.1 million, fully drawn prior to the IPO which generated net proceeds of $225.9 million on May 5, 2017 [20]. - As of December 31, 2025, the aggregate investment portfolio totaled $5,924.2 million, primarily comprised of $5,361.9 million in senior commercial real estate loans [32]. - KKR reported $723.2 billion of assets under management (AUM) as of September 30, 2025, providing significant advantages in sourcing and managing investments [24]. - KKR Real Estate had $84.6 billion of AUM as of September 30, 2025, enhancing the company's access to capital and strategic partnerships [25]. - The company has raised an additional $438.1 million in equity commitments from third-party investors and employees, enhancing its capital base [20]. - The portfolio includes $502.6 million net investment in real estate owned assets (REO) and $44.6 million in CMBS investments [32]. Investment Strategy - The company focuses on originating floating-rate transitional senior loans, with expectations for future investment activity to be heavily weighted toward these loans [32]. - The investment strategy includes targeting loans collateralized by institutional-quality real estate assets located in top markets [27]. - The company’s investment strategy focuses on floating-rate senior loans, which are expected to earn attractive risk-adjusted yields in a rising interest rate environment [52]. Financing and Leverage - Non-Mark-to-Market financing represented 74% of the company's secured financing, totaling $3.5 billion as of December 31, 2025 [44]. - The company refinanced and upsized its secured term loan from $339.5 million to $650.0 million, reducing the spread from S+3.50% to S+2.50% [48]. - The total leverage ratio as of December 31, 2025, was 3.9-to-1, with plans to maintain appropriate leverage levels for the portfolio [50]. - The company’s total portfolio financing outstanding principal was $4.716 billion, with a maximum capacity of $8.207 billion [45]. Regulatory and Operational Considerations - The company operates as a REIT, allowing it to avoid U.S. federal income taxes on distributed net taxable income [22]. - The company expects to continue operating as a REIT, which may limit its expansion opportunities and the manner in which it conducts operations [57]. - The company elected to be treated as a REIT for U.S. federal income tax purposes starting from the taxable year ended December 31, 2014, and expects to continue qualifying as a REIT [57]. - The company may need to forego attractive opportunities to comply with REIT requirements, potentially limiting its expansion [57]. - The company may face risks related to its REIT status and other tax considerations that could impact its operations and financial condition [58]. Competition and Market Environment - The company competes with various institutional lenders and investors, which may affect its ability to generate satisfactory returns [59]. - The company faces competition from various institutional lenders and investors, including other REITs and specialty finance companies, which may limit its ability to generate satisfactory returns [59]. - Changes in the financial regulatory regime could increase competition for investment opportunities previously unavailable to banks and financial institutions [60]. - The company competes with several other REITs that may have overlapping investment objectives and lower costs of funds [59]. Management and Decision-Making - The investment committee includes experienced professionals with over 25 years of commercial real estate experience, ensuring informed decision-making [26]. - The company is externally managed and does not have any employees, with executive officers being employees of the Manager or its affiliates [61]. - The company believes that access to its Manager's and KKR's professionals provides competitive advantages in assessing risks and determining appropriate pricing for investments [60]. Financial Reporting and Transparency - As of December 31, 2025, the company reported a common book value impacted by a CECL allowance of $204.1 million and accumulated depreciation of $5.1 million [36]. - As of December 31, 2025, the company's floating-rate loan portfolio and financing arrangements are benchmarked to Term SOFR, SONIA, or EURIBOR [56]. - The company’s SEC filings are available on its website and can be accessed by investors for financial information [61].

Financial Performance - Reported net loss attributable to common stockholders of $32.0 million and $69.9 million, or $0.49 and $1.05 per diluted share for Q4 and full year 2025, respectively [2] - For the year ended December 31, 2025, the net income attributable to common stockholders was $(69.885) million, resulting in a loss of $(1.05) per diluted share [16] - Distributable Earnings for 2025 were $26.324 million, or $0.39 per diluted share, compared to a loss of $(70.683) million, or $(1.02) per diluted share in 2024 [16] - The company reported distributable earnings before realized gains and losses of $59.960 million, or $0.90 per diluted share for 2025, down from $103.478 million, or $1.49 per diluted share in 2024 [16] Liquidity and Capital Structure - Liquidity position of $886.6 million, including $84.6 million in cash and $700.0 million of undrawn capacity on the corporate revolving credit agreement as of December 31, 2025 [6] - Repurchased 4,629,824 shares at an average price of $9.35 for a total of $43.3 million during the year [8] - Entered into a new $250.0 million term lending agreement and a £300.0 million term credit agreement to finance European originations [6] Loan Portfolio and Credit Quality - Current loan portfolio of $5.4 billion, with 99% floating rate and a weighted average unlevered all-in yield of 7.3% [6] - Originated and funded $424.4 million in floating-rate senior loans in Q4 2025, with a weighted average loan-to-value (LTV) ratio of 68% [9] - Collected 100% of interest payments due on the loan portfolio, with an average risk rating of 3.2 [6] - Increased CECL allowance for risk-rated 5 loans to $204.1 million, or $3.15 per share, primarily due to additional reserves [6][8] - The provision for credit losses, net, was $119.372 million, equating to $1.79 per diluted share for 2025, an increase from $80.605 million, or $1.16 per diluted share in 2024 [16] - The company expects to downgrade a life science loan in Boston, MA, with an outstanding principal balance of $229.6 million, which was risk-rated 3 as of December 31, 2025 [17] - The company anticipates an increase in the allowance for credit losses related to the aforementioned loan in Q1 2026, although the amount cannot be estimated at this time [17] Management and Future Outlook - Focus for 2026 includes accelerating the resolution of select REO and watchlist assets to unlock value and position the company for durable earnings growth [7] - The diluted weighted average common shares outstanding for 2025 were 66,807,432, compared to 69,396,890 in 2024 [16] - KKR Real Estate Finance Trust Inc. had $723.2 billion in assets under management as of September 30, 2025 [22] - The company is externally managed by KKR Real Estate Finance Manager LLC, an indirect subsidiary of KKR & Co. Inc. [22] - The company will host a teleconference on February 4, 2026, to discuss its financial results for Q4 2025 [19]