Claros Mortgage Trust (NYSE:CMTG) Q4 2025 Earnings call February 19, 2026 10:00 AM ET Company ParticipantsAnh Huynh - VP of Investor RelationsChris Muller - DirectorJohn Nicodemus - Managing DirectorMike McGillis - President and CFOPriyanka Garg - EVPRichard Mack - CEORick Shane - Managing DirectorOperatorHello, and welcome to the Claros Mortgage Trust fourth quarter 2025 earnings conference call. My name is Becky, and I will be your conference facilitator today. All participants will be in a listen-only mo ...

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Group 1 - Brett Ashcroft-Green is a CERTIFIED FINANCIAL PLANNER™ and the founder of Ashcroft Green Advisors, a registered investment advisory firm based in Nevada [1] - The firm specializes in working with high-net-worth and ultra-high-net-worth families, leveraging Brett's extensive experience in private credit and commercial real estate mezzanine financing [1] - Brett has a professional background that spans the U.S. and Asia, including significant experience in China, and is fluent in Mandarin Chinese [1] Group 2 - The article does not provide any specific financial, investment, tax, or legal advice, emphasizing the importance of consulting with a qualified financial professional [3] - It highlights that the author's views are based on independent research and professional experience, without any compensation from companies mentioned [2][3]

Financial Data and Key Metrics Changes - For Q4 2025, the company reported a GAAP net loss attributable to common stockholders of $27.4 million, or -$0.58 per basic common share, which includes a provision for credit losses of $14.4 million, or -$0.30 per share, and an impairment loss in the Miami Beach REO asset of $6.8 million, or -$0.14 per share [15] - The book value at December 31 was $7.29 per common share, a decline of $0.65 per share from Q3, primarily due to the provision for credit losses and impairment loss on REO [15] - The aggregate CECL reserve at December 31 was approximately $148 million, up from $134 million in the previous quarter, reflecting an increase in specific reserves on collateral-dependent loans and worsening macroeconomic forecasts [16] Business Line Data and Key Metrics Changes - The total loan portfolio commitments at year-end were $1.8 billion, with an outstanding principal balance of $1.7 billion and about $77 million of future fundings, accounting for only about 4% of total commitments [9] - The realized loan portfolio yield for Q4 was 6.7%, which would have been 8% excluding nonaccrual loans [9] Market Data and Key Metrics Changes - The commercial real estate industry experienced strong momentum in 2025, with increased capital availability and improved fundamentals across many markets and property types [5] - Lending volume expanded to a wider range of property types and markets, benefiting the CMBS market and strengthening CLO issuance [5][6] Company Strategy and Development Direction - The company aims to reduce higher-cost debt and focus on asset resolutions, with plans to begin regrowing the portfolio in the latter half of 2026 [7][8] - The strategy includes reallocating capital in the portfolio and recycling into new originations as a high priority [8] Management's Comments on Operating Environment and Future Outlook - Management noted that the market momentum from 2025 has continued into early 2026, setting the stage for potentially stronger transaction activity across property types [7] - The company expects to see upgrades and downgrades in credit ratings, with ongoing risks of future losses embedded in their reserves [25][26] Other Important Information - The company had an active year of loan repayments and resolutions totaling about $469 million during 2025, with $45 million of loan repayments in Q4 [10] - The company is focused on resolving remaining rated loans, particularly in the office sector, and is optimistic about the overall performance of the portfolio [26][30] Q&A Session Summary Question: How is the company thinking about the economics of new origination versus returning capital to shareholders? - The company plans to continue resolving loans and decreasing leverage until it starts originating again later in the year [19] Question: What is the current reserve position and likelihood for further reserve build? - The company updates its CECL process quarterly, with the current reserve reflecting the latest economic forecasts, and believes it is appropriately reserved for collateral-dependent loans [21][22] Question: Where may book value per share trough in this cycle? - Management acknowledged the risk of future losses and noted that the majority of the portfolio is performing well, with ongoing resolutions expected [25][26] Question: What are the expectations for the multifamily property type? - The company feels positive about the multifamily sector overall, despite some downgrades, and expects a recovery trend in the second half of the year [31][32] Question: What is the visibility on scheduled maturities? - The company expects the portfolio to decrease through mid-2026 before stabilizing and regrowing, with clear communication with borrowers regarding expectations for loan repayments [37][39]

A steadily building wall of maturing property debt in the US is finally letting up as the outlook for commercial real estate improves https://t.co/BkQniu7omj ...

Europe’s commercial real estate market posted its best quarter for deal making since the ECB brought the cheap money era to a a shuddering halt in 2022 https://t.co/rx3ClCMTpt ...

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Core Insights - The regional banking sector is showing signs of recovery, particularly in commercial real estate (CRE), as valuations normalize and lending activity increases [1][3][4] - Class A office spaces are experiencing a resurgence, indicating a potential turnaround in the commercial real estate market [2][3] - The S&P Regional Banking ETF has increased by over 17% since its lows in November 2025, contrasting with the S&P Financial Sector's modest 4% rise [5] Group 1: Regional Banking Sector Recovery - The regional banking sector is benefiting from a combination of Federal Reserve actions and increased lending activity, leading to improved outlooks compared to six to ten months ago [1][3] - There is a notable shift in the commercial real estate landscape, with a recovery in Class A office spaces, suggesting a positive trend for regional banks [2][3] - The sector has maintained solid credit performance, with only seven basis points of charge-offs reported in the last quarter, indicating strong credit activity [9] Group 2: Challenges and Trends - Concerns remain regarding the impact of private credit on the financial sector, particularly following recent auto-related failures [10][12] - The regional banks have largely avoided risky lending practices that have plagued non-bank institutions, positioning them favorably in the current environment [8][11] - The ongoing economic environment is characterized by uncertainty, with potential risks from tariffs and the effects of AI on job creation and productivity [17][21][22] Group 3: Future Outlook and Innovations - The regional banking sector is expected to benefit from technological advancements, particularly in AI, which could enhance productivity and operational efficiency [33][35] - Consolidation within the regional banking industry is becoming a common strategy to compete against larger banks and fintech challengers, as seen in the recent merger announcements [39][40] - Regional banks have a defined sphere of influence, allowing them to focus on profitable sub-markets and maintain close relationships with local businesses [29][30]

For the second month in a row, we're seeing a significant cooldown in commercial real estate deal-making. With interest rates still high and all that continued uncertainty in the broader economy, it's just getting tougher to get the deals done. Now, I've been watching this space for a few decades now on CNBC, but now we're getting these amazing monthly spreadsheets of the actual deals provided exclusively to us by Moody's for the Property Play.That's my new platform dedicated to commercial real estate inves ...

Listen and subscribe to The Big Idea with Elizabeth Gore on Apple Podcasts, Spotify, or wherever you find your favorite podcast. Are you an entrepreneur looking to open a storefront? Here’s what you need to know… This week on The Big Idea with Elizabeth Gore, SERHANT. founder and media personality Ryan Serhant joins the show to answer the question: Should I buy or rent commercial real estate for my business? Serhant shares his expert advice on the real estate market and offers top guidance for entrepreneurs ...