Blackstone Mortgage: Our Take On The Results And Our Forward Projections

Binary Tree Analytics
5.15K Followers
(14min)

Summary

  • Blackstone Mortgage Trust is a real estate finance company specializing in commercial real estate loans.
  • The REIT does not only use its own equity to make loans, but also borrows heavily, with a 4.3 debt/equity ratio on its balance sheet.
  • The current commercial real estate downturn is causing a significant decline in BXMT's book value due to loan defaults and property value decreases.
  • The article articulates the pro forma formula used to come to an ultimate book value of $17.9/share for the fund.
  • Investors are best served to trade BXMT based on the discount to book value, buying when the discount is wide and selling when it narrows.

Low angle view of London city Canary Wharf skyscrapers

Gary Yeowell

Thesis

Blackstone Mortgage Trust (NYSE:BXMT) is a real estate finance company that originates senior loans collateralized by commercial properties in North America, Europe, and Australia. The REIT is one of the largest in the space, alongside Starwood Property Trust (

This article was written by

5.15K Followers
With an investment banking cash and derivatives trading background, Binary Tree Analytics ('BTA') aims to provide transparency and analytics in respect to capital markets instruments and trades. BTA focuses on CEFs, ETFs and Special Situations, and aims to deliver high annualized returns with a low volatility profile. We have been investing for over 20 years after obtaining a Finance major at a top university.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in BXMT over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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