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- **European Expansion Success**: Closed first European loan, part of $2.5B+ European credit platform.
- **REO Unlock Potential**: $0.13 per share quarterly earnings from asset sales, with $933M liquidity to support redeployment.
- **Market Momentum**: $400M+ Q4 originations expected, matching repayments despite timing delays.
- **Risk Management**: 85% of loan book risk-rated 3+, CECL reserve 3% of loans, stable 1.8x debt-to-equity ratio.
- **Strategic Initiatives**: K-Star platform expansion, share buybacks ($34M YTD), and exploratory M&A for scale.

**【Management Opening Remarks】**
- Reported GAAP net income of $8 million ($0.12 per share) and distributable loss of $2 million due to taking ownership of a Raleigh multifamily property.
- Paid a $0.20 cash dividend for the quarter.
- Book value remained stable at $13.78 per share.

**【CEO Commentary】**
- Highlighted robust market activity with $400 million+ expected Q4 originations, including first European loan secured by 12 Paris/Lyon industrial assets.
- K-Star platform manages $37B+ loans and is special servicer on $45B CMBS, supporting disciplined risk management.
- REO portfolio unlock potential: $0.13 per share quarterly earnings from asset sales.
- 2025 investment volume of $10B across global real estate credit platform.

**【COO Commentary】**
- Liquidity at near-record $933M (including $200M cash) and $7.7B total financing availability (77% non-MTM).
- Year-to-date share repurchases of $34M at $9.70 avg price.
- Watch list: 85% of loan portfolio risk-rated 3+; CECL reserve $160M (3% of loans).
- REO progress: Raleigh multifamily under renovation, West Hollywood condo sales launched, Portland entitlements expected Q1 2026.

**【Q&A Highlights】**
- Liquidity timing: Q3 repayments ($480M) > originations ($110M) due to European closings; expect Q4 originations to match repayments.
- Life Science recovery: 4 assets remain risk-rated 3; early signs of demand from larger pharma tenants.
- European lending: similar ROE to U.S. (hedged basis), but larger loan sizes and multi-jurisdictional portfolios.
- M&A: open to strategic opportunities for scale and diversification, but no active deals.
- 2026 outlook: >$1.5B repayments to be matched with originations, maintaining 1.8x debt-to-equity target.

KKR Real Estate Finance Trust Inc. (KREF) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

KREF

KREF fundamentals

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