FS Credit Real Estate Income Trust Reports $42.6M Net Income in Q1 2025

FS Credit Real Estate Income Trust, Inc. reported significant financial performance for the first quarter of 2025, with net income attributable to the company reaching $42.6 million, a substantial increase from $15.8 million in the same period last year. This translates to a net income per share of $0.35, compared to $0.13 in the prior year. The company’s total revenue for the quarter was $61 million, down from $83.4 million in Q1 2024, primarily due to a decrease in interest income, which fell to $162.5 million from $191.7 million. The decline in interest income was attributed to lower average index rates and a reduced average loan balance.

In terms of operational changes, FS Credit Real Estate Income Trust saw a notable increase in real estate operating expenses, which rose to $7.6 million from $1.4 million in the previous year. This increase was largely due to the acquisition of real estate properties through foreclosure. The company also reported a credit loss expense of $10.7 million, a significant improvement compared to a credit gain of $39.9 million in the prior year, reflecting changes in macroeconomic assumptions affecting the current expected credit loss (CECL) reserve.

The company’s loan portfolio showed a slight contraction, with total loans receivable decreasing to $7.3 billion from $7.4 billion at the end of 2024. The number of loans held steady at 143, with a weighted average cash coupon of 3.48%. The company also reported unfunded loan commitments of $248.3 million, down from $254.8 million at the end of the previous year. Geographic distribution of loans remained stable, with the South accounting for 47% of the portfolio, followed by the West at 21%.

FS Credit Real Estate Income Trust is actively managing its capital structure, with total borrowings available under financing arrangements amounting to $2.2 billion as of March 31, 2025. The company’s debt-to-equity ratio stood at 2.1x, consistent with the previous quarter. The firm continues to conduct a public offering of its shares, aiming to raise up to $2.75 billion, which includes a primary offering and a distribution reinvestment plan. The outlook remains cautiously optimistic, with management noting that while the commercial real estate market shows signs of recovery, macroeconomic uncertainties could impact future performance.

Overall, FS Credit Real Estate Income Trust's first-quarter results reflect a strategic focus on managing its loan portfolio and operational expenses while navigating a complex economic landscape. The company remains committed to its investment objectives, aiming to provide stable cash distributions and preserve capital for its investors.