KKR Real Estate Finance Trust Inc. (KREF) reported net income attributable to common stockholders of $13.1 million, or $0.19 per diluted share, for the year ended December 31, 2024. However, the company also reported a distributable loss of $70.7 million, or ($1.02) per diluted share. During the year, KREF repurchased 859,055 shares at an average price of $11.64, totaling $10 million, and declared dividends of $1.00 per common share. The company's investment portfolio totaled $6.3 billion, primarily consisting of performing senior commercial real estate loans with a weighted average unlevered all-in yield of 7.8%.
Significant changes compared to the previous fiscal year (2023) include a decrease in net interest income of $29.9 million, primarily due to a smaller loan portfolio and loans placed on nonaccrual status, partially offset by higher index rates. Total other income increased by $8.3 million, mainly due to increased revenue from real estate owned (REO) operations. Operating expenses decreased by $87.1 million, primarily because of a $94.5 million reduction in the provision for credit losses. The company's total leverage ratio decreased to 3.6x from 4.2x in 2023.
KREF's investment activity during 2024 involved funding $333.3 million for loans closed in prior years and receiving loan repayments of $1.5 billion. The company's portfolio is diversified across property types, with multifamily and industrial assets representing 60% of the loan portfolio. KREF took title to an office property and a life science property through deeds-in-lieu of foreclosure, resulting in net realized losses of $173.5 million. The company extended the final maturity of a $1 billion term credit facility to September 2029 and had no final facility maturities until 2026 and no corporate debt due until 2027.
Key operational developments included a 98% collection rate on interest payments due on the loan portfolio in 2024, with an average risk rating of 3.1 (weighted by total loan exposure). The company's geographic diversification of its loan portfolio is detailed in the filing, showing a concentration in certain regions and property types. KREF does not employ any staff; its operations are managed by an external manager, an indirect subsidiary of KKR.
KREF's outlook, as stated in the filing, anticipates continued focus on originating floating-rate senior loans, potentially including international opportunities. The company expects to utilize repurchase facilities and non-mark-to-market financing to fund future investments. However, the filing also highlights numerous risk factors, including those related to interest rate fluctuations, credit risk, competition, and the company's REIT status, which could materially affect future performance.
About KKR Real Estate Finance Trust Inc.
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