KKR Real Estate Finance Trust Inc. (KREF) reported a net loss of $4.9 million for the first quarter of 2025, translating to a loss of $0.15 per share, compared to a net loss of $3.1 million, or $0.13 per share, in the same period last year. The company's total revenue for the quarter was $35.2 million, down from $46.8 million in the prior year, primarily due to a decrease in interest income, which fell to $114.0 million from $151.6 million. Interest expense also decreased to $82.6 million from $112.5 million, resulting in a net interest income of $31.3 million, down from $39.1 million year-over-year.
KREF's total assets increased to $6.55 billion as of March 31, 2025, up from $6.35 billion at the end of 2024. The growth was driven by an increase in commercial real estate loans held-for-investment, which rose to $6.11 billion from $5.89 billion. However, the allowance for credit losses also increased to $142.3 million from $117.1 million, reflecting a more cautious outlook on credit quality amid ongoing economic uncertainties. The company’s equity decreased to $1.36 billion from $1.40 billion, largely due to the net loss incurred during the quarter.
In terms of operational developments, KREF's loan portfolio consisted of 54 loans with an average risk rating of 3.1, indicating a medium risk level. The company reported that it collected 100% of interest payments due on its loan portfolio during the quarter. KREF's management continues to focus on originating floating-rate transitional senior loans, with the majority of its loans earning a floating rate of interest indexed to Term SOFR. The company also executed a share repurchase program, retiring 889,100 shares at an average price of $11.03 per share during the quarter.
Looking ahead, KREF's management expressed cautious optimism, noting that while the macroeconomic environment remains challenging, the company is well-positioned to navigate these conditions. The firm plans to continue focusing on its core strategy of originating and acquiring transitional senior loans secured by commercial real estate assets. KREF's liquidity position remains strong, with $106.4 million in cash and $570 million available under its revolving credit agreement, which should support its operational and investment activities in the near term.
About KKR Real Estate Finance Trust Inc.
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