Claros Mortgage Trust, Inc.

For Q1 2026, CMTG reported a GAAP net loss of $0.39 per share and a distributable loss of $0.52 per share; distributable loss prior to realized losses was $0.05 per share. The company completed approximately $600 million of loan resolutions across 5 investments, including one loan sale at 90% of par, and the held-for-investment loan portfolio declined to $3.2 billion from $3.7 billion at December 31. CECL provision was $31 million, total CECL reserve on loans decreased to $399 million from $443 million, and net debt-to-equity improved to 1.7x from 1.9x at year-end. Liquidity was $132 million at quarter-end. Forward-looking, management did not give formal earnings guidance, but said 2026 priorities are to continue turning over the portfolio, resolve watch list loans, reposition REO assets, deleverage, and potentially be in a position to make capital allocation decisions later this year.

Richard Mack framed the environment as uncertain but supportive for real estate relative value, citing modestly improved transaction volume, tight credit spreads, and signs of recovery in several property types. He said the company’s priorities are to turn over the portfolio, resolve watch list loans, reposition REO assets, and deleverage, with new capital deployment possible later in the year if execution continues. His tone was confident and optimistic, repeatedly describing 2026 as a pivotal year and saying the stock appears undervalued.

Mike McGillis focused on the quarter’s execution and balance-sheet cleanup. He highlighted $600 million of resolutions, the decline in held-for-investment loans to $3.2 billion, the reduction in hospitality exposure to $592 million from $807 million and land exposure to $120 million from $187 million, plus the retirement of the prior Term Loan B and replacement with a new $500 million senior secured term loan priced at SOFR plus 675 basis points and maturing in January 2030. He also noted $489 million of financing reductions, including $142 million of deleveraging payments, a lower net debt-to-equity ratio of 1.7x, and $132 million of liquidity.

Analysts pressed on the size and trajectory of non-accruals, which were cited as $1.55 billion across 11 loans, and asked whether management had a year-end target. Management said it is hard to give a precise endpoint, but emphasized active sale processes and the goal of removing non-earning and sub-earning assets, using proceeds to pay down leverage and increase liquidity. Asked about the scale of assets in process, management said 8 active sale processes cover about $860 million of asset value, with 4 of the 8 tied to loans that are on the watch list and on non-accrual. Priyanka Garg added that watch list loans have already come down from $2.7 billion in January 2025 to $1.4 billion now, and that the team intends to keep pushing the same playbook.