KKR Real Estate Finance Trust (KREF) investor relations material

Executive summary

• Reported a GAAP net loss attributable to common stockholders of $61.9 million ($0.96 per diluted share) for Q1 2026, driven by higher credit loss provisions and loan write-offs; book value per share at $11.87 as of March 31, 2026.

• Distributable loss was $4.1 million ($0.06 per share), including realized losses, down from the prior quarter.

• 2026 is a transition year focused on resolving watchlist and legacy office assets, and repositioning the portfolio for higher quality and liquidity.

• Board authorized a new $75 million share and preferred stock repurchase program and declared a $0.10 per share dividend for Q2 2026, payable July 15.

• Liquidity remains strong at $653 million, including $135 million in cash and $500 million undrawn revolver.

Financial highlights

• Net interest income was $26.2 million for Q1 2026; total assets were $6.95 billion and total equity was $1.15 billion.

• Distributable earnings (loss) totaled $4.1 million (negative $0.06 per share); distributable earnings before realized losses were $13 million ($0.20 per share).

• Paid a $0.25 cash dividend in April for Q1; dividend reduced to $0.10 per share per quarter, payable July 15.

• CECL provisions of $74 million recorded, total allowance now $260 million ($4.03 per share).

• Originated and funded $184 million in new loans; received $415 million in loan repayments, with 75% from legacy office.

Outlook and guidance

• Targeting reduction of legacy office exposure from 21% to under 10% by year-end, with over half from par repayments.

• Plan to resolve all current watchlist loans by year-end through sales or modifications.

• Expect loans originated between 2024-2026 to comprise ~50% of portfolio by year-end, implying $1B-$1.2B in new originations.

• Earnings expected to trough in H2 2026 into H1 2027, then recover as REO monetization progresses.

• Management expects continued challenges from elevated interest rates, market volatility, and credit risk in office and life science sectors.