ewsba.se
Interested in Claros Mortgage Trust, Inc.? Here are five stocks we like better.
Claros Mortgage Trust reported a Q1 2026 GAAP net loss of $0.39 per share, with distributable loss of $0.52 per share. Management said the company remains focused on reducing risk, resolving watchlist assets and lowering leverage.
The company made significant progress on portfolio cleanup, completing about $600 million in loan resolutions during the quarter and seeing held-for-investment loans fall to $3.2 billion from $3.7 billion at year-end. Watchlist loans have also declined substantially over the past year.
Deleveraging continued as Claros refinanced its Term Loan B and cut net debt-to-equity to 1.7x from 1.9x in the prior quarter. The company ended the quarter with $132 million in liquidity and said it hopes to pivot toward offense later in 2026.
Claros Mortgage Trust (NYSE:CMTG) reported a first-quarter loss as management said it continued to focus on reducing risk in its loan book, resolving watchlist assets and lowering leverage.
The company posted a GAAP net loss of $0.39 per share for the first quarter of 2026, while distributable loss was $0.52 per share, President, Chief Financial Officer and Director Mike McGillis said on the earnings call. Distributable loss before realized losses was $0.05 per share.
→ Light Speed Returns: Corning Cashes In on NVIDIA Growth
Chief Executive Officer and Chairman Richard Mack said the company is operating against a backdrop of continued uncertainty in broader financial markets, citing monetary policy, geopolitical events and renewed inflation concerns. Still, Mack said real estate capital markets appear “relatively resilient,” with modestly improved transaction volume compared with a year earlier and tight real estate credit spreads.
“We intend to build on the progress and momentum we established in 2025,” Mack said. He added that the company’s strategic priorities remain focused on turning over the portfolio, resolving watchlist loans, repositioning real estate owned assets and deleveraging the balance sheet.
→ Uber's Annual Product Showcase Reveals It Is Coming for Airbnb and Booking
McGillis said Claros completed approximately $600 million of loan resolutions tied to five investments during the quarter, four of which were watchlist loans. Mack cited $609 million of loan resolutions for the period.
The resolved loans included two regular-way repayments: a $174 million multifamily construction loan in Salt Lake City, which the company originated in 2022, and a $67 million New York City land loan originated in 2019 that had been rated four on the company’s risk scale.
→ Wells Fargo’s Comeback Is Real—But Not Risk-Free
Claros also resolved two five-rated loans during the quarter. A $77 million Dallas multifamily loan was resolved through foreclosure, while a $71 million Seattle office loan was resolved by transferring the company’s rights and interests to the financing counterparty.
The fifth resolution was the March sale of a $220 million loan secured by a luxury hotel property in Northern California. McGillis said the loan had matured in August 2025 and was downgraded to a four risk rating after the company and borrower did not agree on modification terms by year-end 2025. Although management viewed the collateral as “a unique, irreplaceable asset” in a desirable submarket, McGillis said Claros negotiated a quick off-market sale of the loan at 90% of par, which approximated carrying value after general reserves allocated to the loan.
“We view this as a positive and efficient resolution aligned with our strategic priorities,” McGillis said.
After quarter-end, Claros resolved another watchlist loan through foreclosure. The $25 million loan was collateralized by a multifamily property in Dallas and had previously been rated five. McGillis said the company believes it can create more value for shareholders by owning the asset rather than selling the loan.
Claros’ held-for-investment loan portfolio declined to $3.2 billion as of March 31, from $3.7 billion at Dec. 31. McGillis said hospitality exposure fell to $592 million from $807 million, while land exposure declined to $120 million from $187 million.
Management said the company currently has eight lender-driven sale processes underway across its watchlist loan and REO portfolios. McGillis said those processes could produce additional resolutions of about $861 million, measured by unpaid principal balance for loans and carrying value for REO assets.
During the question-and-answer portion of the call, KBW analyst Jade Rahmani asked about non-accrual loans, which he said totaled $1.55 billion across 11 loans, or roughly 44% of the portfolio. McGillis said it was difficult to provide a precise forecast, but said Claros expected to “continue to chip away” at non-earning and sub-earning assets, use proceeds to repay leverage, reduce interest expense and increase liquidity.
Priyanka Garg, executive vice president of portfolio and asset management, said four of the eight active sale processes involved loans, accounting for about three-quarters of the roughly $860 million total. She said all four loans are on the watchlist and non-accrual, representing “a good chunk” of the non-accrual balance.
Garg said the company’s watchlist loans have declined from $2.7 billion in January 2025 to $1.4 billion. “We’ve demonstrated over five quarters that we’re very committed to bringing that number down,” she said.
McGillis said the pace of credit migration slowed meaningfully in the quarter, with only two loans moving. The company downgraded one $127 million loan collateralized by a portfolio of Texas multifamily assets from a three to a four risk rating, citing the borrower’s unwillingness to invest additional equity ahead of a June 2026 maturity. Claros also placed a $155 million loan secured by a Phoenix multifamily property on non-accrual because of continued delinquency and lack of progress on modification terms.
As of March 31, the portfolio included 13 loans rated four or five, down from 24 such loans a year earlier, McGillis said.
Claros recorded a $31 million provision for current expected credit losses during the quarter. Total CECL reserves on held-for-investment loans decreased to $399 million, or 11.4% of unpaid principal balance, from $443 million, or 10.9% of unpaid principal balance, at Dec. 31. The general CECL reserve declined to $50 million from $78 million.
In January, Claros retired its existing Term Loan B, which had been scheduled to mature in August 2026, and replaced it with a $500 million senior secured term loan from HPS. McGillis said the new loan carries a four-year term, matures in January 2030, includes prepayment flexibility and is priced at SOFR plus 675 basis points. The company also aligned financial covenants across its financing facilities.
Claros reduced outstanding financings by $489 million during the first quarter, including $142 million of deleveraging payments. Net debt-to-equity fell to 1.7 times at March 31, compared with 1.9 times at Dec. 31 and 2.4 times a year earlier. The company ended the quarter with $132 million in liquidity.
Mack said 2026 will be a year of continued execution as Claros seeks to resolve troubled loans and REO, pay down debt and build cash. He said the company hopes to “pivot to offense” by the end of the year, which could include new originations, further deleveraging, reinvestment in select REO assets or share repurchases.
Claros Mortgage Trust is a specialty finance company structured as a real estate investment trust that acquires and manages a portfolio of newly originated, conventional residential mortgage loans guaranteed or insured by U.S. government‐sponsored enterprises. The company concentrates on Agency collateral, including loans backed by Ginnie Mae, Fannie Mae and Freddie Mac, aiming to generate current income while preserving capital through high‐quality, credit‐enhanced assets.
Under an external management agreement with Claros Mortgage Capital Advisors LLC, the firm leverages a seasoned team to source, underwrite and service mortgage assets.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
The article "Claros Mortgage Trust Q1 Earnings Call Highlights" was originally published by MarketBeat.
View MarketBeat's top stocks for May 2026.