Market Overview

KKR Real Estate Finance Trust Inc. Closes Two Senior Loans Totaling $416 Million

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KKR Real Estate Finance Trust Inc. (the "Company" or "KREF") (NYSE:KREF)
today announced the Company closed two floating-rate senior loan
transactions totaling $415.5 million in July 2018. Year-to-date, KREF
has originated ten senior loans totaling $1.6 billion, resulting in a
$3.3 billion portfolio.

Recent Investment Activity

In July 2018, KREF closed a $341.0 million floating-rate senior loan
secured by a 2,640-unit, class-A-/B+ multifamily property portfolio
located in Atlanta, GA and Tampa, FL. The loan has a two-year initial
term with three one-year extension options, carries a coupon of
LIBOR+3.2% and has an appraised loan-to-value ("LTV") of approximately
75%.

In July 2018, KREF closed a $74.5 million floating-rate senior loan
secured by a 1.1 million square foot, 16-building, class-B+ industrial
property in Atlanta, GA. The loan has a three-year initial term with two
one-year extension options, carries a coupon of LIBOR+2.7% and has an
LTV of approximately 74%.

The weighted average underwritten internal rate of return of these two
loans is 10.9%.

Commenting on the recent activity, Chris Lee and Matt Salem, Co-Chief
Executive Officers of KREF, stated: "We have continued our strong
origination momentum into the third quarter. In the first seven months
of 2018, we have originated $1.6 billion of loans, bringing our total
originations for the last twelve months ended July 31, 2018 to $2.4
billion of senior loans, a 126% increase over the corresponding period
in 2017. We are encouraged by our forward pipeline and the opportunity
to continue to make attractive investments throughout the remainder of
2018."

The following table summarizes key features of the two recently closed
floating-rate senior loan transactions ($ in thousands):

Description/Location   Property Type  

Month
Originated

 

Maximum
Face Amount

 

Initial Face
Amount Funded

 

Interest
Rate(A)

  Maturity Date(B)   LTV
Senior Loan, Atlanta, GA & Tampa, FL   Multifamily   July 2018   $ 341,000   $ 332,000   L + 3.2%   August 2023   75 %
Senior Loan, Atlanta, GA Industrial July 2018   74,500     68,800   L + 2.7 August 2023 74  
Total/Weighted Average $ 415,500   $ 400,800   L + 3.1% 75 %
(A)   Floating rate based on one-month USD LIBOR
(B) Maturity date assumes all extension options are exercised.
 

About KREF

KKR Real Estate Finance Trust Inc. (NYSE:KREF) is a real estate finance
company that focuses primarily on originating and acquiring senior loans
secured by commercial real estate properties. KREF is externally managed
and advised by an affiliate of KKR & Co. Inc. For additional information
about KREF, please visit its website at www.kkrreit.com.

Forward-Looking Statements

This release contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, which
reflect the Company's current views with respect to, among other things,
its future operations and financial performance. The forward-looking
statements are based on the Company's beliefs, assumptions and
expectations, taking into account all information currently available to
it. These beliefs, assumptions and expectations can change as a result
of many possible events or factors, not all of which are known to the
Company or are within its control, including those described under Part
I—Item 1A. "Risk Factors" of the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 2017, filed with the Securities
and Exchange Commission ("SEC"), as such factors may be updated from
time to time in the Company's periodic filings with the SEC.
Accordingly, actual outcomes or results may differ materially from those
indicated in this release. All forward looking statements in this
release speak only as of the date of this release. The Company
undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future developments or otherwise, except as required by law.

Definitions

"Loan-to-value ratio": Generally based on the initial loan amount
divided by the as-is appraised value as of the date the loan was
originated.

"Internal Rate of Return": IRR is the annualized effective compounded
return rate that accounts for the time-value of money and represents the
rate of return on an investment over a holding period expressed as a
percentage of the investment. It is the discount rate that makes the net
present value of all cash outflows (the costs of investment) equal to
the net present value of cash inflows (returns on investment). It is
derived from the negative and positive cash flows resulting from or
produced by each transaction (or for a transaction involving more than
one investment, cash flows resulting from or produced by each of the
investments), whether positive, such as investment returns, or negative,
such as transaction expenses or other costs of investment, taking into
account the dates on which such cash flows occurred or are expected to
occur, and compounding interest accordingly. The weighted average
underwritten IRR for the investments shown reflects the returns
underwritten by KKR Real Estate Finance Manager LLC, the Company's
external manager, taking into account certain assumptions around
leverage up to no more than the maximum approved advance rate, and
calculated on a weighted average basis assuming no dispositions, early
prepayments or defaults but assuming that extension options are
exercised and that the cost of borrowings remains constant over the
remaining term. With respect to certain loans included in the weighted
average underwritten IRR shown, the calculation assumes certain
estimates with respect to the timing and magnitude of the initial and
future fundings for the total loan commitment and associated loan
repayments, and assumes no defaults. With respect to certain loans
included in the weighted average underwritten IRR shown, the calculation
assumes the one-month spot USD LIBOR as of the date the loan was
originated. There can be no assurance that the actual weighted average
IRR will equal the weighted average underwritten IRR shown.

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