KKR Real Estate Finance Trust Inc. Closes Two Senior Loans Totaling $266.5 Million

NEW YORK–(BUSINESS WIRE)–KKR Real Estate Finance Trust Inc. (the “Company” or “KREF”) (NYSE:KREF)
today announced the Company closed two floating-rate senior loans
totaling $266.5 million since the November 12th press
release, resulting in current fourth quarter 2018 originations of $673.5
million across six senior loans. Year-to-date, KREF has originated 18
senior loans totaling $2.5 billion, a 68% increase over the
corresponding period in 2017. As of today, the outstanding funded
portfolio is $4.0 billion.

Recent Investment Activity

In November 2018, KREF closed a $103.5 million floating-rate senior loan
secured by a 231-unit luxury multifamily property located in San Diego,
CA. 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 74%.

In December 2018, KREF closed a $163.0 million floating-rate senior loan
secured by a 266-unit, class-B multifamily property located in New York,
NY. The loan has a three-year initial term with two one-year extension
options, carries a coupon of LIBOR+2.6% and has an appraised LTV of
approximately 67%.

The weighted average underwritten internal rate of return of these two
loans is 12.5%.

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

             
Month Maximum Initial Face Interest
Description/Location   Property Type   Originated   Face Amount   Amount Funded   Rate(A)   Maturity Date(B)   LTV
Senior Loan, San Diego, CA Multifamily November 2018 $ 103,500 $ 81,018 L + 3.2% December 2023 74 %
Senior Loan, New York, NY Multifamily December 2018   163,000   148,000 L + 2.6 December 2023 67  
Total/Weighted Average $ 266,500 $ 229,018 L + 2.8% 70 %
 

(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.

Contacts

Media
Kristi Huller or Cara Major
(212) 750-8300
media@kkr.com

Investor
Relations

Sasha Hamilton
(212) 401-0447
sasha.hamilton@kkr.com