In her new role as Blackstone Mortgage Trust CEO, Katie Keenan is focused on talent, culture, and high-quality assets.

10/05/2021 | by

With $684 billion worth of assets, The Blackstone Group is one of the largest alternative asset managers in the world. And after nearly 10 years at the company, Katie Keenan says her career path—including her recent promotion to CEO of Blackstone Mortgage Trust, Inc. (NYSE: BXMT)—has been a product of the firm’s unique culture. 

Blackstone Mortgage Trust, which operates as part of the market-leading Blackstone Real Estate platform, originates high-quality first mortgage loans across sectors and markets to drive reliable, steady income for its shareholders. 

Keenan noted that the strength and resilience of its model has proven itself throughout the pandemic as well as for the many years before, with excellent credit performance and strong current yield that has become increasingly attractive relative to compressing returns elsewhere in the market.  

This year, Blackstone Mortgage Trust has capitalized on the re-emergence of transaction flow to drive significant activity in multifamily, life sciences, industrial, and growth market office lending, leading to strong growth for the business, which just crossed $20bn in portfolio size.

Blackstone Mortgage Trust has an apprenticeship culture that had Keenan coming up through the business sourcing, underwriting and negotiating many of those loans. Throughout her career, she drew on the tremendous information flow and experience within the platform to hone her own investment skills and develop them amongst the broader team. That inclusive culture is something Keenan is intent on preserving as CEO. 

Blackstone Mortgage Trust CEO Katie Keenan
Blackstone Mortgage Trust CEO Katie Keenan

“I’m focused on making sure that we have the highest quality talent from all different backgrounds here,” she said. 

Blackstone Mortgage Trust’s business model focuses on making low-leverage first mortgage loans to institutional sponsors. Keenan added that as “thematic investors,” the company also looks at macroeconomic growth drivers to make investment strategy decisions, including increasing activity in the multifamily and life sciences sectors.

Keenan says she’s excited to continue sharing the story of Blackstone Mortgage Trust’s “compelling business model” with the commercial real estate industry. She recently spoke with REIT magazine about Blackstone Mortgage Trust’s investment approach, why maintaining relationships in the real estate industry is key, and her side job tending to her vegetable garden.

What was the overall appeal of joining a company like Blackstone?

The culture here is unparalleled, so when I had the opportunity to join almost 10 years ago, I was really excited. The level of energy, the intellectual curiosity, and the care that everyone brings to the process—the investment decisions, the collaboration—all of that is inspiring and motivating. It’s a very unique environment to be a part of and a wonderful place to build a career.

The other thing that was really appealing to me is our apprenticeship culture. From the outset, I participated in all the conversations and was a key contributor to the decision-making process. The opportunity to be involved from the day I joined the company and to be able to evolve over time was invaluable. That’s something that is really special about Blackstone and its people, culture, process, and how we make investments. And it ensures we have the best talent on our team to generate top quality lending opportunities for the Blackstone Mortgage Trust portfolio.

As the pandemic evolves, how has a positive culture impacted your employees? 

Our priority for the past year and a half has been ensuring the health and safety of our employees. It has been a challenging period, but it is really heartening to see how much the culture and support network that we built over the years leading up to the pandemic created this infrastructure where we operate as one team and support one another. There is a built-in level of communication and trust that has allowed us to deal with a very difficult situation.

How does being a part of the broader Blackstone umbrella benefit Blackstone Mortgage Trust?

We have a unique vantage point to access different types of investment opportunities, asset classes, markets, types of investing, and the ability to find relative value. We invest across the real estate business within the Blackstone platform—on the private side, in public investments, in securities, and in acquisitions on the equity side. Seeing that range of investment opportunities helps you become a better investor in every way. The breadth of Blackstone and all the different areas in which it invests provides us a unique perspective on trends and opportunities in the market that we would not see otherwise, and allows us to be nimble and decisive to capture the best loans available in the market.

How does Blackstone Mortgage Trust operate on a day-to-day basis?

Blackstone Mortgage Trust is focused on making high-quality first mortgage loans to institutional sponsors on real estate with solid fundamentals. Where we sit within Blackstone, we have the tremendous benefit of all the information we’re seeing across the business. We run as part of a highly integrated platform, so we have the information and the scale of the entire firm which drives differentiated access to investment opportunities and supports strong relationships throughout the industry. Having all those data points helps drive better decision-making.

Across the real estate platform, we have over $200 billion of capital under management, so we’re very significant owners in every asset class that we find interesting. This gives us deep, real-time information about fundamentals and capital markets. Our culture is very focused on sharing this information constantly, and this is really the bedrock for all of our investment decisions. So when we’re investing out of Blackstone Mortgage Trust in first mortgage investments, that process is supported by a tremendous network of information flow from across Blackstone Real Estate and the broader firm.

What is Blackstone Mortgage Trust’s investment approach? 

At Blackstone, we’re thematic investors. We focus on what we see as the macro key growth drivers in the economy, and we use that to inform our different investment strategies within the firm. For example, we’ve been investing in life sciences and content creation for some time, and that translates through to the Blackstone Mortgage Trust portfolio where we’ve done a lot of lending on Boston lab buildings, as well as on studios and creative office space in Los Angeles. We’ve seen the strength and resilience in garden-style multifamily across the country, and it is our most active sector for new loans today. We’re regularly looking to bring the overall macro trends that we observe to lending opportunities that are experiencing tailwinds across the market.

Another key differentiating factor for our business is the size of Blackstone Mortgage Trust. Our scale gives us the unique access to a high-quality pipeline of investment opportunities. In any given quarter, 75% to 80% of our business is with strong sponsors who are repeat borrowers. We understand what’s important to these sponsors, they’ve had great experiences with us over the years, and we can draw on the depth of our relationships to capitalize on the best lending opportunities for the Blackstone Mortgage Trust business.

Has the pandemic impacted Blackstone Mortgage Trust’s approach to originations for the rest of 2021 or heading into 2022? 

Throughout the pandemic, the Blackstone Mortgage Trust business model has been stable and resilient. It’s all about putting together a portfolio of high-quality, first mortgage loans on strong underlying assets. It worked very well leading up to the pandemic, and it led to resilient performance from the company throughout the pandemic as well—we had 99.7% interest collection in 2020. 

This resiliency over the past year or so has given us a solid foundation to re-accelerate our focus on finding really great first mortgage lending opportunities. We’ve been pursuing that at a very strong pace. We’re seeing a lot of attractive investment opportunities in the market, and our capital and balance sheet are both well-positioned to access those opportunities—we’ve closed $6.5billion of new loans so far this year, all consistent with the core themes that have driven Blackstone Mortgage Trust’s strong performance over the last 8 years.

What’s the best career advice you’ve ever received? 

Always be open to opportunities to learn and grow. I’ll always remember a class I took on luck and positive psychology, and the myriad studies that show “lucky” people are really just those that are open to opportunities. You never know where a growth opportunity will take you, and it’s important to always be open and receptive. I have had the opportunity to constantly expand my experience, knowledge base, and responsibilities within Blackstone—there’s always something new to learn.

What advice would you pass along to someone entering a career in real estate today?

Find great people who care about each other and are willing to invest in you. Having colleagues that care about your short and long-term trajectory, give you access to growth opportunities, and invest the time and resources in developing your knowledge base and talent is invaluable. 

Blackstone Mortgage Trust CEO Katie Keenan

Specific to real estate, I always say to keep in touch with people you meet at every level. This is a very small industry and the people who are in the trenches with you at the beginning of your career can very often grow into your most important business relationships over time. Maintaining those relationships and fostering them is one of the fun parts about the industry, and you never know where they’ll lead.

What are some of your hobbies?

I’m a pretty avid weekend gardener—it’s one of the things I really like to do outside of work with my children and family. We have an extensive fruit and vegetable garden that I spend a lot of time on. I think it could seem like work to some people, but I find it very rewarding. We have tons of tomatoes, cucumbers, a couple of different kinds of squash, kale, strawberries, and raspberries.

What are some of Blackstone Mortgage Trust’s company goals for the near- to medium-term? 

At Blackstone Mortgage Trust, we’ve always been very focused on creating strong, consistent, current income for our shareholders. That comes from directly originating a hand-selected portfolio of first mortgage loans. That has led to really great credit performance, stability in our earnings, and a very strong business model. Today we have great momentum building on that foundation to grow the portfolio and our earnings power. I’m most focused on making sure that we’re in the best possible position to continue that trajectory and deliver the highly attractive current income we produce to our shareholders 

What are your personal goals as Blackstone Mortgage Trust’s leader?

As I mentioned earlier, the culture at Blackstone and Blackstone Mortgage Trust is fantastic. It’s a really important touchstone for us. I’m focused on the trajectory of the business and our investment portfolio and earnings profile, but also on the quality and talent of the team that we have. I care deeply about continuing to attract and retain people who bring diverse perspectives into our organization and make sure they have great opportunities to develop. I think we’ve made very significant strides within Blackstone in this respect, but there is always more to do. 

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