KKR Real Estate Finance: Mgmt. Flags Book Value Stability Ahead, but a Prolonged Earnings Trough and Unfinished Legacy Resolutions Temper the Near Term

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KKR Real Estate Finance: Mgmt. Flags Book Value Stability Ahead, but a Prolonged Earnings Trough and Unfinished Legacy Resolutions Temper the Near Term

olio contains embedded value that it

can unlock through disciplined execution and subsequent redeployment into performing

loan assets. Mgmt. noted it is starting to see positive leasing signs at the West Coast assets,

aided by a tightening in tech- and AI-related office demand that is spilling into life

science. Mgmt. characterized the Boston life science market as further behind the West

Coast in leasing demand, though still showing green shoots. Mgmt. grouped the portfolio

into three monetization buckets:

• Near-term (3 assets): West Hollywood condos ($96M), where mgmt. closed on

the first unit sale this month and is in active discussions with prospective buyers

on additional units. Raleigh Multifamily ($72M), which mgmt. still views as a

near-term sale. Philadelphia office ($34M), which is in the market with a targeted

profitable liquidation this year.

• Medium-term (2 assets): Mountain View ($137M), where mgmt. executed a full

building lease with OpenAI, expects the tenant to take occupancy of a portion of

the space this quarter, and anticipates bringing the property to market within the

next year (mgmt. framed the sale as around 2Q27). Portland, Oregon

redevelopment ($95M), where mgmt. expects to complete the entitlement

process this month and is near final on redevelopment rights.

• Longer-term (2 assets):the Seattle life science asset ($97M) and the newly

acquired South Boston life science asset ($128M), both of which mgmt.

characterized as further behind on leasing demand and intends to let season rather

than force a sale.

• KREF received over $800M of repayments in 2Q26, bringing 1H26 repayments to