“We believe stockholder return is well served by balancing current return with optimization of book value and long-term earnings potential through our strategic capital allocation decisions,” BXMT chief executive Katie Keenan said in a statement.

The dividend cut, from 62 cents to 47 cents per share, is expected to save approximately $100 million annually, which can be redirected to new loans or other investments.

This move follows similar actions by other commercial real estate mortgage REITs, such as KKR Real Estate Finance Trust Inc. and Ares Commercial Real Estate Corp., which reduced their dividends by 42% and 24% respectively earlier this year.

The majority of BXMT’s troubled loans are tied to US office buildings, which comprise about a quarter of its outstanding loans. Office values have dropped 37% from their early 2022 peak, compared to a 20% decline for all commercial property, according to the Green Street Commercial Property Price Index.

BXMT reported reducing its net exposure to offices by $1.4 billion over the past two years. Approximately 13% of the office portfolio was given a risk rating of “3”, primarily associated with European properties. About 7% of the portfolio received the worst risk rating, with BXMT considering these loans impaired.