kref-20220208
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 8-K
 
 
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 8, 2022
 
KKR Real Estate Finance Trust Inc.
(Exact name of registrant as specified in its charter) 
 
 
Maryland 001-38082 47-2009094
(State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.)
 
30 Hudson Yards,Suite 7500
New York,New York 10001
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (212) 750-8300

Not Applicable
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
☐                 Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
☐                 Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
☐                 Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
☐                 Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, par value $0.01 per shareKREFNew York Stock Exchange
6.50% Series A Cumulative Redeemable Preferred Stock, par value $0.01 per shareKREF PRANew York Stock Exchange
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐



Item 2.02    Results of Operations and Financial Condition.

On February 8, 2022, KKR Real Estate Finance Trust Inc. (the “Company”) issued an earnings release and supplemental financial information announcing its financial results for the quarter and year ended December 31, 2021. The earnings release and supplemental financial information are furnished as Exhibit 99.1 and Exhibit 99.2, respectively, hereto and are incorporated herein by reference.

The information in Item 2.02 of this Current Report, including Exhibits 99.1 and 99.2, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended (the “Securities Act”), unless it is specifically incorporated by reference therein.

Forward-Looking statements

This Report contains forward-looking statements within the meaning of the “safe harbor” provisions of Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. The forward-looking statements are based on the Company’s beliefs, assumptions and expectations of its future performance, 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. The forward-looking statements speak only as of the date of this Report or as of the date they are made, and the Company does not undertake any obligation to update any forward-looking statements except as required by law. Information about factors affecting the Company and the forward-looking statements is available in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, as such factors may be updated from time to time in the Company’s periodic filings with the Securities and Exchange Commission, which are available at www.sec.gov.

Item 9.01    Financial Statements and Exhibits.

(d)    Exhibits.
Exhibit No.Description
99.1
99.2
104Cover Page Interactive Data File, formatted in Inline XBRL (embedded within the Inline XBRL document)


SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
  
 KKR Real Estate Finance Trust Inc.
By: /s/ Vincent J. Napolitano
 Name:    Vincent J. Napolitano
 Title:    General Counsel and Secretary
 
Date: February 8, 2022


kreflogoa22.jpg
KKR REAL ESTATE FINANCE TRUST INC. REPORTS
FOURTH QUARTER AND FULL YEAR 2021 FINANCIAL RESULTS

New York, NY, February 8, 2022 - KKR Real Estate Finance Trust Inc. (the “Company” or “KREF”) (NYSE: KREF) today reported its financial results for the quarter and full year ended December 31, 2021.

Reported net income attributable to common stockholders of $35.2 million and $125.6 million, or $0.59 and $2.21 per diluted share of common stock, for the three and twelve months ended December 31, 2021, respectively.

Reported Distributable Earnings(1) of ($2.9) million and $92.4 million, or ($0.05) and $1.63 per diluted share of common stock, for the three and twelve months ended December 31, 2021, respectively.

Fourth Quarter 2021 Highlights

•Originated and funded $1.8 billion and $1.5 billion, respectively, relating to 18 floating-rate loans, with a weighted average appraised loan-to-value ratio (“LTV”)(2) and coupon of 68% and L+3.0%, respectively. Received loan repayments of $679.6 million.
•Completed an accretive underwritten public offering of 5,547,361 common shares at $21.76 per share, resulting in $120.4 million of net proceeds. The offering was $0.22 per share accretive to book value per share.
•Completed repricing of $297.8 million existing secured term loan and a $52.2 million add-on, for an aggregate principal amount of $350.0 million due September 2027, which was issued at par. The new secured term loan bears interest at L+3.50%, and is subject to a LIBOR floor of 0.50%, which is an aggregate improvement of 1.75%.
•$528.9 million liquidity position, including $271.5 million of cash and $200.0 million of undrawn capacity on the corporate revolving credit facility (“Revolver”), in addition to $235.3 million of unencumbered senior loans.
•Took title to one defaulted senior retail loan with an outstanding principal balance and net carrying value of $109.6 million and $69.3 million, respectively. Accordingly, the Company recognized an $8.2 million GAAP gain from reversal of the allowance for credit losses and recognized a $32.1 million realized loss on loan write-off through distributable earnings.
•Common book value increased to $1,188.9 million, or $19.37 per common share, as of December 31, 2021, representing seven consecutive quarters of book value accretion.

2021 Highlights

•Originated and funded a record $4.8 billion and $3.6 billion, respectively, relating to 37 floating-rate loans. Total originations for 2021 represented a 428% and 56% increase over 2020 and 2019 originations, respectively.
•Current funded loan portfolio of $6.7 billion is 100.0% performing, 100.0% floating rate with a weighted average LTV of 68% as of December 31, 2021.
•Issued 6,900,000 shares of 6.5% Series A Cumulative Redeemable Preferred Stock (the “Series A Preferred Stock”), at a liquidation price of $25.00 per share, and received net proceeds of $167.1 million. In January 2022, the Company issued an additional 6,210,000 shares of Series A Preferred Stock and received net proceeds of $151.2 million.
•Optimized and diversified financing sources:
•71% of the secured financing was completely non-mark-to-market, and the remaining balance is only subject to mark-to-credit, as of December 31, 2021.
•Closed a $1.3 billion managed collateralized loan obligation (“CLO”) with a two-year reinvestment period providing $1.1 billion of non-mark financing equating to an 84.25% advance rate and a weighted average cost of capital of L+1.30% before transaction costs.
•Entered into a new $500.0 million term lending agreement, which provides asset-based financing on a non-mark-to-market basis with matched-term up to five years.

(1)    Distributable earnings is net of $32.9 million, or ($0.55) and ($0.58) per diluted share, of realized losses on loan write-offs for the three and twelve months ended December 31, 2021, respectively.
(2)    LTV is generally based on the initial loan amount divided by the as-is appraised value as of the date the loan was originated or by the current principal amount as of the date of the most recent as-is appraised value.
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Matt Salem, Chief Executive Officer of KREF, said: “KREF had a strong 2021 with record originations of $4.8 billion and a 35% increase in the funded portfolio to $6.8 billion. Our franchise, client relationships, and the ability to leverage the broader KKR platform positions KREF well for continued success in 2022.”

Patrick Mattson, President and Chief Operating Officer of KREF, added: “The KREF brand continues to drive robust capital markets activity. During the quarter, KREF raised accretive common equity and upsized and improved the cost of capital on the Term Loan B. KREF’s growth continued into 2022 including the issuance of an additional $155 million of 6.5% Series A Preferred Stock and the pricing of a new $1.0 billion managed CRE CLO.”

Portfolio Performance

Collected 97.3% and 100.0% of interest payments due on loan portfolio for the year ended December 31, 2021 and for the month ended January 31, 2022, respectively. As of December 31, 2021, the average risk rating of the Company's portfolio was 2.9 (Average Risk), weighted by outstanding principal amount, as compared to 3.0 (Average Risk) as of September 30, 2021. As of December 31, 2021, 94.1% of the Company's loans was risk-rated 3 or better.

Fourth Quarter 2021 Investment Activity

Loan Originations

The Company committed capital and funded to the following floating-rate loans ($ in thousands):
Description/ LocationProperty TypeMonth OriginatedCommitted Principal AmountInitial Principal Funded
Interest Rate (A)
Maturity Date(B)
LTV
Senior Loan, Seattle, WA(D)
Life ScienceOctober 2021$140,262 $87,000 L + 3.1%October 202669%
Senior Loan, Miami, FLMultifamilyOctober 202189,500 89,500 L + 2.8November 202676
Senior Loan, San Diego, CAMultifamilyOctober 2021103,500 103,500 L + 2.8November 202671
Senior Loan, Washington, DCOfficeNovember 2021187,700 111,365 L + 3.3December 202655
Senior Loan, Sharon, MA Multifamily December 202156,925 56,925 L + 2.8December 202670
Senior Loan, Nashville, TN Hospitality December 202166,035 64,285 L + 3.6January 202768
Senior Loan, Dallas, TX Office December 2021138,000 135,830 L + 3.6December 202668
Senior Loan, Atlanta, GA Multifamily December 202161,500 55,430 L + 2.9January 202767
Senior Loan, Doral, FL(E)
 Multifamily December 2021106,000 106,000 L + 2.8December 202677
Senior Loan, Orlando, FL Multifamily December 2021102,400 88,900 L + 3.0January 202774
Senior Loan, Charlotte, NC Multifamily December 202186,800 76,000 L + 3.0January 202774
Senior Loan, Durham, NC Multifamily December 202160,000 49,954 L + 2.9January 202767
Senior Loan, Georgetown, TX Multifamily December 202141,800 41,800 L + 3.3January 202768
Senior Loan, Hollywood, FL Multifamily December 202181,000 81,000 L + 3.0January 202774
Senior Loan, Cambridge, MA(F)
 Life Science December 2021115,669 50,623 L + 3.9January 202751
Senior Loan, Dallas, TX Multifamily December 202189,963 77,509 L + 2.8January 202767
Senior Loan, Las Vegas, NV Multifamily December 2021106,343 102,000 L + 2.7January 202761
Senior Loan, West Palm Beach, FL Multifamily December 2021171,500 169,225 L + 2.7January 202773
Total/ Weighted Average(C)
$1,804,897 $1,546,846 L + 3.0%68%

(A)    Floating rate based on one-month USD LIBOR. The weighted average coupon is 3.1%, based on outstanding principal and inclusive of in-place LIBOR floors, as of December 31, 2021.
(B)    Maturity date assumes all extension options are exercised, if applicable.
(C)    Weighted average interest rate and LTV are based on committed principal amount of underlying loans.
(D)    The total whole loan is $188.0 million, co-originated by the Company and a KKR affiliate. KREF's interest is 74.6% of the loan.
(E)    The total whole loan is $212.0 million, co-originated by the Company and a KKR affiliate. KREF's interest is 50.0% of the loan.
(F)    The total whole loan is $401.3 million, co-originated by the Company and KKR affiliates. KREF's interest is 28.8% of the loan.


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Year End Portfolio Summary

The following table sets forth certain information regarding the Company’s portfolio(A) as of December 31, 2021 ($ in millions):
InvestmentCommitted Principal AmountOutstanding Principal Amount
Amortized Cost(B)
Carrying Value(C)
Max Remaining Term (Years)(D)(E)
Weighted Average LTV(D)
Senior Loans(F)
$8,051.8 $6,636.2 $6,594.9 $6,572.8 3.668%
Non-Senior Loans(G)
41.1 41.1 40.5 40.3 4.0n.a.
CMBS B-Pieces(H)
40.0 35.7 35.7 35.57.458
Total/Weighted Average$8,132.8 $6,712.9 $6,671.1 $6,648.6 3.668%


(A)    Excludes one Real Estate Owned asset with a net carrying value of $78.6 million as of December 31, 2021.
(B)    Amortized cost represents the outstanding face amount of loan, net of applicable unamortized discounts, loan origination fees and write-offs.
(C)    Carrying value represents the amortized cost of loan, net of applicable allowance for credit losses. Carrying value for CMBS B-Pieces, held through an equity method investment, is measured at fair value.
(D)    Weighted by outstanding principal amount for the Company's senior, mezzanine and real estate corporate loans and by net equity for its CMBS B-Piece investments through an aggregator vehicle. Weighted average LTV excludes one real estate corporate loan to a multifamily operator with an outstanding principal amount of $41.1 million as of December 31, 2021.
(E)    Max remaining term (years) assumes all extension options are exercised, if applicable. 
(F)    Senior loans include senior mortgages and similar credit quality investments, including junior participations in the Company's originated senior loans for which it has syndicated the senior participations and retained the junior participations for its portfolio.
(G)    Includes one real estate corporate loan to a multifamily operator with an outstanding principal amount of $41.1 million as of December 31, 2021. Excludes one fully funded mezzanine loan with an outstanding principal amount of $5.5 million that was fully written off.
(H)    Represents an equity method investment in RECOP I, an aggregator vehicle that invests in CMBS B-Pieces.

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Non-GAAP Financial Measures

Reconciliation of Distributable Earnings to Net Income Attributable to Common Stockholders

The table below reconciles Distributable Earnings and related diluted per share amounts to net income attributable to common stockholders and related diluted per share amounts, respectively, for the three months ended December 31, 2021, September 30, 2021 and December 31, 2020 and the years ended December 31, 2021 and 2020, respectively ($ in thousands, except per share data):
Three Months Ended
Per Diluted Share(C)
Three Months Ended
Per Diluted Share(C)
Three Months Ended
Per Diluted Share(C)
December 31, 2021September 30, 2021December 31, 2020
Net Income (Loss) Attributable to Common Stockholders$35,198 $0.59 $31,989 $0.57 $28,776 $0.52 
Adjustments
Non-cash equity compensation expense1,413 0.02 2,027 0.04 1,305 0.02 
Unrealized (gains) or losses(A)
1,463 0.02 (748)(0.01)(203)— 
Provision for (reversal of) credit losses, net(3,077)(0.05)1,165 0.02 (3,438)(0.06)
Gain on redemption of non-voting manager units(5,126)(0.09)— — — — 
Non-cash convertible notes discount amortization91 — 91 — 91 — 
Distributable Earnings before realized losses on loan write-offs$29,962 $0.50 $34,524 $0.62 $26,531 $0.48 
Realized losses on loan write-offs(B)
(32,905)(0.55)— — — — 
Distributable Earnings$(2,943)$(0.05)$34,524 $0.62 $26,531 $0.48 
Weighted average number of shares of common stock outstanding, diluted59,364,67256,011,24355,669,230
(A)    Includes $2.5 million, $0.3 million and ($0.1) million non-cash redemption value adjustment of the Special Non-Voting Preferred Stock and ($1.1) million, ($1.0) million and ($0.1) million of unrealized mark-to-market adjustment to RECOP I's underlying CMBS investments for the three months ended December 31, 2021, September 30, 2021 and December 31, 2020, respectively.
(B)    Includes $32.1 million write-off on a defaulted senior retail loan which the Company took title of the underlying property and $0.9 million write-off of the remaining balance on an impaired mezzanine retail loan during the three months ended December 31, 2021.
(C)    Numbers presented may not foot due to rounding.
Year Ended
Per Diluted Share(C)
Year Ended
Per Diluted Share(C)
December 31, 2021December 31, 2020
Net Income (Loss) Attributable to Common Stockholders$125,635 $2.21 $53,553 $0.96 
Adjustments
Non-cash equity compensation expense7,428 0.13 5,676 0.10 
Unrealized (gains) or losses(A)
1,059 0.02 4,036 0.06 
Provision for (reversal of) credit losses, net(4,059)(0.07)50,344 0.90 
Gain on redemption of non-voting manager units(5,126)(0.09)— — 
Non-cash convertible notes discount amortization361 0.01 362 0.01 
Distributable Earnings before realized losses on loan write-offs$125,298 $2.21 $113,971 $2.03 
Realized losses on loan write-offs(B)
(32,905)(0.58)(4,650)(0.08)
Distributable Earnings
$92,393 $1.63 $109,321 $1.95 
Weighted average number of shares of common stock outstanding, diluted56,783,38856,057,237
(A)    Includes $3.3 million and $0.2 million non-cash redemption value adjustment of the Special Non-Voting Preferred Stock, and ($2.2) million and $3.9 million of unrealized mark-to-market adjustment to RECOP I's underlying CMBS investments for the years ended December 31, 2021 and 2020, respectively.
(B)    Includes $32.1 million write-off on a defaulted senior retail loan which the Company took title of the underlying property and $0.9 million write-off of the remaining balance on an impaired mezzanine retail loan during the year ended December 31, 2021. Includes $4.7 million write-off on a $5.5 million mezzanine retail loan, which was 5-rated and put on non-accrual status, during the year ended December 31, 2020.
(C)    Numbers presented may not foot due to rounding.

Book Value

The Company’s book value per share of common stock was $19.37 as of December 31, 2021, as compared to book value per share of common stock of $19.09 and $18.76 as of September 30, 2021 and December 31, 2020, respectively.

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Book value per share as of December 31, 2021 includes the impact of an estimated CECL allowance of $23.7 million, or ($0.39) per common share. See Note 2 — Summary of Significant Accounting Policies, to the Company's consolidated financial statements included in the Form 10-K for the fiscal year ended December 31, 2021 for detailed discussion of allowance for credit losses.

On October 1, 2021, the KKR Member exercised its Call Option to redeem the Non-Voting Manager Units, including the non-voting manager units held by the Company. Accordingly, a wholly-owned TRS of the Company ("KREF TRS") received a cash call amount of $5.1 million and the Company concurrently redeemed the SNVPS which resulted in a net book value accretion of $1.9 million, or $0.03 per common share, during the year ended December 31, 2021, thus eliminating the cumulative negative impact of the SNPVS on book value. See Note 11 — Equity, to the Company's consolidated financial statements included in the Form 10-K for the fiscal year ended December 31, 2021 for detailed discussion of the SNVPS.

Subsequent Events

The following events occurred subsequent to December 31, 2021:

Investing Activities

The Company originated the following senior loans:
Description/ LocationProperty TypeMonth OriginatedCommitted Principal AmountInitial Principal Funded
Interest Rate (A)
Maturity Date(B)
LTV
Senior Loan, Brandon, FLMultifamilyJanuary 2022$90,300 $61,920 SOFR + 3.1%February 202775%
Senior Loan, Washington, D.C.(C)
OfficeJanuary 2022100,000 57,060 L + 3.2%February 202855
Senior Loan, Phoenix, AZ(D)
IndustrialJanuary 2022100,000 2,244 SOFR + 4.0%February 202757
Senior Loan, Arlington, VAMultifamilyJanuary 2022135,300 130,890 SOFR + 2.9%February 202765
Senior Loan, West Hollywood, CAMultifamilyJanuary 2022102,000 102,000 L + 3.0%February 202765
Senior Loan, San Carlos, CA(E)
Life ScienceFebruary 2022125,000 79,809 SOFR + 3.6%February 202768
Total/ Weighted Average$652,600 $433,923 L/SOFR + 3.3%64%

(A)    Floating rate based on one-month USD LIBOR or one-month Term SOFR, as applicable.
(B)    Maturity date assumes all extension options are exercised, if applicable.
(C)    The total whole loan is $228.5 million, co-originated by the Company and a KKR affiliate. The Company's interest is 43.8% of the loan.
(D)    The total whole loan is $195.3 million, co-originated by the Company and a KKR affiliate. The Company's interest is 51.2% of the loan.
(E)    The total whole loan is $195.9 million, co-originated by the Company and a KKR affiliate. The Company's interest is 63.8% of the loan.

Loan Repayments

In January 2022, the Company received approximately $139.8 million in loan repayments, including a full repayment of $76.2 million on one 4-rated senior hospitality loan.

Financing Activities

In February 2022, the Company priced a $1.0 billion managed multifamily CLO (“KREF 2022-FL3”) expected to close on or around February 10, 2022, subject to customary closing conditions. KREF 2022-FL3 will provide the Company with match-term financing on a non-mark-to-market and non-recourse basis, and features a two-year reinvestment period with an 84.75% advance rate at a weighted average running cost of capital of Term SOFR plus 1.71%, before transaction costs.

Corporate Activities

Preferred Stock Issuance

In January 2022, the Company issued an additional 6,210,000 shares of 6.5% Series A Cumulative Redeemable Preferred Stock (the “Series A Preferred Stock”), which included the exercise of the underwriters' option to purchase additional shares of Series A Preferred Stock, and received net proceeds after underwriting discount and commission (inclusive of $1.5 million paid to KKR Capital Markets, a KKR affiliate, for its services as joint bookrunner) of $151.2 million.

5

Dividends

In January 2022, the Company paid $26.4 million in dividends on its common stock, or $0.43 per share, with respect to the fourth quarter of 2021, to stockholders of record on December 31, 2021.
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Teleconference Details:

The Company will host a conference call to discuss its financial results on Wednesday, February 9, 2022 at 11:00 a.m. Eastern Time. Members of the public who are interested in participating in the Company’s fourth quarter and full year 2021 earnings teleconference call should dial from the U.S., (844) 784-1730, or from outside the U.S., +1 (412) 380-7410, shortly before 11:00 a.m. and reference the KKR Real Estate Finance Trust Inc. Teleconference Call; a pass code is not required. Please note the teleconference call will be available for replay beginning approximately two hours after the broadcast. To access the replay, callers from the U.S. should dial (877) 344-7529 and callers from outside the U.S. should dial +1 (412) 317-0088, and enter conference identification number 1686943.

Webcast:

The conference call will also be available on the Company’s website at www.kkrreit.com. To listen to a live broadcast, please go to the site at least 15 minutes prior to the scheduled start time in order to register, download and install any necessary audio software. A replay of the webcast will also be available for 30 days on the Company’s website.

Supplemental Information

The slide presentation accompanying this release and containing supplemental information about the Company’s financial results for the fiscal quarter ended December 31, 2021 may also be accessed through the investor relations section of the Company’s website at www.kkrreit.com.

About KKR Real Estate Finance Trust Inc.

KKR Real Estate Finance Trust Inc. (NYSE: KREF) is a real estate investment trust that primarily originates or acquires transitional senior loans collateralized by institutional-quality commercial real estate assets that are owned and operated by experienced and well-capitalized sponsors and located in liquid markets with strong underlying fundamentals. The Company's target assets also include mezzanine loans, preferred equity and other debt-oriented instruments with these characteristics. The Company is externally managed and advised by KKR Real Estate Finance Manager LLC, a registered investment adviser and an indirect subsidiary of KKR & Co. Inc., a leading global alternative investment firm with a 45-year history of leadership, innovation and investment excellence and $470.6 billion of assets under management as of December 31, 2021.

Additional information can be found on the Company’s 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. You can identify these forward looking statements by the use of words such as “outlook,” “believe,” “expect,” “potential,” “continue,” “may,” “should,” “seek,” “approximately,” “predict,” “intend,” “will,” “plan,” “estimate,” “anticipate,” the negative version of these words, other comparable words or other statements that do not relate strictly to historical or factual matters. By their nature, forward-looking statements speak only as of the date they are made, are not statements of historical fact or guarantees of future performance and are subject to risks, uncertainties, assumptions or changes in circumstances that are difficult to predict or quantify, in particular due to the uncertainties created by the COVID-19 pandemic, including the projected impact of COVID-19 on the Company's business, financial performance and operating results. 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. Such forward-looking statements are subject to various risks and uncertainties, including, among other things: the severity and duration of the COVID-19 pandemic; potential risks and uncertainties relating to the ultimate geographic spread of COVID-19; actions that may be taken by governmental authorities to contain the COVID-19 outbreak or to treat its impact; the potential negative impacts of COVID-19 on the global economy and the impacts of COVID-19 on the Company’s financial condition and business operations; adverse developments in the availability of desirable investment opportunities whether they are due to competition, regulation or otherwise; the general political, economic and competitive conditions in the United States and in any foreign jurisdictions in which the Company invests; the level and volatility of prevailing interest rates and credit spreads; adverse changes in the real estate and real estate capital markets; difficulty or delays in redeploying the proceeds from repayments of existing investments; general volatility of the securities markets in which the Company participates; changes in the Company’s business, investment strategies or target assets; deterioration in the performance of the properties securing the Company’s investments that may cause deterioration in the performance of the Company’s investments and, potentially, principal losses to the Company; acts of God such as hurricanes, earthquakes and other natural disasters, pandemics such as COVID-19, acts of war and/or terrorism and other events that may cause unanticipated and uninsured performance declines and/or losses to the Company or the owners and operators of the real estate securing the Company’s investments; the adequacy
7

of collateral securing the Company’s investments and declines in the fair value of the Company’s investments; difficulty in obtaining financing or raising capital; difficulty in successfully managing the Company’s growth, including integrating new assets into the Company’s existing systems; reductions in the yield on the Company’s investments and increases in the cost of the Company’s financing; defaults by borrowers in paying debt service on outstanding indebtedness; the availability of qualified personnel and the Company’s relationship with its manager, KKR Real Estate Finance Manager LLC; subsidiaries of KKR & Co. Inc. control the Company and KKR's interests may conflict with those of the Company’s stockholders in the future; the cost of operating the Company’s platform, including, but not limited to, the cost of operating a real estate investment platform; adverse legislative or regulatory developments; the Company’s qualification as a real estate investment trust ("REIT") for U.S. federal income tax purposes and its exclusion from registration under the Investment Company Act of 1940, as amended (the "Investment Company Act"); and authoritative accounting principles generally accepted in the United States of America ("GAAP") or policy changes from such standard-setting bodies such as the Financial Accounting Standards Board (the "FASB"), the Securities and Exchange Commission (the "SEC"), the Internal Revenue Service, the New York Stock Exchange and other authorities that the Company is subject to, as well as their counterparts in any foreign jurisdictions where the Company might do business; and other risks and uncertainties, 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, 2020, as such factors may be updated from time to time in the Company’s periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in this release. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements and information included in this release and in the Company’s filings with the SEC. 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 review any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by law.

CONTACT INFORMATION

Investor Relations:                        
KKR Real Estate Finance Trust Inc.
Jack Switala
Tel: +1-888-806-7781 (U.S.) / +1-212-763-9048 (Outside U.S.)
[email protected]

Media:
Kohlberg Kravis Roberts & Co. L.P.
Cara Major or Miles Radcliffe-Trenner
Tel: +1-212-750-8300
[email protected]

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 or by the current principal amount as of the date of the most recent as-is appraised value. For the CMBS B-Pieces, LTV is based on the weighted average LTV of the underlying loan pool. 

“Distributable Earnings”: Distributable Earnings, a measure that is not prepared in accordance with GAAP, is a key indicator of its ability to generate sufficient income to pay its quarterly dividends and in determining the amount of such dividends, which is the primary focus of yield/income investors who comprise a significant portion of the Company’s investor base. Accordingly, the Company’s believes providing Distributable Earnings on a supplemental basis to its net income as determined in accordance with GAAP is helpful to its stockholders in assessing the overall performance of the Company’s business.

The Company defines Distributable Earnings as net income (loss) attributable to stockholders or, without duplication, owners of the Company’s subsidiaries, computed in accordance with GAAP, including realized losses not otherwise included in GAAP net income (loss) and excluding (i) non-cash equity compensation expense, (ii) depreciation and amortization, (iii) any unrealized gains or losses or other similar non-cash items that are included in net income for the applicable reporting period, regardless of whether such items are included in other comprehensive income or loss, or in net income, and (iv) one-time events pursuant to changes in GAAP and certain material non-cash income or expense items agreed upon after discussions between the Company’s manager and board of directors and after approval by a majority of the Company’s independent directors. The exclusion of depreciation and amortization from the calculation of Distributable Earnings only applies to debt investments related to real estate to the extent the Company forecloses upon the property or properties underlying such debt investments.

While Distributable Earnings excludes the impact of the Company’s unrealized current provision for credit losses, any loan losses are charged off and realized through Distributable Earnings when deemed non-recoverable. Non-recoverability is
8

determined (i) upon the resolution of a loan (i.e. when the loan is repaid, fully or partially, or in the case of foreclosure, when the underlying asset is sold), or (ii) with respect to any amount due under any loan, when such amount is determined to be non-collectible.

Distributable Earnings should not be considered as a substitute for GAAP net income. The Company cautions readers that its methodology for calculating Distributable Earnings may differ from the methodologies employed by other REITs to calculate the same or similar supplemental performance measures, and as a result, the Company’s reported Distributable Earnings may not be comparable to similar measures presented by other REITs.

9

KKR Real Estate Finance Trust Inc. and Subsidiaries

Consolidated Balance Sheets
(Amounts in thousands, except share and per share data)
December 31, 2021December 31, 2020
Assets
Cash and cash equivalents(A)
$271,487 $110,832 
Commercial mortgage loans, held-for-investment6,316,733 4,844,534 
Less: Allowance for credit losses(22,244)(59,801)
Commercial mortgage loans, held-for-investment, net6,294,489 4,784,733 
Real estate owned, net78,569 — 
Equity method investments35,537 33,651 
Accrued interest receivable15,241 15,412 
Other assets(B)
7,916 20,984 
Total Assets$6,703,239 $4,965,612 
Liabilities and Equity
Liabilities
Secured financing agreements, net$3,726,593 $2,574,747 
Collateralized loan obligations, net1,087,976 810,000 
Secured term loan, net338,549 288,028 
Convertible notes, net141,851 140,465 
Loan participations sold, net— 66,232 
Dividends payable26,589 24,287 
Accrued interest payable6,627 5,381 
Accounts payable, accrued expenses and other liabilities(C)
7,521 4,823 
Due to affiliates5,952 6,243 
Total Liabilities5,341,658 3,920,206 
Commitments and Contingencies— — 
Temporary Equity
Redeemable preferred stock— 1,852 
Permanent Equity
Preferred Stock, 50,000,000 shares authorized
Preferred stock, $0.01 par value (zero and 1 share issued and outstanding as of December 31, 2021 and 2020, respectively)— — 
Series A cumulative redeemable preferred stock, $0.01 par value (6,900,000 and zero shares issued and outstanding as of December 31, 2021 and 2020, respectively; liquidation preference of $25.00 per share)69 — 
Common stock, $0.01 par value, 300,000,000 authorized (65,271,058 and 59,519,754 shares issued; 61,370,732 and 55,619,428 shares outstanding as of December 31, 2021 and 2020, respectively)613 556 
Additional paid-in capital1,459,959 1,169,695 
Accumulated deficit(38,208)(65,698)
Repurchased stock (3,900,326 shares repurchased as of December 31, 2021 and 2020)(60,999)(60,999)
Total KKR Real Estate Finance Trust Inc. stockholders’ equity1,361,434 1,043,554 
Noncontrolling interests in equity of consolidated joint venture
147 — 
Total Permanent Equity1,361,581 1,043,554 
Total Liabilities and Equity$6,703,239 $4,965,612 
(A)    Includes $54.0 million and $0.0 million held in collateralized loan obligation as of December 31, 2021 and 2020, respectively.
(B)     Includes $0.0 million and $15.9 million of loan repayment proceeds held by servicer and receivable by the Company, and $2.3 million and $0.0 million of restricted cash as of December 31, 2021 and 2020, respectively.
(C)     Includes $1.5 million and $0.9 million of expected loss reserve for unfunded loan commitments as of December 31, 2021 and 2020, respectively.
10

KKR Real Estate Finance Trust Inc. and Subsidiaries

Consolidated Statements of Income
(Amounts in thousands, except share and per share data)
Three Months EndedYear Ended
December 31, 2021September 30, 2021December 31, 2020December 31, 2021December 31, 2020
Net Interest Income
Interest income$72,715 $75,320 $63,201 $279,950 $269,188 
Interest expense30,266 29,832 28,835 114,439 127,312 
Total net interest income42,449 45,488 34,366 165,511 141,876 
Other Income
Income (loss) from equity method investments1,863 2,162 1,168 6,371 537 
Gain (loss) on sale of investments5,126 — — 5,126 — 
Other income390 130 86 686 744 
Total other income (loss)7,379 2,292 1,254 12,183 1,281 
Operating Expenses
General and administrative3,383 3,659 2,862 14,235 14,238 
Provision for (reversal of) credit losses, net(3,077)1,165 (3,438)(4,059)50,344 
Management fees to affiliate5,289 4,964 4,252 19,378 16,992 
Incentive compensation to affiliate3,463 2,215 2,929 10,273 6,774 
Total operating expenses9,058 12,003 6,605 39,827 88,348 
Income (Loss) Before Income Taxes, Preferred Dividends, Redemption Value Adjustment and Participating Securities' Share in Earnings
40,770 35,777 29,015 137,867 54,809 
Income tax expense427 106 157 684 412 
Net Income (Loss)40,343 35,671 28,858 137,183 54,397 
Preferred stock dividends and redemption value adjustment4,966 3,682 82 11,369 844 
Participating securities' share in earnings179 — — 179 — 
Net Income (Loss) Attributable to Common Stockholders$35,198 $31,989 $28,776 $125,635 $53,553 
Net Income (Loss) Per Share of Common Stock
Basic$0.59 $0.57 $0.52 $2.22 $0.96 
Diluted$0.59 $0.57 $0.52 $2.21 $0.96 
Weighted Average Number of Shares of Common Stock Outstanding
Basic59,364,672 55,637,48055,619,42856,571,20055,985,014
Diluted59,453,264 56,011,24355,669,23056,783,38856,057,237
Dividends Declared per Share of Common Stock$0.43 $0.43 $0.43 $1.72 $1.72 
11
KKR Real Estate Finance Trust Inc. Fourth Quarter and Full Year 2021 Supplemental Information February 8, 2022

 
Legal Disclosures 2 This presentation has been prepared for KKR Real Estate Finance Trust Inc. (NYSE: KREF) for the benefit of its stockholders. This presentation is solely for informational purposes in connection with evaluating the business, operations and financial results of KKR Real Estate Finance Trust Inc. and its subsidiaries (collectively, "KREF“ or the “Company”). This presentation is not and shall not be construed as an offer to purchase or sell, or the solicitation of an offer to purchase or sell, any securities, any investment advice or any other service by KREF. Nothing in this presentation constitutes the provision of any tax, accounting, financial, investment, regulatory, legal or other advice by KREF or its advisors. This presentation may not be referenced, quoted or linked by website by any third party, in whole or in part, except as agreed to in writing by KREF. This presentation 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. You can identify these forward looking statements by the use of words such as “outlook,” “believe,” “expect,” “potential,” “continue,” “may,” “should,” “seek,” “approximately,” “predict,” “intend,” “will,” “plan,” “estimate,” “anticipate,” the negative version of these words, other comparable words or other statements that do not relate strictly to historical or factual matters. By their nature, forward-looking statements speak only as of the date they are made, are not statements of historical fact or guarantees of future performance and are subject to risks, uncertainties, assumptions or changes in circumstances that are difficult to predict or quantify, in particular due to the uncertainties created by the COVID-19 pandemic, including the projected impact of COVID-19 on our business, financial performance and operating results. 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. Such forward-looking statements are subject to various risks and uncertainties, including, among other things: the severity and duration of the COVID-19 pandemic; potential risks and uncertainties relating to the ultimate geographic spread of COVID-19; actions that may be taken by governmental authorities to contain the COVID-19 outbreak or to treat its impact; the potential negative impacts of COVID-19 on the global economy and the impacts of COVID-19 on the Company’s financial condition and business operations; deterioration in the performance of the properties securing our investments that may cause deterioration in the performance of our investments and, potentially, principal losses to us; difficulty or delays in redeploying the proceeds from repayments of our existing investments; the general political, economic and competitive conditions in the United States and in any foreign jurisdictions in which the Company invests; the level and volatility of prevailing interest rates and credit spreads; adverse changes in the real estate and real estate capital markets; general volatility of the securities markets in which the Company participates; changes in the Company’s business, investment strategies or target assets; difficulty in obtaining financing or raising capital; adverse legislative or regulatory developments; reductions in the yield on the Company’s investments and increases in the cost of the Company’s financing; acts of God such as hurricanes, earthquakes and other natural disasters, pandemics such as COVID-19, acts of war and/or terrorism and other events that may cause unanticipated and uninsured performance declines and/ or losses to the Company or the owners and operators of the real estate securing the Company’s investments; deterioration in the performance of properties securing the Company’s investments that may cause deterioration in the performance of the Company’s investments and, potentially, principal losses to the Company; defaults by borrowers in paying debt service on outstanding indebtedness; the adequacy of collateral securing the Company’s investments and declines in the fair value of the Company’s investments; adverse developments in the availability of desirable investment opportunities whether they are due to competition, regulation or otherwise; difficulty in successfully managing the Company’s growth, including integrating new assets into the Company’s existing systems; the cost of operating the Company’s platform, including, but not limited to, the cost of operating a real estate investment platform and the cost of operating as a publicly traded company; the availability of qualified personnel and the Company’s relationship with our Manager; KKR controls the Company and its interests may conflict with those of the Company’s stockholders in the future; the Company’s qualification as a REIT for U.S. federal income tax purposes and the Company’s exclusion from registration under the Investment Company Act of 1940; authoritative GAAP or policy changes from such standard-setting bodies such as the Financial Accounting Standards Board, the Securities and Exchange Commission (the “SEC”), the Internal Revenue Service, the New York Stock Exchange and other authorities that the Company is subject to, as well as their counterparts in any foreign jurisdictions where the Company might do business; and other risks and uncertainties, 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, 2020, as such factors may be updated from time to time in the Company’s periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in this presentation. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements and information included in this presentation and in the Company’s filings with the SEC. All forward looking statements in this presentation speak only as of February 8, 2022. KREF undertakes no obligation to publicly update or review any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by law. All financial information in this presentation is as of December 31, 2021 unless otherwise indicated. This presentation also includes non-GAAP financial measures, including Distributable Earnings and Distributable Earnings per Diluted Share. Such non-GAAP financial measures should be considered only as supplemental to, and not as superior to, financial measures prepared in accordance with U.S. GAAP. Please refer to the Appendix of this presentation for a reconciliation of the non-GAAP financial measures included in this presentation to the most directly comparable financial measures prepared in accordance with U.S. GAAP.

 
3 KKR Real Estate Finance Trust Inc. Overview Best In Class Portfolio Conservative Balance Sheet KREF’s Manager Fully Integrated with KKR $6.8 Billion Investment Portfolio 99% Senior Loans 74% Multifamily & Office $131 Million Average Loan Size(1) 100% Performing Senior loans secured primarily by transitional, institutional multifamily and office properties owned by high quality sponsors. $6.7 Billion Financing Capacity 71% Fully Non-Mark-to-Market(2) Conservative liability management focused on diversified non-mark-to-market financing 23% KKR Ownership in KREF $529 Million Current Liquidity(3) $471 Billion Global AUM(4) $25 Billion Balance Sheet(4) $41 Billion Real Estate AUM(4) (5) 135+ Real Estate Professionals(4) One firm culture that rewards investment discipline, creativity and determination and emphasizes the sharing of information, resources, expertise and best practices (1) Average loan commitment is inclusive of the unfunded KREF commitment. (2) Based on outstanding face amount of secured financing, including non-consolidated senior interests, and excludes convertible notes and the corporate revolving credit facility. (3) Includes $271.5 million in cash, $200.0 million undrawn corporate revolver capacity, and $57.4 million of available borrowings based on existing collateral. (4) As of December 31, 2021. (5) Figures represent AUM across all KKR real estate transactions.

 
Fourth Quarter and Full Year 2021 Highlights 4 • Net income(1) of $0.59 and $2.21 per diluted share for 4Q and full year 2021, respectively • Distributable Earnings(2) of ($0.05) and $1.63 per diluted share for 4Q and full year 2021, respectively. Distributable earnings is net of $32.9 million, or $0.55 and $0.58 per diluted share, of realized losses on loan write-offs for 4Q and full year 2021, respectively • Book Value per Common Share(3) (“BVPS”) of $19.37 per share, compared to $19.09 per share in 3Q’21, representing seven consecutive quarters of book value accretion • $6.8 billion predominantly senior loan portfolio • Multifamily and office assets represent 74% of loan portfolio • Weighted average risk rating of 2.9 • Received $679.6 million in loan repayments • Q4 record originations of 18 floating-rate senior loans totaling $1.8 billion with $1.5 billion of initial fundings • Full year 2021 record originations of 37 floating-rate senior loans totaling $4.8 billion with $3.6 billion of initial fundings • Subsequent to year-end, originated six floating-rate senior loans totaling $652.6 million with $433.9 million of initial fundings Note: Net income attributable to common stockholders per share and Distributable Earnings per share are based on diluted weighted average shares outstanding for the quarter ended December 31, 2021; book value per share is based on common shares outstanding as of December 31, 2021. (1) Represents Net Income attributable to common stockholders. (2) See Appendix for definition and reconciliation to financial results prepared in accordance with GAAP. (3) Book value per share includes the year-to-date (“YTD”) impact of a ($3.3) million, or ($0.05) per common share, non-cash redemption value adjustment to our redeemable Special Non-Voting Preferred Stock (‘SNVPS’). On October 1, 2021, KREF redeemed its SNVPS for a cash redemption value of $5.1 million, thus eliminating the cumulative negative impact of the SNPVS on KREF’s book value. Financials Portfolio Originations Liquidity & Capitalization • Completed an accretive underwritten public offering of 5,547,361 common shares at $21.76 per share, resulting in $120.4 million of net proceeds. The offering was $0.22 per share accretive to BVPS. • Completed repricing of $297.8 million existing Term Loan B and a $52.2 million add-on, for an aggregate principal amount of $350.0 million. The new Term Loan B bears interest at L+3.50% and is subject to a LIBOR floor of 0.50%, which is an aggregate improvement of 1.75%. • 71% of financing is fully non-mark-to-market and the remaining balance is only mark-to-credit • $528.9 million of available liquidity, including $271.5 million of cash, and $200.0 million undrawn on the corporate revolver • In January 2022, KREF completed an offering of additional 6,210,000 shares of its 6.5% Series A Cumulative Redeemable Preferred Stock at a liquidation preference of $25.00 per share, resulting in net proceeds of $151.2 million. • In February 2022, priced a $1.0 billion managed multifamily CLO. The CLO is expected to close on or around February 10, 2022 and will provide KREF with match-term financing on a non-mark-to-market and non-recourse basis, and features a two-year reinvestment period with an 84.75% advance rate at a weighted average running cost of capital of SOFR + 1.71%, before transaction costs.

 
4Q'21 Financial Summary 5 (1) See Appendix for definition and reconciliation to financial results prepared in accordance with GAAP. (2) Represents the GAAP principal amount on senior and mezzanine/other loans, net equity in RECOP I, and one real estate owned retail asset. (3) Represents (i) total debt less cash to (ii) total permanent equity. (4) Represents (i) total leverage less cash to (ii) total permanent equity. (5) Book value per share includes (i) CECL credit loss allowance of ($23.7) million or ($0.39) per common share, and (iii) the YTD impact of ($3.3) million, or ($0.05) per common share, non-cash redemption value adjustment to our redeemable SNVPS. On October 1, 2021, KREF redeemed its SNVPS for a cash redemption value of $5.1 million, thus eliminating the cumulative negative impact of the SNPVS on KREF’s book value. Income Statement Balance Sheet ($ in Millions) ($ in Millions)4Q21 Net Interest Income $42.4 Other Income 7.4 Operating Expenses and Other (12.7) Preferred stock dividends and redemption value adjustment (5.0) Provision for credit losses 3.1 Net Income Attributable to Common Stockholders $35.2 Weighted Average Shares Outstanding, Diluted 59,453,264 Net Income per Share, Diluted $0.59 Distributable Earnings(1) ($2.9) Distributable Earnings per Share, Diluted(1) ($0.05) Dividend per Share $0.43 4Q21 Total Portfolio $6,478.4(2) Term Credit Facilities 1,554.8 Term Lending Agreements 1,117.6 Asset Specific Financing 60.0 Revolving Credit Facility 135.0 Secured Term Loan 350.0 Convertible Notes 143.8 Total Debt $3,361.2 Term Loan Facility 870.5 Collateralized Loan Obligations 1,095.3 Total Leverage $5,327.0 Cash 271.5 Total Permanent Equity 1,361.6 Common Stockholders’ Equity 1,188.9 Debt-to-Equity Ratio(3) 2.3x Total Leverage Ratio(4) 3.7x Shares Outstanding 61,370,732 Book Value per Share(5) $19.37

 
$18.89 $18.91 $19.09 $19.37 1Q'21 2Q'21 3Q'21 4Q'21 Book Value per Share Recent Operating Performance 6 (1) Represents Net Income attributable to common stockholders. (2) See Appendix for definition and reconciliation to financial results prepared in accordance with GAAP. Net Income(1) and Distributable Earnings(2) $0.52 $0.52 $0.57 $0.59 $0.55 $0.54 $0.62 ($0.05) 1Q'21 2Q'21 3Q'21 4Q'21 Net Income per Diluted Share Distributable Earnings per Diluted Share Dividends and Book Value Per Share Dividend per share: Dividend yield on book value per share: Net income: Distributable earnings: $19.76 ($ in Millions) 1Q'21 $29.2 $30.4 4Q'21 $35.2 ($2.9) 3Q'21 $32.0 $34.5 2Q'21 $29.3 $30.4 1Q'21 $0.43 9.1% 2Q'21 $0.43 9.1% 3Q'21 $0.43 9.0% 4Q'21 $0.43 8.9% $0.43

 
$4,998 $5,330 $5,618 $5,826 $6,792 $472 $576 $454 $559 $848 $1,143 $1,225 $1,679 $1,368 $244 $271 $935 $680 $33 4Q'20 Portfolio 1Q'21 Fundings 1Q'21 Repayments 1Q'21 Portfolio 2Q'21 Fundings 2Q'21 Repayments 2Q'21 Portfolio 3Q'21 Fundings 3Q'21 Repayments 3Q'21 Portfolio 4Q'21 Fundings 4Q'21 Repayments 4Q'21 Loan write-off 4Q'21 Portfolio (3) Last Twelve Months Loan Activity 7 (1) Includes capital committed to our investment in an aggregator vehicle that invests in CMBS and one real estate owned retail asset. (2) Future funding obligations are generally contingent upon certain events and may not result in investment by us. (3) Includes $0.4 million, $0.4 million, $0.5 million and $0.8 million PIK interest for 4Q'21, 3Q'21, 2Q'21 and 1Q'21, respectively. Portfolio Funding Activity – Outstanding Principal(1) $5,784 Future Funding Obligations(2) $5,470 (3) $6,466 ($ in Millions) $7,051 (3) (3) $8,160

 
4Q’21 Loan Originations – Select Case Studies 8 Investment Washington, D.C. Office West Palm Beach Multifamily Seattle Life Science Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Loan Size $187.7 million $171.5 million $140.3 million(1) Location Washington, D.C. West Palm Beach, FL Seattle, WA Collateral Class-A Office totaling 357k SF 812-unit Class-A Multifamily Class-A Life Science totaling 210k SF Loan Purpose Refinance Refinance Acquisition LTV(2) 55% 73% 69% Investment Date November 2021 December 2021 October 2021 Asset Photos (1) The total whole loan is $188.0 million, co-originated and co-funded by KREF and a KKR affiliate. KREF’s interest was 75% of the loan or $140.3 million. (2) LTV based on initial loan amount divided by the as-is appraised value as of the date the loan was originated.

 
4Q’21 Loan Originations – Select Case Studies 9 Investment Dallas Office Cambridge Life Science Doral Multifamily Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Loan Size $138.0 million $115.7 million(1) $106.0 million(2) Location Dallas, TX Cambridge, MA Doral, FL Collateral Class-A Office totaling 314k SF Class-A Life Science totaling 374k SF 631-unit Class-A Multifamily Loan Purpose Refinance Construction Acquisition LTV(3) 68% 51% 77% Investment Date December 2021 December 2021 December 2021 Asset Photos (1) The total whole loan is $401.3 million, co-originated and co-funded by KREF and KKR affiliates. KREF’s interest was 29% of the loan or $115.7 million. (2) The total whole loan is $212.0 million, co-originated and co-funded by KREF and a KKR affiliate. KREF’s interest was 50% of the loan or $106.0 million. (3) LTV based on initial loan amount divided by the as-is appraised value as of the date the loan was originated or by the total commitment amount divided by the as-stabilized appraised value as of the date the loan was originated. Representative Photo

 
Multifamily 46% Office 28% Life Science 9% Hospitality 7% Industrial 4% Condo (Residential) 4% Student Housing 3% Single Family Rental <1% Floating 100.0% Senior Loans 99.4% Non-Senior 0.6% Class-A 75% Class-B 25% Multifamily Class-A 91% Class-B 9% KREF Loan Portfolio by the Numbers 10 Geography(2) Investment Type(3) Note: The charts above are based on total assets. Total assets reflect the principal amount of our senior and mezzanine loans. (1) As of February 4, 2022. (2) Map excludes $5.5 million Midwest Mezzanine portfolio, $41.1 million real estate corporate loan, and one real estate owned retail asset with a net carrying value of $78.6 million. (3) Senior loans include senior mortgages and similar credit quality loans, including related contiguous junior participations in senior loans where KREF has financed a loan with structural leverage through the non-recourse sale of a corresponding first mortgage and excludes vertical loan syndications. (4) KREF classifies a loan as life science if more than 50% of the gross leasable area is leased to, or will be converted to, life science-related space. (5) Office property certification % is based on current principal loan balance. See description for LEED certification in the appendix. Property Type Interest Rate Type $2,083 $4,134 $5,075 $4,998 $6,792 4Q'17 4Q'18 4Q'19 4Q'20 4Q'21 Total Portfolio Growth Current Portfolio: $7.1 billion(1) Including net funding and repayment activity subsequent to quarter-end 11% 8% 5% 6% 10% 14% 12% 12% Other <5%, 22% ($ in Millions) (4) 77% Office(5)

 
4% 6% 84% 6% 1 2 3 4 5 0% 9% 82% 7% 2% 1 2 3 4 5 Portfolio Credit Quality Remains Strong • Collected 97.3% of interest payments due on loan portfolio and 100% on loans rated 4 or better 11 Loan-to-Value(1,2) Risk Rating Distribution Weighted Average Risk Rating(3): 3.0 Weighted Average LTV(3): 67% (1) LTV is generally based on the initial loan amount divided by the as-is appraised value as of the date the loan was originated or by the current principal amount as of the date of the most recent as-is appraised value, except as noted on page 20. (2) Includes non-consolidated senior interests and excludes vertical loan syndications and a real estate corporate loan. (3) Weighted average is weighted by current principal amount. (4) Excludes $5.5 million mezzanine loan risk-rated 5 that was fully written-off as of December 31, 2021. (% of total loan portfolio) (% of loan portfolio) 4Q'21 Loan Count 1 03 454 Loan Count 0 23 443 3Q'21 4Q'21 3Q'21 Weighted Average LTV(3): 68% Weighted Average Risk Rating(3)(4): 2.9 14% 19% 28% 31% 8% 0% - 60% 60% - 65% 65% - 70% 70% - 75% 75% - 80% 16% 21% 24% 29% 10% 0% - 60% 60% - 65% 65% - 70% 70% - 75% 75% - 80% 0%

 
Case Studies: Watch List Loans (Risk Rating 4 & 5) 12 Investment New York Condo Queens Industrial New York Condo Loan Type Floating-Rate Senior Loan Floating-Rate Senior Loan Floating-Rate Senior Loan Investment Date December 2018 July 2017 August 2017 Collateral 126-Unit Class-A Residential Condominium Two Class–B Buildings Totaling 595k RSF 6 Luxury Residential Condominiums Loan Purpose Acquisition Acquisition Refinance Location New York, NY Queens, NY New York, NY Committed Amount $235 million $70 million $40 million Current Principal Amount $211 million $68 million $40 million Loan Basis $1,316 / SF $112 / SF $1,333 / SF Coupon L + 3.6% L + 3.0% L + 4.2% LTV(1) 71% 77% 73% Max Remaining Term (Yrs.) 2.0 0.6 0.3 Loan Risk Rating 4 4 4 (1) LTV is based on the initial loan amount divided by the as-is appraised value as of the date the loan was originated or by the current principal amount as of the date of the most recent as-is appraised value. • The $76.2 million Brooklyn hotel loan previously on the watch list repaid in full in January 2022. • For the Portland retail loan previously on the watch list, KREF took title to the defaulted senior loan with an outstanding principal balance and net carrying value of $109.6 million and $69.3 million, respectively. Accordingly, KREF recognized an $8.2 million GAAP gain from reversal of the allowance for credit losses and recognized a $32.1 million realized loss on write-off through distributable earnings.

 
Term Lending Agreements 21% Collateralized Loan Obligations 20% Term Loan Facility 16% Secured Term Loan 7% Senior Loan Interests 6% Asset Specific Financing 1% Term Credit Facilities 29% 2.3x 3.7x Debt-to-Equity Ratio Total Leverage Ratio (3) Financing Overview: 71% Non-Mark-To-Market • Diversified financing sources totaling $6.7 billion with $1.4 billion of undrawn capacity 13 (1) Term credit facilities are marked to credit only and not subject to capital markets mark-to-market provisions. (2) Represents (i) total outstanding debt agreements (excluding non-recourse term loan facility), secured term loan and convertible notes, less cash to (ii) total permanent equity, in each case, at period end. (3) Represents (i) total outstanding debt agreements, secured term loan, convertible notes, and collateralized loan obligation, less cash to (ii) total permanent equity, in each case, at period end. (4) Based on outstanding face amount of secured financing, including non-consolidated senior interests, which result from non-recourse sales of senior loan interest in loans KREF originated, and excludes convertible notes and the corporate revolving credit facility. (5) Loan bears interest at L +3.5% and is subject to a LIBOR floor of 0.5%. Maximum Capacity Outstanding Face Amount Weighted Avg. Coupon Advance Rate Non- MTM Term Credit Facilities $1,840 $1,555 L+1.6% 69.7% (1) Term Lending Agreements $1,172 $1,118 L+1.8% 81.1%  Warehouse Facility $500 $0 n/a n/a  Asset Specific Financing $300 $60 L+1.7% 78.9%  Secured Term Loan $350 $350 L+3.5%(5) -  Convertible Notes $144 $144 6.1% -  Corporate Revolving Credit Facility $335 $135 L+2.0% -  Total Corporate Obligations $4,641 $3,362 Term Loan Facility $1,000 $870 L+1.6% 80.7%  Collateralized Loan Obligations $1,095 $1,095 L+1.3% 84.3%  Total Leverage $6,736 $5,327 ($ in Millions) Summary of Outstanding Financing Leverage Ratios Outstanding Secured Financing(4) Non-Mark- to-Market 71% (2)

 
Financing Overview: Term Credit Facilities 14 Counterparty Total / Weighted Average Drawn $981 $384 $191 $1,555 Capacity $1,000 $600 $240 $1,840 Collateral: Loans / Principal Balance 14 Loans / $1,396 8 Loans / $552 6 Loans / $282 28 Loans / $2,230 Final Stated Maturity(1) September 2026 December 2023 October 2023 - Weighted Average Pricing L + 1.4% L + 1.9% L + 2.0% L + 1.6% Weighted Average Advance 70.3% 69.5% 67.6% 69.7% Mark-to-market Credit Only Credit Only Credit Only - Property Type(2): ($ in Millions) Multi- family 55% Office 26% Industrial 7% Life Science 7% Student Housing 4% Condo 1% Single Family Rental <1% (1) Based on extended maturity date. (2) Based on principal balance of financing.

 
Liquidity Overview $271.5 $200.0 $57.4 $528.9 $0.0 $100.0 $200.0 $300.0 $400.0 $500.0 $600.0 Cash Undrawn Corporate Revolver Approved and Undrawn Credit Capacity Total Available Liquidity 15 ($ in Millions) (1) Represents under-levered amounts under financing facilities. While these amounts were previously contractually approved and/or drawn, in certain cases, the lender’s consent is required for us to (re)borrow these amounts. (1) Sources of Available Liquidity • In addition to the available liquidity below, KREF had $235.3 million of unencumbered senior loans that can be pledged to financing facilities subject to lender approval, as of December 31, 2021.

 
Portfolio Repositioning for Higher Rate Environment 16 • 100% of the loan portfolio is indexed to one-month USD LIBOR • 54% of the portfolio is subject to a LIBOR floor of at least 0.25% and 9% of total outstanding financing, including the Secured Term Loan, is subject to a LIBOR floor greater than 0.0% • Portfolio weighted average LIBOR floor of 0.74% • Ongoing portfolio rotation out of higher rate-floor loans is positioning KREF to benefit from a rising rate environment Net Interest Income Per Share Quarterly Sensitivity to LIBOR 0.25% LIBOR as of 12/31/2021 ($ Impact Per Share / Q) 0.50% 0.75% 1.00%0.10% $0.00 LIBOR LIBOR = 0.00%

 
Appendix 17

 
Portfolio Details 18 *See footnotes on subsequent page ($ in Millions) # Investment Location Property Type Investment Date Total Whole Loan (2) Committed Principal Amount (2) Current Principal Amount Net Equity (3) Future Funding (4) Coupon (5)(6) Max Remaining Term (Yrs) (5)(7) Loan Per SF / Unit / Key LTV (5)(8) Risk Rating Senior Loans (1) 1 Senior Loan Arlington, VA Multifamily 9/30/2021 $381.0 $381.0 $352.9 $78.8 $28.1 L + 3.2% 4.8 $ 317,965 / unit 69% 3 2 Senior Loan Bellevue, WA Office 9/13/2021 520.8 260.4 61.0 26.4 199.4 L + 3.6% 5.3 $ 200 / SF 63% 3 3 Senior Loan Los Angeles, CA Multifamily 2/19/2021 260.0 260.0 249.7 50.8 10.3 L + 3.6% 4.2 $ 465,874 / unit 68% 3 4 Senior Loan Boston, MA Life Science 5/24/2018 250.5 250.5 243.6 55.4 6.9 L + 3.2% 2.0 $ 521 / SF 53% 1 5 Senior Loan Mountain View, CA Office 7/14/2021 362.8 250.0 184.1 45.9 65.9 L + 3.3% 4.6 $ 599 / SF 73% 3 6 Senior Loan New York, NY Condo (Resi) 12/20/2018 234.5 234.5 210.7 40.0 23.8 L + 3.6% 2.0 $ 1,316 / SF 71% 4 7 Senior Loan Bronx, NY Industrial 8/27/2021 381.2 228.7 97.5 95.8 131.2 L + 4.1% 4.7 $ 118 / SF 52% 3 8 Senior Loan Various Multifamily 5/31/2019 216.5 216.5 215.3 37.7 1.2 L + 3.1% 2.4 $ 201,206 / unit 74% 3 9 Senior Loan (9) Various Industrial 6/30/2021 425.0 212.5 3.7 1.0 208.8 L + 5.4% 4.5 $ 8 / SF 74% 3 10 Senior Loan Minneapolis, MN Office 11/13/2017 194.4 194.4 194.4 32.8 - L + 3.8% 0.9 $ 179 / SF 65% 2 11 Senior Loan Washington, D.C. Office 11/9/2021 187.7 187.7 111.9 26.7 75.8 L + 3.3% 4.9 $ 321 / SF 55% 3 12 Senior Loan Boston, MA Office 2/4/2021 375.0 187.5 187.5 37.4 - L + 3.3% 4.1 $ 506 / SF 71% 3 13 Senior Loan Chicago, IL Multifamily 6/6/2019 186.0 186.0 179.5 32.4 3.6 L + 3.6% 2.4 $ 364,837 / unit 72% 3 14 Senior Loan The Woodlands, TX Hospitality 9/15/2021 183.3 183.3 168.3 29.8 15.0 L + 4.2% 4.8 $ 185,155 / key 64% 3 15 Senior Loan Philadelphia, PA Office 4/11/2019 182.6 182.6 156.9 24.6 25.7 L + 2.6% 2.4 $ 219 / SF 68% 3 16 Senior Loan Washington, D.C. Office 12/20/2019 175.5 175.5 119.7 36.5 55.8 L + 3.4% 3.0 $ 586 / SF 58% 3 17 Senior Loan West Palm Beach, FL Multifamily 12/29/2021 171.5 171.5 169.2 70.6 2.3 L + 2.7% 5.0 $ 208,405 / unit 73% 3 18 Senior Loan Chicago, IL Office 7/15/2019 170.0 170.0 136.6 25.9 33.4 L + 3.3% 2.6 $ 131 / SF 59% 3 19 Senior Loan Boston, MA Life Science 4/27/2021 332.3 166.2 123.1 33.3 43.1 L + 3.6% 4.4 $ 511 / SF 66% 3 20 Senior Loan Philadelphia, PA Office 6/19/2018 165.0 165.0 165.0 72.1 - L + 2.5% 1.5 $ 169 / SF 71% 3 21 Senior Loan New York, NY Multifamily 12/5/2018 163.0 163.0 148.0 22.3 15.0 L + 2.6% 1.9 $ 556,391 / unit 77% 3 22 Senior Loan Oakland, CA Office 10/23/2020 509.9 159.7 106.5 16.8 8.3 L + 4.3% 3.9 $ 306 / SF 65% 3 23 Senior Loan Plano, TX Office 2/6/2020 153.7 153.7 131.0 19.8 22.7 L + 2.7% 3.1 $ 182 / SF 63% 2 24 Senior Loan Seattle, WA Life Science 10/1/2021 188.0 140.3 87.3 21.1 53.0 L + 3.1% 4.8 $ 555 / SF 69% 3 25 Senior Loan Boston, MA Multifamily 3/29/2019 138.0 138.0 137.0 29.5 1.0 L + 2.7% 2.3 $ 351,282 / unit 63% 3 26 Senior Loan Dallas, TX Office 12/10/2021 138.0 138.0 135.8 24.8 2.2 L + 3.6% 4.9 $ 432 / SF 68% 3 27 Senior Loan Fort Lauderdale, FL Hospitality 11/9/2018 130.0 130.0 130.0 24.1 - L + 3.4% 1.9 $ 375,723 / key 66% 3 28 Senior Loan Fontana, CA Industrial 5/11/2021 119.9 119.9 43.2 14.0 76.7 L + 4.6% 4.4 $ 37 / SF 64% 3 29 Senior Loan Irving, TX Multifamily 4/22/2021 117.6 117.6 108.9 17.1 8.7 L + 3.3% 4.4 $ 119,949 / unit 70% 3 30 Senior Loan Cambridge, MA Life Science 12/22/2021 401.3 115.7 50.6 11.5 65.1 L + 3.9% 5.0 $ 469 / SF 51% 3 31 Senior Loan Pittsburgh, PA Student Housing 6/8/2021 112.5 112.5 112.5 16.9 - L + 2.9% 4.4 $ 155,602 / bed 74% 3 32 Senior Loan Las Vegas, NV Multifamily 12/28/2021 106.3 106.3 102.0 24.5 4.3 L + 2.7% 5.0 $ 193,182 / unit 61% 3 33 Senior Loan Doral, FL Multifamily 12/10/2021 212.0 106.0 106.0 25.6 - L + 2.8% 4.9 $ 335,975 / unit 77% 3 34 Senior Loan San Diego, CA Multifamily 10/20/2021 103.5 103.5 103.5 18.3 - L + 2.8% 4.9 $ 448,052 / unit 71% 3 35 Senior Loan Orlando, FL Multifamily 12/14/2021 102.4 102.4 88.9 21.2 13.5 L + 3.0% 5.0 $ 234,565 / unit 74% 3 36 Senior Loan Brisbane, CA Life Science 7/22/2021 95.0 95.0 85.0 16.3 10.0 L + 3.0% 4.6 $ 734 / SF 71% 3 37 Senior Loan State College, PA Student Housing 10/15/2019 93.4 93.4 85.3 27.6 8.1 L + 2.7% 2.9 $ 71,474 / bed 64% 3 38 Senior Loan Dallas, TX Multifamily 12/23/2021 90.0 90.0 77.5 18.7 12.5 L + 2.8% 5.0 $ 238,488 / unit 67% 3 39 Senior Loan Miami, FL Multifamily 10/14/2021 89.5 89.5 89.5 20.5 - L + 2.8% 4.9 $ 304,422 / unit 76% 3 40 Senior Loan Denver, CO Multifamily 6/24/2021 88.5 88.5 88.5 16.2 - L + 3.0% 4.5 $ 295,000 / unit 77% 3 41 Senior Loan Dallas, TX Office 1/22/2021 87.0 87.0 87.0 21.1 - L + 3.3% 4.1 $ 288 / SF 65% 3 42 Senior Loan Charlotte, NC Multifamily 12/14/2021 86.8 86.8 76.0 18.1 10.8 L + 3.0% 5.0 $ 206,522 / unit 74% 3 43 Senior Loan New York, NY Multifamily 3/29/2018 86.0 86.0 86.0 13.2 - L + 4.0% 1.3 $ 462,366 / unit 63% 2 44 Senior Loan Mesa, AZ Industrial 5/4/2021 84.3 84.3 57.0 23.9 27.3 L + 3.2% 4.4 $ 66 / SF 55% 3 45 Senior Loan Hollywood, FL Multifamily 12/20/2021 81.0 81.0 81.0 19.4 - L + 3.0% 5.0 $ 327,935 / unit 74% 3 46 Senior Loan Seattle, WA Office 3/20/2018 80.7 80.7 80.7 13.4 - L + 4.1% 1.3 $ 468 / SF 56% 3 47 Senior Loan Brooklyn, NY Hospitality 1/18/2019 76.2 76.2 76.2 16.2 - L + 2.9% 2.1 $ 389,000 / key 69% 4 48 Senior Loan Phoenix, AZ Single Family Rental 4/22/2021 72.1 72.1 15.7 8.1 56.4 L + 4.8% 4.4 $ 34,268 / unit 50% 3 49 Senior Loan Arlington, VA Multifamily 10/23/2020 141.8 70.9 70.9 11.5 - L + 3.8% 3.8 $ 393,858 / unit 73% 3 50 Senior Loan Denver, CO Multifamily 9/14/2021 70.3 70.3 69.3 12.0 1.0 L + 2.7% 4.8 $ 286,157 / unit 78% 3

 
Portfolio Details 19 *See footnotes on subsequent page ($ in Millions) # Investment Location Property Type Investment Date Total Whole Loan (2) Committed Principal Amount (2) Current Principal Amount Net Equity (3) Future Funding (4) Coupon (5)(6) Max Remaining Term (Yrs) (5)(7) Loan Per SF / Unit / Key LTV (5)(8) Risk Rating Senior Loans (1) 51 Senior Loan Queens, NY Industrial 7/21/2017 70.1 70.1 67.5 17.3 2.6 L + 3.0% 0.6 $ 112 / SF 77% 4 52 Senior Loan Washington, D.C. Multifamily 12/4/2020 69.0 69.0 66.3 10.3 2.7 L + 3.5% 3.9 $ 265,132 / unit 63% 3 53 Senior Loan Dallas, TX Multifamily 8/18/2021 68.2 68.2 68.2 9.6 - L + 3.8% 4.7 $ 189,444 / unit 70% 3 54 Senior Loan Austin, TX Multifamily 9/12/2019 67.5 67.5 67.5 10.5 - L + 2.5% 2.7 $ 191,218 / unit 74% 3 55 Senior Loan Nashville, TN Hospitality 12/9/2021 66.0 66.0 64.3 9.7 1.7 L + 3.6% 5.0 $ 279,498 / key 68% 3 56 Senior Loan Atlanta, GA Multifamily 12/10/2021 61.5 61.5 55.4 13.3 6.1 L + 2.9% 5.0 $ 183,542 / unit 67% 3 57 Senior Loan Durham, NC Multifamily 12/15/2021 60.0 60.0 50.0 49.4 10.0 L + 2.9% 5.0 $ 144,795 / unit 67% 3 58 Senior Loan Sharon, MA Multifamily 12/1/2021 56.9 56.9 56.9 13.8 - L + 2.8% 4.9 $ 296,484 / unit 70% 3 59 Senior Loan Georgetown, TX Multifamily 12/16/2021 41.8 41.8 41.8 41.4 - L + 3.3% 5.0 $ 199,048 / unit 68% 3 60 Senior Loan New York, NY Condo (Resi) 8/4/2017 39.9 39.9 39.9 20.4 - L + 4.2% 0.3 $ 1,333 / SF 73% 4 61 Senior Loan (10) Denver, CO Industrial 12/11/2020 28.8 28.8 10.7 10.3 18.1 L + 3.8% 4.0 $ 21 / SF 61% 3 Total / Weighted Average $10,004.0 $8,051.8 $6,635.9 $1,623.6 $1,368.1 L + 3.2% 3.6 68% 2.9 Non-Senior Loans 1 Real Estate Corporate Loan (11) n.a. Multifamily 12/11/2020 102.6 41.1 41.1 40.5 - L + 12.0% 4.0 n/a n.a. 3 Total / Weighted Average $102.6 $41.1 $41.1 $40.5 $0.0 12.3% 4.0 n.a. 3.0 CMBS B-Pieces 1 RECOP I (12) Various Various 2/13/2017 n.a. 40.0 35.7 35.7 4.3 4.6% 7.4 n.a. 58% n.a. Total / Weighted Average $40.0 $35.7 $35.7 $4.3 4.6% 7.4 58% Real Estate Owned 1 Real Estate Asset (13) Portland, OR Retail 12/16/2021 n.a. n.a. 78.6 78.4 n.a. n.a. n.a. n.a. n.a. n.a. Total / Weighted Average $78.6 $78.4 Portfolio Total / Weighted Average $8,132.9 $6,791.3 $1,778.2 $1,372.4 4.0% 3.6 68% 2.9

 
Portfolio Details (1) Senior loans include senior mortgages and similar credit quality investments, including junior participations in our originated senior loans for which we have syndicated the senior participations and retained the junior participations for our portfolio and excludes vertical loan syndications. • For Senior Loan 12, the total whole loan is $375.0 million, co-originated and co-funded by KREF and a KKR affiliate. KREF’s interest was 50% of the loan or $187.5 million, of which a $150.0 million senior note was syndicated to a third party lender. Post syndication, KREF retained a mezzanine loan with a total commitment of $37.5 million, fully funded as of December 31, 2021, at an interest rate of L + 7.9%. • For Senior Loan 13, the total whole loan is $186.0 million, of which an $81.6 million senior note was syndicated to a third party lender. Post syndication, KREF retained the mezzanine loan and a 45% interest in the senior loan which both totaled $104.4 million commitment, of which $100.7 million was funded as of December 31, 2021, at a blended interest rate of L + 4.7%. • For Senior Loan 22, the total whole loan is $509.9 million, co-originated and co-funded by KREF and a KKR affiliate. KREF’s interest was 31% of the loan or $159.7 million, of which $134.7 million in senior notes were syndicated to third party lenders. Post syndication, KREF retained a mezzanine loan with a total commitment of $25.0 million, of which $16.7 million was funded as of December 31, 2021, at an interest rate of L + 12.9%. (2) Total Whole Loan represents total commitment of the entire whole loan originated. Committed Principal Amount includes participations by KKR affiliated entities and third parties that are syndicated/sold. (3) Net equity reflects (i) the amortized cost basis of our loans, net of borrowings and (ii) the cost basis of our investment in RECOP I. (4) Represents Committed Principal Amount less Current Principal Amount on Senior Loans and $4.3 million of unfunded commitment to RECOP I. (5) Weighted averages are weighted by current principal amount for senior loans and non-senior loans and by net equity for our RECOP I CMBS B-Piece investment. Non-Senior Loan 1 is excluded from the weighted average LTV. (6) L = one-month USD LIBOR rate; greater of (i) spot one-month USD LIBOR rate of 0.10% and (ii) LIBOR floor, where applicable, included in portfolio-wide averages represented as fixed rates. (7) Max remaining term (years) assumes all extension options are exercised, if applicable. (8) For senior loans, loan-to-value ratio ("LTV") LTV is generally based on the initial loan amount divided by the as-is appraised value as of the date the loan was originated or by the current principal amount as of the date of the most recent as-is appraised value; for Senior Loan 6, LTV is based on the initial loan amount divided by the appraised bulk sale value assuming a condo-conversion and no renovation; for Senior Loan 60, LTV is based on the current principal amount divided by the adjusted appraised gross sellout value net of sales cost; for mezzanine loans, LTV is based on the current balance of the whole loan dividend by the as-is appraised value as of the date the loan was originated; for RECOP I CMBS B-Pieces, LTV is based on the weighted average LTV of the underlying loan pool at issuance; for Senior Loans 2, 7, 9, 28, 30, 44, 48, and 61 LTV is calculated as the total commitment amount of the loan divided by the as-stabilized value as of the date the loan was originated. (9) For Senior Loan 9, the total whole loan facility is $425.0 million, co-originated and co-funded by KREF and a KKR affiliate. KREF’s interest was 50% of the facility or $212.5 million. The facility is comprised of individual cross-collateralized whole loans. As of December 31, 2021, there were three underlying senior loans in the facility with a commitment of $31.6 million and outstanding principal of $3.7 million. (10) For Senior Loan 60, Loan per SF of $1,333 is based on the allocated loan amount of the residential units. Excluding the value of the retail and parking components of the collateral, the Loan per SF is $1,926 based on allocating the full amount of the loan to only the residential units. (11) Non-Senior Loan 1 is a real estate corporate loan to a multifamily operator. (12) Represents our investment in an aggregator vehicle alongside RECOP I that invests in CMBS B-Pieces. Committed principal represents our total commitment to the aggregator vehicle whereas current principal represents the current funded amount. (13) Took title to one defaulted senior retail loan with an outstanding principal balance and net carrying value of $109.6 million and $69.3 million, respectively. The property was recognized on KREF’s balance sheet as REO with a carrying value of $78.6 million, which included the estimated fair value of the property and capitalized transaction costs. 20

 
Fully Extended Loan Maturities 21 Fully Extended Loan Maturities(1) ($ in Millions) (1) Excludes RECOP I CMBS B-Piece investment. • Fully extended weighted average loan maturity of 3.6 years(1) $301.8 $609.7 $1,508.6 $535.5 $2,803.9 $917.7 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 2022 2023 2024 2025 2026 2027

 
22 Consolidated Balance Sheets (1) Includes $54.0 million and $0.0 million held in collateralized loan obligation as of December 31, 2021 and 2020, respectively. (2) Includes $0.0 million and $15.9 million of loan repayment proceeds held by the servicer and receivable by KREF, and $2.3 million and $0.0 million of restricted cash as of December 31, 2021 and 2020, respectively. (3) Includes $1.5 million and $0.9 million of expected loss reserve for unfunded loan commitments as of December 31, 2021 and 2020, respectively. (in thousands - except share and per share data) December 31, 2021 December 31, 2020 Assets Cash and cash equivalents (1) $ 271,487 $ 110,832 Commercial real estate loans, held-for-investment 6,316,733 4,844,534 Less: Allowance for credit losses (22,244) (59,801) Commercial real estate loans, held-for-investment, net 6,294,489 4,784,733 Real estate owned, net 78,569 - Equity method investments 35,537 33,651 Accrued interest receivable 15,241 15,412 Other assets (2) 7,916 20,984 Total Assets $ 6,703,239 $ 4,965,612 Liabilities and Equity Liabilities Secured financing agreements, net $ 3,726,593 $ 2,574,747 Collateralized loan obligations, net 1,087,976 810,000 Secured term loan, net 338,549 288,028 Convertible notes, net 141,851 140,465 Loan participations sold, net - 66,232 Dividends payable 26,589 24,287 Accrued interest payable 6,627 5,381 Accounts payable, accrued expenses and other liabilities (3) 7,521 4,823 Due to affiliates 5,952 6,243 Total Liabilities 5,341,658 3,920,206 Commitments and Contingencies - - Temporary Equity Redeemable preferred stock - 1,852 Permanent Equity Preferred Stock, 50,000,000 shares authorized Preferred stock, $0.01 par value (zero and 1 share issued and outstanding as of December 31, 2021 and 2020, respectively) - - Series A cumulative redeemable preferred stock, $0.01 par value, (6,900,000 and zero shares issued and outstanding as of December 31, 2021 and 2020, respectively; liquidation preference of $25.00 per share) 69 - Common stock, $0.01 par value, 300,000,000 authorized (65,271,058 and 59,519,754 shares issued; 61,370,732 and 55,619,428 shares outstanding as of December 31, 2021 and 2020, respectively) 613 556 Additional paid-in capital 1,459,959 1,169,695 Accumulated deficit (38,208) (65,698) Repurchased stock (3,900,326 shares repurchased as of December 31, 2021 and 2020) (60,999) (60,999) Total KKR Real Estate Finance Trust Inc. stockholders’ equity 1,361,434 1,043,554 Noncontrolling interests in equity of consolidated joint venture 147 - Total Permanent Equity 1,361,581 1,043,554 Total Liabilities and Equity $ 6,703,239 $ 4,965,612

 
23 Consolidated Statements of Income (in thousands - except share and per share data) December 31, 2021 September 30, 2021 December 31, 2020 December 31, 2021 December 31, 2020 December 31, 2019 Net Interest Income Interest income $ 72,715 $ 75,320 $ 63,201 $ 279,950 $ 269,188 $ 274,335 Interest expense 30,266 29,832 28,835 114,439 127,312 158,860 Total net interest income 42,449 45,488 34,366 165,511 141,876 115,475 Other Income Income (loss) from equity method investments 1,863 2,162 1,168 6,371 537 4,568 Gain (loss) on sale of investments 5,126 - - 5,126 - (2,688) Change in net assets related to CMBS consolidated variable interest entities - - - - - 1,665 Other income 390 130 86 686 744 2,453 Total other income (loss) 7,379 2,292 1,254 12,183 1,281 5,998 Operating Expenses General and administrative 3,383 3,659 2,862 14,235 14,238 10,522 Provision for (reversal of) credit losses, net (3,077) 1,165 (3,438) (4,059) 50,344 - Management fees to affiliate 5,289 4,964 4,252 19,378 16,992 17,135 Incentive compensation to affiliate 3,463 2,215 2,929 10,273 6,774 3,272 Total operating expenses 9,058 12,003 6,605 39,827 88,348 30,929 Income (Loss) Before Income Taxes, Preferred Dividends, Redemption Value Adjustment and Participating Securities' Share in Earnings 40,770 35,777 29,015 137,867 54,809 90,544 Income tax expense 427 106 157 684 412 579 Net Income (Loss) 40,343 35,671 28,858 137,183 54,397 89,965 Preferred Stock dividends and redemption value adjustment 4,966 3,682 82 11,369 844 (527) Participating securities' share in earnings 179 - - 179 - - Net Income (Loss) Attributable to Common Stockholders $ 35,198 $ 31,989 $ 28,776 $ 125,635 $ 53,553 $ 90,492 Net Income (Loss) Per Share of Common Stock, Basic $ 0.59 $ 0.57 $ 0.52 $ 2.22 $ 0.96 $ 1.58 Net Income (Loss) Per Share of Common Stock, Diluted $ 0.59 $ 0.57 $ 0.52 $ 2.21 $ 0.96 $ 1.57 Weighted Average Number of Shares of Common Stock Outstanding, Basic 59,364,672 55,637,480 55,619,428 56,571,200 55,985,014 57,426,912 Weighted Average Number of Shares of Common Stock Outstanding, Diluted 59,453,264 56,011,243 55,669,230 56,783,388 56,057,237 57,532,490 Dividends Declared per Share of Common Stock $ 0.43 $ 0.43 $ 0.43 $ 1.72 $ 1.72 $ 1.72 Three Months Ended Year Ended

 
Reconciliation of GAAP Net Income to Distributable Earnings 24 (1) Includes $3.3 million, $2.5 million, $0.3 million, ($0.2) million and $0.7 million non-cash redemption value adjustment of our SNVPS, and ($2.2), ($1.1) million, $1.0 million, ($0.1) million and $0.0 million of unrealized mark-to-market adjustment to our RECOP I’s underlying CMBS investments during FY'21, 4Q'21, 3Q'21, 2Q'21 and 1Q'21, respectively. (2) Includes $32.1 million write-off on a defaulted senior retail loan which we took title of the underlying property and $0.9 million write-off of the remaining balance on an impaired mezzanine retail loan during the year ended December 31, 2021. (3) Includes 212,188, zero, 373,763, 274,764 and 111,633 dilutive restricted stock units for FY'21, 4Q'21, 3Q'21, 2Q'21 and 1Q'21, respectively. (4) FY 2021 Distributable Earnings per diluted share is $1.63 ($1.63 per basic share), however 2021 quarterly DE per diluted share totaled $1.66 per share ($1.67 per basic share). The $0.03 per share difference is a result of the impact of the October common offering on the WA number of shares for the year. (5) Numbers presented may not foot due to rounding. (in thousands - except share and per share data) December 31, 2021 Per Diluted Share(4)(5) December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 Net Income (Loss) Attributable to Common Stockholders 125,635$ 2.21$ 35,198$ 31,989$ 29,264$ 29,184$ Adjustments Non-cash equity compensation expense 7,428 0.13 1,413 2,027 1,994 1,994 Unrealized (gains) or losses (1) 1,059 0.02 1,463 (748) (364) 708 Provision for (reversal of) credit losses, net (4,059) (0.07) (3,077) 1,165 (559) (1,588) Gain on redemption of non-voting manager units (5,126) (0.09) (5,126) - - - Non-cash convertible notes discount amortization 361 0.01 91 91 90 89 Distributable Earnings before realized losses on loan write-offs 125,298$ 2.21$ 29,962$ 34,524$ 30,425$ 30,387$ Realized losses on loan write-offs (2) (32,905) (0.58) (32,905) - - - Distributable Earnings 92,393$ 1.63$ (2,943)$ 34,524$ 30,425$ 30,387$ Weighted average number of shares of common stock outstanding, diluted (3) 56,783,388 59,364,672 56,011,243 55,907,086 55,731,061 Year Ended Three Months Ended

 
Reconciliation of GAAP Net Income to Distributable Earnings 25 (1) Includes $3.3 million, $0.2 million and ($1.2) million non-cash redemption value adjustment of our SNVPS, and ($2.2) million, $3.9 million and $0.0 million of unrealized mark-to-market adjustment to our RECOP I’s underlying CMBS investments during the years ended December 31, 2021, 2020 and 2019, respectively. (2) Includes $32.1 million write-off on a defaulted senior retail loan which we took title of the underlying property and $0.9 million write-off of the remaining balance on an impaired mezzanine retail loan during the year ended December 31, 2021. Includes $4.7 million write-off on a $5.5 million mezzanine retail loan, which was 5-rated and put on non-accrual status, during the year ended December 31, 2020. (3) Includes 212,188, 72,223 and 105,578 dilutive restricted stock units for the years ended December 31, 2021, 2020 and 2019, respectively. (4) Numbers presented may not foot due to rounding. (in thousands - except share and per share data) December 31, 2021 Per Diluted Share(4) December 31, 2020 Per Diluted Share(4) December 31, 2019 Per Diluted Share(4) Net Income (Loss) Attributable to Common Stockholders 125,635$ 2.21$ 53,553$ 0.96$ 90,492$ 1.57$ Adjustments Non-cash equity compensation expense 7,428 0.13 5,676 0.10 4,091 0.07 Unrealized (gains) or losses (1) 1,059 0.02 4,036 0.06 1,179 0.02 Provision for (reversal of) credit losses, net (4,059) (0.07) 50,344 0.90 - - Gain on redemption of non-voting manager units (5,126) (0.09) - - - - Non-cash convertible notes discount amortization 361 0.01 362 0.01 360 0.01 Reversal of previously unrealized gain now realized - - - - 191 0.00 Distributable Earnings before realized losses on loan write-offs 125,298$ 2.21$ 113,971$ 2.03$ 96,313$ 1.67$ Realized losses on loan write-offs (2) (32,905) (0.58) (4,650) (0.08) - - Distributable Earnings 92,393$ 1.63$ 109,321$ 1.95$ 96,313$ 1.67$ Weighted average number of shares of common stock outstanding, diluted (3) 56,783,388 56,057,237 57,532,490 Year Ended

 
Key Definitions 26 “Distributable Earnings": Commencing for all periods ending on or after December 31, 2020, the Company has elected to present Distributable Earnings, a measure that is not prepared in accordance with GAAP, as a supplemental basis to KREF’s net income as determined in accordance with GAAP as the Company believes it would be useful to investors in evaluating the Company’s operating performance and its ability to pay its dividends. Distributable Earnings replaces the Company’s prior presentation of Core Earnings, and Core Earnings presentations from prior reporting periods have been recast as Distributable Earnings. The Company defines Distributable Earnings as net income (loss) attributable to stockholders or, without duplication, owners of the Company's subsidiaries, computed in accordance with GAAP, including realized losses not otherwise included in GAAP net income (loss) and excluding (i) non-cash equity compensation expense, (ii) depreciation and amortization, (iii) any unrealized gains or losses or other similar non-cash items that are included in net income for the applicable reporting period, regardless of whether such items are included in other comprehensive income or loss, or in net income, and (iv) one-time events pursuant to changes in GAAP and certain material non-cash income or expense items agreed upon after discussions between the Company’s Manager and board of directors and after approval by a majority of the independent directors. The exclusion of depreciation and amortization from the calculation of Distributable Earnings only applies to debt investments related to real estate to the extent the Company forecloses upon the property or properties underlying such debt investments. While Distributable Earnings excludes the impact of the unrealized current provision for credit losses, any loan losses are charged off and realized through Distributable Earnings when deemed non-recoverable. Non-recoverability is determined (i) upon the resolution of a loan (i.e. when the loan is repaid, fully or partially, or in the case of foreclosure, when the underlying asset is sold), or (ii) with respect to any amounts due under any loan, when such amount is determined to be non-collectible. Distributable Earnings should not be considered as a substitute for GAAP net income. The Company cautions readers that its methodology for calculating Distributable Earnings may differ from the methodologies employed by other REITs to calculate the same or similar supplemental performance measures, and as a result, the Company’s reported Distributable Earnings may not be comparable to similar measures presented by other REITs. LEED: LEED is the most widely used green building rating system in the world. LEED certification provides independent verification of a building or neighborhood’s green features, allowing for the design, construction, operations and maintenance of resource-efficient, high-performing, healthy, cost-effective buildings.