GPMT

Granite Point is an internally managed commercial-mortgage REIT whose portfolio is anchored in exactly the wrong asset class right now: senior floating-rate loans against commercial real estate, including office. The filing is blunt that 'higher vacancies, slower leasing activity, and tenant reevaluation of space needs' plus 'elevated interest rates and limited market liquidity have created a high level of uncertainty with respect to property values,' and that management finds it 'difficult to predict' how its office borrowers will perform. That is the definition of unknowable, unpriceable credit risk — the core reason this is an 'avoid' rather than a contrarian 'buy' despite the visually cheap price.

The numbers corroborate the stress. GPMT has now lost money four years running (-$40.8M in 2022, -$63.2M in 2023, -$207M in 2024, -$41.2M in 2025), and while the FY2025 GAAP loss narrowed +80% YoY, the economic picture is worse than the headline: the 10-K reports Distributable Earnings (Loss) to common of $(94.6)M, or $(1.98)/share, driven by $(80.5)M of write-offs, and even Distributable Earnings before realized gains was negative at $(7.2)M, or $(0.15)/share. The earnings engine does not currently cover its own dividend, which is why dividends paid were slashed 56.8% to $10.4M. ROE is -7.4% and operating cash flow is a razor-thin $2.67M (down 69.5%). Total assets fell 17% and equity fell 10.7% — the balance sheet is shrinking as loans run off and get written down, not compounding.