Granite Point's Dividend Holds Firm Amidst Market Turmoil

NEW YORK, NY – December 17, 2025 – Granite Point Mortgage Trust Inc. (NYSE: GPMT) affirmed its commitment to shareholder returns this week, declaring its fourth-quarter dividends while simultaneously releasing a business update that paints a picture of cautious maneuvering in a complex commercial real estate market. The real estate investment trust announced a quarterly cash dividend of $0.05 per common share, a figure that signals stability in the short term but also reflects a year of significant recalibration for the company.

The announcement comes as the commercial real estate sector continues to grapple with economic uncertainty, higher interest rates, and shifting property valuations. For investors and market watchers, Granite Point's latest moves offer a valuable glimpse into the strategies mortgage REITs are employing to navigate these headwinds, balancing shareholder payouts with the critical need for balance sheet resilience.

A Dividend Under Scrutiny

Granite Point's Board of Directors declared the $0.05 per share common stock dividend for the fourth quarter of 2025, payable on January 15, 2026, to shareholders of record as of December 30, 2025. This marks the fourth consecutive quarter the dividend has been held at this level, providing a degree of predictability for income-focused investors. The company also declared a consistent quarterly dividend of $0.4375 per share for its 7.00% Series A Preferred Stock.

However, this consistency within 2025 masks a more dramatic long-term shift. The current annualized dividend of $0.20 per share is a stark reduction from the $0.20 quarterly dividend the company paid through 2023. This significant cut, implemented at the beginning of the year, reflects the broader pressures on the company's earnings and a strategic pivot toward capital preservation.

Further analysis reveals potential challenges to the dividend's long-term sustainability. The company's dividend payout ratio has been negative for recent periods, a financial metric indicating that its earnings have not been sufficient to cover the dividend payments. While not uncommon for REITs to use other cash flow sources for distributions, a sustained negative ratio often raises flags among analysts. Some market observers suggest that without a significant improvement in earnings or a more favorable market environment, the current dividend level could face future pressure. This has led the company to adopt what many describe as a "liquidity-first" approach to its capital allocation strategy.

Fortifying the Balance Sheet

The fourth-quarter business update provides clear evidence of this conservative, liquidity-focused strategy. Granite Point reported that it had realized approximately $39.0 million in full and partial principal repayments during the quarter, a figure that far outpaces the roughly $4.8 million it funded on existing loans. This disparity suggests a deliberate focus on de-risking and deleveraging rather than aggressive portfolio expansion.

This defensive posture is further underscored by the company's debt management. Granite Point announced it had reduced its secured credit facility borrowings by an additional $7.5 million. Reducing debt, especially secured borrowings, strengthens the company's financial foundation and provides greater flexibility to weather market downturns.

Perhaps the most telling figure in the update is the company's cash position. As of December 16, Granite Point held approximately $66.9 million in unrestricted cash. This substantial cash buffer is a critical tool, providing the resources to manage loan-related issues, capitalize on distressed opportunities, and maintain operational stability without being forced into unfavorable asset sales. This robust liquidity is central to the company’s strategy of navigating the current cycle with prudence.

Navigating a Treacherous CRE Landscape

Granite Point's operational update serves as a microcosm of the broader challenges and strategies at play across the commercial real estate lending landscape. A key highlight was the successful refinancing of a real estate owned (REO) property in Maynard, Massachusetts. The company provided an $18.0 million first mortgage to facilitate the transaction, effectively transitioning a non-performing asset back into a performing loan on its books.

An REO property is one that a lender takes ownership of after a borrower defaults and the property goes through foreclosure. Managing and disposing of these assets can be costly and time-consuming, acting as a drag on a lender's performance. By refinancing the Maynard property, Granite Point has resolved a problem asset and generated a new income stream with a financing spread of SOFR plus 3.05%. This move is indicative of a broader industry trend where lenders are actively seeking creative solutions to work through distressed loans that have accumulated amid higher interest rates and changing work patterns affecting office and other commercial properties.

The company's portfolio is predominantly composed of senior floating-rate loans, which are tied to benchmarks like SOFR. While this structure has helped protect income streams as interest rates rose, it has also increased the debt service burden on its borrowers. This, in turn, elevates the risk of defaults and the potential for more assets to become REO, making the successful resolution of the Maynard property a significant and positive data point for the company's risk management capabilities.

A Strategy of Prudence and Patience

Taken together, the dividend announcement and business update reveal a management team executing a clear playbook for a challenging environment. The strategy is not one of bold growth, but of deliberate risk mitigation, capital preservation, and methodical problem-solving. By prioritizing principal repayments over new originations and using cash flow to pay down debt, Granite Point is strengthening its position for the long haul.

The company's focus on maintaining a large cash reserve and actively managing its portfolio, including resolving distressed assets, demonstrates a patient approach. Management appears willing to sacrifice short-term growth in loan originations for the long-term stability of the enterprise. This conservative stance is a direct response to the volatile conditions in the commercial property markets, where transaction volumes remain subdued and price discovery is ongoing.

While the reduced dividend may be a point of concern for some investors, others may see it as a prudent measure that frees up capital to protect the book value of the company's investments. The path forward for Granite Point, like that of its peers in the mortgage REIT sector, will be heavily influenced by the direction of interest rates, the health of the U.S. economy, and the ultimate performance of the underlying commercial real estate assets that secure its loans. For now, the company's actions suggest it is battening down the hatches, ensuring it has the liquidity and financial fortitude to navigate whatever storms may lie ahead.