Climate Change Data

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• the general political, economic and competitive conditions in the United States and in any foreign jurisdictions in which we invest, including with respect to the effects of the COVID-19 pandemic, and their impact on our loan portfolio, financial condition and business operations
• accelerating inflationary trends
• higher interest rates imposed by the Federal Reserve
• the economic impact of escalating global trade tensions, the conflict between Russia and Ukraine, and the adoption; or expansion of economic sanctions or trade restrictions
• reduced demand for office, multifamily or retail space
• how widely utilized COVID-19 vaccines will be
• actions that may be taken by governmental authorities to contain the COVID-19 outbreak or to treat its impact
• the impact of, and market dislocations that may result from, governmental intervention in the economic and financial system or from regulatory reform of the oversight of financial markets
• interest rate mismatches between our target assets and any borrowings used to fund such assets
• adverse developments in the availability of desirable investment opportunities
• 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 our existing investments
• general volatility of the securities markets in which we participate
• changes in our business, investment strategies or target assets
• deterioration in the performance of the properties securing our investments
• acts of God
• the adequacy of collateral securing our investments and declines in the fair value of our investments
• difficulty in obtaining financing or raising capital
• difficulty in successfully managing our growth
• reductions in the yield on our investments and increases in the cost of our financing
• defaults by borrowers in paying debt service on outstanding indebtedness
• the availability of qualified personnel and our relationship with our Manager
• subsidiaries of KKR & Co. Inc. have significant influence over us and KKR's interests may conflict with those of our stockholders in the future
• the cost of operating our platform
• adverse legislative or regulatory developments
• our qualification as a real estate investment trust (“REIT”) for U.S. federal income tax purposes and our exclusion from registration under the Investment Company Act of 1940
• authoritative accounting principles generally accepted in the United States of America (“GAAP”) or policy changes

Mitigation Strategies

• maintain a robust asset management relationship with our borrowers and have utilized these relationships to proactively address the impacts of the COVID-19 pandemic on our loans secured by properties experiencing cash flow or other negative business pressures
• Closed a $1.0 billion managed multifamily CLO, with a two-year reinvestment period providing $847.5 million of non-mark-to-market and non-recourse financing
• Entered into three new asset specific financing facilities totaling $490.6 million, which provide non-recourse matched-term asset-based financing on a non-mark-to-market basis
• Entered into a new $350.0 million term lending agreement, which provides match-term financing on a non-mark-to-market basis with an option to increase the facility to $500.0 million
• Increased the borrowing capacity of existing $500.0 million term lending agreement to $1.0 billion, which provides match-term asset-based financing on a non-mark-to-market basis.
• Increased the borrowing capacity on the corporate revolving credit facility (“Revolver”) by $275.0 million to $610.0 million and extended the maturity date through March 2027.
• are working with our lenders and borrowers to minimize the impact of any LIBOR transition on our financial condition and results of operations

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• increased frequency or intensity of adverse weather and natural disasters

Transition Risks

• government restrictions, standards or regulations intended to reduce greenhouse gas emissions and potential climate change impacts

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Increased competition from entities engaged in mortgage lending and/or investing in our target assets
• Conflicts with KKR and its affiliates, including our Manager, could result in decisions that are not in the best interests of our stockholders
• We are dependent on our Manager and its access to KKR’s investment professionals and resources.
• Global economic trends and economic conditions, including heightened inflation, slower growth or recession, changes to fiscal and monetary policy, higher interest rates, labor shortages, currency fluctuations and challenges in global supply chains
• Reduced demand for office, multifamily or retail space, including as a result of the COVID-19 pandemic and/or hybrid work schedules which allow work from remote locations other than the employer's office premises
• 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 us or the owners and operators of the real estate securing our investments
• Climate change, climate change-related initiative and regulation and the increased focus on environmental, social and governance issues, may adversely affect our business and financial results and damage our reputation

Mitigation Strategies

• Our Manager leverages the proprietary information available to us through KKR’s global investment platforms to conduct thorough underwriting and due diligence and develop a deeper understanding of the opportunities, risks and challenges of the investments that we review.
• Our Manager benefits from KKR's capital markets team, comprised of a team of approximately 70 professionals that advise KKR’s investment teams and portfolio companies on executing equity and debt capital markets solutions.
• We plan to maintain leverage levels appropriate to our specific portfolio.
• We will endeavor to match the terms and indices of our assets and liabilities and will also seek to minimize the risks associated with mark-to-market and recourse borrowing.
• We continue to expand and diversify our financing sources, especially those sources that provide non-mark-to-market financing, reducing our exposure to market volatility.

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• increased frequency or intensity of adverse weather and natural disasters

Transition Risks

• government restrictions, standards or regulations intended to reduce greenhouse gas emissions and potential climate change impacts