By Peter Grant

Blackstone Mortgage Trust Inc., a large commercial real-estate lender, is expected to appoint Katie Keenan as chief executive Wednesday, partly crediting the role she played in helping navigate the company through one of the most challenging markets in decades.

Ms. Keenan, 36 years old, has been president of the real-estate investment trust that was created by investment giant Blackstone Group Inc., one of the world's largest commercial real-estate owners. She is set to succeed Steve Plavin, who will be overseeing Blackstone Group's European debt business.

The real-estate investment trust, which went public in 2013, has a $18.7 billion portfolio of first mortgage loans that it made to owners of office buildings, warehouses, apartment properties and other commercial real estate in North America, Europe and Australia.

Like many first mortgage lenders, the Blackstone REIT moved to the sidelines during the first six months of the pandemic. But business has picked up this year, with $1.7 billion worth of new loans made in the first quarter of 2021, according to the firm.

"We're back in growth mode," Ms. Keenan said in an interview.

Ms. Keenan joined Blackstone in 2012 and was promoted to president of the REIT in 2020. She was being groomed to head the REIT as part of its long-term transition plan and is being promoted now partly due to the strength of her performance over the past year, Blackstone executives said.

"That was the plan," Mr. Plavin said. "She was ready to take the next step."

The pandemic has posed staggering problems for real-estate owners as tenants and other users vanished from offices, hotels, malls and other spaces with high contagion risks. When the pandemic first hit, shares of mortgage REITs plummeted, with investors fearing the dark days of previous commercial property collapses.

The most dire predictions haven't come true, thanks partly to government stimulus programs and the Federal Reserve's easy money policy, and many of the mortgage REITs have rebounded. Shares of Blackstone's REIT closed at $31.35 Tuesday, well above their pandemic low of $15.22 in early April. They hit a record high of $40.27 in February 2020.

Dangers still remain for owners of many properties and their lenders. Malls possibly will face a struggle recovering the ground they lost to online retail when tens of millions of people were sheltering in their homes. Office buildings face a threat from lower demand resulting from the popularity of remote working.

Ms. Keenan said she feels confident about her company's portfolio, which currently includes 122 loans. Virtually none are backed by stand-alone retail property and only two of the loans aren't fully performing.

About 54% of the loans in the portfolio are backed by office buildings. But Ms. Keenan noted that they are occupied by tenants that continue to have a strong appetite for office space, like biotech companies and entertainment companies that want to be near Hollywood studios.

The recovery of the office sector will take time and the work-from-home trend will hurt the values and rents of many properties, Ms. Keenan said. But she noted that the trend will affect each building differently and that Blackstone's portfolio will outperform the market.

"New, quality buildings with amenities are going to be where employers are going to want to be in order to bring the talent back," she said.

Write to Peter Grant at peter.grant@wsj.com

(END) Dow Jones Newswires

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