Our loan portfolio decreased to $22.1 billion as of 9/30, with $1 billion of repayments outpacing $440 million of loan fundings. These incremental investments represent fundings under existing loans, and our credit facility of lenders continue to advance their share of these ordinary core loan fundings, indicative of the strength of our banking relationships and the quality of our overall portfolio. Our 185 loans are diversified across geographies and property types, and only 5% of our total portfolio is characterized as non performing, which indicates a five risk rated loan with an asset specific CECL reserve. Our total asset specific CECL reserve increased $108 million to $323 million at quarter-end, a reserve equivalent to 23% of the related loans cost basis and applying a decline of over 50% in the underlying real estate collateral value.
These incremental asset specific reserves were offset by a $12 million decline in our general CECL reserve for a net reserve increase of $97 million during the quarter. These reserves do not impact DE until they are realized, but do impact GAAP net income, which declined $0.42 this quarter to $0.17 per share as a result. In addition, our aggregate CECL reserve of $477 million does impact our book value. However, our ability to retain earnings in excess of our dividend has limited our book value decline to about 1% since January 1st of this year, despite a 39% increase in our total CECL reserve over the past three quarters. Looking at our risk ratings, as noted we downgraded three office loans to a five risk rating this quarter. All of these loans are on cost recovery status as of 9/30, which means that any cash interest received is applied as a reduction to our loan basis rather than recognized as income.
Year-to-date, we have recorded $41 million of such cost recovery proceeds, representing about $0.19 per share of unrecognized net income. As I’ve highlighted in prior calls, this income will eventually be recognized that these loans recover or will otherwise reduce future realized losses should credit continue to deteriorate. Outside of impaired loans, we only had two downgrades and reported seven upgrades as the majority of our portfolio continues to perform well and generate compelling returns with comparatively lower levels of risk. Overall, our portfolio average risk rating remains at 2.9, same level we have maintained for the past four quarters. In closing, we remain steadfast in our focus on maintaining a strong balance sheet, finding opportunities to reduce risk in our portfolio, and managing our more challenged credits to maximize long-term shareholder value.
Our $0.62 dividend is well covered by our distributable earnings and provides a highly attractive, reliable income stream for our stockholders, generating a 12% yield on yesterday’s quotes. As a final note, we view our recent addition to the S&P Small Cap 600 as an endorsement of BXMT as a valuable long-term investment for our stockholders. The resulting incremental demand creates additional liquidity for our stock, which we believe will benefit our investors across market cycles. Thank you for joining the call and I will now ask the operator to open the call to questions.
Operator: Thank you. [Operator Instructions]. We’ll go first to Stephen Laws with Raymond James.
Stephen Laws: Hi, good morning. Katie, I guess to start, can you maybe talk a little bit about where you think you are kind of evaluating the one to three years, I know, you talked about some performance metrics in your comments, kind of what is the risk of kind of additional negative ratings migration, kind of how do you feel about the lead time into some of the loans that maybe have maturity dates later next year that you’ll start getting more color on in the coming quarters?
Katie Keenan: Yeah, thanks, Stephen. Thanks for joining us. So it’s a great question. And I think that we go through our one to three isn’t really the entire portfolio in a lot of depth every quarter. I think you can see the proactive approach we’re taking both in terms of how we have treated the 4s and 5s, which really are in many cases are really in almost all cases downgrades in anticipation of challenge. And then also the proactive modifications that we have taken on across our office portfolio and anywhere where we see that there may potentially be stress ahead. So when we look at our 3s, and 4s in our office, we’ve really done proactive mods on many of those loans over the last year. And as a result, we’ve put those loans in much better position.
So we’re not waiting around to sort of deal with the 2024 maturity and see what happens then. We’ve been having conversations with our sponsors about those loans for many months and that is sort of the result of the $750 million of equity on our 3 and 4 rated office loans that we’ve brought in over the last year. So, I think when we look at the overall credit environment we have 200 loans across the portfolio, there’s obviously going to be movements in both directions, on the margin, but we are very in depth on how we look at these deals and we’re running out multiple year projections in terms of looking at decision points and risk areas. And so our risk ratings really reflect what we see over the future in addition to what we’re seeing today.
Stephen Laws: Great, thanks, Katie. And then as a quick follow-up, can you talk about the repayment outlook, not doing any new origination similar to most peers, where do you think leverage trends or maybe troughs, how do you see that and then appetite for more loan sales not a lot in Q3 I think but maybe could you touch on that, please? Thank you.
Katie Keenan: Yeah, so you know, I think that we’re really proud of the reduction in leverage that we’ve had, that’s really been a factor of the overall conservative approach we’ve taken with the business. We’ve had a very healthy pace of repayment so far this year, $1 billion in the quarter. And I think that’s really a result of the quality of the portfolio and the institutional liquidity of the assets that underlie our loans. And we’ve seen that continue, even this quarter obviously, when rates ticked up. I think the pace of repayments could possibly slow down as rates are higher, but as I mentioned in the call script, we literally just had an office loan repaid this week. So, the factor with these loans that they reached the end of their business plans our sponsors are ready to sell, they’re ready to refi.
And because our portfolio as a whole is low leverage, and we’re lending on high quality assets that have business plans that are generally working, we do see that continued liquidity. So, we expect repayments to continue and I think that as far as looking at — and the leverage will sort of continue in the range it is as a result of that, looking at new investments, we are actively looking at new investments, we have plenty of liquidity, our balance sheet is in great shape. And it’s really a factor of overall transaction volume and making sure the investment opportunities clear the high bar that we’ve set for ourselves for ourselves, both from a return perspective, and from a credit perspective. So with overall transaction volumes down, 40% to 60% across the market, the addressable universe is smaller, but we’re very actively out there with our big origination team looking for deals.
And I think that, as the market continues to persist through this period, and reaches more potential precision points coming into next year, I think there will be more opportunities, and we’ll certainly be looking for them.
Stephen Laws: Right, thanks for your comments this morning, Katie.
Operator: We’ll go next Steve DeLaney with JMP Securities.
Steve DeLaney: Thanks. Good morning, everyone. So I know a lot of focus, probably today on the three new office downgrades. I’d like to flip it over though and ask question about the seven upgrades. Were they mostly loans that were moved from a 4 to a 3, are there any large loans in there, and is there a common theme in those seven situations, I know every loan is unique, but what is allowed, what is improving, generally on those seven loans that is causing you to upgrade them? Thank you.
Katie Keenan: Yeah, thanks Steve. Great question. So those loans really primarily fall into the category of multifamily and they’re primarily two to sorry, three risk rating to two risk rating loans. And I would say, generally, our risk ratings have been pretty sticky over time, we have a lot of loans in the three category that continue to perform on their business plans. But, with some situations where we just see really continued outperformance strong that — getting into the zone where we feel very, very good about the execution on the credit, we move those types of loans to 2s, and in some cases, 1s if it’s sort of another leg up from that. So these are multifamily assets, business plans completed, strong rent growth, strong debt yields, and really just working in terms of their business plans and benefiting from the leverage level that we have on them.
