ACR 10-K & 10-Q changes, risk factors and insider trading
ACRES Commercial Realty Corp. (also ACR-PC, ACR-PD) · NYSE · Real Estate Investment Trusts · CIK 1332551 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
Removed heading “We may not be able to generate future taxable income to fully utilize our net capital loss carryforwards.”
Largest changes
“We may not be able to generate future taxable income to fully utilize our net capital loss carryforwards.”see in full comparison
“As of December 31, 2024, we had an CLCF of $121.9 million that expires on December 31, 2025. We can utilize our CLCF to reduce our net capital gain income that would be subject to income taxes to the extent it is not distributed to our shareholders. Utilizing our CLCF may allow us to reduce our required distributions to shareholders or income tax liability which would allow us to retain future taxable income as capital. However, we may not generate sufficient taxable income of the appropriate tax character to fully utilize this carryforward prior to its expiration. …”see in full comparison
The statute permits exemptions from its provisions, including business combinations that are exempted by the board of directors before the time that the interested stockholder becomes an interestedsee in full comparisonstockholder.stockholder or the issuance of stock that resulted in the interested stockholder becoming subject to the statute if such issuance was approved by the board of directors or a committee of such board.
Full comparison: every changed paragraph (6)
Increased consumer demand, along with tight labor markets and supply chain imbalances, have created inflationary pressure on the U.S. economy. Our ownership of commercial real estate can act as an effective hedge against inflation, since in an inflationary environment, increases in the cost of construction and higher mortgage rates are likely to make new supply more expensive, leading to a limited supply of buildings, which in turn increases both rental rates and property values. Further, the Federal Reserve has raised, and may continue to raise,raise interest rates in an effort to combat inflation, and so the interest payable on our existing fixed rate debt on our real estate portfolio becomes relatively cheaper, and the rates on our floating rate loans and financing adjust accordingly.
Subject to maintaining our qualification as a REIT and exclusion from regulation under the Investment Company Act, we may invest in mezzanine debt, preferred equity and mezzanine or other subordinated tranches of CMBS. We currently have investments in mezzanine debt. These types of investments carry a higher degree of risk of loss than senior secured debt investments such as our whole loan investments because, in the event of default and foreclosure, holders of senior liens will be paid in full before mezzanine investors. Depending on the value of the underlying collateral at the time of foreclosure, there may not be sufficient assets to pay all or any part of amounts owed to mezzanine investors. Moreover, mezzanine and other subordinate debt investments may have higher LTV than conventional senior lien financing, resulting in less equity in the collateral and increasing the risk of loss of principal. If a borrower defaults or declares bankruptcy, we may be subject to agreements restricting or eliminating our rights as a creditor, including rights to call a default, cure a default, foreclose on collateral, and accelerate maturity or control decisions made in bankruptcy proceedings. In addition, the prices of lower credit quality securities are generally less sensitive to interest rate changes than more highly rated investments, but more sensitive to economic downturns or individual issuer developments because the ability of obligors of investments underlying the securities to make principal and interest payments may be impaired. In such event, existing credit support relating to the securities’ structure may not be sufficient to protect us against loss of our principal. For additional risks regarding real estate-related loans, see “Risks Related to Investments- Our commercial mortgage loans and mezzanine loans are subject to the risks inherent in owning the real estate securing or underlying those investments that could result in losses to us.”
The statute permits exemptions from its provisions, including business combinations that are exempted by the board of directors before the time that the interested stockholder becomes an interested stockholder.stockholder or the issuance of stock that resulted in the interested stockholder becoming subject to the statute if such issuance was approved by the board of directors or a committee of such board.
Dividends paid by REITs are generally not eligible for the reduced 15% maximum tax rate for dividends paid to individuals (20% for those with taxable income above certain thresholds that are adjusted annually under current law). The more favorable rates applicable to regular corporate dividends could cause stockholders who are individuals to perceive investments in REITs to be relatively less attractive than investments in the stock of non-REIT corporations that pay dividends to which more favorable rates apply, which could reduce the value of the stocks of REITs. However, for taxable years beginning before January 1, 2026, non-corporate taxpayers may deduct up to 20% of certain pass-through business income, including “qualified REIT dividends” (generally, dividends received by a REIT stockholder that are not designated as capital gain dividends or qualified dividend income), subject to certain limitations. Dividends from REITs as well as regular corporate dividends will also be subject to a 3.8% Medicare surtax for taxpayers with modified adjusted gross income above $200,000 (if single) or $250,000 (if married and filing jointly).
We may not be able to generate future taxable income to fully utilize our net capital loss carryforwards.
As of December 31, 2024, we had an CLCF of $121.9 million that expires on December 31, 2025. We can utilize our CLCF to reduce our net capital gain income that would be subject to income taxes to the extent it is not distributed to our shareholders. Utilizing our CLCF may allow us to reduce our required distributions to shareholders or income tax liability which would allow us to retain future taxable income as capital. However, we may not generate sufficient taxable income of the appropriate tax character to fully utilize this carryforward prior to its expiration. To the extent that our CLCF expires unutilized, we may not fully realize the benefit of this tax attribute which could lead to higher annual distribution requirements or tax liabilities after 2025.
Management's Discussion & Analysis (MD&A)
New heading “Net Change in Interest Expense for the Comparative Years Ended December 31, 2025 and 2024:”
New heading “Mortgage Payable”
Removed heading “Net Change in Interest Expense for the Comparative Years Ended December 31, 2024 and 2023:”
Removed heading “4.50% Convertible Senior Notes”
Removed heading “Senior Unsecured Notes”
Removed heading “12.00% Senior Unsecured Notes”
Largest changes
“The JPMorgan Chase 2025 Facility specifies events of default, subject to certain materiality thresholds and grace periods, customary for this type of financing arrangement, including but not limited to: payment defaults; bankruptcy or insolvency proceedings; a change of control of the ACRES SPE 2025-1, LLC, ("Seller SPE") or of us; breaches of covenants and/or certain representations and warranties; and a judgment in an amount greater than $250,000 against the Seller SPE or ACRES RF or $10.0 million against us. …”see in full comparison
“The Indenture contains restrictive covenants that, among other things, require us to maintain certain financial ratios. The foregoing limitations are subject to exceptions as set forth in the Supplemental Indenture. At December 31, 2025, we were in compliance with these covenants. …”see in full comparison
“The Indenture contains restrictive covenants that, among other things, require us to maintain certain financial ratios. The foregoing limitations are subject to exceptions as set forth in the Supplemental Indenture. At December 31, 2024, we were in compliance with these covenants. …”see in full comparison
“One retail loan in the Northeast region, with a principal balance of $8.0 million at December 31, 2023, for which foreclosure was determined to be probable. The loan was modified in February 2021 to extend its maturity to December 2021. In December 2021, this loan entered payment default and was placed on nonaccrual status. The borrower filed for bankruptcy in 2023 and the property was sold to a third-party bidder at auction in February 2024. The sale closed in April 2024, at a purchase price of $8.3 million and the loan was paid off at par.”see in full comparison
“Senior Secured Financing Facility: Our senior secured financing facility allows us to borrow against loans and real estate investments that we own. This facility has an individual floating rate loan series structure that have a three month commitment period after the financing is approved by the lender, subject to the maximum dollar amount agreed upon for the series. …”see in full comparison
“Senior Secured Financing Facility: Our senior secured financing facility allows us to borrow against loans and real estate investments that we own. This facility has an individual floating rate loan series structure that has a three month commitment period after the financing is approved by the lender, subject to the maximum dollar amount agreed upon for the series. …”see in full comparison
Full comparison: every changed paragraph (259)
We are a Maryland corporation and an externallyexternally-managed managedreal estate investment trust ("REIT") that is primarily focused on originating, holding and managing commercial real estate ("CRE") mortgage loans and equity investments in commercial real estate properties through direct ownership and joint ventures. Our manager is ACRES Capital, LLC (our “"Manager”"), a subsidiary of ACRES Capital Corp. (collectively, “"ACRES”"), a private commercial real estate lender exclusively dedicated to nationwide middle market CRE lending with a focus on multifamily, student housing, hospitality, office and industrial properties in top United States (“"U.S.”") markets. Our Manager draws upon the management team of ACRES and its collective investment experience to provide its services. Our longer-term objective is to provide our stockholders with total returns over time, including quarterly distributions and capital appreciation, while seeking to manage the risks associated with our investment strategiesstrategies, as well as to maximize long-term stockholder value by maintaining stability through our available liquidity and diversified CRE loan portfolio. Our short-term strategy is to drive book value (“BV”) growth over the coming years by utilizing our NOL carryforwards and a portion of our net capital loss carryforwards. At our latest determination, which is as of our 2023 tax return filed in October 2024, we have NOL carryforwards of $32.1 million and net capital loss carryforwards of $121.9 million. By retaining future earnings, we can grow our investable base and selectively deploy the anticipated capital growth into new whole loan originations at attractive yields, which we expect will grow our earnings available for distribution.
Currently, markets are grappling with trade tensions, geopolitical tensions, the risk of increased tariffs, inflation and thelabor prospect of having higher interest rates for longer than originally forecasted.volatility. These market pressures have caused continued disruption in many market segments, including the financial services, real estate and credit markets and these disruptions have affected the availability and the cost of capital. The increase in the cost of capital is expected to cause dislocations in various investment and financing markets in which we participate as we and other market participants adjust to the new financing environment.
Since September 2024, the U.S. Federal Reserve lowered the Federal Funds rate by 1.75% in six rate cuts reaching its lowest levels since 2022. Lowering rates and decreasing costs may encourage consumer spending and accelerate corporate profit growth, which may positively impact the credit profile of the collateral underlying our loans and positively impact our borrowers' ability to sell or refinance in the current market; however, lower rates would also correlate to decreases in our net income. There is also no certainty with respect to the timing and pace of potential future decreases or if such decreases will continue to occur.
The U.S. Federal Reserve raised the Federal Funds rate by 5.25% in 11 rate hikes between March 2022 and July 2023 to combat inflation. While the U.S Federal Reserve has lowered rates in September, November and December 2024, there is no certainty with respect to the timing and pace of potential future decreases or if such decreases will continue to occur. Interest rates may remain at or near recent highs, which creates further uncertainty for the economy and our borrowers. A rising interest rate environment generally correlates to increases in our net income. However, increases in interest rates may adversely affect our existing borrowers and could lead to nonperformance, i.e. the borrower’s inability to pay debt service. Lowering rates and decreasing costs may encourage consumer spending and accelerate corporate profit growth, which may positively impact the collateral underlying our loans and positively impact our borrowers' ability to sell or refinance in the current market.
Additionally,The multifamily real estate market continues to be a competitive market, and as a result of investors' continued confidence in that asset class, the market for those assets continues to experience spread compression on newly originated deals. Furthermore, the office property market continues to experience high vacancies, slower leasing activity and current tenants reevaluating their needs for physical office space due to remote-work trends across the country. These factors, coupled with inflation, historically higher interest rates and dislocations in market liquidity, have converged to create higher levels of uncertainty surrounding property values, which in turn, also negatively impact borrowers' ability and willingness to financially support and standby their investments in their office properties, their abilities to sell or refinance their positions in the current market and ultimately our financial results.
In response, we continue to manage corporate liquidity actively and responsibly, manage our CRE assets through a solutions basedsolutions-based approach with our borrowers and manage our daily operations in light of changing macroeconomic circumstances. Our Manager also continuously monitors for new capital opportunities and selectively executes on agreements that are expected to enhance our returns.
We originate transitional floating-rate CRE loans with a target size between $10.0 million and $100.0 million. During the year ended December 31, 2025, we originated 14 new CRE floating-rate whole loans, with total commitments of $733.0 million, one new $15.0 million CRE mezzanine loan, one new $9.3 million CRE preferred equity investment and net funded commitments of $3.1 million. Loan payoffs and sales during the year ended December 31, 2025 were $418.9 million, producing a net increase to the portfolio of $341.5 million. During the year ended December 31, 2024, we selectively originated one floating-rate CRE loan, with a total commitment of $47.9 million. Loan payoffs during the year ended December 31, 2024 were $377.6 million, along with loan foreclosures of $37.7 million, partially offset by net funded commitments of $5.9 million, producing a net decrease to the portfolio of $361.5 million.
Our CRE loan portfolio, which had acarrying $1.5values of $1.8 billion and $1.8$1.5 billion carrying value at December 31, 20242025 and 2023,2024, respectively, comprised:
First mortgage loans, which we refer to as whole loans. These loans are typically secured by first liens on CRE property, including the following property types: multifamily, student housing, hospitality, office, self-storageself-storage, mixed-use and retail. All but twothree of our CRE whole loans were current on contractual payments at December 31, 2024.2025.
Mezzanine debt that is senior to borrower’s equity but is subordinated to other third-party debt. These loans are subordinated CRE loans, usually secured by a pledge of the borrower’s equity ownership in the entity that owns the property or by a second lien mortgage on the property. At bothDecember 31, 2025, no individual mezzanine loans were included in CRE loans held for investment on our consolidated balance sheet. At December 31, 2024 and 2023,2024, we had one individual mezzanine loan included in CRE loans held for investment on our consolidated balance sheet that had no carrying value. This mezzanine loan was not current on contractual payments at December 31, 2024.
Preferred equity investments that are subordinate to first mortgage loans and mezzanine debt. These investments may be subject to more credit risk than subordinated debt but provide the potential for higher returns upon a liquidation of the underlying property and are typically structured to provide some credit enhancement differentiating it from the common equity in such investments. At December 31, 2025, we had one preferred equity investment included in CRE loans held for investment with a carrying value of $9.2 million. We also hold the first mortgage CRE whole loan on the underlying collateral for this investment. At December 31, 2024, we had no preferred equity investments included in CRE loans held for investment.
While the CRE whole loans included in the CRE loan portfolio are substantially composed of floating-rate loans benchmarked to the one-month Term Secured Overnight Financing Rate ("Term SOFR"), asset yields are protected through the use of benchmark floors and minimum interest periods that typically range from 12 to 18 months at the time of a loan’s origination. Our benchmark floors provide asset yield protection when the benchmark rate falls below an in-place benchmark floor. Our net investment returns are enhanced by a decline in the cost of our floating-rate liabilities that do not have benchmark floors. Our net investment returns will be negatively impacted by the rising cost of our floating-rate liabilities that do not have floors until the benchmark rate is above the benchmark floor, at which point our floating-rate loans and floating-rate liabilities will be match funded,match-funded, effectively locking in our net interest margin until the benchmark floor rate is activated again or the floating-rate loan is paid off or refinanced.
In a business environment where benchmark rates are increasing significantly, cash flows of the CRE assets underlying our loans may not be sufficient to pay debt service on our loans, which could result in non-performance or default. We partially mitigate this risk by generally requiring our borrowers to purchase interest rate cap agreements with non-affiliated, well-capitalized third parties and by selectively requiring our borrowers to have and maintain debt service reserves. These interest rate caps generally mature prior to the maturity date of the loan and the borrowers are required to pay to extend them. TheIn certain cases, the sponsors maywill need to fund additional equity into the properties to cover these costs as the property may not generate sufficient cash flow to pay these costs. At December 31, 2024,2025, 74.7%76.5% of the par value of our CRE loan portfolio had interest rate caps or funded debt service reserves in placeplace. withOur interest rate caps have a weighted-average maturity of six15 months.
At December 31, 2024,2025, our par-value $1.5$1.8 billion floating rate CRE loan portfolio had a weighted average benchmark floor of 0.97%.1.78%. At December 31, 2023,2024, our par-value $1.9$1.5 billion floating rate CRE loan portfolio, which included one whole loan without a benchmark floor, had a weighted average benchmark floor of 0.70%.0.97%. With the historicalcurrent trend of risingdecreasing benchmark rates, we have seen the coupons on all of our floating-rate assets and debt risedecrease accordingly. Because we have equity invested in each CREfloating-rate loan, and because in all instances the benchmark interest rates are above our loan floors, the risedecrease in interest rates resulted in ana increasedecrease in our net interest income. See "Interest Rate Risk" in "Item 7A: Quantitative and Qualitative Disclosures About Market Risk."
Our portfolio comprises loans with a diverse array of collateral types and locations. Multifamily continues to comprise the majority of our portfolio, with 77.4%81.9% of our portfolio allocated to multifamily at December 31, 20242025 and 79.6%77.4% at December 31, 2023.2024. The following charts show our portfolio allocation at carrying value by property type at December 31, 20242025 and 20232024:
Our properties are located throughout the U.S., with onetwo and twoone National Council of Real Estate Investment Fiduciaries (“NCREIF”) regions, the Southwest at December 31, 2024 and Southwest and Southeast at December 31, 2023,2025 and Southwest at December 31, 2024, in excess of 20% of the total portfolio carrying value. The following charts shows our portfolio allocation by property type at December 31, 20242025 and 20232024:
From time to time, we may acquire real estate property through direct equity investments or as a result of our lending activities. During the year ended December 31, 2025, we acquired one property via foreclosure valued at $75.8 million that was contributed to a joint venture with an unrelated third-party. During the year ended December 31, 2024, we acquired one property via deed-in-lieu of foreclosure and one property via foreclosure, valued at $20.3 million and $30.9 million, respectively, each of which was immediately contributed to joint ventures with unrelated third-parties. Each of these investments is reported as investments in an unconsolidated entity on our consolidated balance sheet at December 31, 2025.
Additionally, we acquired two properties via foreclosure during the year ended December 31, 2024 that are held as investments in real estate. These properties had values of $17.5 million and $9.4 million, at the time of foreclosure. In December 2024, we sold an office property located in the Northeast region for $20.0 million and generated a net gain on the sale of $7.5 million. During the year ended December 31, 2025, we sold two properties consisting of one student housing project in the Southeast region for $106.8 million that generated a net gain of $13.1 million and an office complex located in the Southwest region for $16.5 million that generated a net loss of $1.5 million.
From time to time, we may acquire real estate property through direct equity investments or as a result of our lending activities. During the first quarter of 2024, we acquired an office property located in the East North Central region via deed-in-lieu of foreclosure that, at acquisition, had a cost basis of $14.0 million and a fair value of $20.3 million. We recognized a $5.8 million net unrealized gain upon converting the CRE loan to real estate owned and immediately contributed the property into a joint venture with an unrelated third-party, seeking to maximize the property's value through a multifamily conversion. In the third quarter of 2024, we acquired a multifamily property in the Southwest region via foreclosure that, at acquisition, had a cost basis of $30.9 million. No gain or loss was recognized upon conversion of the CRE loan to real estate investment owned, and the property was immediately contributed to a joint venture with an unrelated third-party. Both of these investments are reported as investments in an unconsolidated entity on our consolidated balance sheet at December 31, 2024.
Additionally, we acquired two properties via foreclosure in the third quarter of 2024 that are held as investments in real estate. The first is an office complex located in the Southwest region that, at acquisition, had a fair value of $17.5 million. We recognized a $2.8 million net unrealized gain upon converting the CRE loan to real estate owned. The second acquisition is a multi-family property located in the Southeast region with a cost basis of $9.4 million. No gain or loss occurred upon conversion of the CRE loan to real estate owned. In December 2024, we sold an office property located in the Northeast region for $20.0 million and generated a net gain on the sale of $7.5 million.
At December 31, 2024,2025, the totalnet carrying value of our net real estate-related assets and liabilities was $176.6$123.8 million on sevensix properties owned, three of which are included in investments in real estate and fourthree of which are included in properties held for sale on our consolidated balance sheets. The existence of net capital loss carryforwards available until December 31, 2025, allows for potential future capital gains on certain of these investments to be shielded from income taxes or there is a requirement to distribute under the REIT tax regulations.
Each of ourOur CRE debt- securitizationsterm initiallyreinvestment providedfinancing facility provides for a two-year reinvestment period that allowedallows us to reinvest CRE loan payoffs and principal paydown proceeds into the securitizations,reinvestment facility and pending certain eligibility criteria are met and rating agency approval is obtained. The reinvestment periods on both our securitizations ended in May 2023 and December 2023, respectively.met.
In March 2025, we exercised the optional redemption on ACR 2021-FL1 and ACR 2021-FL2 in conjunction with the closing of the CRE term reinvestment facility.
We reevaluate our current expected credit losses ("CECL") allowance quarterly, incorporating our current expectations of macroeconomic factors considered in the determination of our CECL reserves. At December 31, 2024,2025, the CECL allowance on our CRE loan portfolio was $32.8$20.4 millionmillion, or 2.2%1.1% of our $1.5$1.8 billion loan portfolio. During the year ended December 31, 2024,2025, we recorded a netreversal provision forof credit losses primarily driven by anet generalimprovements worsening macroeconomic factors overin the yearmodeled credit risk of our loan portfolio as well as anloan increasepayoffs. inThese modeledreversals credit risk in our portfoliowere offset by loana payoffs.general decline in projected macroeconomic factors. We also recorded a charge-off of $700,000$4.7 million for one CRE wholemezzanine loan heldthat was fully reserved for sale.in 2022.
At December 31, 2023,2024, the CECL allowance on our CRE loan portfolio was $28.8$32.8 millionmillion, or 1.5%2.2% of our $1.9$1.5 billion loan portfolio. During the year ended December 31, 2023,2024, we recorded a net provision for credit losses primarily attributabledriven toby a general worsening of macroeconomic factors over the modeledyear increasesas well as an increase in general portfoliomodeled credit risk compoundedin our portfolio offset by ongoingloan uncertaintypayoffs. aroundWe thealso commercialrecorded reala estate market’s current macroeconomic outlook, which affected our borrowers’ business plan execution and general market liquidity. In June 2023, we received the deed-in-lieucharge-off of foreclosure$700,000 tofor aone propertyCRE formerly collateralizing an officewhole loan in the East North Central region with a principal balance of $22.8 million, which resulted in a charge off of $948,000 against the allowanceheld for credit losses.sale.
Additionally, the decline in our CECL reserves from our highest reserve balance at June 30, 2020 of $61.1 million, or 3.4% of the par balance of our CRE loan portfolio, to our current reserve balance at December 31, 20242025 of $32.8$20.4 million, or 2.2%1.1% of the par balance of our CRE loan portfolio, has been due to the following: the successful resolution of our individually evaluated loans with specific reserves, the overall newer vintage of our CRE loan portfolio (with only 4.1% of the portfolio, at December 31, 2025, being originated prior to the fourth quarter of 2020) as well as the increased percentage allocation of our CRE loan portfolio to multifamily loans over time. Multifamily loans have historically had the lowest credit losses of any asset class, and our percentage allocation of our CRE loan portfolio to multifamily at carrying value has grown from 58.4% at June 30, 2020 to 77.4%81.9% at December 31, 2024.2025.
Common stock book value was $28.87$30.01 per share at December 31, 2024,2025, aan $2.22increase of $1.14 per share,share or 8%, increase4% from December 31, 2023.2024.
Our net income allocable to common shares for the year ended December 31, 20242025 was $9.1 million,$239,000, or $1.19$0.03 per share-basic ($1.15$0.03 per share-diluted), as compared to net income allocable to common shares of $3.0$9.1 million, or $0.35$1.19 per share-basic ($0.35$1.15 per share-diluted), for the year ended December 31, 2023.2024.
Includes interest income from one loan reported as loan held for sale on our consolidated balance sheet at December 31, 2024.
CRE whole loans. The decrease of $29.5$38.7 million for the comparative years ended December 31, 20242025 and 20232024 was primarily attributable to a decrease in total(i) the daily average par value of our CRE portfolio resulting from loan payoffs and foreclosures.foreclosures and (ii) the benchmark rate over the comparative periods.
Other. The decrease of $732,000 for the comparative years ended December 31, 2024 and 2023 was primarily attributable to a decrease in restricted cash in our CRE securitizations, offset, in part, by an increase in yields on our interest earning money market accounts.
Net Change in Interest Expense for the Comparative Years Ended December 31, 2024 and 2023:
AggregateCRE interestmezzanine expenseloans. decreasedThe byincrease $14.7of $1.7 million for the comparative years ended December 31, 20242025 and 2023.2024 Wewas attributeprimarily the changeattributable to the following:origination of a mezzanine loan in March 2025.
Securitized borrowings. The net decrease of $7.8 million for the comparative years ended December 31, 2024 and 2023 was primarily attributable to paydowns on our borrowings, offset, in part, by an increase in the weighted average spread and benchmark rate over the comparative periods.
SeniorCRE securedpreferred financingequity facility.loan. The increase of $534,000$249,000 for the comparative years ended December 31, 20242025 and 20232024 was primarily attributable to anthe increaseorigination of a preferred equity loan in borrowingsSeptember and the benchmark rate over the comparative periods.2025.
CRE - term warehouse financing facilities.Other. The decrease of $7.6$1.4 million for the comparative years ended December 31, 20242025 and 20232024 was primarily attributable to paydownsa decrease in (i) restricted cash in our CRE securitizations and (ii) yields on our borrowingsinterest offset,earning inmoney part,market by an increase in the benchmark rate over the comparative periods.accounts.
Net Change in Interest Expense for the Comparative Years Ended December 31, 2025 and 2024:
UnsecuredAggregate juniorinterest subordinatedexpense debentures.decreased Theby increase$30.2 of $99,000million for the comparative years ended December 31, 20242025 and 20232024. wasWe attributableattribute the change to an increase in benchmark rates over the comparative periods.following:
Securitized borrowings. The net decrease of $66.1 million for the comparative years ended December 31, 2025 and 2024 was primarily attributable to the redemptions of our ACR 2021-FL1 and ACR 2021-FL2 securitizations and a decrease in the benchmark rate over the comparative periods.
Senior secured financing facility. The decrease of $651,000 for the comparative years ended December 31, 2025 and 2024 was primarily attributable to a decrease in the benchmark rate over the comparative periods.
CRE - term warehouse financing facilities. The decrease of $3.9 million for the comparative years ended December 31, 2025 and 2024 was primarily attributable to a decrease in the benchmark rate over the comparative periods and paydowns on our borrowings.
CRE - term reinvestment financing facility. The increase of $40.9 million for the comparative years ended December 31, 2025 and 2024 was primarily attributable to the formation of our new CRE term reinvestment financing facility.
Unsecured junior subordinated debentures. The decrease of $499,000 for the comparative years ended December 31, 2025 and 2024 was attributable to a decrease in benchmark rates over the comparative periods.
Includes fee income of $6.6$4.2 million and $8.0$6.6 million recognized on our floating-rate CRE whole loans for the years ended December 31, 20242025 and 2023,2024, respectively.
Includes one loan reported as loan held for sale on our consolidated balance sheet at December 31, 2024.
Includes amortization expense of $4.8 million and $5.3 million for each of the years ended December 31, 20242025 and 20232024, respectively, on our interest-bearing liabilities collateralized by CRE whole loans.
Includes net amortization expense of $1.6 million for each of the years ended December 31, 20242025 and 20232024 on 20 terminated interest rate swap agreements that were in net loss positions at the time of termination. The remaining net losses, reported in accumulated other comprehensive loss on the consolidated balance sheets, will be amortized as an expenseaccreted over the remaining life of the debt.
Aggregate real estate income and other revenue increased by $7.9$4.4 million for the comparative years ended December 31, 20242025 and 2023.2024. The increase year over year is attributed to: (i) incremental increase in revenues from the acquisition of an office building through deed-in-lieu of foreclosure in June 2023, and asset acquisitions in the third quarter of 2024 of a multifamily property and an office property through foreclosures, (ii) increased revenues from a hotel property that had increased occupancyaverage and rentaldaily rates for the comparative periods and (iii) an increase in revenue related to a student housing property that completed construction and became operational in August 2024. This was partially offset by a decrease in revenues from a hotel property that had decreased average daily rates for the comparative periods.
Aggregate operating expenses increaseddecreased by $1.4$8.4 million for the comparative years ended December 31, 20242025 and 2023.2024. We attribute the changes to the following:
The increase in general and administrative expense for the comparative years ended December 31, 20242025 and 20232024 was primarily attributable to (i) increased professional services related to auditconstruction expenses,consulting fees paid to third parties and legal expenses related to an amendment to our term reinvestment financing facility, partially offset by (i)a wagesdecline andin benefitstrustee fees related to namedour executivessecuritizations decreasingand (ii) an increase in operating expenses related to new office space, partially offset by a decrease in D&O insurancedues and (iii)subscriptions related to a decrease in operatingtotal expensescosts duerelating to non-recurringratings expenses in 2023.fees.
Real estate expenses. The increase of $8.0$4.4 million for the comparative years ended December 31, 20242025 and 20232024 was primarily related to (i) an increase in expenses related to a student housing property that completed construction and became operational in August 2024, (ii) an incremental increase in expenses from the acquisition of an office building through deed-in-lieu of foreclosure in June 2023, and asset acquisitions in the third quarter of 2024 of a multifamily property and an office property each through deed-in-lieu of foreclosure and (iii) an increase in expenses at a hotel property that had increased taxes, lease amortization and an incremental increase in operating expenses. This was partially offset by (i) a sale of an office property in December 2024 that had no operations in 2025 and (ii) an incremental decrease in operating expenses related to a hotel property with lower occupancy.
Equity compensation - related party. The decrease of $810,000 for the comparative years ended December 31, 2025 and 2024 was primarily related to the vesting of restricted shares, which decreased the monthly equity compensation expense.
Provision(Reversal of) provision for credit losses, net. The provisiondecrease forof credit losses was $4.8$12.5 million for the yearcomparative years ended December 31, 2025 and 2024 compared to the provision for credit losses of $10.9 million for the year ended December 31, 2023. The decrease of the provision year over year iswas primarily driven by payoffsnet offset by an increaseimprovements in reserves from macroeconomic factors andthe modeled credit risk relatedof toour propertyCRE performance.loan portfolio as well as payoffs, offset by a general decline in projected macroeconomic factors during the periods. We also recorded a $4.7 million charge-off as of December 31, 2025. Please refer to the "Financing Receivables" section for more information on our provision for credit losses.
The following table sets forth information relating to our other income (expense) incurred for the years presented (dollars in thousands):
Aggregate other income (expense) increaseddecreased $16.0$5.8 million for the comparative years ended December 31, 20242025 and 2023.2024. We attribute the change to the following:
Equity in losses of unconsolidated subsidiaries. The decrease of $815,000 for the comparative years ended December 31, 2025 and 2024 was primarily related to two unconsolidated entity formations after June 30, 2024, and an additional unconsolidated entity formation in March 2025. These unconsolidated entities had losses for the year ended December 31, 2025.
Gain on sale of real estate. The increase of $6.8 million during the year ended December 31, 2024 was primarily attributed to the sale of an office property in the Northeast region during the year ended December 31, 2024 that generated a non-recurring gain of $7.5 million compared to the sale of a hotel property in the Northeast region in February 2023 that generated a non-recurring gain of $745,000.
Gain on conversion of real estate. The increasedecrease of $8.6 million duringfor the twelvecomparative monthsyears ended December 31, 2024,2025 and 2024 was primarily attributed to the completion of two foreclosures that generated non-recurring unrealized gains of $5.8 million, in the first quarter of 2024, and $2.8 million, in the third quarter of 2024, as the fair value of both properties exceeded the amortized cost basis of the loans at the time of foreclosure. There were no gains on conversion of real estate during the year ended December 31, 2025.
Gain on sale of real estate. The increase of $4.2 million for the comparative years ended December 31, 2025 and 2024 was primarily attributed to the sale of a property generating a one time gain of $13.1 million which was offset by a one time loss of $1.5 million on a sale of a property in December 2025, compared to the sale of an office property in the Northeast region during the year ended December 31, 2024 that generated a non-recurring gain of $7.5 million.
Other Income. The increasedecrease of $1.5 million$475,000 during the comparative years ended December 31, 20242025 and 20232024 is primarily attributed to the reversal of warrantya reservesrepresentations and representationswarranty reserve related to a discontinued residential lending business.business that occurred in 2024.
What changed in the latest 10-Q
Risk Factors
Full comparison: every changed paragraph (2)
The Merger is subject to the satisfaction or waiver of a number of conditions as set forth in the Merger Agreement, including the approval of our stockholders.Agreement. There are no assurances that all of the conditions necessary to consummate the Merger will be satisfied or that the conditions will be satisfied in the time frame expected. If the Merger is not completed within the expected timeframe or at all, such delay or failure to complete the Merger may materially and adversely affect the synergies and other benefits that we may expect to achieve as a result of the Merger and Internalization and could result in additional transaction costs, loss of revenue or other effects associated with uncertainty about the Merger and Internalization, and the trading price of our common stock may decline significantly.
We have incurred substantial legal, accounting, financial advisory and other expenses in connection with and as a result of completing the Merger and Internalization and we may may incur additional expenses in connection with the completion of the Merger and Internalization. There are a number of factors beyond our control that could affect the total amount or the timing of the transaction and integration expenses. Many of the expenses that will be incurred are, by their nature, difficult to estimate accurately at the present time.
Management's Discussion & Analysis (MD&A)
New heading “Net Change in Interest Expense for the Comparative three and six months ended June 30, 2026 and 2025:”
Removed heading “Net Change in Interest Income for the Comparative three months ended March 31, 2026 and 2025:”
Largest changes
“In November 2021, an indirect, wholly-owned subsidiary of ours entered into a Master Repurchase and Securities Contract Agreement (the "Morgan Stanley Facility") with Morgan Stanley Mortgage Capital Holdings LLC ("Morgan Stanley") to finance the origination of CRE loans. As amended, the Morgan Stanley Facility has a maximum facility amount of $250.0 million, charges interest of one-month Term SOFR plus market spreads and was scheduled to mature in November 2025. We also have the right to request an extension for an additional one-year period. In March 2025, we entered into Amendment No. …”see in full comparison
“Net Change in Interest Expense for the Comparative three and six months ended June 30, 2026 and 2025:”see in full comparison
“Net Change in Interest Income for the Comparative three months ended March 31, 2026 and 2025:”see in full comparison
see in full comparisonIncludes one CRE loan with an amortized cost of $24.4 million in maturity default at March 31, 2026.Includes one CRE loan with an amortized cost of $32.3 million in maturity default at December 31, 2025.
During thesee in full comparisonthreesix months endedMarchJune31,30, 2026, our principal sources of liquidity were: (i) gross financing proceeds of $879.5 million from our CRE securitization; (ii) proceeds of $55.5 million from our CRE term reinvestment financing facility; (iii) net proceeds of $33.2 million from repayments on our CRE portfolio; (iv) proceeds of $29.1 million from a CRE loansale;sale, (ivv) proceeds of $20.0 million from the sale of an investment in real estate; (vvi)netproceeds of$14.8$13.6 million fromrepayments onourCREseniorportfoliosecured financing facility; and (vivii)$1.0$1.3 million contribution by our non-controlling interest. These sources of liquidity were offset by the paydowns on our term warehouse facilities, deployments in CRE loan portfolio and real estate investments, distributions on our preferred stock and ongoing operating expenses and substantially resulted in the $41.1 million of unrestricted cash we held at June 30, 2026.
“These sources of liquidity were offset by paydowns on our term warehouse facilities, deployments in CRE loan portfolio and real estate investments, distributions on our preferred stock and ongoing operating expenses and substantially resulted in the $48.0 million of unrestricted cash we held at March 31, 2026.”see in full comparison
Full comparison: every changed paragraph (179)
As previously reported, on April 29, 2026, we entered into an Agreement and Plan of Merger (the “"Merger Agreement”"), pursuant to which we will acquire ACC in an all-stock transaction (the “"Merger”"). As a result of the Merger, among other things, we will acquire our Manager, and transition from an externally-managed REIT to an internally-managed REIT (the “"Internalization”"). which we expect will close in the third quarter. Being internally managed will further align the interest of our seasoned management team with its shareholders. Additionally, the Merger will enhance our financial profile through the recognition of third-party fee income earned from an evergreen fund vehicle, separately managed accounts and a growing insurance platform.
We originate transitional floating-rate CRE loans with a target size between $10.0 million and $100.0 million. During the threesix months ended MarchJune 31,30, 2026, we originated nine new CRE floating-rate whole loans, purchased one new CRE floating-rate whole loan and purchased a participation in an existing CRE floating-rate whole loan, with total commitments of $495.6 million and funded $13.6$31.4 million of loan commitments. These increases were offset by loan payoffs and sales during the threesix months ended MarchJune 31,30, 2026 in the amount of $110.6$203.3 million and unfunded commitments of $24.2 million, producing a net increase to the portfolio of $374.4$299.5 million. During the year ended December 31, 2025, we originated 14 new CRE floating-rate whole loans, with total commitments of $733.0 million, one new $15.0 million CRE mezzanine loan, one new $9.3 million CRE preferred equity investment and net funded commitments of $3.1 million. Loan payoffs and sales during the year ended December 31, 2025 were $418.9 million, producing a net increase to the portfolio of $341.5 million.
Our CRE loan portfolio, which had carrying values of $2.2$2.1 billion and $1.8 billion at MarchJune 31,30, 2026 and December 31, 2025, respectively, comprised:
First mortgage loans, which we refer to as whole loans. These loans are typically secured by first liens on CRE property, including the following property types: multifamily, student housing, hospitality, office, self-storage, mixed-use and retail. All but fourfive of our CRE whole loans were current on contractual payments at MarchJune 31,30, 2026.
Mezzanine debt that is senior to borrower’s equity but is subordinated to other third-party debt. These loans are subordinated CRE loans, usually secured by a pledge of the borrower’s equity ownership in the entity that owns the property or by a second lien mortgage on the property. At both MarchJune 31,30, 2026 and December 31, 2025, no individual mezzanine loans were included in CRE loans held for investment on our consolidated balance sheet.
Preferred equity investments that are subordinate to first mortgage loans and mezzanine debt. These investments may be subject to more credit risk than subordinated debt but provide the potential for higher returns upon a liquidation of the underlying property and are typically structured to provide some credit enhancement differentiating it from the common equity in such investments. At MarchJune 31,30, 2026 and December 31, 2025, we had one preferred equity investment included in CRE loans held for investment with a carrying value of $9.5$9.7 million and $9.2 million, respectively. We also hold the first mortgage CRE whole loan on the underlying collateral for this investment.
In a business environment where benchmark rates are increasing significantly, cash flows of the CRE assets underlying our loans may not be sufficient to pay debt service on our loans, which could result in non-performance or default. We partially mitigate this risk by generally requiring our borrowers to purchase interest rate cap agreements with non-affiliated, well-capitalized third parties and by selectively requiring our borrowers to have and maintain debt service reserves. These interest rate caps generally mature prior to the maturity date of the loan and the borrowers are required to pay to extend them. In certain cases, the sponsors will need to fund additional equity into the properties to cover these costs as the property may not generate sufficient cash flow to pay these costs. At MarchJune 31,30, 2026, 74% of the par value of our CRE loan portfolio had interest rate caps or funded debt service reserves in place. Our interest rate caps have a weighted-average maturity of 15 months.
At MarchJune 31,30, 2026, our par-value $2.2$2.1 billion floating-rate CRE loan portfolio had a weighted average benchmark floor of 2.13%.2.22%. At December 31, 2025, our par value $1.8 billion floating rate CRE loan portfolio had a weighted average benchmark floor of 1.78%. With the current trend of decreasing benchmark rates, we have seen the coupons on all of our floating-rate assets and debt decrease accordingly. Because we have equity invested in each floating-rate loan, and because in all instances the benchmark interest rates are above our loan floors, the decrease in interest rates resulted in a decrease in our net interest income. See "Interest Rate Risk" in "Item 3: Quantitative and Qualitative Disclosures About Market Risk."
Our portfolio comprises loans with a diverse array of collateral types and locations. Multifamily continues to comprise the majority of our portfolio, with 81.5%80.8% of our portfolio allocated to multifamily at MarchJune 31,30, 2026 and 81.9% at December 31, 2025. The following charts show our portfolio allocation at carrying value by property type at MarchJune 31,30, 2026 and December 31, 2025:
From time to time, we may acquire real estate property through direct equity investments or as a result of our lending activities. We did not acquire any real estate property in the three months ended MarchJune 31,30, 2026.
At MarchJune 31,30, 2026, the net carrying value of our net real estate-related assets and liabilities was $106.3$104.6 million on five properties owned, two of which are included in investments in real estate and three of which are included in properties held for sale on our consolidated balance sheets.
At MarchJune 31,30, 2026 and December 31, 2025, our financing arrangements were as follows (dollars in thousands):
We reevaluate our current expected credit losses ("CECL") allowance quarterly, incorporating our current expectations of macroeconomic factors considered in the determination of our CECL reserves. At MarchJune 31,30, 2026, the CECL allowance on our CRE loan portfolio was $19.4$21.1 million, or 0.9%1.0% of our $2.2$2.1 billion loan portfolio. During the threesix months ended MarchJune 31,30, 2026, we recorded a reversalnet ofprovision for credit losses primarily attributable to improvementsa decline in projected macroeconomic factors during the quarter,factors, offset by an increaseimprovements in the modeled credit risk of our loan portfolio.portfolio and loan payoffs.
Additionally, the decline in our CECL reserves from our highest reserve balance at June 30, 2020 of $61.1 million, or 3.4% of the par balance of our CRE loan portfolio, to our current reserve balance at MarchJune 31,30, 2026 of $19.4$21.1 million, or 0.9%1.0% of the par balance of our CRE loan portfolio, has been due to the following: the successful resolution of our individually evaluated loans with specific reserves, except for the charge-off noted above, the overall newer vintage of our CRE loan portfolio (with only 6.3%6.7% of the portfolio, at MarchJune 31,30, 2026, being originated prior to the fourth quarter of 2020) as well as the increased percentage allocation of our CRE loan portfolio to multifamily loans over time. Multifamily loans have historically had the lowest credit losses of any asset class, and our percentage allocation of our CRE loan portfolio to multifamily at carrying value has grown from 58.4% at June 30, 2020 to 81.5%80.8% at MarchJune 31,30, 2026.
Common stock book value was $29.98$26.76 per share at MarchJune 31,30, 2026, a $0.03$3.25 per share decrease from December 31, 2025.
Our net loss allocable to common shares for the three months ended MarchJune 31,30, 2026 was $1.0$12.5 millionmillion, or $(0.16$1.87) per share-basic ($(0.16$1.87) per share-diluted) as compared to net loss allocable to common shares for the three months ended MarchJune 31,30, 2025 of $5.9 million$732,000 or $(0.80$0.10) per share-basic ($0.80$0.10 per share-diluted). Our net loss allocable to common shares for the six months ended June 30, 2026 was $13.5 million, or ($2.04) per share-diluted.share-basic ($2.04) per share-diluted), as compared to net loss allocable to common shares for the six months ended June 30, 2025 of $6.6 million, or ($0.90) per share-basic ($0.90) per share-diluted).
The following tabletables analyzesanalyze the change in interest income and interest expense for the comparative three and six months ended MarchJune 31,30, 2026 and 2025 by changes in volume and changes in rates. The changes attributable to the combined changes in volume and rate have been allocated proportionately, based on absolute values, to the changes due to volume and changes due to rates (dollars in thousands, except amounts in footnotes):
Percent change is calculated as the net change divided by the respective interest income or interest expense for the three months ended MarchJune 31,30, 2025.
Includes aan decreaseincrease in fee income of $390,000$391,000 recognized on our CRE whole loans that was due to changes in volume.
Net decrease is due to a portion of the terminated swaps being fully amortizingamortized as of December 31, 2025.
Net Change in Interest Income for the Comparative three months ended March 31, 2026 and 2025:
Aggregate interest income increased by $5.6 million for the comparative three months ended March 31, 2026 and 2025. We attribute the change to the following:
CRE whole loans. The increase of $4.3 million for the comparative three months ended March 31, 2026 and 2025 was primarily attributable to an increase in the daily average par value of our CRE portfolio resulting from loan production, offset by a decrease in the benchmark rate over the comparative period.
CRE mezzanine loans. The decrease of $63,000 for the comparative three months ended March 31, 2026 and 2025 was primarily attributable to the origination and payoff of a mezzanine loan during fiscal year 2025.
CRE preferred equity loan. The increase of $247,000 for the comparative three months ended March 31, 2026 and 2025 was primarily attributable to the origination of a preferred equity loan in September 2025.
Other. The increase of $1.2 million for the comparative three months ended March 31, 2026 and 2025, was primarily attributable to an increase in restricted cash from the close of our new CRE securitization, ACRES Commercial Realty 2026-FL4 Issuer, LLC ("ACR 2026-FL4"), and increase in yields on our interest earning money market accounts.
NetPercent Changechange inis Interestcalculated Expenseas the net change divided by the respective interest income or interest expense for the Comparative threesix months ended MarchJune 31,30, 2026 and 2025:2025.
Includes an increase in fee income of $781,000 recognized on our CRE whole loans that was due to changes in volume.
Net change pertains to amortization expense and is reflected in the change in volume.
Net decrease is due to a portion of the terminated swaps being fully amortized as of December 31, 2025.
AggregateNet interestChange expensein increasedInterest by $2.0 millionIncome for the comparativeComparative three and six months ended MarchJune 31,30, 2026 and 2025. We attribute the change to the following2025:
Securitized borrowings. The net decrease of $6.8 million for the comparative three months ended March 31, 2026 and 2025, was primarily attributable to the issuance of our ACR 2026-FL4 securitization, offset by the redemptions of our ACR 2021-FL1 and ACR 2021-FL2 securitizations and a decrease in the benchmark rate over the comparative periods.
Senior secured financing facility. The decrease of $167,000 for the comparative three months ended March 31, 2026 and 2025, was primarily attributable to a decrease in borrowings and benchmark rate over the comparative periods.
CRE - term warehouse financing facilities. The increase of $1.5 million for the comparative three months ended March 31, 2026 and 2025, was primarily attributable to an increase in the average daily borrowings balance, offset by a decrease in the benchmark rate over the comparative periods.
CRE - term reinvestment financing facility. The increase of $7.6 million was attributable to the close of our new CRE term reinvestment financing facility in March 2025.
UnsecuredAggregate juniorinterest subordinatedincome debentures.increased Theby decrease$9.6 ofmillion $84,000and $15.2 million for the comparative three and six months ended MarchJune 31,30, 2026 and 2025,2025. wasWe primarilyattribute attributablethe change to a decrease in the benchmark rate over the comparative periods.following:
CRE whole loans. The increase of $10.2 million and $14.5 million for the comparative three and six months ended June 30, 2026 and 2025 was primarily attributable to an increase in the daily average par value of our CRE portfolio resulting from loan production, offset by a decrease in the benchmark rate over the comparative period.
CRE mezzanine loans. The decrease of $680,000 and $742,000 for the comparative three and six months ended June 30, 2026 and 2025 was attributable to the origination and payoff of a mezzanine loan during the fiscal year 2025.
CRE preferred equity loan. The increase of $256,000 and $504,000 for the comparative three and six months ended June 30, 2026 and 2025 was attributable to the origination of a preferred equity loan in September 2025.
Other. The decrease of $196,000 for the comparative three months ended June 30, 2026 and 2025 was primarily attributable to a decrease in the daily average balance and yields on our interest earning money market accounts. The increase of $965,000 for the comparative six months ended June 30, 2026 and 2025 was primarily attributable to an increase in restricted cash from the close of our new CRE securitization, ACRES Commercial Realty 2026-FL4 Issuer, LLC ("ACR 2026-FL4"), and increase in yields on our interest earning money market accounts during the first quarter of fiscal year 2026.
Net Change in Interest Expense for the Comparative three and six months ended June 30, 2026 and 2025:
Aggregate interest expense increased by $7.6 million and $9.6 million for the comparative three and six months ended June 30, 2026 and 2025. We attribute the change to the following:
Securitized borrowings. The increase of $12.2 million and $5.4 million for the comparative three and six months ended June 30, 2026 and 2025 was primarily attributable to the issuance of our ACR 2026-FL4 securitization, offset by the redemptions of our ACR 2021-FL1 and ACR 2021-FL2 securitizations and a decrease in borrowings and the benchmark rate over the comparative periods.
Senior secured financing facility. The increase of $617,000 and $451,000 for the comparative three and six months ended June 30, 2026 and 2025 was primarily attributable to the acceleration of amortization of deferred debt issuance costs.
CRE - term warehouse financing facilities. The decrease of $519,000 for the comparative three months ended June 30, 2026 and 2025 was primarily attributable to a decrease in the average borrowings balance and benchmark rate over the comparative periods. The increase of $1.0 million for the comparative six months ended June 30, 2026 and 2025 was primarily attributable to an increase in the average daily borrowings balance during the first quarter of fiscal year 2026, offset by a decrease in the benchmark rate over the comparative periods.
CRE - term reinvestment financing facility. The decrease of $4.5 million for the comparative three months ended June 30, 2026 and 2025 was primarily attributable to a decrease in the average borrowings balance and benchmark rate over the comparative periods. The increase of $3.1 million for the comparative six months ended June 30, 2026 and 2025 was attributable to the March 2025 close and subsequent utilization of our CRE term reinvestment financing facility.
Unsecured junior subordinated debentures. The decrease of $79,000 and $163,000 for the comparative three and six months ended June 30, 2026 and 2025 was primarily attributable to a decrease in the benchmark rate over the comparative periods.
Hedging. The decrease of $85,000 and $152,000 for the comparative three and six months ended June 30, 2026 and 2025 was attributable to a portion of our terminated swaps being fully amortized.
The following tabletables presentspresent the average net yield and average cost of funds for the three and six months ended MarchJune 31,30, 2026 and 2025 (dollars in thousands, except amounts in footnotes):
Includes fee income of $1.2$1.3 million and $777,000$895,000 recognized on our floating-rate CRE whole loans for the three months ended MarchJune 31,30, 2026 and 2025, respectively.
Includes amortization expense of $837,000$2.0 million and $2.8 million$669,000 for the three months ended MarchJune 31,30, 2026 and 2025, respectively, on our interest-bearing liabilities collateralized by CRE whole loans.
Includes amortization expense of $186,000$189,000 and $175,000$178,000 for the three months ended MarchJune 31,30, 2026 and 2025, respectively.
Includes net amortization expense of $326,000$312,000 and $393,000$397,000 for both the three months ended MarchJune 31,30, 2026 and 2025, respectively, on 1714 and 20 terminated interest rate swap agreements, respectively, that were in net loss positions at the time of termination. The remaining net losses, reported in accumulated other comprehensive loss on the consolidated balance sheets, will be accreted over the remaining life of the debt.
Average net yield includes net amortization/accretion and fee income and is computed based on average amortized cost.
Includes fee income of $2.5 million and $1.7 million recognized on our floating-rate CRE whole loans for the six months ended June 30, 2026 and 2025, respectively.
Includes amortization expense of $2.9 million and $3.5 million for the six months ended June 30, 2026 and 2025, respectively, on our interest-bearing liabilities collateralized by CRE whole loans.
Includes amortization expense of $376,000 and $353,000 for the six months ended June 30, 2026 and 2025, respectively.
Includes net amortization expense of $638,000 and $790,000 for the six months ended June 30, 2026 and 2025, respectively, on 17 and 20 terminated interest rate swap agreements, respectively, that were in net loss positions at the time of termination. The remaining net losses, reported in accumulated other comprehensive loss on the consolidated balance sheets, will be accreted over the remaining life of the debt.
Aggregate real estate income and other revenue decreased by $2.8 million and $5.7 million for the comparative three and six months ended MarchJune 31,30, 2026 and 2025. The decrease in the comparative three and six months was attributed to: (i) a decrease in revenue related to a student housing property that was sold in September 2025, and (ii) a decrease in revenue at an office property that was sold in December 2025, partially offset by an increase in revenues at a hotel property in the northeast region that had increased occupancy and rates in the comparative period.
The following tabletables setsset forth information relating to our operating expenses for the periods presented (dollars in thousands):
ACR insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 11 filings (3 insiders, 21 trade dates, 34,361 shares, about $781.0K). Net open-market shares: -34,361 (purchases minus sales); net value about -$781.0K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-10 | Bryant David J |
Open-market sale | 1,440 | $13.89 | $20.0K |
| 2026-08-06 | Fogel Mark S |
Grant/award | 1,440,552 | — | — |
| 2026-08-06 | Kilpatrick Linda M |
Grant/award | 3,928 | — | — |
| 2026-08-06 | Neff P Sherrill |
Grant/award | 4,280 | — | — |
| 2026-08-06 | Kessler Steven J |
Grant/award | 2,568 | — | — |
| 2026-08-06 | Jesberger Jaclyn |
Grant/award | 343,856 | — | — |
| 2026-08-06 | Ickowicz Gary |
Grant/award | 2,568 | — | — |
| 2026-08-06 | Edwards Karen K |
Grant/award | 2,568 | — | — |
| 2026-08-06 | Blackwell Eldron C |
Grant/award | 7,856 | — | — |
| 2026-08-06 | Brengel Kyle K. |
Grant/award | 309,675 | — | — |
| 2026-08-06 | Fentress Andrew |
Grant/award | 988,453 | — | — |
| 2026-08-06 | Fentress Andrew |
Grant/award | 892,213 | — | — |
| 2026-08-06 | Acres Capital Corp. |
Disposition to issuer | 1,171,112 | — | — |
| 2026-08-06 | Bryant David J |
Grant/award | 2,054 | — | — |
| 2026-08-06 | Bryant David J |
Grant/award | 2,123 | — | — |
| 2026-08-06 | Reasoner Martin E. |
Grant/award | 1,517,095 | — | — |
| 2026-08-06 | Persaud Richard A. |
Grant/award | 109,990 | — | — |
| 2026-08-04 | Eagle Point Credit Management Llc |
Open-market sale | 98 | $21.80 | $2.1K |
| 2026-07-31 | Eagle Point Dif Gp I Llc |
Open-market sale | 84 | $21.80 | $1.8K |
| 2026-07-30 | Eagle Point Dif Gp I Llc |
Open-market sale | 908 | $21.80 | $19.8K |
| 2026-07-29 | Eagle Point Credit Management Llc |
Open-market sale | 2,212 | $21.80 | $48.2K |
| 2026-07-28 | Eagle Point Credit Management Llc |
Open-market sale | 206 | $21.79 | $4.5K |
| 2026-07-27 | Eagle Point Credit Management Llc |
Open-market sale | 1,389 | $21.78 | $30.3K |
| 2026-07-24 | Eagle Point Dif Gp I Llc |
Open-market sale | 1,267 | $21.78 | $27.6K |
| 2026-07-23 | Eagle Point Dif Gp I Llc |
Open-market sale | 5,234 | $21.79 | $114.0K |
| 2026-07-22 | Eagle Point Dif Gp I Llc |
Open-market sale | 2,732 | $21.78 | $59.5K |
| 2026-07-16 | Eagle Point Dif Gp I Llc |
Open-market sale | 389 | $21.82 | $8.5K |
| 2026-07-15 | Eagle Point Dif Gp I Llc |
Open-market sale | 9 | $21.85 | $197 |
| 2026-07-14 | Eagle Point Dif Gp I Llc |
Open-market sale | 1,113 | $21.87 | $24.3K |
| 2026-06-24 | Eagle Point Dif Gp I Llc |
Open-market sale | 2,076 | $22.50 | $46.7K |
| 2026-06-15 | Eagle Point Credit Management Llc |
Open-market sale | 2,270 | $22.57 | $51.2K |
| 2026-06-15 | Eagle Point Credit Management Llc |
Open-market sale | 3,711 | $25.47 | $94.5K |
| 2026-06-12 | Eagle Point Credit Management Llc |
Open-market sale | 849 | $25.47 | $21.6K |
| 2026-06-11 | Eagle Point Credit Management Llc |
Open-market sale | 215 | $25.47 | $5.5K |
| 2026-06-10 | Eagle Point Credit Management Llc |
Open-market sale | 6 | $25.47 | $153 |
| 2026-06-10 | Eagle Point Credit Management Llc |
Open-market sale | 1,521 | $22.55 | $34.3K |
| 2026-06-03 | Eagle Point Credit Management Llc |
Open-market sale | 422 | $22.55 | $9.5K |
| 2026-06-01 | Eagle Point Credit Management Llc |
Open-market sale | 5 | $22.55 | $113 |
| 2026-06-01 | Eagle Point Credit Management Llc |
Open-market sale | 5,801 | $25.41 | $147.4K |
| 2026-05-20 | Eagle Point Dif Gp I Llc |
Open-market sale | 404 | $22.50 | $9.1K |
Well-known investors holding ACR (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 31,568 | $561.6K | 0.0% | Added 168% |