ACRES COMMERCIAL REALTY CORP. ANNOUNCES COMPLETION OF MERGER, INTERNALIZATION AND PRIVATE NOTES OFFERING

Rhea-AI Summary

ACRES Commercial Realty (NYSE: ACR) has completed its previously announced all-stock acquisition of ACRES Capital Corp., converting from an externally managed to an internally managed REIT. At closing, the company issued approximately 7.5 million new ACR common shares to ACC stockholders as merger consideration and terminated its Management Agreement. After eliminating ACR shares previously held by ACC, the net increase in ACR common shares outstanding is about 6.3 million. Company leadership noted that the combined team will collectively own over 40% of ACR common stock.

ACRES Commercial Realty also completed a private placement of $200 million of 8.625% Senior Secured Notes due 2031. According to the company, part of the proceeds will be used to repay its $150 million 5.75% Senior Unsecured Notes maturing in August 2026, with the remainder for general corporate purposes. The new notes, maturing on July 31, 2031, are first-lien secured by pledges of certain subsidiary stock, residual equity interests in securitized financing vehicles and other CRE assets, and are guaranteed by certain subsidiaries.

Positive

• Internalization completed via all-stock merger with ACC, ending external management
• 7.5 million ACR shares issued; insiders to own over 40% of common stock
• $200 million 8.625% Senior Secured Notes due 2031 successfully placed
• Proceeds to fully repay $150 million 5.75% Senior Unsecured Notes maturing August 2026

Negative

• Net dilution of approximately 6.3 million additional ACR common shares outstanding
• New 8.625% secured notes carry higher coupon than 5.75% notes being repaid
• New debt is first-lien secured by certain subsidiary equity and CRE-related collateral

Market Context

ACR's prior acquisition announcement was followed by a 2.08% 24-hour reaction, giving the platform a...

Analysis

ACR's prior acquisition announcement was followed by a 2.08% 24-hour reaction, giving the platform a direct transaction precedent. The current closing adds finality, while Net Selling insider activity remained a risk to monitor.

Key Figures

Merger shares issued: 7.5 million shares Net share increase: 6.3 million shares Private notes offering: $200 million +5 more

8 metrics

Merger shares issued 7.5 million shares ACR common stock issued to ACC stockholders

Net share increase 6.3 million shares Net increase in ACR common shares outstanding

Private notes offering $200 million 8.625% Senior Secured Notes due 2031

Notes coupon 8.625% Senior Secured Notes due 2031

Notes maturity July 31, 2031 Senior Secured Notes maturity date

Existing notes repayment $150 million 5.75% Senior Unsecured Notes maturing in August 2026

Existing notes coupon 5.75% Senior Unsecured Notes maturing in August 2026

Management ownership over 40% ACR common shares owned collectively by the ACRES team

Historical Context

5 past events · Latest: Jul 15 (Neutral)

Pattern 5 events

Date	Event	Sentiment	24h Move	Catalyst
Jul 15	Earnings date notice	Neutral	+0.2%	Company scheduled its second-quarter 2026 results release and investor conference call.
May 27	Preferred dividends	Positive	+1.8%	Company declared quarterly cash dividends for Series C and Series D preferred stock.
Apr 30	First-quarter earnings	Negative	+2.1%	Company reported a common-share net loss while originating loans and closing a CRE CLO.
Apr 30	Management internalization	Positive	+2.1%	Company announced an all-stock acquisition and transition to internally managed REIT status.
Apr 15	Earnings date notice	Neutral	+0.1%	Company scheduled its first-quarter 2026 results release and investor conference call.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Pattern Detected

ACR's five prior tracked news events all produced nonnegative 24-hour reactions, including a 2.08% gain after the prior acquisition announcement despite negative earnings news.

Key Terms

externally-managed REIT, internally-managed REIT, senior secured notes, first lien

4 terms

externally-managed REIT financial

"transitioned from an externally-managed REIT to an internally-managed REIT"

A REIT that hires an outside company to run its day-to-day operations, make investment decisions, and manage properties instead of employing an in-house management team. Like a homeowner who hires a property manager, the external manager handles leasing, maintenance and acquisitions in exchange for fees and sometimes performance-based payments, which can affect the REIT’s costs, incentives and how closely managers’ actions align with shareholders’ interests — details investors watch when evaluating returns and risk.

internally-managed REIT financial

"transitioned from an externally-managed REIT to an internally-managed REIT"

A type of real estate investment trust (REIT) that employs its own staff to handle day-to-day management, acquisitions, leasing, and asset oversight instead of hiring an outside management company. Like choosing an in-house team rather than contractors, this structure affects the REIT’s cost structure, control and reporting lines, and how management’s incentives and decisions are aligned with shareholders. Investors often view it in light of fee transparency, governance and who makes operating decisions for the portfolio.

senior secured notes financial

"private placement of $200 million of 8.625% Senior Secured Notes"

Senior secured notes are loans a company sells to investors that are backed by specific assets and given first priority for repayment if the company defaults. Because they have a claim on collateral and are paid before other debts, they usually offer lower risk and correspondingly lower interest than unsecured debt; investors use them to judge how safe repayment and recovery of principal might be, like holding a mortgage instead of an unsecured credit card balance.

first lien financial

"will be secured on a first lien basis by the pledge of certain capital stock"

A first lien is a legal claim that gives a lender the top priority to be repaid from specific collateral if a borrower defaults or liquidates assets. Think of it as being first in line for the proceeds from a sale—investors who hold a first lien are more likely to recover their money than holders of later claims, so these loans generally carry lower risk and different pricing compared with unsecured or subordinated debt.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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Completion of Merger and Internalization

UNIONDALE, N.Y., Aug. 6, 2026 /PRNewswire/ -- ACRES Commercial Realty Corp. (NYSE: ACR) (the "ACR" or "Company") announced today that it has completed its previously disclosed acquisition of ACRES Capital Corp. ("ACC") in an all-stock transaction (the "Merger") and transitioned from an externally-managed REIT to an internally-managed REIT (the "Internalization"). Upon closing of the Merger and Internalization, the Company issued approximately 7.5 million shares of ACR common stock to ACC stockholders as merger consideration and terminated the existing Management Agreement. The net increase in ACR common shares outstanding is approximately 6.3 million shares after giving effect to the elimination of ACR shares held by ACC in consolidation.

"The entire ACRES team is excited to have completed this transaction. Collectively, we will own over forty percent of ACR common shares and are highly motivated to drive value for all stakeholders. We believe this combination will enable the company to continue to meet the needs of our customers as they turn to ACRES for capital and service.  We look forward to the next phase of growth for the company," said Andrew Fentress Chairman of the Board and Mark Fogel President of ACRES Commercial Realty Corp.

Private Offering of Senior Secured Notes

The Company also announced today that it has completed a private placement of $200 million of 8.625% Senior Secured Notes due 2031 (the "Notes"), pursuant to a Note Purchase Agreement between the Company, the Purchasers party thereto and UMB Bank, N.A. (the "Collateral Agent"). The Company intends to use a portion of the proceeds from the sale of the Notes to repay in full its $150 million of 5.75% Senior Unsecured Notes upon their maturity in August 2026, with the remaining portion used for general corporate purposes.  

The Notes will mature on July 31, 2031 and will be secured on a first lien basis by the pledge of certain capital stock in its subsidiaries, residual equity interests in securitized financing vehicles and certain other CRE assets (the "Collateral"), and guaranteed by certain subsidiaries of the Company that granted security interests in the Collateral in favor of the Collateral Agent.

"We are pleased to announce the successful completion of this refinancing with Raymond James who has been a trusted advisor and partner since our acquisition of the ACR contract six years ago," said Andrew Fentress Chairman of the Board and Mark Fogel President of ACRES Commercial Realty Corp.

About ACRES Commercial Realty Corp.

ACRES Commercial Realty Corp. is a public commercial mortgage REIT that is primarily focused on originating, holding and managing commercial real estate mortgage loans and equity investments in commercial real estate properties through direct ownership and joint ventures. The Company is dedicated to nationwide middle market lending with a focus on multifamily, student housing, hospitality, industrial and office properties in top U.S. markets. For more information, please visit the Company's website at www.acresreit.com or contact investor relations at IR@acresreit.com.

Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as "may," "trend," "will," "continue," "expect," "intend," "anticipate," "estimate," "believe," "look forward" or other similar words or terms. Because such statements include risks, uncertainties and contingencies, actual results may differ materially from the expectations, intentions, beliefs, plans or predictions of the future expressed or implied by such forward-looking statements. Factors that can affect future results are discussed in the documents filed by the Company from time to time with U.S. Securities and Exchange Commission (the "SEC").  These risks and uncertainties include, but are not limited to, risks and uncertainties relating to the Company's ability to successfully manage the transition to self-management and the ability to achieve expected cost savings or other benefits of the Internalization and the timing thereof; unanticipated expenditures relating to or liabilities arising from the internalization; litigation or regulatory issues relating to the Internalization; the impact of the Internalization on the Company's common stock dividend, and the impact of the Internalization on relationships with, and potential difficulties retaining, the Company's executive officers, employees and directors on a go-forward basis. The foregoing list of factors is not exhaustive. Accordingly, you should not place undue reliance on any forward-looking statements contained herein. For a discussion of some of the risks and important factors that could affect such forward-looking statements, please refer to the Company's most recent annual and quarterly reports and other filings filed with the SEC, which are available on the Company's website (www.acresreit.com). The Company undertakes no obligation to update or revise any forward-looking statement to reflect new or changing information or events after the date hereof or to reflect the occurrence of unanticipated events, except as may be required by law.

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SOURCE ACRES Commercial Realty Corp.

FAQ

What did ACRES Commercial Realty (ACR) announce on August 6, 2026?

ACRES Commercial Realty announced completion of its merger with ACRES Capital and a $200 million senior secured notes offering. According to ACRES Commercial Realty, the deal internalizes management and funds repayment of existing 2026 notes and general corporate purposes.

How many new shares did ACRES Commercial Realty issue in the ACRES Capital merger?

ACRES Commercial Realty issued approximately 7.5 million new ACR common shares to ACRES Capital stockholders. According to ACRES Commercial Realty, the net increase in common shares outstanding is about 6.3 million after eliminating ACR shares previously held by ACRES Capital.

What are the terms of ACRES Commercial Realty’s 2026 senior secured notes offering (ACR)?

ACRES Commercial Realty completed a $200 million private placement of 8.625% Senior Secured Notes due July 31, 2031. According to ACRES Commercial Realty, the notes are first-lien secured by specified subsidiary stock, securitization equity interests and certain CRE assets, and guaranteed by certain subsidiaries.

How will ACRES Commercial Realty use proceeds from its $200 million senior secured notes?

ACRES Commercial Realty plans to use part of the proceeds to repay its $150 million 5.75% Senior Unsecured Notes maturing August 2026. According to ACRES Commercial Realty, remaining proceeds will fund general corporate purposes, supporting overall balance sheet and operational needs.

What does internalization mean for ACRES Commercial Realty shareholders after the ACRES Capital merger?

Internalization means ACRES Commercial Realty shifted from external to internal management by acquiring ACRES Capital. According to ACRES Commercial Realty, the Management Agreement was terminated and the combined team will own over 40% of ACR common shares, aligning leadership with shareholders.

Are ACRES Commercial Realty’s new 8.625% notes secured or unsecured?

The 8.625% Senior Notes due 2031 are secured on a first-lien basis. According to ACRES Commercial Realty, they are backed by pledges of certain subsidiary capital stock, residual equity in securitized financing vehicles and specific commercial real estate assets and guaranteed by certain subsidiaries.