Sunrise Realty Trust Commits $48 Million to a Senior Whole Loan to Refinance a 15-Property Portfolio of Graduate by Hilton Hotels

Rhea-AI Summary

Sunrise Realty Trust (Nasdaq: SUNS) committed $48 million of a $69 million B-note, subordinate to a $337 million A-note, as part of a combined $406 million financing to refinance a 15-property portfolio of Graduate by Hilton hotels for borrower AJ Capital Partners.

An affiliate on the Tannenbaum Capital Group platform holds the remaining $21 million of the B-note. The portfolio covers university-anchored, full-service hotels in major markets including University of Michigan, University of Virginia, and UC Berkeley.

Positive

• $48M commitment to a $69M B-note
• $406M combined proceeds used to refinance 15 properties
• Portfolio includes upscale, full-service hotels in major university markets
• Affiliate involvement on TCG platform shares note exposure

Negative

• B-note is subordinate to a $337M A-note
• Concentration in university-anchored lodging increases sector exposure
• SUNS and affiliate together hold the entire $69M B-note

News Market Reaction

+3.32%

1 alert

+3.32% News Effect

On the day this news was published, SUNS gained 3.32%, reflecting a moderate positive market reaction.

Data tracked by StockTitan Argus on the day of publication.

Key Figures

SUNS B-note commitment: $48 million Total B-note size: $69 million Senior A-note: $337 million +5 more

8 metrics

SUNS B-note commitment $48 million Portion of $69M B-note on Graduate by Hilton portfolio

Total B-note size $69 million Subordinate tranche below $337M A-note

Senior A-note $337 million Held by third-party lender above SUNS’s B-note

Total refinancing proceeds $406 million Refinancing 15-property Graduate by Hilton portfolio

Hotel properties 15 hotels Graduate by Hilton portfolio across major U.S. university markets

Authorized shares under plan 1,000,000 shares S-3 shareholder plan prospectus dated Sep 3, 2025

Q3 2025 net income $4.05M GAAP net income for quarter ended Sep 30, 2025

Q3 2025 Distributable Earnings $4.12M Quarter ended Sep 30, 2025

Market Reality Check

Price: $9.34 Vol: Volume 32,958 is below 20...

low vol

$9.34 Last Close

Volume Volume 32,958 is below 20-day average 77,287 (relative volume 0.43x). low

Technical Price at $9.34, trading below 200-day MA of $10.22 and 24.37% under 52-week high.

Peers on Argus

SUNS was down 0.74% with mixed REIT mortgage peers: GPMT down 8.95%, RPT down 1....

1 Down

SUNS was down 0.74% with mixed REIT mortgage peers: GPMT down 8.95%, RPT down 1.74%, while ACR and SEVN were modestly up. Momentum scanner only flagged MITT down 1.52%, suggesting a stock-specific tone.

Historical Context

5 past events · Latest: Feb 10 (Neutral)

Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Feb 10	Earnings call scheduled	Neutral	+0.8%	Announcement of Q4 and full-year 2025 earnings release and webcast.
Feb 04	Bridge loan commitment	Positive	-0.3%	SUNS committed $14.0M to a $21.6M senior bridge loan for a ranch acquisition.
Dec 15	Dividend declaration	Neutral	-1.0%	Quarterly dividend of $0.30 per share, unchanged from prior quarter.
Nov 13	Q3 2025 earnings	Positive	+0.2%	Q3 2025 net income $4.05M and Distributable Earnings $4.12M with loan growth.
Oct 27	Bridge loan refinancing	Positive	-1.6%	Commitment of $30.0M to a $45.0M senior bridge loan for Houston retail asset.

Pattern Detected

SUNS often shows weak or negative price reactions to positive capital deployment and dividend announcements, while earnings updates see modest positive alignment.

Recent Company History

Over the past few months, SUNS expanded its loan book with a $30.0M senior bridge loan for a Houston retail asset and now a senior whole loan exposure to a 15-property Graduate by Hilton portfolio. It maintained a steady $0.30 quarterly dividend and reported stronger Q3 2025 results with net income of $4.05M and Distributable Earnings of $4.12M. An earnings call for Q4 and full-year 2025 was scheduled for March 12, 2026, showing continued communication alongside portfolio growth.

Regulatory & Risk Context

Active S-3 Shelf

Shelf Active

Active S-3 Shelf Registration 2025-09-03

SUNS has an effective S-3 shelf dated Sep 3, 2025 covering up to 1,000,000 authorized but unissued shares for a shareholder plan. As of the latest data, reported usage is 0, with no recent 424B supplements, indicating no disclosed issuance under this plan yet.

Market Pulse Summary

This announcement highlights SUNS’s continued focus on originating and holding structured loans, her...

Analysis

This announcement highlights SUNS’s continued focus on originating and holding structured loans, here committing $48 million within a $69 million B-note that supports a $406 million refinancing of 15 Graduate by Hilton hotels. It follows earlier bridge loans and stronger Q3 2025 results with net income of $4.05M and Distributable Earnings of $4.12M. Investors may watch loan performance, future deployment updates, and any usage of the S-3 plan for 1,000,000 shares as key indicators.

Key Terms

senior whole loan, b-note, a-note, subordinate, +1 more

5 terms

senior whole loan financial

"Commits $48 million to a Senior Whole Loan to refinance a 15-property portfolio"

A senior whole loan is a single, complete loan held by one lender that has first claim on the borrower's pledged asset if the borrower defaults. Think of it like holding the first mortgage on a house rather than a small slice of many mortgages; because it gets paid before other debts, it generally carries lower risk and different interest terms. Investors care because its senior priority and standalone nature affect expected returns, recoveries in default and how easily the loan can be sold or financed.

b-note financial

"committed $48 million of a $69 million B-note, subordinate to a $337 million A-note"

A B-note is the subordinate piece of a loan or debt package that carries greater risk and usually a higher interest rate than the senior portion. Think of a mortgage sliced into two stacks: the top stack gets paid first and is safer, while the B-note is the lower stack that absorbs losses first but pays more if things go well. Investors watch B-notes because their performance signals credit stress and can boost yield — but they also expose holders to bigger potential losses in a default.

a-note financial

"subordinate to a $337 million A-note held by a third party lender"

An A-note is the senior, higher-priority portion of a loan or debt package that gets paid first if a borrower runs into trouble. For investors, it usually means lower risk and lower interest compared with junior pieces; think of it like being first in line at a checkout — you get your share before others, so this note is often treated as safer and more stable in a mixed loan structure.

subordinate financial

"$69 million B-note, subordinate to a $337 million A-note held by a third party"

Subordinate describes a claim, debt, or security that has lower priority for repayment than other obligations if a borrower defaults or liquidates. Think of it like being in line behind others at a checkout: holders of subordinate claims typically face higher risk of losing money but often receive higher yields to compensate, so investors weigh potential returns against greater chance of loss and lower recovery in default.

cre financial

"mission of financing transitional CRE projects to deliver attractive risk-adjusted returns"

Commercial real estate (CRE) means buildings and land used to generate income—like offices, shopping centers, warehouses and apartment complexes. Investors care because CRE produces rent, affects a company’s costs and value, and is sensitive to interest rates and the economy; think of it as a business’s rental property whose income and price can swing with market demand and borrowing costs, influencing returns and risk.

AI-generated analysis. Not financial advice.

WEST PALM BEACH, Fla., Feb. 18, 2026 (GLOBE NEWSWIRE) -- Sunrise Realty Trust, Inc. (“SUNS” or the “Company”) (Nasdaq: SUNS), a lender on the Tannenbaum Capital Group (“TCG”) Real Estate platform, today announced that it had committed $48 million of a $69 million B-note, subordinate to a $337 million A-note held by a third party lender, on behalf of the borrower, AJ Capital Partners. The combined $406 million in proceeds were used for the refinancing of a 15-property portfolio of Graduate by Hilton hotels (the "Project"). An affiliate on the TCG Real Estate Platform holds the remaining $21 million of the B-note.

The Project reflects the borrower’s long-term strategy of investing in university-anchored lodging given its high-conviction in collegiate lodging demand and its belief in opportunities for continuing portfolio synergies. The portfolio consists of 15 full service, upscale hotels in major university markets across the U.S., including the University of Michigan, University of Virginia, and UC Berkeley.

"This transaction exemplifies our ability to identify compelling opportunities in markets with captive demand and limited new supply, and, as importantly, reflects our strong conviction in cultivating mutually valuable partnerships for the long-term," said Brian Sedrish, CEO of SUNS. "By partnering with a top-tier institution to support the sponsor’s vision for these premier assets, we continue to execute on our mission of financing transitional CRE projects to deliver attractive risk-adjusted returns for our shareholders."

About Sunrise Realty Trust, Inc.

Sunrise Realty Trust, Inc. (Nasdaq: SUNS) (“SUNS”) is an institutional commercial real estate (“CRE”) lender providing flexible financing solutions to sponsors of CRE projects primarily in the Southern United States. It focuses on transitional CRE business plans with the potential for near-term value creation, collateralized by top-tier assets predominantly located in established and rapidly expanding Southern markets. For additional information regarding SUNS, please visit www.sunriserealtytrust.com.

About TCG Real Estate

TCG Real Estate refers to a group of affiliated CRE-focused debt funds, including a Nasdaq-listed mortgage real estate investment trust (“REIT”), Sunrise Realty Trust, Inc. (Nasdaq: SUNS), and a private mortgage REIT, Southern Realty Trust Inc. The funds provide flexible financing on transitional CRE properties that present opportunities for near-term value creation, with a focus on top-tier CRE assets located primarily within markets in the Southern U.S. benefiting from economic tailwinds with growth potential. For additional information regarding TCG, please visit www.theTCG.com.

About AJ Capital Partners

Adventurous Journeys ("AJ") Capital Partners is a vertically integrated real estate investment manager founded in 2008 and based in Nashville, Tennessee. AJ repositions real estate to build timeless, scalable businesses and brand platforms across hospitality, mixed-use, and residential sectors. Notable brands include Graduate Hotels®, Marine & Lawn Hotels & Resorts®, and Field & Stream Lodge Co. The firm delivers transformative real estate by applying placemaking, inspired design, and hospitality principles to spaces overlooked or undervalued by traditional investment firms. The firm’s current portfolio includes $6 billion of assets across 100+ properties and 50+ geographic markets. Learn more at www.ajcpt.com.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the Company’s current views and projections with respect to, among other things, projections and operating results. All statements other than historical facts are forward-looking statements. Words such as “believes,” “expects,” “will,” “intends,” “plans,” “guidance,” “estimates,” “projects,” “anticipates,” “future,” and similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions and are not guarantees of future performance, conditions or results. Certain factors, risks, and uncertainties discussed under the caption “Risk Factors” and elsewhere in SUNS’ most recently filed periodic reports on Form 10-K and Form 10-Q and in subsequent filings could cause actual results and performance to differ materially from those projected in these forward-looking statements.

Investor Relations Contact

Robyn Tannenbaum
561-510-2293
ir@thetcg.com

Media Contact

Doug Allen
Dukas Linden Public Relations
646-722-6530
TCG@DLPR.com

FAQ

How much did Sunrise Realty Trust (SUNS) commit to the Graduate by Hilton refinancing on Feb 18, 2026?

SUNS committed $48 million to the transaction. According to the company, that $48 million is part of a $69 million B-note used alongside a $337 million A-note for the $406 million refinance.

What is the total financing size for the 15-property Graduate by Hilton portfolio refinanced by SUNS on Feb 18, 2026?

The total financing amounted to $406 million. According to the company, that comprised a $337 million A-note plus a $69 million B-note, of which SUNS committed $48 million.

Who holds the remainder of the B-note alongside SUNS in the Feb 18, 2026 transaction?

An affiliate on the Tannenbaum Capital Group platform holds the remaining $21 million. According to the company, SUNS and the affiliate together hold the full $69 million B-note position.

Which markets are included in the 15-property Graduate by Hilton portfolio refinanced by SUNS?

The portfolio spans major university markets, including University of Michigan, University of Virginia, and UC Berkeley. According to the company, these are full-service, upscale hotels anchored by collegiate demand.

What is the credit structure of the financing in which SUNS participated on Feb 18, 2026?

The financing uses a senior A-note and a subordinate B-note structure. According to the company, the $69 million B-note is subordinate to a $337 million A-note held by a third-party lender.