ACRES Commercial Realty (NYSE: ACR) grows CRE loan portfolio to $2.2B
Rhea-AI Filing Summary
ACRES Commercial Realty Corp. reported a small GAAP net loss allocable to common shares of $1.0 million, or $(0.16) per diluted share, for the first quarter of 2026. Earnings Available for Distribution were positive at $0.02 per diluted share, reflecting adjustments such as non-cash credit loss reversals and real estate depreciation.
The company’s commercial real estate loan portfolio reached about $2.2 billion at par value, with 81.5% in multifamily properties and 96.2% of the portfolio current on payments. During the quarter, ACRES added approximately $496 million of new loans and, together with late-2025 originations, closed a $1.0 billion CRE CLO, while total book value per share was $29.98 as of March 31, 2026.
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Insights
ACRES shows portfolio growth and strong credit quality, but earnings remain modest.
ACRES Commercial Realty generated a Q1 2026 GAAP net loss allocable to common shares of $1.0 million, or $(0.16) per diluted share, while posting positive EAD of $0.02 per share. Total revenues were $17.8 million, supported by both interest and real estate income.
The CRE loan portfolio reached $2.2 billion at par, 81.5% in multifamily and 96.2% current on payments, with a weighted average loan-to-value of 76%. The company closed a $1.0 billion CRE CLO and reported book value per share of $29.98 as of March 31, 2026, with CECL reserves at 0.88% of par.
Leverage stood at 3.4x with total capitalization of $2.42 billion and liquidity of $86.8 million. Future company filings may provide more detail on how sustained loan growth, funding costs, and credit performance affect GAAP earnings versus EAD.
8-K Event Classification
Key Figures
Key Terms
Earnings Available for Distribution financial
Current Expected Credit Losses financial
CRE loan portfolio financial
Term Reinvestment Financing Facility financial
Secured Overnight Finance Rate financial
Earnings Snapshot
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On April 30, 2026, ACRES Commercial Realty Corp. (the “Company”) issued a press release and detailed presentation regarding its operating results for the quarter ended March 31, 2026. A copy of this press release is furnished with this report as Exhibit 99.1 and a copy of the earnings presentation is furnished with this report as Exhibit 99.2 as well as made available on the Company’s website at www.acresreit.com.
Item 7.01 Regulation FD Disclosure.
The information provided in Item 2.02 above is incorporated by reference into this Item 7.01.
The information set forth in Items 2.02 and 7.01 in this Current Report, and all of the exhibits hereto, is to be considered “furnished” pursuant to Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information set forth in Items 2.02 and 7.01 in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.
Item 9.01 Financial Statements and Exhibits.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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ACRES COMMERCIAL REALTY CORP. |
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April 30, 2026 |
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/s/ Eldron C. Blackwell |
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Eldron C. Blackwell |
Exhibit 99.1
ACRES COMMERCIAL REALTY CORP.
REPORTS RESULTS FOR
FIRST QUARTER 2026
Uniondale, NY, April 30, 2026 – ACRES Commercial Realty Corp. (NYSE: ACR) (“ACR” or the “Company”), a real estate investment trust that is primarily focused on originating, holding and managing commercial real estate mortgage loans and equity investments in commercial real estate property through direct ownership and joint ventures, today reported results for the quarter ended March 31, 2026. ACR’s GAAP net loss allocable to common shares was $1.0 million or $(0.16) per share-diluted, for the quarter ended March 31, 2026.
“The ACRES origination team added $496 million of high-quality loans to our portfolio during the first quarter. The combination of those new loans along with $571 million of loans originated during the fourth quarter of 2025, led to the closing of a $1 billion CRE CLO in February. We also sold one of our real estate investments this quarter, which resulted in a $3.3 million gain,” said Mark Fogel, President and Chief Executive Office of ACRES Commercial Realty Corp. “The ACRES team continues to grow the portfolio by providing loans to first-rate sponsors in strong markets nationwide. At the same time, we remain dedicated to actively managing the portfolio to maximize value to our shareholders.”
ACR issued a full, detailed presentation of its results for the quarter ended March 31, 2026 that can be viewed at www.acresreit.com.
Earnings Call Details
ACR will host a live conference call on April 30, 2026 at 10:00 a.m. Eastern Time to discuss its first quarter 2026 operating results. The conference call can be accessed by dialing 1-800-445-7795 (U.S. domestic) or 1-785-424-1699 (International), Conference ID ACRES or from the investor relations section of the Company’s website at www.acresreit.com.
For those unable to listen to the live conference call, a replay will be available on the Company’s website and telephonically through May14, 2026 by dialing 1-844-512-2921 (U.S. domestic) or 1-412-317-6671 (International), with the passcode 11161260.
About ACRES Commercial Realty Corp.
ACRES Commercial Realty Corp. is a real estate investment trust 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 externally managed by ACRES Capital, LLC, a subsidiary of ACRES Capital Corp., a private commercial real estate lender exclusively dedicated to nationwide middle market commercial real estate lending with a focus on multifamily, student housing, hospitality, industrial and office property 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,” “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 the Securities and Exchange Commission, including, without limitation, factors impacting whether we will be able to maintain our sources of liquidity and whether we will be able to identify sufficient suitable investments to increase our originations. 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.
First Quarter 2026 Earnings Presentation April 30, 2026 Exhibit 99.2
DISCLAIMER Forward-Looking Statements This presentation contains forward-looking statements within the meaning of federal securities laws. These forward-looking statements are not historical facts but rather are based on ACRES Commercial Realty Corp.’s (“ACR’s” or the “Company’s”) current beliefs, assumptions and expectations. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to ACR or are within its control. If a change occurs, its business, financial condition, liquidity and results of operations may vary materially from those expressed in the forward-looking statements. You should not place undue reliance on these forward-looking statements, which reflect ACR’s view only as of the date of this presentation. ACR uses words such as “anticipate,” “expect,” “intend,” “plan,” “believe,” “seek,” “estimate,” “target,” and variations of these words and similar expressions to identify forward-looking statements. Forward-looking statements are subject to various risks and uncertainties that could cause actual results to vary from its forward-looking statements, including, but not limited to: The adequacy of its cash reserves and working capital; The timing of cash flows, if any, from its investments; Unanticipated increases in financial and other costs, including a rise in interest rates; Its ability to maintain compliance with over-collateralization and interest coverage tests in certain financing arrangements; Its dependence on ACRES Capital, LLC, its “manager”, and ability to find a suitable replacement in a timely manner, or at all, if its manager or the Company were to terminate the management agreement; Environmental and/or safety requirements; Its ability to satisfy complex rules in order for ACR to qualify as a real estate investment trust (“REIT”), for federal income tax purposes and qualify for its exemption under the investment company act of 1940, as amended, and its ability and the ability of its subsidiaries to operate effectively within the limitations imposed by these rules; Legislative and regulatory changes (including changes to laws governing the taxation of REITs or the exemptions from registration as an investment company); and Other factors discussed under item IA. Risk factors in its annual report on form 10-K for the year ended December 31, 2025 and those factors that may be contained in any subsequent filing ACR makes with the Securities and Exchange Commission. Changes in the industry, interest rates, the debt securities markets, real estate markets or the general economy; Increased rates of default and/or decreased recovery rates on its investments; The performance and financial condition of its borrowers; The cost and availability of its financings, which depend in part on its asset quality, the nature of its relationships with its lenders and other capital providers, its business prospects and outlook and general market conditions; The availability and attractiveness of terms of additional debt repurchases; Availability, terms and deployment of short-term and long-term capital; Availability of, and ability to retain, qualified personnel; Changes in its business strategy; Availability of investment opportunities in commercial real estate-related and commercial finance assets; The degree and nature of its competition; The resolution of its non-performing and sub-performing assets; The Company’s ability to comply with financial covenants in its debt instruments; ACRESREIT.COM
DISCLAIMER Forward-Looking Statements (continued) In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this presentation might not occur and actual results, performance or achievement could differ materially from those anticipated or implied in the forward-looking statements. The Company undertakes no obligation, and specifically disclaims any obligation, to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Past Performance Past performance is not indicative of future results. There is no guarantee that any investment strategy referenced herein will work under all market conditions. Prior to making any investment decision, you should evaluate your ability to invest for the long-term, especially during periods of downturns in the market. You alone assume the responsibility of evaluating the merits and risks associated with any potential investment or investment strategy referenced herein. Notes on Presentation This presentation contains information regarding financial results that is calculated and presented on the basis of methodologies other than in accordance with accounting principles generally accepted in the United States (“GAAP”), which management believes is relevant to assessing ACR’s financial performance. Please refer to page 18 for the reconciliation of Net Income (Loss), a GAAP financial measure, to Earnings Available for Distribution (“EAD”), a non-GAAP financial measure. Unless otherwise indicated, information included in this presentation is at or for the period ended March 31, 2026. Definitions Refer to page 20 for a description of certain terms not otherwise defined or footnoted, including EAD, Benchmark Rate, Book Value, and other key terms. This presentation is for informational purposes only and does not constitute an offer to sell or the solicitation of any offer to buy any securities of ACR or any other entity. Any offering of securities would be made pursuant to separate documentation and any such securities would not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. No Offer or Sale of Securities ACRESREIT.COM
Highlights Manager is focused on delivering shareholder value through EAD1 growth ACRESREIT.COM Percentage of Multifamily-focused CRE in Loan Portfolio 81% Per Share-Diluted GAAP Net Loss / EAD ($0.16) / $0.02 1Q26 Net CRE Loan Activity $374.4M $29.98 Book Value Per Share at March 31, 2026 ACRES 2026-FL4 ($1B Transaction Size) 86.5% at S+168 1 Refer to page 17 for the reconciliation of Net Income (Loss), a GAAP financial measure, to EAD, a non-GAAP financial measure Percentage of CRE loan portfolio current on payments 96.2%
$2.2B First Quarter 2026 Results Financial Results Book Value CRE Loan Activity & CRE Portfolio Capitalization, Liquidity & NOL ACRESREIT.COM Total liquidity at March 31, 2026 $86.8M $106.3M of net investments in real estate and properties held for sale 96.2% of the par value of the CRE loan portfolio is current on payments of the par value of the CRE loan portfolio is rated 4 or 52 14% Comprising 60 loans with a weighted average LTV of 76% CRE loan portfolio at par value $374.4M of net loan fundings 11.9% annual increase since ACRES acquisition in 3Q20 $29.98 Book value per share Down from $30.01 in 4Q25 and up from $28.50 in 1Q25 EAD1 per share diluted $0.02 ($0.16) GAAP net loss per share-diluted 1 Refer to page 17 for the reconciliation of Net Income (Loss), a GAAP financial measure, to EAD, a non-GAAP financial measure 2 Percentage represents the Company’s economic interest in the CRE loans $32.1M Net Operating Loss Carryforwards at March 31, 2026 Total capacity at March 31, 2026 $2.8B $974.8M Capacity available at March 31, 2026
BALANCE SHEET Overview 1Q26 Balance Sheet Overview Summary of Changes to Book Value per Share 1 Total Assets ($B) $2.5 Total Liquidity ($M) $86.8 CRE Whole Loans, at par ($B) WA Spread $2.2 3.29% CECL Reserve – General ($M) Per BV Share1 / Basis Points $19.4 $2.96/0.88% Investments in Real Estate and Properties Held for Sale, net2 ($M) Number of Investments $106.3 5 Total Borrowings, at cost ($B) Leverage Ratio $1.9 3.4x Asset Specific Borrowings, at par ($B) WA Spread $1.7 1.81% Corporate Debt, at par ($M) WA Coupon $201.5 6.30% Preferred and Common Equity3 ($M) Dividend %: WA Preferred / Common $224.0/$330.9 8.76% / NA ACRESREIT.COM 1 Per share adjustments are calculated based on the share count outstanding of 6,558,865 utilized in the calculation of book value at March 31, 2026 2 Investments in real estate and properties held for sale are shown net of related financings and real estate related lease obligations 3 Includes $134.3 million of non-controlling interests Capitalization Total Capitalization $2.4B Stockholders’ equity 23% Term warehouse financing facilities (limited recourse) 1% Senior secured financing facility (limited recourse) 2% Mortgage Payable (limited recourse) 1% Corporate Debt - TRUPS & 5.75% Notes (no guarantee) 8% Securitization Notes Payable (Non-Recourse) 36% Term Reinvestment Financing Facility 29%
Loans held for investment, at amortized cost $2,202.8 CECL Reserves ($19.4) CRE whole loans, floating-rate WA 1M SOFR + 3.29% WA 1M SOFR Floor2 2.13% WA CRE loan portfolio LTV 76% Total number of CRE loans 60 Average CRE loan size, at par $36.9 WA Risk Rating, at par 2.5 CRE Loan Portfolio Overview CRE Loan Summary 1 Balance by Region 1,3 ACRESREIT.COM 1 All $ amounts are in millions and the percentages for region and property type disclosures are based on total carrying value of the CRE loans 2 At March 31, 2026, all CRE whole loans are indexed to SOFR and the WA benchmark rate was 3.69% 3 Texas (15.0%) and Florida (12.0%) were the states with the highest concentrations. Based on regions identified by the National Council of Real Estate Investment Fiduciaries (NCREIF) 4 ACRES originated 9 new loan commitments and purchased two loan commitments for a total of $495.6 million during the three months ended March 31, 2026 Loan Count 53 Loan Count 60 Loan Portfolio Activity, at par 1,4 Property Type 1 Pacific 10.3% Mountain 13.0% Southwest 16.9% West North Central 3.7% East North Central 14.1% Southeast 19.0% Mid Atlantic 10.4% Northeast 12.6% Multifamily 81.5% Office 10.9% Self-storage 0.7% Hotel 4.7% Mixed-Use 2.2%
Fully Extended Loan and Interest Rate Cap Maturities ($ in millions at par) CRE Loan Portfolio Maturity Profile ACRESREIT.COM 1 Excludes three loans in maturity default at March 31, 2026 2 Fully-extended maturity basis assumes borrower elects and qualifies for all extensions 3 Interest rate caps are contractually owned by the underlying borrower and supplement the property cash flows that collateralize the floating rate CRE loan portfolio 4 Interest rate caps have maturities from April 2026 through March 2029 5 Seven loans funded debt service reserves in lieu of purchasing an interest rate cap Fully extended weighted average loan maturity 1,2 of the par value of the portfolio has interest rate caps or debt service reserves in place at March 31, 2026 3,4,5 3.3 years 74%
CRE Loan Risk Ratings and CECL Reserves 56 of ACR’s 60 loans, or 96%, are current on contractual payments at March 31, 2026 CECL Reserve Overview ACRESREIT.COM 1 See page 21 for additional information on the risk rating definitions 2 Percentage represents the Company’s economic interest in the CRE loans. 3 Amount is less than 0.5%. W.A. Risk Rating by Collateral Type, $ at par 1Q26 W.A. Risk Rating: 2.5 4Q25 W.A. Risk Rating: 2.7 of ACR’s loans have a risk rating of 1, 2 or 3 that are performing in line with or near underwritten expectations 1,2 86% Specific CECL Reserve General CECL Reserve Total Reserve $20.4M Total Reserve $19.4M 43% Risk Rated 4 - 5 57% Risk Rated 1 - 3 49% Risk Rated 4 - 5 51% Risk Rated 1 - 3 1Q26 Risk Rating Overview2 $1.5B $1.8B $241.4M $235.2M $58.4M $103.3M $16.0M $15.9M Loan Count 9 34 1 15 1 $47.8M $25.0M 3
Investments in Real Estate Properties $106.3 million of net investments in real estate and properties held for sale 1,2 388-key hotel next to a convention center Equity investment in the north central region Conversion to a Hilton hotel and stabilization Acquired in April 2022 ACRESREIT.COM 1 Investments in real estate comprise five properties, two of which are held at depreciated/amortized cost basis and three of which are held for sale at lower of cost or fair value. Images exclude three REO properties totaling $37.4 million3. 2 Depreciation and amortization expense on investments in real estate is $1.2 million for the 1st quarter of 2026. 3 Represents GAAP net equity basis value at March 31, 2026. Hotel $29.1M 3 Hotel $39.8M 3 Realized Land Sale 1Q26 12-acre parcel of land Equity investment in the northeast region Acquired in November 2021 for $14.2M Sold in March 2026 for $20.0M GAAP and EAD gain of $3.3M recorded in 1Q26 279-key hotel next to a convention center Equity via lending activities in the northeast region Acquired the deed in November 2020 Reclassified to held for sale as of September 30, 2022 Select Investment Highlights Realized Land Sale 1Q26
Capitalization Overview $ in Millions Capitalization Capacity Amount3 $ Avail. W. Avg. Coupon Leverage Ratio Term Reinvestment Financing 2 $749.1 $709.2 $37.3 SOFR + 1.75% 1.3x Term Warehouse Financing 2 500.0 18.9 480.4 SOFR + 4.00% - Senior Secured Financing 2 500.0 41.7 457.1 SOFR + 3.77% 0.1x Mortgages Payable 2 20.2 20.2 - SOFR + 3.80% 0.1x Senior Unsecured Notes 150.0 149.7 - 5.75% 0.2x Trust Preferred Securities 51.5 51.5 - SOFR + 3.95% 0.1x Total Recourse Debt $1,970.8 $991.2 $974.8 1.8x Securitizations 2 873.5 873.5 - SOFR + 1.68% 1.6x Total Leverage $2,844.3 $1,864.7 $974.8 5.58% 3.4x Preferred Equity 224.0 8.76% Common Equity 196.6 Non-controlling interests 134.3 Total Capitalization $2,419.6 5.94% 1 Total Capitalization ($ in Millions) $2,419.6 Corporate WACC 1 5.94% Total Asset Specific Financing $1,663.5 WA Asset Specific Debt Spread SOFR + 1.81% Term/Senior Secured Avail. $974.8 Recourse Debt Leverage 1.8x Total Corporate Leverage 3.4x ACRESREIT.COM 1 Weighted average cost of capital (“WACC”) calculation excludes the impact of common equity in the denominator 2 Asset-specific borrowings total $1.7 billion, of which securitizations are 53% 3 Includes $10.9 million of unamortized deferred debt issuance costs and discounts on borrowings Outstanding Financing 99% Non-Mark-to-Market 1% Term Warehouse Financing 47% Securitizations 38% Term Reinvestment Financing 8% Senior Unsecured Notes 2% Senior Secured Financing 3% Trust Preferred Securities 1% Mortgages Payable
Leverage AND Liquidity Trend ACRESREIT.COM 1 Includes the projected amount of proceeds available to the Company if the unfinanced loans were financed with the applicable facilities $64.7 $86.8 $ in millions Leverage Ratios Total Liquidity ($ in millions) $64.5 $107.9
Illustrative EARNINGS PROFILE ACRESREIT.COM Projected Maximum CRE Loan Portfolio Size & GAAP EPS & EAD per Share Projected maximum CRE loan portfolio size $2,300.0 $2,500.0 $2,750.0 Target range of asset-specific leverage 3.1x 3.5x 3.8x Illustrative return on net deployable capital 11.5% 12.5% 13.0% CRE net interest income $67.2 $72.7 $80.4 Less: general & administrative (11.5) (11.5) (11.5) Less: base and incentive management fees (6.3) (6.3) (6.3) Less: corporate interest expense (13.2) (13.2) (13.2) Less: GAAP to EAD Adjustments (15.9) (16.6) (17.2) Less: preferred dividends (20.4) (20.4) (20.4) Illustrative GAAP earnings ($0.1) $4.7 $11.8 Add: other GAAP activities 6.7 7.4 7.9 Illustrative EAD $6.6 $12.2 $19.7 Fully diluted share count 6.8 6.8 6.8 GAAP EPS ($0.02) $0.69 $1.73 EAD EPS $0.97 $1.78 $2.88 ACR has presented this slide for illustrative purposes only. The illustrative earnings potential is based on current market conditions and assumptions with respect to general business, economic, regulatory, and financial conditions and other future events, as well as matters specific to ACR's business, all of which are difficult to predict and many of which are beyond ACR’s control. As a result, there can be no assurance that any of the results will be realized or achieved. The illustration should not be relied upon as being necessarily indicative of future results, and you are cautioned not to place undue reliance on these scenarios. The chart below is meant to display the illustrative earnings potential of the Company. It is not meant to represent performance guidance for any period 1.
Appendix ACRESREIT.COM
Consolidated Balance Sheets ACRESREIT.COM (in thousands, except share and per share data) March 31, 2026 December 31, 2025 Assets (unaudited) Cash and cash equivalents $ 47,985 $ 83,768 Restricted cash 1,835 2,190 Accrued interest receivable 30,042 27,259 CRE loans 2,202,837 1,830,367 Less: allowance for credit losses (19,431) (20,398) CRE loans, net 2,183,406 1,809,969 Loan receivable – due from Manager 10,300 10,375 Investments in unconsolidated entities 29,722 29,237 Properties held for sale 90,851 90,825 Investments in real estate 59,382 76,415 Right of use assets 19,415 19,545 Intangible assets 6,000 6,221 Other assets 7,167 6,560 Total Assets $ 2,486,105 $ 2,162,364 Liabilities Accounts payable and other liabilities $ 7,631 $ 7,482 Management fee payable - related party 1,037 — Accrued interest payable 5,068 6,814 Borrowings 1,864,671 1,544,938 Lease liabilities 46,096 45,942 Distributions payable 3,423 3,457 Accrued tax liability 75 8 Liabilities held for sale 3,181 3,131 Total Liabilities 1,931,182 1,611,772 Equity Series C Preferred stock, par value $0.001 5 5 Series D Preferred stock, par value $0.001 5 5 Common stock, par value $0.001 7 7 Additional paid-in capital 1,142,949 1,142,410 Accumulated other comprehensive loss (1,277) (1,603) Distributions in excess of earnings (721,051) (720,028) Total Stockholders’ Equity 420,638 420,796 Non-controlling interests 134,285 129,796 Total Equity 554,923 550,592 Total Liabilities and Equity $ 2,486,105 $ 2,162,364
Consolidated Statements of Operations (Unaudited, in thousands, except share and per share data) For the Three Months Ended Mar. 31, 2026 Mar. 31, 2025 Revenues Interest income $ 34,360 $ 28,726 Interest expense 25,114 23,123 Net interest income 9,246 5,603 Real estate income 8,547 11,366 Other revenue 31 33 Total revenues 17,824 17,002 Operating Expenses General and administrative 3,036 3,159 Real estate expenses 9,710 13,342 Management fees - related party 1,561 1,631 Equity compensation - related party 540 815 Corporate depreciation and amortization 19 18 (Reversal of) provision for credit losses, net (967) (1,717) Total operating expenses 13,899 17,248 Other Income (Expense) Equity in earnings (losses) on unconsolidated subsidiaries 245 (492) Gain on sale of investment in real estate 3,336 — Other income 23 84 Total other (expense) income 3,604 (408) Income (Loss) before Taxes $ 7,529 $ (654) Income tax expense (1) (76) Net Income (Loss) $ 7,528 $ (730) Net income allocated to preferred shares (5,114) (5,313) Net (income) loss allocable to non-controlling interest, net of taxes (3,437) 184 Net (Loss) Income Allocable to Common Shares $ (1,023) $ (5,859) Net (Loss) Income per Common Share – Basic $ (0.16) $ (0.80) Net (Loss) Income per Common Share – Diluted $ (0.16) $ (0.80) Weighted Average Number of Common Shares Outstanding - Basic 6,558,864 7,362,236 Weighted Average Number of Common Shares Outstanding - Diluted 6,558,864 7,362,236 ACRESREIT.COM
Earnings Available for Distribution ACRESREIT.COM 1 See page 20 for additional information on these non- GAAP financial measures 2 Amount presented is net of the amount allocable to the non-controlling interest (Unaudited, in thousands, except share and per share data) For the Three Months Ended Mar. 31, 2026 Mar. 31, 2025 Net Loss Allocable to Common Shares – GAAP $ (1,023) $ (5,859) Realized gain on sale of investment in real estate (3,336) — Net loss allocable to common shares - GAAP, adjusted $ (4,359) $ (5,859) Reconciling Items from Continuing Operations: Non-cash equity compensation expense 540 815 Non-cash reversal of CRE credit losses2 (554) (1,717) Realized net gain (loss) on core activities 3,336 (700) Real estate depreciation and amortization 1,170 1,155 Earnings (Loss) Available for Distribution Allocable to Common Shares 1 $ 133 $ (6,306) Earnings (Loss) Available for Distribution per Common Share – Diluted 1 $ 0.02 $ (0.86) Weighted Average Number of Common Shares Outstanding - Diluted on EAD Allocable to Common Shares 6,839,819 7,362,236 The following table provides a reconciliation from GAAP net income (loss) allocable to common shares to Earnings Available for Distribution allocable to common shares, a non-GAAP measure, for the periods presented 1:
CECL Trend Analysis Chart ACRESREIT.COM 1 Property type percentages based on total carrying value of the CRE loans, CECL reserve percentage is based on the total par value of the CRE loans Since 2Q24, market liquidity and volatility in the commercial real estate sector have caused a decrease in the CECL reserves to 0.88% at 1Q26
Benchmark Sensitivity Analysis Trend At March 31, 2026, the CRE loan portfolio is 99% floating rate loans that are indexed to one-month term SOFR with a weighted average floor of 2.13% SOFR Change Decreased 1.00% No Change Decreased 0.50% Increased 0.50% Increased 1.00% SOFR: 3.69% SOFR Change Decreased 1.00% No Change Decreased 0.50% Increased 0.50% Increased 1.00% SOFR: 3.66% ACRESREIT.COM December 31, 2025 March 31, 2026 Quarterly Net Interest Income per Share Sensitivity to Changes in SOFR Change to a positive correlation to net interest income assuming a 0.50% to 1.00% increase to SOFR
Key Definitions Earnings Available for Distribution: Earnings Available for Distribution (“EAD”) is a non-GAAP financial measure that the Company uses to evaluate its operating performance. EAD excludes the effects of certain transactions and GAAP adjustments that it believes are not necessarily indicative of its current CRE loan portfolio and other CRE-related investments and operations. EAD excludes income (loss) from all non-core assets comprising of investments and securities owned by the Company at the initial measurement date of December 31, 2016 in commercial finance, middle market lending, residential mortgage lending, certain legacy CRE loans and other non-CRE assets designated as assets held for sale. EAD, for reporting purposes, is defined as GAAP net income (loss) allocable to common shares, excluding (i) non-cash equity compensation expense, (ii) unrealized gains and losses, (iii) non-cash provisions for loan losses, (iv) non-cash impairments on securities, (v) non-cash amortization of discounts or premiums associated with borrowings, (vi) net income or loss from a limited partnership interest owned at the initial measurement date, (vii) net income or loss from non-core assets, (viii) real estate depreciation and amortization, (ix) foreign currency gains or losses and (x) income or loss from discontinued operations. EAD may also be adjusted periodically to exclude certain one-time events pursuant to changes in GAAP and certain non-cash items. Although pursuant to the Fourth Amended and Restated Management Agreement the Company calculates the Manager’s incentive compensation using EAD excluding incentive fees payable to the Manager, the Company includes incentive fees payable to the Manager in EAD for reporting purposes. Secured Overnight Finance Rate: Secured Overnight Finance Rate (“SOFR”) refers to the collective one-month Term Secured Overnight Finance Rate that are used as benchmarks on the originated loans. Book Value : Book value is presented per common share, excluding unvested restricted stock and including warrants to purchase common stock. The measure refers to common stock book value, which is calculated as total stockholders’ equity less preferred stock equity. Leverage ratio is calculated as the respective period ended borrowings over total equity. Asset-specific leverage ratio excludes corporate debt from the calculation. Leverage Ratio: ACRESREIT.COM Current Expected Credit Losses: Current Expected Credit Losses (‘CECL”) refers to the provision to earnings in order to estimate expected losses.
Other Disclosures Rating 1: Property performance has surpassed underwritten expectations Occupancy is stabilized, the property has had a history of consistently high occupancy, and the property has a diverse and high-quality tenant mix Rating 2: Property performance is consistent with underwritten expectations and covenants and performance criteria are being met or exceeded Occupancy is stabilized, near stabilized or is on track with underwriting Rating 3: Property performance lags behind underwritten expectations Occupancy is not stabilized and the property has some tenancy rollover Rating 4: Property performance significantly lags behind underwritten expectations. Performance criteria and loan covenants have required occasional waivers Occupancy is not stabilized and the property has a large amount of tenancy rollover Rating 5: Property performance is significantly worse than underwritten expectations. The loan is not in compliance with loan covenants and performance criteria and may be in default. Expected sale proceeds would not be sufficient to pay off the loan at maturity The property has a material vacancy rate and significant rollover of remaining tenants An updated appraisal is required upon designation and updated on an as-needed basis CRE loans are collateralized by a diversified mix of real estate properties and are assessed for credit quality based on the collective evaluation of several factors, including but not limited to: collateral performance relative to underwritten plan, time since origination, current implied and/or re-underwritten loan-to-collateral value ratios, loan structure and exit plan. Depending on the loan’s performance against these various factors, loans are rated on a scale from 1 to 5, with loans rated 1 representing loans with the highest credit quality and loans rated 5 representing loans with the lowest credit quality. The factors evaluated provide general criteria to monitor credit migration in the Company’s loan portfolio; as such, a loan’s rating may improve or worsen, depending on new information received. The criteria set forth below should be used as general guidelines, and therefore not every loan will have all of the characteristics described in each category below. Commercial Real Estate Loans Risk Ratings ACRESREIT.COM
Additional information is available at the Company’s website. Contact Information Headquarters: 390 RXR Plaza Uniondale, NY 11556 Investor Relations: ir@acresreit.com 516-862-2385 New York Stock Exchange: Common Stock Symbol: ACR Pref. Stock Symbols: ACRPrC & ACRPrD ACRES Commercial Realty Corp. is a real estate investment trust that is primarily focused on originating, holding and managing commercial real estate mortgage loans and equity investments in commercial real estate property through direct ownership and joint ventures. www.acresreit.com