ACRES Commercial Realty (NYSE: ACR) signs construction loan guarantees

Rhea-AI Filing Summary

ACRES Commercial Realty Corp. entered into several guaranty and indemnity agreements tied to a joint venture construction project. The company and certain individuals agreed to guarantee a $62 million construction loan and a related bridge loan made to a borrower held in a joint venture in which ACRES has a 90% membership interest.

Under these arrangements, the guarantors back the borrower’s completion of the project, payment of debt and interest, certain recourse “bad boy” obligations, and carry costs under the main loan documents. ACRES also signed an environmental indemnity, providing environmental representations, covenants and indemnification to the lenders, and separately guaranteed repayment and completion obligations under a bridge loan agreement with Hoyne Savings Bank.

Insights

Real estate credit analyst

ACRES takes on broad guarantees for a large JV construction and bridge loan.

ACRES Commercial Realty Corp. now guarantees a $62 million construction loan to a borrower in a joint venture where it holds a 90% interest. The guaranties extend beyond simple repayment to cover project completion, debt service, carry costs and specified recourse or “bad boy” obligations, meaning ACRES is a primary obligor if the borrower fails to perform under the loan documents.

The company also agreed to environmental indemnity provisions and a separate repayment and completion guaranty tied to a bridge loan with Hoyne Savings Bank. These commitments increase ACRES’ exposure to this specific project and to construction and environmental performance risks, although they are secured by the underlying real estate and governed by detailed loan and operating agreements. Future disclosures in company filings may clarify how these obligations evolve as the project progresses and the loans amortize or are refinanced.

8-K Event Classification

2 items: 1.01, 9.01

2 items

Item 1.01 Entry into a Material Definitive Agreement Business

The company signed a significant contract such as a merger agreement, credit facility, or major partnership.

Item 9.01 Financial Statements and Exhibits Exhibits

Financial statements, pro forma financial information, and exhibit attachments filed with this report.

Understanding 8-K Material Events →

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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

Date of Report (Date of earliest event reported): September 12, 2025

ACRES Commercial Realty Corp.

(Exact name of Registrant as Specified in Its Charter)

Maryland			1-32733	20-2287134
(State or Other Jurisdiction of Incorporation)			(Commission File Number)	(IRS Employer Identification No.)
390 RXR Plaza
Uniondale, New York				11556
(Address of Principal Executive Offices)				(Zip Code)

Registrant’s Telephone Number, Including Area Code: 516 535-0015

N/A

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.001 par value per share		ACR		New York Stock Exchange
8.625% Fixed-to-Floating Series C Cumulative Redeemable Preferred Stock		ACRPrC		New York Stock Exchange
7.875% Series D Cumulative Redeemable Preferred Stock		ACRPrD		New York Stock Exchange

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 1.01 Entry into a Material Definitive Agreement.

On September 12, 2025, ACRES Commercial Realty Corp. (the “Company”) entered into guaranties related to a $62 million construction loan and an $11 million bridge loan made to a borrower that is held by a joint venture in which the Company has a 90% membership interest. Pursuant to the Guaranty of Completion, executed September 12, 2025, by Adam Friedberg, Anthony Hrusovsky, Peter Koch and the Company (collectively, the “Guarantors”) for the benefit of DL RCF I Loan Holdings, LLC and DL RCF I Loan Holdings (Evergreen), LLC (collectively, the “Lender”), the Guarantors guarantee to the Lender, the Borrower’s obligation to commence, construct, develop and complete the construction project in a good and workmanlike manner in accordance with the terms and conditions of the Loan Agreement, dated September 12, 2005 by and among the Borrower, DL RCF I Loan Holdings, LLC (the “Agent”) and the Lender (the “Loan Agreement”) and to perform all other work contemplated or required to be completed pursuant to the loan documentation through final completion.

On September 12, 2025, the Guarantors also entered into a Guaranty of Retail Space to guarantee the payment and performance of all of the obligations for the payment of debt and the performance of the obligations under the Loan Agreement and a Guaranty of Recourse Obligations to guarantee the payment and performance of the certain liabilities (“bad boy”) and payment obligations set forth in the Loan Agreement and agree to be liable for the guaranteed obligations as a primary obligor. Also on September 12, 2025, the Guarantors entered into the Guaranty of Interest and Carry Costs to guarantee the payment and performance of the Borrower’s obligation to timely pay all Carry Costs and Debt Service and its obligation to make deposits into the Carry Cost Account (each as defined in the agreement) in accordance with the Loan Agreement, and all interest due to the Bridge Lender and/or preferred return due to HTC Investor pursuant to the Master Tenant Operating Agreement. The Guarantors also unconditionally covenant and agree to be liable for these guaranteed obligations as a primary obligor. Additionally, the Guarantors with the Borrower also entered into an Environmental Indemnity Agreement jointly and severally in favor of the Lender and Agent whereby the Guarantors serving as Indemnitors provided environmental representations and warranties, covenants and indemnification.

In connection with the $10.9 million bridge loan from Hoyne Savings Bank (“Bridge Lender”) to Borrower, the Company entered into the Repayment and Completion Guaranty on September 25, 2025, in favor of Bridge Lender subject to the Bridge Loan Agreement between Borrower and Bridge Lender (the “Bridge Loan Agreement”) to guarantee the prompt payment of all indebtedness under the Bridge Loan Agreement and the prompt performance of all other covenants, obligations and agreements of Borrower under the Bridge Loan Agreement, including but not limited to, construction of the improvements and completion before the completion date and material compliance with all environmental covenants and indemnities set forth in the Bridge Loan Agreement.

The foregoing description of the Guaranty of Completion, the Guaranty of Retail Space, the Guaranty of Recourse Obligations, the Environmental Indemnity Agreement and the Repayment and Completion Guaranty are only summaries, do not purport to be complete and are qualified in their entirety by reference to the full text of such agreements, which are filed as Exhibits 10.1, 10.2, 10.3, 10.4, 10.5 and 10.6 hereto and are incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.		Description
10.1		Guaranty of Completion, executed September 12, 2025 by Adam Friedberg, Anthony Hrusovsky, Peter Koch and ACRES Commercial Realty Corp. for the benefit of DL RCF I Loan Holdings, LLC
10.2		Guaranty of Retail Space, executed September 12, 2025 by Adam Friedberg, Anthony Hrusovsky, Peter Koch and ACRES Commercial Realty Corp. for the benefit of DL RCF I Loan Holdings, LLC
10.3		Guaranty of Recourse Obligations, executed September 12, 2025 by Adam Friedberg, Anthony Hrusovsky, Peter Koch and ACRES Commercial Realty Corp. for the benefit of DL RCF I Loan Holdings, LLC
10.4		Guaranty of Interest and Carry Costs, executed September 12, 2025 by Adam Friedberg, Anthony Hrusovsky, Peter Koch and ACRES Commercial Realty Corp. for the benefit of DL RCF I Loan Holdings, LLC
10.5		Environmental Indemnity Agreement, dated September 12, 2025 by 65 E. Wacker Holdings II, LLC, Adam Friedberg, Anthony Hrusovsky, Peter Koch and ACRES Commercial Realty Corp. in favor of DL RCF I Loan Holdings, LLC
10.6		Repayment and Completion Guaranty, dated September 12, 2025 by ACRES Commercial Realty Corp. in favor of Hoyne Savings Bank

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.

			ACRES COMMERCIAL REALTY CORP.
Date:	September 18, 2025	By:	/s/ Eldron Blackwell
			Eldron Blackwell Senior Vice President and Chief Financial Officer

FAQ

What did ACRES Commercial Realty Corp. (ACR) disclose in this 8-K?

ACRES Commercial Realty Corp. disclosed that it entered into multiple guaranty and indemnity agreements related to a joint venture construction project, including guarantees of a $62 million construction loan, a related bridge loan, and associated completion, recourse, carry cost and environmental obligations.

How large is the construction loan ACRES Commercial Realty is guaranteeing?

The company, together with other guarantors, agreed to guarantee a $62 million construction loan made to a borrower that is held by a joint venture in which ACRES Commercial Realty Corp. has a 90% membership interest.

What types of obligations are covered by ACRES Commercial Realty’s guaranties?

The guaranties cover the borrower’s obligations to commence and complete construction, pay debt and interest, satisfy certain recourse or “bad boy” liabilities, pay carry costs and debt service, fund a carry cost account, and comply with environmental covenants and indemnities under the loan and bridge loan agreements.

What is ACRES Commercial Realty’s interest in the joint venture borrower?

The borrower is held by a joint venture in which ACRES Commercial Realty Corp. has a 90% membership interest, aligning the company’s guarantees with a majority economic interest in the project.

Does ACRES Commercial Realty have environmental responsibilities under these agreements?

Yes. The guarantors, including ACRES Commercial Realty Corp., entered into an Environmental Indemnity Agreement providing environmental representations and warranties, covenants and indemnification in favor of the lender and agent, and environmental compliance is also addressed in the bridge loan related guaranty.

Which lender is involved in the bridge loan guaranteed by ACRES Commercial Realty?

The bridge loan guaranteed by ACRES Commercial Realty Corp. in the Repayment and Completion Guaranty is in favor of Hoyne Savings Bank, as described in connection with the Bridge Loan Agreement between the borrower and Hoyne Savings Bank.