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1. Company Snapshot

1.a. Company Description

ACRES Commercial Realty Corp., a real estate investment trust (REIT), focuses on the origination, holding, and management of commercial real estate mortgage loans and other commercial real estate-related debt investments in the United States.It invests in commercial real estate-related assets, including floating and fixed rate first mortgage loans, first priority interests in first mortgage loans, subordinated interests in first mortgage loans, mezzanine debt, preferred equity investments, commercial mortgage-backed securities, and commercial real estate equity and preferred equity investments.The company qualifies as a real estate investment trust for federal income tax purposes.


It generally would not be subject to federal corporate income tax to the extent that it distributes 100% of its REIT taxable income.The company was formerly known as Exantas Capital Corp.and changed its name to ACRES Commercial Realty Corp.


in February 2021.ACRES Commercial Realty Corp.was incorporated in 2005 and is based in Uniondale, New York.

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1.b. Last Insights on ACR

Recent positive drivers behind ACRES Commercial Realty Corp's performance include: * Strong Q1 2025 earnings release, with the company reporting a solid quarter and reaffirming its financial guidance. * Authorization of an additional $10 million share repurchase program, which is a positive event for shareholders as it reduces the number of outstanding shares and can potentially increase earnings per share. * Declaration of quarterly cash dividends for its preferred stock, indicating a commitment to returns for preferred shareholders. * The company's cash, cash equivalents, and marketable securities of $164.8 million as of March 31, 2025, provides a strong financial position and is expected to fund operations into the second quarter of 2027.

1.c. Company Highlights

2. ACRES Commercial Realty Corp. Delivers Strong Q4 2025 Despite GAAP Net Loss

ACRES Commercial Realty Corp. reported a GAAP net loss allocable to common shares of $3 million, or $0.43 per share, and an EAD loss of $0.48 per share, which included a $4.7 million charge-off on a mezzanine loan. The actual EPS came out at -$0.48 relative to estimates at -$0.01, indicating a significant deviation. Revenue growth for the next year is estimated to be -25.5%. The company's book value per share stood at $30.01, up from $29.63 in the third quarter.

Publication Date: Mar -08

📋 Highlights
  • New Loan Commitments:: $571 million in new loan commitments, driving a $443.8 million net increase in the loan portfolio.
  • Securitization Execution:: Closed $1 billion CRE securitization (ACRES 2026-FL4) with a 1.68% weighted average debt spread.
  • Portfolio Risk Reduction:: Commercial loan portfolio risk rating improved to 2.7 from 3.0 in Q3, across 53 investments totaling $1.8 billion.
  • Share Repurchase Value:: Repurchased 493,000 shares at a 33% discount to book value, which rose to $30.01 from $29.63 in Q3.

Loan Portfolio and Securitization

The commercial real estate loan portfolio stood at $1.8 billion across 53 individual investments, with a weighted average risk rating of 2.7, down from 3.0 in the third quarter. The company closed a $1 billion CRE securitization in January, ACRES 2026-FL4, with a weighted average debt spread of 1.68%. New loan commitments reached $571 million, resulting in a net increase to the loan portfolio of $443.8 million.

Valuation and Leverage

The company's debt-to-equity leverage ratio increased to 2.8x, with management indicating comfort with a leverage level of up to four turns on total capital. The current Price-to-Book Ratio stands at 0.31, suggesting the stock may be undervalued. The ROE is at 4.99%, and the ROIC is 4.73%. The Net Debt / EBITDA ratio is 13.21, indicating a relatively high level of debt.

Share Repurchase and Liquidity

The company repurchased 493,000 common shares at a 33% discount to book value, demonstrating a commitment to returning value to shareholders. Liquidity stood at $108 million, providing a cushion for future investments. Management expects to grow the portfolio by $500 million to $700 million in 2026, with a continued focus on executing its business strategy and growing earnings for shareholders.

Management's Outlook

As Andrew Dodd Fentress stated, "We are inside our comfort level of four turns of leverage on total capital. I don't think you will see us go above that." This indicates a cautious approach to leverage, which may help mitigate potential risks in the portfolio. The expected growth in the loan portfolio and the focus on executing the business strategy are positive indicators for future performance.

3. NewsRoom

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AGNC Investment (NASDAQ:AGNCZ) versus ACRES Commercial Realty (NYSE:ACR) Financial Review

Mar -08

Source: defenseworld.net

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ACRES Commercial Realty Corp. (ACR) Q4 2025 Earnings Call Transcript

Mar -05

Source: seekingalpha.com

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ACRES COMMERCIAL REALTY CORP. REPORTS RESULTS FOR FOURTH QUARTER 2025 AND YEAR ENDED DECEMBER 31, 2025

Mar -04

Source: prnewswire.com

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ACR Alpine Capital Research Buys 1 Million Shares of Arrow Electronics Stock

Feb -25

Source: fool.com

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ACRES Commercial Realty (NYSE:ACR) versus KKR Real Estate Finance Trust (NYSE:KREF) Head-To-Head Contrast

Feb -22

Source: defenseworld.net

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ACRES Commercial Realty Corp. to Report Results for Fourth Quarter 2025

Feb -18

Source: prnewswire.com

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ACRES Commercial Realty Corp. (NYSE:ACR) Given Consensus Rating of “Moderate Buy” by Analysts

Feb -08

Source: defenseworld.net

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Insider Selling: ACRES Commercial Realty (NYSE:ACR) Major Shareholder Sells $114,194.20 in Stock

Feb -02

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.00%)

6. Segments

Real Estate Investment Trust

Expected Growth: 6.0%

ACRES Commercial Realty Corp.'s 6.0% growth is driven by increasing demand for commercial properties, strategic acquisitions, and strong property management. Additionally, the REIT's diversified portfolio across multiple markets and property types, such as office, retail, and industrial, provides a stable source of income. Furthermore, the company's focus on value-add opportunities and redevelopment projects contributes to its growth momentum.

7. Detailed Products

Office Spaces

ACRES Commercial Realty Corp. offers a wide range of office spaces for lease or sale, catering to various business needs and sizes.

Industrial Properties

The company provides industrial properties for lease or sale, suitable for manufacturing, logistics, and distribution purposes.

Retail Spaces

ACRES Commercial Realty Corp. offers retail spaces for lease or sale, perfect for restaurants, cafes, shops, and other retail businesses.

Land Development

The company provides land development services, helping clients acquire and develop land for commercial use.

Property Management

ACRES Commercial Realty Corp. offers property management services, including leasing, maintenance, and financial management.

Investment Sales

The company provides investment sales services, helping clients buy and sell commercial properties.

Leasing Services

ACRES Commercial Realty Corp. offers leasing services, helping clients find the right commercial space for their business needs.

8. ACRES Commercial Realty Corp.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for ACRES Commercial Realty Corp. is moderate due to the availability of alternative commercial real estate services.

Bargaining Power Of Customers

The bargaining power of customers is low due to the specialized nature of commercial real estate services offered by ACRES Commercial Realty Corp.

Bargaining Power Of Suppliers

The bargaining power of suppliers is moderate due to the availability of multiple suppliers for commercial real estate services.

Threat Of New Entrants

The threat of new entrants is high due to the relatively low barriers to entry in the commercial real estate industry.

Intensity Of Rivalry

The intensity of rivalry is high due to the competitive nature of the commercial real estate industry and the presence of multiple established players.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 80.64%
Debt Cost 7.64%
Equity Weight 19.36%
Equity Cost 13.85%
WACC 8.84%
Leverage 416.52%

11. Quality Control: ACRES Commercial Realty Corp. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Ladder Capital

A-Score: 6.6/10

Value: 5.8

Growth: 4.2

Quality: 5.4

Yield: 10.0

Momentum: 4.5

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
Two Harbors Investment

A-Score: 6.2/10

Value: 8.8

Growth: 3.4

Quality: 4.0

Yield: 10.0

Momentum: 3.5

Volatility: 7.3

1-Year Total Return ->

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Stock-Card
Redwood Trust

A-Score: 5.9/10

Value: 6.8

Growth: 3.9

Quality: 4.4

Yield: 10.0

Momentum: 3.0

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
Ellington Residential Mortgage REIT

A-Score: 5.7/10

Value: 3.9

Growth: 3.0

Quality: 4.8

Yield: 10.0

Momentum: 3.5

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
Ready Capital

A-Score: 5.2/10

Value: 7.6

Growth: 5.4

Quality: 2.8

Yield: 10.0

Momentum: 0.5

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
ACRES Commercial Realty

A-Score: 4.9/10

Value: 7.3

Growth: 4.1

Quality: 3.1

Yield: 0.0

Momentum: 8.0

Volatility: 7.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

19.14$

Current Price

19.14$

Potential

-0.00%

Expected Cash-Flows