Earnings

ACRES Completes Manager Merger, Widens Third-Quarter Loss

The Tip Desk · November 11, 2026 · 3 min read

GAAP net loss allocable to common shares was $56.3 million, or $(5.16) a share-diluted, as the REIT became internally managed.

ACRES Commercial Realty Corp. (ACR) completed the acquisition of its manager on August 6, 2026, and became an internally managed commercial mortgage REIT, a structural break from the externally managed model it described in the two prior quarters.

GAAP net loss allocable to common shares was $56.3 million, or $(5.16) a share-diluted, for the quarter ended September 30, 2026, wider than the $12.5 million, or $(1.87) a share-diluted, loss in the second quarter and the $1.0 million, or $(0.16) a share-diluted, loss in the first quarter.

Chairman Andrew Fentress said the company now has three lines of business that management expects to drive results: Principal Investing, Investment Management and Insurance. He said employees and directors own over 45% of the common shares.

Earnings available for distribution, a non-GAAP measure, was $(2.64) a share-diluted. Book value was $16.81 a share at September 30, 2026. The internalization reduced GAAP book value per share by $8.62 from the transaction.

Net interest income was $12.8 million in the third quarter. GAAP leverage was 2.7 times. The CRE loan portfolio was $2.1 billion at par value.

The CRE loan portfolio stood at $2,147.3 million across 56 loans at September 30, 2026, versus 57 loans and $2,137.8 million at June 30, 2026. The company recorded $34.3 million of new loan production, $35.8 million of payoffs and paydowns and $11.0 million of future fundings. Multifamily was 80.9% of the portfolio by carrying value. Weighted average loan-to-value was 77.5%.

The CECL reserve rose to $29.4 million in the third quarter from $21.1 million in the second quarter. The reserve as a percentage of CRE loans at par was 1.37%, up from 0.88% in the first quarter. The company attributed the increase to a more conservative macroeconomic outlook, with portfolio risk ratings unchanged. Weighted average risk rating was 2.61 at September 30, 2026, versus 2.6 at June 30, 2026. Eighty-six percent of loans were risk rated 1 through 3. Ninety-six percent of the par value of the CRE loan portfolio was current on payments.

The portfolio was 97% floating-rate loans indexed to one-month term SOFR, with a weighted average floor of 2.33% and a weighted average benchmark rate of 3.77% at September 30, 2026. SOFR was 3.91% a year earlier.

Total liquidity was $96.2 million at September 30, 2026, after $82.7 million at June 30, 2026. Total tax assets were $122.7 million. Weighted average remaining maturity of borrowings was 10.5 years.

Investment Management assets under management were $2.5 billion, 100% third-party capital excluding the company’s investment in the Consolidated Fund. Principal Investing AUM was $2.3 billion. The company said it had originated $8.5 billion since 2014 and manages and services $4.8 billion of gross loan commitments and REO properties in a single strategy.

Management framed a $2–$3 EAD per share run-rate target and a 10–12% target net interest margin, with five drivers it listed as balance-sheet optimization, fee-paying AUM, origination fees, insurance revenue and cost savings from internalizing management. The company said the illustrative figures rest on assumptions stated on the slide, do not constitute guidance or a forecast, and may differ materially from actual results.