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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 Q3 2025 Earnings

ACRES Commercial Realty Corp.'s financial performance in the third quarter of 2025 was robust, with GAAP net income allocable to common shares reaching $9.8 million or $1.34 per share diluted. Earnings available for distribution (EAD) for the quarter was $1.01 per share, significantly surpassing the estimated $0.21 per share. The company's GAAP book value per share stood at $29.63 on September 30, up from $27.93 on June 30. The earnings beat was a notable achievement, reflecting the company's effective execution of its business strategy.

Publication Date: Nov -24

📋 Highlights
  • Loan Portfolio Reduction:: Net decrease of $46.8M due to $106.4M in new loans offset by $153.2M in payoffs/sales, ending at $1.4B.
  • Capital Gain from Sale:: Generated $13.1M gross capital gain from selling one real estate investment, leveraging capital loss carryforward.
  • Earnings Available for Distribution (EAD):: Surged to $1.01/share (Q3 2025) from $0.04/share (Q2 2025).
  • Share Repurchases:: Repurchased 153K shares for $2.9M at 36% discount to book value, with $2.5M remaining in buyback program.
  • Book Value Progress:: GAAP book value rose to $29.63/share, nearing $30/share target, with only 3 properties left to sell.

Portfolio Performance

The company's commercial real estate loan portfolio stood at $1.4 billion across 46 individual investments, with a weighted average spread of 3.63% over 1-month term SOFR rates. During the quarter, ACRES funded new loan commitments of $106.4 million, while loan payoffs, sales, and paydowns totaled $153.2 million, resulting in a net decrease to the loan portfolio of $46.8 million. The sale of one of its real estate investments generated a gross capital gain of $13.1 million, aligning with the company's strategic plan to utilize its capital loss carryforward.

Capital Management and Liquidity

ACRES used $2.9 million to repurchase 153,000 common shares at an approximate 36% discount to book value during the quarter. The company had approximately $2.5 million remaining on its Board-approved share repurchase program at quarter-end. Its available liquidity stood at $64 million, comprising $41 million of unrestricted cash and $23 million of projected financing available on unlevered assets. Management's efforts to optimize capital management are evident in these actions.

Valuation and Outlook

With a Price-to-Book Ratio (P/B) of 0.35, the stock appears undervalued relative to its book value. The company's net operating loss carryforward was $32.1 million or approximately $4.55 per share, providing a potential future benefit. Management targets a book value of around $30 per share and is close to achieving this objective. Analysts estimate next year's revenue growth at 0.4%, but the company's current trajectory suggests potential for further upside. The significant earnings beat in the current quarter indicates a positive momentum that could continue into the next year.

Dividend Initiation

The company is poised to consider initiating a dividend once it reaches its book value objectives and completes the monetization of its assets. With only three properties remaining to be sold, management is nearing its target book value of $30 per share. The initiation of a dividend would likely be a positive catalyst for the stock, potentially attracting income-focused investors and further supporting the share price.

3. NewsRoom

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ACR Poker's Dual Venom PKO Tournaments Deliver Knockout Success, Smashing Guaranteed Prize Pools to Award $7.8 million to Players

Nov -04

Source: prnewswire.com

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ACRES Commercial Realty Corp. (ACR) Q3 2025 Earnings Call Transcript

Oct -30

Source: seekingalpha.com

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ACRES Commercial Realty Corp. Reauthorizes an Additional $7.5 Million Share Repurchase Program

Oct -29

Source: prnewswire.com

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ACRES COMMERCIAL REALTY CORP. REPORTS RESULTS FOR THIRD QUARTER 2025

Oct -29

Source: prnewswire.com

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Anaptys Announces New Positive Phase 2b Trial Results for Rosnilimab in Rheumatoid Arthritis at ACR Late-Breaking Oral Presentation

Oct -29

Source: globenewswire.com

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Enlivex Therapeutics to Present Phase IIa 3-month Data of Allocetra in Patients with Moderate-to-Severe Knee Osteoarthritis at the ACR Convergence 2025

Oct -28

Source: globenewswire.com

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Tonix Pharmaceuticals Presented Data on Tonmya™ (Cyclobenzaprine HCl Sublingual Tablets) at the 2025 American College of Rheumatology (ACR) Convergence

Oct -27

Source: globenewswire.com

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Cabaletta Bio Presents Positive Clinical Data and Development Updates for Rese-cel at ACR Convergence 2025

Oct -27

Source: globenewswire.com

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: 6.1

Growth: 4.6

Quality: 5.5

Yield: 10.0

Momentum: 4.0

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
Two Harbors Investment

A-Score: 6.6/10

Value: 9.2

Growth: 4.2

Quality: 6.6

Yield: 10.0

Momentum: 2.0

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
Redwood Trust

A-Score: 6.0/10

Value: 6.8

Growth: 4.0

Quality: 6.0

Yield: 10.0

Momentum: 2.0

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
Ellington Residential Mortgage REIT

A-Score: 5.7/10

Value: 4.5

Growth: 2.8

Quality: 5.2

Yield: 10.0

Momentum: 2.5

Volatility: 9.3

1-Year Total Return ->

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Stock-Card
Ready Capital

A-Score: 5.2/10

Value: 7.4

Growth: 5.4

Quality: 2.9

Yield: 10.0

Momentum: 0.5

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
ACRES Commercial Realty

A-Score: 4.7/10

Value: 6.6

Growth: 4.1

Quality: 3.1

Yield: 0.0

Momentum: 7.5

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

23.52$

Current Price

23.52$

Potential

-0.00%

Expected Cash-Flows