Download PDF

1. Company Snapshot

1.a. Company Description

Arbor Realty Trust, Inc.invests in a diversified portfolio of structured finance assets in the multifamily, single-family rental, and commercial real estate markets in the United States.The company operates in two segments, Structured Business and Agency Business.


It primarily invests in bridge and mezzanine loans, including junior participating interests in first mortgages, and preferred and direct equity, as well as real estate-related joint ventures, real estate-related notes, and various mortgage-related securities.The company offers bridge financing products to borrowers who seek short-term capital to be used in an acquisition of property; financing by making preferred equity investments in entities that directly or indirectly own real property; mezzanine financing in the form of loans that are subordinate to a conventional first mortgage loan and senior to the borrower's equity in a transaction; junior participation financing in the form of a junior participating interest in the senior debt; and financing products to borrowers who are looking to acquire conventional, workforce, and affordable single-family housing.Further, it underwrites, originates, sells, and services multifamily mortgage loans through conduit/commercial mortgage-backed securities programs.


The company qualifies as a real estate investment trust for federal income tax purposes.It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders.Arbor Realty Trust, Inc.


was incorporated in 2003 and is headquartered in Uniondale, New York.

Show Full description

1.b. Last Insights on ABR

Arbor Realty Trust faces challenges due to distressed multifamily loans from 2021-2022, totaling $4.6 billion, nearing the end of their extensions. The company's Q3 earnings revealed a significant decline in net income, down 57% year-over-year, and rising credit loss provisions. Despite a 30% discount to book value, uncertainty around legacy asset resolutions warrants caution. The company's dividend yield stands at 12%, with coverage concerns rising amidst rent declines in key markets like Texas and Florida.

1.c. Company Highlights

2. Arbor Realty Trust's Q3 Earnings: A Deeper Dive into the Numbers

Arbor Realty Trust reported distributable earnings of $73 million or $0.35 per share in the third quarter, beating analyst estimates of $0.28 per share, with actual EPS coming in at $0.34. The company's Agency business originations were $2 billion, with loan sales also at $2 billion, generating $10 million more in gain on sale income. The balance sheet lending operation's investment portfolio grew to $11.7 billion, with an all-in yield of 7.27%. The company's interest income decreased by $22 million, mainly due to a $13 million reduction in interest income going forward and a $9 million impact from accelerated reversals of accrued interest on delinquencies.

Publication Date: Nov -10

📋 Highlights
  • Liquidity Boost from CLOs:: Generated $75 million from a $1 billion CLO issuance and $90 million from refinancing a legacy CLO, totaling $165 million in liquidity.
  • Asset Sales Income:: Realized $48 million gain on Lexford portfolio and $7.5 million from Homewood tax savings, contributing $55.5 million to distributable income.
  • Distributable Earnings:: Achieved $73 million or $0.35 per share in Q3, with $0.35/share temporarily reduced by $0.05–$0.06 due to delinquency reversals but expected to improve in 2026.
  • Delinquency Resolution Progress:: Addressing $750 million in delinquencies, planning to resolve $500 million within 45 days, with $122 million in new REO assets added in Q3.
  • Origination Growth:: Originated $2.4 billion in Q3 (Agency, bridge, SFR, construction) and expects $8.5–$9 billion for 2025, with NII recovery projected in H1 2026.

Revenue and Margin Analysis

The company's revenue growth is expected to be negative, with analysts estimating a -3.8% growth rate for next year. However, the company's efforts to resolve delinquencies and improve the interest income are expected to drive a flat to slightly higher portfolio in Q4. The company's net interest income (NII) is expected to improve drastically in the first and second quarters of next year, with the third quarter being the trough.

Valuation Metrics

Using the current valuation metrics, the company's P/E Ratio is 9.73, and the P/B Ratio is 0.6. The Dividend Yield is 15.82%, indicating an attractive return for investors. These metrics suggest that the company's stock is undervalued, with a low P/B Ratio and a high Dividend Yield. The company's ROE is 6.12%, which is relatively low, but the ROIC is 47.61%, indicating a strong return on invested capital.

Delinquencies and REO Assets

The company had $750 million in delinquencies at September 30, which they expect to resolve through reworking loans and taking back assets as REO. The company took back $122 million of new REO assets in Q3, bringing the REO book to $470 million. They expect to take back another $150 million of loans in Q4. The company's goal is to dispose of assets quickly to keep REO assets within the guided range of $400-600 million.

Outlook and Capital Allocation

The company is confident that the third quarter is the trough in NII and expects the run rate to improve drastically in the first and second quarters of next year. The company has a share buyback program and will evaluate the best use of its capital, with insiders continuing to buy stock as it trades below book value. With an optimistic outlook for the second half of next year, the company views buying back stock as an opportunity.

3. NewsRoom

Card image cap

Arbor Realty Trust Preferreds: The Bizarre Price Gap

Nov -20

Source: seekingalpha.com

Card image cap

The Dark Side Of REIT Investing

Nov -15

Source: seekingalpha.com

Card image cap

Winners And Losers Of REIT Earnings Season

Nov -14

Source: seekingalpha.com

Card image cap

Undercovered Dozen: Okta, Arbor Realty Trust, CVR Partners And More

Nov -07

Source: seekingalpha.com

Card image cap

Arbor Realty: Texas Rents Dip As 12% Dividend Yield Raise Cut Fears

Nov -05

Source: seekingalpha.com

Card image cap

Arbor Realty Trust: Explaining The 12% Dip

Nov -03

Source: seekingalpha.com

Card image cap

Arbor Realty Trust, Inc. (ABR) Q3 2025 Earnings Call Transcript

Oct -31

Source: seekingalpha.com

Card image cap

Arbor Realty Trust Reports Third Quarter 2025 Results and Declares Dividend of $0.30 per Share

Oct -31

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.43%)

6. Segments

Structured Business

Expected Growth: 7.43%

Arbor Realty Trust's Structured Business growth of 7.43% is driven by increasing demand for commercial mortgage-backed securities, expansion of the company's lending platform, and strategic partnerships. Additionally, the company's ability to originate and securitize high-quality loans, coupled with a favorable interest rate environment, has contributed to its growth momentum.

Agency

Expected Growth: 7.43%

Arbor Realty Trust, Inc.'s Agency segment growth of 7.43% is driven by increasing demand for government-sponsored enterprise (GSE) loans, expansion of the Federal Housing Administration (FHA) and Department of Veterans Affairs (VA) loan programs, and strategic partnerships with mortgage originators. Additionally, the company's efficient operations and technology investments have improved processing capabilities, further contributing to growth.

7. Detailed Products

Mortgage Loans

Arbor Realty Trust, Inc. offers a range of mortgage loan products, including Fannie Mae, Freddie Mac, and FHA/HUD loans, to multifamily and commercial property owners.

Bridge Loans

Arbor Realty Trust, Inc. provides bridge loans for short-term financing needs, offering flexible terms and quick closings.

Mezzanine Loans

Arbor Realty Trust, Inc. offers mezzanine loans, which combine debt and equity financing to provide additional capital for property owners.

CMBS Loans

Arbor Realty Trust, Inc. originates and services commercial mortgage-backed securities (CMBS) loans for commercial property owners.

Agency Loans

Arbor Realty Trust, Inc. offers Fannie Mae and Freddie Mac agency loans for multifamily and commercial properties.

Construction Loans

Arbor Realty Trust, Inc. provides construction loans for ground-up development projects, including multifamily, commercial, and mixed-use properties.

8. Arbor Realty Trust, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Arbor Realty Trust, Inc. operates in the mortgage banking industry, which has a moderate threat of substitutes. While there are alternative investment options available, the company's diversified portfolio and strong brand recognition help mitigate this threat.

Bargaining Power Of Customers

Arbor Realty Trust, Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's strong relationships with its customers and its ability to provide customized solutions help to mitigate this force.

Bargaining Power Of Suppliers

Arbor Realty Trust, Inc. relies on a network of suppliers to originate and service mortgage loans. While the company has some bargaining power due to its scale, suppliers still have some negotiating power, particularly in times of high demand.

Threat Of New Entrants

The mortgage banking industry has significant barriers to entry, including regulatory hurdles and the need for significant capital investments. This limits the threat of new entrants and allows Arbor Realty Trust, Inc. to maintain its competitive position.

Intensity Of Rivalry

The mortgage banking industry is highly competitive, with many established players competing for market share. Arbor Realty Trust, Inc. must continually innovate and improve its operations to maintain its competitive position.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 75.08%
Debt Cost 10.27%
Equity Weight 24.92%
Equity Cost 13.68%
WACC 11.12%
Leverage 301.32%

11. Quality Control: Arbor Realty Trust, Inc. passed 4 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
Starwood Property Trust

A-Score: 7.4/10

Value: 6.3

Growth: 6.1

Quality: 7.1

Yield: 10.0

Momentum: 5.0

Volatility: 9.7

1-Year Total Return ->

View Full Report
Stock-Card
Rithm Capital

A-Score: 6.8/10

Value: 6.6

Growth: 2.3

Quality: 6.0

Yield: 10.0

Momentum: 6.0

Volatility: 10.0

1-Year Total Return ->

View Full Report
Stock-Card
Annaly Capital Management

A-Score: 6.7/10

Value: 5.6

Growth: 3.8

Quality: 5.4

Yield: 10.0

Momentum: 6.0

Volatility: 9.7

1-Year Total Return ->

View Full Report
Stock-Card
Blackstone Mortgage Trust

A-Score: 6.4/10

Value: 2.7

Growth: 4.4

Quality: 7.2

Yield: 10.0

Momentum: 5.5

Volatility: 8.7

1-Year Total Return ->

View Full Report
Stock-Card
Arbor Realty Trust

A-Score: 5.9/10

Value: 7.0

Growth: 4.6

Quality: 5.9

Yield: 10.0

Momentum: 2.5

Volatility: 5.3

1-Year Total Return ->

View Full Report
Stock-Card
AGNC Investment

A-Score: 5.8/10

Value: 3.6

Growth: 3.2

Quality: 4.0

Yield: 9.0

Momentum: 5.0

Volatility: 10.0

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

8.85$

Current Price

8.85$

Potential

-0.00%

Expected Cash-Flows