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1. Company Snapshot

1.a. Company Description

Chicago Atlantic Real Estate Finance, Inc.operates as a commercial real estate finance company in the United States.It originates, structures, and invests in first mortgage loans and alternative structured financings secured by commercial real estate properties.


The company offers senior loans to state-licensed operators and property owners in the cannabis industry.It has elected to be taxed as a real estate investment trust (REIT) and would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders.The company was incorporated in 2021 and is based in Chicago, Illinois.

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1.b. Last Insights on REFI

Chicago Atlantic Real Estate Finance, Inc. faces negative drivers, including intensifying competition in the cannabis REIT sector. Despite Q2 earnings beating estimates, with EPS of $0.51 per share, exceeding the Zacks Consensus Estimate of $0.45, regulatory momentum and federal reform discussions may impact the company's growth. Additionally, the recent addition to the Zacks Rank #5 (Strong Sell) List on September 11, 2025, raises concerns. Sector volatility and potential shifts in cannabis rescheduling may influence tenant strength and stability.

1.c. Company Highlights

2. Chicago Atlantic Real Estate Finance Posts Steady Q3 Earnings

Chicago Atlantic Real Estate Finance reported net interest income of $13.7 million for the third quarter, a 5.1% decrease from $14.4 million in the second quarter. Earnings per share (EPS) came in at $0.49, beating analyst estimates of $0.46. The company's loan portfolio principal totaled approximately $400 million across 26 portfolio companies as of September 30. The weighted average yield to maturity stood at 16.5%, with 36.7% fixed rate loans and 63.3% floating rate loans.

Publication Date: Nov -12

📋 Highlights
  • Pipeline Growth: $441 million in potential loans and investments, diversified across growth, maturities, M&A, and ESOP sales.
  • Loan Portfolio Composition: $400 million in principal, 36.7% fixed-rate loans (16.5% weighted average yield to maturity) and 63.3% floating-rate loans.
  • Net Interest Income Decline: Q3 net interest income dropped 5.1% to $13.7 million compared to Q2's $14.4 million.
  • Dividend Payout Ratio: Maintains 90%-100% payout ratio based on basic distributable earnings per share for 2025.

Loan Portfolio Performance

The company's gross originations during the quarter were $39.5 million, offset by unscheduled principal repayments of $62.7 million. David Kite, Chief Operating Officer, highlighted that the portfolio's composition is well-diversified, with only 14% exposed to further rate decline. The company's disciplined approach to lending has enabled it to maintain a strong portfolio, insulated from cannabis equity and interest rate volatility.

Pipeline and Growth Prospects

The pipeline of potential loans and other investments stands at approximately $441 million, with ESOPs continuing to form a large part of the pipeline. Peter Sack, Co-Chief Executive Officer, noted that the company is on pace to hit its goal of net growth in the loan portfolio. Analysts estimate next year's revenue growth at 3.5%, indicating a steady outlook for the company.

Valuation and Dividend Yield

With a Price-to-Sales Ratio of 6.06 and a Dividend Yield of 15.92%, Chicago Atlantic Real Estate Finance appears to be attractively valued. The company's Return on Equity (ROE) stands at 5.78%, indicating a relatively stable return profile. The dividend payout ratio is expected to be between 90% to 100% for the 2025 tax year, making it an attractive income-generating investment.

Operational Highlights

Chicago Atlantic continues to focus on its core strengths in the cannabis industry, leveraging its expertise to drive outsized returns for investors. The company's approach to underwriting focuses on limited license jurisdictions, operators with diverse earnings streams, and conservative leverage levels. The company's partnership with borrowers, such as Verano, demonstrates its commitment to building long-term relationships and supporting growth initiatives.

3. NewsRoom

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Cannabis REITs to Watch This December

Dec -06

Source: marijuanastocks.com

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3 Top Marijuana Stocks To Watch In Today's Stock Market

Nov -28

Source: marijuanastocks.com

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Three Leading Ancillary Cannabis Stocks Poised for Growth in November 2025

Nov -20

Source: marijuanastocks.com

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Dividend Power Dogs: 12 Ideal Safer November Stars

Nov -16

Source: seekingalpha.com

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3 Top Marijuana Stocks For Better Investing And Larger Profits In 2026

Nov -07

Source: marijuanastocks.com

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Chicago Atlantic Real Estate Finance, Inc. (REFI) Q3 2025 Earnings Call Transcript

Nov -04

Source: seekingalpha.com

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Chicago Atlantic Real Estate Finance, Inc. (REFI) Tops Q3 Earnings and Revenue Estimates

Nov -04

Source: zacks.com

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Dividend Power Dogs: 13 Ideal Safer October Stars

Oct -21

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.00%)

6. Segments

Real Estate Investment Trust

Expected Growth: 5.0%

Chicago Atlantic Real Estate Finance, Inc.'s 5.0% growth is driven by increasing demand for industrial and logistics properties, strategic acquisitions, and a strong pipeline of investments in high-growth markets. Additionally, the company's diversified portfolio and experienced management team contribute to its growth momentum.

7. Detailed Products

Bridge Loans

Short-term, interest-only loans for real estate investors and developers to acquire, renovate, or reposition properties

Construction Loans

Loans for real estate developers and builders to finance ground-up construction, renovation, or redevelopment projects

Permanent Loans

Long-term, fixed-rate loans for stabilized properties, providing permanent financing for income-producing assets

Mezzanine Loans

Subordinated debt financing for real estate developers and investors, providing additional leverage for projects

Preferred Equity

Subordinated equity investments for real estate developers and investors, providing additional capital for projects

8. Chicago Atlantic Real Estate Finance, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Chicago Atlantic Real Estate Finance, Inc. is medium due to the presence of alternative financing options for real estate investors.

Bargaining Power Of Customers

The bargaining power of customers for Chicago Atlantic Real Estate Finance, Inc. is low due to the company's specialized financing options and expertise in the real estate industry.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Chicago Atlantic Real Estate Finance, Inc. is medium due to the presence of multiple suppliers of capital and the company's ability to negotiate favorable terms.

Threat Of New Entrants

The threat of new entrants for Chicago Atlantic Real Estate Finance, Inc. is high due to the relatively low barriers to entry in the real estate finance industry and the potential for new competitors to emerge.

Intensity Of Rivalry

The intensity of rivalry for Chicago Atlantic Real Estate Finance, Inc. is high due to the competitive nature of the real estate finance 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 19.54%
Debt Cost 5.25%
Equity Weight 80.46%
Equity Cost 5.25%
WACC 5.25%
Leverage 24.28%

11. Quality Control: Chicago Atlantic Real Estate Finance, Inc. passed 5 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

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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

12.75$

Current Price

12.75$

Potential

-0.00%

Expected Cash-Flows