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1. Company Snapshot

1.a. Company Description

The Loans segment originates conduit first mortgage loans that are secured by cash-flowing commercial real estate; and originates and invests in balance sheet first mortgage loans secured by commercial real estate properties that are undergoing transition, including lease-up, sell-out, and renovation or repositioning.It also invests in note purchase financings, subordinated debt, mezzanine debt, and other structured finance products related to commercial real estate.The Securities segment invests in commercial mortgage-backed securities and the U.S. Agency Securities.


This segment also invests in corporate bonds and equity securities.The Real Estate segment owns and invests in a portfolio of commercial and residential real estate properties, such as leased properties, office buildings, student housing portfolios, hotels, industrial buildings, shopping center, and condominium units.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.Ladder Capital Corp was founded in 2008 and is headquartered in New York, New York.

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1.b. Last Insights on LADR

Ladder Capital Corp's recent performance was negatively impacted by a miss in Q4 earnings, with distributable earnings per share (EPS) of $0.17, and a realized loan loss of $5.0 million related to a commercial loan in Oregon. The company's conservative underwriting and shrinking office exposure were notable, but its dividend coverage was affected. Additionally, QRG Capital Management Inc. lowered its holdings in Ladder Capital Corp by 24.9% during the third quarter. The company's CECL reserve declined 10% quarter-over-quarter, signaling improving portfolio quality.

1.c. Company Highlights

2. Ladder Capital Corp: A Strong Foundation for Growth

Ladder Capital Corp reported distributable earnings of $21.4 million or $0.17 per share in the fourth quarter, adjusting for a $5 million realized loan loss. For the full year, the company generated distributable earnings of $109.9 million, delivering a 7.1% return on equity. The actual EPS came out at $0.21, slightly below estimates of $0.23. The company's adjusted leverage ratio was 2.0 times, and it maintained robust liquidity of $608 million.

Publication Date: Mar -06

📋 Highlights
  • Investment-Grade Ratings: Achieved from Moody's and Fitch, the only commercial mortgage REIT with such ratings, enhancing capital access and reducing funding costs.
  • Distributable Earnings: $21.4M ($0.17/share) in Q4, $109.9M annually; 7.1% return on equity, adjusted leverage ratio of 2.0x, and $608M liquidity.
  • Portfolio Performance: Loan portfolio of $2.2B (7.8% yield) and securities of $2.1B (5.3% yield), with 99% of securities investment-grade rated.
  • 2026 Growth Strategy: Targeting $6B+ loan portfolio by year-end, with $1.2B in new loans originated in seven months, leveraging securities paydowns for funding.
  • Market Positioning: CEO emphasizes cautious underwriting, avoiding large cities and data centers, focusing on utility and bricks-and-mortar investments for stable returns.

Investment Portfolio Performance

Ladder's loan portfolio totaled $2.2 billion, representing 42% of total assets, with a weighted average yield of 7.8%. The company's securities portfolio totaled $2.1 billion, with a weighted average yield of 5.3%, and 99% of the portfolio was investment-grade rated. The real estate segment generated stable net operating income, with a portfolio of 149 net lease properties. As CEO Brian Harris stated, the company is well-positioned to take advantage of lending opportunities emerging in the commercial real estate market.

Growth Prospects and Strategy

In 2026, Ladder plans to focus on growing its loan portfolio and earnings. It has already originated $1.2 billion in new loans over the last seven months and expects to use the proceeds from paydowns in its securities book to fund its growing loan origination pipeline. Harris estimated a return on equity (ROE) of 9-10%, with the potential to go higher due to one-time gains from harvesting real estate investments. The loan portfolio is expected to grow to over $6 billion by year-end, with a focus on lower-leverage models.

Valuation and Outlook

With a Price-to-Book Ratio of 0.88 and a Dividend Yield of 8.87%, Ladder Capital Corp appears to be reasonably valued. Analysts estimate next year's revenue growth at 18.2%. The company's strong foundation, investment-grade ratings, and robust liquidity position it for growth. As Harris noted, the company is poised to take advantage of a reset in real estate prices and a favorable liquidity environment.

Competitive Advantage

Ladder's independence in underwriting decisions allows it to avoid problematic loans and maintain a stable book value compared to its peers. The company's focus on selective investments, particularly in real estate equity, and its caution when underwriting bridge loans, particularly in large cities with potential issues, are key strengths. With an average loan balance of around $25 million and a focus on more stable markets, Ladder is well-positioned to capitalize on opportunities in the commercial real estate market.

3. NewsRoom

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Buy The Dip: These 9-13% Yields Are Way Too Cheap

Mar -23

Source: seekingalpha.com

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Ladder Capital Corp Announces First Quarter 2026 Dividend to Holders of Class A Common Stock

Mar -13

Source: businesswire.com

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Buy These 9%-10% Yielding Cash Cows On The Dip

Mar -09

Source: seekingalpha.com

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Ladder Closes $675 Million in New Unsecured Capital Commitments, Including Expansion of Revolver Capacity to $1.25 Billion

Feb -23

Source: businesswire.com

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Ladder Capital: Don't Worry About The Dividend Shortfall

Feb -16

Source: seekingalpha.com

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Ladder Capital Corp (NYSE:LADR) Receives Consensus Recommendation of “Moderate Buy” from Brokerages

Feb -15

Source: defenseworld.net

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Ladder Capital: No Harm In Positioning Itself Conservatively

Feb -11

Source: seekingalpha.com

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New York State Common Retirement Fund Has $2.81 Million Holdings in Ladder Capital Corp $LADR

Feb -08

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.00%)

6. Segments

Loans

Expected Growth: 7%

Ladder Capital Corp's 7% loan growth is driven by increasing demand for commercial real estate financing, expansion into new markets, and a strong track record of originating high-quality loans. Additionally, the company's diversified lending platform, which includes first mortgage loans, mezzanine loans, and preferred equity investments, has contributed to its growth.

Real Estate

Expected Growth: 7%

Ladder Capital Corp's 7% growth in Real Estate is driven by increasing demand for commercial properties, low interest rates, and government incentives for real estate investments. Additionally, the company's diversified portfolio, strong property management, and strategic acquisitions have contributed to its growth. Furthermore, the growing trend of e-commerce and logistics has boosted demand for industrial and warehouse spaces, benefiting Ladder Capital Corp's Real Estate segment.

Corporate/Other

Expected Growth: 7%

Ladder Capital Corp's Corporate/Other segment growth of 7% is driven by increasing investment management fees, expansion of its commercial loan portfolio, and growing demand for its mortgage banking services. Additionally, the company's strategic acquisitions and partnerships have contributed to its growth, along with a favorable interest rate environment and a strong balance sheet.

Securities

Expected Growth: 7%

Ladder Capital Corp's 7% growth is driven by increasing demand for commercial real estate loans, expansion into new markets, and a strong track record of originating and securitizing loans. Additionally, the company's diversified portfolio and ability to adapt to changing market conditions have contributed to its growth.

7. Detailed Products

Commercial Mortgage Loans

Ladder Capital Corp provides commercial mortgage loans to borrowers for the acquisition, refinancing, or renovation of commercial properties.

Bridge Loans

Ladder Capital Corp offers bridge loans to borrowers who need short-term financing for commercial properties.

Construction Loans

Ladder Capital Corp provides construction loans to borrowers for the development of new commercial properties or the renovation of existing ones.

Mezzanine Financing

Ladder Capital Corp offers mezzanine financing to borrowers who need additional capital to complete a project or refinance existing debt.

Preferred Equity

Ladder Capital Corp provides preferred equity investments to borrowers who need additional capital without taking on more debt.

8. Ladder Capital Corp's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Ladder Capital Corp is moderate, as there are alternative investment options available to investors, but the company's diversified portfolio and strong brand recognition help to mitigate this threat.

Bargaining Power Of Customers

The bargaining power of customers is low for Ladder Capital Corp, as the company's products and services are highly specialized and customers have limited alternatives.

Bargaining Power Of Suppliers

The bargaining power of suppliers is moderate for Ladder Capital Corp, as the company relies on a diverse range of suppliers, but some suppliers may have significant bargaining power due to their size and importance.

Threat Of New Entrants

The threat of new entrants is high for Ladder Capital Corp, as the financial services industry is highly competitive and new entrants can easily enter the market with innovative products and services.

Intensity Of Rivalry

The intensity of rivalry is high for Ladder Capital Corp, as the company operates in a highly competitive industry with many established players, and the company must continually innovate and differentiate itself to maintain its market 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 69.17%
Debt Cost 8.04%
Equity Weight 30.83%
Equity Cost 13.66%
WACC 9.77%
Leverage 224.32%

11. Quality Control: Ladder Capital 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

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Ellington Financial

A-Score: 7.0/10

Value: 5.9

Growth: 2.4

Quality: 6.0

Yield: 10.0

Momentum: 7.5

Volatility: 10.0

1-Year Total Return ->

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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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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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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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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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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

9.93$

Current Price

9.94$

Potential

-0.00%

Expected Cash-Flows