ACRES Commercial Realty Corp. Reports $12.5 Million Net Loss for Q2 2026

ACRES Commercial Realty Corp. reported a net loss of $12.5 million, or $(1.87) per share, for the three months ended June 30, 2026, compared to a net loss of $732,000, or $(0.10) per share, for the same period in 2025. For the six months ended June 30, 2026, the company recorded a net loss of $13.5 million, or $(2.04) per share, compared to a net loss of $6.6 million, or $(0.90) per share, in the prior year. The increase in losses was attributed to higher operating expenses, including a $5.1 million charge related to merger and internalization costs, and a provision for credit losses of $716,000, reflecting a decline in macroeconomic conditions.

Total revenues for the second quarter of 2026 were $20.98 million, a slight decrease from $21.87 million in the same quarter of 2025. Interest income from commercial real estate (CRE) loans increased to $38.26 million from $28.50 million year-over-year, driven by a larger average loan portfolio. However, real estate income fell significantly, particularly from rental operations, which dropped to $1.62 million from $4.41 million, primarily due to the sale of a student housing property in September 2025.

The company’s total assets increased to $2.41 billion as of June 30, 2026, up from $2.16 billion at the end of 2025. This growth was largely due to an increase in CRE loans, which rose to $2.13 billion from $1.83 billion. The allowance for credit losses also increased to $21.11 million, representing 1.0% of the loan portfolio, reflecting ongoing economic uncertainties. The company’s leverage ratio, defined as borrowings to total equity, rose to 3.2 times from 2.8 times, indicating a higher reliance on debt financing.

Strategically, ACRES is transitioning from an externally-managed to an internally-managed REIT through a merger with ACRES Capital Corp., expected to close in the third quarter of 2026. This move aims to align management interests with shareholders and enhance financial performance by eliminating external management fees. The company originated nine new CRE loans during the first half of 2026, with total commitments of $495.6 million, while also managing existing loans to mitigate potential losses amid rising interest rates and economic volatility.

Looking ahead, ACRES anticipates continued challenges in the commercial real estate market, particularly in the office sector, which is experiencing high vacancy rates. The company plans to actively manage its liquidity and loan portfolio while exploring new capital opportunities to enhance returns. The successful completion of the merger is expected to further strengthen its operational capabilities and financial profile.