ACRES Commercial Realty Corp. reported a net loss of $5.9 million, or $(0.80) per share, for the three months ended March 31, 2025, compared to a net income of $556,000, or $0.07 per share, for the same period in 2024. The company's total revenues decreased to $17.0 million from $18.8 million year-over-year, primarily due to a significant drop in interest income from commercial real estate (CRE) loans, which fell to $28.5 million from $41.9 million. This decline was attributed to a reduction in the total par value of the CRE portfolio resulting from loan payoffs and foreclosures, as well as a decrease in the benchmark interest rate.
In terms of operational metrics, ACRES reported a decrease in its total assets to $1.78 billion as of March 31, 2025, down from $1.88 billion at the end of 2024. The company's CRE loans decreased to $1.38 billion from $1.49 billion, with the allowance for credit losses also declining to $31.1 million from $32.8 million. The company recorded a reversal of expected credit losses of $1.7 million during the quarter, primarily due to loan payoffs and adjustments to macroeconomic factors.
Strategically, ACRES has been active in managing its portfolio and financing arrangements. In March 2025, the company entered into a master repurchase agreement with JPMorgan Chase Bank to finance existing CRE loans and the origination of new loans, with a maximum facility amount of $939.9 million. This facility includes a two-year reinvestment period, allowing the company to reinvest principal proceeds from asset repayments into qualifying assets. Additionally, the company exercised optional redemptions on its previous securitizations, ACR 2021-FL1 and ACR 2021-FL2, as part of its financing strategy.
Looking ahead, ACRES aims to leverage its net operating loss carryforwards of $32.1 million and net capital loss carryforwards of $121.9 million to enhance its investable base and selectively deploy capital into new loan originations. The company is focused on managing liquidity and navigating the current economic environment, which includes elevated interest rates and market volatility. The management remains cautious but optimistic about future opportunities, emphasizing the importance of maintaining a diversified CRE loan portfolio to mitigate risks associated with market fluctuations.
About ACRES Commercial Realty Corp.
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