Sachem Capital Corp. Reports $7.2 Million Net Loss in Q1 2026

Sachem Capital Corp. reported a net loss of $7.2 million for the first quarter of 2026, compared to a net income of $0.9 million in the same period last year. This significant decline is attributed to a provision for credit losses of $5.4 million, which increased substantially from $1.1 million in the prior year, largely due to a $3.9 million non-cash loss related to a loan restructuring. The company’s interest income from loans rose to $8.8 million, an increase of 11% from $7.9 million in the previous year, while interest income from limited liability company investments fell sharply by 56% to $0.9 million.

Total assets increased to $473.3 million as of March 31, 2026, up from $460.0 million at the end of 2025. This growth was primarily driven by a $36.3 million increase in investments in developmental real estate, offset by a $22.5 million decrease in loans held for investment. The company’s liabilities also rose, totaling $307.7 million, a 7.9% increase from $285.1 million, mainly due to higher senior secured notes and lines of credit. Shareholders' equity decreased to $165.6 million from $174.9 million, reflecting the net loss and dividends paid during the quarter.

In terms of operational metrics, Sachem Capital held 108 loans for investment as of March 31, 2026, with a gross principal amount of $355.8 million. The weighted average contractual interest rate on these loans was 11.92%. The company reported a significant increase in non-performing loans, which totaled $75.4 million, compared to $117.6 million at the end of 2025. The allowance for credit losses increased to $12.4 million, representing 3.5% of the total loans held for investment.

Strategically, Sachem Capital is undergoing a transformation with a planned contribution agreement with Industrial Realty Group Global, LLC, which is expected to close by the end of 2026. This agreement involves a significant restructuring, including a 20-to-1 reverse stock split and a change in the company’s name to "IRG Realty Trust, Inc." The transaction aims to enhance the company’s asset base and operational focus, although it may lead to substantial dilution for existing shareholders. The company is also addressing a material weakness in its internal controls over financial reporting, which could impact its financial results if not remediated effectively.

Looking ahead, Sachem Capital anticipates that its current cash balances, along with available credit facilities and projected cash flows from operations, will be sufficient to meet its short-term obligations. However, the company acknowledges the risks associated with the upcoming maturities of its debt and the need for refinancing, which will depend on market conditions. The management remains focused on optimizing its capital structure and enhancing shareholder value through strategic initiatives and operational improvements.