ACRES Cuts Repo Interest-Coverage Covenant After Merger Costs Crush Q3

ACRES Commercial Realty Corp. (NYSE: ACR) is a commercial mortgage REIT that originates and manages floating-rate bridge loans, primarily on multifamily properties in the U.S. middle market. The company completed a significant structural change on August 6, 2026, when it acquired its external manager, ACRES Capital LLC, in an all-stock transaction and became internally managed. The deal required issuing approximately 7.5 million shares, nearly doubling the common share count, with the management team and employees collectively owning roughly 45% of the company upon closing.

Heading into the internalization, the balance sheet carried meaningful leverage. In connection with the transaction, ACRES refinanced its maturing $150 million of 5.75% senior unsecured notes with $200 million of new 8.625% senior secured notes due 2031, adding incremental interest cost and pledging capital stock and securitization residuals as collateral. The company also assumed an $185 million term loan facility at a fixed rate of 8.749% maturing in 2033. At September 30, 2026, total borrowings stood at approximately $1.98 billion against total equity of $1.19 billion.

The loan portfolio itself remained largely stable: 96% of the $2.1 billion CRE loan portfolio at par was current on payments at September 30, 2026, with 86% of loans rated 1 through 3 on the company's internal scale. Total liquidity was $96.2 million at quarter-end, up from $82.7 million at June 30, 2026.