Apollo Commercial Real Estate Finance, Inc.
For the period ended Jun 30, 2026. Filed Aug 10, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 10, 2026
ARI$2.32-3.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-04-28.
0001193125-26-187094
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-10.
0001193125-26-342628
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 143 previous paragraphs and 128 current paragraphs.
66 unchanged; 29 reworded; 32 added; 47 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 13 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (32)
Current report
As previously disclosed, following the Asset Sale, our management team, in consultation with our board of directors, evaluated a range of commercial real estate–related strategies designed to reposition ARI. In assessing potential new asset strategies, we leveraged Apollo's broader investment platform and origination capabilities. We also considered strategic M&A opportunities and explored available strategic alternatives, including dissolution. On June 15, 2026, we announced that, following an extensive review of potential strategic alternatives for ARI, our board of directors determined that our dissolution, the liquidation of our assets and the winding up of our business and affairs are advisable and in our best interests and the best interests of the ARI stockholders.
Current report
On July 14, 2026, we filed the Special Meeting Proxy with the SEC related to the Special Meeting, for the following purposes: (i) to consider and vote on the Dissolution Proposal; (ii) to consider and vote on the Executive Compensation Proposal; and (iii) to consider and vote on the Adjournment Proposal. If the Plan is approved by our Stockholders, we will adopt the liquidation basis of accounting which requires our assets to be recognized at the estimated amounts expected to be collected and liabilities to be recognized at the estimated amounts at which they are expected to be settled.
Current report
The Asset Sale
Current report
For the six months ended June 30, 2026 and 2025, our net income available to common stockholders was $45.9 million, or $0.27 per diluted share of common stock, and $40.6 million, or $0.28 per diluted share of common stock, respectively.
Current report
General and administrative expenses remained relatively consistent for the three months ended June 30, 2026 compared to the three months ended March 31, 2026.
Current report
Other Income, net
Current report
Other income increased by $6.9 million for the three months ended June 30, 2026 compared to the three months ended March 31, 2026. The increase was primarily due to an increase in bank interest earned on our cash balance, which was significantly higher during the three months ended June 30, 2026 due to cash received from the Asset Sale.
Current report
Net Realized Loss on Investments
Current report
During the three months ended June 30, 2026, we recorded a net realized loss on investments of $339.1 million. The net realized loss consisted of the following: i) a $335.0 million write-off of a previously recorded Specific CECL Allowance relating to loans that were included in the Asset Sale; ii) a $2.6 million net realized loss resulting from the discount on the Asset Sale compared to our loan’s cost basis; and iii) a $1.5 million write-off of a previously recorded Specific CECL Allowance upon the discounted repayment of the Chicago Hotel Loan. Refer to "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" for additional detail.
Current report
Loss on Extinguishment of Debt
Current report
During the three months ended June 30, 2026, we recorded a loss on extinguishment of debt of $30.7 million relating to the repayment of debt in connection with the Asset Sale. The loss represented unamortized fees and deferred financing costs associated with our secured debt arrangements, senior secured term loan, and senior secured notes. Refer to "Note 7 – Secured Debt Arrangements, Net", "Note 8 – Senior Secured Term Loans, Net", and "Note 9 – Senior Secured Notes, Net" for additional detail.
Current report
During the three months ended June 30, 2026, we wrote off $335.0 million of our Specific CECL Allowance in connection with the Asset Sale. The remaining $3.0 million of Specific CECL Allowance related to the Chicago Hotel Loan, which repaid at a discount during the three months ended June 30, 2026. Upon repayment, we reversed $1.5 million of the Specific CECL Allowance and wrote off the remaining $1.5 million. Comparatively, during the three months ended March 31, 2026, there was no change to our Specific CECL Allowance.
Current report
Net interest income decreased by $38.3 million during the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The net decrease was attributable to the sale of our commercial real estate loan portfolio on April 24, 2026, resulting in two fewer months of interest income recorded during the six months ended June 30, 2026 compared to the six months ended June 30, 2025. Refer to "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" for additional detail.
Current report
Management fees expense decreased by $5.2 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The decrease was primarily due to a reduction in the base management fee rate under the A&R Management Agreement entered into in connection with the Asset Sale and write-offs of previously recorded Specific CECL Allowances during the six months ended June 30, 2026 in connection with the Asset Sale. Refer to "Note 13 – Related Party Transactions" for additional information.
Current report
Other Income, net
Current report
Other income increased by $5.9 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was primarily due to an increase in bank interest earned on our cash balance, which was significantly higher during the six months ended June 30, 2026 due to cash received from the Asset Sale.
Current report
Loss from Equity Method Investments
Current report
We recognized a loss from equity method investments of $0.5 million during the six months ended June 30, 2026 compared to a loss of $1.4 million during the six months ended June 30, 2025. The decrease in the loss is primarily due to greater legal costs incurred by the joint venture in 2025 compared to 2026.
Current report
Net Realized Loss on Investments
Current report
During the six months ended June 30, 2026, we recorded a net realized loss on investments of $339.1 million. The net realized loss consisted of the following: i) a $335.0 million write-off of a previously recorded Specific CECL Allowance relating to loans that were included in the Asset Sale; ii) a $2.6 million net realized loss resulting from the discount on the Asset Sale compared to our loan’s cost basis; and iii) a $1.5 million write-off of a previously recorded Specific CECL Allowance upon the discounted repayment of the Chicago Hotel Loan. Refer to "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" for additional detail.
Current report
Loss on Extinguishment of Debt
Current report
During the six months ended June 30, 2026, we recorded a loss on extinguishment of debt of $30.7 million relating to the repayment of debt in connection with the Asset Sale. The loss represented unamortized fees and deferred financing costs associated with our secured debt arrangements, senior secured term loan, and senior secured notes. Refer to "Note 7 – Secured Debt Arrangements, Net", "Note 8 – Senior Secured Term Loans, Net", and "Note 9 – Senior Secured Notes, Net" for additional detail.
Current report
Valuation Allowance, Loans and Other Lending Assets Held for Sale
Current report
During the six months ended June 30, 2025, we recorded a fair value adjustment of $1.2 million on a promissory note classified as held for sale (representing the difference between the note's amortized cost and the note's fair value as of June 30, 2025). The promissory note was subsequently sold in July 2025 at a price of 97.0%, upon which we reversed the valuation allowance and recorded an equivalent realized loss.
Current report
Decrease in Specific CECL Allowance
Current report
During the six months ended June 30, 2026, we wrote off $335.0 million of our Specific CECL Allowance in connection with the Asset Sale. The remaining $3.0 million of Specific CECL Allowance related to the Chicago Hotel Loan, which repaid at a discount during the six months ended June 30, 2026. Upon repayment, we reversed $1.5 million of the Specific CECL Allowance and wrote off the remaining $1.5 million. There was no change to our Specific CECL Allowance during the six months ended June 30, 2025. Refer to "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" for additional detail.
Current report
During the three months ended June 30, 2026, we recorded a net realized loss on investments of $339.1 million in connection with the Asset Sale. The net realized loss consisted of the following: i) a $335.0 million write-off of a previously recorded Specific CECL Allowance relating to loans that were included in the Asset Sale; ii) a $2.6 million net realized loss resulting from the discount on the Asset Sale compared to our loan’s cost basis; and iii) a $1.5 million write-off of a previously recorded Specific CECL Allowance upon the discounted repayment of the Chicago Hotel Loan. Refer to "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" for additional detail.
Current report
We also recorded a realized loss on extinguishment of debt of $30.7 million during the three months ended June 30, 2026, relating to the repayment of debt in connection with the Asset Sale. The loss represented unamortized fees and deferred financing costs associated with our secured debt arrangements, senior secured term loan, and senior secured notes. Refer to "Note 7 – Secured Debt Arrangements, Net", "Note 8 – Senior Secured Term Loans, Net", and "Note 9 – Senior Secured Notes, Net" for additional detail.
Current report
On the Closing Date, we sold our commercial real estate loan portfolio (other than loans that were repaid prior to closing and the Chicago Hotel Loan which was repaid after the Closing Date). Accordingly, there were no outstanding loans as of June 30, 2026.
Current report
On June 15, 2026, our board of directors determined that our dissolution, the liquidation of our assets and the winding up of our business and affairs are advisable and in our best interests and the best interest of the ARI stockholders. On July 14, 2026, we filed the Special Meeting Proxy with the SEC. The vote on the matters set forth in the Special Meeting Proxy will materially impact our long-term capital needs and our plan to meet those needs.
Current report
On June 15, 2026, our board of directors declared a dividend of $3.75 per share of common stock, payable July 15, 2026 to stockholders of record as of June 30, 2026, a distribution that will be classified predominately as a return of capital rather than as a distribution of current or accumulated earnings and profits. This larger distribution reflects the board's determination, following its review of strategic alternatives, that returning of capital is in the best interests of the Company and our stockholders.
Current report
If our stockholders approve the Plan described in our Special Meeting Proxy, any distributions made following such approval are expected to be treated as liquidating distributions for U.S. federal income tax purposes, rather than as ordinary dividends. Liquidating distributions would generally be applied first against and reduce a stockholder's adjusted tax basis in its shares, with any amount in excess of basis treated as gain from the sale or exchange of such shares. Stockholders should refer to the Special Meeting Proxy, and any definitive proxy statement subsequently filed with the SEC, for a more complete description of the proposed Plan and its tax consequences, and should consult their own tax advisors regarding the treatment of any distributions received in connection therewith.
Removed paragraphs (47)
Previous report
General and administrative expenses decreased by $1.6 million for the three months ended March 31, 2026 compared to the three months ended December 31, 2025. The decrease was primarily attributable to lower amortization of RSUs in the current quarter compared to prior quarter. Additionally, there were higher costs associated with reimbursements to the Manager and legal expenses during the three months ended December 31, 2025.
Previous report
During the three months ended March 31, 2026, there was no change to our Specific CECL Allowance. Comparatively, during the three months ended December 31, 2025, our Specific CECL Allowance increased by $3.0 million related to a commercial mortgage loan secured by a hotel in Chicago, IL.
Previous report
Net interest income decreased by $3.4 million during the three months ended March 31, 2026 compared to the three months ended March 31, 2025. This decrease was primarily attributable to higher average debt balances as well as lower average index rates during the three months ended March 31, 2026, and modifications to several of our loans, resulting in spread decreases. The effects of lower interest rates were partially offset by a higher average loan balance during the three months ended March 31, 2026 compared to the three months ended March 31, 2025. Refer to "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" for additional detail.
Previous report
Management fees expense decreased by $0.4 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The decrease was primarily due to lower Stockholders' Equity (as defined in the Management Agreement) during the three months ended March 31, 2026.
Previous report
Refer to "Note 13 – Related Party Transactions" and "Note 16 – Commitments and Contingencies" for additional information.
Previous report
Loan Portfolio Details
Previous report
The following table sets forth certain information regarding our loan portfolio as of March 31, 2026 ($ in thousands):
Previous report
Weighted-Average Coupon and Weighted-Average All-in Yield are based on the applicable benchmark rates as of March 31, 2026 on the floating rate loans.
Previous report
Weighted-Average All-in Yield includes the amortization of deferred origination fees, loan origination costs and accrual of both extension and exit fees. Weighted-Average All-in Yield excludes the benefit of forward points on currency hedges relating to loans denominated in currencies other than USD.
Previous report
Gross of deferred financing costs of $10.9 million.
Previous report
Cost of funds includes weighted-average spread and applicable benchmark rates as of March 31, 2026 on secured debt arrangements.
Previous report
Represents loan portfolio at carrying value less secured debt outstanding.
Previous report
The following table provides additional details of our commercial mortgage loan portfolio and subordinate loan portfolio as of March 31, 2026 ($ in millions):
Previous report
Amortized cost for these loans is net of the recorded Specific CECL Allowance.
Previous report
Loans are secured by the same property.
Previous report
Includes portfolio of office, industrial, and retail property types.
Previous report
Total may not foot due to rounding.
Previous report
Our average asset and debt balances for the three months ended March 31, 2026 were ($ in thousands):
Previous report
Average month-end balances reflect principal and borrowings outstanding for assets and related debt, respectively.
Previous report
Portfolio Management
Previous report
Our portfolio benefits from our core investment strategy whereby we target assets that are secured by institutional quality real estate throughout the United States and Europe. As discussed in Item 1. "Business—Investment Strategy" in our most recent Annual Report on Form 10-K, the Manager has implemented underwriting standards which place a particular emphasis on due diligence of prospective investments' sponsors and borrowers, as well as assessment of the risk/return profile and appropriate structure of each investment opportunity. As of March 31, 2026, our portfolio's weighted-average origination LTV ratio was 59%, excluding risk-rated "5" loans. This reflects significant equity value which we believe our loan sponsors would be committed to protect during periods of volatility and market disruption.
Previous report
We maintain a strong relationship with our borrowers and actively manage the assets in our portfolio on an ongoing basis. A dedicated team of asset management professionals performs surveillance of all loans in our portfolio, on an individual basis, from closing through final repayment. This robust monitoring process includes continuous assessment of asset level performance against underwritten criteria, changes in borrowers' financial position, as well as the impact of macroeconomic trends and microeconomic developments on loan assets and respective underlying collateral performance.
Previous report
In addition to ongoing asset management, as further described in "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" to our condensed consolidated financial statements, we perform a quarterly review of our portfolio whereby each loan is assigned a risk rating of "1" through "5," from less risk to greater risk, respectively. This analysis includes assessment of loans based on a variety of factors, including, without limitation, LTV ratio, debt yield, property type, geographic and local market dynamics, physical condition, cash flow volatility, leasing and tenant profile, loan structure and exit plan, and project sponsorship. In performing the analysis with respect to each loan, these various factors are assessed holistically, with a focus on their interplay, whereby no single factor on its own (whether quantitative or qualitative) is given more weight in the assessment or is prescriptive as to which specific risk rating is assigned to a specific loan. We apply these various factors on a case-by-case basis depending on the facts and circumstances for each loan, and the different factors may be given different weightings in different situations. As of March 31, 2026, the weighted-average risk rating of the loan portfolio was 3.0.
Previous report
The following table presents the carrying value of our loans by internal risk rating as of March 31, 2026 ($ in thousands):
Previous report
Net of Specific CECL Allowance.
Previous report
$3.7 million of the General CECL Allowance for 2026 is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable, accrued expenses and other liabilities in our condensed consolidated balance sheets.
Previous report
At March 31, 2026, our debt-to-equity ratio was 4.3 and our portfolio was comprised of $8.8 billion of commercial mortgage loans and $0.1 billion of subordinate loans. In order to achieve our return on equity, we generally finance our mortgage loans with 2.0 to 3.0 turns of leverage and generally do not finance our subordinate loan portfolio given built-in inherent structural leverage. Consequently, depending on our portfolio mix, our debt-to-equity ratio may exceed our previously disclosed thresholds.
Previous report
We maintain policies relating to our use of leverage. See "Leverage Policies" above. In the future, we may seek to raise further equity or debt capital or engage in other forms of borrowings in order to fund future investments or to refinance expiring indebtedness.
Previous report
We generally intend to hold our assets for investment, although we may sell certain of our investments in order to manage our interest rate risk and liquidity needs, meet other operating objectives and adapt to market conditions.
Previous report
Borrowings Under Various Financing Arrangements
Previous report
The following table summarizes the outstanding balances and maturities for our various financing arrangements:
Previous report
Borrowings Outstanding represent principal balances as of the respective reporting periods.
Previous report
Maturity dates represent weighted-average maturities based on borrowings outstanding and assumes extensions at our option are exercised with consent of financing providers, where applicable.
Previous report
As of March 31, 2026, we had six secured credit counterparties through wholly-owned subsidiaries.
Previous report
As of March 31, 2026, we had £662.6 million, €339.2 million, and kr1.9 billion ($1.5 billion assuming conversion into USD as of March 31, 2026) of borrowings outstanding under the Barclays Private Securitization secured by certain of our commercial mortgage loans.
Previous report
As of March 31, 2026, we held one senior secured term loan, our 2030 Term Loan, which represents the refinancing of our 2026 and 2028 Term Loans that were outstanding as of December 31, 2024. Refer to "Note 8 – Senior Secured Term Loans, Net" for discussion of the refinance.
Previous report
Refer to "Note 7 – Secured Debt Arrangements, Net" of our condensed consolidated financial statements for additional disclosure regarding our secured credit facilities, Barclays Private Securitization, and revolving credit facility.
Previous report
Refer to "Note 8 – Senior Secured Term Loans, Net" and "Note 9 – Senior Secured Notes, Net" of our condensed consolidated financial statements for additional disclosure regarding our Senior Secured Term Loans and Senior Secured Notes, respectively.
Previous report
General CECL Allowance
Previous report
There are a number of significant assumptions required to estimate our General CECL Allowance which include deriving and applying an annual historical loss rate, estimating the impacts of current and future macroeconomic conditions, and forecasting the timing of expected repayments, satisfactions and future fundings.
Showing the first 40 of 47 passages. Open the source sections for the rest.
Reworded paragraphs (29)
Previous wording
We make forward-looking statements herein and will make forward-looking statements in future filings with the SEC, press releases or other written or oral communications within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). For these statements, we claim the protections of the safe harbor for forward-looking statements contained in such Sections. Forward-looking statements are subject to substantial risks and uncertainties, many of which are difficult to predict and are generally beyond our control. These forward-looking statements include information about possible or assumed future results of our business, financial condition, liquidity, results of operations, plans and objectives. When we use the words "believe," "expect," "anticipate," "estimate," "plan," "continue," "intend," "should," "may" or similar expressions, it intends to identify forward-looking statements. Statements regarding the following subjects, among others, may be forward-looking: higher interest rates and inflation; market trends in our industry, real estate values, the debt securities markets or the general economy; the demand for commercial real estate loans; our business and investment strategy; our operating results; actions and initiatives of the U.S. government and governments outside of the United States, changes to government policies and the execution and impact of these actions, initiatives and policies; the state of the economy generally or in specific geographic regions; the impact of a shutdown of the U.S. federal government; economic trends and economic recoveries; our ability to obtain and maintain financing arrangements, including secured debt arrangements and securitizations; the timing and amount of expected future fundings of unfunded commitments; the availability of debt financing from traditional lenders; the volume of short-term loan extensions; the demand for new capital to replace maturing loans; expected leverage; general volatility of the securities markets in which we participate; changes in the value of our assets; the scope of our target assets; interest rate mismatches between our target assets and any borrowings used to fund such assets; changes in interest rates and the market value of our target assets; changes in prepayment rates on our target assets; effects of hedging instruments on our target assets; rates of default or decreased recovery rates on our target assets; the degree to which hedging strategies may or may not protect us from interest rate volatility; impact of and changes in governmental regulations, tax law and rates, accounting, legal or regulatory issues or guidance and similar matters; our continued maintenance of our qualification as a REIT for U.S. federal income tax purposes; our continued exclusion from registration under the Investment Company Act of 1940, as amended (the "1940 Act"); th…
Excerpt shortened here; the source contains the full paragraph.
Current wording
We make forward-looking statements herein and will make forward-looking statements in future filings with the SEC, press releases or other written or oral communications within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). For these statements, we claim the protections of the safe harbor for forward-looking statements contained in such Sections. Forward-looking statements are subject to substantial risks and uncertainties, many of which are difficult to predict and are generally beyond our control. These forward-looking statements include information about possible or assumed future results of our business, financial condition, liquidity, results of operations, plans and objectives. When we use the words "believe," "expect," "anticipate," "estimate," "plan," "continue," "intend," "should," "may" or similar expressions, it intends to identify forward-looking statements. Statements regarding the following subjects, among others, may be forward-looking: higher interest rates and inflation; market trends in our industry, real estate values, the debt securities markets or the general economy; the demand for commercial real estate loans; our business and investment strategy; our operating results; actions and initiatives of the U.S. government and governments outside of the United States, changes to government policies and the execution and impact of these actions, initiatives and policies; the state of the economy generally or in specific geographic regions; the impact of a shutdown of the U.S. federal government; economic trends and economic recoveries; our ability to obtain and maintain financing arrangements, including secured debt arrangements and securitizations; the timing and amount of expected future fundings of unfunded commitments; the availability of debt financing from traditional lenders; the volume of short-term loan extensions; the demand for new capital to replace maturing loans; expected leverage; general volatility of the securities markets in which we participate; changes in the value of our assets; the scope of our target assets; interest rate mismatches between our target assets and any borrowings used to fund such assets; changes in interest rates and the market value of our target assets; changes in prepayment rates on our target assets; effects of hedging instruments on our target assets; rates of default or decreased recovery rates on our target assets; the degree to which hedging strategies may or may not protect us from interest rate volatility; impact of and changes in governmental regulations, tax law and rates, accounting, legal or regulatory issues or guidance and similar matters; our continued maintenance of our qualification as a REIT for U.S. federal income tax purposes; our continued exclusion from registration under the Investment Company Act of 1940, as amended (the "1940 Act"); th…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. Forward-looking statements are not predictions of future events. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us. See Item 1A. "Risk Factors" and Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our most recent Annual Report on Form 10-K. These and other risks, uncertainties and factors, including those described in the annual, quarterly and current reports that we file with the SEC, could cause our actual results to differ materially from those included in any forward-looking statements we make. All forward-looking statements speak only as of the date they are made. New risks and uncertainties arise over time, and it is not possible to predict those events or how they may affect us. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Current wording
The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. Forward-looking statements are not predictions of future events. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us. See Item 1A. "Risk Factors" and Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our most recent Annual Report on Form 10-K and "Risk Factors" in the Special Meeting Proxy. These and other risks, uncertainties and factors, including those described in the annual, quarterly and current reports that we file with the SEC, could cause our actual results to differ materially from those included in any forward-looking statements we make. All forward-looking statements speak only as of the date they are made. New risks and uncertainties arise over time, and it is not possible to predict those events or how they may affect us. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Previous wording
We are externally managed and advised by the Manager, an indirect subsidiary of Apollo, a global, high-growth alternative asset manager with assets under management of approximately $938.4 billion as of December 31, 2025.
Current wording
We are externally managed and advised by the Manager, an indirect subsidiary of Apollo, a global, high-growth alternative asset manager with assets under management of approximately $1.05 trillion as of June 30, 2026.
Previous wording
On the Closing Date, pursuant to the terms and subject to the conditions set forth in the Purchase Agreement, the Company sold its commercial real estate loan portfolio (other than loans that were repaid prior to closing and one loan with a principal balance of $46 million which is expected to repay after the Closing Date) to Athene for cash consideration of approximately $8.6 billion, which is based on 99.7% of the total commitment amount of such loans as of the Closing Date, subject to certain adjustments as provided in the Purchase Agreement. Please refer to "Note 20 - Subsequent Events" to the accompanying consolidated financial statements for further details.
Current wording
On the Closing Date, pursuant to the terms and subject to the conditions set forth in the Purchase Agreement, the Company sold its commercial real estate loan portfolio (other than loans that were repaid prior to closing and the Chicago Hotel Loan which was repaid after the Closing Date) to Athene for cash consideration of approximately $8.6 billion, which is based on 99.7% of the total commitment amount of such loans as of the Closing Date, subject to certain adjustments as provided in the Purchase Agreement. A portion of the proceeds from the Asset Sale were used to repay all secured credit facilities and other indebtedness and to pay transaction expenses.
Previous wording
For the three months ended March 31, 2026 and 2025, our net income available to common stockholders was $23.2 million, or $0.16 per diluted share of common stock, and $22.9 million, or $0.16 per diluted share of common stock, respectively.
Current wording
For the three months ended June 30, 2026 and 2025, our net income available to common stockholders was $22.7 million, or $0.11 per diluted share of common stock, and $17.7 million, or $0.12 per diluted share of common stock, respectively.
Previous wording
Net interest income decreased by $8.0 million during the three months ended March 31, 2026 compared to the three months ended December 31, 2025. The net decrease was primarily attributable to lower average index rates during the three months ended March 31, 2026 compared to the three months ended December 31, 2025. Additionally, our commercial mortgage loan secured by a hotel in Chicago, IL was moved to nonaccrual status as of December 31, 2025, and no interest income was recorded on this loan during the three months ended March 31, 2026. Lastly, modifications to several of our loans resulted in interest rate decreases and further decreased interest income. Refer to "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" for additional detail.
Current wording
Net interest income decreased by $27.9 million during the three months ended June 30, 2026 compared to the three months ended March 31, 2026. The net decrease was attributable to the sale of our commercial real estate loan portfolio on April 24, 2026, resulting in two fewer months of interest income recorded during the three months ended June 30, 2026 compared to the three months ended March 31, 2026. Refer to "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" for additional detail.
Previous wording
For the three months ended March 31, 2026, we recorded net income related to real estate owned of $0.4 million compared to net income of $1.9 million for the three months ended December 31, 2025. The decrease in net income was primarily due to the seasonality of hotel operations, which led to $2.1 million and $0.5 million lower net income from operations, prior to depreciation, for the D.C. Hotel and the Atlanta Hotel, respectively, during the three months ended March 31, 2026 as compared to the three months ended December 31, 2025. The decrease was partially offset by an increase in operating income attributable to our Brooklyn Multifamily Development as the lease-up of the property continues to ramp up. Refer to "Note 5 – Real Estate Owned" for further discussion of operations related to real estate owned. at
Current wording
For the three months ended June 30, 2026, we recorded net income related to real estate owned of $8.5 million compared to net income of $0.4 million for the three months ended March 31, 2026. The increase in net income was primarily due to the seasonality of hotel operations, which led to $6.4 million higher net income from operations, prior to depreciation, for the D.C. Hotel during the three months ended June 30, 2026 as compared to the three months ended March 31, 2026. Further, net income attributable to the Brooklyn Multifamily Development increased $2.7 million during the three months ended June 30, 2026 as compared to the three months ended March 31, 2026 as the lease-up of the property continues to ramp up. Refer to "Note 5 – Real Estate Owned" for further discussion of operations related to real estate owned.
Previous wording
Management fees expense decreased by $0.5 million for the three months ended March 31, 2026 compared to the three months ended December 31, 2025. The decrease was primarily due to lower Stockholders' Equity (as defined in the Management Agreement) during the three months ended March 31, 2026.
Current wording
Management fees expense decreased by $4.6 million for the three months ended June 30, 2026 compared to the three months ended March 31, 2026. The decrease was primarily due to a reduction in the base management fee rate under the A&R Management Agreement entered into in connection with the Asset Sale and write-offs of previously recorded Specific CECL Allowances during the three months ended June 30, 2026. Refer to "Note 13 – Related Party Transactions" for additional information.
Previous wording
Increase in Specific CECL Allowance, net
Current wording
Decrease in Specific CECL Allowance
Previous wording
Our General CECL Allowance decreased by $3.3 million during the three months ended March 31, 2026 compared to a decrease of $0.5 million during the three months ended December 31, 2025. During both periods, the decrease was primarily due to the favorable impacts of portfolio seasoning, and partially offset by the effect of loan originations. Refer to "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" for additional information related to our General CECL Allowance.
Current wording
During the three months ended June 30, 2026, we reversed our previously recorded $41.2 million General CECL Allowance as a result of the Asset Sale. Comparatively, during the three months ended March 31, 2026, our General CECL Allowance decreased by $3.3 million. The decrease was primarily due to the favorable impacts of portfolio seasoning, and partially offset by the effect of loan originations. Refer to "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" for additional information related to our General CECL Allowance.
Previous wording
Foreign currency gains and losses on derivative instruments are evaluated on a combined basis and the net impact for the three months ended March 31, 2026 and the three months ended December 31, 2025 were a net loss of $0.3 million and a net gain of $0.3 million, respectively. The net loss for the three months ended March 31, 2026 compared to the net gain for three months ended December 31, 2025 was predominantly due to higher forward point estimates for the three months ended March 31, 2026.
Current wording
Foreign currency gains and losses on derivative instruments are evaluated on a combined basis and the net impact for the three months ended June 30, 2026 and the three months ended March 31, 2026 were a net gain of $0.9 million and a net loss of $0.3 million, respectively. The net loss for the three months ended March 31, 2026 compared to the net gain for the three months ended June 30, 2026 was predominantly due to higher forward point estimates for the three months ended March 31, 2026.
Previous wording
The following table sets forth information regarding our condensed consolidated results of operations and certain key operating metrics for the three months ended March 31, 2026 and 2025 ($ in thousands):
Current wording
The following table sets forth information regarding our condensed consolidated results of operations and certain key operating metrics for the six months ended June 30, 2026 and 2025 ($ in thousands):
Previous wording
For the three months ended March 31, 2026, we recorded net income related to real estate owned of $0.4 million compared to net income of $3.1 million for the three months ended March 31, 2025. The decrease was primarily attributable to lower income from operations, prior to depreciation, due to demand impact from tariffs and lower international and business travel in 2026 compared to 2025. The decrease was partially offset by operating income attributable to our Brooklyn Multifamily Development as the lease-up of the property continues to ramp up. There was no such activity during the quarter ended March 31, 2025 as the property was still under construction with no revenue streams generated and all expenses being capitalized. Refer to "Note 5 – Real Estate Owned" for full discussion of operations related to real estate owned.
Current wording
For the six months ended June 30, 2026, we recorded net income related to real estate owned of $8.9 million compared to net income of $7.3 million for the six months ended June 30, 2025. The increase was primarily due to operating income attributable to our Brooklyn Multifamily Development as the lease-up of the property continues to ramp up. There was no such activity during the six months ended June 30, 2025 as the property was still under construction with no revenue streams generated and all expenses being capitalized. Refer to "Note 5 – Real Estate Owned" for full discussion of operations related to real estate owned.
Previous wording
General and administrative expenses decreased by $0.7 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 primarily due to a decrease in amortization of RSUs as well as a decrease in legal expenses.
Current wording
General and administrative expenses decreased by $1.5 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 primarily due to a decrease in amortization of RSUs as well as a decrease in legal expenses.
Previous wording
During the three months ended March 31, 2026, we recorded a net decrease in our General CECL Allowance of $3.3 million. The decrease was primarily driven by the favorable impacts of portfolio seasoning, which was partially offset by the effect of loan originations. Comparatively, during the three months ended March 31, 2025, we recorded a net increase in our General CECL Allowance of $4.0 million, primarily driven by a more adverse macroeconomic outlook as well as the effects of loan originations. The increase was partially offset by the favorable impacts of portfolio seasoning.
Current wording
During the six months ended June 30, 2026, we recorded a net decrease in our General CECL Allowance of $44.5 million. The decrease was driven by the sale of our commercial real estate loan portfolio, resulting in a full reversal of our General CECL Allowance. Comparatively, during the six months ended June 30, 2025, we recorded a net increase in our General CECL Allowance of $7.1 million, primarily driven by the effect of loan originations. The increase was partially offset by the favorable impacts of portfolio seasoning.
Previous wording
Foreign currency gains and losses on derivative instruments are evaluated on a combined basis and the net impact for the three months ended March 31, 2026 and three months ended March 31, 2025 was a net loss of $0.3 million and a net gain of $1.6 million, respectively. The net loss for the three months ended March 31, 2026 compared to the net gain for the three months ended March 31, 2025 was predominantly due to higher forward point estimates for the three months ended March 31, 2026.
Current wording
Foreign currency gains and losses on derivative instruments are evaluated on a combined basis and the net impact for the six months ended June 30, 2026 and six months ended June 30, 2025 was a net gain of $0.6 million and a net loss of $6.8 million, respectively. The net gain for the six months ended June 30, 2026 compared to the net loss for the six months ended June 30, 2025 was predominantly due to higher forward point estimates for the six months ended June 30, 2025.
Previous wording
For the three months ended March 31, 2026 and December 31, 2025, our Distributable Earnings were $30.7 million, or $0.22 per share, and $37.2 million, or $0.26 per share, respectively.
Current wording
For the three months ended June 30, 2026 and March 31, 2026, our Distributable Earnings were ($349.1) million, or $(2.62) per share, and $30.7 million, or $0.22 per share, respectively.
Previous wording
Unvested RSUs are net of incremental shares assumed repurchased under the treasury stock method, if dilutive. For the three months ended March 31, 2026 and three months ended December 31, 2025, there were 599,484 and 405,421 incremental shares included, respectively.
Current wording
Unvested RSUs are net of incremental shares assumed repurchased under the treasury stock method, if dilutive. For the three months ended June 30, 2026 and three months ended March 31, 2026, there were 574,742 and 599,484 incremental shares included, respectively.
Previous wording
Distributable Earnings Prior to Realized Loss on Investments
Current wording
Distributable Earnings Prior to Realized Loss on Investments and Realized Loss on Extinguishment of Debt
Previous wording
We believe it is useful to our investors to present Distributable Earnings prior to realized loss on investments to reflect our operating results because (i) our operating results are primarily comprised of earning interest income on our investments net of borrowing and administrative costs, which comprise our ongoing operations and (ii) it has been a useful factor related to our dividend per share because it is one of the considerations when a dividend is determined. We believe that our investors use Distributable Earnings and Distributable Earnings prior to realized loss on investments, or a comparable supplemental performance measure, to evaluate and compare the performance of our company and our peers.
Current wording
We believe it is useful to our investors to present Distributable Earnings prior to realized loss on investments and realized loss on extinguishment of debt to reflect our operating results because (i) our operating results are primarily comprised of earning interest income on our investments net of borrowing and administrative costs, which comprise our ongoing operations and (ii) it has been a useful factor related to our dividend per share because it is one of the considerations when a dividend is determined. We believe that our investors use Distributable Earnings and Distributable Earnings prior to realized loss on investments and realized loss on extinguishment of debt, or a comparable supplemental performance measure, to evaluate and compare the performance of our company and our peers.
Previous wording
There were no realized losses on investments for the three months ended March 31, 2026 or the three months ended December 31, 2025. Accordingly, the table below summarizes the reconciliation from net income available to common stockholders to Distributable Earnings ($ in thousands):
Current wording
During the three months ended March 31, 2026, there were no realized losses on investments or realized losses on extinguishment of debt.
Previous wording
During the three months ended March 31, 2026, we committed $299.9 million of capital to a new loan (fully funded at closing), and provided $338.9 million of add-on fundings. During the three months ended March 31, 2026, we received $468.6 million in loan repayments.
Current wording
During the six months ended June 30, 2026, we committed $299.9 million of capital to a new loan (fully funded at closing), and provided $373.8 million of add-on fundings. During the six months ended June 30, 2026, we received $9.5 billion in loan repayments.
Previous wording
We use leverage for the sole purpose of financing our portfolio and not for the purpose of speculating on changes in interest rates. In addition to our secured debt arrangements, senior secured notes and senior secured term loan, we access additional sources of borrowings. Our charter and bylaws do not limit the amount of indebtedness we can incur; however, we are subject to and carefully monitor the limits placed on us by our credit providers and those that assign ratings on our company.
Current wording
We use leverage for the sole purpose of financing our portfolio and not for the purpose of speculating on changes in interest rates. Our charter and bylaws do not limit the amount of indebtedness we can incur; however, we are subject to and carefully monitor the limits placed on us by our credit providers and those that assign ratings on our company. At June 30, 2026, our debt-to-equity ratio was 0.7 and our only outstanding debt was the construction financing on the Brooklyn Multifamily property.
Previous wording
Our current debt obligations consist of $1.2 billion, at face value, of corporate debt, $6.5 billion of secured debt arrangements, and $439.8 million of debt related to real estate owned, held for investment. Our corporate debt includes $744.4 million of term loan borrowings and $500.0 million of senior secured notes. Subsequent to quarter end, all corporate debt and secured debt arrangements were fully repaid using proceeds from the Asset Sale. Please refer to "Note 20 - Subsequent Events" for further details.
Current wording
Our current debt obligations consist of $371.5 million of debt related to real estate owned, held for investment. Refer to "Note 5 – Real Estate Owned" of our condensed consolidated financial statements for additional disclosure regarding our debt related to real estate owned. During the three months ended June 30, 2026 all corporate debt and secured debt arrangements were fully repaid using proceeds from the Asset Sale. Refer to "Note 7 – Secured Debt Arrangements, Net", "Note 8 – Senior Secured Term Loans, Net", and "Note 9 – Senior Secured Notes, Net" for additional detail.
Previous wording
Our primary sources of liquidity as of March 31, 2026 were represented with $126.8 million of cash on hand, $101.7 million of loan proceeds held by servicer, $55.9 million of available borrowings under our financing arrangements based on existing collateral and cash flows from operations. Additionally, we held approximately $287.4 million of unencumbered assets and have $26.0 million of additional capacity on our construction financing secured by our Brooklyn Multifamily Development property which is available to fund future construction costs.
Current wording
Our primary sources of liquidity as of June 30, 2026 were represented with $1.2 billion of cash on hand, and cash flows from operations. Additionally, we held $21.7 million of additional capacity on our construction financing secured by our Brooklyn Multifamily Development property which is available to fund remaining construction costs.
Previous wording
We intend to continue to make regular quarterly distributions to holders of our common stock. U.S. federal income tax law generally requires that a REIT distribute annually at least 90% of our REIT taxable income, without regard to the deduction for dividends paid and excluding net capital gains, and that we pay tax at regular corporate rates to the extent that we annually distribute less than 100% of our net taxable income. We generally intend over time to pay dividends to our stockholders in an amount equal to our net taxable income, if and to the extent authorized by our board of directors. Any distributions we make are at the discretion of our board of directors and depend upon, among other things, our actual results of operations. These results and our ability to pay distributions are affected by various factors, including the net interest and other income from our portfolio, our operating expenses and any other expenditures. If our cash available for distribution is less than our net taxable income, we could be required to sell assets or borrow funds to make cash distributions or we may make a portion of the required distribution in the form of a taxable stock distribution or distribution of debt securities.
Current wording
U.S. federal income tax law generally requires that a REIT distribute annually at least 90% of our REIT taxable income, without regard to the deduction for dividends paid and excluding net capital gains, and that we pay tax at regular corporate rates to the extent that we annually distribute less than 100% of our net taxable income. Any distributions we make are at the discretion of our board of directors and depend upon, among other things, our actual results of operations. These results and our ability to pay distributions are affected by various factors, including the net interest and other income from our portfolio, our operating expenses and any other expenditures.
Previous wording
As of March 31, 2026 and December 31, 2025, we had 6,770,393 shares of our Series B-1 Preferred Stock outstanding. The Series B-1 Preferred Stock pay cumulative cash dividends, which are payable quarterly in equal amounts in arrears on the 15th day of each January, April, July and October: at a rate of 7.25% per annum of the $25.00 per share liquidation preference. Except under certain limited circumstances, the Series B-1 Preferred Stock is generally not convertible into or exchangeable for any other property or any other of our securities at the election of the holders. On and after July 15, 2026, we may, at our option, redeem the shares at a redemption price of $25.00, plus any accrued unpaid dividends to, but not including, the date of the redemption.
Current wording
As of June 30, 2026 and December 31, 2025, we had 6,770,393 shares of our Series B-1 Preferred Stock outstanding. The Series B-1 Preferred Stock pay cumulative cash dividends, which are payable quarterly in equal amounts in arrears on the 15th day of each January, April, July and October: at a rate of 7.25% per annum of the $25.00 per share liquidation preference. On July 15, 2026, we redeemed the shares at a redemption price of $25.00, plus the accrued unpaid dividends of $3.1 million.
Previous wording
During the three months ended March 31, 2026 we repurchased 2,874,144 shares of our common stock at a weighted-average price of $10.52 per share. During the three months ended March 31, 2025, there was no common stock repurchase. Please refer to "Item 2. Unregistered Sales of Equity Securities and Use of Proceeds" for further detail.
Current wording
During the three and six months ended June 30, 2026 we repurchased 8,579,855 and 11,453,999 shares, respectively, of our common stock at a weighted-average price of $10.85 and $10.76 per share, respectively. During the three and six months ended June 30, 2025, there was no common stock repurchase activity. Please refer to "Item 2. Unregistered Sales of Equity Securities and Use of Proceeds" for further detail.
Previous wording
Refer to "Note 2 – Summary of Significant Accounting Policies" to our consolidated financial statements of our most recent Annual Report on Form 10-K for the complete listing and description of our significant accounting policies.
Current wording
On the Closing Date the Company sold its commercial real estate loan portfolio (other than loans that were repaid prior to closing and the Chicago Hotel Loan which repaid after the Closing Date). Accordingly, there were no outstanding loans and no CECL allowance as of June 30, 2026. Refer to "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" for further discussion regarding our General CECL Allowance. Refer to "Note 2 – Summary of Significant Accounting Policies" to our consolidated financial statements of our most recent Annual Report on Form 10-K for the complete listing and description of our significant accounting policies.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
The table below summarizes the reconciliation from net income available to common stockholders to Distributable Earnings and Distributable Earnings prior to realized loss on investments and realized loss on extinguishment of debt ($ in thousands):
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Refer to "Note 5 – Real Estate Owned" of our condensed consolidated financial statements for additional disclosure regarding our debt related to real estate owned.