ACRES Commercial Realty Corp. Files 2023 Annual Report

TL;DR

<b>ACRES Commercial Realty Corp. has filed its 2023 10-K report, detailing its financial position and operations.</b>

AI Summary

ACRES Commercial Realty Corp. (ACR-PD) filed a Annual Report (10-K) with the SEC on March 7, 2024. ACRES Commercial Realty Corp. filed its 10-K report for the fiscal year ending December 31, 2023. The company was formerly known as Exantas Capital Corp. and Resource Capital Corp. The filing includes details on various financial instruments and agreements, such as the ACR2021FL1 Senior Notes and the CreTerm Warehouse Financing Facility. Specific segments mentioned include Commercial Real Estate Portfolio and Hotels. The report references related party transactions, including loans to ACRES Capital Corp.

Why It Matters

For investors and stakeholders tracking ACRES Commercial Realty Corp., this filing contains several important signals. This 10-K filing provides a comprehensive overview of ACRES Commercial Realty Corp.'s financial performance and strategic activities for the fiscal year 2023, crucial for investors assessing the company's stability and future prospects. The detailed information on financial instruments, segments, and related party transactions offers insights into the company's risk exposure and operational structure.

Risk Assessment

Risk Level: medium — ACRES Commercial Realty Corp. shows moderate risk based on this filing. The company's financial health and operations are subject to various risks detailed in the 10-K, including market conditions and specific financial instruments, as indicated by the numerous financial agreements and segment details provided.

Analyst Insight

Investors should review the detailed financial statements and risk factors in the 10-K to understand ACRES Commercial Realty Corp.'s exposure to real estate market fluctuations and its debt structure.

Key Numbers

• 20231231 — Fiscal Year End (Report period)
• 20240307 — Filing Date (Date of submission)
• 6798 — SIC Code (Industry classification)
• MD — State of Incorporation (Company's legal domicile)

Key Players & Entities

• ACRES Commercial Realty Corp. (company) — Filer name
• Exantas Capital Corp. (company) — Former company name
• Resource Capital Corp. (company) — Former company name
• ACR2021FL1SeniorNotesMember (company) — Financial instrument
• CreTermWarehouseFinancingFacilityMember (company) — Financing facility
• ACRESCapitalCorpMember (company) — Related party
• MorganStanleyMortgageCapitalHoldingsLLCMember (company) — Counterparty in financing agreements
• MassachusettsMutualLifeInsuranceCompanyMember (company) — Counterparty in financing agreements

FAQ

Risk Factors

• Financial Instruments and Agreements [medium — financial]: The company is involved with various financial instruments and agreements, including notes, financing facilities, and repurchase agreements, which carry inherent financial risks.
• Commercial Real Estate Market Conditions [medium — market]: The company's performance is tied to the broader commercial real estate market, which is subject to economic cycles, interest rate changes, and tenant demand.
• Related Party Transactions [medium — financial]: Transactions with related parties, such as loans to ACRES Capital Corp., introduce potential conflicts of interest and specific financial risks.

Key Dates

• 2023-12-31: Fiscal Year End — Defines the reporting period for the 10-K.
• 2024-03-07: Filing Date — Date the 10-K was officially submitted to the SEC.

Key Financial Figures

• $0.001 — nge on which registered Common Stock, $0.001 par value ACR New York Stock Exchan
• $10.0 million — itional floating-rate CRE loans between $10.0 million and $100.0 million. During the year end
• $100.0 million — ate CRE loans between $10.0 million and $100.0 million. During the year ended December 31, 202
• $68.2 million — ree CRE loans with total commitments of $68.2 million. At December 31, 2023, our CRE loan por
• $1.9 billion — our CRE loan portfolio at par comprised $1.9 billion of floating-rate CRE whole loans with a
• $4.7 million — portfolio comprised one fully reserved $4.7 million mezzanine loan at December 31, 2023.
• $2.2 billion — olio . At December 31, 2023, we managed $2.2 billion of assets, including $1.5 billion of as
• $1.5 billion — naged $2.2 billion of assets, including $1.5 billion of assets that were financed and held i
• $28.8 million — ludes an allowance for credit losses of $28.8 million. (2) Includes real estate-related rig
• $19.2 m — l estate-related right of use assets of $19.2 million, mortgages payable of $41.8 milli
• $41.8 m — of $19.2 million, mortgages payable of $41.8 million, intangible assets of $7.9 millio
• $7.9 m — of $41.8 million, intangible assets of $7.9 million, lease liabilities of $43.5 milli
• $43.5 million — s of $7.9 million, lease liabilities of $43.5 million and other liabilities of $27,000. (3)
• $27,000 — $43.5 million and other liabilities of $27,000. (3) Includes property held for sale-
• $3.0 million — ty held for sale-related liabilities of $3.0 million. (4) There are no stated rates associ

Filing Documents

• acr-20231231.htm (10-K) — 7168KB
• acr-ex10_1.htm (EX-10.1) — 25KB
• acr-ex21_1.htm (EX-21.1) — 39KB
• acr-ex23_1.htm (EX-23.1) — 3KB
• acr-ex31_1.htm (EX-31.1) — 14KB
• acr-ex31_2.htm (EX-31.2) — 13KB
• acr-ex32_1.htm (EX-32.1) — 7KB
• acr-ex32_2.htm (EX-32.2) — 7KB
• acr-ex97_1.htm (EX-97.1) — 50KB
• acr-ex99_3.htm (EX-99.3) — 261KB
• img81433179_0.jpg (GRAPHIC) — 14KB
• img81433179_1.jpg (GRAPHIC) — 65KB
• img81433179_2.jpg (GRAPHIC) — 80KB
• img81433179_3.jpg (GRAPHIC) — 174KB
• img81433179_4.jpg (GRAPHIC) — 65KB
• img81433179_5.jpg (GRAPHIC) — 65KB
• img81433179_6.jpg (GRAPHIC) — 80KB
• img81433179_7.jpg (GRAPHIC) — 80KB
• 0000950170-24-027462.txt (&nbsp;) — 29963KB
• acr-20231231.xsd (EX-101.SCH) — 3797KB
• acr-20231231_htm.xml (XML) — 5922KB

Forward-Looking Statements

Forward-Looking Statements 3 PART I Item 1:

Business

Business 5 Item 1A:

Risk Factors

Risk Factors 16 Item 1B: Unresolved Staff Comments 39 Item 1C: Cybersecurity 39 Item 2:

Properties

Properties 40 Item 3:

Legal Proceedings

Legal Proceedings 40 Item 4: Mine Safety Disclosures 40 PART II Item 5: Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 41 Item 6: [Reserved] 43 Item 7:

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 44 Item 7A:

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 80 Item 8:

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 82 Item 9: Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 138 Item 9A:

Controls and Procedures

Controls and Procedures 138 Item 9B: Other Information 140 Item 9C Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 140 PART III Item 10: Directors, Executive Officers and Corporate Governance 141 Item 11:

Executive Compensation

Executive Compensation 141 Item 12:

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 141 Item 13: Certain Relationships and Related Transaction and Director Independence 141 Item 14: Principal Accountant Fees and Services 141 PART IV Item 15: Exhibits and Financial Statement Schedules 142 Item 16: Form 10-K Summary 145

SIGNATURES

SIGNATURES 146 (Back to Index)

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS In this annual report on Form 10-K, references to "Company," "we," "us," or "our" refer to ACRES Commercial Realty Corp. and its subsidiaries; references to the Company's "Manager" refer to ACRES Capital, LLC, a subsidiary of ACRES Capital Corp., unless specifically stated otherwise or the context otherwise indicates. This report contains certain forward-looking statements. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by terms such as "anticipate," "believe," "could," "estimate," "expects," "intend," "may," "plan," "potential," "project," "should," "will" and "would" or the negative of these terms or other comparable terminology. Forward-looking statements contained in this report are based on our beliefs, assumptions and expectations regarding our future performance, taking into account all information currently available to us. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us or are within our control. If a change occurs, our business, financial condition, liquidity and results of operations may vary materially from those expressed in our forward-looking statements. Forward-looking statements we make in this report are subject to various risks and uncertainties that could cause actual results to vary from our forward-looking statements, including: changes in our industry, interest rates, the debt securities markets, real estate markets or the general economy; increased rates of default and/or decreased recovery rates on our investments; the performance and financial condition of our borrowers; the cost and availability of our financings, which depend in part on our asset quality, the nature of our relationships with our lende

BU SINESS

ITEM 1. BU SINESS General We are a Maryland corporation, incorporated in 2005, and a real estate finance company that is organized and conducts our operations to qualify as a real estate investment trust ("REIT") for federal income tax purposes under Subchapter M of the Internal Revenue Code of 1986, as amended, or the Code. On February 16, 2021, we amended our certificate of incorporation to change our name to ACRES Commercial Realty Corp. from Exantas Capital Corp. Our investment strategy is primarily focused on originating, holding and managing commercial real estate ("CRE") mortgage loans and equity investments in commercial real estate property through direct ownership and joint ventures. We are externally managed by ACRES Capital, LLC (our "Manager") a subsidiary of ACRES Capital Corp. (collectively "ACRES"), a private commercial real estate lender exclusively dedicated to nationwide middle market CRE lending with a focus on multifamily, student housing, hospitality, industrial and office property in top United States, or U.S., markets. Our Manager draws upon the management team of ACRES and its collective investment experience to provide its services. Our objective is to provide our stockholders with total returns over time, including the payment of quarterly distributions when approved by our board of directors, (our "Board") and capital appreciation, while seeking to manage the risks associated with our investment strategies. We finance a substantial portion of our portfolio investments through borrowing strategies seeking to match the maturities and repricing dates of our financings with the maturities and repricing dates of our investments. Our investment strategy targets the following CRE credit investments, including: Floating-rate first mortgage loans, which we refer to as whole loans; First priority interests in first mortgage loans, which we refer to as A-notes; Subordinated interests in first mortgage loans, which we refer to as B-note

View Full Filing

View this 10-K filing on SEC EDGAR