ACRES Commercial Realty Corp.

Good day, ladies and gentlemen, and welcome to the third quarter 2025 Acres Commercial Realty Corp. Earnings Conference Call. Currently, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session with instructions to follow at that time. If anyone requires assistance during the conference, please press star, then zero on your touchtone phone. As a reminder, this call is being recorded. I would like to now introduce your host for today's conference, Kyle Bringle, Vice President, Operations. You may begin.

Good morning and thank you for joining our call. I would like to highlight that we have posted the third quarter 2025 earnings presentation to our website. This presentation contains summary and detailed information about the quarterly results of the company. Before we begin, I want to remind everyone that certain statements made during this call are not based on historical information and may constitute forward-looking statements. When used in this conference call, the words believes, anticipates, expects, and similar expressions are intended to identify forward-looking statements. Although the company believes these forward-looking statements are based on reasonable assumptions, such statements are based on management's current expectations and beliefs and are subject to several trends, risks, and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements. These risks and uncertainties are discussed in the company's reports filed with the SEC, including its reports on Forms 8-K, 10-Q, and 10-K, and in particular, the risk factor section of its Form 10-K. Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The company undertakes no obligation to update any of these forward-looking statements. Furthermore, certain non-GAAP financial measures may be discussed on this conference call. Our presentation of this information is not intended to be considered in isolation or as a substitute to the financial information presented in accordance with GAAP. Reconciliations of non-GAAP financial measures to the most comparable measures compared in accordance with generally accepted accounting principles are contained in the earnings presentation for the past quarter. With me on the call today are Mark Fogel, President and CEO, and Eldrin Blackwell, ACR CFO. I will now turn the call over to Mark.

Good morning, everyone, and thank you for joining our call. Today I will provide an overview of our loan operations, real estate investments, and the health of the investment portfolio. while Eldrin Blackwell, our CFO, will discuss the financial statements, liquidity condition, book value, and operating results for the third quarter of 2025. Of course, we look forward to your questions at the end of our prepared remarks. The ACRES team remains focused on executing on our business strategy by building a pipeline of high-quality investments, actively managing the portfolio, and focusing on growth in both earnings and book value for our shareholders. In the third quarter, we funded new commitments of $106.4 million, offset by loan payoffs, sales, and paydowns of $153.2 million, producing a net decrease to the loan portfolio of $46.8 million. We expect a substantial number of new loan closings in the fourth quarter, which will produce positive growth in the portfolio for the full year. The weighted average spread of the floating rate loans in our $1.4 billion commercial real estate loan portfolio is now 3.63% over one month term SOFR rates. The portfolio generally continues to perform, demonstrating sound and consistent underwriting and proactive asset management. The company ended the quarter with $1.4 billion of commercial real estate loans across 46 individual investments. At September 30th, our weighted average risk rating was 3.0 an increase from 2.9 at June 30th, and the number of loans rated four or five was 13, both at the end of last quarter and the end of this quarter. During the quarter, we sold one of our real estate investments, which resulted in a gross capital gain of $13.1 million. This gain on sale represented a significant part of our strategic plan to use our capital loss carry forward to maximize shareholder value. During the quarter, we also closed on a construction loan with a third-party lender to convert an REO office property in Chicago to a Class A 252-unit multifamily property. The property had previously been contributed to a joint venture with a Chicago-based developer. We expect a grand opening of the property during Q3 2026. As we exit our real estate investments and the loan portfolio continues to amortize, we expect to redeploy capital into attractive CRE loans. As always, we will seek to optimize our portfolio leverage in order to drive equity returns. In summary, the Acres team continues to be focused on the overall quality of the investment portfolio, including investments in real estate, with the goal of improving credit quality and recycling capital into new investments to enhance shareholder value. We will now have ACR's CFO, Eldren Blackwell, discuss the financial statements and operating results during the third quarter.